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Pride Home Center, Inc. v. Wesco Insurance Co.

United States District Court, N.D. Texas

December 27, 2017

PRIDE HOME CENTER, INC. and WITT FLOORING CENTER, LLC, Plaintiffs,
v.
WESCO INSURANCE COMPANY, ANNETTE YVONNE TARQUINIO, and AGNESS INSURANCE AGENCY, INC., Defendants.

          MEMORANDUM OPINION AND ORDER GRANTING MOTION FOR REMAND

          MARY LOU ROBINSON SENIOR UNITED STATES DISTRICT JUDGE

         Before the Court are Plaintiffs' motion, filed September 29, 2017, to remand this case, Defendant Wesco Insurance's response in opposition, and Plaintiffs' reply. For the following reasons, Plaintiffs' motion for a remand is granted.

         Basis of Removal

         In its notice of removal Defendant alleged this case was removable under 28 U.S.C. § 1441 because of a complete diversity of citizenship and the amount-in-controversy exceeded $75, 000. There is no question that the requisite amount in controversy existing in this case. Defendant further alleges that Defendants Tarquinio and Agness Insurance Agency, both in-state citizens, were fraudulently joined in this lawsuit.

         Procedural History

         On October 5, 2016 Plaintiffs filed this civil action in the 251st Judicial District Court in and for Potter County, Texas, naming Wesco Insurance Company, Annette Tarquinio and Agness Insurance Agency as Defendants. Plaintiff alleges that Defendant Wesco Insurance Company has wrongfully delayed and refused to timely pay on a valid commercial roof replacement claim. Plaintiff alleges that Defendant Tarquinio, the insurance adjuster hired to inspect the damages, performed a improper and substandard inspection of both the damaged roof and equipment located thereon, falsely represented that she would recommend Wesco pay for a roof replacement, and has failed to adjust the claim by preparing and delivering to Wesco such a recommendation or any damage report. Finally, Plaintiff alleges that it engaged and instructed the Agness agency to procure a insurance policy that fully insured for a replacement roof and for full coverage for all of the damaged equipment located thereon, but that Agness failed to do so.

         Defendant Wesco timely filed a notice of removal under diversity jurisdiction, alleging improper joinder of both co-defendants. Plaintiff has timely moved for a remand of this case.

         Facts

         In May of 2017 a wind and hail storm caused damages to Plaintiffs' roof and air conditioning equipment located thereupon. Plaintiffs promptly reported the loss to Wesco. Wesco hired Tarquinio to investigate the loss and adjust the claim on its behalf. As of the date of the filing of the remand motion, Plaintiffs state that Tarquinio has failed to properly inspect the property, note all of the covered damages, adjust the claim, file a report with Westco recommending the claim be paid in whole or in part, and has failed to timely provide any estimate of covered damages to the Plaintiffs.

         Removal Standards

         Federal district courts have jurisdiction over civil actions between "citizens of different States" where the amount in controversy exceeds $75, 000. See 28 U.S.C. § 1332(a). Diversity actions are removable "only if none of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought." 28 U.S.C. 1441(b)."Removal statutes are to be construed strictly against removal and for remand." Eastus v. Blue Bell Creameries, L.P., 97 F.3d 100, 106 (5th Cir. 1996).

         Improper Joinder Standards

         The test for improper joinder is whether the removing defendant has demonstrated that there is no possibility of recovery by the Plaintiffs against any in-state defendant. Smallwood v. III. Cent. R.R. Co., 385 F.3d 568, 573 (5th Cir. 2004). The Fifth Circuit reiterated that to prove improper joinder the defendant must show 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." Id. The Fifth Circuit has stated that "the burden of demonstrating fraudulent joinder is a heavy one, " but "the mere hypothetical possibility that such an [viable] action could exist" is insufficient. See Griggs v. State Farm Lloyds, 181 F.3d 694, 701 (5th Cir. 1999). Instead, determining whether the plaintiff has "stated a valid state law cause of action depends upon and is tied to the factual fit between the plaintiffs allegations and the pleaded theory of recovery." Id. In reviewing the facts before the Court and ruling on the issue of improper joinder, the Court is to "resolve all uncertainties in favor of the nonremoving party." Cavallini v. State Farm Mut. Auto Ins. Co., 44 F.3d 256, 259 (5th Cir. 1995).

         Improper ...


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