Pek v. Allstate Vehicle and Property Insurance Company et al

Filing 62

MEMORANDUM ADOPTING REPORT AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE for 57 Report and Recommendations, DENYING 35 Motion for Summary Judgment, filed by Allstate Vehicle and Property Insurance Company. The Objections (Dkt. 58 ) are OVERRULED. Defendant's Motion for Partial Summary Judgment as to Plaintiffs' Bad Faith Claims Based on the Existence of a Bona Fide Dispute (Dkt. 35 ) is hereby DENIED. Signed by District Judge Amos L. Mazzant, III on 5/23/2019. (baf, )

United States District Court
EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION

ING PEK and ALICE PEK
Plaintiffs,
v.
ALLSTATE VEHICLE AND PROPERTY
INSURANCE COMPANY,
Defendant.

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Case No. 4:18-cv-00259-ALM-KPJ

MEMORANDUM ADOPTING REPORT AND
RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE
Came on for consideration the Report of the United States Magistrate Judge in this
action, this matter having been referred to the United States Magistrate Judge pursuant to 28
U.S.C. § 636. On April 22, 2019, the Report and Recommendation of the Magistrate Judge
was entered (the “Report”) (see Dkt. #57) recommending Defendant Allstate Vehicle and
Property Insurance Company’s (“Allstate” or “Defendant”) Motion for Partial Summary
Judgment as to Plaintiffs’ Bad Faith Claims Based on the Existence of a Bona Fide Dispute (the
“Motion for Summary Judgment”) (Dkt. #35) be Denied. See Dkt. #57 at 9.
Allstate filed an Objection to the Report (the “Objections”). See Dkts. #58, 59. 1 The
Court has made a de novo review of the Objections and is of the opinion that the findings and
conclusions of the Magistrate Judge are correct and the Objections are without merit as to the

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Allstate’s Objection is contained in docket entry fifty-eight, and Defendant’s Proposed Order Granting
Defendant’s Objections to Report and Recommendation of the United States Magistrate Judge is docket entry
fifty-nine.

ultimate findings of the Magistrate Judge.

The Court hereby adopts the findings and

conclusions of the Magistrate Judge as the findings and conclusions of the Court.
I.

BACKGROUND

This case arises out of an insurance dispute. Plaintiffs Ing Pek and Alice Pek (together,
“Plaintiffs”) own a home located at 5960 Temple Drive, Plano, Texas 75093 (the “Property”),
which was insured by Allstate. See Dkt. #1-2 at 3. 2 The Property suffered damage following
two storms, which occurred on or about March 26, 2016, and April 21, 2017. See Dkt. 1-2 at 3.
The parties dispute how much money Plaintiffs should receive to cover the damage to the
Property under their insurance policies with Allstate as a result of the storms.
II.

DISCUSSION

Defendants’ individual objections were unnumbered and appeared to readdress a few
objections multiple times throughout the Objections. See Dkt. #58. As such, Defendant’s
objections are summarized below.
Evidentiary Objections
Defendant objects that “[t]aken cumulatively, the Magistrate[ Judge]’s conclusions are
built upon [] improper findings to which Allstate objects.” See Dkt. #58 at 2. To support this
assertion, Defendant points to the Magistrate Judge’s citation to Plaintiff’s Original Petition,
which Defendant asserts is, in fact, Defendant’s Notice of Removal and Jury Demand.
Defendant miscites the record.
In reviewing the evidence, the Court finds there is extensive evidence to support a
finding that the Property “suffered damage to the exterior and roof during two storms, which

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Defendant objects to citations to docket entry #1-2 at 3 because Defendant asserts that this is Allstate’s Notice of
Removal and Jury Demand. Not so. Docket entry #1-2, also marked as Docket entry #3, is Plaintiffs’ Original
Petition, as filed in the state court prior to removal. Docket entry #1 includes the Notice of Removal, to which
Plaintiff’s Original Petition is attached. See Dkt. #1-2. Defendant’s Jury Demand is entered at docket entry #2.

