The federal district court found there was no diversity based upon joinder of the adjustor and granted the insured's motion for remand. Jada Rest. Grp., LLC v. Acadia Ins. Co., 2020 U.S. Dist. LEXIS 163296 (W.D. Tex. Sept. 8, 2020).

    Plaintiff owned several restaurants. It held a business insurance policy with Acadia. When state and local authorities limited Plaintiff's business to take-out or delivery service due to the COVID-19 pandemic, Plaintiff sustained heavy income losses. 

    Plaintiff submitted a claim for business interruption to Acadia. Defendant Christopher Michels, an insurance adjuster, was retained by Acadia to investigate the claim. After Michels completed the investigation, Acadia denied the claim. Acadia relied on the policy's virus exclusion and the absence of direct physical loss of or damage to the property.

    Plaintiff sued in state court. it alleged that Defendant Michels conducted an outcome-oriented investigation of Plaintiff's claims. Plaintiff asserted that Michels made no requests for documentation or information relating to the claim and denied the claim so quickly that he cold not have conducted a proper investigation. Acadia sent plaintiffs a notice under the Texas Insurance Code that Acadia was accepting any potential liability for Defendant Michel.

    Acadia removed to federal district court, asserting diversity jurisdiction. Plaintiffs moved for remand, arguing that both Plaintiff and Defendant Michels were Texas citizens. Acadia argued that Michels was improperly joined because of its election to accept liability on Michels' behalf. 

    The court found that the Texas Insurance Code provision that allowed an insurer to accept potential liability for an adjustor applied only to "forces of nature." Government-mandated business closures were not "forces of nature." Further, a virus was not a "force of nature" for the purposes of the statute. 

    Further, Plaintiff adequately pled a claim against Defendant Michels. Plaintiff alleged his investigation was done so quickly that it was out-come oriented. Michels erroneously denied coverage based upon the policy's virus exclusion when none o the restaurants had evidence of viral contamination. Moreover, Plaintiff alleged misconduct on the part of Defendant Michel that was separate and apart from Acadia. Whereas Plaintiff's claims against Acadia sounded primarily in breach of contract, the claims against Defendant Michel rested on alleged violation of the Texas Insurance Code.

    Therefore, Plaintiff pled specific causes of action against Defendant Michels and he was not improperly joined. The case was remanded for lack of subject matter jurisdiction.