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Heller v. ACE European Group Ltd.

United States District Court, Fifth Circuit

December 16, 2013

ZEV HELLER, Plaintiff,


MICAELA ALVAREZ, District Judge.

Pending before the Court are no fewer than eight separate motions, with associated responses and replies, totaling seventeen separate briefs. To mix Herculean metaphors, faced with a hydra-headed docket, [1] the Court will choose the path of virtue[2] and clean out the Augean stables.[3]

First, the Court will address the three motions for summary judgment, with associated responses and replies: "Defendants' Traditional and No-Evidence Motion for Summary Judgment Regarding Plaintiff's Misrepresentation Claims, "[4] "Defendants' No-Evidence Motion for Summary Judgment, "[5] and "Defendants' No-Evidence Motion for Summary Judgment Regarding Alleged Violations of the Prompt Payment Statute."[6] Of these, the Court GRANTS the first, DENIES in part and GRANTS in part the second, and GRANTS the third.

The Court will then proceed to address the "Motion to Exclude Evidence and for Sanctions, "[7] "Motion to Compel Appraisal, "[8] "Motion to Compel Deposition, "[9] "Motion for Extension of Time for Plaintiff's Designation of Experts, "[10] and "Motion for Leave to File a Plaintiff's Request to Re-Open Plaintiff Expert Deadline and Extend Expert Designation Deadline."[11] Of these, the Court GRANTS in part the first, GRANTS the second, DENIES the third, and DENIES the fourth and fifth.

In summary, the Court dismisses all claims except wrongful denial of coverage. As sanction for discovery noncooperation, the Court orders Plaintiff to compensate Defendant for costs of deposition and inspection; Defendant will notify the Court of remaining actions to be taken. The Court orders the parties to engage in appraisal and ABATES the case until appraisal is complete, except that the Court remains available in the event the party-appointed appraisers cannot agree on an umpire.

I. Background

Zev Heller ("Plaintiff") owns three properties in McAllen, Texas, located at 119 E. Shasta Avenue, 123 E. Shasta Avenue, and 125 E. Shasta Avenue ("119 Shasta, " "123 Shasta, " "125 Shasta").[12] On March 29, 2012, hailstorms swept across South Texas and damaged these properties.[13] On March 30, 2012, Defendant's contractor ACSI contacted Plaintiff, acknowledging receipt of his claims and assigning Steve Schultz to assess the damage. Mr. Schultz contacted Plaintiff on April 3, 2012, and met to inspect the properties on April 3 and 18, 2012.[14] Mr. Schultz filed his damage estimates for 123 and for 125 E. Shasta on April 27, 2012, [15] and his damage estimate for 119 E. Shasta on April 30, 2012.[16] Defendant notified Plaintiff that the claim for 125 E. Shasta had been accepted but fell below deductible on May 1, 2012, and paid the full amount of the estimates for 119 and 123 E. Shasta on May 10, 2012.

Alleging a raft of claims, addressed below, Plaintiff filed suit in state court in October of 2012, [17] and Defendant timely removed to this Court.[18]

II. Summary Judgments Section

A. Law of Summary Judgment

"Summary judgment serves as the ultimate screen to weed out truly insubstantial lawsuits prior to trial."[19] In summary judgment, the Court discerns whether the situation calls for a judgment as a matter of law.[20] These situations may occur in one of three ways. First, a fact may be undisputed. A fact that is not addressed may be deemed admitted.[21] Second, a fact may not be material to the claim, such that even if it were true, it would not dispose of the matter. "Factual disputes that are irrelevant or unnecessary will not be counted."[22] Third, a fact may be so clearly established that no genuine dispute over it can exist.[23] "Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial'."[24]

Parties may cite to any part of the record in their motions or responses.[25] Parties need not proffer evidence in a form admissible at trial, [26] but must proffer evidence substantively admissible at trial.[27] "A court considering a motion for summary judgment must consider all facts and evidence in the light most favorable to the nonmoving party."[28] In addition, a court "must disregard all evidence favorable to the moving party that the jury is not required to believe.""[29] "However, the nonmoving party may not rest on mere allegations, but must set forth specific facts indicating a genuine issue for trial."[30] "To withstand summary judgment, [the nonmoving party] must show, by affidavits, depositions, answers to interrogatories, and admissions on file, that there are specific facts that create a genuine issue for trial."[31] The Court will not ferret through the record to complete an unfinished case.[32]

B. Defendant's Motion for Summary Judgment on Misrepresentation Claims

The Court first sets out the elements for negligent misrepresentation in Texas. "The elements of a negligent misrepresentation claim are: (1) the representation is made by a defendant in the course of his business, or in a transaction in which he has a pecuniary interest; (2) the defendant supplies "false information" for the guidance of others in their business; (3) the defendant did not exercise reasonable care or competence in obtaining or communicating the information; and (4) the plaintiff suffers pecuniary loss by justifiably relying on the representation."[33] Plaintiff alleges four main instances of misrepresentation. The Court will take each of these allegations in turn.

First, Plaintiff alleges that Defendant represented claim investigation would begin within 15 days of the claim report, but investigation on two of the properties began 19 days after the claim report.[34] The allegation exploits an ambiguity in the insurance policy language: the meaning of "begin any investigation of the claim." The Court notes that this is a claim for breach of contract, not misrepresentation. Even construing the contract in Plaintiff's favor, as a matter of law, an allegation of breach of contract does not allege misrepresentation without more.

Second, Plaintiff alleges that Defendant represented payment would arrive 5 days after notification the claim was covered, but payment did not arrive until two weeks after the inspection.[35] This claim is also for breach of contract, and the allegation ignores Plaintiff's own responsibility to supply Defendant with the signed statement of loss. Plaintiff does not dispute that after Plaintiff supplied this sworn statement, [36] Defendant paid the claim within 5 days.[37] Thus, Plaintiff has failed to raise a genuine issue of material fact.

Third, Plaintiff alleges that Mr. Schultz represented the claim would be reported "promptly, " but waited two weeks to report his findings.[38] While the Court is relieved to find an actual allegation of misrepresentation, Mr. Schultz' statement that the report would be sent "promptly" does not promise any particular date. Plaintiff has failed to point to a specific misrepresentation or ...

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