Dye

UNITED STATES DISTRICT COURT FOR THE

NORTHERN DISTRICT OF OKLAHOMA

DUSTY L. DYE and REBECCA H. DYE, )

)

Plaintiffs, )

)

v. ) Case No. 26-CV-0001-CVE-MTS

)

ALLSTATE VEHICLE AND PROPERTY )

INSURANCE COMPANY and JIMMY )

WILLIS INSURANCE SERVICES, LLC, )

)

Defendants. )

OPINION AND ORDER

Now before the Court are Defendant Jimmy Willis Insurance Services’ Motion to Dismiss

for Fraudulent Joinder (Dkt. # 14) and Plaintiffs’ Motion to Remand and Brief in Support (Dkt. #

19). Defendant Allstate Vehicle and Property Insurance Company (Allstate) removed this case to

federal court on the basis of diversity jurisdiction, even though plaintiffs and defendant Jimmy Willis

Insurance Services, LLC (Willis) are citizens of Oklahoma. Dkt. # 2. Allstate argues that plaintiffs

fraudulently joined Willis as a party to defeat diversity jurisdiction, because plaintiffs have not

alleged any viable basis for recovery against Willis. Dkt. # 1, at 17-26. Plaintiffs ask the Court to

remand this case to state court for lack of subject matter jurisdiction, because plaintiffs have asserted

viable claims that Willis failed to procure the insurance policy they requested and Willis failed to

ensure that plaintiffs actually qualified for the insurance policy issued by Allstate. Dkt. # 19, at 12-

14; Dkt. # 29, at 8-10.

I.

On June 10, 2025, plaintiffs Dusty L. Dye and Rebecca H. Dye filed this case alleging claims

of breach of contract and breach of the covenant of good faith and fair dealing (bad faith) against

Allstate following the partial denial of their insurance claim for wind and hail damage to their home.

Dkt. # 2-2. Plaintiffs state that they are citizens of Oklahoma, and Allstate is incorporated in Illinois

with its principal place of business in Illinois. Dkt. # 2, at 1; Dkt. # 2-2, at 1. Plaintiffs also asserted

claims of negligent procurement of insurance and constructive fraud against Willis, and Willis is a

citizen of Oklahoma. Dkt. # 2-2, at 16-21.

Plaintiffs allege that they contacted Willis to procure a homeowner’s insurance policy for

their new home, and they state that they “requested Willis procure a full replacement cost policy that

would in actuality provide coverage that would fully replace their home in the event of a loss without

exclusions, deductions or loopholes for any weather-related losses.” Dkt. # 2-2, at 2. Plaintiffs

claim that Willis represented that the policy issued by Allstate “would pay to replace anything and

everything no matter what in the event of a catastrophe.” Id. at 2-3. Plaintiffs contend that Willis

failed to advise them that the condition of their home could be a factor in the reduction or total

exclusion of coverage under the policy. Id. at 5-6. Plaintiffs claim that Willis made an affirmative

representation that their new home was in good condition and satisfied all of Allstate’s underwriting

guidelines. Id. at 6. Plaintiffs’ petition fails to include any allegations concerning when they initially

contacted Willis for an insurance quote, but evidence provided by Allstate establishes that plaintiffs

applied for homeowner’s coverage in August 2019. Dkt. # 27-1, at 1; Dkt. # 27-2, at 5.

On June 17, 2023, a tornado struck plaintiffs’ home and caused significant damage to the

roof, chimney, and exterior of the home. Id. at 8. Plaintiffs also claim the storm damaged wooden

paneling and sheet rock inside the home, and additional damage to the attic and other interior spaces

was caused following the storm when a tarp on the roof proved ineffective to keep water out of the

home. Id. Plaintiffs contacted Allstate the next day to file a claim under their homeowner’s

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insurance policy. Id. Plaintiffs claim that Allstate sent a consultant who conducted a brief and

inadequate investigation, and an Allstate adjustor concluded that more information was needed to

evaluate plaintiffs’ claim. Id. at 8-9. Allstate sent an engineer to examine plaintiffs’ home on July

