United States District Court, N.D. Texas, Dallas Division
FINDINGS, CONCLUSIONS, AND RECOMMENDATION OF THE
UNITED STATES MAGISTRATE JUDGE
L. HORAN UNITED STATES MAGISTRATE JUDGE.
case has been referred to the undersigned United States
magistrate judge for pretrial management under 28 U.S.C.
§ 636(b) and a standing order of reference from United
States District Judge Ed Kinkeade. See Dkt. No. 9.
Allstate Insurance Company (“Allstate”) has filed
an Election of Legal Responsibility Pursuant to Texas
Insurance Code § 542A.006');">542A.006. See Dkt. No. 6.
Athena Trentin and Robert Dye have filed a motion to remand,
see Dkt. No. 7, and Allstate has filed a response,
see Dkt. No. 10. Plaintiffs did not file a reply,
and the time to do so has passed.
following reasons, the undersigned recommends that the motion
to remand should be granted.
April 2, 2018, Plaintiffs purchased an insurance policy from
Allstate. The policy was sold by Allstate agents Grant
Galliford and Edith Aracely Cordero. According to Plaintiffs,
Galliford and Cordero represented that their boathouse would
be covered under the policy without reservation. See
Dkt. No. 1-1 at 7.
boathouse was damaged on July 11, 2018 and Plaintiffs
submitted a claim on July 12, 2018. Plaintiffs allege the
boathouse was damaged by a windstorm and hail. On August 6,
2018, Allstate denied the claim because its investigation
determined that the damage was the result of severe corrosion
of carbon steel support columns caused by age and constant
exposure to water and oxygen for many years. Allstate's
stated reason for denying the claim was that corrosion was
not a covered peril under the policy. See id.; Dkt.
No. 8-1 at 1.
January 17, 2019 Plaintiffs filed their Original Petition in
the 14th-A Judicial District Court of Dallas County, Texas,
styled Athena Trentin and Robert Dye v. Allstate Vehicle
and Property Insurance Company, Grant Galliford and Edith
Aracely Cordero, Cause No. DC-00899 (the “State
Court Action”). Plaintiffs assert claims against all
three defendants for violations of the Texas Insurance Code
and also assert claims against Allstate for breach of
contract and violation of the Prompt Payment of Claims Act.
See Dkt. No. 1-1.
removed the case to federal court based solely on diversity
jurisdiction under 28 U.S.C. § 1332(a). See
Dkt. No. 1. They contend that complete diversity exists
because Plaintiffs are citizens of Texas, Allstate is a
citizen of Illinois and that the Texas citizenship of
Galliford and Cordero should be disregarded for purposes of
diversity because they have been improperly joined. See
Id. at 2-4.
removal, Allstate filed its Election of Legal Responsibility
Pursuant to Texas Insurance Code § 542A.006');">542A.006 (the
“Election”) in which Allstate elects to accept
legal responsibility for whatever liability its agents
Galliford and Cordero might have to Plaintiffs under the
insurance claim and seeks Galliford's and Cordero's
dismissal with prejudice. See Dkt. No. 6; Tex. Ins.
Code § 542A.006');">542A.006.
then filed their Motion to Remand. See Dkt. No. 7.
Plaintiffs contend that the case should be remanded to State
court because the parties are not diverse, that their joinder
of non-diverse Defendants Galliford and Cordero was proper,
and remand is required under the voluntary-involuntary rule.
They also argue that Allstate's election to accept legal
responsibility for the non-diverse Defendants does not
preclude removal. See id.
filed a response. See Dkt. No. 10. Allstate argues
that removal is proper because Galliford and Cordero were
improperly joined to defeat diversity jurisdiction and that
Plaintiffs fail to state a claim against Galliford and
Cordero. See id.
undersigned now concludes that the motion to remand should be
granted and that the Court does not have jurisdiction to
dismiss Galliford and Cordero under the Section 542A.006');">542A.006
Federal Jurisdiction and Removal
federal court's jurisdiction is limited, and federal
courts generally may hear a case of this nature only if it
involves a question of federal law or where diversity of
citizenship exists ...