197 F. Supp. 3d 944
S.D. Tex.2016Background
- Plaintiff Fidel Lopez sued United Property & Casualty Insurance Company (UPC) and adjuster Bibiana Aguilar in Texas state court for alleged underpayment of water-damage claims (~$117,534 alleged; UPC paid ~$17,035).
- Lopez pleaded fraud, breach of contract, violations of Texas Insurance Code §§ 541 and 542, and violations of the Texas DTPA, seeking actual, exemplary damages and fees.
- UPC removed the case to federal court based on diversity jurisdiction; Lopez moved to remand, arguing Aguilar (a Texas resident) defeats diversity.
- UPC argued Aguilar was improperly joined and her citizenship should be ignored; Aguilar moved to dismiss.
- The court applied Fifth Circuit improper-joinder standards, using a Rule 12(b)(6)-style plausibility review under Twombly/Iqbal and recent Fifth Circuit guidance requiring federal pleading standards.
- The district court concluded Lopez failed to state plausible claims against Aguilar under the cited provisions of the Texas Insurance Code and the DTPA (and failed to plead fraud with Rule 9(b) particularity), so Aguilar was improperly joined and was dismissed without prejudice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether federal court has diversity jurisdiction | Lopez: Aguilar is a Texas resident; complete diversity lacking; remand required | UPC: Aguilar improperly joined; her citizenship should be ignored and diversity exists | Held: Aguilar improperly joined; removal proper; remand denied |
| Whether Aguilar can be liable under Tex. Ins. Code § 541.060(a)(2),(3),(4) | Lopez: Aguilar’s substandard investigation/adjustment violated these provisions | UPC/Aguilar: Those provisions apply to insurers, not individual adjusters | Held: Court dismissed those claims as inapplicable to an adjuster |
| Whether Aguilar can be liable under Tex. Ins. Code § 542.003(b)(3),(b)(4) | Lopez: Aguilar knowingly underestimated damages, violating § 542.003 | Defendants: Chapter 542 regulates insurers, not adjusters | Held: Court found § 542.003 generally applies to insurers, not adjusters; claim not viable |
| Whether DTPA/fraud claims against Aguilar were pleaded with requisite particularity | Lopez: Aguilar made misrepresentations and acted unconscionably | UPC/Aguilar: Lopez fails to plead who, what, when, where, how as required by Rule 9(b) | Held: DTPA/fraud allegations fail Rule 9(b); not plausibly pleaded against Aguilar |
Key Cases Cited
- Gasch v. Hartford Acc. & Indem. Co., 491 F.3d 278 (5th Cir. 2007) (removal standards and diversity removal principles)
- Smallwood v. Illinois Central R.R. Co., 385 F.3d 568 (5th Cir. 2004) (improper-joinder standard and Rule 12(b)(6)-style analysis)
- Int’l Energy Ventures Mgmt., L.L.C. v. United Energy Group, Ltd., 818 F.3d 193 (5th Cir. 2016) (apply federal pleading standards when assessing plaintiffs state-law petition for joinder analysis)
- Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720 (5th Cir. 2002) (burden on removing party and construing doubts against removal)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility pleading standard)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (two-step Twombly/Iqbal pleading analysis)
- Caterpillar Inc. v. Lewis, 519 U.S. 61 (1996) (complete diversity requirement for § 1332 jurisdiction)
- Pullman Co. v. Jenkins, 305 U.S. 534 (1939) (review state pleadings as of removal for jurisdictional analysis)