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Ekhlassi v. National Lloyds Insurance Co.

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

January 9, 2018

ALI EKHLASSI, Plaintiff,


          Lee H. Rosenthal, Chief United States District Judge.

         This case arises from a dispute over flood-insurance payments for damage from a Houston, Texas 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). The court previously granted Auto Club's motion for partial summary judgment. (Docket Entry No. 17). National Lloyds now moves for summary judgment on the basis that the statute of limitations bars Ekhlassi's claims.

         Based on the motion, the record evidence, and the applicable law, National Lloyds' motion for summary judgment is granted and Ekhlassi's claims 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 $274, 940.05 for the flood damage. (Docket Entry No. 19 at 2). Ekhlassi had coverage under both the Homeowners policy from Auto Club and the flood policy from National Lloyds, before and during the storm. The National Lloyds policy was part of the National Flood Insurance Program administered by the Federal Emergency Management Agency.

         In May 2015, just after the flood, Ekhlassi reported his losses to National Lloyds. A few days later, National Lloyds sent insurance adjuster Jim Nemechek to inspect Ekhlassi's property. Nemechek estimated losses totaling $3, 768.15 for “flood loss clean-up and other covered damages, ” but found that all other damages were excluded under Ekhlassi's policy. (Docket Entry No. 18 at 3).

         On October 6, 2015, National Lloyds sent Ekhlassi a letter stating that he had not yet submitted a proof of loss form for his claim and that it could not process his claim payment for $3, 768.25 until it received his proof of loss. (Docket Entry No. 18, Ex. C). The letter informed Ekhlassi that he had 240 days from the date of loss to provide the signed and sworn proof of loss and that National Lloyds was denying payment for “any building and contents items not subject to direct physical loss by or from flood” and “all non-covered items located below the lowest elevated floor of your post-FIRM elevated building.” (Id.). On December 28, 2015, Ekhlassi provided the sworn proof of loss to National Lloyds, stating an amount of $276, 190.05 less the deductible, for a total of $274, 940.05. On January 11, 2016, National Lloyds sent Ekhlassi a second letter rejecting the proof of loss, confirming that it would pay only the previously determined amount of $3, 768.25, and referring Ekhlassi to the October 6, 2015 denial letter for the reasons. (Docket Entry No. 18, Ex. E).

         One year later, on January 11, 2017, Ekhlassi sued National Lloyds and Auto Club, alleging breach of contract, violations 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.

         National Lloyds moved for summary judgment, (Docket Entry No. 18), and Ekhlassi responded, (Docket Entry No. 19). The summary judgment record evidence includes a copy of Ekhlassi's Standard Flood Insurance Policy, Number 1547431881, a copy of the loss report, the October 6, 2015 letter from National Lloyds to Ekhlassi, Ekhlassi's original petition, a copy of the January 11, 2016 letter from National Lloyds to Ekhlassi, an affidavit from National Lloyds' records custodian, and FEMA memorandum W-15022 granting a 180-day extension for policy holders to submit proof of loss. This record is analyzed under the applicable legal standards.

         II. The Legal Standards

         A. Summary Judgment

         “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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