Texas Insurance Law Newsbrief - February 25, 2025

U.S. DISTRICT COURT CONCLUDES THAT TURNING A HOME’S CENTRAL HEATING SYSTEM OFF THE NIGHT BEFORE WINTER STORM URI WAS NOT UNREASONABLE AS A MATTER OF LAW

The United States District Court for the Southern District of Texas concluded that a homeowner turning off the main heating system in her home prior to Winter Storm Uri was not unreasonable as a matter of law and presented enough of a genuine issue of fact to survive an insurer’s motion for summary judgment in a coverage dispute.

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In Dorcas Giwa v. State Farm Lloyds, Civil Action No. 4:23-cv-014551, 2025 U.S. Dist. LEXIS 31537 (S.D. Texas [Houston Division] Feb. 21, 2025), pandemic-related travel restrictions prevented homeowner Dorcas Giwa from returning to her Harris County home for over a year.  Giwa was still stranded out of the country as Winter Storm Uri approached in February 2021, so she asked her three adult children to take care of her home in her absence.  The night before the Winter Storm was expected to hit Houston, Giwa’s son wrapped the pipes, drained the faucets, turned off the main water line, and turned the main heating system off because, according to him, “it was warm in the house” and he was trying to “follow local city guidelines.”  Subsequently, Giwa’s pipes froze and burst, causing significant damage to the home.  Giwa filed a claim with State Farm, who denied the claim under a freeze-damage exclusion in the policy which specifically excluded from coverage damages caused by plumbing system freezes unless the insured used reasonable care to maintain heat in the building structure at 55 degrees Fahrenheit or to shut off the water supply and drain the system and appliances of water.

When Giwa sued State Farm for coverage for the claim, State Farm filed a motion for summary judgment on the freeze-damage exclusion in the policy, arguing that Giwa’s failure to use reasonable care triggered the exclusion because it was unreasonable as a matter of law for Giwa’s son to turn the heater off without draining the appliances.

In denying summary judgment, the court began its analysis by noting that each side acknowledged that the extent of Winter Storm Uri “was likely outside the realm reasonably foreseeable at the time Giwa was winterizing the house.”  In addition, the court paid specific attention to the fact that Giwa’s son took other efforts to winterize the home, including wrapping the pipes, opening the cabinets, and draining the faucets.  Moreover, Giwa’s son testified during his deposition that local news had asked residents to turn their heaters off in order to alleviate the strain the storm would put on the power grid.  Based on these facts, the court concluded that a reasonable jury could determine that these efforts did comport with the policy’s “reasonable care” requirements and that turning the heater off as the winter storm approached was not by itself unreasonable as a matter of law. State Farm’s motion for summary judgment was denied.

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U.S. DISTRICT COURT HOLDS THAT DELIVERY OF PRE-SUIT NOTICE TO A THIRD-PARTY CLAIMS ADJUSTER INSTEAD OF DIRECTLY TO THE INSURER IS NOT SUFFICIENT NOTICE UNDER TEXAS INSURANCE CODE.

The United States District Court for the Northern District of Texas concluded that providing pre-suit notice to an independent adjuster hired by a third-party claims administrator instead of directly to the insurer does not satisfy the notice requirements imposed by the Texas Insurance Code.

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In Devindra Invs., Inc. v. Wesco Ins. Co., No. 4:24-CV-097-Z-BR, 2025 U.S. Dist. LEXIS 29821 (N.D. Texas [Amarillo Division], Feb. 19, 2025, mem. op.), a commercial property owned and operated by Devindra Investments Inc. suffered property damage from a hailstorm.  Devindra filed a claim under its commercial insurance policy issued by Wesco Insurance Company, who then assigned the claim to an independent adjuster from a third-party claims administrator.  Devindra sent a Pre-Suit Notice and Demand Letter to the third-party adjuster and eventually filed a lawsuit against Wesco seeking attorneys’ fees and other alleged damages.

