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Ekhlassi v. National Lloyds Insurance Co.

United States District Court, S.D. Texas, Houston Division

November 27, 2017

ALI EKHLASSI, Plaintiff,
v.
NATIONAL LLOYDS INSURANCE CO. and AUTO CLUB INDEMNITY CO., Defendants.

          MEMORANDUM AND OPINION GRANTING AUTO CLUB'S MOTION FOR PARTIAL SUMMARY JUDGMENT

          Lee H. Rosenthal Chief United States District Judge

         This case arises from a dispute over flood-insurance payments for damage during the Memorial Day Storm in May 2015. Ali Ekhlassi held two insurance policies: a Texas Homeowners Deluxe Policy issued by the Auto Club Indemnity Company and a flood-insurance policy with National Lloyds Insurance Company, underwritten by the Federal Emergency Management Agency. (Docket Entry Nos. 16-2, 16-3). Auto Club moves for partial summary judgment on Ekhlassi's claims, on the ground that the policy explicitly excluded flood damage from coverage. (Docket Entry No. 16). Ekhlassi did not respond to Auto Club's motion.

         Based on the motion, the record evidence, and the applicable law, Auto Club's motion for partial summary judgment is granted and Eklassi's claims against Auto Club are dismissed, with prejudice. The reasons are stated below.

         I. Background

         The relevant facts are undisputed. Between May 23 to 25, 2015, a severe storm caused heavy flooding in Houston. Ekhlassi suffered significant damage to his home when five to six feet of floodwater filled his unfinished basement garage for two days. Ekhlassi alleges a loss amount of $258, 437.29 for the flood-related damage. (Docket Entry No. 16-6 at 4). Ekhlassi had coverage under both the Homeowners policy from Auto Club and the flood-insurance policy from National Lloyds before and during the storm. The Auto Club policy is a “named peril policy, ” covering only specifically listed categories of losses. (Docket Entry No. 16-10 at 2).

         Ekhlassi filed a claim with National Lloyds for the policy limit of $250, 000 and an additional claim with Auto Club under his Homeowners Policy. (Docket Entry Nos. 16-5, 16-10 at 2). Auto Club's adjuster, Mike Hendricks, and engineer, Darin Lasater, inspected Ekhlassi's home and determined that all of the alleged damage was flood-related. (Docket Entry No. 16-4). Based on that determination, Auto Club denied Ekhlassi's claim because flood damage was not a named peril under his policy. (Docket Entry No. 16-4 at 2). Indeed, the policy specifically excluded water damage from coverage. (Docket Entry No. 16-12).

         Ekhlassi submitted proof of damage and losses to an elevator cab, to the flooring in the basement and kitchen, and to kitchen cabinets. (Docket Entry Nos. 16-6-16-9). It is undisputed that the floodwater caused the damage to the elevator and basement floor. It is also undisputed that the kitchen cabinets were not damaged during the flood. They were removed and replaced to address potential damage to any wood flooring extending underneath the cabinets. But it is also undisputed that the wood floor did not extend underneath the cabinets. Instead, the wood floor stopped in front of the cabinets.

         Ekhlassi sued National Lloyds and Auto Club, alleging breach of contract, violation of Chapters 541 and 542 of the Texas Insurance Code, and violations of the Deceptive Trade Practices Act. Tex. Ins. Code § 541.060, 542.055-60; Tex. Bus. Com. Code § 17.46. Because Ekhlassi did not respond to Auto Club's motion, the summary judgment record consists only of Auto Club's submissions. That evidence includes: Auto Club's Texas Homeowners Deluxe Policy; National Lloyds Insurance Company's floor policy; an affidavit from Auto Club's engineer, Darin Lasater; Ekhlassi's proof of loss submitted to National Lloyds; Ekhlassi's Rule 26(a) initial disclosures, including estimates for repairing the damaged elevator and floors, and for removing and replacing the kitchen cabinets; photographs of the damage; a settlement letter from Auto Club to Ekhlassi; settlement documents and a check from National Lloyds to Ekhlassi; affidavits from Randall Taylor, Auto Club's expert adjuster, and Claudia Lezell, Auto Club's flooring expert; and reports from Cory Walker, National Lloyds' engineer, and Peter de la Mora, Ekhlassi's engineer.

         The summary judgment record is analyzed under the applicable legal standards.

         II. The Legal Standard

         A. The Summary Judgment Standard

         “Summary judgment is required when ‘the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.'” Trent v. Wade, 776 F.3d 368, 376 (5th Cir. 2015) (quoting Fed.R.Civ.P. 56(a)). “A genuine dispute of material fact exists when the ‘evidence is such that a reasonable jury could return a verdict for the nonmoving party.'” Nola Spice Designs, LLC v. Haydel Enters., Inc., 783 F.3d 527, 536 (5th Cir. 2015) (quoting Anderson v. Liberty Lobby, 477 U.S. 242, 248 (1986)). “The moving party ‘bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of [the record] which it believes demonstrate the absence of a genuine issue of material fact.'” Id. (quoting EEOC v. LHC Grp., Inc., 773 F.3d 688, 694 (5th Cir. 2014)); see also Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).

         If the burden of proof at trial lies with the nonmoving party, the movant may satisfy its initial burden by showing an absence of evidence to support the nonmoving party's case. Fret v. Melton Truck Lines, Inc., No. 17-50031, 2017 U.S. App. LEXIS 16912, at *5-6 (5th Cir. Sept. 1, 2017) (quoting Lindsey v. Sears Roebuck & Co., 16 F.3d 616, 618 (5th Cir. 1994)). While the party moving for summary judgment must demonstrate the absence of a genuine issue of material fact, it does not need to negate the elements of the nonmovant's case. Coastal Agric. Supply, Inc. v. JP Morgan Chase Bank, N.A., 759 F.3d 498, 505 (5th Cir. 2014) (citing Boudreaux v. Swift Transp. Co., 402 F.3d 536, 540 (5th Cir. 2005)). A fact is material if “its resolution could affect the outcome of the actions.” Aly v. City of Lake Jackson, 605 Fed. App'x 260, 262 (5th Cir. 2015) (citing Burrell v. Dr. Pepper/Seven UP Bottling Grp., Inc., 482 F.3d 408, 411 (5th Cir. 2007)). “If the moving party fails to meet [its] initial burden, the motion [for summary judgment] must be denied, regardless of the nonmovant's response.” Pioneer Exploration, LLC v. Steadfast Ins. Co., 767 F.3d 503 (5th Cir. 2014).

         “When the moving party has met its Rule 56(c) burden, the nonmoving party cannot survive a summary judgment motion by resting on the mere allegations of its pleadings.” Bailey v. E. Baton Rouge Parish Prison, 663 Fed. App'x 328, 331 (5th Cir. 2016) (quoting Duffie v. United States, 600 F.3d 362, 371 (5th Cir. 2010)). The nonmovant must identify specific evidence in the record and articulate how that evidence supports that party's claim. Willis v. Cleco Corp., 749 F.3d 314, 317 (5th Cir. 2014). “This burden will not be satisfied by ‘some metaphysical doubt as to the material facts, by conclusory allegations, by unsubstantiated assertions, or by only a scintilla of evidence.'” Jurach v. Safety Vision, LLC, 642 Fed. App'x 313, 317 (5th Cir. 2016) (quoting Boudreaux, 402 F.3d 536, ...


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