Insurance – Breach Of Contract – Hail Damage

Hail damage claims are a big source of litigation for insurance attorneys in the Dallas and Fort Worth areas. An opinion from the Federal Court , Southern District of Texas, McAllen Division is worth reading. It is styled, Armando Martinez, et al v. State Farm Lloyd’s, et al.
This is a granting of summary judgement in favor of State Farm.
Martinez’s claims arise from damage sustained to their property as the result of hail storms in April 2012. On May 7, 2012, Martinez reported an insurance claim for property loss and State Farm inspected the property of May 14, 2012, estimating the loss to the dwelling at $10,802.78. The adjuster found damage to the dwelling roof, shed roof, gutters, and a metal carport. On the same day, State Farm issued a check for $8,325.08, after applying depreciation and deductible.
On June 14, 2012, Martinez visited State Farm and reported the work was complete and State Farm paid the recoverable depreciation of $1,570.70 and the claim was closed.
Martinez then sued State Farm alleging breach of contract and various insurance related causes of action.
At issue in the summary judgment motion was whether the pending motion raised any issues of material fact that State Farm breached the insurance policy. Martinez alleged the claim was not paid properly and State Farm stated the claim was paid according to the insurance contract and cited the relevant contract provisions.
In Texas, insurance policies are controlled by contract construction. The elements of a breach of contract claim in Texas are: (1) the existence of a valid contract, (2) performance or tendered performance by the plaintiff, (3) breach of the contract by the defendant, and (4) damages sustained by the plaintiff as a result of the breach.
Here, there is not dispute that there was a valid contract.
The undisputed evidence is that State Farm paid the cost to repair or replace very soon after the claim was made. Martinez claims the payment was insufficient but the policy provides that any additional payments will be paid after the work is complete. The record established this was done.
Per the Court, Martinez appeared to allege that State Farm has a general duty under the policy to pay for damaged property covered by the policy even when Martinez failed to notify State Farm of such damage. The Court said this argument was without merit and dismissed the entire case by way of summary judgement.
The facts and theories of law are worth reading to get a better understanding of exactly what the court did in this case and why it did so.