12, 2023, but the engineer did not issue a report concerning his findings until January 2024. Id. at

9. Plaintiffs consulted a chimney company to inspect their damaged chimney, and they were told

that total replacement of the chimney was the only viable option. Id. at 10. Plaintiffs claim that

Allstate refused to pay for total replacement of the chimney on the grounds of pre-existing damage,

wear and tear, and improper installation, and Allstate agreed to make only partial payments for

damage to the roof, gutters, cosmetic repairs to the chimney, windows, and fence. Id. at 9-10.

On June 10, 2025, plaintiffs filed this case alleging breach of contract and bad faith claims

against Allstate, and they assert that the policy language mandates replacement coverage for all

property suffering wind and hail damage. Id. at 12. Plaintiffs specifically allege that the language

of the policy “does not make any distinction as to ‘cosmetic’ damage” but, instead, the policy

requires “benefits for replacement with like, kind quality.” Id. Plaintiffs contend that Allstate

engages in a pattern or practice of undervaluing claims based on “outcome-oriented” investigations,

although many of these allegations seem generic and not based on the specific conduct allegedly

engaged in by Allstate when evaluating plaintiffs’ insurance claim. Id. at 13-16. Plaintiffs assert

claims of negligent procurement of insurance and constructive fraud against Willis based on their

allegations that they requested an insurance policy that would provide full replacement of any

damaged property for any accidental loss or damage, and they allege that Willis failed to procure a

policy that would fully cover their property for all accidental losses without exclusions. Id. at 17-21.

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Allstate removed the case to this court on the basis of diversity jurisdiction, even though

plaintiffs and Willis are citizens of Oklahoma and it would appear that complete diversity of

citizenship is lacking. Dkt. # 2. Allstate contends that plaintiffs fraudulently joined Willis as a party

for the sole purpose of defeating diversity jurisdiction, because plaintiffs have not alleged a

potentially viable claim against Willis. According to Allstate, plaintiffs allege that they requested

a replacement cost policy and admit in their petition that they actually were issued a replacement cost

policy. Dkt. # 2, at 5. Allstate argues that Willis had no duty to explain the terms of coverage, and

they cannot seek to hold Willis liable for negligent procurement if they failed to read the insurance

policy before accepting it. Id. at 8. Plaintiffs assert that Willis should have inspected their property

before submitting an application for insurance coverage, but Allstate argues that Oklahoma law

imposes no duty on insurance agents to conduct underwriting on behalf of an insurance company

before submitting an application for insurance coverage. Id. at 9.

II.

Plaintiffs ask the Court to remand this case to state court, because they have alleged

potentially viable claims against Willis and the parties are not completely diverse. Plaintiffs accuse

Allstate of ignoring the allegations of their petition, and they argue that they have alleged that they

clearly asked Willis to procure an insurance policy that would cover their home for replacement cost

of any damage without any exclusions to coverage. Dkt. # 19, at 12. Plaintiffs also argue that Willis

intentionally inflated the value of their home to increase insurance premiums, even though it should

have known the home was older and would become “less insurable” due to age and deterioration.

Id. at 14. Allstate responds that it relied on the allegations of plaintiffs’ petition and removed the

case to this Court due to the lack of potentially viable claims against Willis under Oklahoma law.

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Dkt. #27, at 12. Allstate also argues that plaintiffs’ insurance claim was not denied due to the type

of insurance policy procured by Willis for plaintiffs’ home, and Willis had no legal obligation to

conduct an initial underwriting for issuance of the policy. Id. at 16-18.

Federal courts are courts of limited jurisdiction, and there is a presumption against the

exercise of federal jurisdiction. Merida Delgado v. Gonzales, 428 F.3d 916, 919 (10th Cir. 2005);

Penteco Corp. Ltd. Partnership--1985A v. Union Gas System, Inc., 929 F.2d 1519, 1521 (10th Cir.

