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Ewell v. Centauri Specialty Insurance Co.

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

June 17, 2019

ROBERT EWELL, Plaintiff,



         This insurance case is before the Court on the Motion to Dismiss [Doc. # 5] filed by Defendant Steven Wiley. Plaintiff Robert Ewell did not file a response to the Motion to Dismiss. Instead, Plaintiff filed a Motion to Abstain and Remand (“Motion to Remand”) [Doc. # 10], to which Defendant Centauri Specialty Insurance Company (“Centauri”) filed an Opposition [Doc. # 11]. Plaintiff failed to file a reply in support of his Motion to Remand, and did not request an extension of the reply deadline. Based on the Court's review of the record and applicable legal authorities, the Court grants Wiley's Motion to Dismiss and denies Plaintiff's' Motion to Remand.

         I. BACKGROUND

         Plaintiff owns property in Fort Bend County, Texas. The property was insured under a homeowner's policy issued by Centauri. Plaintiff filed a claim with Centauri for damage to the property allegedly caused by a severe storm on August 25, 2017. Defendant Wiley was assigned as the adjuster for Plaintiff's claim. Centauri failed to pay the full amount of Plaintiff's insurance claim.

         On February 11, 2019, Centauri gave Plaintiff written notice of its election pursuant to Chapter 542A of the Texas Insurance Code to assume any liability Wiley might have to Plaintiff. See Letter, Exh. B to Motion to Dismiss. Plaintiff filed this lawsuit on March 15, 2019, naming both Wiley and Centauri as Defendants. Plaintiff served Centauri on March 20, 2019, and Centauri filed a timely Notice of Removal on April 18, 2019.

         Wiley filed his Motion to Dismiss, and Plaintiff filed a Motion to Remand. Both motions are now ripe for decision.


         Wiley argues that the Texas Insurance Code requires dismissal of Plaintiff's claims against him. Under the Texas Insurance Code, an insurer 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 § 542A.006(a). Where, as here, an insurer makes such an election before the plaintiff files suit, “no cause of action exists against the agent related to the claimant's claim, and, if the claimant files an action against the agent, the court shall dismiss that action with prejudice.” Tex. Ins. Code § 542A.006(b) (emphasis added).

         It is uncontested that Centauri made the Chapter 542A election to accept any liability Wiley may have to Plaintiff. Therefore, pursuant to § 542A.006(b), Wiley's Motion to Dismiss is granted.


         Any “civil action brought in a State court of which the district courts . . . have original jurisdiction, may be removed by the defendant . . ..” 28 U.S.C. § 1441(a). Federal district courts have original jurisdiction over lawsuits between citizens of different states where the matter in controversy exceeds $75, 000.00, exclusive of interest and costs. See 28 U.S.C. § 1332(a)(1).

         A lawsuit involving a non-diverse defendant may be removed if the non-diverse defendant was improperly joined. See Hornbuckle v. State Farm Lloyds, 385 F.3d 538, 542 (5th Cir. 2004). A non-diverse defendant is improperly joined if “there is no reasonable basis for the district court to predict that the plaintiff might be able to recover” against the non-diverse defendant in state court. Cumpian v. Alcoa World Alumina, L.L.C., 910 F.3d 216, 219 (5th Cir. 2018) (quoting Smallwood v. Ill. Cent. R.R. Co., 385 F.3d 568, 573 (5th Cir. 2004) (en banc)).

         In this case, Centauri made an election under Chapter 542A of the Texas Insurance Code before Plaintiff filed this lawsuit and, therefore, “no cause of action exists against [Wiley] related to the claimant's claim . . ..” Tex. Ins. Code § 542A.006(b). Because there is no reasonable basis to predict that Plaintiff might be able to recover against Wiley in state court, he was improperly joined as a defendant in this suit.[1] The remaining parties are completely diverse and, therefore, the Court has subject matter jurisdiction and removal was proper.

         Plaintiff argues that Centauri's Chapter 542A election was not a voluntary act of the Plaintiff and, therefore, “the voluntary-involuntary rule makes this case not removable.” See Motion to Remand, p. 5. Plaintiff relies on Massey v. Allstate Vehicle & Prop. Ins. Co., 2018 WL 3017431, *2 (S.D. Tex. June 18, 2018) (Miller, J.), to support his argument. In Massey, the district court noted that the voluntary-involuntary rule provides that “an action nonremovable when commenced may become removable thereafter only by the voluntary act of the plaintiff.” Id. (citing Crockett v. R.J. Reynolds Tobacco Co., 436 F.3d 529, 532 (5th Cir. 2006) (quoting Weems v. Louis Dreyfus Corp., 380 F.2d 545, 547 (5th Cir. 1967)). There is an exception to the voluntary-involuntary rule, however, “where a claim against a nondiverse or in-state defendant is dismissed on account of fraudulent joinder.” SeeMassey, 2018 WL 3017431 at *2; see also Vyas v. Atain Specialty Ins. Co., 2019 WL 2119733, *4 (S.D. Tex. May 15, 2019) (Rosenthal, J.); Greatland Inv., Inc. v. Mt. Hawley Ins. Co., 2019 WL 2120854, *2 (S.D. Tex. May 15, 2019) (Miller, J.). Here, Centauri ...

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