Shortly after the filing of pleadings, Wesco filed a Motion to Limit Plaintiff’s Recovery of Attorneys’ Fees, arguing that Devindra’s service of its pre-suit notice to the third-party adjuster did not constitute adequate notice under the Texas Insurance Code.  Specifically, Wesco claimed that Devindra was required under Tex. Ins. Code. § 542A.003(a)-(c) to provide pre-suit notice “to any person from whom Devindra sought damages.” Wesco contended that, as the insurer, Wesco was “the person” from whom Devindra sought damages, and since Devindra provided notice to the third-party adjuster and not Wesco, Devindra failed to provide adequate notice and should be precluded from receiving any award of attorneys’ fees under § 542A.007(d). Devindra, on the other hand, argued that the independent adjuster was “the functional equivalent of a claims employee” of the insurer, meaning that service on the third-party adjuster constituted service on Wesco in the same way that service on a Wesco employee would constitute service on Wesco.

Ultimately, the court agreed with Wesco and granted the motion to limit Devindra’s recovery of attorneys’ fees.  Reasoning that the purpose of requirements for pre-suit notice is “to discourage litigation and encourage settlements of consumer complaints,” the court identified that the statute imposes a clear responsibility upon claimants like Devindra:  “a claimant’s obligation to give timely, adequate notice is a straightforward duty and a prerequisite to filing suit.”  While Devindra may have attempted to discharge its duty under the statute by providing notice to the third-party adjuster, Wesco was still left unable to adequately evaluate Devindra’s claims before Devindra filed suit, ultimately hindering the pro-settlement purpose of the statute. The court concluded that Devindra had a clear responsibility to deliver the mandatory notice to the necessary recipient.  Since Wesco was the necessary recipient, providing notice to the third-party claims administrator was not sufficient to discharge Devindra’s obligation under the law.  Accordingly, the court held that because Wesco was entitled to but did not receive the required pre-suit notice, Texas law precluded Devindra from receiving any award for attorneys’ fees.

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TEXAS APPELLATE COURT REVERSES JUDGMENT AGAINST ATTORNEY ON BASIS THAT DISBURSEMENT OF SETTLEMENT FUNDS IS WITHIN SCOPE OF LEGAL REPRESENTATION AND IS PROTECTED BY ATTORNEY IMMUNITY

A Texas appellate court held that the attorney immunity doctrine barred certain claims under the Texas Uniform Fraudulent Transfer Act because, as a matter of law, disbursing settlement funds is conduct within the scope of legal representation.

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In Ridgeway v. MedFinManager LLC, No. 04-22-00769-CV, 2025 Tex. App. LEXIS 934 (Tex. App.—San Antonio, Feb. 19, 2025), Ernest Barrett hired Henry Ridgeway to represent him in personal injury lawsuit arising from a motor vehicle accident.  During the course of his treatment, Barrett filed an application for MedFinManager, LLC, a specialty financial services company that facilitates medical care on a lien.  Eventually, Barrett had surgery, and MedFin bought the accounts receivable from Barrett’s medical providers.

Years later, Barrett hired Hugo Xavier de los Santos as co-counsel with Ridgeway and settled his personal injury lawsuit.  Shortly thereafter, de los Santos presented Barrett with a Closing Letter, listing the amounts that de los Santos would be paying to Barrett’s medical providers out of the settlement and stating that de los Santos would be paying “only the above set forth amounts to each of Barrett’s respective health care providers.”  De los Santos then sent MedFin separate letters stating that Barrett disagreed with the amounts charged by his medical providers, and de los Santos enclosed checks for less than the amounts charged.  As a result, MedFin sued Barrett, Ridgeway, and de los Santos for breach of contract and other claims, including fraudulent transfer under the Texas Uniform Fraudulent Transfer Act (“TUFTA”).  At trial, both Ridgeway and de los Santos asserted the affirmative defense of attorney immunity for acts within the scope of their legal representation of Barrett.  Nevertheless, the jury found, among other things, that de los Santos violated the TUFTA and was personally liable to MedFin.

