Casey v. Headinstate Farm Lloyds

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ROBERT CASEY, Plaintiff, v. HEADINSTATE FARM LLOYDS, Defendant.

Civil Action No. 3:21-CV-346-L

United States District Court, N.D. Texas, Dallas Division

August 26, 2022

MEMORANDUM OPINION AND ORDER

Sam A Lindsay, United States District Judge

Before the court is Defendant State Farm Lloyds' (“Defendant” or “State Farm”) Motion for Summary Judgment (Doc. 13), filed on November 19, 2021. For the reasons herein explained, the court grants State Farm's Motion for Summary Judgment (Doc. 13) with respect to Plaintiff Robert Casey's (“Plaintiff” or “Mr Casey”) claims of (1) breach of good faith and fair dealing; (2) violating the Texas Deceptive Trade Practices Act; (3) violating § 541 of the Texas Insurance Code; and (4) violating §§ 542.055(a)(1), 542.055(a)(2)-(3), and 542.056(a) of the Texas Insurance Code; and denies State Farm's Motion for Summary Judgment (Doc. 13) with respect to Mr. Casey's claims of (1) breach of contract; and (2) violating §§ 542.058(a) and 542.060 of the Texas Insurance Code.

I. Factual and Procedural Background

This action arises from a dispute regarding an insurance claim filed by Plaintiff to recover benefits under his homeowners insurance policy for hail or wind damage that occurred to his home on June 9, 2019. On January 11, 2021, Mr. Casey sued State Farm in the 116th Judicial District Court of Dallas County, Texas for breach of contract; breach of good faith and fair dealings; violations of the Texas Deceptive Trade Practices Act, Tex. Bus. & Com. Code Ann. § 17.41, et seq. (“DTPA”); and Chapters 541 and 542 of the Texas Insurance Code (collectively, the “Extra-Contractual Claims”). On February 18, 2021, State Farm removed this action to this court on grounds that complete diversity of citizenship exists between the parties and that the amount in controversy exceeds $75,000, exclusive of interest and costs.

The court now sets forth the undisputed facts in accordance with the standard in Section II of this opinion. On June 9, 2019, a storm hit Mr. Casey's home and caused it to suffer wind or hail damage. At that time, Plaintiff's home was insured by State Farm under State Farm Homeowners Policy No. 58-B3-Q669-4 (the “Policy”). On August 28, 2019, Mr. Casey filed a claim with State Farm for damages resulting from the June 9, 2019 storm. Subsequently, a State Farm adjuster inspected the home on September 11, 2019, and found storm damages of $3,642.98, which resulted in $0.00 payable to Mr. Casey after applying depreciation and his deductible. Mr. Casey then initiated the appraisal process under the Policy that resulted in an Appraisal Award being issued on September 17, 2020, in the amount of $76,871.20 for the replacement value and $64,064.03 for the actual cash value after subtracting $12,807.17 for depreciation. Def.'s Summ. J. App. 103-113. On October 12, 2020, State Farm issued a letter to Mr. Casey advising him that the Appraisal Award of $76,871.20 less $73,228.22 for “Non-Covered Items,” $1,125.05 for depreciation and $2,708.00 for deductible resulted in $934.98 for “Replacement Cost Benefits” to him. Def.'s Summ. J. App. 114-116. On May 26, 2021, State Farm issued a supplemental letter and payment to Mr. Casey. In the letter, State Farm enclosed a payment in the amount of $10,796.42 based upon the following breakdown:

Appraisal Award Replacement Cost:

$ 76,871.20

Less Non-Covered Items:

$ 61,964.97

State Farm estimate of roof damages:

$ 871.79

Less Depreciation:

$ 2,273.60

Less Deductible:

$ 2,708.00

Less Prior Payments:

$ 0.00

Actual Cash Value Payment (enclosed):

$ 10,796.42

Replacement Cost Benefits Remaining:

$ 2,273.60

Def.'s Summ. J. App. 122-124. State Farm also included a payment of $677.36, which represented “an interest payment.” Id. State Farm filed the present motion for summary judgment on November 19, 2021.

State Farm contends that it is entitled to summary judgment on the breach of contract claim because Mr. Casey has not shown that “he is entitled to additional policy benefits beyond those paid by State Farm.” Doc. 17 at 3. State Farm further contends that it is entitled to summary judgment on the Extra-Contractual Claims because it “provided more than enough evidence to establish a reasonable basis for its decision and subsequent payment of Plaintiff's claim.” Id. at 8. Plaintiff counters that State Farm is not entitled to summary judgment because there is a genuine dispute of material fact regarding the amount of covered damages and non-covered damages. Stated another way, Mr. Casey argues that he is entitled to additional payment beyond that already paid by State Farm because State Farm's payment excluded amounts that he contends are attributable to the covered wind or hail event.

