Newton v. State Farm Lloyds

Docket NumberCivil Action 4:21-CV-00322-SDJ-CAN
Decision Date17 May 2022
PartiesCHRISTINA NEWTON, Plaintiff, v. STATE FARM LLOYDS, Defendant.
CourtU.S. District Court — Eastern District of Texas



Pending before the Court is Defendant State Farm Lloyds's Motion for Summary Judgment [Dkt. 36]. Having considered State Farm's Motion, Plaintiff's Response [Dkt. 31], and all other relevant filings, the Court recommends State Farm's Motion for Summary Judgment [Dkt. 36] be GRANTED IN PART and DENIED IN PART, as set forth herein.

Instant Lawsuit

Plaintiff Christina Newton's (Plaintiff) suit arises out of an insurance claim for damage to the laminate composition shingle roof of her residence, allegedly caused by a wind and hailstorm in March 2019 [Dkt. 11 at 2]. On March 18, 2021, Plaintiff filed her original petition in the 431st District Court of Denton County, Texas, Cause No 21-2093-431, against State Farm Lloyds (Defendant or “State Farm”) [Dkt. 1 at 1]. On April 22, 2021, Defendant removed Plaintiff's suit to the Eastern District of Texas based on diversity jurisdiction [Dkt. 1]. On June 4, 2021, Plaintiff filed her amended complaint - the live pleading - alleging State Farm underpaid her insurance claim for wind/hail damage to the roof of her residence in violation of the Texas Insurance Code and in breach of her insurance policy with State Farm [Dkt. 11]. On June 21, 2021, this matter was referred to the undersigned for pretrial proceedings [Dkt 13].

Plaintiff asserts two groups of claims against Defendant: (1) breach of contract; and (2) noncompliance with the Texas Insurance Code. With respect to the Texas Insurance Code, Plaintiff contends Defendant violated the prompt payment requirements under Chapter 542 of the Texas Insurance Code, and asserts “laundry list” claims under Chapter 541 of the Texas Insurance Code, specifically §§ 541.051, 541.060, and 541.061, for Defendant's alleged misrepresentations, unreasonable investigation and explanation of the claim, and failure to settle the claim in good faith [Dkt. 11 at 6-8]. As to Chapter 542, Plaintiff alleges the “failure of State Farm to pay for the losses and/or to follow the statutory time guidelines for accepting or denying coverage constitutes a violation of Section 542.051 et seq. of the Texas Insurance Code, ” specifically failure to “pay for policy benefits owed to [Plaintiff] within the period set forth under Section 542.058 [Dkt. 11 at 6]. Plaintiff seeks statutory interest and attorney's fees under § 542.060, § 541.152, and pursuant to Texas Civil Practice & Remedies Code §§ 38.001-38.003; as well as costs, prejudgment interest, and post-judgment interest [Dkt. 11 at 6, 8-9]. To reiterate, by and through these claims, Plaintiff asserts that State Farm underestimated the scope and cost to repair and replace the damage from hail and/or wind to the roof, fence, and interior rooms of the home resulting in underpayment of the claim [Dkt. 11 at 2-3].

Motion for Summary Judgment

On February 22, 2022, State Farm filed a Motion for Summary Judgment [Dkt. 36]. State Farm argues it is entitled to summary judgment on each of Plaintiff's Texas Insurance Code claims [Dkt. 36 at 5-10]. State Farm urges Plaintiff has not shown that a genuine issue of material fact exists as to these extra-contractual claims, and therefore, summary judgment is warranted.

State Farm does not move for summary judgment on Plaintiff's breach of contract claim [Dkt. 36 at 2].