The appellate court reversed the judgment against de los Santos, concluding that because the act of disbursing the settlement funds was within the scope of de los Santos’s legal representation of Barrett, de los Santos was protected by attorney immunity against the claims brought by MedFin.  After evaluating the specific task de los Santos was doing at the time of the alleged wrongful conduct, the court relied on Texas case law to conclude that disbursing settlement funds to or on behalf of a client is conduct within the scope of an attorney’s representation as a matter of law.  Absent any evidence of de los Santos participating in a fraudulent business scheme or knowingly helping Barrett to avoid paying a judgment, the fact that de los Santo distributed part of the settlement funds to himself as his attorney’s fee did not mean that he was acting in his personal capacity rather than his capacity as Barrett’s attorney.  When combined with its conclusion that the TUFTA does not abrogate the attorney immunity defense, the appellate court concluded that de los Santos established his defense of attorney immunity as a matter of law and reversed the judgment against him.

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BYSTANDER DAMAGES, EVEN THOUGH COVERED UNDER A UIM POLICY, WERE SUBJECT TO A SINGLE, PER PERSON LIMIT OF $50,000, WHICH HAD ALREADY BEEN EXHAUSTED

In Farmers Tex.Cnty. Mut. Ins. Co. v. Blanek., No. 14-23-00799-CV 2025 Tex. App. LEXIS 589* (February 4, 2025), the Court of Appeals of Texas for the Fourteenth District, Houston held that under the policy’s unambiguous language, only a single per person limit would be triggered for a Plaintiff’s bodily injury.

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Another claimant’s mental anguish bystander damages, though covered, would also be subject to that limit. 

The dispute was between Melodye Blanek and Farmer Texas County Mutual Insurance Company.  Jamie Blanek, the daughter of Melodye Blanek, was injured as a pedestrian when struck by an underinsured motor vehicle.  Melodye witnessed the accident and claimed mental anguish damages as a bystander, but Melodye did not suffer any bodily injury. Melodye’s insurer paid Jamie the maximum per person limit of $50,000 for uninsured/underinsured motorist bodily injury liability coverage, but denied Melodye’s claim for bystander damages since the per person limit was already exhausted. Melody sued in District Court in McLennan County Texas, and the trial court granted summary judgment against Farmers, ruling that the policy required Famers to pay an additional per person limit to Melodye.  The Court of Appeals reversed and rendered a take nothing judgment.

The Court started the analysis with the relevant policy terms.   Since coverage was not at issue in this case, the Court looked at the declarations and the limit of liability section of the policy.  The declarations for this particular policy showed separate limits of liability for bodily injury and property damage for UIM coverage such that the “per person” or “each person” limit was $50,000.  The UIM limit of liability section further stated that the $50,000 limit is “our maximum limit of liability for all damages for bodily injury sustained by any one person in any one motor vehicle accident.”  

Melodye argued that her bystander claim should be independent and not derivative of her daughter’s claim.  She cited Haralson v. State Farm Mutual Automobile Insurance Co., 564, F.Supp.2d 616 (N.D. Tex. 2008), a federal court case, to support her argument.  The Court acknowledged some similarities such as both cases involved a claim for UIM coverage by a bystander who witnessed a family member injured in an auto accident as well as identical policy language. Haralson allowed for a separate “each person” limit to be available to the bystander.  However, that result was driven by a key factual difference: the bystander in Haralson also suffered a bodily injury.  Because Melodye did not suffer a bodily injury, the Court stated that Haralson is not on point.

Farmers argued that the word “for” in the clause “for bodily injury” meant “resulting from.”  Under Farmers’ interpretation, one $50,000 “each person” limit for UIM coverage is to apply to all damages resulting from or because of bodily injury sustained by any single covered person in any one motor vehicle accident, regardless how many claimants there were.  The Court agreed with Farmers and added that this interpretation was reasonable.  The trial court’s judgment was reversed and a take-nothing judgment in favor of Farmers was rendered.