1991). “It is well-established that statutes conferring jurisdiction upon the federal courts, and

particularly removal statutes, are to be narrowly construed in light of our constitutional role as

limited tribunals.” Pritchett v. Office Depot, Inc., 420 F.3d 1090, 1095 (10th Cir. 2005). The party

invoking federal jurisdiction has the burden to allege jurisdictional facts demonstrating the presence

of federal subject matter jurisdiction. McNutt v, General Motors Acceptance Corp. of Indiana, Inc.,

298 U.S. 178, 182 (1936) (“It is incumbent upon the plaintiff properly to allege the jurisdictional

facts, according to the nature of the case”); Montoya v. Chao, 296 F.3d 952, 955 (10th Cir. 2002)

(“The burden of establishing subject-matter jurisdiction is on the party asserting jurisdiction”). “The

Court resolves doubtful cases in favor of remand.” McDonald v. CSAA Ins. Exch., 2017 WL

887108, *2 (W.D. Okla. Mar. 6, 2017) (citing Fajen v. Found. Reserve Ins. Co., 683 F.2d 331, 333

(10th Cir. 1982)).

A defendant may remove a case to federal court if the case is one over “which the district

courts of the United States have original jurisdiction.” 28 U.S.C. § 1441(a). Under 28 U.S.C. §

1332, federal courts have “original jurisdiction of all civil actions where the matter in controversy

exceeds the sum or value of $75,000, exclusive of interest and costs, and is between. .. citizens of

different states.” The Supreme Court has construed § 1332 to require complete diversity, and the

“plaintiff must meet the requirements of the diversity statute for each defendant ....” Newman-

Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826, 829 (1989) (emphasis in original). The Supreme

Court has recognized that a defendant’s “right of removal cannot be defeated by a fraudulent joinder

of a resident defendant having no real connection with the controversy.” Wilson v. Republic Iron

& Steel Co., 257 U.S. 92, 97 (1921). A defendant can prove fraudulent joinder by showing that

either: (1) plaintiff's jurisdictional factual allegations are fraudulent and made in bad faith; or (2)

plaintiff has no possibility of recovery against the non-diverse defendant. DeSmet v. CSAA Ins.

Exch., 2019 WL 7284769, *2 (N.D. Okla. Dec. 27, 2019) (citing Slover v. Equitable Variable Life

Ins. Co., 443 F. Supp. 2d 1272, 1279 (N.D. Okla. 2006)). If a defendant can show that all non-

diverse defendants were fraudulently joined, the remaining parties will be completely diverse and

the federal court has subject matter jurisdiction. See American Nat. Bank & Trust Co. of Sapulpa,

v. Bic Corp., 931 F.2d 1411, 1412 (10th Cir. 1991) (“If as defendant suggests, plaintiffs joined the

Oklahoma residents without good faith, defendant may remove on the grounds of fraudulent

joinder.”’).

“The burden of persuasion placed upon those who cry ‘fraudulent joinder’ is indeed a heavy

one.” Hart v. Bayer Corp., 199 F.3d 239, 246 (Sth Cir. 2000) (quoting B., Inc. v. Miller Brewing

Co., 663 F.2d 545, 549 (5th Cir. 1981)). When a defendant raises specific allegations of fraudulent

joinder, the Court may pierce the pleadings to evaluate the defendant’s argument. Smoot v. Chicago,

Rock Island & Pac. R.R. Co., 378 F.2d 879, 881-82 (10th Cir. 1967); Dodd v. Fawcett Publications,

Inc., 329 F.2d 82, 85 (10th Cir. 1964). “After resolving disputed questions of fact and ambiguities

in favor of the plaintiffs, the court then determines whether they have ‘any possibility of recovery

against the party whose joinder is questioned.’” Asbury v. N. Star Mut. Ins. Co., 2015 WL 588607,

*1 (W.D. Okla. Feb. 11, 2015) (quoting Montano v. Allstate Indem., 211 F.3d 1278, 2000 WL

525592, *1 (10th Cir. Apr. 14, 2000)). “[T]he court must decide whether there is a reasonable basis

to believe the plaintiff might succeed in at least one claim against the non-diverse defendant.” Nerad

v. AstraZeneca Pharms., Inc., 203 F. App’x 911, 913 (10th Cir. 2006).1 “A ‘reasonable basis’ means

just that: the claim need not be a sure-thing, but it must have a basis in the alleged facts and the

applicable law.” Id. Although the Court can pierce the pleadings, “[t]his does not mean that the

federal court will 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.”

