LOPEZ v. LLOYDS (2025)

ORDER

On this day, the Court considered Defendant State Farm Lloyds’ Partial Motion for Summary Judgment (“Mot. Summ. J.”), ECF No. 40. For the following reasons, the Motion is GRANTED in part and DENIED in part.

I. BACKGROUND

This is an insurance coverage dispute. The following facts are undisputed unless otherwise noted. Plaintiff Emilia R. Lopez owns property located at 10024 Mercedes Street, El Paso, Texas 79924 (the “Property”), which was insured under a homeowner's policy issued by State Farm for the period of August 13, 2022, to August 13, 2023. Compl. ¶¶ 7–8, ECF No. 1; Proposed Undisputed Facts (“PUF”) ¶ 2, ECF No. 40-1; PUF Resp. ¶ 2, ECF No. 45-1. Lopez alleges that the Property sustained water damage on August 3, 2023, within the coverage period, and she submitted a claim to State Farm approximately one month later, on September 6. PUF ¶ 1; PUF Resp. ¶ 1.

Shortly after receiving the claim, State Farm was contacted by a public adjuster who claimed to represent Lopez. PUF ¶ 4; PUF Resp. ¶ 4. State Farm then attempted to contact Lopez directly but received no response. PUF ¶¶ 5, 7–8; PUF Resp. ¶¶ 5, 7–8. It informed the public adjuster that it “needed to speak” with Lopez. PUF ¶ 6. According to State Farm, it sought to contact Lopez for two reasons: (1) to confirm that she wished to proceed through the public adjuster, and (2) to complete its standard “[Q]uality [F]irst [C]ontact.” Id. Lopez acknowledges that State Farm informed the public adjuster of the first reason but denies that it mentioned anything about a “Quality First Contact.” PUF Resp. ¶ 6. In either instance, the public adjuster told State Farm that it did not need to speak with Lopez and refused to assist in facilitating contact. PUF ¶ 7; PUF Resp. ¶ 7. State Farm continued its efforts to reach Lopez but received no response until November 2, 2023, when it was notified that she had retained legal counsel. PUF ¶ 8; PUF Resp. ¶ 8.

State Farm inspected the property on January 16, 2024. PUF ¶ 9; PUF Resp. ¶ 9. Lopez was not present. PUF¶ 10; PUF Resp. ¶ 10. Then, on February 18—before State Farm had accepted or denied her claim—Lopez filed suit, alleging that the parties had reached an impasse and that further negotiations would be futile. PUF ¶ 11; PUF Resp. ¶ 11; Compl. ¶ 6. Lopez asserts both common law and statutory claims. Her common law claims include breach of the duty of good faith and fair dealing, breach of contract, common law fraud, fraud by nondisclosure, and fraud in the sale of an insurance policy. Compl. ¶¶ 41–53, 72–93. She also brings statutory claims under multiple provisions of the Texas Insurance Code's deceptive practices section (Chapter 541), as well as one claim under the Texas Deceptive Trade Practices Act (“DTPA”). Id. ¶¶ 54–69.

On January 13, 2025, State Farm moved for partial summary judgment, seeking judgment on all claims except breach of contract. See generally Mot. Summ. J. Lopez responded on January 27. Resp., ECF No. 45. State Farm did not file a reply. Meanwhile, Lopez filed a Motion in Limine, ECF No. 36, seeking to exclude the testimony and strike the reports of both of State Farm's Experts: Alan W. Berryhill and Jarrod C. Burns. State Farm filed a Response to the Motion in Limine, ECF No. 39, to which Lopez filed a Reply, ECF No. 42.

II. DISCUSSION

A. Standard

A court must enter summary judgment “if 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.” Fed. R. Civ. P. 56(a); see Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Weaver v. CCA Indus., Inc., 529 F.3d 335, 339 (5th Cir. 2008). “A fact is ‘material’ if its resolution in favor of one party might affect the outcome of the lawsuit under governing law.” Sossamon v. Lone Star State of Tex., 560 F.3d 316, 326 (5th Cir. 2009) (quoting Hamilton v. Segue Software, Inc., 232 F.3d 473, 477 (5th Cir. 2000) (per curiam)). A dispute about a material fact is genuine only “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Ellison v. Software Spectrum, Inc., 85 F.3d 187, 189 (5th Cir. 1996).

