Crenshaw v. State Farm Lloyds

• Decision Date: 22 November 2019
• Docket Number: No. 4:18-cv-236-O,4:18-cv-236-O
• Citation: 425 F.Supp.3d 729
• Parties: Thomas CRENSHAW v. STATE FARM LLOYDS
• Court: U.S. District Court — Northern District of Texas

425 F.Supp.3d 729

Thomas CRENSHAW

v.STATE FARM LLOYDS

No. 4:18-cv-236-O

United States District Court, N.D. Texas, Fort Worth Division.

Signed November 22, 2019

Charlie Gustin, David Bergen, Jr., Richard D. Daly, Daly & Black PC, Houston, TX, Stephen Weikai Wu, Mackie Wolf Zientz & Mann PC, Dallas, TX, for Thomas Crenshaw.

Sarah E. Bradbury, Bradbury Law PLLC, Amy M. Stewart, Keron Andre Wright, Tonika G.E. Brown, Stewart Law Group PLLC, Michele C. Spillman, Condon Tobin Sladek Thornton, Dallas, TX, for State Farm Lloyds.

ORDER

Reed O'Connor, UNITED STATES DISTRICT JUDGE

Pending are Defendant's Motion for Summary Judgment (ECF No. 19), with Brief in Support (ECF No. 20); Plaintiff's Response to Defendant's Motion for Summary Judgment (ECF No. 28), with Brief in Support (ECF No. 29); Defendant's Reply in Support of Motion for Summary Judgment (ECF No. 35); Plaintiff's Supplemental Response (ECF No. 38); and Plaintiff's Response to Defendant's Motion for Leave (ECF No. 40), with Brief in Support (ECF No. 41). Defendant contends it is entitled to judgment as a matter of law because Plaintiff's breach of contract claim fails since it paid the full amount owed, and his Prompt Payment Act claim fails because it timely made all payments. For the following reasons, the Court GRANTS in part State Farm's Motion for Summary Judgment and DENIES it in part .

I. BACKGROUND¹

Defendant State Farm Lloyds ("State Farm") insured plaintiff Thomas Crenshaw's ("Crenshaw") home and property. Orig. Pet. 2, ECF No. 1. Following storm damage, Crenshaw filed a claim pursuant to this policy on July 10, 2017. Id. On July 18, 2017, State Farm inspected the home, it then notified Crenshaw that it accepted his claim, and on July 25, 2017, it paid him $1,123.33, which represented the loss caused by the storm damage, less his deductible and deprecation. See Am. Comp. 2, ECF No. 21.

Crenshaw later sued State Farm and alleged it underpaid and mishandled his insurance claims. Pl. Br. in Supp. of Resp. to Summ. J. 1, ECF No. 29. He sued in state district court, asserting breach of contract, insurance code, and deceptive trade practices act claims. See generally Orig. Pet., ECF No. 1. State Farm removed the case based on diversity of citizenship. Notice of Removal, 1, ECF No. 1. After removal, Crenshaw amended his complaint to assert only breach of contract and Prompt Payment Act claims, and he requests attorneys fees. See Am. Comp., ECF No. 21.

While this case was pending, State Farm invoked the insurance policy's appraisal provision. See generally Pl.'s Mot. for Reinstatement, ECF No. 14. The appraisal process became final on July 25, 2019 and determined that Crenshaw's loss amounted to $6,923.32. Def. Br. in Sup. Mot. Sum. J. 4. On August 9, 2019, State Farm paid Crenshaw, pursuant to the appraisal award, $4,086.99 (the appraisal award less the deductible, depreciation, and the initial claim payment). Id.

II. LEGAL STANDARDS

A. Summary Judgment

Summary judgment is proper when the pleadings and evidence on file 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). "[T]he substantive law will identify which facts are material." Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A genuine issue of material fact exists "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. The movant makes a showing that there is no genuine issue of material fact by informing the court of the basis of its motion and by identifying the portions of the record which reveal there are no genuine material fact issues. See Fed. R. Civ. P. 56(c) ; Celotex Corp. v. Catrett , 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

When reviewing the evidence on a motion for summary judgment, a court must decide all reasonable doubts and inferences in the light most favorable to the non-movant. See Walker v. Sears, Roebuck & Co. , 853 F.2d 355, 358 (5th Cir. 1988). A court cannot make a credibility determination in light of conflicting evidence or competing inferences. Anderson , 477 U.S. at 255, 106 S.Ct. 2505. As long as there appears to be some support for the disputed allegations such that "reasonable minds could differ as to the import of the evidence," the motion for summary judgment must be denied. Id. at 250, 106 S.Ct. 2505.

