GALVESTON FEDERAL COURT GRANTS MOTION FOR LEAVE TO AMEND PLEADINGS, WITH A WARNING THAT TWOMBLY AND IGBAL HAVE NOT RADICALLY ALTERED THE HEIGHTENED FEDERAL PLEADING REQUIREMENT AS OFTEN TOUTED BY DEFENDANTS

Cruz v. Allstate Texas Lloyds and Pilot Catastrophe Services, Inc. 2011 WL 3502772 (S.D. Tex., J. Froeschner, Aug. 10, 2011). The United States District Court in the Southern District of Texas in Galveston granted a plaintiff’s motion for leave to amend its Complaint on August 10, 2011 allowing the plaintiff to add claims against a newly identified individual adjuster assigned by the Defendants to handle a property damage claim following Hurricane Ike. The crux of Defendants' opposition to the motion was that the factual allegations pleaded in the proposed amended complaint were insufficient to state a claim against the adjuster under the current federal pleadings standard.

In its opinion granting Plaintiff’s motion, the Court warned that the Defendants, like many insurance companies and adjusters in similar property damage suits spawned by Hurricane Ike, sought too much protection from the post-Twombly/Igbal heightened federal pleading standard.  The Court warned that Twombly and Igbal have not altered the pleading landscape as radically as so often touted by Defendants. According to the Court, the height of the pleading requirement should be relative to the circumstances of the case at hand, including heightened pleading requirements of Rule 9(b).  The case before the Court (noting that there are a multitude of others like it on the Court's docket), is a noncomplex, straightforward property damage dispute involving allegations of substandard adjustment practices.  In such cases, the Court held that all that need be alleged were “facts that, if proven, could make it reasonably possible for a Texas court to find” that a defendant violated certain provisions of the Texas Insurance Code or engaged in fraudulent behavior.