Matyn v. State Farm Lloyds

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MARY MATYN and ROBERT D. MATYN, Plaintiffs, v. STATE FARM LLOYDS, Defendant.

Civil Action No. 4:23-CV-00174-ALM-AGD

United States District Court, E.D. Texas, Sherman Division

February 7, 2024

REPORT AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE

AILEEN GOLDMAN DURRETT, UNITED STATES MAGISTRATE JUDGE

The above-referenced case was referred to the undersigned United States Magistrate Judge for pre-trial purposes in accordance with 28 U.S.C. § 636. Pending before the court is Defendant State Farm Lloyds' Motion for Partial Summary Judgment (Dkt. #25). After reviewing Defendant's Motion for Partial Summary Judgment (Dkt. #25), Plaintiffs Mary Matyn and Robert D. Matyn's Response in opposition (Dkt #26), Defendant's Reply in support (Dkt. #27) and all other relevant pleadings, the court recommends that Defendant's Motion for Partial Summary Judgment be granted in part and denied in part as set forth herein.

BACKGROUND

On January 20, 2023, Plaintiffs filed the instant lawsuit in the 429th Judicial District Court of Collin County, Texas, and on February 3, 2023, Plaintiffs amended their complaint to join the proper Defendant (Dkt. #1 at p. 1). On March 6, 2023 Defendant removed based on diversity jurisdiction, 28 U.S.C § 1332 (Dkt. #1 at p. 2). Following removal, Plaintiffs filed an Amended Complaint in federal court on April 6, 2023 alleging that their home was damaged by a severe winter storm on or about February 17, 2021 (Dkt. #10 at p. 3). Plaintiffs allege their home “sustained significant damage all over, including its floors, walls, ceilings, and exterior” that was caused “by an abrupt and accidental discharge or overflow of water as a result of freezing” (Dkt. #10 at p. 3). Plaintiffs allege that Defendant refused to cover the full amount of the damages, which Plaintiffs believe are all covered under the insurance policy they have with Defendant (Dkt. #10 at p. 5). Defendant disputes Plaintiffs' allegations and argues that many of the damages alleged by Plaintiffs are not covered under Plaintiffs' insurance policy (Dkt. #11 at p. 4). Defendant alleges it has paid $96,117.67 to Plaintiffs under the policy, (Dkt. #25 at p. 2), but Plaintiffs believe they are still owed $123,757.90 for additional covered losses (Dkt. #25 at p. 9).

Plaintiffs sued Defendant under four independent causes of action: (1) breach of contract; (2) noncompliance with the Texas Insurance Code - Unfair Settlement Practices; (3) violations of the Texas Insurance Code - Prompt Payment of Claims; and (4) breach of the duty of good faith and fair dealing (Dkt. #10 at pp. 14-17). Defendant has moved for partial summary judgment, arguing Defendant did not breach the contract because Plaintiffs are seeking payment for damages that are not covered by the insurance policy, and Plaintiffs cannot show more than a bona fide controversy regarding the extent of insurance coverage (Dkt. #25 at pp. 1-2).

LEGAL STANDARD

The purpose of summary judgment is to isolate and dispose of factually unsupported claims or defenses to help “secure the just, speedy and inexpensive determination of every action.” Nat'l Cas. Co. v. Kiva Const. & Eng'g, Inc., 496 Fed. App'x 446, 449 (5th Cir. 2012) (citing 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 the movant is entitled to judgment as a matter of law.” FED. R. CIV. P. 56(a). “A genuine dispute of material fact exists ‘if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.'” Certain Underwriters at Lloyd's, London v. Axon Pressure Prod. Inc., 951 F.3d 248, 255 (5th Cir. 2020) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). All inferences must be construed in the light most favorable to the nonmoving party. See id.; Osprey Ship Mgmt. Inc. v. Foster, 387 Fed. App'x 425, 429 (5th Cir. 2010). “[T]he substantive law will identify which facts are material. This means [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.” Gibson v. Collier, 920 F.3d 212, 219 (5th Cir.), cert. denied, 140 S.Ct. 653 (2019) (citing Parrish v. Premier Directional Drilling, L.P., 917 F.3d 369, 378 (5th Cir. 2019)) (internal quotations omitted).

