Suing Adjuster And 543A.006(b)

Suing insurance adjusters has been made clearer after the courts have made rulings interpreting Texas Insurance Code, Rule 542A.006(b).  This is addressed further in a 2022, magistrate’s ruling from the Northern District of Texas, Abilene Division.  The opinion is styled, David Buttross d/b/a FL20, Inc. vs. Great Lakes Insurance SE.

This opinion arising from a Rule 12(b)(6) motion to dismiss.  The motion is based on 5th Circuit rulings regarding the interpretation of Texas Insurance Code, Section 542A.006(b).

Valdez does not attack the sufficiency of the factual allegations in Plaintiff’s Complaint, but rather argues that the Plaintiff’s claim against her is foreclosed by state law, specifically because of Great Lakes’s election under Section 542A.006.  As a general matter, the Fifth Circuit has determined that Rule 12(b)(6) motions to dismiss typically cannot be granted on affirmative defense grounds unless a successful affirmative defense appears clearly on the face of the pleadings.

The Section 542A.006 election here does not clearly appear on the face of the pleadings.  But it does not appear that either the Texas state courts or the Fifth Circuit has directly addressed the question of whether an election under Section 542A.006 is an affirmative defense.  Regardless, the undersigned finds it is unnecessary to resolve this question at this point because the fact of the pre-suit election is not disputed, and the Motion is unopposed.

The Texas Insurance Code was amended as of September 2017 to allow an insurer “to accept whatever civil liability an agent might have to the claimant for the agent’s acts or omissions related to the claim by providing written notice to the claimant.”  The Insurance Code further provides that “[i]f an insurer makes an election under Subsection (a) before a claimant files an action to which this chapter applies, no cause of action exists against the agent related to the claimant’s claim, and, if the claimant files an action against the agent, the court shall dismiss that action with prejudice.”

Here, because it is undisputed that Great Lakes made a pre-suit election under Section 542A.006, the Court is required to dismiss with prejudice Plaintiff’s claims against Valdez relating to this insurance dispute.


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