Ward et al v. USF&G Specialty Insurance Company et al, No. 4:2010cv00799 - Document 22 (S.D. Tex. 2010)
Court Description: MEMORANDUM AND OPINION DENYING 11 MOTION for Leave to File First Amended Complaint.(Signed by Judge Sim Lake) Parties notified.(jegonzalez, )
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IN THE UNITED STATES DISTR ICT COURT FOR THE SOUTHERN DISTRICT OF TEXA S HOUSTON DIVISION DANIEL WARD and SHAREE WARD, Plaintiffs, CIVJL ACTTON NO . H-10-0799 USF&G SPECIALTY INSURANCE COMPANY n/k/a GEOVERA SPECIALTY INSURANCE COM PANY, Defendant . MEMORANDUM OPIN ION AND ORDER Sharee Daniel Ward bring this action against USF&G Specialty Insurance Company n/k/a Geovera Specialty Insurance Company C'Geovera''l alleging that Geovera wrongfully managed an insurance claim Wards submitted damages their home . Pending before the court is Plaintiffs' Motion for Leave First Amended Complaint (Docket Entry No. explained below, 1. File For the reasons court will deny the Wards' m otion . Factual and Procedural Background This action concerns Geovera's handling of the homeowners' Ward et al v. USF&G Specialty Insurance Company et al Doc. 22 insurance claim Wards submitted damages their home sustained during Hurricane Ike in mid-september of 2008 . A t issue is whether the plaintiffs should be granted leave file an amended complaint, which would add a Texas insurance adjuster as defendant Dockets.Justia.com this removed action . Daniel and Sharee Ward are individuals residing Harris County , Texasx Geovera California insurance company with its principal place of business in California x County, Texas .3 The insured property at issue located in Harris The proposed defendant , Joel Wilson, a Texas resident .4 A. Plaintiffs' In surance Claim Daniel and Sharee Ward purchased a Texas Homeowners' Insurance Policy (''the Policy/') from Geovera (then known as ''USF&G Specialty Insurance Company''), which insured the Wards' home from 2008, July July 3O, 2009 .5 The parties do not dispute that the Policy covered the Wards' home at the time Hurricane Ike struck Harris County, Texas, on September and Septemb er 2008.6 The plaintiffs allege that they immediately subm itted an insurance claim defendant Ike, including damages the roof, damages caused by Hurricane porch, lplaintiffs' Original Petition , attachment Notice of Removal, Docket Entry No . 1, % 2 . zDefendant's Notice Removal , Docket Entry No . 3plaintiffs' Original Petition , attachment Notice of Removal, Docket Entry No . 1, % 6 . siding , Defendant's % Defendant's 4plaintiffs' First Amended Complaint , Exhibit A to Plaintiffs' Motion for Leave to File First Amended Comp laint / Subject to Plaintiffs' Motion Remand (nplaintiffs ' Motion''), Docket Entry No . l1, % 4 . 5Id . % 77 Declaration of Rhonda J . Thompson , Exhibit A Defendant's Notice of Removal, Docket Entry No . 1, % 3. 6=Id portions of the home's interiorx According the Wards' allegations, Geovera has engaged including wrongfully denying parts of the claim , underpaying parts the claim , delaying payment on claim , and making misrepresentations regarding the Wards' coverage under the Policyx B. Plaintiffs' Proposed Joinder Of particular importance the pending matter Joel Wilson's involvement in the Wards' insurance-claim process and the timing activities . extent Wards' knowledge of his identity The Wards filed their original petition the Judicial District Court of Harris County on January 14, 2010 .9 only named defendant was Geovera (then ''USF&G/') 10 and nowhere the petition did plaintiffs mention Joel Wilson insurance company . individual acting on behalf allegations misconduct, any other Certain the Wards' claim that Geovera umisrep resented to Plaintiffs that the damage covered under the Policyz'' refer the Property was individual statements, but the petition only attributes these action s to Geovera .ll Rplaintiff's Original Petition , attachment Notice of Removal, Docket Entry No . 1, % 10. Defendant's 8Id . %% 13-26. gplaintiff's Original Petition , attachment Notice of Removal, Docket Entry No . 