SOUTHERN DISTRICT OF TEXAS DISMISSES PLAINTIFF’S BAD FAITH AND PROMPT PAYMENT OF CLAIMS CAUSES OF ACTION IN WIND AND HAIL LAWSUIT

This past week the District Court for the Southern District of Texas, Houston Division, partially granted State Farm Lloyds’ Motion for Summary Judgment, and dismissed an insured’s bad faith claims pursuant the bona fide dispute doctrine.  In Nasti v. State Farm Lloyds, 2015 WL 150468 (S.D. Tex)(January 9, 2015)(J. Harmon), Plaintiff Gary Nasti sued State Farm Lloyds for alleged storm damage to his Woodlands home.  After receiving a free roof estimate from a local roofer, Mr. Nasti reported a claim to State Farm Lloyds and requested an inspection.  State Farm inspected the claim and determined that the amount of damage did not exceed Plaintiff’s $6,584.00 policy deductible.  Plaintiff requested a second inspection and State Farm determined that there was no storm damage; however, State Farm did not alter the original estimate establishing that Plaintiff’s alleged damage was below his deductible.  Plaintiff’s expert, Shannon Kimmel, opined that the roof needed to be entirely replaced for $49,808.47 and that State Farm’s adjusters ignored and underestimated covered damage.  Plaintiff sued State Farm for breach of contract, and multiple violations of under the Texas Insurance Code and Deceptive Trade Practice Act.

Judge Melinda Harmon found that a fact issue existed regarding the conflicting estimates between State Farm and Plaintiff with regard to his breach of contract claim; however the Court dismissed Plaintiff’s bad faith and prompt payment claims because Plaintiff’s expert provided a declaration clearly establishing that a genuine dispute as to the extent of covered versus non-covered damage exists between the covered damages.  Since a bona fide dispute regarding what damage, if any, should have been covered, the Court partially granted State Farm’s summary judgment and dismissed all of Plaintiff’s claims except breach of contract.

[Editor’s note: Christopher Martin, Marilyn Cayce, and Raymond Kutch of Martin, Disiere, Jefferson and Wisdom were privileged to represent State Farm Lloyds in this matter].