SUMMARY JUDGMENT ON CLAIM INVESTIGATION NOT APPROPRIATE WHEN HOMEOWNER REPLACES ROOF BEFORE ADJUSTER CAN INSPECT, BUT ADJUSTER SUBSEQUENTLY DOES LITTLE MORE THAN TAKE PICTURES

In Santacruz v. Allstate Texas Lloyd’s, Inc., 2014 WL 5870429 (5^th Cir. November 13, 2014,) the 5^th Circuit reversed a summary judgment in favor of Santacruz’s homeowner’s insurance carrier on the basis that Santacruz had raised fact questions on the reasonableness of the adjuster’s claim investigation and the damages arising from the alleged breach of the duty of good faith and fair dealing.  The matter was remanded for further proceedings in the Northern District of Texas trial court.    Plaintiff alleged a June 28, 2010, rainstorm in Dallas blew several shingles off his roof, thereby causing the roof to leak and part of the roof to collapse. He promptly reported the claim to his carrier who advised him it would be a couple of days before an adjuster could inspect the roof. He advised the carrier that more storms were forecast for the rest of the week and that his contractor advised the roof needed to be replaced rather than patched or tarped.  The carrier reportedly advised that they needed to inspect the roof before any repairs.  The Plaintiff promptly replaced the roof, anyway. The adjuster subsequently inspected the roof, took pictures of the roof and interior, but did no further investigation.  The claim was then denied.

When considering the carrier’s motion for summary judgment, the trial court focused its attention on whether Allstate had a reasonable basis for denying the claim. The trial court believed Allstate has such a basis because they were denied “access to the damaged property” by the Plaintiff’s replacing the roof before it could be inspected.  The Plaintiff contended he was prompted to do the quick repairs because of the impending storms and his contractual duty to “make reasonable and necessary repairs to protect the property.”  The Court of Appeals disagreed with the trial court and held there was a question of fact about the reasonableness of the claim denial and investigation because Allstate did not attempt to talk to the contractor nor obtain any weather reports. These additional efforts would have revealed the condition of the roof when the contractor observed it and why he felt the condition was due to covered wind damage.  The Court of Appeals further held that the Plaintiff’s testimony about the lost value of his personal and household items, and production of the invoice and estimates from two contractors about repair costs, were sufficient to raise fact questions about damages. Summary judgment was not appropriate on that record.