II. Motion for Summary Judgment Standard

Summary judgment shall be granted when the record shows that there is no genuine dispute as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 323-25 (1986); Ragas v. Tennessee Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir. 1998). A dispute regarding a material fact is “genuine” if the evidence is such that a reasonable jury could return a verdict in favor of the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). When ruling on a motion for summary judgment, the court is required to view all facts and inferences in the light most favorable to the nonmoving party and resolve all disputed facts in favor of the nonmoving party. Boudreaux v. Swift Transp. Co., Inc., 402 F.3d 536, 540 (5th Cir. 2005). Further, a court “may not make credibility determinations or weigh the evidence” in ruling on a motion for summary judgment. Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000); Anderson, 477 U.S. at 25455.

Once the moving party has made an initial showing that there is no evidence to support the nonmoving party's case, the party opposing the motion must come forward with competent summary judgment evidence of the existence of a genuine dispute of material fact. Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 586 (1986). On the other hand, “if the movant bears the burden of proof on an issue, either because he is the plaintiff or as a defendant he is asserting an affirmative defense, he must establish beyond peradventure all of the essential elements of the claim or defense to warrant judgment in his favor.” Fontenot v. Upjohn Co., 780 F.2d 1190, 1194 (5th Cir. 1986) (emphasis in original). “[When] the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no ‘genuine [dispute] for trial.'” Matsushita, 475 U.S. at 587 (citation omitted). Mere conclusory allegations are not competent summary judgment evidence, and thus are insufficient to defeat a motion for summary judgment. Eason v. Thaler, 73 F.3d 1322, 1325 (5th Cir. 1996). Unsubstantiated assertions, improbable inferences, and unsupported speculation are not competent summary judgment evidence. See Forsyth v. Barr, 19 F.3d 1527, 1533 (5th Cir. 1994).

The party opposing summary judgment is required to identify specific evidence in the record and to articulate the precise manner in which that evidence supports his or her claim. Ragas, 136 F.3d at 458. Rule 56 does not impose a duty on the court to “sift through the record in search of evidence” to support the nonmovant's opposition to the motion for summary judgment. Id.; see also Skotak v. Tenneco Resins, Inc., 953 F.2d 909, 915-16 & n.7 (5th Cir. 1992). “Only disputes over facts that might affect the outcome of the suit under the governing laws will properly preclude the entry of summary judgment.” Anderson, 477 U.S. at 248. Disputed fact issues that are “irrelevant and unnecessary” will not be considered by a court in ruling on a summary judgment motion. Id. If the nonmoving party fails to make a showing sufficient to establish the existence of an element essential to its case and on which it will bear the burden of proof at trial, summary judgment must be granted. Celotex, 477 U.S. at 322-23.

III. Analysis

A. Summary of the Parties' Contentions

Defendant contends that because it paid Mr. Casey for his covered losses under the Policy, he cannot meet the fourth element of his breach of contract claim that requires damages be sustained as a result of the breach. According to State Farm, Mr. Casey has no evidence that the damages sought by him resulted from the June 9, 2019 storm, which is covered, and not from wear, tear, and deterioration, which is not covered under the Policy. Doc. 17 ¶ 2. Specifically, State Farm argues that it is not liable for non-covered perils such as “1) Historical tile repairs; 2) Raised edge of the second-floor flat roof resulting in lack of proper water shedding and accelerated deterioration; 3) Historical mortar displacement at the ridge of the roof; and 4) Deterioration at and around roof appurtenances.” Doc. 14 ¶ 31. State Farm further contends that Mr. Casey is unable to “segregate the portion of Property damage that may be related to wind damage versus the portion of the damage that is not covered.” Id. ¶ 29. Additionally, State Farm argues that absent a breach of contract, Mr. Casey cannot maintain his Extra-Contractual Claims without proof of an independent injury.

Next State Farm contends that it “is entitled to summary judgment on Plaintiff's extra-contractual claims because the summary judgment record conclusively establishes that State Farm had a reasonable basis for its claim decision and that it complied with all obligations under the policy and the Texas Insurance Code.” Doc. 14 ¶ 3. State Farm argues that “[a]s a general rule there can be no claim for bad faith when an...