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NO PERSONAL JURISDICTION IN TEXAS OVER A MICHIGAN INSURER AND A FLORIDA POLICY

In an appeal from an interlocutory order overruling an insurer’s special appearance, the Court of Appeals of Texas for the First District, Houston in Auto-Owners Ins. Co. v. Millionder, No. 01-24-00221-CV 2025 Tex. App. LEXIS 569* (February 4, 2025), dismissed the case against Auto-Owners for lack of personal jurisdiction.

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This case involved an auto insurance policy procured by Millionder in Florida while Millionder was a Florida resident.  Either Auto-Owners Insurance Company or its subsidiary Southern-Owners Insurance Company issued the policy through Messick Insurance Agency in Florida.  During the policy period, Millionder moved to Texas and was involved in a pedestrian motor vehicle accident in Harris County, Texas. Millionder filed a claim for over $188,000.00 with Auto-Owners for UIM benefits, and Auto-Owners denied the claim. Millionder then sued the negligent driver who hit her as well as Auto-Owners for breach of contract, declaratory judgment, underinsured benefits, deceptive trade practices, fraud, negligence, negligent misrepresentation, and negligent hiring, supervision or management for wrongfully denying her UIM claim.  Auto-Owners filed a special appearance for lack of personal jurisdiction, which the trial court overruled.

Personal jurisdiction over a nonresident defendant may be exercised when the defendant has established “minimum contacts” with the forum state and the exercise of jurisdiction over the nonresident defendant comports with “traditional notions of fair play and substantial justice.”  LG Chem. Am., Inc. v. Morgan, 670 S.W.3d 341, 346 (Tex. 2023). There are two kinds of personal jurisdiction: general and specific.  Rogers v. TexWest, L.L.C., 261 S.W.3d 818, 821 (Tex. App.—Dallas 2008, no pet.).

1. Specific Jurisdiction

Auto-Owners argued: 1) the lawsuit does not arise from or relate to any activities by Auto-Owners in Texas; 2) Millionder procured a Florida insurance policy was she was a Florida resident; 3) she failed to report the change to her vehicle’s garaging location

Millionder argued:  1)Auto-Owners accepted premiums by a Texas resident; 2) provided a policy to a Texas resident; 3) adjusted claims and hired contractors to adjust claims in Texas; 4) defended previous lawsuits in Harris County, Texas; and 5) otherwise conducted business in Texas.

The Court held that for it to exercise specific jurisdiction over a nonresident defendant, the defendant must have purposefully availed itself of the privilege of conducting business in Texas and “its purposeful contacts” with Texas must be substantially connected to the operative facts of the litigation or form the basis of the cause of action. 

With regard to payment of premiums, Auto-Owners provided evidence that it did not write policies in Texas and did not seek payment of premiums from Texas residents.  The Court cited caselaw that “the making of payments in Texas is not sufficient to establish minimum contacts.”  3-D Electric Co. v. Barnett Constr. Co., 706 S.W.2d 135, 142 (Tex.App.—Dallas 1986, writ ref’d n.r.e.).   The Court concluded that the mere receipt of premiums in Florida that originated from a Texas address does not establish the type of minimum contacts needed for the Court to have specific jurisdiction over Auto-Owners.

With regard to issuance of a policy to a Texas resident, the Court cited caselaw that the “mere sale of a product to a Texas resident will not generally suffice to confer specific jurisdiction upon our courts.  Instead, the facts alleged must indicate that the seller intended to serve the Texas market.  Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569, 577 (Tex. 2007).  The Court concluded that since Auto-Owners did not sell the policy to Millionder in Texas and since there was no evidence that it targeted the Texas market, Millionder’s argument was meritless.

With regard to adjusting claims in Texas, which was an argument not preserved for review on appeal because it was not argued in the lower court, the Court still provided an analysis and stated that “Auto-Owners’ use of independent adjusters in Texas would not subject Auto-Owners to jurisdiction in Texas because the contacts of an independent contract are  not attributable to the principal.  Schott Glas v. Adame, 178 S.W.3d 399, 413 (Tex.App.—Dallas 2008, no pet.).

