326 F. Supp. 3d 346
S.D. Tex.2017Background
- Plaintiffs Flor and Arnoldo Gonzalez sued State Farm Lloyds and adjuster Bobby Greer after a May 17, 2016 storm allegedly damaged their home; Greer inspected the property twice and estimated damages at $9,258.84 on October 27, 2016.
- Plaintiffs filed suit in Texas state court on December 16, 2016; defendants removed the case to federal court and Plaintiffs moved to remand.
- Plaintiffs asserted claims under the Texas Deceptive Trade Practices Act (DTPA), the Texas Insurance Code (TIC), negligence, negligent misrepresentation, and civil conspiracy against both State Farm and Greer.
- Defendants argued Greer was improperly joined and his Texas residency should be disregarded for purposes of diversity jurisdiction.
- The court evaluated whether Plaintiffs plausibly stated claims against Greer under federal pleading standards (Twombly/Iqbal) and the heightened Rule 9(b) standard for fraud-based claims.
- Court dismissed Greer without prejudice as improperly joined, found complete diversity between Plaintiffs and State Farm, and denied Plaintiffs’ motion to remand.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Greer was properly joined such that his Texas residency defeats diversity | Greer is a proper defendant on TIC, DTPA, negligence, and conspiracy claims | Greer was improperly joined because Plaintiffs cannot state a viable claim against him | Greer was improperly joined and dismissed without prejudice; federal diversity jurisdiction exists and remand denied |
| Sufficiency of fraud-based claims (DTPA and TIC §541.060(a)(1)) under Rule 9(b) | Alleged misrepresentations and deceptive acts by Greer support DTPA and fraud-based TIC claims | Plaintiffs’ allegations are conclusory and lack the particularity required by Rule 9(b) | DTPA and fraud-based TIC claims against Greer fail Rule 9(b); pleadings insufficient |
| Sufficiency of non-fraud TIC claims and factual specificity | Plaintiffs track statutory language and allege defective inspection/under-estimation of damages | Allegations are conclusory, lack factual detail (what was improper, which damages omitted, timing of claim) | Remaining TIC claims against Greer are insufficiently pled under Twombly/Iqbal |
| Negligence / negligent misrepresentation / conspiracy | Greer negligently advised on repairs, misrepresented coverage/amounts, and conspired with State Farm | No independent duty by adjuster alleged; negligent misrep. lacks justifiable reliance and fails 9(b); conspiracy lacks meeting-of-minds facts | Negligence, negligent misrepresentation, and conspiracy claims against Greer are inadequately pled and fail |
Key Cases Cited
- Salazar v. Allstate Texas Lloyd's, Inc., 455 F.3d 571 (5th Cir.) (improper joinder analysis)
- Smallwood v. Illinois Cent. R. Co., 385 F.3d 568 (5th Cir.) (standards for improper joinder)
- Int'l Energy Ventures Mgmt., L.L.C. v. United Energy Group, Ltd., 818 F.3d 193 (5th Cir.) (predicting plaintiff's ability to recover standard)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S.) (pleading standard; conclusory allegations insufficient)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S.) (plausibility pleading standard)
- Benchmark Elec., Inc. v. J.M. Huber Corp., 343 F.3d 719 (5th Cir.) (Rule 9(b) application and standards)
- Crosstex N. Texas Pipeline, L.P. v. Gardiner, 505 S.W.3d 580 (Tex.) (elements of negligence and causation)