Gamble et al v. State Farm Fire and Casualty Company et al

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF OKLAHOMA
JUSTIN GAMBLE and 	)
BRITTANY GAMBLE, 	)
)
Plaintiffs, 	)
)
v. 	) 	Case No. CIV-25-396-R
)
STATE FARM FIRE AND CASUALTY 	)
COMPANY, et al., 	)
)
Defendants. 	)
ORDER
Plaintiffs initiated this action in state court asserting claims for breach of contract,
bad faith and constructive fraud/negligent misrepresentation against State Farm and claims
for negligent procurement of insurance and constructive fraud/negligent misrepresentation
against Tyler McCall and the Tyler McCall Insurance Agency, Inc. State Farm removed
the case, contending that Mr. McCall and the McCall Agency1 were fraudulently joined
and their non-diverse citizenship may therefore be disregarded for purposes of establishing
diversity jurisdiction. Now before the Court is Plaintiffs’ Amended Motion to Remand
[Doc. No. 16] arguing that State Farm has not met its burden of showing fraudulent joinder.
The motion is fully briefed [Doc. Nos. 20, 21, 24] and at issue.
1 For ease of reference, and because Plaintiffs do not distinguish between Mr. McCall and
the McCall Agency, the Court refers to these parties together as the McCall Agency.
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STANDARD
The standard for establishing that a defendant has been fraudulently joined is a
difficult one: “the removing party must demonstrate either: (1) actual fraud in the pleading
of jurisdictional facts, or (2) inability of the plaintiff to establish a cause of action against
the non-diverse party in state court.” Dutcher v. Matheson, 733 F.3d 980, 988 (10th Cir.
2013) (quoting Cuevas v. BAC Home Loans Servicing, LP, 648 F.3d 242, 249 (5th
Cir.2011). This standard “is more exacting than that for dismissing a claim under
Fed.R.Civ.P. 12(b)(6)” and requires all factual disputes and all ambiguities in the
controlling law to be resolved in the plaintiff’s favor. Montano v. Allstate Indem., 211 F.3d
1278 (10th Cir. 2000) (unpublished);2 see also Dutcher, 733 F.3d at 988. “[R]emand is
required if any one of the claims against the non-diverse defendant…is possibly viable.”
Montano, 211 F.3d at *2. However, where a defendant’s “non-liability is…established as
both a matter of fact and law,” the defendant’s joinder is fraudulent and remand is
appropriately refused. Dodd v. Fawcett Publications, Inc., 329 F.2d 82, 85 (10th Cir. 1964).
Further, “it is well settled that upon allegations of fraudulent joinder designed to prevent
removal, federal courts may look beyond the pleadings to determine if the joinder, although
fair on its face, is a sham or fraudulent device to prevent removal.” Smoot v. Chicago, R.I.
& P. R. Co., 378 F.2d 879, 882 (10th Cir. 1967). But courts must be careful not to “pre-
try, as a matter of course, doubtful issues of fact to determine removability; the issue must
be capable of summary determination and be proven with complete certainty.” Id. at 882.
2 Unpublished decisions are cited for their persuasive value. See Fed. R. App. P. 32.1.
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DISCUSSION
This case arises from State Farm’s alleged wrongful denial of Plaintiffs’ claim for
storm damage to their property, including its refusal to pay for a full roof replacement.
Plaintiffs allege that the denial was part of a systemic and pervasive scheme by State Farm
to deny wind and hail damage claims based on an undisclosed and narrow definition of hail
damage and a variety of bad faith claims handling tactics. Pet. [Doc. No. 1-2] ¶ 1. State
Farm implemented the scheme, in part, through its “Hail Focus initiative,” which allegedly
aims to reduce indemnity payments and deny full roof replacements to policyholders. Id.
¶¶ 4, 10. Plaintiffs claim that she was subjected to this scheme when State Farm denied her
claim for storm damage.
The McCall Agency is the State Farm insurance agency that sold Plaintiffs the
insurance policy. Plaintiffs allege that State Farm’s “captive agents,” like the McCall
Agency, are aware of the scheme to underpay hail damage claims but fail to disclose it to
the insured. Id. ¶¶ 1, 4, 35. They assert that the McCall Agency negligently failed to procure
the insurance coverage they requested and misrepresented, concealed, or omitted material
facts from Plaintiffs. State Farm argues that Plaintiffs cannot possibly state a claim against
the McCall Agency under either of these theories of recovery. The Court agrees.
With respect to the negligent procurement claim, Oklahoma law recognizes that an
insurance agent has a “duty to act in good faith and use reasonable care, skill and diligence
in the procurement of insurance.” Swickey v. Silvey Co., 979 P.2d 266, 269 (Okla. Civ.
