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Johnson v. Allstate Vehicle and Property Insurance Co.

United States District Court, S.D. Texas, Houston Division

July 13, 2017

Howard Johnson II, Plaintiff,
v.
Allstate Vehicle and Property Insurance Company, James Burt, and Wesley Arnold Defendants.

          MEMORANDUM OPINION AND ORDER

          Gray H. Miller, United States District Judge

         Pending before the court is plaintiff Howard Johnson II's motion to remand. Dkt. 5. Having considered the motion, response, complaint, and the applicable law, the court is of the opinion that the motion should be DENIED.

         I. Background

         This is an insurance dispute between Johnson and defendants Allstate Vehicle and Property Insurance Company (“Allstate”), James Burt, and Wesley Arnold (collectively, Defendants). In 2015, Johnson purchased an Allstate House & Home Policy (the “Policy”), insuring his property at 7691 Ameswood Road, Houston, Texas 77095 (the “Property”). Dkt. 1-1 at 9. Johnson purchased the Policy from Arnold, who is an insurance agent for Allstate. Id. Johnson alleges that prior to purchasing the Policy, Arnold represented to him that the Policy included hail and windstorm coverage. Id. Allstate responds that the Policy plainly covers windstorm and hail damage unless the damage is to the Property's interior that is not the result of a storm-created opening. Dkt. 5-4 at 24.

         The Policy states:

SECTION 1 - LOSSES WE COVER UNDER COVERAGES A, B AND C:
We will cover sudden and accidental direct physical loss to the property described in Dwelling Protection-Coverage A, Other Structures Protection-Coverage B or Personal Property-Coverage C caused by the following, except as limited or excluded in this policy:
2. Windstorm or hail.
We do not cover:
a) Loss to covered property inside a building structure, caused by rain, snow, sleet, sand or dust unless the wind or hail first damages the roof or walls and the wind forces rain, snow, sleet, sand or dust through the damaged roof or wall.

Dkt. 5 at 5, Ex. D.

         On or about April 17, 2016, the Property sustained damage from a storm.[1] Dkt 1-1 at 9. Johnson submitted a claim to Allstate against the Policy for damage to the Property. Id. at 10. Allstate then assigned or hired Burt to adjust the claim. Id. On or about September 16, 2016, Burt inspected Johnson's Property, and found $190.24 in covered damage.[2] Id. at 10. Johnson claims that Burt's assessment undervalued the amount of damage to the property and that Burt misrepresented the cause of damage to the Property. Id. Johnson claims that the damage to the Property is estimated at $32, 551.73. Id.

         On March 14, 2017, Johnson filed suit against Defendants in the 133rd Judicial District Court of Harris County, Texas. Id. at 1. Johnson asserts causes of action (1) against Arnold for violations of the Texas Deceptive Trade Practices Act (“DTPA”), the Texas Insurance Code, and common law fraud; (2) against Allstate for breach of contract, breach of the duty of good faith and fair dealing, fraud, and violations of the DTPA and Texas Insurance Code; and (3) against Burt for fraud, negligence, gross negligence, and violations of the DTPA and the Texas Insurance Code. Id. at 13-23 (citing Tex. Bus. & Com. Code Ann. § 17.41-63, § 17.50 (West 2017), Tex. Ins. Code Ann. § 541- 42 (West 2017); Tex. Civ. P. & Rem. Code § 41.001(11)(A)-(B) (West 2017)).

         On April 18, 2017, Allstate and Arnold removed the case to federal court on the basis of diversity jurisdiction. Id. at 1. On May 1, 2017, Johnson filed a motion to remand. Dkt. 5. On May 19, 2017, Defendants responded. Dkt. 10.

         II. Legal Standards

         A. Removal

         A defendant may remove an action to federal court in instances where the court would have original jurisdiction over the case. 28 U.S.C. § 1441 (2012). Subject matter jurisdiction based on diversity requires that (1) complete diversity exists among the parties, and (2) the amount in controversy exceeds $75, 000. 28 U.S.C. § 1332. A case may be removed despite the presence of a non-diverse defendant if that defendant has been improperly joined, i.e., without a legal basis to do so. Hornbuckle v. State Farm Lloyds, 385 F.3d 538, 542 (5th Cir. 2004). As the removing party, the defendant bears the “heavy burden” of demonstrating improper joinder. Travis v. Irby, 326 F.3d 644, 649 (5th Cir. 2003). To meet this burden, the party seeking removal must demonstrate that “there is no reasonable basis for the district court to predict that the plaintiff might be able to recover against the in-state defendant.” McDonal v. Abbott Labs., 408 F.3d 177, 183 (5th Cir. 2005) (citations omitted). The statutory right to removal is strictly construed because ‚Äúremoval jurisdiction raises ...


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