Texas Judge Refuses to Remand Restaurant’s Coverage Action, Agent Dismissed

DALLAS — A Texas federal judge has refused to remand a restaurant owner’s COVID-19 business interruption coverage action to state court, ruling that a Texas-based insurance agent and its employee were improperly joined as defendants, therefore diversity of citizenship exists.

In an Aug. 18 order, Judge Sidney Fitzwater ruled that plaintiff Vandelay Hospitality Group cannot recover damages in the form of insurance coverage against Baron Cass and his employer Swingle Collins Company LLC, because under Texas law, benefit of the bargain damages are not recoverable in a claim for negligent misrepresentation.

“Here, Vandelay seeks to recover ‘the amount of coverage’ …