Razo et al v. State Farm Lloyds
ORDER & OPINION re 13 Motion for Summary Judgment.(Signed by Judge Micaela Alvarez) Parties notified.(BelindaSaenz, 7)
United States District Court
Southern District of Texas
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
ARMANDO RAZO, et al,
STATE FARM LLOYDS,
December 08, 2017
David J. Bradley, Clerk
§ CIVIL ACTION NO. 7:17-CV-00352
ORDER & OPINION
The Court now considers State Farm Lloyds’ (“Defendant”) motion for summary
judgment.1 After duly considering the record and relevant authorities, the Court GRANTS the
Armando and Guadalupe Razo (“Plaintiffs”) entered into a residential property insurance
contract with Defendant on July 28, 2013 which provided coverage until July 28, 2014. 2 A storm
allegedly occurred on or about May 28, 2014, damaging Plaintiffs’ covered residence, 3 and
Plaintiffs submitted a claim to Defendant on July 1, 2014.4 Defendant completed two inspections
of Plaintiffs’ property, ultimately submitting a decision letter to Plaintiffs containing $6,023.54
on April 3, 2015,5 and never altering its decision thereafter. Plaintiffs were dissatisfied with this
Dkt. No. 13.
Dkt. No. 13-1 p. 4 (insurance contract); see also Dkt. No. 1-2 ¶ 7 (Plaintiff’s original petition).
Dkt. No. 1-2 ¶ 8.
Dkt. No. 13-2 ¶ 5.
Dkt. No. 13-11.
Plaintiffs filed the instant lawsuit in state court on August 23, 2017,6 and the case was
removed to federal court on September 15, 2017.7 Plaintiffs moved for remand on October 11,
2017 on the grounds that the amount in controversy did not exceed $75,000.00,8 but the Court
denied this motion on October 1, 2017.9 Defendant subsequently amended its answer with leave
of Court on November 11, 2017, pleading the statute of limitations as one of its affirmative
defenses.10 Defendant thereafter filed the instant limitations-based motion for summary judgment
on November 13, 2017,11 and Plaintiffs never responded, rendering the motion unopposed by
operation of the Local Rules.12 The Court now turns to its analysis.
Under Federal Rule of Civil Procedure (“Rule”) 56, summary judgment is proper when
there is “no genuine dispute as to any material fact and the movant is entitled to judgment as a
matter of law.”13 “A fact is ‘material’ if its resolution could affect the outcome of the action,”14
while a “genuine” dispute is present “only if a reasonable jury could return a verdict for the nonmovant.”15 As a result, “[o]nly disputes over facts that might affect the outcome of the suit under
the governing law will properly preclude the entry of summary judgment.”16
The movant bears the initial burden of showing the absence of a genuine issue of material
fact,17 but is freed from this initial burden on matters for which the non-movant would bear the
burden of proof at trial; in that event, the movant’s burden is reduced to merely pointing to the
Dkt. No. 13-16 p. 6.
Dkt. No. 1.
Dkt. No. 5.
Dkt. No. 7.
Dkt. No. 12 ¶ 26.
Dkt. No. 13.
See L.R. 7.2–7.4 of the Local Rules of the Southern District of Texas.
Fed. R. Civ. P. 56(a).
Burrell v. Dr. Pepper/Seven UP Bottling Grp., Inc., 482 F.3d 408, 411 (5th Cir. 2007) (internal quotation marks
and citation omitted).
Fordoche, Inc. v. Texaco, Inc., 463 F.3d 388, 392 (5th Cir. 2006) (citation omitted).
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
absence of evidence.18 The non-movant must then demonstrate the existence of a genuine issue
of material fact.19 This demonstration must specifically indicate facts and their significance,20
and cannot consist solely of “[c]onclusional allegations and denials, speculation, improbable
inferences, unsubstantiated assertions, and legalistic argumentation[.]”21
In conducting its analysis, the Court may consider evidence from the entire record,
viewing that evidence in the light most favorable to the non-movant.22 Rather than combing
through the record on its own, however, the Court looks to the motion for summary judgment
and response to present the evidence for consideration.23 Parties may cite to any part of the
record, or bring evidence in the motion and response.24 By either method, parties need not
proffer evidence in a form admissible at trial,25 but must proffer evidence substantively
admissible at trial.26
As an initial matter, Defendant has not waived its limitations defense by virtue of its
failure to plead this affirmative defense in its original answer.27 Rule 8(c) requires a defendant to
affirmatively plead its limitations defense, and thus the general rule is that such a failure
constitutes waiver of the defense.28 However, such a failure can be cured by subsequent
See id. at 323–25; see also Transamerica Ins. Co. v. Avenell, 66 F.3d 715, 718–19 (5th Cir. 1995).
See Celotex Corp., 477 U.S. at 323.
See Ragas v. Tenn. Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir. 1998).
U.S. ex rel. Farmer v. City of Hous., 523 F.3d 333, 337 (5th Cir. 2008) (citing TIG Ins. Co. v. Sedgwick James of
Wash., 276 F.3d 754, 759 (5th Cir. 2002)).
See Moore v. Willis Indep. Sch. Dist., 233 F.3d 871, 874 (5th Cir. 2000) (citations omitted).
See Fed. R. Civ. P. 56(e).
See Fed. R. Civ. P. 56(c).
