State Farm And Federal Court

The United States District Court, Northern District Texas, Abilene Division, issued an opinion March 13, 2018, that is worth reading to note deficiencies in a case against State Farm.  It is styled, Bob Click v. State Farm Lloyds and Rob Allen.

Pleadings in Federal Court are strict.  This case was filed in State Court against State Farm and their adjuster.  State Farm removed the case to Federal Court and Click filed a motion to remand back to the State Court.  The Motion to Remand was denied.

Click’s home suffered water damage.  Click’s homeowners policy with State Farm covered this type of loss.  Click objected to State Farm’s estimates of damages that were quotes of $9,015 and $11,824.  State Farm did another inspection and quoted $18,288.

Click did his own estimate and submitted it for $82,819.  State Farm increased its payout to $25,741.  Click filed suit.

To pass muster under Rule 12(b)(6), a complaint must have contained enough facts to state a claim to relief that is plausible on its face.  While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff’s obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.  The court should not strain to find inferences favorable to the plaintiffs and not accept conclusory allegations, unwarranted deductions, or legal conclusions.

Click does not explain how his alleged facts support any statutory violations.

Click does not allege in the complaint how State Farm purportedly made its misrepresentations, other than a repeated general reference to advertising materials claiming to fully restore the insured following a loss.  Even if this court were inclined to search his factual background section of the complaint for what he might construe as misrepresentations, Click would still be required to plead facts showing the other elements of these claims.  Reading the complaint most favorably to Click and inserting natural factual assumptions, Click argues that a common
element of the three “laundry list” violations cited by Click is the purported difference between the policy as advertised and State Farm’s unwillingness to pay Click the full amount of his estimated damages.  This argument is unsound: the
insured cannot decide that the multiple estimates prepared by an adjustor are insufficient, provide his own estimate, and then claim that the insurer violates the DTPA by declining to pay out the total of his estimate, whether or not the insurer
advertised the policy as compensating for all loss.
Furthermore, the “laundry list” sets out several examples of deceptive or misleading behavior under the DTPA, but Click does not contend he was misled or deceived, instead appearing to argue that by advertising complete reimbursement, the insurer must pay out any amount the insured feels entitled to.  Click has at least constructive knowledge this is not how property insurance operates: in his complaint, he notes that he “has been in the construction industry all his life, … and has substantial experience and expertise in the construction industry, including preparing estimates and completing all types of water damage repairs … over the years.”  Click has failed allege sufficiently that State Farm acted to deceive or defraud him, instead citing the DTPA provisions generally and asking the court to infer a supporting factual allegation based upon advertising puffery; this claim cannot survive the motion to dismiss.