Adjuster May Not be Sued to Defeat Federal Jurisdiction

Barn Roof Collapse Suit Attempts to Avoid Federal Court Fails Because of Fraudulent Joinder

In Funaro v. State Farm Fire & Casualty Co., United States District Court for the Western District of Pennsylvania, Civil Action No. 25-04, Judge: W. Scott Hardy  (W.D. Pa. Nov. 19, 2025) the District Court was faced with motions by Plaintiff Funaro including the following:

Motion to Remand.
State Farm’s Partial Motion to Dismiss.
Statutory bad faith (42 Pa. C.S. § 8371) against State Farm alone
KEY FACTS

On January 10, 2021 a large barn roof in Honesdale, PA collapsed under weight of snow. The barn incurred structural damage, contents damage (including $90,000 to 100,000 in a custom French stove).

Plaintiffs were insured under a State Farm policy (using a standard homeowner/farmowner form). State Farm accepted coverage and made payments: $40,000 initial (2021–2023) for barn and $35,000 in May 2024 for stove.

Plaintiffs obtained higher repair estimate ($225,000) and demanded additional payment by use of appraisal proceeding. Adjuster T.J. Ortman (PA resident) refused appraisal, citing policy’s 1-year suit-limitation clause had expired. Plaintiffs sued in Allegheny County Common Pleas on December 3, 2024 (almost 4 years post-loss). State Farm removed, asserting fraudulent joinder of Ortman to destroy diversity.

POLICY PROVISIONS AT ISSUE
Suit-Limitation Clause

“Suit Against Us” provides: “No action will be brought against us unless there has been full compliance with all of the policy provisions. Any action by any party must be started within one year after the date of loss or damage.”

The court noted that the quoted language is Standard State Farm language has been repeatedly upheld as reasonable under Pennsylvania law.

HOLDINGS & LEGAL REASONING
Fraudulent Joinder Standard:

The court concluded that there was no “colorable” or “reasonable basis in fact or law” for claim against non-diverse defendant. Claiming tortious interference with contract against the insurer's adjuster is not colorable under PA law when adjuster acts within scope of authority. Since the adjuster, as an agent of State Farm, enjoys a qualified privilege the adjuster was found to be fraudulently joined.

Count I – Specific Performance (Compel Appraisal) & Count III – Breach of Contract

The District Court dismissed both with prejudice as time-barred. 1-year suit-limitation clause enforceable and reasonable under PA law. The court also found no estoppel because there was no affirmative misleading conduct by State Farm that prevented timely filing.

Count II – Statutory Bad Faith (§ 8371) against Ortman

Dismissed with prejudice because § 8371 applies only to “insurers,” not adjusters.

Count IV – Tortious Interference against Ortman

Dismissed with prejudice for the same reasoning as the finding of fraudulent joinder. Pennsylvania insureds generally cannot sue individual adjusters for tortious interference when the adjuster is acting for the insurer.

CONCLUSIONS

Only the § 8371 bad-faith claim against State Farm survived while the court concluded that State Farm’s 1-year suit limitation remains bulletproof.

Individual adjusters are effectively immune to tortious interference claims in routine disputes. Only the bad-faith claim vs. State Farm proceeds (appraisal possibly available as remedy thereunder).

ZALMA OPINION

For reasons known only to policyholder attorneys the preference for suing an insurer for bad faith conduct is state court and they will name the adjuster to defeat diversity and remain in state court. Since an adjuster is just acting as an agent of the insurer the adjuster cannot be a proper defendant. The court only ruled on the motions before it and the remaining cause of action - bad faith - appears to be subject to the one-year private limitation of action provision and will probably be the subject of a motion for summary judgment by State Farm.

(c) 2025 Barry Zalma & ClaimSchool, Inc.

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