WESTERN DISTRICT JUDGE FINDS ALLEGATIONS AGAINST ADJUSTER SUFFICIENT TO STATE A CLAIM AND GRANTS MOTION TO REMAND

A federal court in Waco recently held that an insured property owner had stated a claim against an insurance adjuster, requiring remand of the case to state court.  The claim in Sai Hotel Grp. Ltd. v. Steadfast Ins. Co., No. CIV.A. W-15-CV-263, 2015 WL 6511434 (W.D. Tex. Oct. 27, 2015), arose out of alleged damage to a commercial property from a wind and hailstorm on October 2, 2014. The insured, made a claim to Steadfast Insurance Company, which assigned local adjuster Thomas Gollatz to inspect the property and adjust the claim. Plaintiff alleged that Steadfast subsequently denied the claim relying “exclusively on Mr. Gollatz’s substandard investigation.”

After Plaintiff sued both Steadfast and the adjuster Gollatz, Steadfast removed the case to federal court, alleging that Leidy improperly joined the adjuster as a non-diverse defendant to defeat federal diversity jurisdiction. Judge Walter Smith noted that since there were no allegations of fraud, the inquiry is limited to whether the state court petition in effect at the time of removal provided a reasonable basis to believe that the plaintiff may recover against the non-diverse defendant under Texas law. Judge Smith noted specifically that the question is only whether or not there is a possibility that the Plaintiff might prevail.

Judge Smith began his analysis with the conclusion that the notice pleading standard under Rule 47 of the Texas Rules of Civil Procedure should be applied. He then referenced the addition of  Rule 91a to the Texas Rules of Civil Procedure, which provides a standard for dismissal on the pleadings similar to that found in Rule 12(b)(6) of the Federal Rules of Civil Procedure. However, Judge Smith concluded that the “fair notice” standard of Rule 47 remains in effect and that courts which have analyzed improper joinder since the enactment of Texas Rule 91a have “for the most part” determined that the “fair notice” standard is still applicable.

Based on the conclusion that the broad fair-notice standard applies, and is not modified by Rule 91a, the Court found that Plaintiff’s Original Petition “enumerated several instances” in which the adjuster’s actions constitute violations of the Texas Insurance Code. The Court did not reference any specific allegations that met the fair-notice standard.   Finding that Plaintiff had sufficiently pleaded causes of action against the adjuster under the fair-notice standard, Judge Smith remanded the case to state court.

[Editor’s Note: Even though the Court did not specifically enumerate the factual allegations against the adjuster that met the fair-notice standard, it should be noted that the pleadings in this case contained more detail regarding actions taken by the individual adjuster than the generic first-party pleadings that are common in Texas storm litigation.]