Brandley v. Allstate Texas Lloyd's

Filing 30

MEMORANDUM AND OPINION granting in part and denying in part 20 MOTION for Partial Summary Judgment. (Signed by Magistrate Judge Stephen Wm Smith) Parties notified. (jmarchand)

Br a n dl ey v. Allstate Texas Lloyd's

Do c. 30

U N IT E D STATES DISTRICT COURT S O U T H E R N DISTRICT OF TEXAS H O U S T O N DIVISION § § § § § § § § § §

Z c a ta lin e Brandley P la in tif f , vs. A llstate Texas Lloyd's d/b/a, A lls ta te Insurance Company, D e f e n d a n t,

C iv il Action H-07-1410

M E M O R A N D U M AND ORDER GRANTING PARTIAL SUMMARY JUDGMENT T h is lawsuit arises out of the burglary of plaintiff Zcataline Brandley's home and the ref u sal of defendant Allstate Texas Lloyd,'s d/b/a Allstate Insurance Company ("Allstate"), to pay Brandley's claim for the items taken in the burglary. Brandley has brought claims for b re a ch of contract, emotional distress and mental anguish, common law bad faith, violations o f the Deceptive Trade Practices Act ("DTPA"), and violations of Article 21.21 of the Texas In s u ra n c e Code. She also seeks punitive damages and attorney's fees. See Dkt. 1, Ex. A. A lls ta te has brought a motion for partial summary judgment, arguing that Brandley is not e n title d to punitive damages and attorneys fees, and that she has no evidence to support her D T P A , Article 21.21, common law bad faith, and emotional distress and mental anguish c la im s . See Dkt. 20. For the reasons expressed below, Allstate's motion is granted in part, a n d denied in part. 1

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S t a n d a r d of Review T o obtain summary judgment, Allstate bears the burden of demonstrating that "the p le a d in g s , depositions, answers to interrogatories, and admissions on file, together with the af fid av its, if any, show that there is no genuine issue as to any material fact" and therefore ju d g m e n t is appropriate as a matter of law. Fed. R. Civ. P. 56(c). Summary judgment should is s u e if, after having adequate time for discovery, Brandley has produced insufficient e v i d e n c e to create a jury question on one or more of the essential elements of her claims. C e lo tex Corp. v. Catrett, 477 U.S. 317, 327 (1986). Conversely, where Allstate has the b u r d e n of proof, it must establish, as a matter of law, every essential element of its defense b e f o re Brandley can be obligated to produce specific facts to rebut the defense. Chaplin v. N a tio n s Credit Corp., 307 F.3d 368, 372 (5th Cir. 2002). In determining the existence of a g e n u in e issue of material fact, the court will draw all inferences arising from the facts in the lig h t most favorable to the nonmoving party. Hotard v. State Farm Fire & Cas. Co., 286 F .3 d 814, 817 (5th Cir. 2002). A n a ly sis 1. B r a n d le y ' s claims regarding common law bad faith, and violations of the

D T P A and Article 21.21 of the Texas Insurance Code. B ran d ley has not responded to Allstate's motion and the only evidence in the record is the evidence attached to Brandley's original petition. This evidence is limited to a page f ro m Brandley's insurance policy with Allstate, and a "public release report for Harris

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C o u n t y law enforcement" which lists the items reported stolen in the burglary. See Dkt. 1 (c o n ta in in g attachments to Plaintiff's Original Petition, pgs. 7, 10-12). This evidence is insufficient to overcome summary judgment. Despite having had am p le time to conduct discovery,1 Brandley has failed to produce evidence creating a jury q u e s tio n on one or more of the essential elements of her claims. See Celotex Corp. v. Catrett, 4 7 7 U.S. 317 at 327. To establish a DTPA or Article 21.21 violation, Brandley must first d e m o n s tra te that Allstate breached its common law duty of good faith and fair dealing. H ig g in b o th a m v. State Farm Mut. Auto. Ins. Co., 103 F.3d 456, 460 (5th Cir. 1997). To d e m o n s tra te this breach, Brandley must show that Allstate had no reasonable basis for d e n yin g her claim. Id. at 459. Here, the burglary report and page from Brandley's insurance p o lic y do not create a jury question under a bad faith theory of liability because these d o c u m e n ts do not show that Allstate denied her claim for an improper or unreasonable re a s o n . In fact, these documents do not even show that Allstate denied Brandley's claim. A c c o rd in g ly, Brandley has not created a jury question on an essential element of her bad f a ith , DTPA and Article 21.21 claims and therefore they must be dismissed.2 2. P u n itiv e damages.

To obtain punitive damages Brandley must demonstrate that Allstate was actually

This case was removed to federal court on April 26, 2007, the scheduling order has been in place since July 18, 2007, and the discovery cut-off date is March 31, 2008. Allstate has also requested that summary judgment issue with respect to Brandley's emotional distress and mental anguish claims. However, Allstate provides no argument or authority for dismissing these claims and therefore its request is denied. 3
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a w a re that its conduct would probably result in the kind of harm that is not ordinarily a s s o c ia te d with a breach of contract or bad faith denial of a claim. Universe Life Ins. Co. v. G ile s, 950 S.W.2d 48, 54 ( Tex. 1997). Specifically, she must show that Allstate was aware th a t extraordinary harm such as death, grievous physical injury or financial ruin would p r o b a b ly occur when it denied her claim. Id. Here again, because Brandley has produced n o evidence showing that Allstate denied her claim in the first place, much less denied it with a n awareness that it would cause her extraordinary harm, Brandley has failed to create a q u e s tio n for the jury on the issue of punitive damages. Her prayer for these damages is, th e re f o re , dismissed. 3. A tt o r n e y 's Fees.

Brandley's petition also asserts her entitlement to attorney's fees for breach of contract a s provided by Section 38.001 of the Texas Civil Practice and Remedies Code. Allstate a rg u e s that Brandley may not recover attorney's fees because Section 38.006 of the Code e x p re ss ly states that Chapter 38 does not apply to insurance contracts subject to Chapters 541 a n d 542 of the Insurance Code. See Tex. Civ. Prac. & Rem.Code Ann. § 38.006 (Vernon 1 9 9 7 ). The court, however, is in no position to rule on this issue because the parties have not e sta b lis h e d whether Brandley's insurance contract is subject to Chapters 541 and 542 of the In s u ra n c e Code. Further, the Texas Supreme Court has held that in some circumstances an in s u re d may recover attorney's fees against an insurer in Texas. See Grapevine Excavation, I n c . v. Maryland Lloyds, 35 S.W.3d 1, 5 (Tex. 2000) answer to certified question conformed

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to Federated Mut. Ins. Co. v. Grapevine Excavation, Inc., 241 F.3d 396 (5th Cir. 2001) (h o ld in g that in "a policyholder's successful suit for breach of contract against an insurer ... th e insurer is liable for reasonable attorney's fees incurred in pursuing the breach of contract a c tio n under section 38.001." ). Next, while Allstate claims that Brandley has failed to designate an expert witness on th e subject of attorney's fees, her initial disclosures list L. Mickele' Daniels as a person h a v in g knowledge of reasonable attorney's fees (Dkt. 23, p.1). Allstate has not demonstrated w h y this disclosure is insufficient, nor has it demonstrated why L. Mickele' Daniels should b e barred from testifying on the subject. Accordingly, Allstate's motion to dismiss

B ra n d le y's request for attorneys fees is denied. Signed at Houston, Texas on May 2, 2008.

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