Last week, a federal court in Houston held that an insured property owner had stated a claim against an independent insurance adjuster, requiring remand of the case to state court.  The claim in Leidy v. Alterra Am. Ins. Co., No. CIV.A. H-15-2497, 2015 WL 6039741 (S.D. Tex. Oct. 15, 2015), arose out of alleged property damage from a hailstorm on August 16, 2013. Dianne Leidy, the insured, made a claim to Alterra American Insurance Company, which assigned independent adjuster Synergy Adjusting Corporation to inspect the property and adjust the claim. One of the adjusters obtained a hail report that did not show any hailstorms affecting the property in August of 2013. Alterra denied the claim on this basis, and the opinion is unclear whether there was any other basis for denying the claim, such as observed wear and tear on the property.

After Leidy sued both Alterra and the Synergy adjusters, Alterra removed the case to federal court, alleging that Leidy improperly joined the Synergy adjusters as a non-diverse defendant to defeat federal diversity jurisdiction. Judge Nancy Atlas analyzed whether the adjusters were improperly joined, which requires a showing that pleadings show no possibility of recovery against the non-diverse defendant under Texas law. Alterra argued that the pleadings against the adjusters lacked specificity and were “mere recitations” of the Insurance Code statutes. Judge Atlas rejected this argument, finding sufficient allegations that the adjuster “conducted a substandard, results-oriented inspection of the Subject Property,” “failed to discover covered damages,” performed an inspection that lasted “approximately one hour,” and “misrepresented material facts.” Interestingly, the court also considered allegations in plaintiff’s Motion to Remand that the coverage decision based on the hail report was incorrect because there were several publicized reports of heavy storms in the area on August 16, 2013. This consideration of facts that “amplify or clarify facts alleged in the state court complaint,” appears to be a departure from other federal court decisions that advise against looking outside of the pleadings in an improper-joinder analysis.

Finding that Leidy had sufficiently pleaded causes of action against the adjusters under the fair-notice standard, Judge Atlas remanded the case to state court.

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