Richardson et al v. Allstate Vehicle and Property Insurance Company et al

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IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF OKLAHOMA
JEREMIAH RICHARDSON, et al.,
Plaintiffs,
v.
ALLSTATE VEHICLE AND
PROPERTY INSURANCE COMPANY,
et al.,
Defendants.
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) 	Case No. CIV-25-734-PRW
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ORDER
Before the Court are Plaintiffs Jeremiah and Elisabeth Richardson’s Motion to
Remand (Dkt. 19); Defendant Allstate Vehicle and Property Insurance Company’s
Response in Opposition (Dkt. 20); and Plaintiffs’ Reply (Dkt. 21). Upon review, the Court
GRANTS the Motion (Dkt. 19).
Background
This case arises from an insurance dispute following hail and windstorm damage to
Plaintiffs’ home. Plaintiffs purchased an Allstate homeowners’ replacement cost insurance
policy through Allstate’s captive agent, Jeff Farquhar, and his office, Farquhar Financial
Group, LLC (collectively, “Agent”). Following wind and hail damage to their home in May
of 2024, Plaintiffs submitted an insurance claim to Allstate. According to Plaintiffs,
Allstate paid far below the actual cost of repairs, which should include the full replacement
value of the roof. Allstate claims that total replacement is inappropriate because most of
roof’s damage was due to aging, not hail.
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Plaintiffs believe that Allstate is engaged in a common scheme to deny or underpay
Oklahoma insureds for wind and hailstorm damage. Agent allegedly assisted with this
practice by selling insurance coverage to Plaintiffs without disclosing Allstate’s bad faith
tactics. Accordingly, on May 21, 2025, Plaintiffs filed a Petition against Defendants in
Oklahoma County District Court. Plaintiffs accuse Allstate of (1) breach of contract, (2)
breach of the duty of good faith and fair dealing, and (3) constructive fraud and negligent
misrepresentation. Plaintiffs accuse Agent of (1) negligent procurement of insurance and
(2) constructive fraud and negligent misrepresentation.
On July 2, 2025, Allstate removed this case to this court, arguing that Plaintiffs
fraudulently 	joined 	Agents—the 	sole 	non-diverse 	defendants. 	On 	August 	1, 	2025,
Plaintiffs moved to remand this case back to Oklahoma County District Court. The Motion
to Remand (Dkt. 19) is now fully briefed.
Legal Standard
Diversity jurisdiction requires a party to “show that complete diversity of citizenship
exists between the parties and that the amount in controversy exceeds $75,000.”1 Under
the doctrine of fraudulent joinder, however, courts are to ignore a non-diverse defendant’s
citizenship if the defendant invoking the court’s jurisdiction carries the “heavy burden” of
showing either “(1) actual fraud in the pleading of jurisdictional facts,” or, as is more
1 Radil v. Sanborn W. Camps, Inc., 384 F.3d 1220, 1225 (10th Cir. 2004) (citation omitted).
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common, “(2) inability of the plaintiff to establish a cause of action against the non-diverse
party in state court.”2
“Where, as here, removal is based on the second prong, the removing party must
demonstrate the non-liability of the defendant[s] alleged to be fraudulently joined with
complete certainty.”3 Remand is required if any claim against a nondiverse defendant “is
possibly viable.”4 The standard for showing fraudulent joinder is stringent because of (1)
the presumption in favor of a plaintiff’s right to select their forum and join tortfeasors,5 (2)
the presumption against the exercise of removal jurisdiction due to federalism concerns,6
2 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)).
3 Ford v. Liberty Mut. Ins. Co., No. CIV-19-925-G, 2020 WL 259554, at *2 (W.D. Okla.
Jan. 16, 2020) (cleaned up and citation omitted); see also Smoot v. Chi., R.I. & P. R. Co.,
378 F.2d 879, 882 (10th Cir. 1967).
4Montano v. Allstate Indem., 211 F.3d 1278, at *2 (10th Cir. 2000). The Court cites
unpublished decisions of the Tenth Circuit for their persuasive value, consistent with Tenth
Cir. R. 32.1 and Fed. R. App. P. 32.1.