Claims “Conceded” by Plaintiff - Texas Insurance Code Chapter 541

On March 15, 2022, Plaintiff filed a Response to Defendant's Motion for Summary Judgment [Dkt. 40]. In her Response, Plaintiff makes clear she is abandoning any claims brought under Chapter 541 of the Texas Insurance Code after considering rulings on such claims in other Eastern District of Texas cases [Dkt. 40 at 2]. Because Plaintiff concedes or otherwise abandons these claims, summary judgment on them is proper. See Rasco v. Potter, No. H-05-0034, 2007 WL 9758165, at *2 (S.D. Tex. Jan. 4, 2007) (granting summary judgment in favor of the defendant on the claims the plaintiff abandoned), aff'd, 265 Fed.Appx. 279 (5th Cir. 2008). Therefore, the undersigned recommends dismissal of each of Plaintiff's claims for violations of Chapter 541 of the Texas Insurance Code, and any claim for attorney's fees under such Chapter as well. Again, State Farm does not move for summary judgment on Plaintiff's breach of contract claim, and this claim should proceed to trial. Thus, the sole remaining claim(s) for the Court's consideration in connection with the pending Motion are the alleged violations of Texas Insurance Code Chapter 542.[1] At Hearing on March 22, 2022, the Parties confirmed no Reply would be filed.


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.Appx. 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 issue as to any material fact and that 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)). “The substantive law will identify which facts are material. This means only 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. 2019) (citing Parrish v. Premier Directional Drilling, L.P., 917 F.3d 369, 378 (5th Cir. 2019)) (cleaned up).

The party moving for summary judgment has the burden to show that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. Bucklew v. Precythe, 139 S.Ct. 1112, 1131 (2019). When 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.Appx. 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.Appx. 798, 802 (5th Cir. 2020) (citing Anderson, 477 U.S. at 249-50). The Court need only consider the record materials cited by the parties. FED. R. CIV. P. 56(c)(3). Rule 56 does not impose upon the district court a duty to sift through the record in search of evidence to support a party's opposition to summary judgment.” Forsyth v. Barr, 19 F.3d 1527, 1537 (5th Cir. 1994) (quotations omitted).


State Farm submits the following evidence in support of its Motion for Summary Judgment:

Exhibit A [Dkt. 36-1]: Excerpts from the Deposition of Plaintiff Christina Newton;
Exhibit B [Dkt. 36-2]: State Farm Estimate;
Exhibit C [Dkt. 36-3]: State Farm Correspondence to Christina Newton and Daniel Newton Dated August 23, 2019; and
Exhibit D [Dkt. 36-4]: Plaintiff's Homeowner Policy Renewal Declaration and Policy.
Plaintiff submits the following evidence in her Response:
Exhibit A [Dkt. 40-1]: Appraisal Determination;
Exhibit B [Dkt. 40-2]: Defendant's August 23, 2019 Estimate;
Exhibit C [Dkt. 40-3]: Defendant's August 23, 2019, Correspondence;
Exhibit D [Dkt. 40-4]: Plaintiff's Appraisal Letter; and
Exhibit E [Dkt. 40-5]: Plaintiff's Expert Report.

No objections have been made to the Court's consideration of any of the submitted summary judgment evidence.[2]

Undisputed Facts

Plaintiff is the named insured and owner of a homeowner's insurance policy purchased from State Farm (the Policy) [Dkts. 11 at 2; 36 at 1; 36-4; 40 at 1]. Plaintiff owns the insured property, her residence, located at 4001 Marigold Lane, Prosper, Texas 75078 (the “Property”) [Dkts. 11 at 2; 36 at 3]. Plaintiff's Policy for the Property covers losses caused by hail, wind, and damages to the residence subject to certain exclusions [Dkts. 11 at 2-3; 15 at 2; 36 at 3; 36-4 at 3]. On March 24, 2019, the date of loss, Plaintiff's Property was subject to hail and/or wind damage from a storm [Dkts. 11 at 2; 36 at 3]. Plaintiff filed a claim under the Policy on or around August 14, 2019 and State Farm inspected the Property on or around August 16 2019 [Dkts. 36 at 3; 40 at 1].[3] Following completion of its investigation, on August 23, 2019, State Farm notified Plaintiff it would pay a net claim of $176.67 based on its estimate finding a replacement cost value of $6, 705.92 for the damage with recoverable depreciation of $592.25, and less the deductible of $5, 937.00 [Dkts. 11 at 3; 15 at 3; 36 at 3; 36-3 at 2; 40 at 1]. State Farm tendered payment in the amount of $176.67 together with such notification [Dkts. 36-3 at 2; 40-3 at 1]. State Farm's correspondence states its investigation concluded that some of the observed...

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