With regard to defending previous litigation in Texas, the Court stated that this can only be an argument to support general jurisdiction.

1. General Jurisdiction

“Courts do not have general jurisdiction over corporate defendants that are neither incorporated in the forum state nor have their principal place of business there, absent some relatively substantial contacts with the forum state.” Searcy v. Parex Res., Inc., 496 S.W.3d 58, 72 (Tex. 2016).   The Court highlighted pertinent evidence to justify lack of general jurisdiction such as Auto-Owners being a Michigan resident with a registered office in Florida for policies issued in Florida; not being licensed to transact business in Texas; not being incorporated under the laws of Texas or being required to maintain a registered agent for service in Texas; in fact not maintaining a registered agent in Texas; not maintaining officers, places of business, post office boxes, or telephone listing; not having real estate, facilities, bank accounts or other property interests in Texas; not having employees, agents or servants in Texas and not advertising, soliciting, marketing or conducting promotional activities in Texas.

The last part of the Court’s opinion makes it clear that Auto-Owners’ filing a general denial after the special appearance was overruled did not then waive their objection to the lower court’s exercise of personal jurisdiction.

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INSURER’S ROOF DAMAGE EXPERT (ROBERT J. HERRERA) SURVIVES MOTION TO STRIKE

In Wings Platinum, LLC v. Westchester Surplus Lines Ins. Co., No 3:23-CV-2145-D 2025 U.S. Dist. LEXIS 19433* (February 4, 2025), Wings Platinum LLC sought to strike the expert testimony and opinions of Robert J. Herrera, an engineer at Stephens Engineering, retained and designated by Westchester Surplus Lines Insurance Company.

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The United States District Court for the Northern District of Texas, Dallas Division, declined to strike the testimony and opinions of insurer’s roofing expert. 

Wings owned commercial property located at 3950 Platinum Way in Dallas, Texas and had an insurance policy with Westchester.  In April 2021, there was a severe wind and hail storm.  Wings filed a property damage claim and Westchester retained Herrera to investigate and inspect the property.  Herrera inspected the property and wrote three reports.  The First report concluded that the fractures in the thermoplastic membrane of the roof were not caused by wind or hail.  The Second report after another inspection identified fractures in the membrane consistent with impact but not caused by a weather event in 2021 but instead by a storm in 2017.  The Third report maintained the opinions of the Second report. After Westchester denied the claim, Wings sued in state court. The suit was removed to federal court.

Wings sought to exclude Herrera’s testimony and opinions arguing that he was not qualified as an expert on the age of the damage to the roof and that his opinions on the age of the hail damage were not reliable, lacking any reasonable basis and not the result of sound scientific principles and methods.  The Court disagreed.  Quite simply stated, Herrera’s training and experience at Stephens qualified him to offer such opinions as an expert because Rule 702 does not mandate that an expert be highly qualified in order to testify about a given issue.  The Court pointed out that differences in expertise go to the weight to be assigned to that expert’s testimony by a juror, but do not go to its admissibility. Van Winkle v. Rogers, 82 F.4^th 370, 379 (5^th Cir. 2023). It was sufficient that Herrera’s affidavit stated that received on-the-job training when he began working at Stephen in 2020 that was “specific to identifying and assessing wind-and-hail related damage to roofs, including the type of roof at issue in this lawsuit.” Herrera also shadowed senior level engineers for 3 to 4 months and at the time he inspected the roof at issue, he had inspected about 200 buildings.  By the time of his affidavit, Herrera inspected about 750 properties.

Wings also sought to challenge Herrera’s opinions regarding the age of the hail damage as unreliable because they were subjective and Herrera could not explain how his determination could be duplicated or tested.  The Court was not swayed by this argument either.  “Rule 702 does not prohibit an expert from reaching an opinion that is based on the expert’s experience.” Kumho Tire Co. v. Carmichael, 526 U.S. 137, 156, 119 S. Ct. 1167, 143 L.Ed. 2d 238 (1999).  The Court was satisfied with reliability where the expert inspected the property, observed the markings himself, was able to distinguish the hail from other sources of damage, and reviewed a weather report to determine whether another hailstorm could have damaged the roof.  Again, the Court emphasized that Herrera’s opinions go to the weight of his testimony, not admissibility, and therefore the Court refused to strike his testimony and opinions.