“[The] party seeking summary judgment always 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.” Celotex, 477 U.S. at 323; Wallace v. Tex. Tech. Univ., 80 F.3d 1042, 1046–47 (5th Cir. 1996). To show the existence of a genuine dispute, the nonmoving party must support its position with citations to “particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations ․, admissions, interrogatory answers, or other materials[,]” or show “that the materials cited [by the movant] do not establish the absence ․ of a genuine dispute, or that [the moving party] cannot produce admissible evidence to support the fact.” Fed. R. Civ. P. 56(c)(1).

The court resolves factual controversies in favor of the nonmoving party, but factual controversies require more than “conclusory allegations,” “unsubstantiated assertions,” or “a ‘scintilla’ of evidence.” Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc) (citations omitted). Further, when reviewing the evidence, the court must draw all reasonable inferences in favor of the nonmoving party and may not make credibility determinations or weigh evidence. Man Roland, Inc. v. Kreitz Motor Express, Inc., 438 F.3d 476, 478–79 (5th Cir. 2006) (citing Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000)). Thus, the ultimate inquiry in a summary judgment motion is “whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.” Anderson, 477 U.S. at 251–52.

B. Analysis: Lopez's Motion in Limine

In its Motion for Partial Summary Judgment, State Farm relies in part on an expert report from third-party engineer Jarrod Burns, who inspected the Property. See Mot. Summ. J. Ex. B (“Burns Report”), ECF No. 40-3. Lopez moves to exclude Burns's testimony and strike his report under Federal Rule of Evidence 702 and Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579 (1993).¹ Mot. Limine ¶¶ 12–21.

Federal Rule of Evidence 702 governs the admissibility of expert testimony. It permits a qualified expert to testify if the proponent establishes, by a preponderance of the evidence, that: (a) the expert's specialized knowledge will assist the trier of fact in understanding the evidence or determining a fact in issue; (b) the testimony is based on sufficient facts or data; (c) the testimony is the product of reliable principles and methods; and (d) the expert has reliably applied those principles and methods to the facts of the case. Fed. R. Evid. 702. These standards apply equally at trial and on summary judgment. Reitz v. Woods, 85 F.4th 780, 787 (5th Cir. 2023) (citations omitted).

Rule 702 requires district courts to act as gatekeepers, ensuring that expert testimony is both relevant and reliable. Id. (citing Pipitone v. Biomatrix, Inc., 288 F.3d 239, 243–44 (5th Cir. 2002)). But this gatekeeping role is limited and is not intended to displace the adversarial process. Primrose Operating Co. v. Nat'l Am. Ins. Co., 382 F.3d 546, 562 (5th Cir. 2004). Indeed, the exclusion of expert testimony is the exception rather than the rule. United States v. Perry, 35 F.4th 293, 330 (5th Cir. 2022) (citing Puga v. RCX Sols., Inc., 922 F.3d 285, 294 (5th Cir. 2019)). It should be reserved for cases in which the testimony is “so fundamentally unsupported that it cannot possibly help the factfinder.” Gen Elec. Cap. Bus. Asset Funding Corp. v. S.A.S.E. Mil. Ltd., No. 5:03-cv-189-RF, 2004 WL 5495590, at *5 (W.D. Tex. Oct. 21, 2004) (citing Viterbo v. Dow Chem. Co., 826 F.2d 420, 422 (5th Cir. 1987)). In lieu of exclusion, “[v]igorous cross-examination, presentation of contrary evidence, and careful instruction on the burden of proof” remain the proper tools for challenging shaky but otherwise admissible evidence. Primrose, 382 F.3d at 562 (quoting United States v. 14.38 Acres of Land, 80 F.3d 1074, 1078 (5th Cir. 1996)). Challenges that concern the weight, rather than the admissibility, of expert testimony are properly left for the jury. Id. (citing 14.38 Acres, 80 F.3d at 1077). This includes “questions relating to the bases and sources of an expert's opinions.” 14.38 Acres, 80 F.3d at 1078 (quoting Viterbo, 826 F.2d at 422).

Lopez challenges the admissibility of two of Burns's opinions: (1) that the tented floor tiles were caused by thermal expansion rather than water damage and (2) that a comparison of photographs taken before and after the alleged incident suggests that the Property did not sustain water damage. Mot. Limine ¶¶ 12–21.

