Roach v. Allstate Vehicle and Property Insurance Company
3:15-cv-03228
N.D. Tex.Feb 29, 2016Background
- Roach sues Allstate and adjuster Morgan for hail and wind damage to her property under an Allstate policy.
- Allstate assigned Morgan to investigate Roach’s claim; Roach alleges Morgan conducted a substandard inspection and misrepresented damages and coverage.
- Roach claims Morgan advised repairs that would not prevent future damage and misrepresented that damages were below the deductible though damages exceeded $44,000.
- Roach sued in state court; Allstate removed to federal court claiming improper joinder to defeat diversity.
- The court must decide if Morgan was improperly joined and whether remand is required; the court ultimately remands to state court.
- Texas fair-notice pleading standard and Texas Insurance Code § 541.060(a)(2) are central to whether Roach can state a claim against Morgan individually.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Improper joinder standard applied to Morgan | Roach contends there is a reasonable possibility of recovery against Morgan personally. | Allstate argues Roach fails to state a claim against Morgan under Texas law and the complaint fails to show independent actions by Morgan. | Roach states a potentially valid claim; Morgan not improperly joined |
| Texas fair notice pleading against an in-state defendant | Roach’s petition clearly distinguishes Morgan’s acts from Allstate’s, satisfying fair notice. | Roach lumps the defendants together, failing to plead independently against Morgan. | Roach’s petition satisfies fair notice pleading as to Morgan |
| Roach's claim under Texas Insurance Code § 541.060(a)(2) against Morgan | Morgan’s misrepresentations and substandard actions violate § 541.060(a)(2) and may be imputable to the adjuster personally. | Adjuster liability under § 541.060(a)(2) is limited or uncertain; some cases foreclose individual liability. | Roach pleads a potentially valid § 541.060(a)(2) claim against Morgan |
| Remand based on diversity after finding potential claims against in-state Morgan | If a non-diverse in-state defendant is properly joined, remand is required. | If any claim against Morgan is not viable, court could maintain diversity and deny remand. | Because Morgan is potentially liable, complete diversity is destroyed and remand is required |
Key Cases Cited
- Smallwood v. Illinois Central Railroad Company, 385 F.3d 568 (5th Cir. 2004) (improper-joinder standard: can predict recovery against in-state defendant)
- Griggs v. State Farm Lloyds, 181 F.3d 694 (5th Cir. 1999) (Rule 12(b)(6)-type pleading analysis for state claims in removal context)
- International Energy Ventures Management, L.L.C. v. United Energy Group, Limited, 800 F.3d 143 (5th Cir. 2015) (Texas fair-notice pleading standard applies to improper-joinder analysis)
- GoDaddy.com, LLC v. Toups, 429 S.W.3d 752 (Tex. 2014) (Rule 91a context; fair notice pleading standard interpretation)