United States District Court, S.D. Texas, Laredo Division
Garcia Marmolejo United States District Judge
Luis Gonzalez moves to remand this insurance-coverage dispute
because the Parties are not completely diverse. Plaintiff and
Defendants Haag Engineering, Sampson Quang Nguyen, and David
L. Teasdale (collectively "Haag Defendants") are
Texas citizens. Defendant State Auto and the Haag Defendants
oppose remand, arguing that the Court should disregard the
Haag Defendants' citizenship because they have been
improperly joined in an effort to defeat diversity
the Court concludes that the Haag Defendants-as engineers-are
not in the business of insurance, Plaintiff has not pleaded
any facts that would lead to a possible recovery against the
Haag Defendants under the Texas Insurance Code. Thus, they
are improperly joined. Plaintiffs Motion to Remand (Dkt. No.
7) is DENIED, and the Haag Defendants are DISMISSED WITHOUT
PREJUDICE from this lawsuit.
March of 2016, a hailstorm bombarded Plaintiffs home in
Laredo, Texas, damaging his roof. (Dkt. No. 1-3 at 3).
Afterwards, Plaintiff submitted a claim to State Auto, its
home-insurance provider, to recover all cost of repair to his
home. (Id. at 4). State Auto then hired Haag
Engineering, an independent engineering firm incorporated in
Texas, to help inspect the roofs damage. (Id.). Haag
sent two of its engineers, Nguyen and Teasdale, to the
property to prepare an engineering report. (Id. at
4). The report concluded that the hailstorm did not cause the
roofs damage. (Id.). State Auto relied upon this
engineering report when it adjusted and allegedly undervalued
Plaintiffs claim. (Id. at 5).
with State Auto's decision, Plaintiff filed this lawsuit
in the 111th judicial district of Webb County. Plaintiffs
original petition alleges that State Auto violated the Texas
Insurance Code, breached its duty of good faith and fair
dealings, and broke its contract with Plaintiff.
(Id. at 10-13). It also alleges that the Haag
Defendants violated the Texas Insurance Code by conducting
unfair settlement practices. (Id. at 8-9).
March 24, 2017, State Auto removed this case based on
diversity jurisdiction, contending that complete diversity
exists and that the amount in controversy exceeds $75,
000.All Defendants urge the Court to disregard
the Haag Defendants' citizenship because they are
improperly joined. They argue that since the Haag Defendants
are not in the business of insurance, there is no possibility
of recovering against them under the Texas Insurance Code. On
April 20, 2017, Plaintiff moved to remand this case. He
asserts that the Haag Defendants are in the business of
insurance (even though they are officially engineers) because
they acted as the de-facto adjusters of his claim by
inspecting his home. Thus, Plaintiff says, he has pleaded a
potential claim under the Texas Insurance Code, thereby
defeating this Court's diversity jurisdiction.
28 U.S.C. § 1441, an action filed in state court may be
removed to federal court when (1) subject matter jurisdiction
exists and (2) the removal procedure is properly followed.
Motions to remand to state court are governed by 28 U.S.C.
§ 1447(c), which states that "[i]f at any time
before final judgment it appears that the district court
lacks subject matter jurisdiction, the case shall be
remanded." The removing party bears the burden of
establishing that federal jurisdiction exists over the
controversy. Winters v. Diamond Shamrock Chem. Co.,
149 F.3d 387, 397 (5th Cir. 1998). This burden requires all
disputed factual issues and any uncertainties under
controlling state law to be resolved in favor of remand.
Guillory v. PPG Indus., Inc., 434 F.3d 303, 308 (5th
limited exceptions, "[a] federal district court has
removal jurisdiction over an action if the district court
could have exercised original jurisdiction over it."
Elam v. Kansas City S. Ry Co., 635 F.3d 796, 803
(5th Cir. 2011) (citing 28 U.S.C. § 1441(a)). Federal
courts have original jurisdiction in cases where the amount
in controversy exceeds $75, 000 and which are between,
inter alia, "citizens of different
States." 28 U.S.C. § 1332(a)(1). The doctrine of
improper joinder, however, "constitutes a narrow
exception to the rule of complete diversity."
McDonal v. Abbott Laboratories, 408 F.3d 177, 183
(5th Cir. 2005).
"plaintiff improperly joins a non-diverse defendant,
then the court may disregard the citizenship of that
defendant, dismiss the non-diverse defendant from the case,
and exercise subject matter jurisdiction over the remaining
diverse defendant." Flagg v. Stryker Corp., 819
F.3d 132, 136 (5th Cir. 2016) (en banc). The removing party
has the heavy burden of proving improper joinder.
McDonal, 408 F.3d at 183.
joinder can be established in two ways: "(1) actual
fraud in the pleading of jurisdictional facts, or (2) the
inability of the plaintiff to establish a cause of action
against the non-diverse party in state court."
Smallwood v. III. Cent. R.R. Co., 385 F.3d 568, 573
(5th Cir. 2004) (en banc). To make the second showing, a
defendant must demonstrate that "there is no reasonable
basis for the district court to predict that the plaintiff
might be able to recover against an in-state defendant."
this analysis, there are two ways to determine whether the
plaintiff could possibly recover against the non-diverse
defendant: (1) conduct a Rule l2(b)(6)-type analysis, looking
to the face of the complaint to assess whether it states a
claim against the non-diverse defendant; or (2) to
"pierce the pleadings" and conduct a
summary-judgment analysis to identify discrete facts that
would preclude recovery against the non-diverse defendant.
Id. at 573-74. The latter method is applicable only
when the plaintiff has "misstated or omitted discrete
facts that would determine the propriety of joinder."
Id. If a court does pierce the pleadings and the
defendant has come forth with some evidence supporting
improper joinder, "the plaintiff must produce at least
some controverting evidence." Michels v. Safeco
Ins., 544 F.App'x 535, 539 (5th Cir. 2013) (per