1. Burns's opinion that the tented floor tiles were caused by thermal expansion is admissible.

Lopez frames her challenge to Burns's opinion that the Property's tented floor tiles resulted from thermal expansion as three distinct objections. Id. ¶¶ 15–18. First, Lopez argues that the opinion is not based on sufficient facts or data because Burns “cites no evidence from the record ․ that discusses the actual temperature or weather conditions” at the Property. Id. ¶ 16. Second, she claims that Burns's methodology is unreliable because it “completely lacked any inclusion” of local weather conditions. Id. ¶ 17. And third, she asserts that the opinion would not assist the trier fact of fact “without evidence of the [local] weather and temperature conditions.” Id. ¶ 18. Thus, while each distinct objection is framed under a different Rule 702 factor, they all rest on the same premise: that the opinion is unreliable because Burns's report lacks data on the specific weather or temperature conditions at the Property.

In his expert report, Burns explains that the tiles were “hollow-sounding when walked/tapped upon [indicating] a loss of bond between the tile and the underlying concrete.” Burns Report 6. He attributes this loss of bond to differential movement—either expansion of the tile or contraction of the slab—caused by a “temperature differential ․ introduced to a contiguous field of floor tiles.” Id. According to Burns, this phenomenon commonly occurs during cold weather or abrupt temperature changes. Id. at 6–7. The essence of Burns's opinion, then, is not that he identified a particular weather event that caused the tented floor tiles, but that the observed tenting pattern is characteristic of thermal expansion caused by general temperature fluctuation—not water damage. See id. And this assumption is based on his engineering expertise and firsthand inspection of the Property. Id. at 1, 7.

Further, Rule 702 requires only that an expert's opinions be based on “sufficient” facts and data—not all conceivably relevant facts. Arnold v. Canal Barge Co., No. 13-cv-4966, 2014 WL 2465313, at *4 (E.D. La. June 2, 2014). Indeed, courts routinely admit expert testimony that relies on estimated inputs or reasonable assumptions, so long as the methodology itself is sound. Nkansah v. Martinez, No. 15-cv-646, 2017 WL 2798520, at *4 (M.D. La. June 28, 2017) (collecting cases). For example, in Arnold, the expert estimated the concentration of ammonia caused by a substance by using a proxy chemical rather than by testing the actual substance at issue. 2014 WL 2465313, at *2–4. The court held that this did not render the opinion inadmissible, explaining that it was “the kind of situation in which ‘reliable expert testimony involves estimation and reasonable inferences from a sometimes incomplete record.’ ” Id. at *3 (quoting Moore v. Int'l Paint, L.L.C., 547 F. App'x 513, 516 (5th Cir. 2013)).

Here, too, Lopez's challenge to Burns's thermal expansion opinion does not rest on any claim that it is based on “completely unsubstantiated factual assertions,” Int'l Paint, 547 F. App'x at 515 (quoting Hathaway v. Bazany, 507 F.3d 312, 319 n.4 (5th Cir. 2007)), but that it lacks particularization—specifically, data on the actual weather conditions at the Property. But, as noted, where the issue is the degree of factual support or the reasonableness of the assumptions used, such objections go to weight, not admissibility. Wackman v. Rubsamen, 602 F.3d 391, 403 (5th Cir. 2010) (“[T]he [alleged ‘analytical] gaps’ go to the weight of the evidence, which the jury [is] free to balance ․” (citations omitted)).

If Lopez believes Burns's conclusions are flawed, she may challenge them through cross-examination or with her own expert. But under Rule 702 and Daubert, Burns's testimony is admissible. Her first objection is therefore denied.

2. Burns's opinion that the photographs indicate no water damage is admissible.

Second, Lopez challenges Burns's opinion that comparing photographs of the flooring near the water heater—some taken in 2015 and others during his inspection—indicate the absence of water damage. Mot. Limine ¶¶ 19–21. Lopez contends that this comparison requires no “scientific, technical, or other specialized knowledge,” and that the jury does not need expert assistance to determine whether the photographs “look the same.” Id. ¶¶ 19–20. She therefore argues that the opinion is inadmissible.