Smoot, 378 F.2d at 882.

Negligent Procurement

Plaintiffs allege that Willis failed to truthfully represent the scope of coverage offered by

Allstate and it failed to procure a replacement cost insurance policy that would restore their property

to its pre-loss condition. Dkt. # 2-2, at 18. In their motion to remand, plaintiffs focus on two

particular aspects of Willis’ alleged negligent procurement of insurance when preparing plaintiffs’

application for insurance coverage with Allstate. First, plaintiffs claim that Willis attempted to

procure insurance coverage for which plaintiffs did not qualify, and Willis should have known that

plaintiffs’ home was not eligible for a total replacement policy. Dkt. # 19, at 12-13. Second,

plaintiffs argue that Willis inflated the replacement cost of plaintiffs’ home in the insurance

application in order to increase plaintiffs’ premiums. Id. at 14.

1 Unpublished decisions are not precedential, but they may be cited for their persuasive value.

See FED. R. APP. 32.1; 10TH CIR. R. 32.1.

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Under Oklahoma law “[a]n agent has the duty to act in good faith and use reasonable care,

skill and diligence in the procurement of insurance and 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 Companies, 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. Group of Cos., 83 P.3d 894, 895 (Okla. Civ. App. 2003) (citing Swickey, 979 P.2d

at 269). In discharging their duty to act in good faith and exercise reasonable care, skill, and

diligence in insurance procurement, “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. (emphasis in original). If an agent is not

provided with pertinent information, “the scope of the agent’s duty to use reasonable care, skill, or

diligence in the procurement of insurance does not extend” to create liability for unknown

information. Rotan, 83 P.3d at 895. Oklahoma courts are in agreement that an insurance agent does

“not have a duty to advise an insured with respect to his insurance needs.” Id.; Mueggenborg v.

Ellis, 55 P.3d 452, 453 (Okla. Civ. App. 2002). “What is required is that the agent ‘offer coverage

... for needs that are disclosed by the insured.’” Asbury v. North Star Mut. Ins. Co., 2015 WL

588607, *2 (W.D. Okla. Feb. 11, 2015) (quoting Rotan, 83 P.3d at 895).

Allstate argues that Willis prepared an application for replacement cost coverage and

plaintiffs actually received a replacement cost policy in 2019.* Dkt. # 27, at 12. Allstate has

> Both sides have provided affidavits contesting what plaintiffs told Willis’s agent when Willis

prepared an application for insurance coverage. Allstate has provided the affidavit of Samuel

Castro, a licensed sales producer at Willis, and Willis denies plaintiffs’ allegation that he told

them he could procure an insurance policy that would “replace anything and everything no

matter what in the event of a catastrophe.” Dkt. # 27-1, at 1. Plaintiff Rebecca Dye has

provided a copy of the application for insurance coverage prepared by Willis on plaintiffs’ behalf,

and the application identified the current market value as the same as the purchase price of $167,000.

