A federal district judge in San Antonio recently dismissed all claims against Clearview Risk Insurance Programs, LLC, d/b/a Strata Underwriting Managers (“Strata”) after finding the insureds improperly joined Strata to the lawsuit, in an apparent attempt to deprive the federal court of subject-matter jurisdiction. 444 Utopia Lane, LLC, et al., v. Peleus Ins. Co., et al., No. SA-20-CV-0716-XR, 2020 WL 4593209 (W.D. Tex. Aug. 11, 2020) involved a claim made by the insureds alleging substantial hailstorm damage to their property. After the adjuster’s inspected the property, coverage was denied because the claim was untimely. The insureds filed suit against Peleus Insurance Company (“Peleus”) and Strata in state court for

breach of contract, violations of Insurance Code Chapters 541 and 542, DTPA violations, and breach of the duty of good faith and fair dealing.

Strata denied it was a party to the insurance contract, and Peleus removed the case to federal court on the basis of diversity, asserting that Strata was improperly joined. In doing so, Strata cited a letter it sent to the insureds before they filed suit accepting liability of “any other agent or representative of Peleus” pursuant to Texas Insurance Code Chapter 542A, which allows an insurer to accept whatever liability an agent might have for the agent’s acts or omissions regarding weather-related claims for property damage. The insureds argued Peleus could not accept liability for Strata’s actions because Strata and Peleus were engaged in a joint enterprise to provide them with insurance and, thus, Peleus actions did not relate to their claim.

The court disagreed with the insureds, finding Strata acted Peleus’ agent in placing the insurance, which fit the definition of “agent’ under Texas Insurance Code Chapter 542A. Consequently, the court held Strata was improperly joined, denied the insured’s motion to remand, and dismissed all claims against Strata without prejudice.

Jump to Page

Necessary Cookies

Necessary cookies enable core functionality such as security, network management, and accessibility. You may disable these by changing your browser settings, but this may affect how the website functions.

Analytical Cookies

Analytical cookies help us improve our website by collecting and reporting information on its usage. We access and process information from these cookies at an aggregate level.