See Celotex Corp., 477 U.S. at 324 (“We do not mean that the nonmoving party must produce evidence in a form
that would be admissible at trial in order to avoid summary judgment.”).
See Bellard v. Gautreaux, 675 F.3d 454, 460 (5th Cir. 2012) (“[T]he evidence proffered by the plaintiff to satisfy
his burden of proof must be competent and admissible at trial.”).
See Dkt. No. 1-4 (Defendant’s original answer does not contain the affirmative defense of statute of limitations).
Fed. R. Civ. P. 8(c); see In re Hinkley, 58 B.R. 339, 347 (Bankr. S.D. Tex. 1986), aff'd, 89 B.R. 608 (S.D. Tex.
1988), aff'd sub nom. Hinkley v. Robinson, 875 F.2d 859 (5th Cir. 1989).
amendment.29 Here, Defendant cured its failure by subsequent amendment,30 and thus has not
waived its limitations defense.
The defendant bears the burden of proof to establish its limitations defense.31 Limitations
begins accruing “when facts come into existence that authorize a party to seek a judicial
remedy.”32 In the insurance context, this is accomplished when the insurer sends a decision letter
to the insured (i.e., denying the claim outright or including payment the insured disagrees with),
so long as the insurer never actually changes its position on the matter at a later time. 33 This is so
regardless of whether the insurer’s letter expressly states that the claim/claim file is closed.34
Here, Defendant sent its decision letter to Plaintiff enclosed with payment in the amount of
$6,023.54 on April 3, 2015,35 never later changing its position on the matter. Thus, Plaintiffs’
claims against Defendant began accruing on April 3, 2015.
Breach of contract
Under Texas law, “the statute of limitations for a breach of contract action is four years
from the day the cause of action accrues.”36 However, this limitations period may be
contractually modified, so long as the agreed-to period is at least two years long.37 Here, the
contract at issue provides for a limitations period of two years and one day from the date
Id. (citing Combee v. Shell Oil Co., 615 F.2d 698, 700 (5th Cir.1980); Dunn v. Koehring Co., 546 F.2d 1193 (5th
Cir. 1977) modified on other grounds, 551 F.2d 73 (5th Cir. 1977)).
Dkt. No. 12 ¶ 26 (pleading its statute of limitations defense in its amended answer).
Diversicare Gen. Partner, Inc. v. Rubio, 185 S.W.3d 842, 846 (Tex. 2005) (“A defendant moving for summary
judgment on the affirmative defense of limitations has the burden to conclusively establish that defense . . . .”).
Provident Life & Acc. Ins. Co. v. Knott, 128 S.W.3d 211, 221 (Tex. 2003).
Castillo v. State Farm Lloyds, 210 Fed. Appx. 390, 393–94 (5th Cir. 2006).
Id. at 393.
Dkt. No. 13-16 p. 6.
Spicewood Summit Office Condominiums Ass'n, Inc. v. Am. First Lloyd's Ins. Co., 287 S.W.3d 461, 464 (Tex.
App.—Austin 2009, pet. denied) (citing Tex. Civ. Prac. & Rem.Code Ann. § 16.051 (West 2008); Stine v. Stewart,
80 S.W.3d 586, 592 (Tex. 2002)).
Spicewood Summit Office Condominiums Ass'n, Inc., 287 S.W.3d at 464 (“Parties may contract for a different
period of time in which a party may file a breach of contract action.”); Jett v. Truck Ins. Exch., 952 S.W.2d 108, 109
(Tex. App.—Texarkana 1997, no writ); Tex. Civ. Prac. & Rem. Code Ann. § 16.070 (West) (“[A] person may not
enter a stipulation, contract, or agreement that purports to limit the time in which to bring suit on the stipulation,
contract, or agreement to a period shorter than two years.”).
Plaintiffs’ claims accrue.38 Because Plaintiffs’ claims began accruing on April 3, 2015, the
contractual limitations period expired on April 4, 2017. However, Plaintiffs did not file suit until
August 23, 201739—over four months later. Thus, Plaintiffs’ breach of contract claim is barred
by limitations and must be dismissed.
Extra contractual claims
For precisely the same reason, Plaintiffs’ remaining extra-contractual claims are barred
by limitations. Notably, Plaintiffs’ common law bad faith, Texas Deceptive Trade Practices and
Consumer Protection Act, and Texas Insurance Code Chapter 541 claims have default two-year
limitations periods40 (apart from the contract) which are thus independently barred given the
underlying facts in the present case. In sum, all of Plaintiffs’ claims against Defendant are barred
For all these reasons, Defendant’s motion for summary judgment is GRANTED. The
Court will issue a final judgment separately pursuant to Rule 58.
IT IS SO ORDERED.
DONE at McAllen, Texas, this 8th day of December, 2017.
United States District Judge
Dkt. No. 13-1 p. 10 (“[S]uit or action brought against us is started within two years and one day after the cause of
Dkt. No. 13-16 p. 6.
See Tex. Ins. Code Ann. § 541.162 (West) (setting two-year limitations period for TIC Chapter 541 claims); Tex.
Bus. & Com. Code Ann. § 17.565 (West) (setting two-year limitations period for DTPA claims); Morales v. Lloyd’s,
2016 WL 7734651, at *6 (S.D. Tex. Mar. 30, 2016) (recognizing two-year limitations period for common law bad
faith claims) (citing Tex. Civ. Prac. & Rem. Code Ann. § 16.003 (West)).
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