Dkt. # 27-2, at 4. The estimated replacement cost for the home was listed as $231,148, with an

additional $138,689 in coverage for personal property.3 Id. at 2. The application for coverage

expressly included a request for “Roof Surfaces Extended Coverage Endorsement,” which provided

full replacement coverage for the roof of plaintiffs’ home. Id. In May 2023, Allstate notified

plaintiffs that the roof of their home no longer qualified for full replacement coverage, because the

roof was more than 10 years old. Dkt. # 27-5, at 4. The notice expressly advised plaintiffs that the

roof surfaces extended coverage had not been purchased and they should contact their agent if they

intended to purchase more extensive insurance coverage for their roof. Allstate also notified that it

had amended the policy to use the “actual cash value of the loss” for the repair or replacement of

damaged property. Id. at 9. The notice of changes to the homeowner’s insurance policy came

directly from Allstate and was not based on new or additional information provided to Allstate by

submitted an affidavit acknowledging that she spoke to Castro, and she claims that Castro

falsely represented that the policy provided full replacement coverage for the roof of

plaintiffs’ home. Dkt. # 29-4, at 1-4. The Court finds it unnecessary to consider the

allegations in the affidavits or attempt to resolve any factual disputes, because the

documentary evidence provides a clearer representation of the actual coverage procured and

the notice provided to plaintiffs about that coverage.

3 Plaintiffs allege that Willis inflated the value of their home to increase the replacement cost,

and this directly increased their insurance premiums due the unreasonably high value of the

home. Dkt. # 2-2, at 6. However, plaintiffs have made no specific allegations as to what a

reasonable value and/or replacement cost for the home would have been, and plaintiffs have

made no allegations explaining how using the purchase price of the home as a starting point

for calculating the replacement cost for the home was unreasonable. Plaintiffs have not made

any attempt to explain this theory of negligent procurement in their briefing, and the Court

does not find that plaintiffs have met their burden to adequately alleged a negligent

procurement claim against Willis based on an allegedly inflated home value.

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Willis. Dkt. # 27, at 9. In November 2021, Willis had already advised plaintiffs that this change to

their homeowner’s policy would go into effect at the next renewal, and there is no evidence that

plaintiffs asked Willis to attempt to procure extended roof coverage or that plaintiffs offered to pay

an additional premium for such coverage. Dkt. # 27-1, at 3; Dkt. # 33-4.

The evidence shows that Willis initially helped plaintiffs procure homeowner’s insurance

from Allstate in 2019 and the policy Willis requested on plaintiffs’ behalf included replacement

coverage for plaintiffs’ home, including for the roof. There is also no dispute that Allstate amended

the policy to remove total replacement coverage for the roof, and Allstate provided notice to

plaintiffs of this change to their insurance coverage before the storm in June 2023. There is no

evidence in the record suggesting that plaintiffs contacted Willis to request additional coverage after

learning that Allstate had removed total roof replacement coverage from their homeowner’s

insurance policy. Plaintiffs could also have decided the coverage offered by Allstate did not meet

their needs and sought coverage from another insurer, but they chose to renew their policy with

Allstate after receiving notice from Willis of changes to their homeowner’s insurance policy. Under

Oklahoma law, an insurance agent has a duty to “act in good faith and use reasonable care, skill and

diligence in the procurement of insurance,” and the agent may be liable to the insured if the

“insurance is not procured and the insured suffers a loss.” Swickey, 979 P.2d at 269. Plaintiffs have

cited no authority suggesting that an insurance agent has a continuing duty after the initial

procurement of insurance to monitor the insured’s policy and ensure that the policy continues to meet

the insurance needs disclosed by the insured. See Kutz v. State Farm Fire & Cas. Co., 189 P.3d 740

(Okla. Civ. App) (insurance agent had no legal obligation to notify the insured that the insurer had

cancelled the policy due to non-payment of premiums).

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Plaintiffs argue that they sought a homeowner’s insurance policy that would cover all losses

“in the event of a loss without exclusions, deductions or loopholes for any weather-related losses,”

and they seek to hold Willis liable for negligent procurement for failing to procure such a policy.

Dkt. # 19, at 12. The Court will consider whether Oklahoma law would likely recognize a claim

against an insurance agent based on the agent’s alleged failure to procure total replacement coverage

policy with no out of pocket costs to the insured and no exclusions limiting the scope of coverage.

Plaintiffs claim that Willis represented that it could obtain “full replacement cost coverage,” which

was allegedly the “best policy Allstate offered.” Dkt. # 2-2, at 6. Plaintiffs also claim that they

believed they would receive full replacement coverage for any type of loss, even for cosmetic

damage to their home, for all weather related losses without any out of pocket costs to themselves.

