United States District Court, S.D. Texas, Houston Division
JAMES A. MACARI, et al., Plaintiffs,
LIBERTY MUTUAL INSURANCE COMPANY, et al., Defendants.
MEMORANDUM AND ORDER
F. ATLAS SENIOR JUDGE
insurance case is before the Court on the Motion to Abstain
and Remand (“Motion”) [Doc. # 10] filed by
Plaintiffs James A. and Gail M. Macari, to which Defendant
Liberty Insurance Company (“Liberty”) [Doc. # 14]
filed a Response [Doc. # 14]. Based on the Court's review
of the record and applicable legal authorities, the Court
grants Plaintiffs' Motion.
own property in Harris County, Texas. The property was
insured under a homeowner's policy issued by Liberty.
Plaintiffs filed a claim with Liberty for damage to the
property allegedly caused by a plumbing leak on December 7,
2018. Defendant David James Meaders was assigned as the
adjuster for Plaintiffs' claim. Plaintiffs allege that
Liberty failed to pay any amount in connection with their
filed this lawsuit in Texas state court on August 15, 2019,
naming both Liberty and Meaders as Defendants. Plaintiffs
served Meaders on August 28, 2019, and served Liberty on
August 30, 2019. On September 19, 2019, Liberty gave written
notice of its election pursuant to Chapter 542A of the Texas
Insurance Code to assume any liability Meaders might have to
Plaintiffs. See Election of Legal Responsibility,
Exh. C to Notice of Removal [Doc. # 1]. Liberty filed a
timely Notice of Removal on September 26, 2019.
filed a Motion to Remand, arguing that the Court lacks
subject matter jurisdiction because Plaintiffs and Defendant
Meaders are citizens of Texas. Liberty argues in response
that Meaders was improperly joined and, therefore, his
citizenship should be disregarded for purposes of diversity
jurisdiction. The Motion to Remand has been briefed and is
now ripe for decision.
MOTION TO REMAND
“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).
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)). “[T]he burden on the removing party is to
prove that the joinder of the in-state parties was improper -
that is, to show that sham defendants were added to defeat
jurisdiction.” Smallwood, 385 F.3d at 575.
“Thus, in conducting improper-joinder inquiries, the
focus must remain on whether the nondiverse party was
properly joined when joined.” Yarco Trading Co.,
Inc. v. United Fire & Cas. Co., __ F.Supp.2d __,
2019 WL 3024792, *8 (S.D. Tex. July 11, 2019) (internal
quotations and citation omitted).
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 the election is made after the
lawsuit is filed, “the court shall dismiss the action
against the agent with prejudice.” Tex. Ins. Code
case, Liberty made its § 542A election after the lawsuit
was filed. Therefore, Plaintiffs' claims against Meaders
were not barred by § 542A.006 at the time he was joined
to this suit. Liberty's election, made after the lawsuit
was filed, does not retroactively render Meaders an
improperly joined party. See, e.g., Yarco Trading,
2019 WL 3024792 at *9; Greatland Inv., Inc. v. Mt. Hawley
Ins. Co., 2019 WL 2120854, *2 (S.D. Tex. May 15, 2019)
(stating that if the insurer makes a § 542A election
after the plaintiff has filed suit, the agent-defendant is
not improperly joined).
are residents and citizens of Texas. Meaders is also a
citizen of Texas. Therefore, the parties are not completely
diverse and the Court lacks subject matter jurisdiction
pursuant to 28 U.S.C. § 1332(a).
CONCLUSION AND ORDER
time this lawsuit was filed and Meaders was named a
Defendant, Liberty had not made its election pursuant to
§ 542A.006. Therefore, Meaders was not improperly joined
when the lawsuit was filed. He and Plaintiffs are citizens of
Texas and, as a ...