App. 1999). “This duty rests, in part, on specialized knowledge about the terms and
conditions of insurance policies generally.” Rotan v. Farmers Ins. Grp. of Companies, Inc.,
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83 P.3d 894, 895 (Okla. Civ. App. 2004) (internal quotations marks and brackets omitted).
An insurance agent can therefore be liable to the insured in negligence “if, by the agent’s
fault, insurance is not procured as promised and the insured suffers a loss.” Swickey, 979
P.2d at 269. However, “the scope of the agent’s duty to use reasonable care, skill, or
diligence in the procurement of insurance” is limited to needs disclosed by the insured.
Rotan, 83 P.3d at 895. Agents “do not have a duty to advise an insured with respect to his
insurance needs” and “a general request for adequate protection and the like does not
change this duty.” Id. (internal quotation marks and brackets omitted). Thus, “[t]o
discharge their duty to act in good faith and use reasonable care, skill, and diligence in the
procurement of insurance, including use of their specialized knowledge about the terms
and conditions of insurance policies, insurance agents need only offer coverage mandated
by law and coverage for needs that are disclosed by the insureds, and this duty is not
expanded by general requests for ‘full coverage’ or ‘adequate protection.’” Id.
Here, Plaintiffs alleges that they contacted the McCall Agency “to procure full
replacement cost homeowners insurance coverage from State Farm,” they requested “a
replacement cost policy,” they “expressly and/or inherently disclosed concerns and
insurance needs to Agent,” Agent was “aware that the Plaintiff [sic]
needs coverage under a policy that would fully replace the Insured Property’s roof in the
event of a loss, without exclusion of any weather-related losses,” and that “[b]y virtue of
the act of procuring the Policy and binding coverage” the Agent “expressly and/or
inherently conveyed that [the] coverage limit was accurate.” Pet. ¶ 25. They then claim that
the McCall Agency negligently procured a policy that provides illusory coverage, deviates
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from what they requested, and does not accurately reflect the replacement cost value of the
property. Id. ¶ 63.
However, it is clear from Plaintiffs’ allegations and the record that Plaintiffs
received the policy they requested and had sufficient coverage to replace their roof. The
policy is an all-risk replacement cost policy that provides coverage for any accidental direct
physical loss, including wind and hail damage. Pet. ¶¶ 4(c), 31-33. Because Plaintiffs
received the replacement cost value policy they requested, they cannot possibly show that,
“by the agent’s fault, insurance [was] not procured as promised.” Swickey, 979 P.2d at 269.
Plaintiffs’ damages flow from State Farm’s allegedly improper interpretation of their
policy and adjustment of their claim, not the agent’s failure to procure the correct type of
policy, type of coverage, or coverage limit. See Stafford v. State Farm Fire & Cas. Co.,
CIV-25-08-HE (W.D. Okla. May 25, 2025) (“The fact that a claim under a policy is denied,
or paid at a level less than that sought by the insured, does not, without more, render the
policy illusory.”); Rain Drop Found., Inc. v. State Farm Fire & Cas. Co., No. 24-1101-D,
2025 WL 582562, at *4 (W.D. Okla. Feb. 21, 2025) (no viable claim against agent because
“Plaintiff’s alleged damages arose, not because of the type of insurance procured, but
because State Farm refused to replace Plaintiff’s roof”); Steinkamp v. State Farm Fire &
Cas. Co., No. CIV-22-00047-PRW, 2023 WL 11920886, at *2 (W.D. Okla. Sept. 29, 2023)
(no viable claim against agent because “Plaintiff’s claim against State Farm depends upon
what damage her roof sustained, not the terms of her policy”). As a result, Plaintiffs have
no possibly viable claim against the McCall Agency for negligent procurement of
insurance.
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Plaintiffs’ remaining cause of action asserts that the McCall Agency engaged in
constructive fraud and negligent misrepresentation. A constructive fraud claim under
Oklahoma law requires a “breach of duty which, without an actually fraudulent intent,
gains an advantage to the person in fault, … by misleading another to his prejudice, ….”
Okla. Stat. Ann. tit. 15, § 59(1); see also Sullivan v. Wyndham Hotels & Resorts, Inc., No.
21-7003, 2021 WL 5822690, at *3 (10th Cir. Dec. 8, 2021) (explaining that negligent
misrepresentation requires a material misrepresentation, a breach of a duty in making the
misrepresentation, and reasonable reliance to the plaintiff’s detriment). Such a duty “may
arise if a party selectively discloses facts that create a false impression.” Specialty
Beverages, L.L.C. v. Pabst Brewing Co., 537 F.3d 1165, 1181 (10th Cir. 2008) (applying
Oklahoma law). “In other words, one conveying a false impression by the disclosure of
some facts and the concealment of others is guilty of fraud even though his statement is
true as far as it goes, since concealment is in effect a false representation that what is
disclosed is the whole truth.” Id. (internal quotation marks and brackets omitted).