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occurred on or about March 23, 2016, and April 21, 2017,” including Defendant’s own records.
See Dkts. #36-2–36-6. Accordingly, this objection is OVERRULED.
Rule 56(c)
Defendant objects to the Report because “[a]ll inferences of any kind are viewed
favorably to Plaintiffs.” See Dkt. #58 at 3. Further, Defendant “objects to the Report because it
improperly relies on ‘mere allegations contained in the pleadings’ as evidence of bad faith.”
See id. No specific “mere allegations” are cited.
Summary judgment is appropriate when, viewing the evidence and all justifiable
inferences in the light most favorable to the non-moving party, there is no genuine issue of
material fact and the moving party is entitled to judgment as a matter of law. FED. R. CIV. P.
56(c); Hunt v. Cromartie, 526 U.S. 541, 549 (1999). The appropriate inquiry is “whether the
evidence presents a sufficient disagreement to require submission to a jury or whether it is so
one-sided that one party must prevail as a matter of law.” Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 251–52 (1986).
Upon review, the Magistrate Judge’s Report recommended denial of Defendant’s
Motion for Summary Judgment because a fact issue appropriate for the finder of fact remained
regarding all causes of action addressed in the Motion for Summary Judgment. See Dkt. #57.
In so doing, the Magistrate Judge relied on the “omissions or inconsistencies” of Allstate’s
reports. See Dkt. #57 at 8 (citing Dkt. #42-4 at 2; Dkt. #42-6 at 1; Dkt. #42-10 at 1. The Court
does not find the Report took “[a]ll inferences” favorably to Plaintiffs, but considered the
evidence presented by both parties. Upon review, Defendant failed to establish that the evidence
in this case is so one-sided that Defendant must prevail as a matter of law. Accordingly, this
objection is OVERRULED.

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“Denial” as a Term of Art
Defendant argues that the Report misuses the term of art “denial,” and accordingly,
Defendant should prevail on its Motion for Summary Judgment. See Dkt. 58 at 3. Regardless
of whether the Report accurately used “denial” as a term of art, the Magistrate Judge’s Report
correctly noted that no further payments were made under Plaintiffs’ second claim. Whether
the claim was “denied,” or the parties were “not in agreement” does not affect the fact issue in
this case. Accordingly, any error was harmless. This objection is OVERRULED.
Bona Fide Dispute
Finally, Defendant objects to the Report because the Report did not rely on the parties’
definition of “bona fide,” or provide a definition of bona fide. See Dkt. #58 at 4. Black’s Law
Dictionary, while instructive, is not law. Upon review, the Magistrate Judge correctly cited
Texas case law which addresses the proper standard to assess whether there is a bona fide
dispute between the parties. See Dkt. #57 at 5 (citing Universe Life Ins. Co. v. Giles, 950 S.W.2d
48 (Tex. 1997); Transp. Ins. Co. v. Moriel, 879 S.W.2d 10, 17 (Tex. 1994) (“Evidence that
merely shows a bona fide dispute about the insurer's liability on the contract does not rise to the
level of bad faith.”).
Defendant further asserts that the Report misapplies the standard under Moriel. See Dkt.
#58 at 4. However, Defendant improperly assumes summary judgment is proper despite
questions of fact regarding Allstate’s reports. Because there is a threshold question regarding
the reports, the Court need not reach the ultimate question of whether a bona fide dispute exists
because there is a genuine issue of material fact at the heart of Plaintiffs’ claims. As such, this
issue is properly a question for the factfinder and this objection is OVERRULED.

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III.

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CONCLUSION

Upon review, the Objections (Dkt. #58) are OVERRULED.
Defendant’s Motion for Partial Summary Judgment as to Plaintiffs’ Bad Faith Claims
Based on the Existence of a Bona Fide Dispute (Dkt. #35) is hereby DENIED.
IT IS SO ORDERED.

SIGNED this 23rd day of May, 2019.

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AMOS L. MAZZANT
UNITED STATES DISTRICT JUDGE

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