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Hightower v. USAA Casualty Insurance Co.

United States District Court, N.D. Oklahoma

April 7, 2017

1 USAA CASUALTY INSURANCE CO., and 2 THOMAS A. FULTON, Independent Appraiser, Defendants.



         Before the Court are defendant Thomas A. Fulton's Motion to Dismiss and Brief in Support (Doc. 9) and defendant USAA Casualty Insurance Company's Partial Motion to Dismiss and Brief in Support (Doc. 10). Plaintiffs have opposed both motions. (Docs. 15, 16).

         1. Background

         Plaintiffs purchased a home insurance policy underwritten by defendant USAA Casualty Insurance Co. (“USAA CIC”). Plaintiffs allege that they promptly submitted a claim under the policy after their home incurred wind and roof damage in October 2015. USAA CIC retained defendant Thomas Fulton to inspect and appraise plaintiffs' home to evaluate the damage. (Doc. 2, Exh. 3 at 18-25).

         Plaintiffs filed this lawsuit in the Tulsa County District Court on April 12, 2016. (Doc. 2, Exh. 2). Plaintiffs' Amended Petition alleges claims of bad faith, breach of contract, and intentional infliction of emotional distress against defendant USAA CIC and a claim of negligence against defendant Fulton, due to USAA CIC's alleged refusal to pay plaintiffs the “proper amount.” (Doc. 2, Exh. 3 at 18-25). Plaintiffs' Amended Petition attaches as an exhibit the affidavit of their expert, Mark Pollack, a licensed insurance adjuster. (Id. at 25). Defendants timely removed the action to this Court on May 16, 2016. (Doc. 2).

         II. Legal Standard

         In considering a Rule 12(b)(6) dismissal motion, a court must determine whether the plaintiff has stated a claim upon which relief may be granted. See Fed. R. Civ. P. 12(b)(6). The Federal Rules of Civil Procedure require “a short and plain statement of the claim to show that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). The complaint must provide “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). The standard does “not require a heightened fact pleading of specifics, but only enough facts to state a claim to relief that is plausible on its face, ” and the factual allegations “must be enough to raise a right to relief above the speculative level.” Id. at 555-56, 570 (citations omitted). The Twombly pleading standard is applicable to all civil actions. See Ashcroft v. Iqbal, 556 U.S. 662, 684 (2009). For the purpose of making the dismissal determination, a court must accept all the well-pleaded factual allegations of the complaint as true, even if doubtful, and must construe the allegations in the light most favorable to the plaintiff. See Twombly, 550 U.S. at 555; Alvarado v. KOB-TV, L.L.C., 493 F.3d 1210, 1215 (10th Cir. 2007).

         III. Discussion

         A. Defendant Thomas A. Fulton's Motion to Dismiss and Brief in Support (Doc. 9)

         Plaintiffs have asserted one negligence claim against defendant Fulton. Plaintiffs' Amended Petition alleges that defendant Fulton was “negligent in that he departed from the professionally expected standards of care when he deliberately falsified his final findings to report that the roof damage to Plaintiffs' home, although clearly caused by the wind, was somehow a result of a pre-existing condition to the home.” (Doc. 2, Exh. 3, at ¶ 36).

         Defendant Fulton's Motion argues that plaintiffs have failed to state a negligence claim against him under Fed.R.Civ.P. 12(b)(6) because Oklahoma law does not recognize claims of negligence against independent insurance adjusters, as set forth in Trinity Baptist Church v. Brotherhood Mutual Insurance Services, LLC, 341 P.3d 75 (Okla. 2014). (Doc. 9 at 3-4). In response, plaintiffs assert that Trinity Baptist does not foreclose their negligence claim because their Amended Petition alleges that defendant Fulton is an insurance appraiser, not an insurance adjuster. (Doc. 17 at 2-3). Plaintiffs further challenge the Court's subject-matter jurisdiction over this case, on the ground that there is no diversity of jurisdiction because a negligence claim may be brought against defendant Fulton.[1] (Id. at 3). In his Reply, defendant Fulton contends that his Motion should be granted because the reasoning set forth in Trinity Baptist applies regardless of his status as an insurance adjuster or an insurance appraiser. (Doc. 17 at 1-2). In the alternative, defendant Fulton argues that plaintiffs' Amended Complaint falsely alleges that he is an “independent appraiser” instead of an “independent adjuster.” (Id. at 4-5).

         The Court concludes that plaintiffs may not assert a negligence claim against defendant Fulton based on the reasoning set forth in Trinity Baptist. There, the Oklahoma Supreme Court adopted the majority view that “an insured cannot maintain a separate tort action for negligence against an independent insurance adjuster hired by the insurer because the independent adjuster owes the insured no duty of care.” Trinity Baptist, 341 P.3d at 83. From a policy standpoint, the court reasoned that “it makes little sense to hold that the adjuster has an independent duty when the insurer itself is subject to liability for the adjuster's mishandling of claims in actions alleging breach of contract and bad faith.” Id. at 86. The court cautioned that imposing a legal duty upon an independent adjuster could potentially allow a plaintiff “double recovery, ” i.e., recovery from both the adjuster and the insurance company on the basis of the adjuster's conduct. Id.

         At the outset, the Court notes that plaintiffs' assertion that defendant Fulton is not an insurance adjuster is inconsistent with the affidavit of plaintiffs' expert, which states that defendant Fulton was defendant USAA CIC's “appraiser/adjuster.”[2] Nonetheless, the Court agrees with defendant Fulton that it is irrelevant whether he is an insurance appraiser or an insurance adjuster because the reasoning in Trinity Baptist, although it pertained to an independent insurance adjuster, is broadly worded and the same policy concerns are applicable here. Specifically, given the existence of USAA CIC's legal duty to plaintiffs, it would be fundamentally unfair to permit plaintiffs to potentially recover from both defendants USAA CIC and Fulton for defendant Fulton's allegedly negligent conduct. See Trinity Baptist, 341 P.3d at 86.

         The Court's conclusion is further supported by the fact that the adjuster in Trinity Baptist and defendant Fulton functioned in essentially identical capacities. Both were third parties retained by insurance companies to assist in the evaluation of an insured's claim. Both were also sued for their conduct in handling the insurance claim. Specifically, the plaintiff in Trinity Baptist alleged the adjuster's “handling and investigation” of the insurance claim was negligent. Id. at 78. In this case, plaintiffs allege that defendant Fulton was negligent in his evaluation and reporting of their insurance claim. Thus, the reasoning supporting the Oklahoma Supreme Court's conclusion ...

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