Broxterman v. State Farm Lloyds
MEMORANDUM OPINION AND ORDER - GRANTING 33 MOTION for Summary Judgment (Partial) filed by State Farm Lloyds. It is further ORDERED that Plaintiff take nothing by her extra-contractual claims of breach of the duty of good faith and fai r dealing, violations of the Texas Insurance Code,violations of the Texas Deceptive Trade Practices Act and tie-in statutes, unfair insurance practices, and misrepresentation, and that those claims should be DISMISSED with prejudice. Only Plaintiffs breach of contract claim, alleging that Defendant failed to pay her the benefits under the Policy to properly repair her Property, should proceed to trial. Signed by Judge Amos L. Mazzant, III on 2/4/2016. (baf, )
United States District Court
EASTERN DISTRICT OF TEXAS
STATE FARM LLOYDS
CIVIL ACTION NO 4:14-CV-661
MEMORANDUM OPINION AND ORDER
Pending before the Court is Defendant State Farm Lloyds’ Motion for Partial Summary
Judgment (Dkt. #33). After reviewing the relevant pleadings, the Court finds that the motion
should be granted.
The above-referenced case arises out of a dispute between a policyholder and her insurer
regarding the extent of damages and amount of loss suffered to Plaintiff’s property located at 920
Wandering Way Drive, Allen, TX 75002 (the “Property”) (Dkt. #9 at p. 2). Defendant State
Farm Lloyds (“State Farm”) issued a homeowners’ insurance policy to Plaintiff, effective
December 1, 2003, through December 1, 2014 (the “Policy”) (Dkt. #33 at p. 3). On or about
April 3, 2014, the Property suffered damage due to storm-related conditions (Dkt. #9 at p. 2).
On or about April 26, 2014, prior to reporting her claim to State Farm, Plaintiff signed
document for representation by her public adjuster, John Bellerose (“Bellerose”), and the Voss
Law Firm, to whom Bellerose referred her (Dkt. #33 at p. 4). On May 1, 2014, Bellerose’s
company, Aware Owner, issued an estimate for the storm damages totaling $15,015.09 (Dkt. #33
at p. 4). On or about May 27, 2014, Jesse Corona (“Corona”) of the Voss Law Firm reported
Plaintiff’s insurance claim to State Farm (Dkt. #33 at p. 4).
State Farm assigned the claim to adjuster Gary Hodge (“Hodge”), who inspected the
Property on May 30, 2014, and prepared an estimate for damages totaling $5,425.52 (Dkt. #33 at
p. 5). State Farm issued payment in accordance with Hodge’s estimate on June 11, 2014 (Dkt.
#33 at p. 5). State Farm issued payment to the Voss Law Firm, as had been requested at the time
the insurance claim was reported (Dkt. #33 at pp. 4-5).
On October 16, 2014, State Farm removed the case to this Court under diversity
jurisdiction (Dkt. #1). On October 24, 2014, the Court ordered the parties “to replead as
necessary to comply with the Federal Rules of Civil Procedure and the Court’s Local Rules.”
(Dkt. #7 at p.1). On November 10, 2014, Plaintiff filed her First Amended Complaint (Dkt. #9).
In her First Amended Complaint, Plaintiff contended that that State Farm failed to
adequately compensate her for damages to the Property, and she sought to recover damages
based on the following claims: (1) breach of contract, (2) violations of the Texas Deceptive
Trade Practices Act and Tie-In Statutes, (3) violations of the Texas Insurance Code, (4) breach of
the common law duty of good faith and fair dealing, (5) unfair insurance practices, and (6)
intentional or negligent misrepresentation (see Dkt. #9).
On September 30, 2015, Defendant State Farm Lloyds’ filed its motion for partial
summary judgment (Dkt. #33). On October 16, 2015, Plaintiff filed her response (Dkt. #35). On
October 28, 2015, Defendant filed its reply (Dkt. #39).
The purpose of summary judgment is to isolate and dispose of factually unsupported
claims or defenses. See Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986). Summary judgment
is proper if the pleadings, the discovery and disclosure materials on file, and any affidavits
“[show] that there is no genuine dispute as to any material fact and that the movant is entitled to
judgment as a matter of law.” FED. R. CIV. P. 56(a). A dispute about a material fact is genuine
“if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The trial court must resolve all
reasonable doubts in favor of the party opposing the motion for summary judgment. Casey
Enters., Inc. v. Am. Hardware Mut. Ins. Co., 655 F.2d 598, 602 (5th Cir. 1981) (citations
omitted). The substantive law identifies which facts are material. Anderson, 477 U.S. at 248.