Plaintiffs allege that “Defendants” made several misrepresentations, including that
the property met all underwriting guidelines, the property was eligible for replacement cost
coverage, all property inspections had occurred, the replacement cost value was accurate,
and the policy covered all weather-related damage. Plaintiffs also allege that “Defendants”
failed to disclose that pre-existing issues with the property would prevent or limit coverage.
They further contend that they communicated with the McCall Agency after their claim
was submitted, the agent referred to efforts to convince State Farm to reconsider its claims
decision as a “hail mary,” and the agent conveyed that State Farm did not receive Plaintiffs’
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roofer had sent documents. Plaintiffs do not, either in their allegations or briefing, identify
any specific statements made by the McCall Agency during the procurement process about
inspections, underwriting, or claims handling. Plaintiffs do, however, repeatedly assert that
these misrepresentations or omissions were inherent in the McCall Agency’s act of
procuring, binding, and selling the policy. See Pet. ¶¶ 4, 19, 25, 36, 63(b)(5); Pl.’s Mot. at
1 (“McCall represented to the Plaintiffs – by virtue of the act of marketing, selling,
procuring, and binding State Farm replacement cost insurance coverage…”), at 14 (“By
selling and/or renewing the policy and binding coverage, McCall represented…”).
Regardless, none of these alleged misrepresentations or omissions have a causal
connection to Plaintiffs’ claimed damages. State Farm issued Plaintiffs a replacement cost
policy, so the property did meet the underwriting guidelines and was eligible for
replacement cost coverage. See Steinkamp, 2023 WL 11920886, at *4 (“This cannot be a
misrepresentation because there is no indication that Plaintiffs’ property did not meet State
Farm’s underwriting requirements.”). There is no indication that the coverage values are
wrong or that the property had some pre-existing defect that negated or limited coverage
for wind and hail damage to the roof. State Farm’s determination that some of the claimed
damage is attributable to a non-covered peril or was not caused by storm damage does not
mean the coverage is negated, as evidenced by the fact that State Farm found covered
damage to the property. See Pet. ¶ 40(e). The policy provides coverage for any accidental
direct physical loss, including wind and hail damage to the roof, but the parties disagree
about the extent of the damage and whether some of the damage was caused by wind/hail.
Thus, any implied representations by the agent about the property’s condition or its
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eligibility for a replacement cost value policy were either true or not the cause of Plaintiffs’
losses. See Rain Drop Found., Inc. v. State Farm Fire & Cas. Co., No. 24-1101-D, 2025
WL 582562, at *5 (W.D. Okla. Feb. 21, 2025) (“[T]he Court is unable to make out a causal
nexus between [the agent’s] actions at the procurement stage and Plaintiff’s alleged
prejudice at the coverage determination stage.”).
Plaintiffs further allege that the McCall Agency failed to disclose information about
State Farm’s bad faith claim’s handling tactics and the Hail Focus initiative. However,
Plaintiffs have not identified any statements that might give rise to a duty to disclose this
information. See Stafford v. State Farm Fire & Cas. Co., CIV-25-08-HE (W.D. Okla. May
25, 2025) (concluding that the plaintiff had not alleged any facts show that the insurance
agent had a duty to disclose State Farm’s bad faith claims handling or undisclosed
definitions). As a result, Plaintiffs have not asserted a possibly viable claim against Mr.
McCall or the McCall Agency for constructive fraud/negligent misrepresentation.
CONCLUSION
State Farm has met its burden of establishing that Plaintiffs are unable to establish
a cause of action against Mr. McCall or the McCall Agency for negligent procurement or
constructive fraud/negligent misrepresentation. Mr. McCall and the McCall Agency are
fraudulently joined defendants, and their citizenship is therefore disregarded for purposes
of determining subject matter jurisdiction. Plaintiffs’ Amended Motion to Remand [Doc.
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No. 18] is DENIED and the claims against Mr. McCall or the McCall Agency are dismissed
without prejudice.3
IT IS SO ORDERED this 2nd day of July, 2025.
3 Plaintiffs’ Motion includes a perfunctory request to conduct jurisdictional discovery to
confirm the agent’s complicity in the alleged scheme. Plaintiffs have not formally moved
for jurisdictional discovery or provided an adequately developed argument as to why
jurisdictional discovery should be permitted. The request is therefore denied.
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