1. zozd . g 11yd . ( .j to Defendant's On March 1O, 2010, Geovera removed the action on basis of diversity jurisdiction. Joel Wilson was not mentioned in Geovera's Notice of Removal or supporting documentsxz On May 2010, the Wards Amended Complaint x? Wards argue that the amend so they can RXY'EY ,// Wilson was the individual adjuster investigate the Wards' insurance claim and a damages estimate aW are nloel B . Wilsonr'' a nnewly discovered proper defendantx 4 assigned should grant them leave prepare Geoverax s The Wards assert they uwere not Wilson's involvement with claim until EGeovera) produced portions of its claim file along with its Motion to Compel Appraisalz'lf which Geovera filed on May No . 2010 (Docket Entry The parties do not dispute that Wilson Texas resident and domiciliaryl? and that, if added , the case wou ld be remanded . their proposed amended complaint, the Wards allege fraud, conspiracy H Defendant's Notice commit fraud, Removal, Docket Entry No . 1. H plaintiffs' Motion , Docket Entry No . M plaintiffs' Motion , Docket Entry No . %% 2, lsplaintiffs' Reply to Defendant's Response to Plaintiffs' Motion for Leave to File First Amended Complaint (uplaintiffs' Reply''), Docket Entry No . 17, % 2 . 16Id U plaintiffs' First Amended Complaint , Exhib it A to Plaintiffs' Motion, Docket Entry No . 11, % 4 . - 4- and violations of the Texas Insurance Code . The Wards support these claims by alleging the following facts : 20 . Defendants Geovera and Wilson misrepresented to Plaintiffs that the damage to the Property was not covered under the Policy, even though the damage was caused by a covered occurrence . . Defendants Geovera and Wilson failed to make an attempt to settle Plaintiffs' claim in a fair manner, although they were aware of their liability to Plaintiffs under the Policy . Defendants Geovera and W ilson failed to exp lain to Plaintiffs the reasons for their offer of an inadequate settlement . Defendants Geovera and Wilson failed to affirm or deny coverage of Plaintiffs' claim with in a reasonable time . Defendants Geovera & Wilson refused fully compensate Plaintiffsl) under the terms of the Policy r even though Defendants Geovera and Wilson failed to conduct a reasonable investigation . l8 . Furthermore , the Wards allege recklessly made false representations that Wilson aS nknowingly m aterial facts and/or knowingly concealed a11 or part of material information from Plaintiffs.''lg According Wards , Wilson spent almost hours on their property carrying out his inspection . zo They point specific nrefused instances Wilson's acknowledge despite overwhelming evidence l8Id . %% 20-24 . l9Id 20yd ( j conduct : of the damage claiming Wilson Plaintiffs' roof contrary''; (b ) urefused take p ictures Plaintiffs' roof that this was their advantage because , damage to the roof was report most represented Plaintiffs op inion , pre-existing condition''; and wrote Geovera nriddled with errors'' and nfailed include Plaintiffs' Hurricane Ike damages that had been noted upon inspection .''z' A11 of these alleged facts occurred before the Wards filed their original petition . subm itted a sworn affidavit as an attachment an earlier p leading stated that he ''gdid) adjuster came also averred remember this action , which adjuster's! name, inspect (the Plaintiffs') home .''22 adjuster was an Ward Etheir) house for almost hours'' and that he utold gthem) that he would not take pictures Etheir) roof because it would severely limit Etheir) claim since he believed the damages were p re-existing . 'zz; These personal inter- actions filed also occurred before Wards their original petition . C. Defendant's Response Geovera argues response that the plaintiffs' motion should be denied because the Wards, through the addition of a nondiverse 2lrd HAffidavit of Daniel Ward , Exhibit A to Plaintiffs' Response and Supporting Memorandum to Geovera Specialty Insurance Comp any's Motion to Compel Appraisal Subject to Plaintiffs' Motion to Remand (nplaintiffs' Response'/), Docket Entry No . 1O, p . 2 . 231d party, are merely attempting jurisdiction.zl According to de feat federal diversity Geovera, denial of the Wards' motion proper because the Wards knew about Mr . Wilson's activities and knew should have known M r . Wilson's identity before they originally filed suit .25 support of these contentions, Geovera refers to the Wards' statements their motion before the court acknowledging that Wilson ''personally communicated with Plaintiffs throughout the claim handling process'' and played investigation of their c1aim . 