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SO Apartments, LLC v. Everest Indemnity Insurance Co.

United States District Court, W.D. Texas, San Antonio Division

November 30, 2017

SO APARTMENTS, LLC; TRIFS COVE, LLC; PP APARTMENTS LLC; GARDINA COURT APTS, LLC; TV APTS, LLC; TRIF TRADEWIND, LLC; AND TRIFF GARDINA, LLC, Plaintiffs,
v.
EVEREST INDEMNITY INSURANCE COMPANY, MICHAEL HARGRAVE, Defendants.

          ORDER

          XAVIER RODRIGUEZ, UNITED STATES DISTRICT JUDGE

         On this date, the Court considered the status of the above-captioned case. After reviewing the parties' briefing and the applicable law, the Court hereby GRANTS Plaintiffs' Motion to Remand to State Court. Docket no. 2.

         BACKGROUND

         Plaintiffs filed their Original Petition in the 285th Judicial District Court of Bexar County, Texas on August 22, 2017. Docket no. 1-1. Plaintiffs bring claims related to an alleged insurance claim following a storm. Id.

         Plaintiffs, citizens of Texas, allege that on April 19, 2016, a hail storm damaged their insured properties located at 1318 Gardina St., San Antonio, Texas 78201 and 423 Vance Jackson, San Antonio, Texas 78201 (“the Properties”). Id. at 11. Plaintiffs are the owners of insurance policies for these properties, issued by Defendant Everest. Id.

         Plaintiffs allege they sustained covered losses when a wind and hailstorm damaged the Properties, and Plaintiffs reported such to Everest pursuant to the policy. Id. at 12. Everest hired Defendant Michael Hargrave to address the damages, but Hargrave allegedly failed to address all of the damages. Id. After the initial inspection, Hargrave and Everest allegedly have done little to advance Plaintiffs' claims and ignored Plaintiffs' pleas for help. Id. Everest has allegedly failed to accept, deny, or pay the claim. Id. Plaintiffs allege that Hargrave “conducted an outcome-oriented investigation and under-scoped Plaintiffs' damages.” Id.

         Plaintiffs allege that Everest wrongfully failed to accept, deny, or pay their claim timely and have effectively denied the claim for full repairs to the Properties, despite the policy providing coverage for such losses. Id. Plaintiffs allege Everest failed to fully pay Plaintiffs' claim and engaged its agents to misrepresent policy provisions and coverage. Id.

         Plaintiffs bring claims against Everest for breach of contract, breach of the duty of good faith and fair dealing, civil conspiracy, and noncompliance with the Texas Insurance Code. Id. at 13-19. Plaintiffs also bring claims against Hargrave for civil conspiracy and noncompliance with the Texas Insurance Code. Id. at 16-19.

         On September 29, 2017, Everest removed the case to this Court, alleging diversity of citizenship between the proper parties. Docket no. 1. Given that Plaintiffs and Hargrave are all citizens of Texas, Everest argues that Hargrave is improperly joined. Id. On October 27, 2017, Plaintiffs filed their Motion to Remand now pending before the Court. Docket no. 2.

         ANALYSIS

         I. Legal Standard

         “[A]ny civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or defendants, to the district court of the United States for the district and division embracing the place where such action is pending.” 28 U.S.C. § 1441(a). On a motion to remand, the court must consider whether removal was proper. In order for removal to be proper, a district court must have original jurisdiction over the removed action. See id.

         Federal district courts have original jurisdiction over civil actions if the parties are diverse and the amount in controversy exceeds $75, 000. 28 U.S.C. § 1332(a). There is no dispute regarding the amount in controversy, which is alleged to be in excess of $75, 000. Docket no. 1. Further, there are no disputes regarding the states of citizenship of any of the parties.

         A defendant may remove a case with a non-diverse defendant to a federal forum if the non-diverse defendant is improperly joined. Smallwood v. Illinois Cent. R. Co., 385 F.3d 568, 573 (5th Cir. 2004). There are two ways to establish improper joinder: “(1) the plaintiff has stated a claim against a diverse defendant that he fraudulently alleges is non[-]diverse, or (2) the plaintiff has not stated a claim against a defendant that he properly alleges is non[-]diverse.” Int'l Energy Ventures Mgmt., L.L.C. v. United Energy Grp., Ltd., 818 F.3d 193, 199 (5th Cir. 2016) (citing Smallwood, 385 F.3d at 573) (emphasis in original). ...


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