Suing Insurance Adjusters

Suing Adjusters in federal court is often times difficult.  The reason is that an adjuster is usually sued in state court in an effort to defeat diversity jurisdiction thus, keeping the case in state court.  When an insurance company believes the adjuster has been sued solely to defeat diversity jurisdiction, the insurance company will remove the case to federal court and ask the Judge to dismiss the adjuster.

This is what happened in this 2018, 5th Circuit opinion styled, William Mauldin v. Allstate Insurance Company; Mayella Gonzales; Theresa Hernandez.

Pursuant to 28 U.S.C., Section 1441 and 1446, Allstate removed this case to federal court where the Judge allowed the removal.  Mauldin appealed this issue to this Court.

Mauldin contends that Allstate’s removal filing was procedurally deficient for failing to file all state court documents, improperly filing “a veritable ‘flurry’ of extraneous documents,” and failing to join all state court defendants in the removal filing or otherwise obtain their consent.  Mauldin then turns to his substantive arguments, asserting that Allstate failed to establish diversity or the amount in controversy.  His complaints were swiftly disposed of by this Court.

The statute governing removal requires that the removing party file a notice of removal stating the grounds for removal, together with a copy of “all process, pleadings, and orders served upon such defendant … in such action.”  Mauldin points to three “citation documents” and a “civil case information sheet” which he suggests were not filed, as well as the improper filing of unidentified extraneous documents.  Mauldin’s argument fails for the simple reason that the complained of procedural defects are not jurisdictional and do not require remand.  As to Mauldin’s complaint that not all defendants consented to the removal, the removal statute requires that all defendants join in or consent to removal.  First, the failure to join in the removal petition is procedural and “not a jurisdictional defect.”  Moreover, defendant Hernandez did consent to the removal.  As to Gonzalez, this Court has repeatedly made clear that a removing defendant “need not obtain the consent of a co-defendant that the removing party contends is improperly joined.”

As to the damages amount, Mauldin in his state court petition sought damages between $200,000 and $1,000,000, satisfying the amount in controversy requirement.  On the diversity issue, those who claim fraudulent joinder have a heavy burden, but Allstate meets that burden by pointing out that the state court petition does not make any allegations naming Gonzalez or discussing her conduct, and the complaint offers no basis for entitlement to relief from Gonzalez, whose only connection to the underlying dispute was in conducting Mauldin’s examination under oath as Allstate’s attorney.

The Motion to Remand was properly denied.

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