26 nmajor role'' Geovera also cites a letter out- lining the adjustment and settlement Wards' claimr as well aS a Supporting affidavit stating that the letter was sent Wards October 2008 . 27 the The letter Wards was the name ''loel'' appears the pages comprising the Loss Report and the several of Estimate , which are attached to the letter .28 Additionally , Joel's business telephone M Defendants' Response to Plaintiffs' Motion for Leave to File (uDefendants' Response''), Docket Entry First Amended Complaint No . 16, % 5 .1. 25ld . :% 4 .3-4 . 6. 1% 26Id 2l. (quoting Plaintiffs' Motion, Docket Entry No . z7Adjustment and Settlement Letter, Exhibit 2 to Defendants' Response, Docket Entry No . 16; A ffidavit of Jim Bledsoe , Exhibit 1 to Defendants' Response, Docket Entry . No . 16. z8Adjustment and Settlement Letter, Estimate, and Statement of Loss, Exhib it 2 and attachments to Exhib it Response , Docket Entry No . 16 . 2 to Defendants' number and business address are b0th listed on the Estimate Geovera sent the Wards in October of 2008 .29 II . Applicable Law A. Rule 15 Standard a party's motion leave before the deadline set Federal Rule amend a pleading filed the court's scheduling order, Civil Procedure amendment will be allowed . The Wards filed their motion for leave to amend on May 20, August well before the (Docket Entry 2010, deadline set out in the scheduling order (Docket Entry No . Under 15(a), a uparty may amend its p leading once course within matter days after serving pleading is one to which a responsive pleading is required , 21 days after service responsive pleading or 21 days after service whichever a motion under Rule 12(b), Fed. R . Civ . 15(a)(1). earlier .'' al1 other cases, a party may amend its pleading only with the opposing party's written consent or the court's leave.'' Fed. R. l5 (a) (2). The rule provides that 'U tlhe court should freely give leave when justice requires .'' Id = . M Estimate and Statement of Loss, attachments to Exhibit 2 Defendants' Response, Docket Entry No . 16. - 8- B. Amendments Invoking a Hensgens Analy sis The Wards' p roposed amendment, however, faces different standard . An amendment that would add a nnew nondiverse defendant removed case'' should be scrutinized nmore closely than ordinary amendment .'' Hensqens v . Deere & Co w F . 2d 1179, 1182 1987). l447(e) provides that 'U ijf after removal the plaintiff seeks join additional defendants whose joinder would destroy subject matter jurisdiction, the court may deny joinder, or permit joinder and remand the action court .'' Increased scrutiny appropriate because nthe court's decision will determine the continuance of Hensqens, the State jurisdiction.'' See F .2d at 1182 .30 The court is confronted with competing interests . On one hand is the possibility of parallel proceedings at the state and federal levels, which could lead to inconsistent results and the waste judicial resources. defendant's interest =Id other hand retaining federal forum . confronted with these competing interests, discretion deciding whether the diverse Id . When nshould use allow th at party to be added '' MAlthough Hensqens was decided prior to the enactment of 5 1447 (e), the Fifth Circuit has suggested the Hensqens analysis still applies . See Templeton v . Nedllovd Lines, 901 F .2d 1273, 1275-76 (5th Cir . 1990) (per curiam) (discussing the legislative history behind 5 l447 (e)). - 9- The Fifth Circuit in Hensqens set out a nonexhaustive list of factors should consider interests balance the defendant's maintaining the federal forum interests of not having parallel lawsuits . the competing Id . The list includes: the extent to which the purpose amendment is to defeat federal jurisdiction, whether plaintiff has been dilatory in asking for amendment, whether plaintiff will be significantly injured amendment bearing on the equities. allowed, and Id . If the court p erm its the amendment the nondiverse defendant, court ; other factors then must remand the amendment is allowed , state court maintains jurisdiction. Id. 111 . Analv sis The Wards argue that they were unaware of Wilson 's identity specific 17etition .3l actions time Geovera argues they four filed their the Henscens factors weigh in favor of denying the Ward s' motion for leave that the Wards' primary purpose original amend , and bringing this motion defeat diversity jurisdiction.3z Each of the four factors will be considered turn . M plaintiffs' Motion , Docket Entry No . % 32Defendant's Sur-Reply to Plaintiffs ' Reply to Defendant's Response to Plaintif fs' Motion for Leave to File First Amended Complaint (''Defendant's Sur-Reply''), Docket Entry No . 