5 See Grancare, LLC v. Thrower by & through Mills, 889 F.3d at 549–50 (9th Cir. 2018)
(“The relative stringency of the standard accords with the presumption against removal
jurisdiction, under which we strictly construe the removal statute, and reject federal
jurisdiction if there is any doubt as to the right of removal in the first instance.” (internal
quotation marks and citation omitted)); Crowe v. Coleman, 113 F.3d 1536, 1538 (11th Cir.
1997) (This strict approach to fraudulent joinder “makes sense given the law that absent
fraudulent joinder, plaintiff has the right to select the forum, to elect whether to sue joint
tortfeasors and to prosecute his own suit in his own way to a final determination.” (internal
citation and quotation marks omitted)).
6 Removal jurisdiction must be “construe[d] . . . strictly because of the ‘significant
federalism concerns’ implicated.” Dixon v. Coburg Dairy, Inc., 369 F.3d 811, 816 (4th Cir.
2004) (en banc) (internal citation and quotation marks omitted); see also Shamrock Oil &
Gas Corp. v. Sheets, 313 U.S. 100, 109 (1941) (“Due regard for the rightful independence
of state governments . . . requires that [federal courts] scrupulously confine their own
jurisdiction to the precise limits which the statute has defined.” (citations and internal
quotation marks omitted)).
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and (3) the risk of a post-merits reversal for lack of jurisdiction. Accordingly, a challenged
joinder may be considered non-fraudulent even when the predicate claim might not survive
a motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6).7
When considering whether an exercise of diversity jurisdiction pursuant to the
fraudulent joinder doctrine is appropriate, courts resolves “all factual and legal issues . . . in
favor of the plaintiff.”8 And courts may “look beyond the pleadings” and consider the entire
record.9 That the Court may pierce the pleadings, however, “does not mean that the federal
court will pre-try . . . doubtful issues of fact to determine removability; the issue must be
capable of summary determination and be proven with complete certainty.”10
Discussion
The Court finds that Allstate has failed to meet its heavy burden to show that there
is no possibility of recovery against Agent on Plaintiffs’ negligent procurement and
constructive fraud claims. Here, Allstate must show “[the] inability of the plaintiff[s] to
7 See Montano, 211 F.3d at *2 (“This standard is more exacting than that for dismissing a
claim under Fed. R. Civ. P. 12(b)(6); indeed, the latter entails the kind of merits
determination that, absent fraudulent joinder, should be left to the state court where the
action was commenced.” (citation omitted)); see also Grancare, 889 F.3d at 549 (“A claim
against a defendant may fail under Rule 12(b)(6), but that defendant has not necessarily
been fraudulently joined.”).
8 Dutcher, 733 F.3d at 988 (quoting Pampillonia v. RJR Nabisco, Inc., 138 F.3d 459, 461
(2d Cir. 1998)).
9 Brazell v. Waite, 525 F. App’x 878, 881 (10th Cir. 2013) (internal quotation marks
omitted) (citing Smoot, 378 F.2d at 881–82).
10 Smoot, 378 F.2d at 882 (internal quotation marks and citation omitted).
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establish a cause of action against the non-diverse party in state court.”11 Thus, Plaintiffs
need only establish at least one possibly viable claim against Agent.
