Dallas Fort Worth Insurance Lawyer Blog
Claim Denial Attorneys need to read this opinion from the Southern District of Texas, Houston Division. It is styled, Caramba, Inc. d/b/a Pueblo Viejo v. Nationwide Mutual Fire Insurance Company.
This is a summary judgment case in favor of Nationwide.
This insurance coverage dispute arises out of claim filed seeking damages for various violations of the Texas Insurance Code. The focus here is on Section 542.058. The timeline of Facts of the case by a reading of the case. Discussed here is the Courts reasoning in the case so that Insurance Lawyers can understand how the Courts interpret Section 542.058 when deciding the case.
In its Motion for Summary Judgment, Nationwide argued in a separate section entitled “Tex. Ins. Code, Section 542.058” that “Plaintiff cannot show Nationwide wrongfully rejected the claim or otherwise delayed payment.” In its Response, Plaintiff did not address Nationwide’s argument or otherwise discuss the Section 542.058 claim. Specifically, Plaintiff did not present evidence to raise a genuine issue of material fact that Nationwide wrongfully delayed payment in violation of Section 542.058.
Caramba argues that “Section 542.058 and 542.060 do not require any predicate of a bad faith finding.” Caramba correctly states this legal principle. To prevail on a claim under Section 524.058, it is not necessary for a plaintiff to prove that the insurer acted wrongfully or in bad faith. The statute requires only liability under the policy and a failure to comply with the timing requirements of Section 524.058.
Even where, as here, the insured avoids summary judgment on the breach of contract claim, it still bears the burden to establish its right to Chapter 542 remedies. To establish a violation of Section 542.058, the insured must prove that (1) it made a claim under an insurance policy, (2) the insurer is liable for that claim, and (3) the insurer failed to comply with the timing requirements of the statute. Section 542.058 generally requires the insurer, “after receiving all items, statements, and forms reasonably requested and required under Section 542.055,” to make payment of the claim within sixty days. Therefore, to avoid summary judgment on the Section 542.058 claim, Plaintiff was required to present evidence to raise a genuine issue of material fact regarding when Nationwide received “all items, statements, and forms reasonably requested and required” under the Texas Insurance Code.
Plaintiff did not identify or cite to any evidence in the record showing when Nationwide received “all items, statements, and forms reasonably requested and required under Section 542.055,” an essential element of the Section 542.058 claim. In the Reply to its Motion seeking reconsideration, Plaintiff notes that it alleged in the Complaint that it sent “its letter as per Section 542A” to Nationwide on December 3,2018. To avoid summary judgment, however, Caramba was required to go beyond the pleadings and designate specific facts showing that there is a genuine issue of material fact for trial.
Plaintiff in its Reply to its Motion for reconsideration cites to evidence in the record which it now claims establishes August 15, 2018, as the relevant date when Nationwide had all the necessary information. Plaintiff did not cite this evidence in the summary judgment record during the summary judgment briefing. When evidence exists in the summary judgment record but the nonmovant fails even to refer to it in the response to the motion for summary judgment, that evidence is not properly before the district court. Rule 56 does not impose upon the district court a duty to sift through the record in search of evidence to support a party’s opposition to summary judgment.
Moreover, the evidence Plaintiff now cites does not raise a genuine issue of material fact that Nationwide had all necessary information by August 15, 2018. It is undisputed that after that date, Plaintiff submitted the DELK report which valued the damage to the Property at $423,334.35. Later, on February 14, 2020, Plaintiff’s damages expert issued his report which valued the damage to the Property at $190,088.93. Plaintiff has failed to present evidence of a date on which Nationwide had all information necessary to decide the claim, including information from Plaintiff’s damages expert valuing the damage to the Property at less than half Plaintiff’s original claim.
In summary, Plaintiff failed to address the Section 542.058 claim in any manner in its Response to the Motion for Summary Judgment. Importantly, Plaintiff failed to present evidence that raised (or now raises) a genuine issue of material fact regarding an essential element of the Section 542.058 claim. Plaintiff offers no explanation for its failure to oppose Defendant’s motion for summary judgment on the Section 542.058 claim specifically, and the Court exercises its discretion to deny Plaintiff the opportunity to address the claim for the first time at this late date.