ALLSTATE LOSES MOTION TO REMAND IN HOMEOWNERS’ DISPUTE

August 29, 2012

Last Monday, a federal district court judge remanded a dispute over coverage under a homeowners’ policy filed against Allstate Texas Lloyds which raised questions as to an agent’s conduct.  Banuelos v. Allstate Texas Lloyd's, Slip Copy, 2012 WL 3598270 (W.D.Tex. August 20, 2012.) The policyholder sued Allstate, Allstate’s “attorney-in-fact,” and its agent.  Allstate removed the case on the basis of diversity jurisdiction arguing that the joinder of the other defendants was fraudulent.  Allstate argued the attorney-in-fact served no role and committed no action that would subject the attorney-in-fact to liability.  The dispute over the agent was more complicated.  The policyholder alleged the agent recommended a contractor to the policyholder to do the repairs to the home.  The contractor was allegedly incompetent and the repairs poorly performed.  Allstate and the agent disputed that the agent had recommended the contractor.  Applying the rule that factual disputes prevent the court from reaching a fraudulent joinder issue, the court remanded the case.