Myers v. Allstate Tex. Lloyd's
| Decision Date | 08 March 2011 |
| Docket Number | NO. 1:10-CV-172,1:10-CV-172 |
| Parties | SHERRIE MYERS, Plaintiff, v. ALLSTATE TEXAS LLOYD'S, MICHELLE RANDOLPH, and JAY AYERS, Defendants. |
| Court | U.S. District Court — Eastern District of Texas |
Pursuant to 28 U.S.C. § 636 and the Local Rules for the United States District Court for the Eastern District of Texas, the District Court referred this matter to the undersigned United States Magistrate Judge, at Beaumont, Texas, for entry of findings and recommendation on case-dispositive motions and determination of non-dispositive matters.1 Pending before the Court is the plaintiff's Motion to Remand (doc. #7).
On February 8, 2010, the plaintiff, Sherrie Myers ("plaintiff" or "Myers") filed her Original Petition in the 128th Judicial District Court of Orange County, Texas, against the defendants Allstate Texas Lloyd's ("Allstate, "), Michelle Randolph ("Randolph"), and Jay Ayers ("Ayers"). See Plaintiff's Original Petition, filed with Notice of Removal (doc. #1). According to the facts set forth in the plaintiff's Original Petition, Myers resides in Orange County, Texas. See Original Petition, at p. 1. Defendant Michelle Randolph is an individual residing in Silsbee, Texas, and defendant Jay Ayers is an individual residing in Orange, Texas. Id. at p. 2. The Original Petition states that Randolph engages in the business of adjusting insurance claims in the States of Texas, and Ayers engages in the business of selling insurance in the State of Texas. Id. According to its Notice of Removal, Allstate Texas Lloyd's is an association of underwriters whose individual underwriters are all residents and citizens of the States of Illinois and Virginia. See Notice of Removal, at p. 2.
Plaintiff states that she is the owner of a Texas Homeowners' Insurance Policy ("the Policy") issued to her by Allstate for coverage of the insured property located at 608 David Drive, Bridge City, Texas. See Original Petition at pp. 2-3. The plaintiff owns the insured property, which is located in Orange County, Texas, in the Eastern District of Texas. Id. at p. 3.
On September 12th through September 13th, 2008, Hurricane Ike struck the area, and the plaintiff's insured property sustained wind damage and interior water damage as a result of the hurricane. Id. at p. 3. The plaintiff also states that winds blew off a bolted-down metal chimney cap, and the joists within the roof are separating in places. Id. She further states that the hurricane's winds caused the roof decking to warp and she sustained damage to her personal belongings and contents within the home. Id. Accordingly, immediately after the storm, Myers filed an insurance claim with Allstate for the damages caused by the hurricane. Id. Specifically, the plaintiff submitted a claim to Allstate against the Policy for roof damage, water damage, wind damage, structural damage and contents damage to the property and accordingly requested that Allstate cover the cost of repairs to the property pursuant to the Policy. Id.
The plaintiff contends that Allstate assigned several adjusters to her claim, but she claims that she received a letter from Allstate rejecting payment on her claim before Allstate had an adjuster inspect her property. Id. She states that the first adjuster inspected the property for only fifteen minutes, and never got up on the roof and never provided a report, but promised that "we will cover everything." Id. The second adjuster was at the property for ten minutes and never provided a report. Id. at pp. 3-4. The third adjuster arrived with Jay Ayers, the plaintiffs insurance agent. Id. at p. 4. Allstate denied the plaintiff's claim in full. Id.
The Original Petition goes on to allege that Allstate wrongfully handled the plaintiff s claim in a number of ways, including wrongfully denying the request for repairs, even though the Policy covered those losses; underpaying plaintiff's claim; "under-scoping" of the damages during the investigation of the claim; and continuing to delay the payment for damages to the property. Id. at p. 4. Plaintiff further alleges that Allstate failed to perform its contractual duties under the Policy by failing to pay the full proceeds of the Policy and failing to adequate compensate plaintiff. Id.