But determining whether the images are consistent with water damage may well require specialized knowledge. First, courts have recognized that identifying or interpreting water damage may necessitate expert analysis. See, e.g., Kaufman v. Cent. RV, Inc., No. 21-cv-2007, 2022 WL 2663879, at *5–6 (D. Kan. July 11, 2022) (admitting expert testimony on whether certain conditions constituted water damage); Berkower v. USAA Cas. Ins. Co., No. 15-cv-23947, 2017 WL 1250419, at *11 (S.D. Fla. Apr. 4, 2017) (same); cf. Hardin v. Town of Leakseville, 345 So. 3d 557, 565–66 (Miss. 2022) (same). Second, “[c]ourts consistently hold that experts can rely on photographic evidence as the basis for their conclusions.” Roddy v. State Farm Gen. Ins. Co., No. 23-cv-9248, 2024 WL 4744018, at *4 (C.D. Cal. Oct. 25, 2024) (collecting cases). For example, in Roddy, the court upheld an expert's use of photographs to assess the cause of water damage, noting that such visual evidence was a permissible and reliable basis for an expert opinion. Id. at *3–4 (“[T]hat analysis of photographic evidence is a reliable method of assessing structural damage to a property makes intuitive sense.”).

Burns's background as an engineer may assist the jury in understanding whether the photographs support or undermine the allegation of water damage. Lopez remains free to introduce contrary testimony or argue to the jury that the photographs speak for themselves—but, again, that does not render Burns's opinion inadmissible under Rule 702. Therefore, this opinion is admissible as well. Because Burns's opinion is admissible in its entirety, Lopez's Motion in Limine is denied.

C. Analysis: State Farm's Motion for Partial Summary Judgment

State Farm moves for summary judgment on all of Lopez's claims except for breach of contract. Mot. Summ. J. ¶ 1. It first argues that Lopez's claim for breach of the duty of good faith and fair dealing fails because a bona fide dispute exists over whether her property sustained covered damages. Id. ¶¶ 2, 10–11. State Farm further contends that all of Lopez's statutory claims under the Texas Insurance Code and the DTPA fail for the same reason. Id. ¶¶ 12–14. Finally, it asserts that Lopez's common law fraud claims must be dismissed because she has offered “no evidence” to support any of the required elements. Id. ¶¶ 15–16.

1. The Court lacks subject matter jurisdiction over most of Lopez's claims, as currently pleaded.

State Farm did not brief—and does not challenge—the Court's subject-matter jurisdiction over Lopez's claims. But the Court has an independent obligation to evaluate its own jurisdiction and must dismiss any claim over which it lacks jurisdiction. See Vincent v. Consol. Operating Co., 17 F.3d 782, 785 (5th Cir. 1994) (noting that courts have a duty to examine subject-matter jurisdiction even when the parties do not raise it); Holcombe v. United States, No. 5:18-cv-555-XR, 2021 WL 67217, at *20 (W.D. Tex. Jan. 6, 2021) (“A federal district court has a mandatory duty to dismiss claims over which it does not have subject matter jurisdiction.” (citing Stanley v. Cent. Intel. Agency, 639 F.2d 1146, 1157 (5th Cir. 1981))).

Lopez filed her Complaint before State Farm formally denied coverage. Compl. ¶ 12 (alleging that “to this date, State Farm has not issued a claim decision”). Accordingly, the Court first determines whether her claims are constitutionally ripe for adjudication.

Constitutional ripeness stems from Article III's limitation of the jurisdiction of federal courts to “cases” and “controversies.” Simmonds v. I.N.S., 326 F.3d 351, 357 (2d. Cir. 2003); see also Lower Colo. River Auth. v. Papalote Creek II, L.L.C., 858 F.3d 916, 922 (5th Cir. 2017) (citing United Transp. Union v. Foster, 205 F.3d 851, 857 (5th Cir. 2000)). A case is constitutionally ripe only if it presents an issue that is neither premature nor speculative. Papalote Creek II, 858 F.3d at 922 (citing Shields v. Norton, 289 F.3d 832, 835 (5th Cir. 2002)). This inquiry mirrors the injury-in-fact requirement for standing:that a plaintiff must have suffered a “concrete and particularized” injury that is “actual or imminent,” rather than “conjectural or hypothetical.” Susan B. Anthony List. v. Driehaus, 573 U.S. 149, 157 n.5, 158 (2014) (noting that courts use the concepts of standing and ripeness interchangeably); see also Cellco P'ship v. City of Rochester, 473 F. Supp. 3d 268, 278–79 (W.D.N.Y. 2020) (“Constitutional ripeness, in other words, is really just about the first standing factor—to say a plaintiff's claim is constitutionally unripe is to say the plaintiff's claimed injury, if any, is not ‘actual or imminent, but instead ‘conjectural or hypothetical.’ ” (quoting Nat'l Org. for Marriage, Inc. v. Walsh, 714 F.3d 682, 688 (2d Cir. 2013))). And because it is rooted in Article III, constitutional ripeness is a jurisdictional requirement. Papalote Creek II, 858 F.3d at 922 (citing Shields, 289 F.3d at 835); Simmonds, 326 F.3d at 357; see also Lewis v. Alexander, 685 F.3d 325, 340 n. 14 (3d Cir. 2012).

