Federal District Court in TX Dismisses Suit Against Claims Adjuster on Basis of Fraudulent Joinder

Case: Patel v. Acceptance Indem. Ins. Co.
U.S. District Court for the Northern District of Texas
2016 U.S. Dist. LEXIS 10300 (N.D. Tex. Jan. 28, 2016)

Plaintiff, Satishhai Patel d/b/a Caravan Inn LLC, filed suit against its property insurer, Acceptance Indemnity Insurance Company (“Acceptance”) together with Acceptance’s Claims Adjuster, Charles Payne. Plaintiff originally filed suit in Texas state court, but Acceptance removed the case to federal court for the Northern District of Texas. Plaintiff then filed a Motion to Remand the suit to state court, arguing diversity of citizenship did not exist, since the Claims Adjuster was domiciled in Texas.

The Court first noted the suit arose from a dispute over insurance coverage of a property damaged during a storm. The basis of Plaintiff’s claims was that Acceptance had not fully paid on the insurance contract covering the property. The Court further found Plaintiff’s allegations against the Claims Adjuster were solely related to the investigation and estimation of damages. According to the Court, the Complaint made clear that Plaintiff’s claims arise out of an alleged breach by the insurer of its duty and the insurer’s denial of the claim. Plaintiff had not alleged any damages caused by the Claims Adjuster individually, nor had it alleged any actions outside the scope of the Adjuster’s employment. Rather, the Court found the insured’s claim was “but another of a long line of cases in which attorneys for an insured-plaintiff joined as a defendant in a lawsuit against an insurance company to recover policy benefits the insurance adjuster or another representative of the insurance company in an effort to avoid removal of the case from state court to federal court.” As such, the Court reasoned, “While it is true that Plaintiff’s Complaint includes what appear to be factual allegations related to [the Claims Adjuster], a close analysis discloses that they are nothing more than mere conclusions. No facts are alleged that would plausibly lead to the conclusion that Plaintiff suffered any damage by reason of the conduct of [the Adjuster], bearing in mind that ultimately Acceptance, not [the Adjuster], was responsible for insurance coverage.”

The Court thus denied the Motion to Remand and dismissed all causes of action against the Claims Adjuster.