Court: District Court, N.D. Texas; April 7, 2014; Federal District Court
Plaintiffs Jeff and Jan’s Coin Laundry filed a motion to remand a case against Defendant Nationwide Mutual Fire Insurance Co. concerning an insurance claim for hail storm damage from 2013. Nationwide, which removed the case to federal court on October 10, 2013, argued that the case fell under diversity jurisdiction despite both the plaintiffs and Felicia Zimmer, a claims adjuster, being Texas domiciliaries. Nationwide claimed Zimmer was improperly joined and therefore did not affect diversity. The court reviewed the motion to remand, the parties' filings, and applicable law, ultimately denying the motion.
The legal basis for removal under 28 U.S.C. 1441(a) requires original jurisdiction through diversity of citizenship and an amount exceeding $75,000. The burden to prove subject matter jurisdiction lies with the removing party. The court emphasized evaluating jurisdictional facts at the time of the complaint's filing and noted the prohibition against jurisdiction where parties are improperly joined. To establish improper joinder, a defendant must demonstrate either actual fraud in jurisdictional pleadings or that the plaintiff cannot establish a cause of action against a non-diverse party. The court indicated it would assess the viability of claims against the in-state defendant through a Rule 12(b)(6)-type analysis.
The primary issue is the proper joinder of Zimmer, a Texas domiciliary, as a defendant in the case involving Jeff and Jan’s Coin Laundry. Nationwide contends that there is no reasonable basis for Coin Laundry to recover from Zimmer, a position supported by the claims presented.
Firstly, the Prompt Payment of Claims Act is applicable solely to insurers, and since Zimmer is not an insurer, she cannot be held liable under this statute. Secondly, any contractual relationship alleged by Coin Laundry pertains exclusively to Nationwide, negating any breach of contract claim against Zimmer.
Additionally, Coin Laundry's negligence claim relies on the assertion that the defendants owed a duty related to the collection of insurance premiums, a duty Zimmer, as an adjuster, did not owe. Similarly, the fraud claim alleges misrepresentations regarding insurance coverage; however, Zimmer was not involved in the provision of insurance, precluding her liability under this theory.
The Deceptive Trade Practices Act (DTPA) claims also fail for the same reasons, as they are tied to the sale and provision of insurance with which Zimmer had no involvement.
While Texas law allows for individual liability of adjusters under the Texas Insurance Code, the claims against Zimmer do not meet the necessary legal criteria. Specifically, the allegations under Tex. Ins. Code § 541.060(a)(1) regarding misrepresentation do not pertain to policy coverage but rather to facts leading to a claim, which is not actionable under the statute. For liability to attach, any misrepresentation must relate directly to policy provisions, not the circumstances surrounding a claim.
Zimmer is accused of violating Tex. Ins. Code § 541.060(a)(2) and § 541.060(a)(7). The former requires insurers to make good faith efforts to settle claims when liability is clear, while the latter mandates a reasonable investigation before refusing to pay a claim. However, Zimmer, as an adjuster without settlement authority, cannot be held liable under these provisions; her role was limited to damage assessment. The court finds no valid claims against her, leading to the conclusion that she is an improperly joined party. Thus, her removal from the case establishes diversity of citizenship between Coin Laundry and Nationwide, satisfying diversity jurisdiction requirements. Consequently, the court denies the Plaintiff's Motion to Remand. The Plaintiff's petition states damages between $100,000 and $200,000, meeting the amount-in-controversy requirement. Nationwide, organized under Ohio law, maintains its principal business there, which is uncontested. Coin Laundry's Motion for Remand claims there are three actionable causes against Zimmer, but some allegations were not present in the original petition, and others contradict it. The court states that it cannot consider assertions from the motion as part of the allegations, adhering to limits established by precedent.