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MOTION FOR SUMMARY JUDGMENT GRANTED IN FAVOR OF PROGRESSIVE WHEN POLICY CONTAINED AN EXCLUSION FOR GOVERNMENT OWNED VEHICLES

In Progressive Cnty. Mut. Ins. Co. v. Saldivar, No. 14-23-00866-CV  2025 Tex. App. LEXIS 581* (February 6, 2025), the Court of Appeals of Texas for the Fourteenth District, Houston recently granted Progressive’s motion for summary judgment based on a UM/UIM provision excluding coverage if the vehicle involved in the accident was owned by a governmental unit or agency.

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The suit arose from a car accident between Conrado Saldivar Jr. and Alma Delia Saldivar when they were hit by a Harris County Precinct Four Constable’s truck being driven by Officer Louis Hooper. Officer Hooper was attempting to make a left turn from a non-turning lane and he was on duty at the time.  The suit was filed initially against Harris County and Officer Hooper.  Later Plaintiffs nonsuited Officer Hooper, but amended the Petition to bring Progressive into the suit alleging entitlement to insurance benefits pursuant to the uninsured/underinsured motorist provision.  Progressive filed a traditional motion for summary judgment arguing that the UM/UIM provision excluded coverage if the vehicle was “owned by any governmental unit or agency,” Harris County is a governmental agency, Harris County owned the vehicle and Officer Hooper was on duty.  The trial court denied Progressive’s motion.

The Court of Appeals disagreed with the trial court and concluded that there was no ambiguity in the policy and that it excluded UM/UIM coverage for damages resulting from the accident with Officer Hooper.  The UM/UIM provision clearly and unambiguously defined “uninsured motor vehicle” as not including vehicles “owned by any governmental unit or agency.”

Plaintiffs’ argument was that the exclusion only excluded an uninsured motor vehicle and because Officer Hooper was operating an underinsured motor vehicle, the exclusion did not apply.  The Cout opined that this is not a reasonable interpretation of the provision.  The provision expressly does not include a vehicle “owned by any governmental unit or agency.”  No one disputed that the vehicle involved was a government agency owned vehicle.  The Court was not persuaded by Plaintiffs’ attempt to liken their case to a case involving an Enterprise Rent-A-Car case (Progressive County Mutual Ins. Co. v. Caltzonsing, 658 S.W.3d 384 (Tex.App.—Corpus Christi 2022, no pet.) The Court also was not persuaded by Plaintiffs’ argument that the government vehicle exclusion violates public policy. The Court reversed the trial court’s order denying Progressive’s summary judgment motion.

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VANDALISM OF UNOCCUPIED RENTAL PROPERTY LEADS TO DENIAL OF COVERAGE UNDER ALLSTATE’S HOMEOWNER POLICY

In Childers v. Allstate Indem. Co, No. 24-40086 2025 U.S. App. LEXIS 52723* (February 6, 2025), the Fifth Circuit Court of Appeals of Texas affirmed the trial court’s granting of summary judgment favoring Allstate.

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Bradley and Crystal Childers lived in Wells, Texas and bought an investment rental property in Lufkin, Texas in 2021.  They purchased a Landlords Package Policy to insure the Lufkin property from Allstate.  That policy had two coverage exceptions: 1) “we will cover damage to the exterior of covered building structures caused by the breaking in of a burglar or burglars if the dwelling is completed and has not been vacant or unoccupied for more than 60 consecutive days immediately prior to the loss”; and 2) we do cover sudden and accidental direct physical loss caused by fire resulting from vandalism unless your dwelling has been vacant or unoccupied for more than 60 consecutive days immediately prior to the vandalism.” The property required extensive repairs and renovations and from the time Plaintiff’s bought the property until a burglary and vandalism occurred, no one had been living there. Allstate denied their claim on the basis that the property had been vacant or unoccupied for more than 60 consecutive days immediately before the reported loss. A suit followed in state court that was removed to federal court.  Plaintiff alleged breach of contract, breach of the duty of good faith and fair dealing.  Allstate served Requests for Admission, which Plaintiffs never answered and the court deemed them admitted.  Allstate moved for summary judgment on the deemed admissions.  Plaintiffs attempted to create a fact issue by submitting an affidavit claiming that the rental property was their home and that they resided there.  The Court determined that this was a “sham” and conflicted with deposition testimony.