Id. at 12. The Court has found no Oklahoma legal authority suggesting that an insurance agent is

required to construe a request for “replacement coverage” to mean a policy with no exclusions and

no possible expenses borne by the insured in the event of a covered loss. The Court will assume for

this Opinion and Order that plaintiffs’ specifically requested a full replacement policy with no

exclusions and no out of pocket costs to them in the event of loss, but this still would not establish

a viable negligent procurement claim against Willis. Plaintiffs have cited no authority suggesting

that an insurance agent has a continuing duty to monitor an insured’s coverage to ensure that it

continues to meet the insured’s initial expectations after initially procuring coverage for the insured.

Plaintiffs’ loss occurred nearly four years after they initially sought homeowner’s insurance from

Allstate and, even if they initially obtained a policy meeting all of their expectations, they received

notice from Allstate and Willis that they no longer had total replacement roof coverage prior to the

2022 renewal. Plaintiffs would have a potentially viable claim if they had contacted Willis after

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receiving notice of changes to their policy and requested additional coverage, which Willis failed

to request or obtain, on their behalf. Instead, plaintiffs took no action to ensure that they maintained

full roof replacement coverage, and they have no Oklahoma authority suggesting that Oklahoma

courts would recognize a negligent procurement claim against an insurance agent under these

circumstances.

The Court will consider plaintiffs’ argument that Willis negligently or recklessly represented

that their home qualified for replacement coverage, because Allstate later denied or reduced payment

on the insurance claim due to “wear and tear” or deterioration. Plaintiffs argue that Willis acted

negligently by applying for coverage on plaintiffs’ behalf for which plaintiffs’ home did not qualify,

and Willis misrepresented to plaintiffs that they were eligible for full replacement coverage with

Allstate. Dkt. # 19, at 12-13. Plaintiffs state in their petition that they sought replacement coverage

for their home, and Willis represented that it could obtain coverage that “would fully restore the

Insured Property to its pre-loss condition in the event of damage . . . .” Dkt. # 2-2, at 6. Plaintiffs’

allegations concerning Allstate’s investigation and subsequent payments under the policy merely

establish the existence of a coverage dispute, and these allegations cannot reasonably be construed

to support a claim against Willis for negligent procurement of insurance. Plaintiffs contend that

Allstate conducted an inadequate and biased investigation of their claim of storm damage and sent

a “hand-picked” engineer who found pre-existing damage, wear and tear, and improper installation

of plaintiffs’ chimney. Plaintiffs claim that Willis should have discovered these alleged defects

before applying for coverage with Allstate, but plaintiffs have not alleged any facts suggesting that

the defects would have been found during an inspection of their home almost four years before they

filed an insurance claim. The record also does not support plaintiffs’ argument that Allstate deemed

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their home uninsurable, and plaintiffs have merely alleged that there is a dispute concerning the

amount owed to them under the plain terms of the insurance policy. This does not constitute the

negligent procurement of insurance and they have not alleged a viable negligent procurement claim

against Willis.

Constructive Fraud

Plaintiffs have also alleged a constructive fraud claim against Willis, and this type of claim

is distinct from an ordinary common-law fraud claim. Under Oklahoma law, a plaintiff must prove

by clear and convincing evidence four elements to prevail on a claim of fraud: “(1) a false

misrepresentation of a material fact, (2) made as a positive assertion either known to be false or

recklessly made without knowledge of the truth, (3) made with the intention of causing the other

party to act, and (4) which is relied on by the other party to his or her own detriment.” Gish v. ECI

Servs. of Oklahoma, Inc., 162 P.3d 223, 228 (Okla. Civ. App. 2006). Constructive fraud, as

opposed to actual fraud, is “a breach of legal or equitable duty to the detriment of another, which

does not necessarily involve any moral guilt, intent to deceive, or actual dishonesty of purpose.”

