U.S. DISTRICT COURT AGAIN REJECTS ARGUMENT THAT INDEPENDENT ADJUSTERS CANNOT BE HELD LIABLE UNDER SECTION 541 OF THE TEXAS INSURANCE CODE

On July 24, 2018, the Unites States District Court for the Northern District of Texas again rejected an independent adjuster’s argument that he cannot be held liable under section 541 of the Texas Insurance Code by virtue of his status as an independent adjuster.  In Recovery Resource Counsel v. ACE American Ins. Co., No. 3:17-CV-2787-N, 2018 WL 3548912, (N.D. Tex. [Dallas Division] July 24, 2018, mem. op.), the insured reported hail damage to its insurer, ACE American Insurance Company (“ACE”).   ACE hired Kirn, an independent insurance adjuster, to investigate the claim. In turn, Kirn hired an inspection company to determine if the property sustained hail damage. The inspection company reported that the property did not sustain hail damage, and ACE denied the claim. The insured subsequently filed suit alleging that ACE and Kirn violated Texas Insurance Code Sections 541.060 and 541.061. In response, Kirn filed a motion to dismiss, contending that independent insurance adjusters cannot be held liable under the Insurance Code. The court swiftly rejected this argument, relying on Northern and Southern District Court precedent that “adjusters who are direct employees of the insurer as well as independent adjusters hired by the insurer can be liable under section 541.”