As for Randolph, the adjuster, the plaintiff contends that she, along with Allstate, misrepresented that the damage to the property was not covered under the Policy, even though the damages was caused by a covered occurrence. Id. Plaintiff further avers that Allstate and Randolph failed to make an attempt to settle the plaintiff's claim in a fair manner, although they were aware of their liability to plaintiff under the Policy. Id. Plaintiff also claims that Allstate and Randolph failed to explain the reasons for their offer of an inadequate settlement, failed to offer adequate compensation without explanation, failed to communicate that any future settlements or payments would be forthcoming, failed to affirm or deny coverage within a reasonable time, refused to fully compensate the plaintiff under the Policy and failed to conduct a reasonable investigation of the claim. Id. at p. 5. The plaintiff further contends that Allstate and Randolph knowingly or recklessly made false representations as to material facts and/or knowingly concealed all or part of material information from the plaintiff. Id. at p. 6.
The plaintiff goes on to make several factual allegations against Ayers, her insurance agent. Id. at p. 12. She states that her claim against him stems from his failure to purchase the amount of flood coverage that plaintiff requested. Id. In sum, the plaintiff states that she switched her insurance carrier to Allstate and used Ayers as her agent in 2005, and she requested that Ayersobtain $75,000 in flood coverage for her, the same amount she had maintained previously. Id. She claims that Ayers agreed to obtain the $75,000 in coverage, effective immediately. Id. When Hurricane Ike hit, she made a claim for damages to her home caused by flooding. Id. At that time, she was informed that she only had $39,100 in flood coverage for her dwelling. Id. She states that she then went to Ayers' office upon being informed of the lesser flood coverage, and she claims that she was then provided with a document with "her obviously forged signature" authorizing a reduction coverage. Id. She contends that Ayers failed to purchase a sufficient amount of flood coverage and then tried to cover up his mistake. Id. She claims that Ayers made misrepresentations about her flood coverage, and the crux of her claims against Ayers arise from this misrepresentation. Id. at 13.
Based upon these alleged facts, the plaintiff asserts the following causes of action. Against Randolph, she claims violations of the Texas Insurance Code, Section 541.060(a) by engaging in unfair settlement practices. See Original Petition, at p. 7. She also asserts causes of action for fraud and conspiracy to commit fraud against Randolph. Id. at pp. 8-9.
Against Ayers, the plaintiff asserts causes of action for violation of the Texas Insurance Code, Section 541.061(1), (2) and (3) which govern misrepresentations of an insurance policy; noncompliance with the Texas Deceptive Trade Practices Act-Consumer Protection Act (DTPA), Section 17.46(b)(5), (7), (9), (12) and (24) of the Texas Business and Commerce Code; fraudulent misrepresentation; negligent misrepresentation; fraud; and breach of contract.
Only the claims against Randolph and Ayers are put at issue by the motion to remand because the removal is based on an allegation of improper joinder of those allegedly non-diversedefendants, as discussed below. Accordingly, the Court will focus solely on those causes of action against Randolph and Ayers.
On March 26, 2010, Allstate file its Notice of Removal to this United States District Court. See Notice of Removal (doc. #1). As grounds for removal, Allstate contends that there is diversity of citizenship and accordingly federal jurisdiction exists pursuant to 28 U.S.C. § 1332. Allstate states that there is complete diversity of citizenship and the requisite $75,000 amount in controversy has been met.2 In support, Allstate contends that Randolph and Ayers were improperly joined and their citizenship should not be considered. See Notice of Removal. Allstate contends that the Ayers has been fraudulently joined because the plaintiff's claims against him are unspecific and conclusory and an agent has no duty to explain the terms or coverages of a policy to the insured. See id. at p. 2. Allstate further argues that Randolph has been fraudulently joined because there is no basis to reasonably predict that Texas law might imposed liability on Randolph because the plaintiff has set forth no real facts relating to her. Id. at p. 4.
On April 23, 2010, the plaintiff filed her motion to remand (doc. #7). The plaintiff generally argues that Randolph and Ayers are both properly joined. See Motion to Remand, at p. 6. First, plaintiff contends that she can maintain a cause of action against both Ayers and Randolph underthe Texas Insurance Code because adjusters and agents can be held individually liable under the Insurance Code. Id. at p. 9. Plaintiff further argues that her factual allegations against Randolph and Ayers are sufficient to support valid causes of action because they specifically concern the wrongful conduct attributable to Randolph and Ayers. Id. at pp 12-13. Accordingly, because plaintiff contends that she has sufficiently stated causes of action against Randolph and Ayers under Texas law for purposes of the improper joinder analysis, plaintiff asserts that diversity jurisdiction is lacking and the case must be remanded. The plaintiff also argues that the removal is procedurally defective because all properly joined defendants did not...
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