Jurisdiction must be assessed based on the facts as they exist at the time the complaint is filed, and post-filing developments cannot create it retroactively. Lujan v. Defs. of Wildlife, 504 U.S. 555, 569 n.4 (1992) (citing Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826, 830 (1998)). Because standing is a jurisdictional requirement, it too must be evaluated at the time of filing. See id.; Steir v. Girl Scouts of the USA, 383 F.3d 7, 15 (1st Cir. 2004) (citing Mangual v. Rotger-Sabat, 317 F.3d 45, 58 (1st Cir. 2003)). And because constitutional ripeness is simply the injury-in-fact element of standing under another name—and is likewise jurisdictional—it must be assessed on the same basis: as of the time the complaint was filed.²

A plaintiff has not suffered a legally cognizable injury until their claim has accrued. Adam v. Am. Optical Corp., 979 F.3d 248, 255 (4th Cir. 2020) (citation omitted); see also Rubin v. J. Crew Grp., Inc., No. 16-cv-2167, 2017 WL 1170854, at *5 (D.N.J. Mar. 29, 2017) (“If ․ a claim has not accrued, Plaintiff cannot have an ‘actual or imminent’ injury.” (citation omitted)). Accordingly, a claim that has not accrued is not constitutionally ripe. Sid Richardson Carbon & Gasoline Co. v. Interenergy Res., Ltd., 99 F.3d 746, 756 (5th Cir. 1996) (“[A] claim that has not yet accrued is not ripe for adjudication ․”); see also Reiter v. Cooper, 507 U.S. 258, 267 (1993); Gemtel Corp. v. Cmty. Redevelopment Agency, 23 F.3d 1542, 1545 (9th Cir. 1994); SMBC Rail Servs., LLC v. W. Petroleum Co., No. 14-cv-3982, 2014 WL 12531506, at *2 (N.D. Tex. Dec. 29, 2014) (“A claim is mature when it has accrued.” (citation omitted)). Thus, if a plaintiff asserts a claim before it has accrued, the court lacks subject-matter jurisdiction, and dismissal is required.See, e.g., Mulgrew v. United States Dep't of Transp., 750 F. Supp. 3d 171, 208–09 (S.D.N.Y. 2024) (collecting cases); Lewis v. Louisiana, No. 23-cv-606, 2023 WL 11827446, at *2 (M.D. La. Nov. 9, 2023), adopted, 2024 WL 3184638 (June 26, 2024); Carter v. Dall. Cnty. Sheriff's Dep't, No. 21-cv-2723, 2022 WL 598527, at *4 (N.D. Tex. Jan. 6, 2022) (citing McDonough v. Smith, 588 U.S. 109, 117–18 (2019)), adopted, 2022 WL 598241 (Feb. 28, 2022); Strizheus v. City of Sioux Falls, 664 F. Supp. 3d 937, 954 (D.S.D. 2003).

Under Texas law, claims based on the denial of insurance coverage—including breach of contract, violation of principles of good faith and fair dealing, and statutory violations under the Texas Insurance Code and the DTPA—accrue only when the insurer denies coverage. Smith v. Travelers Cas. Ins. Co. of Am., 932 F.3d 302, 313 (5th Cir. 2019); In re Dick, No. 1:08-cv-351-SS, 2009 WL 10669203, at *2 (W.D. Tex. Feb. 9, 2009) (collecting cases); Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 221 (Tex. 2003). Courts applying Texas law therefore dismiss such claims when the plaintiff brings suit before a denial has occurred. See, e.g., Pruitt Tool & Supply Co. v. Noble Energy, Inc., No. 23-cv-1576, 2024 WL 3745979, at *4 (S.D. Tex. July 9, 2024); Butts v. State Auto. Mut. Ins. Co., No. 1:22-cv-1238-RP, 2023 WL 3765602, at *3–4 (W.D. Tex. May 17, 2023), adopted, 2023 WL 3765544 (June 1, 2023), vacated in part on other grounds, 2023 WL 11054840 (June 8, 2023); ASI Lloyds v. Newman, No. 12-cv-1451, 2012 WL 13042502, at *8 (S.D. Tex. Nov. 27, 2012).