The party moving for summary judgment has the burden to show that there is no genuine
issue of material fact and that it is entitled to judgment as a matter of law. Id. at 247. If the
movant bears the burden of proof on a claim or defense on which it is moving for summary
judgment, it must come forward with evidence that establishes “beyond peradventure all of the
essential elements of the claim or defense.” Fontenot v. Upjohn Co., 780 F.2d 1190, 1194 (5th
Cir. 1986). Where the nonmovant bears the burden of proof, the movant may discharge its
burden by showing that there is an absence of evidence to support the nonmovant’s case.
Celotex, 477 U.S. at 325; Byers v. Dall. Morning News, Inc., 209 F.3d 419, 424 (5th Cir. 2000).
Once the movant has carried its burden, the nonmovant must “respond to the motion for
summary judgment by setting forth particular facts indicating there is a genuine issue for trial.”
Byers, 209 F.3d at 424 (citing Anderson, 477 U.S. at 248-49). The nonmovant must adduce
Anderson, 477 U.S. at 257.
No “mere denial of material facts
nor…unsworn allegations [nor] arguments and assertions in briefs or legal memoranda” will
suffice to carry this burden. Moayedi v. Compaq Comput. Corp., 98 F. App’x 335, 338 (5th Cir.
2004). Rather, the Court requires “significant probative evidence” from the nonmovant in order
to dismiss a request for summary judgment supported appropriately by the movant. United
States v. Lawrence, 276 F.3d 193, 197 (5th Cir. 2001). The Court must consider all of the
evidence, but must refrain from making any credibility determinations or weighing the evidence.
See Turner v. Baylor Richardson Med. Ctr., 476 F.3d 337, 343 (5th Cir. 2007).
Defendant moves for partial summary judgment on Plaintiff’s extra-contractual claims,
Plaintiff’s claim for violation of the Texas Insurance Code, and Plaintiff’s claim for violation of
the Deceptive Trade Practices Act (the “DTPA”), and Plaintiff’s fraud claims for intentional or
negligent misrepresentations (See Dkt. #33). In her response, Plaintiff voluntarily dismisses her
extra-contractual claims for breach of the common law duty of good faith and fair dealing, bad
faith, and misrepresentation (Dkt. #35 at p. 6). Therefore, the Court will dismiss those claims
with prejudice, and will focus on Plaintiff’s claims under the Texas Insurance Code and DTPA
and tie-in statutes.
In Texas, an individual who has been damaged by “unfair method[s] of competition or
unfair or deceptive act[s] or practice[s] in the business of insurance” may bring a cause of action
under the Texas Insurance Code against the person or persons engaging in such acts or practices.
TEX. INS. CODE § 541.151 (formerly codified as TEX. INS. CODE, art. 21.21); see Higginbotham v.
State Farm Mut. Auto. Ins. Co., 103 F.3d 456, 460 (5th Cir. 1997); Crown Life Ins. Co. v.
Casteel, 22 S.W.3d 378, 382-83 (Tex. 2000). “The prohibited conduct includes ‘failing to
attempt in good faith to effectuate a prompt, fair, and equitable settlement of a claim with respect
to which the insurer’s liability has become reasonably clear.’” Performance Autoplex II Ltd. v.
Mid-Continent Cas. Co., 322 F.3d 847, 860-61 (5th Cir. 2003) (quoting TEX. INS. CODE §
541.151). A violation of Chapter 541 of the Texas Insurance Code is also a violation of the
DTPA. TEX. BUS. & COMM. CODE § 17.50(a); Kondos v. Allstate Tex. Lloyds, No. 1:03-CV1440, 2005 WL 1004720, at 12 (E.D. Tex. Apr. 25, 2005); see Thrash v. State Farm Fire & Cas.
Defendant asserts that the Plaintiff’s extra-contractual claims should be dismissed for failure to comply with Rule
8(a) and 9(b) of the Federal Rules of Civil Procedure (Dkt. #33 at p. 7). Defendant incorporates by reference its
Motion for Partial Dismissal of Plaintiff’s First Amended Complaint (Dkt. #33 at pp. 7-8; see Dkt. #32). The Court
denied Defendant’s motion on February 2, 2016 (Dkt. #51). Therefore, the Court finds that Defendant’s argument is
Co., 992 F.2d 1354, 1357-58 & n. 19 (5th Cir. 1993); Vail v. Texas Farm Bureau Mut. Ins. Co.,
754 S.W.2d 129, 135 (Tex. 1988).
Texas law holds that extra-contractual tort claims pursuant to the Texas Insurance Code
and the DTPA require the same predicate for recovery as a bad faith claim under a good faith and
fair dealing violation. O’Quinn v. Gen. Star Indem. Co., No. 1:13-CV-471, 2014 WL 3974315,
at *8 (E.D. Tex. Aug. 5, 2014); Douglas v. State Farm Lloyds, F. Supp. 2d 532, 544 (S.D. Tex.
1999); Lawson v. Potomac Ins. Co. of Ill., No. 398-CV-0692H, 1998 WL 641809, at *4 (N.D.
