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And Another Texas Court Realizes What The Hailâ„¢ Is Going On?

December 3, 2014

By Steven J. Badger
To view this article in PDF format, please click here.

Another Texas court  --  this time in the Valley  --  has realized What The Hail™ Is Going On?

Nino vs. State Farm Lloyds is identical to thousands of hail damage lawsuits presently pending in the Valley.  Most of these lawsuits are in state courts.  Nino, however, is in Federal Court and pending before United States District Court Judge Micala Alvarez.

It is the typical lawsuit.  The homeowner, Norma Nino, submitted a claim alleging roof and interior water damage resulting from the March 29, 2012, hailstorm.  Her insurer, State Farm, adjusted the claim, finding that the roof had prior repairs and no covered damage resulting from the 2012 hailstorm.  State Farm found minimal other damage totaling $2,311.75, but made no payment given that the amount was below Nino’s deductible. 

Six months later, State Farm received a demand letter from counsel for Nino.  State Farm sent a second adjuster to inspect the alleged damage.  This adjuster found only limited interior damage and wrote an estimate totaling $3,540.10, resulting in a payment to Nino of $1,209.10.

Sound familiar?

Nino filed suit in Hidalgo County District Court.  State Farm removed the matter to Federal Court.  After a year of discovery and other pre-trial activities  --  including Judge Alvarez imposing monetary sanctions against Nino’s lead counsel  for “his noncompliance with the local rules”  --  State Farm moved for summary judgment seeking dismissal of Nino’s extra-contractual claims.

It is obvious from her opinion that Judge Alvarez was frustrated with the case. The Court initially chastised both parties for failing to file briefs conforming with the Federal Rules of Civil Procedure.  Judge Alvarez then specifically criticized Plaintiff’s counsel for failing to make reference to specific parts of the evidentiary record, filing its response brief nine times, and failing to direct the Court to specific portions of the exhibits relevant to the issues presented.

The Court then turned to the merits, considering first whether State Farm had conducted a reasonable investigation.  After evaluating Texas law, Nino’s arguments, and a detailed analysis of State Farm’s investigation, Judge Alvarez wrote:

No reasonable jury could find based on this evidence alone that Defendant's investigation was unreasonable and liability was reasonably clear. Further, unlike Nicolau, Plaintiff has failed to present evidence of bias, of the adjusters' predisposition to find nonhail damage in favor of the insurer, of Defendant's purposeful selection of these adjusters because of their general view on hailstorm cases, or that Defendant was aware of the inspection's questionable validity. Thus, there is no factual or legal basis to conclude this evidence amounts to an unreasonable investigation or evidence of bad faith.

The Court went on to consider Nino’s other arguments, referring to them as “nothing more than speculative and unsupported challenges” and “yet another conclusory paragraph”, and “nothing but conclusory claims” with “no reference to any evidentiary support”.  The Court went on to state that Plaintiff misrepresented certain facts.  After considering all of Nino’s arguments, Judge Alvarez held that because Nino had failed to raise a genuine issue of material fact as to its common law bad faith claim and presented no evidence of DTPA or Texas Insurance Code violations, such claims were dismissed with prejudice.

Thus, it appears that Nino’s only remaining claim to be presented to a jury is a breach of contract claim.

Obviously, Judge Alvarez figured out What The Hail™ Is Going On?  She reviewed Nino’s conclusory allegations and carefully compared them to the actual claim adjustment history.  In the end, Judge Alvarez concluded that there was no basis for extra-contractual liability.

Nino vs. State Farm Lloyds presents another opinion in a growing body of Texas case law demonstrating that when the underlying facts of these claims are given careful consideration, it becomes obvious to the courts What The Hail™ Is Going On? and the insurance companies are given appropriate protection from such lawsuits. 

Texas insurers should not be afraid  --  even in the Valley  --  to assert their legitimate defenses to Texas hail damage lawsuits.  Some judges, like Judge Micala Alarez, will pay attention.

A copy of the Court’s written opinion is available here.

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