Complying With The Policy

Fort Worth lawyers will tell you to comply with the policy provisions when making a claim. In this regard, a case from the U.S. District Court McAllen Division is a good read. It is styled, Belinda Santa Maria v. State Farm Lloyds, et al.
This a summary judgment ruling and there were other motions pending but due to the ruing in favor of State Farm, the Court deemed the other motions of no consequence.
Plaintiff’s claims arise from damage sustained to their property as a result of a storm event on March 29, 2012. Plaintiffs reported the claim on April 11, 2012, and State Farm inspected the property on May 2, 2012, estimating the loss at $7,028.04. On the same day, State Farm issued a check for $2,177.16, after adjusting for depreciation and deductible.
State Farm, in June 2012, received a contractor’s estimate in the amount of $7,028.04 to complete the repairs. When the repairs were complete, State Farm then issued payment of the recoverable depreciation in the amount of $,330.88 and closed the file on July 12, 2012, because Plaintiff’s never indicated that there remained un-repaired damage. State Farm had no further contact or communication with Plaintiff’s until this lawsuit was filed.
The relevant portions of the policy read:
(2) when the repair or replacement is actually completed, we will pay the covered additional amount you actually and necessarily spend to repair or replace the damaged part of the property , …
(3) to receive any additional payments on a replacement cost basis, you must complete the actual repair or replacement of the damaged part of the property within two years after the date of loss, and notify us within 30 days after the work has been completed;…

State Farm points out it paid the amount actually and necessarily spent to repair or replace the damaged property and thus it fully complied with the Policy. State Farm pointed out also, that because Plaintiffs did not (1) object or in any way contest State Farm’s payment of replacement cost benefits, or (2) indicate they disagreed with the amount of the loss determined by State Farm, or (3) make a claim for any other damages, there is no dispute between the parties about the amount of the loss.
In Texas, the elements of a breach of contract 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. In Texas, the party claiming breach of contract has the burden of proof.
Here, the first element of a breach of contract claim is satisfied as the parties do not dispute that they entered into a valid contract. The central issue is whether Plaintiffs performed or tendered performance. The Policy between the parties states “[State Farm] will pay the cost to repair or replace…the damages part of the property covered,”
subject to conditions explained earlier. The undisputed evidence is that State Farm paid the cost to repair or replace very soon after Plaintiffs’ claim was made. While Plaintiffs insist that the payment was insufficient, the Policy here does provide that to receive any additional payments, Plaintiffs must complete the repair or replacement and notify State Farm of the alleged deficiency within thirty days after the work had been completed. The claim file attached to State Farm’s motion for summary judgment clearly indicates that in July 2012 the majority of all work had been completed. Hendrix’s declaration establishes that State Farm received no further notice from Plaintiffs until two years later when suit was filed in May 2014. Neither Ms. Santa Maria’s affidavit or the Guiter affidavit and estimate establish that notice was provided to State Farm before May 2014.In fact, the record as a whole supports State Farm’s contention that after payment was made in July 2012, Plaintiffs had no further contact with State Farm until Plaintiffs filed the instant lawsuit. Thus, it is clear that Plaintiff’s failure to perform as required by the Policy defeats their breach of contract claim.
Plaintiffs appear to be alleging that State Farm has a general duty under the policy to pay for damaged property covered by the Policy even when Plaintiffs fail to notify State Farm of any such damage. This unsupported argument is simply without merit.Plaintiffs failed to give prompt notice of their remaining property damages and failed to file a claim for the alleged damage to their property in contravention of the Policy.
In short, the fact that Plaintiffs are dissatisfied with the damages paid is not the result of State Farm’s failure to fulfill a Policy obligation; instead, it results from Plaintiffs’ knowing failure to even submit damages to State Farm prior to filing this lawsuit. By way of Ms. Santa Maria’s affidavit, the Court observes that Plaintiffs knew at the time of their roof replacement there was a need for further repairs to their property.
At that point, Plaintiffs should have supplemented their claim. Therefore, the Court finds that as it concerns these losses, this lawsuit is in contravention of the requirements of the Policy. In turn, because Plaintiffs have failed to raise a genuine issue of fact, State Farm’s motion was granted.