Croslin v. Enerlex, Inc., 308 P.3d 1041, 1046 (Okla. 2013). A claim of constructive fraud may be

based on a negligent or innocent misrepresentation when there is an underlying duty to correctly

inform another person of certain facts. Id.

Plaintiffs have cited no Oklahoma cases suggesting that an insurance agent has an affirmative

duty to independently investigate whether a property meets underwriting guidelines, and they also

do not allege that Willis made affirmative representations that the property actually met Allstate’s

underwriting guidelines. Plaintiffs contend that Willis falsely represented that it had procured

replacement coverage, even though the policy in effect at the time of the loss did not provide full

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replacement coverage, and that Willis intentionally or negligently represented that plaintiffs’ home

actually qualified for a replacement coverage policy. Dkt. # 19, at 24-26. The Court has already

established that a substantial period of time elapsed from plaintiffs’ initial application for

homeowner’s insurance and the loss suffered in June 2023, and plaintiffs received actual notice of

changes to their policy from Allstate and Willis about these changes prior to the loss. The 2022

policy renewal, as updated on May 4, 2023, contains a declarations page clearly stating that changes

had been made to plaintiffs’ homeowner’s insurance policy, and the amended declarations plainly

state that “Because your Composition Roof is 11 years old, the percent of roof surface

replacement cost currently covered for windstorm or hail damage is: 67%.” Dkt. # 27-5, at 1,

4 (emphasis in original). Willis also prospectively notified plaintiffs that this change to the policy

would take place when the policy renewed in 2022. Dkt. # 27-1, at 3; Dkt. # 33-4.

Plaintiffs cannot show that there is even a possibility that Willis could be held liable for

constructive fraud as a matter of Oklahoma law. Constructive fraud requires that the defendant

negligently made a misrepresentation that misled the plaintiff to his or her detriment. The record

clearly shows that Willis initially obtained a policy with full roof replacement, and Willis and

Allstate notified plaintiffs in 2022 that their home no longer qualified for full replacement coverage.

Even if the Court assumes that plaintiffs were initially misled by something Willis stated or omitted,

plaintiffs later received actual knowledge of the coverage afforded by their policy and took no action

to increase their coverage or seek out a new insurer. At the time of the loss, plaintiffs knew the

scope of coverage provided by the policy and they cannot tie any misrepresentation by Willis to the

lack of full roof replacement coverage. Plaintiffs argue that Willis falsely advised them that their

home satisfied all of Allstate’s underwriting requirements, and this proved to be untrue when Allstate

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later denied coverage based on pre-existing damage. Dkt. # 19, at 24. Allstate’s subsequent

limitation on coverage following a loss several years after the policy was initially issued does not

suggest that plaintiff's home failed to meet Allstate’s underwriting guidelines when the policy was

issued, nor does this suggest that Willis made a false representation about the availability of coverage

when the policy was issued. Plaintiffs have not shown as a matter of Oklahoma law that insurance

agents are responsible for ensuring that insured property complies with an insurer’s underwriting

guidelines years after an initial application for insurance, nor do plaintiffs’ make any allegations that

Willis affirmatively acknowledged at subsequent renewals that their home continued to satisfy

Allstate’s underwriting guidelines. The Court finds that plaintiffs have fraudulently joined Willis

as a party, and the Court will dismiss Willis as a party and retain subject matter jurisdiction over this

case.

IT IS THEREFORE ORDERED that Plaintiffs’ Motion to Remand and Brief in Support

(Dkt. # 19) is denied, and Defendant Jimmy Willis Insurance Services’ Motion to Dismiss for

Fraudulent Joinder (Dkt. # 14) is granted. Jimmy Willis Insurance Services, LLC is hereby

terminated as a party. The parties are directed to correct case caption accordingly on future

pleadings.

IT IS FURTHER ORDERED that the parties shall file a joint status report no later than

July 8, 2026.

DATED this 24th day of June, 2026.

CLAIRE V.EAGAN

UNITED STATES DISTRICT JUDGE

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