21, % 5 .1 . A. Determ ining the Purpose of the Wards' Motion When district courts Fifth Circuit analyze Hensgens factor, nthey consider 'whether the plaintiffs knew should have known the identity of the nondiverse defendant when the Gallecos v . Safeco Ins . Co . of Indw No. H-09-2777, 2009 WL 4730570, (S.D. Dec. 2009) (quoting Tomlinson v. Allstate Indem . Co w No. 0617, 2006 1331541, (E .D . plaintiff's failure prior May A. 2006)). non-diverse defendant removal when such plaintiff knew of an action non-diverse defendant 's identity and activities suggests that the purpose destroy diversity jurisdiction .' ' amendment Sinch , H-1O-1811, WL 3359525 Lowe v. Tex. Aug . 2010) (citing, among others, In re Norplant Contraceptive Prods. Liab. Liticw F. Supp . 432 (E.D. Tex. 1995)). Galleqos a court in this district considered facts similar those present this action . There, the plaintiff sued his insurance company for allegedly mishandling his insurance claim for damages his house sustained during Hurricane Ike . WL 4730570, weighed Galleqos, found the first Henslens factor favor of denying motion , plaintiff knew the existence and identity before filing part because the the original state-court petition . adjuster Id . Although the plaintiff claimed that he had nrecently learned'' who the adjuster was, record showed contrary : adjuster's name and contact information was The three separate letters the plaintiff had received before he filed su it . Id . Similarly, the court in Iriqoven v . State Farm Llovds, C-03-324-H, 2004 WL 398553, the first Hensqens p laintiffs that Company (S.D. factor weighed case b rought 2004), found favor denial . against insurance allegedly mishandling their insurance claim . The court found the plaintiffs nadm ittedly knew , '' at the time that the two proposed defendants had worked on their claim as adjusters their insurance company . Id . at *3-4; see also O 'Connor v . Auto Ins . Co . of Hartford Conn w 846 F. Supp . 40-41 (E.D. 1994) (denying plaintiff's post- insurance agent as the petition showed the plaintiff knew about defendant because agent's role the time the petition was filed) facts th is action dem onstrate that the Wards knew should have known of Wilson's identity and involvement when they filed their original petition affidavit he stated that state court . Daniel Ward's claims adjuster was at his home two hours to conduct an inspection .33 The Wards also state in their motion leave amend that nWilson has firsthand knowledge OAffidavit of Daniel Ward , Exhib it A to Plaintiffs' Response, Docket Entry No . 10, p . 2 . regarding the claim , and personally communicated with Plaintiffs throughout the claim handling process . ''34 Although he Ward stated not remember the adjuster's name, the Wards had more than a year between the inspection and their original petition to acquire enough information include Wilson as defendant . The Wards do not dispute that on October 2008, over a year before they filed their petition , Geovera sent them an enclosed Estimate and Statement Loss . letter with These documents are important to the pending motions because they contain information that would be instrumental identifying Wards' adjuster, including Wilson's first name (uJoel''), a designation that Joel was their claim representative and estimatorr Joel's business address , and Joel's business telephone number .35 The Wards distinguishing attempt their Protective Co ., Apr . strengthen facts from those their argum ent Bramlett v. Med . 3:09-CV-1596-D, 2010 WL 1491422 (N.D. Tex . 