Tex. Sept. 14, 1998). “When an insured joins claims under the Texas Insurance Code and the
DTPA with a bad faith claim, all asserting wrongful denial of policy benefits, if there is no merit
to the bad faith claim, there can be no liability on either statutory claim.” O’Quinn, 2014 WL
3974315, at *8; Higginbotham, 103 F.3d at 460; see Beaumont Rice Mill, Inc. v. Mid-American
Indem. Ins. Co., 948 F.2d 950, 952 (5th Cir. 1991); State Farm Fire & Cas. Co. v. Woods, 925 F.
Supp. 1174, 1180 (E.D. Tex. 1996).
In the present case, Plaintiff’s grounds for asserting that State Farm violated the Texas
Insurance Code and the DTPA arise out of the same factual allegations, and are essentially
identical to her grounds for arguing that State Farm violated its common law duty of good faith
and fair dealing.
In fact, Plaintiff’s response does little to distinguish any of her extra-
contractual claims (See Dkt. #35). Additionally as a preliminary matter, Plaintiff has voluntarily
dismissed her good faith and fair dealing and bad faith claims in this case (Dkt. #35 at p. 6). As
such, those claims have been dismissed with prejudice by the Court.
Because the Texas
Insurance Code and DTPA claims arise out of the same factual allegations as the bad faith
claims, the Court finds that the statutory claims must also be dismissed. See O’Quinn, 2014 WL
3974315, at *8; Higginbotham, 103 F.3d at 460; Kondos, 2005 WL 1004720, at *13.
However, the Court finds that even if Plaintiff could still bring her statutory claims in the
present case, she has not presented sufficient evidence for the claims to stand. Plaintiff has failed
to cite to any sufficient evidence that would create a genuine issue of fact as to whether
Defendant acted unreasonably in its handling of the claims. Specifically, Plaintiff fails to cite to
any credible evidence that would show that Defendant represented that the Policy conferred or
involved rights or obligations that it did not have, that Defendant misrepresented the authority of
any representative or agent, or that Defendant failed to disclose information concerning any good
or service in support of her DTPA claims (See Dkt. #9 at ¶ 28(a)-(c)). Plaintiff further fails to
offer any competent summary judgment evidence in support of her DTPA claims that Defendant
unreasonably delayed the investigation, adjustment, and resolution of her claim, that Defendant
failed to properly investigate Plaintiff’s claim, or that Defendant hired and relied upon a biased
adjuster to obtain a favorable report (See Dkt. #9 at ¶ 28(d)-(g)).
As to Plaintiff’s allegations of the Texas Insurance Code tie-in provisions, Plaintiff cites
to no credible evidence that Defendant failed to effectuate a prompt settlement, that Defendant
failed to provide her with a reasonable explanation of the benefits provided, that Defendant
refused to pay her claim without conducting a reasonable investigation, that Defendant
misrepresented the Policy by failing to disclose a matter required by law, or that Defendant failed
to pay a valid claim after receiving all reasonably requested and required items from Plaintiff
(See Dkt. #9 at ¶ 39 (a)-(f)).
As to Plaintiff’s claim under Chapter 541 of the Texas Insurance Code, Plaintiff offers no
credible evidence that would demonstrate a genuine issue of material fact as to her allegations
that Defendant engaged in false, misleading, or deceptive acts, that Defendant engaged in unfair
claims settlement practices, or that Defendant misrepresented to her pertinent facts or provisions
relating to the coverage at issue (See Dkt. #9 at ¶ 50(a)-(c)). Nor does Plaintiff’s response cite to
any credible evidence that would support her allegations that Defendant failed to act in good
faith in effectuating a prompt and fair settlement within a reasonable time, that Defendant failed
to affirm or deny coverage of her claim within a reasonable time, that Defendant refused to pay
her claims without conducting a reasonable investigation, or that Defendant failed to provide her
with an explanation regarding any denial of the claim or for the offer of a compromise settlement
(See Dkt. #9 at ¶ 50(d)-([g]). Therefore, the Court finds that summary judgment should be
granted as to Plaintiff’s claims of violations of the Texas DTPA and tie-in statutes, violations of
the Texas Insurance Code, and unfair insurance practices.
It is therefore ORDERED that Defendant State Farm Lloyds’ Motion for Partial
Summary Judgment (Dkt. #33) is hereby GRANTED.
It is further ORDERED that Plaintiff take nothing by her extra-contractual claims of
breach of the duty of good faith and fair dealing, violations of the Texas Insurance Code,
violations of the Texas Deceptive Trade Practices Act and tie-in statutes, unfair insurance
practices, and misrepresentation, and that those claims should be DISMISSED with prejudice.
Only Plaintiff’s breach of contract claim, alleging that Defendant failed to pay her the
benefits under the Policy to properly repair her Property, should proceed to trial.
SIGNED this 4th day of February, 2016.
AMOS L. MAZZANT
UNITED STATES DISTRICT JUDGE
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