First, the Court addressed Plaintiff’s argument that the lower court relied on deemed admissions. Plaintiffs argued that Allstate waived its right to rely on the deemed admissions because they were all legal conclusions and not factual determinations.  Because Plaintiffs failed to raise this issue in the district court, they forfeited this argument.

Next, the Court addressed Plaintiff’s argument that the lower court misapplied the sham affidavit doctrine.  Plaintiffs assert that the affidavit supplements rather than contradicts the deposition testimony.  The Court disagreed. The sham affidavits doctrine precludes a party to defeat a motion for summary judgment “using an affidavit that impeaches, without explanation, sworn testimony.”  S.W.S. Erectors, Inc. v. Infax, Inc., 72 F.3d 489, 495 (5^th Cir. 1996). Further, a party cannot “conjure a factual dispute” by contradicting prior deposition testimony. Seigler v. Wal-Mart Stores Tex., L.L.C., 30 F.4^th 472, 477 (5^th Cir. 2022).

Finally, the Court addressed Plaintiff’s argument that there were genuine issues of material fact on the policy’s exceptions.  Plaintiff argued that the property was their secondary residence and therefore it was neither vacant nor unoccupied for over 60 days and Texas election law allows for multiple residences. They further argue that the Policy does not define the terms “residence” and “reside” and this creates ambiguity such that the policy should be construed in their favor.  The Court found these arguments not persuasive either stating that nothing in the Policy linked “residence premises” to weather a home is “vacant” or “unoccupied.”  Focusing on the key distinctions between “vacant” and “unoccupied, the Court gave the terms “vacant” and “unoccupied” their ordinary meaning.  First, under Texas law, “vacant” means “without inanimate objects.” Phoenix Assurance Co., Ltd., of London v. Shepherd, 115 S.W.2d 992, 993-94 (Tex.App.—Galveston 1938). The Lufkin property was clearly not vacant because it housed furniture, vanities, dressers, and mirrors.   Next, under Texas law, a house is “’occupied’ when human beings habitually live in it as a place of abode.” Blaylock v. Am. Guar. Bank Liab. Ins. Co., 632 S.W.2d 719, 721 (Tex. 1982). “Unoccupied” means when a home “ceases to be used for living purposes or as a customary place of human habitation.” Id. at 721.   Since Plaintiff testified that no one lived at this property before the loss and no one rented the property, the Lufkin property was unoccupied for at least 60 days before the loss and held that there is no genuine dispute as to any material fact on whether the property was vacant or unoccupied. 

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INSURER NOT REQUIRED TO PAY FOR ASBESTOS REMOVAL EXPENSES WHEN PLAINTIFFS COULD NOT ESTABLISH WHICH REMOVAL COSTS WERE FOR WATER- RELATED DAMAGE AND WHICH WERE FOR NON-WATER RELATED REMOVAL NOT COVERED UNDER THE POLICY

In Heard v. State Farm Lloyds, No 3:23-CV-02222-K 2025 U.S. Dist. LEXIS 21386* (February 4, 2025), the United States District Court for the Northern District of Texas, Dallas Division, granted State Farm’s Motion for Summary Judgment. 

