Esteban v. State Farm Lloyds

23 F. Supp. 3d 723, 2014 U.S. Dist. LEXIS 70220, 2014 WL 2134598
CourtDistrict Court, N.D. Texas
DecidedMay 22, 2014
DocketCivil Action No. 3:13-CV-3501-B
StatusPublished
Cited by1 cases

This text of 23 F. Supp. 3d 723 (Esteban v. State Farm Lloyds) is published on Counsel Stack Legal Research, covering District Court, N.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Esteban v. State Farm Lloyds, 23 F. Supp. 3d 723, 2014 U.S. Dist. LEXIS 70220, 2014 WL 2134598 (N.D. Tex. 2014).

Opinion

MEMORANDUM ORDER AND OPINION

JANE J. BOYLE, District Judge.

Before the Court is Plaintiffs Amended Motion to Remand (doc. 6), filed October 16, 2013. For the reasons stated below, the Court finds that the Motion should be, and hereby is, GRANTED.

I.

BACKGROUND

This case arises out of an insurer’s alleged failure to properly adjust and pay the full proceeds due on a claim made under an insurance policy. Plaintiff Sara Esteban purchased an insurance policy (“the Policy”) from Defendant State Farm Lloyds (“State Farm”) to insure real property .that she owned in Dallas, Texas (“the Property”). Doc. 1-5, Orig. Pet. Ex. C, at 2-3.1 On March 23, 2013, a wind and hailstorm struck the Dallas area, causing significant damage to homes and businesses in the area. Id. at 3. The Property suffered roof and water damage as a consequence of the storm, and Esteban submitted a claim to State Farm to cover the costs of repair. Id. Defendant Aaron Gal-van was assigned by State Farm to adjust Esteban’s claim. Id. At all relevant times during the adjustment of Esteban’s claim, Galvan acted as an independent adjuster and was not an employee of State Farm. See Doc. 1-5, Galvan Report Ex. C; 4, Defs.’ Resp. 4. Esteban alleges that Galvan “improperly adjusted” her claim, and that his subsequent report “failed to include many of [EstebanJ’s damages.” Doc. 1-5, [726]*726Orig. Pet. Ex. C, at 3-4. More specifically, Esteban charges that “[h]is estimate did not allow adequate funds to cover repairs to restore [her] home” and that Gal-van “misrepresented the cause of, scope of, and cost to repair the damage to Plaintiffs Property, as well as the amount of and insurance coverage for Plaintiffs claim/loss under Plaintiffs insurance policy.” Id. at 4. Esteban also insists that Galvan advised her as to how she could repair the Property in order to prevent further damage, but that this advice was negligent and false. Id.

Esteban maintains that, as a consequence of Galvan’s misrepresentations, State Farm wrongfully denied portions of her claim and misrepresented the amount of damages, which in turn prevented her from properly repairing the Property and caused further damage. Id. at 4-5. Specifically, while State Farm and Galvan represented that Esteban’s damages were only $1,932.72, Esteban insists that her damages exceed $33,000. Id. at 4. Esteban asserts that State Farm has not performed its contractual duty under the Policy and that it has failed to settle her claims in a fair manner. Id. at 5. She also insists that Defendants’ respective failures to properly adjust, inspect, or communicate with her regarding her claims, or to later fully compensate her, constitute violations of the Texas Insurance Code. Id. at 5-8.

Esteban filed her Original Petition in state court on July 26, 2013, alleging causes of action for breach of contract, violations of the Texas Insurance Code, violations of the Texas Deceptive Trade Practices Act, breach of the duty of good faith and fair dealing, fraud, conspiracy, aiding and abetting, negligence, gross negligence, and negligent misrepresentation. Id. at 8-19. Defendants removed this case to federal court on August 30, 2013, claiming that this Court has diversity jurisdiction over this matter. Doc. 1, Notice of Removal 2. Esteban moved to remand on September 17, 2013, and she then filed an Amended Motion to Remand on October 16, 2013.

II.

LEGAL STANDARD

Because the jurisdiction of the federal courts is limited, a federal court must presume that a suit falls outside its jurisdiction. See Howery v. Allstate Ins. Co., 243 F.3d 912, 916 (5th Cir.2001). The party invoking federal jurisdiction has the burden of establishing it. Id. In the removal context, this is the removing party. De Aguilar v. Boeing Co., 47 F.3d 1404, 1408 (5th Cir.1995). The removal statute must be strictly construed in favor of remand, and all doubts and ambiguities must be resolved against federal jurisdiction. See Acuna v. Brown & Root, Inc., 200 F.3d 335, 339 (5th Cir.2000).

Defendants may remove an action filed in state court to federal court if the parties are of completely diverse citizenship and the amount in controversy exceeds $75,000. 28 U.S.C. §§ 1332,1441(a). Here, because Galvan is a citizen of Texas, 28 U.S.C. § 1441(b) prevents Defendants from removing the case unless Galvan has been improperly joined. Caterpillar, Inc. v. Lewis, 519 U.S. 61, 68, 117 S.Ct. 467, 136 L.Ed.2d 437 (1996). Consequently, Defendants must show that Esteban improperly joined Galvan in order to establish federal subject matter jurisdiction. See McKee v. Kansas City S. Ry. Co., 358 F.3d 329, 333-34 (5th Cir.2004).

There are two ways a defendant may demonstrate improper joinder: (1) by showing actual fraud in the pleading of jurisdictional facts, or (2) by proving that the plaintiff will be unable to establish a [727]*727cause of action against the non-diverse defendant under the applicable law. Travis v. Irby, 326 F.3d 644, 647 (5th Cir.2003). Under this second method, defendants must establish that there is no reasonable basis to predict that a plaintiff will be able to recover against the disputed defendants under applicable Texas law. See Smallwood v. Illinois Cent., 385 F.3d 568, 573 (5th Cir.2004). In other words, a defendant must show that “there is no possibility of recovery by the plaintiff against an in-state defendant.” Id. In order to predict whether a plaintiff has a reasonable basis of recovery under state law, a Court may either (1) conduct a Rule 12(b)(6)-type analysis to determine whether the allegations of the plaintiffs complaint state a claim under state law against the in-state defendant, or (2) pierce the pleadings and conduct a summary inquiry to identify the presence of discrete and undisputed facts that would preclude plaintiffs recovery against the in-state defendant. Id. at 573-74. A court must view all factual allegations in the light most favorable to the plaintiff, and any contested issues of fact or ambiguities of state law must be resolved in the plaintiffs favor. Travis, 326 F.3d at 649. Thus, Defendants assume a heavy burden in establishing improper joinder. Id.

111.

ANALYSIS

The parties’ main point of contention is whether Defendant Galvan was properly joined in this action. Defendants maintain that Esteban cannot assert a claim against Galvan as a matter of Texas law because he is an independent adjuster hired by State Farm, and thus owes Esteban no duty under the law.

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23 F. Supp. 3d 723, 2014 U.S. Dist. LEXIS 70220, 2014 WL 2134598, Counsel Stack Legal Research, https://law.counselstack.com/opinion/esteban-v-state-farm-lloyds-txnd-2014.