Opinion
Civil No. SA-99-CA-100-EP.
March 16, 1999.
ORDER FOR REMAND
On this date the Court considered the Plaintiffs' Motion to Remand, filed February 16, 1999, and Defendant State Farm Lloyd's ("State Farm") Response, filed February 23, 1999 in the above-styled and numbered cause. After careful consideration, the Court is of the opinion that the motion should be granted.
This case was originally filed in state court, in the 288th Judicial District Court, Bexar County, Texas. The Defendants removed the instant case to this Court Pursuant to 28 U.S.C. § 1441, asserting diversity jurisdiction under 28 U.S.C. § 1332. State Farm contends that the Insurance Agent Vicki Auth as a citizen of Texas, has been improperly joined because the Plaintiffs cannot establish a valid cause of action against her. The issue before the Court is whether Vicki Auth was fraudulently joined in this case for the purpose of defeating diversity jurisdiction.
The federal removal statute provides as follows:
[A]ny civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending.28 U.S.C. § 1441. The removing party bears the burden of establishing federal jurisdiction. Laughlin v. Prudential Ins. Co., 882 F.2d 187, 190 (5th Cir. 1989); B., Inc. v. Miller Brewing Co., 663 F.2d 545, 548 (5th Cir. 1981). Where there are allegations of fraudulent joinder, the removing party has the burden of proving fraud. Laughlin, 882 F.2d at 190; B., Inc., 663 F.2d at 548.
The test for fraudulent joinder can be met in one of two ways. First, fraudulent joinder may be shown where there is no possibility that the plaintiff will be able to establish a cause of action against the in-state defendant. Laughlin, 882 F.2d at 190; B., Inc., 663 F.2d at 549. Alternatively, there must be an outright fraud in the plaintiff's pleading. Id. In addition, fraudulent joinder must be established by clear and convincing evidence. Parks v. New York Times, 308 F.2d 474, 478 (5th Cir. 1962), cert. denied, 376 U.S. 949 (1964).
If a non-diverse defendant has been fraudulently joined for the purpose of circumventing federal jurisdiction, he or she should be dismissed from the case. Carriere v. Sears, 843 F.2d 98, 102 (5th Cir. 1990). To determine whether remand is appropriate, the court must evaluate all of the factual allegations in the light most favorable to the plaintiff. Laughlin, 882 F.2d at 190; B., Inc., 663 F.2d at 549. Any uncertainties in the controlling substantive law must be resolved in favor of the plaintiff.Laughlin, 882 F.2d at 190; B., Inc., 663 F.24 at 549.
In the instant case, the Plaintiffs' claims are based on Article 21.21 of the Texas Insurance Code, the Texas Deceptive Trade Practices-Consumer Protection Act (DTPA), breach of contract, negligence, breach of the duty of good faith and fair dealing, and negligent misrepresentation. The Plaintiffs are present policy holders of State Farm, and they allege that State Farm insurance agent Vicki Auth made misrepresentations to them regarding their policy.
In this case, the Plaintiffs have established a cause of action against Texas Insurance Agent Vicki Auth under the Texas Insurance Code. In Liberty Mutual Ins. Co. v. Garrison Contractors, Inc., the Texas Supreme Court held that an employee-agent of an insurance company was a person under Article 21.21 of the Insurance Code and accordingly subject to suit in his individual capacity. 966 S.W.2d 482 (Tex. 1998). The court further stated that any insurance company employee-agent acting within the course and scope of employment can be individually liable under the Insurance Code. Id. at 484-486. Therefore, the Plaintiffs have established a cause of action against Vicki Auth under Article 21.21 of the Insurance Code, and this Court will remand this cause to state court. 28 U.S.C. § 1447(c).
Accordingly, it is hereby ORDERED that this cause of action is remanded to the 288th Judicial District Court, Bexar County, Texas.
It is further ORDERED that the District Clerk send a certified copy of this order to the clerk of the state court.
It is FURTHER ORDERED all costs of court are taxed against the party incurring said costs.