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Plaintiffs Stephanie Heard and Amos Heard were living in Dallas, Texas, in a home insured by State Farm, when they experienced a deep winter freeze on February 19, 2021.  The freeze caused some pipes to burst and resulted in water damage in the kitchen, bath and other rooms.  The Heards made plumbing repairs themselves, moved to temporary housing, and made a claim with State Farm.  The initial repair estimate was less than $3,000.  Over time and following re-appraisals and supplemental payments later, State Farm ended up issuing close to $190,000 in payments on the claim. The Heards never completed repairs.

The Heards brought suit alleging State Farm breached its contract by not paying around $9,000 for asbestos removal.  State Farm took the position that asbestos removal was not covered under the policy and the Court agreed.   The evidence showed that the demolition contractor completed both water related and non-water related asbestos removal.  The Heards failed to cite any evidence that the non-water related removal was a covered loss. They further failed to cite evidence to segregate covered and uncovered losses. Further, the Heards’ expert was unable to give an opinion distinguishing what asbestos removal was from affected areas and what asbestos removal was from unaffected areas.  Because the Heards failed to establish a genuine dispute of material fact relating to an essential element of their claims for breach of contract, violations of the Texas Prompt Payment of Claims Act and the Texas Insurance Code, the Court granted State Farm’s Motion for Summary Judgment.

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INSURER DID NOT WAIVE A CONTRACTUAL APPRAISAL PROVISION BECAUSE THERE WAS NO CLEAR INTENT MANIFESTED BY THE INSURER’S CONDUCT

The Western District of Texas upheld the terms of an insurance policy and abated a case to proceed with the appraisal provisions after determining that the insurer did not waive its right to compel appraisal, either expressly or implicitly.

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Rosanky v. Nationwide Assur. Co., 2025 U.S. Dist. LEXIS 12097 (W.D. Tex––January 23, 2025). After a commercial property insured by Nationwide suffered storm damage, the insurer and insured disagreed on the amount of damage, prompting the insured to provide its insurer with pre-suit notice of pending litigation. The insurer invoked the appraisal provision of the policy, which the insured believed had been implicitly waived by Nationwide’s conduct. The court observed that “Nationwide must, by its conduct, manifest clear intent to waive the nonwaiver provision.” The Western District concluded that the insurer did not waive its right to invoke the appraisal provision and abated the case until the parties could complete the appraisal procedures outlined in the policy.

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HOMEOWNERS FAIL TO DEMONSTRATE PROCEDURAL OR MERIT-BASED REASONS TO JUSTIFY REOPENING LITIGATION AND FORCE AN INSURER TO PAY A JUDGMENT AGAINST ITS INSURED

The Southern District Court recently held that homeowners were not entitled to have a judgment reopened or reversal of a court’s rulings dismissing their claims because the homeowners failed to respond timely and did not prove they were likely to succeed on the merits even if the case was reopened.

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Sartor v. Third Coast Ins. Co., 2025 U.S. Dist. LEXIS 13094 (S.D. Tex.––January 24, 2025). Homeowners filed suit against a contractor, the insured, for negligent construction regarding repairs made to their historic home and received a judgment against the insured. The insurers declined coverage due to an exclusion for work on historic properties and the fact that it was a “claims made policy” that expired before the claim, so when no payment was made for the judgment, the homeowners filed suit against the insurers under theories of third-party beneficiary, reliance, and assignee. The insurers filed a motion for summary judgment and motion to dismiss, to which the homeowners never responded, and both motions were granted. The homeowners moved to set aside the rulings and the final judgment under Rule 60(b)(6). “…[A]n action cannot be brought through the catch-all provision of Rule 60(b)(6) if it could have been brought through one of the Rule’s first five subsections. To be successful, a Rule 60(b)(6) motion must ‘show extraordinary circumstances justifying the reopening of a final judgment.’” The Southern District held that the homeowners were not entitled to relief under Rule 60(b)(6) because (1) another subsection of Rule 60(b) applies to their claims, (2) the homeowners did not submit any evidence that they did not receive the motions, orders, and judgment, and (3) even if Rule 60(b)(6) was proper to address their claims, the homeowners did not show they were likely to succeed on the merits if the rulings were reversed and the judgment reopened.

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