FEDERAL DISTRICT JUDGE DISMISSES EXTRA-CONTRACTUAL CLAIMS IN VALLEY HAIL CASES & ORDERS APPRAISAL

Addressing a raft of motions that led her to invoke both Greek mythology and Henry Wadsworth Longfellow, Judge Micaela Alvarez of the Southern District of Texas, McAllen Division, last week dismissed the bulk of a lawsuit arising out of one of the two major valley hailstorms of spring 2012.  In Heller v. Ace European Group Ltd., Civ. No. 7:12-CV-422, 2013 WL 6589253 (S.D. Tex. Dec. 16, 2013), the court was faced with eight motions (and seventeen associated briefs, responses, and replies) — three for summary judgment and the remainder concerning various discovery and appraisal matters.  Judge Alvarez described the motions with “mix[ed] Herculean metaphors” including a “hydra-headed docket” and the court’s effort to “clean out the Augean stables.”  The first section of the court’s order addressed the summary judgment issues, and the latter addressed the remaining issues.

The court’s summary judgment ruling disposed of all of the plaintiff’s extra-contractual causes of action.  First, the plaintiff’s multiple misrepresentation claims asserted no more than mere breaches of contract (which cannot support a misrepresentation finding as a matter of law), were insufficiently alleged in the pleadings, or were conclusively disproved by the evidence.  Similarly, the plaintiff’s statutory and common law claims were either founded on a simple disagreement over the extent of coverage (which does not support extra-contractual recovery), or unsupported by evidence.  Examples of the evidentiary deficiency of the plaintiff’s case include the plaintiff’s failure to adduce expert evidence concerning what constitutes a “reasonable insurance investigation.”  The court also identified pleading infirmities such as the plaintiff’s failure to allege a violation of Section 541.060(a)(5) concerning other insurance, suggesting that the plaintiff’s pleading and the thrust of the statutory prohibition “pass[ed] each other as ships in the night.”  (For this, the Court directly cited Longfellow’s Tales of a Wayside Inn.)  The court did not, however, agree with Ace’s argument that the plaintiff’s failure to designate experts defeated the plaintiff’s contract claim as a matter of law and allowed that claim to proceed.

The court also granted the plaintiff’s motion to compel appraisal.  Ace argued that the plaintiff had waived appraisal by failing to timely invoke it and by “engag[ing] in protracted discovery aimed at claims which could not be resolved through appraisal.”  Following the Texas Supreme Court’s opinion in In re Universal Underwriters, 345 S.W.3d 404, 411 (Tex. 2011), Judge Alvarez ordered the parties to appraisal, concluding that Ace could have invoked appraisal itself to any prejudice from the plaintiff’s delay, and that some amount of litigation could still be avoided by pursuit of the appraisal process.

The remaining disputes before the court were resolved by an order that Ace update the court on the status of a deposition and inspection for which the plaintiff had been uncooperative and that the plaintiff pay Ace’s costs in doing so; a denial of the plaintiff’s motion to compel a deposition that Judge Alvarez found had not been diligently pursued; and, a denial of the plaintiff’s motion for an extension of time to identify experts.