Suing An Insurance Company Employee Who Is Not An Adjuster, Underwriter, Or Agent

Suing an insurance properly is not as easy as it might first seem.  This is illustrated in a recent opinion from the Western District of Texas, San Antonio Division.  The opinion is styled, Finger Oil & Gas, Inc. v. Mid-Continent Casualty Co., Et Al.

Finger Oil sued Mid-Continent, Marsh USA, Inc., and Karen Olivia in State Court.  Mid-Continent removed the case to Federal Court alleging that the non-diverse defendant, Olivia, was improperly joined and thus her citizenship may be disregarded.  Finger Oil filed this motion to remand contending that Olivia is not improperly joined.

Finger Oil’s original petition alleges that one of its oil wells blew out and that it contacted Desiree Scrimger, the commercial lines account manager with Marsh, Finger Oil’s insurance agent.  Scrimger allegedly advised Shelli Finger and others that blowout and cratering were included within the limit of insurance of $1,000,000 and sent an email from the underwriter, Olivia, confirming the coverage.  Finger Oil alleges that, based on that representation, costs were incurred for services totaling approximately $641,000.  However, Mid-Continent later issued reservation of rights letters and denied coverage.  Finger Oil sues under Texas Insurance Code, Section 541.051 for misrepresentation of the benefits or advantages of the insurance policy in question, as well as violations of the DTPA §17.46(b) for representing that the policy coverage had characteristics it did not have, representing the policy conferred or involved rights, remedies, or obligations that it did not have, and breaching the duty of good faith and fair dealing.

In its motion to remand, Finger Oil contends that adjusters may be liable under Chapter 541 and the DTPA for misrepresentations, and asserts that it has sufficiently stated a claim to show that Olivia is not improperly joined.  In response, Mid-Continent attacks the factual bases for Finger Oil’s claims.  Mid-Continent notes that Finger Oil did not attach an email from Olivia to its petition.  Mid-Continent further disputes Finger Oil’s allegation that Olivia is an “underwriter for [Marsh] Wortham,” stating that Olivia is a claims representative and has never been an underwriter, adjuster, or an insurance agent for Marsh.  Mid-Continent contends that Olivia’s only involvement in Finger Oil’s claim was when Finger Oil contacted Marsh on July 11, 2019, and conferred with Olivia regarding the well blowout and asked for information for an approved vendor.  Olivia filled out a notice of occurrence/claim and forwarded the information to the carrier, Mid-Continent, but did not provide Finger Oil any information regarding coverage under the Policy and was not involved in Mid-Continent’s coverage decision.  Mid=Continent asserts that, other than the July 11, 2019 telephone conversation, Olivia had no direct contact with Finger Oil.

Mid-Continent contends that the evidence shows that Finger Oil’s allegation about an email from Olivia confirming coverage is demonstrably false, as Olivia was not the author of the email, did not have any written or oral communications with Scrimger or Finger Oil about coverage, and did not make any representations to Finger Oil regarding coverage.  The email provided is from Desiree Scrimger to Shelli Finger and states only, “Per the underwriter regarding coverage, the Blowout and Cratering are included within the limit of insurance. Limits are$1M occurrence/$2M aggregate.”  Olivia is not a party to the email and is not referenced in the email.

Further, Olivia’s affidavit states that she has never worked as an adjuster, underwriter, or agent for Marsh Wortham, and that she filled out a Notice of Occurrence/Claim, forwarded it to the carrier Mid-Continent, and did not provide any information regarding the coverage or application of the policy, nor was she involved in the decision regarding coverage.  Finger Oil has not provided any affidavits or evidence to contradict Mid-Continent’s evidence.

Mid-Continent has provided uncontroverted evidence that Olivia did not make any representations about coverage or about the benefits or characteristics of the policy, and thus the Court finds that there is no possibility of recovery against Olivia because Mid-Continent has negated the existence of any misrepresentation by Olivia necessary for liability.

This Court denied the Motion to Remand.

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