United States District Court, N.D. Texas, Dallas Division
ARLINGTON HEIGHTS MEMORIAL POST NO. 8234 VETERANS OF FOREIGN WARS OF THE UNITED STATES, FORT WORTH, TEXAS, Plaintiff,
COVINGTON SPECIALTY INSURANCE COMPANY, ENGLE MARTIN & ASSOCIATES, and EDWARD MARTIN SEWELL, JR., Defendants.
MEMORANDUM OPINION AND ORDER
J. BOYLE UNITED STATES DISTRICT JUDGE
the Court is Plaintiff's Motion to Remand. Doc. 9. For
the reasons that follow, Plaintiff's Motion is GRANTED .
initially sued Defendants Covington Specialty Insurance
Company, Engle Martin & Associates, and insurance
adjuster Edward Martin Sewell, Jr. in Texas state court for
violations of the Texas Insurance Code, violations of the
Texas Deceptive Trade Practices Act, breach of contract, and
breach of the duty of good faith and fair dealing. Doc. 10,
App. in Supp. of Pl.'s Mot. to Remand, Pl.'s Orig.
Pet. 6-10 [hereinafter Pl.'s Orig. Pet.].
is a nonprofit organization that owns a piece of property,
including a structure on that property, in Fort Worth, Texas
(the Property). Doc. 10, Pl.'s Orig. Pet. 1, 3. Plaintiff
insured the Property with a commercial property insurance
policy (the Policy) issued by Covington. Id. at 3.
The Policy allegedly provided coverage for damages to the
Property caused by wind and hail. Id. at 3-4.
April 26, 2016, a wind and hail storm damaged the Property.
Id. at 4. Plaintiff asserts that the damage included
harm to the roof, exterior, and interior of the Property.
Id. After the storm, Plaintiff submitted a claim to
Covington. Id. Covington assigned Plaintiff's
claim to Engle Martin & Associates, and Engle Martin
assigned the claim to its employee-adjustor Sewell.
Id. Plaintiff alleges that Engle Martin and Sewell
failed to perform a thorough investigation of the claim.
Id. Specifically, Plaintiff alleges that Sewell: (1)
“did not prepare any estimates or scopes of damages to
the Property or failed to provide those to the
insured”; (2) “failed to hire any qualified
experts to appropriately assess the damage”; (3)
“delayed the claims process and failed to communicate
with the insured”; and (4) “misrepresented the
Policy's coverage.” Id. These
inadequacies, Plaintiff alleges, resulted in Defendants
wrongfully underpaying and denying its claims in July 2016.
Id. at 5. Several months later, Plaintiff filed suit
in state court. Doc. 1, Notice of Removal ¶ 1.
filed its Original Petition in the 116th Judicial District
Court of Dallas County, Texas in October 2016. Doc. 1, Notice
of Removal ¶ 1. Defendants then removed the action to
this Court on diversity grounds in November 2016. Doc. 1,
Notice of Removal ¶ 3. Defendants argue that the Court
has subject matter jurisdiction because Sewell, a Texas
resident, was fraudulently joined as a defendant to defeat
diversity jurisdiction. Id. ¶¶ 3-8.
Plaintiff moved to remand the case, contending that Sewell is
a proper, non-diverse defendant. Doc. 9, Pl.'s Mot. to
Remand ¶¶ 1-2. Defendants responded (Doc. 18), but
Plaintiff did not reply. The Motion is ripe for the
courts are courts of limited jurisdiction. Howery v.
Allstate Ins. Co., 243 F.3d 912, 916 (5th Cir. 2001).
They possess only the power authorized by the Constitution
and statute, which is not to be expanded by judicial decree.
Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375,
377 (1994) (citations omitted); see also McKee v. Kansas
City S. Ry. Co., 358 F.3d 329, 337 (5th Cir. 2004).
District courts “must presume that a suit lies outside
this limited jurisdiction, and the burden of establishing
federal jurisdiction rests on the party seeking the federal
forum.” Howery, 243 F.3d at 916.