The party moving for summary judgment has the burden of showing that there is no genuine dispute as to any material fact and that it is entitled to judgment as a matter of law. Cotroneo v. Shaw Env't & Infrastructure, Inc., 639 F.3d 186, 191 (5th Cir. 2011). “[W]here the movant bears the burden of proof at trial, the movant ‘must establish beyond peradventure all of the essential elements of the claim or defense to warrant judgment in his favor.'” Lyons v. Katy Indep. Sch. Dist., 964 F.3d 298, 302 (5th Cir. 2020) (citation omitted). However, if the movant does not bear the burden of proof at trial, the movant is entitled to summary judgment if “the nonmoving party has failed to make a sufficient showing on an essential element of her case with respect to which she has the burden of proof.” Gonzales v. ConocoPhillips Co., 806 Fed. App'x 289, 291 (5th Cir. 2020) (citing Celotex, 477 U.S. at 323). Once the movant has carried its burden, the nonmovant “must go beyond the pleadings and identify specific evidence in the record showing that there is a genuine issue for trial.” Powers v. Northside Indep. Sch. Dist., 951 F.3d 298, 307 (5th Cir. 2020). “If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted.” Malbrough v. Stelly, 814 Fed. App'x 798, 802 (5th Cir. 2020) (citing Anderson, 477 U.S. at 249-50).

ANALYSIS

A. Breach of Contract

“In order to establish a claim for breach of contract, a plaintiff must establish: (1) the existence of a valid, enforceable contract; (2) the plaintiff performed or tendered performance; (3) defendant breached the contract; and (4) defendant's breach caused plaintiff's damages.” Johnson v. JPMorgan Chase Bank, N.A., No. 4:12cv285, 2013 WL 2554415, at *6 (E.D. Tex. June 7, 2013) (citing Valero Mktg. & Supply Co. v. Kalama Int'l, 51 S.W.3d 345, 351 (Tex. App.-Houston [1st Dist.] 2001, no pet.)). The parties do not dispute whether a valid insurance contract exists (Dkt. #10; Dkt. #11). The issue before the court is whether Defendant breached the insurance contract by not paying certain damages caused by the winter storm. Plaintiffs believe they are owed a significant payment from Defendant, and Defendant argues that the payment Plaintiffs seek is for damages not covered by the contract.

i. Trees, Shrubs, and Landscaping

First, regarding landscaping, Plaintiffs submitted an invoice to Defendant “for removal of a palm tree and shrubs which died during the February 2021 freeze event” (Dkt. #25 at p. 10). Plaintiffs' insurance policy states: “We also do not cover: . . . (b) trees, shrubs, live or artificial plants, lawns, or artificial grass, except as provided in SECTION I - ADDITIONAL COVERAGES, Trees, Shrubs, and Landscaping” (Dkt. #25, Exhibit B-1 at p. A.335). (Emphasis in original). The additional coverage for trees, shrubs, and landscaping in Plaintiffs' insurance policy specifically states: “We will pay for accidental direct physical loss to outdoor[ landscaping] on the residence premises, caused by the following perils: Fire or lightning, Explosion, Riot or civil commotion, Aircraft, Vehicles . . . Vandalism or malicious mischief, or Theft” (Dkt. #25, Exhibit B-1 at p. A.339). (Emphasis in original). “‘An insured cannot recover under an insurance policy unless it pleads and proves facts that show that its damages are covered by the policy.'” Kim v. Nationwide Mut. Ins. Co., 614 F.Supp.3d 475, 490 (N.D. Tex. July 11, 2022) (citing Tchakarov v. Allstate Indem. Co., 2021 WL 4942193, at *5 (N.D. Tex. Oct. 22, 2021). As there is no policy language that provides coverage for the claimed loss of Plaintiffs' trees, shrubs, or landscaping due to the winter freeze, and Plaintiffs point to no evidence to the contrary, the court finds that Defendant is entitled to summary judgment as to any and all claims against Defendant for claimed losses related to trees, shrubs, or landscaping.

ii. Swimming Pool

Next Plaintiffs' expert estimated Plaintiffs' swimming pool sustained damages caused by the freeze event, which total $9,809.23 (Dkt. #25, Exhibit D-1 at p. A.431). In order to recover payment for damages to the pool, Plaintiffs are required to point to evidence in the record that raises a genuine dispute of material fact. Powers, 951 F.3d at 307. Plaintiffs argue that the pool damage should be covered due to an “ensuing loss” provision in the insurance policy (Dkt. #26 at pp. 5-6). This “ensuing loss” provision states: “However, we will pay for any resulting loss from items a. through l. unless the resulting loss is itself a Loss Not Insured as described in this Section” (Dkt. #25, Exhibit B-1 at p. A.346). (Emphasis in original). Plaintiffs point to item b., which deals with “freezing of plumbing, heating, air conditioning, or automatic fire protective sprinkler system or of a household appliance” (Dkt. #25, Exhibit B-1 at p. A.345). This item b., however, has nothing to do with Plaintiffs' pool damage, and they cite to no evidence in the record for such assertion. Indeed, the very next item, c., states that Plaintiffs' insurance policy does not cover “any loss to the property . . . that consists of, or is directly and immediately caused by . . . c. freezing, thawing, pressure, or weight of water, ice, snow, or sleet, whether driven by wind or not, to: (1) a swimming pool, hot tub, or spa,...