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Massey v. Allstate Vehicle and Property Insurance Co.

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

June 18, 2018

Adam F. Massey, et al., Plaintiffs,
v.
Allstate Vehicle and Property Insurance Company, Defendant.

          MEMORANDUM OPINION AND ORDER OF REMAND

          GRAY H. MILLER UNITED STATES DISTRICT JUDGE

         Pending before the court is a memorandum and recommendation (“M&R”) filed by Magistrate Judge Nancy Johnson. Dkt. 16. The Magistrate Judge considered plaintiffs Adam Massey and Stephanie Massey's amended motion for remand (Dkt. 12). Id. Defendant Allstate Vehicle and Property Insurance Company (“Allstate”) timely objected to the M&R. Dkt. 17. The Masseys did not object. Having considered the M&R, motion, Allstate's objections, and other relevant materials in the record, the court is of the opinion that Allstate's objections should be OVERRULED and that the M&R should be ADOPTED IN FULL.

         I. BACKGROUND

         In this insurance case, the Masseys' home suffered storm damage during Hurricane Harvey. Dkt. 1-3. On December 15, 2017, the Masseys sued Allstate and four insurance adjusters[1] in the 333rd Judicial District Court of Harris County, Texas, for: (1) breach of contract; (2) breach of duty of good faith and fair dealing; (3) fraud; (4) conspiracy; (5) negligent hiring, training, supervision, and retention; (6) violations of the Texas Insurance Code; and (7) violations of the Texas Deceptive Trade Practices Act. Id.

         Allstate received service of the petition on December 26, 2017, and filed its answer on January 19, 2018. Dkt. 1. On March 20, Allstate filed an election of legal responsibility (“Election”) under Texas Insurance Code § 542A.006 for the adjusters. Dkt. 1-8. Under § 542A.006, when an insurer is a party to an action, it “may elect to accept whatever liability an agent might have to the claimant for the agent's acts or omissions related to the claim by providing written notice to the claimant.” Tex. Ins. Code Ann. § 542A.006. If this election is made after a lawsuit has been filed, then “the court shall dismiss that action with prejudice.” Id. In relevant part, an “agent” is defined to include an “adjuster who performs any act on behalf of an insurer.” Id. § 542A.001(1).

         On April 2, the Masseys filed an amended petition acknowledging that Allstate filed the Election. Dkt. 1-12. That same day, the state court dismissed the four adjusters pursuant to § 542A.006. Dkt. 1-10. Then, on April 11, Allstate removed the case. Dkt. 1. The Masseys now move for remand. Dkts. 8, 12. It is undisputed that without the adjusters, complete diversity exists. Dkts. 1, 17, 18. The only inquiry is whether removal was proper.

         In the M&R, Judge Johnson finds that the voluntary-involuntary rule applies to this case and makes the case not removable. Dkt. 16 at 10. Further, she finds that Allstate did not timely file its notice of removal. Id. Accordingly, she recommends granting the Masseys' motion for remand. Id. Allstate objects to that recommendation. Dkt. 17.

         II. LEGAL STANDARD

         A. Magistrate Judge

         For dispositive matters, the court “determine[s] de novo any part of the magistrate judge's disposition that has been properly objected to.” Fed.R.Civ.P. 72(b)(3). “The district judge may accept, reject, or modify the recommended disposition; receive further evidence; or return the matter to the magistrate judge with instructions.” Id. “When no timely objection is filed, the court need only satisfy itself that there is no clear error on the face of the record in order to accept the recommendation.” Fed.R.Civ.P. 72(b), Advisory Comm. Note (1983). For non-dispositive matters, the court may set aside the magistrate judge's order only to the extent that it is “clearly erroneous or contrary to law.” Fed.R.Civ.P. 72(a).

         B. Motion for Remand

         A party may remove to federal court “any civil action brought in a State court of which the district courts of the United States have original jurisdiction.” 28 U.S.C. § 1441. The party seeking removal bears the burden of establishing federal jurisdiction. Willy v. Coastal Corp., 855 F.2d 1160, 1164 (5th Cir. 1988). This statutory right to removal is strictly construed because “removal jurisdiction raises significant federalism concerns.” Id. (citations omitted). Therefore, “any doubt about the propriety of removal must be resolved in favor of remand.” Gasch v. Hartford Accident & Indem. Co., 491 F.3d 278, 281-82 (5th Cir. 2007).

         III. OBJECTIONS

         Allstate objects that: (1) the voluntary-involuntary rule does not apply; (2) its removal was timely; and (3) the Masseys' first amended petition created independent grounds for removal based on improper ...


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