Plaintiffs assert that Allstate is engaged in a widespread scheme to systematically
deny or underpay Oklahoma insureds for wind and hailstorm damage.12 Crucially, the
alleged scheme begins when Allstate’s captive agents impliedly represent to the insureds
that their properties meet Allstate’s underwriting guidelines in their present condition at
the time of binding replacement cost insurance policies (either at inception of the policies
or renewal).13 Plaintiffs also assert that the agent was aware of the scheme and failed to
disclose it when he sold, procured, and bound coverage on Plaintiffs’ property.14 Plaintiffs
allege that they requested a policy from the agent that would fully replace their damaged
property without exclusion of weather-related losses.15 Plaintiffs argue that by procuring
and binding the coverage without limitation, the agent “independently established,
calculated, and set the Policy’s replacement cost value and resultant policy limits.”16 This,
per Plaintiffs, meant the captive agent “inherently conveyed that such coverage limit was
accurate, correct, commensurate with actual replacement costs, and represented 100% of
the Insured Property’s insurance to value.”17 Plaintiffs claim they were never made aware
11 Dutcher, 733 F.3d at 988.
12 Compl. (Dkt. 1, Ex. 1), at 4.
13 Id.
14 Id. at 4–5.
15 Id. at 20.
16 Id. at 21.
17 Id.
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of Allstate’s internal definitions of “hail damage,” “wear and tear,” and other related
terms.18 Plaintiffs ultimately allege that they were undercompensated for hail or wind
damage to their properties.
Based on these allegations, Plaintiffs have alleged claims against Agent Farquhar
for 	negligent 	procurement 	and 	constructive 	fraud 	and 	negligent 	misrepresentation.
Plaintiffs detail instances of the agent’s negligence in the Complaint, including by failing
to 	confirm 	that 	their 	property 	met 	Allstate’s 	underwriting 	guidelines,
knowingly procuring and renewing coverage that was materially different from that which
Plaintiffs requested and did not accurately reflect the replacement cost value of the
property, misrepresenting that the property was in good condition, and misrepresenting that
the policies would cover all weather-related losses.
Allstate argues that Plaintiffs cannot make out claims for negligent procurement19
or negligent misrepresentation and constructive fraud20 against the agent. Allstate attempts
to cast doubt on the ability of Plaintiffs to show causation or damage in their claims by
asserting the policies Plaintiffs purchased provided the level of coverage they originally
18 Id. at 22.
19 	Under 	Oklahoma 	law, 	“an 	agent 	is 	liable 	to 	the insured if, 	by 	the 	agent's
fault, insurance is not procured as promised and the insured suffers a loss.” Swickey v.
Silvey Cos., 979 P.2d 266, 269 (Okla. Civ. App. 1999).
20 Under Oklahoma law, constructive fraud consists of “any breach of duty which, without
an actually fraudulent intent, gains an advantage to the person in fault, or anyone claiming
under him, by misleading another to his prejudice, or to the prejudice of anyone claiming
under him.” Okla. Stat. tit. 15, § 59.
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sought, they did in fact have full coverage to replace qualifying property damage, and
Allstate simply denied their claim.
To cast doubt, however, is not to render a case fit for “summary determination” or
to prove it “with complete certainty.”21 In this posture, the Court may not pre-try the
underlying issues. Rather, all factual and legal questions must be resolved in favor of
Plaintiffs. Here, open questions remain regarding the scope of the agent’s role in
procurement of the policy, whether Plaintiffs requested or were promised more extensive
coverage than they received, the precise duties that may be imposed on insurance agents
under Oklahoma law, the representations made by the agent, the existence and the agent’s
knowledge of a widespread scheme to shortchange insured parties when making claims for
hail and wind damage, and more. Upon review of the record, the Court cannot say that
Plaintiffs’ claims against the agent have “no possibility” of succeeding. Further, this Court
has already found remand appropriate in cases remarkably similar to this one.22
Conclusion
For the reasons given above, the Court concludes that Allstate has not met the high
burden required to demonstrate fraudulent joinder. Accordingly, the Court GRANTS
Plaintiffs’ Motion to Remand (Dkt. 17). The Court DIRECTS the Clerk to remand this
action to the District Court of Oklahoma County.
21 Smoot, 378 F.2d at 882 (quoting Dodd, 329 F.2d at 85).
22 See, e.g., Maher v. Allstate Fire and Casualty Co., Case No. CIV-25-81-PRW, 2025 WL
1909507 (W.D. Okla. July 10, 2025).
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IT IS SO ORDERED this 25th day of February 2026.
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