B. Interpretation of Insurance Contracts

Generally, under Texas law, a contract of insurance is subject to the same rules of construction as other contracts. Barnett v. Aetna Life Ins. Co. , 723 S.W.2d 663, 665 (Tex. 1987). When interpreting an insurance contract, terms are given their plain, ordinary meaning unless the policy itself shows that the parties intended the terms to have a different, technical meaning. DeWitt County Elec. Coop., Inc. v. Parks , 1 S.W.3d 96, 101 (Tex. 1999) ; Puckett v. U.S. Fire Ins. Co. , 678 S.W.2d 936, 938 (Tex. 1984). When terms are defined in an insurance policy, those definitions control. Trinity Universal Ins. Co. v. Cowan , 945 S.W.2d 819, 823 (Tex. 1997). Courts interpret the contract as a whole, giving effect to each part. Balandran v. Safeco Ins. Co. of Am. , 972 S.W.2d 738, 741 (Tex. 1998). If the policy terms are susceptible to only one reasonable construction, the terms are enforced as written. Puckett , 678 S.W.2d at 938. If an insurance contract is ambiguous however, a court construes the contract in favor of the insured. Barnett , 723 S.W.2d at 665 ; Canutillo Indep. Sch. Dist. v. Nat'l Union Fire Ins. Co. , 99 F.3d 695, 701 (5th Cir. 1996) (applying Texas law). Where an exclusionary clause is subject to two or more reasonable interpretations, a court must adopt the construction urged by an insured as long as the construction is reasonable, even if the construction urged by the insurer appears to be more reasonable or a more accurate reflection of the parties' intent.

Nat'l Union Fire Ins. Co. of Pittsburgh, Pa. v. Hudson Energy Co., Inc. , 811 S.W.2d 552, 555 (Tex. 1991) ; Glover v. Nat'l Ins. Underwriters , 545 S.W.2d 755, 761 (Tex. 1977).

C. Summary Judgment Evidence

At the summary judgment stage, evidence need not be authenticated or otherwise presented in an admissible form. See Fed. R. Civ. P. 56(c) ; Lee v. Offshore Logistical & Transp., LLC , 859 F.3d 353, 355 (5th Cir. 2017). "[M]aterials cited to support or dispute a fact need only be capable of being ‘presented in a form that would be admissible in evidence.’ " LSR Consulting, LLC v. Wells Fargo Bank, N.A. , 835 F.3d 530, 534 (5th Cir. 2016) (quoting Fed. R. Civ. P. 56(c)(2) ). "This flexibility allows the court to consider the evidence that would likely be admitted at trial—as summary judgment is trying to determine if the evidence admitted at trial would allow a jury to find in favor of the nonmovant—without imposing on parties the time and expense it takes to authenticate everything in the record." Maurer v. Indep. Town , 870 F.3d 380, 384 (5th Cir. 2017).

III. ANALYSIS

The Court will first consider Crenshaw's objections to State Farm's summary judgment evidence, and then evaluate whether State Farm is entitled to judgment as a matter of law on the breach of contract, Prompt Payment Act, and attorneys fees claims.

A. Plaintiff's Objections to Summary Judgment Evidence

Crenshaw objects to portions of the evidence State Farm included in support of its summary judgment motion. He contends Exhibits B, B-1, B-2, B-3, B-4, B-5, and B-6 are not properly authenticated, contain inadmissible hearsay, and are not based on personal knowledge. These exhibits are attached to a business records affidavit, authorized by Rule 902 of the Federal Rules of Evidence. The argument that an affiant must have "personal knowledge as to certain facts in the affidavit ‘[are] meritless, because personal knowledge of all the contents of a business record affidavit is not required.’ " U.S. Bank Nat'l Ass'n v. Dennings , No. 1:15-CV-00239-RP, 2016 WL 8904534, at *4 (W.D. Tex. June 7, 2016). In addition, all State Farm must show is that these records are capable of being presented in a form that would be admissible. And it has shown in its Reply that it can submit this information in admissible form, including attaching an affidavit demonstrating that the objected to exhibits are admissible as business records. Braden v. Allstate Vehicle & Prop. Ins. Co. , No. 4:18-CV-00592-O, 2019 WL 201942, at *3 (N.D. Tex. Jan. 15, 2019), appeal dismissed , No. 19-10198, 2019 WL 3948997 (5th Cir. Apr. 22, 2019). Accordingly, Plaintiff's objections to the summary judgment evidence used to decide the pending motion is DENIED .²

B. Breach of Contract

State Farm argues it is entitled to judgment as a matter of law on Crenshaw's breach of contract claim because it paid him the entire loss amount set by the policy's appraisal provision. Texas courts have repeatedly rejected breach of contract claims when an insurer timely paid an appraisal award. See, e.g., Quibodeaux v. Nautilus Ins. Co. , 655 F. App'x. 984, 986–87 (5th Cir. 2016) ; Blum's Furniture Co. v. Certain Underwriters at Lloyds London , 459 F. App'x. 366, 368–69 (5th Cir. 2012) ; Nat'l Sec. Fire & Cas. Co. v. Hurst , 523 S.W.3d 840, 844–47 (Tex. App.—Houston [14th Dist.] 2017, no pet. h.) ; Garcia v. State Farm Lloyds , 514 S.W.3d 257, 273–74 (Tex. App.—San Antonio 2016, pet. denied). "[A]ppraisal awards made pursuant to the provisions of an insurance contract are binding and enforceable, and every reasonable presumption will be indulged to sustain an appraisal award." Franco v. Slavonic Mut. Fire Ins. Ass'n , 154 S.W.3d 777, 786 (Tex. App.—Houston [14th Dist.] 2004, no pet.). Courts will disregard the award only if the insured shows that the award was (1) made without authority, (2) the result of fraud, accident, or mistake, or (3) not in substantial compliance with the insurance policy. Meisenheimer v. Safeco Ins. Co. of Indiana , No. 3:17-CV-2153-M, 2018 WL...