2010), where the court vacated a post-removal joinder nondiverse defendant . Id . The court's reasoning Bramlett with regard to the first Hensqens factor hurts , not helps, the Wards' situation . In essence , the cou rt was not persuaded by the plaintiffs' explanation delaying joinder because the facts M plaintiffs' Motion , Docket Entry No . O statement of Loss and Estimate , attachments Defendants' Response, Docket Entry No . l6 . Exhibit 2 proposed defendant were known underlying the claim against plaintiffs be fore they filed or should have been known Here, the Wards' interaction their original petition . Id . with the p roposed defendant and receipt of documents containing the proposed defendant's contact information, both of which occurred prior the original lawsuit, show that the Wards knew have known identity and actions should Wilson before they filed The court therefore concludes that the purpose adding Wilson as defendant is defeat diversity jurisdiction. B. The Wards' Diligence in Filing Leave to Amend When plaintiffs propose an nondiverse amendm ent defendants after removal based on diversity jurisdiction, courts generally scrutinize amount time that passed between the filing of the original petition and the motion and between notice removal m otion amend . See GalleGos, 2009 WL 4730570, was dilatory after exam ining (same). factor, other courts dilatory under thirty the When considering the second Hensqens this district have found the p laintiff was following facts: days (finding the plaintiff removal); Iriqoven, 2004 when the motion to amend was filed approximately two months after almost leave delay since the filing state-court action and the notice 398553, leave to amend after notice original petition and removal, Galleqos, 2009 WL 4730570, at *4; when the motion to amend was filed four months after the original petition and nearly two month s after notice removal, Multi-shot, LLC v . B&T Rentals, Inc ., WL 376373, (S.D. Tex. Jan. H-09-3283, 2010); and when the motion amend was filed four and a half months after the original petition and two and a half months after notice 398553, Herez following (S.D. Tex. Jan. removal, Iriloven , 2004) Wards argue they sought leave to amend uimmediately discovery Plaintiffs' case .''36 specific adjuster associated record demonstrates, however, that plaintiffs moved for leave to amend on May 2O, 2010, which is over four months after the filing of the original petition3? and over two months rise Moreover, the actions giving Wards' claims against Wilson occurred approximately fifteen months before they filed suit , and the Wards had access the information they needed to include Wilson petition . Thus, the court concludes the Wards were dilatory in seeking leave to amend . The Wards' Injury If the Amendment is Not Allowed In considering the third factor, ''courts consider whether already named diverse defendant would be unable to satisfy a future M plaintiffs' Reply , Docket Entry M plaintiffs' Original Petition, attachment Notice of Removal, Docket Entry No . 1. M oefendant's Notice Removal, Docket Entry No . Defendant's judgment.'' Galleqos, 2009 see Irigoyen, 2004 4730570, Courts also analyze uwhether the plaintiff could WL 398553, recover against the proposed nondiverse defendant .'' Galleqos, 2009 WL 4730570, Here, there satisfy indication Geovera would be unable judgment. addition, although some of Wards' claims against W ilson may have merit, they are almost identical their claim s against Geovera . There is no individual claim against Wilson the Wards would be unab le to redress in their claims against Geovera . Although, as directed by Hensqens, the court takes account potential inefficiency proceedings if the Wards choose interest parallel state and federal sue Wilson state court , outweighed by Geovera's interest federal forum , timing maintaining Wards' motion , and Wards' intent in adding Wilson as a defendant post-removal . D. Other Equitable Factors The does significantly impact E. not find any additional factors that ruling on the Wards' motion . Conclusion The court will deny the Wards' motion for leave 5 1447 (e ) because under purpose proposing jurisdiction, amend under factors set out by Hensqens, new defendant Wards' defeat d iversity Wards were dilatory in seeking amendment, and the Wards will not be significantly injured if Wilson is not joined as a defendant . IV . Conclusion and Order reasons explained ab ove, the court eoncludes that the Wards have failed nondiverse defendant Motion No . Leave establish they are entitled action . join new, Accordingly, Plaintiffs' File First Amended Complaint (Docket Entry is DENIED . SIGNED at Houston , Texas, on this 10th day of September, 2010. e SIM LAKE UNITED STATES DISTRICT JUDGE
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