Generally, the accrual date in an insurance dispute is evident from the insurer's formal written denial of coverage. See De Jongh v. State Farm Lloyds, 664 F. App'x 405, 408–09 (5th Cir. 2016) (citation omitted); Knott, 128 S.W.3d at 221–22. But a claim may sometimes accrue even without a formal written denial. Knott, 128 S.W.3d at 222; Kessler v. Allstate Fire & Cas. Ins. Co., No. 22-cv-440, 2023 WL 5615808, at *2–3 (Tex. App. Aug. 31, 2023). Still, there must be a “clear indication” that the insurer does not intend to provide coverage. Kessler, 2023 WL 5615808, at *2 (citing Knott, 128 S.W.3d at 221).

That “clear indication” may take different forms. For example, courts have found it in an insurer's decision to close a claim file, id. at *3 (collecting cases), or in an explicit oral denial, see Ehrig v. Germania Farm Mut. Ins. Ass'n, 84 S.W.3d 320, 325 (Tex. App. 2002). More often, courts have held that written communications may constitute a denial even if they do not use the word “deny,” so long as the insurer's determination is clearly conveyed. Knott, 128 S.W.3d at 222 (“[T]here are no magic words that must be used to deny a claim.” (quoting Mangine v. State Farm Lloyds, 73 S.W.3d 467, 470(Tex. App. 2002))); see also Abedinia v. Lighthouse Prop. Ins. Co., No. 20-cv-183, 2021 WL 4898456, at *3 (Tex. App. Oct. 20, 2021); Pace v. Travelers Lloyds of Tex. Ins. Co., 162 S.W.3d 632, 633–34 (Tex. App. 2005). Examples include letters stating “we will be unable to make payment,” Pace, 162 S.W.3d at 633, “[we] regret[ ] that [we] cannot extend coverage,” Citigroup Inc. v. Fed. Ins. Co., 649 F.3d 367, 374 (5th Cir. 2011), or “no benefits are payable,” Lozada v. Farrall & Blackwell Agency, Inc., 323 S.W.3d 278, 289 (Tex. App. 2010).

Here, Lopez does not dispute that she filed suit before State Farm formally denied her claim. Instead, she offers two alternative theories: first, that State Farm's failure to issue a timely decision amounted to a denial, see Compl. ¶ 12, and second, that a May 6, 2024, letter from State Farm constituted a constructive denial, see Resp. Mot. Summ. J. ¶ 35. She attaches the letter to her summary judgment response. See id. at Ex. R (“State Farm Letter”), ECF No. 45–19.

First, as discussed, Texas law requires more than mere delay; a failure to timely respond is not, without more, a “clear indication” that coverage will not be provided. Kessler, 2023 WL 5615808, at *2. Second, even if the May 6 letter could be construed as a denial, it was sent after Lopez filed suit—so it would not cure the jurisdictional defect. And, in any event, the letter does not clearly deny coverage. Rather, it states that State Farm had not completed its evaluation and that the claim remained under review, pending submission of additional materials: photos of the water leak, repair documentation, and a plumber's statement. State Farm Letter 1. That language falls well short of the definitive statements found to constitute denials in Pace, Citigroup, and similar cases.

Accordingly, because Lopez has not shown that her claims had accrued at the time of filing, she has not established that they are constitutionally ripe for adjudication. Her breach of contract and breach of the duty of good faith and fair dealing claims—along with nearly all of her statutory claims—are therefore dismissed without prejudice for lack of subject-matter jurisdiction.

2. State Farm is not entitled to summary judgment on Lopez's claim under Section 541.060(a)(4)(A) of the Texas Insurance Code.

Lopez also brings a claim under section 541.060(a)(4)(A) of the Texas Insurance Code, which prohibits insurers from “failing within a reasonable time to affirm or deny coverage of a claim to a policyholder.” It appears that neither the Texas Supreme Court nor the Fifth Circuit—nor any other court, at any level—has directly addressed when a claim under this subsection accrues.

By its plain text, this provision addresses not the denial of coverage itself, but rather an insurer's failure to timely communicate its decision—whether that decision is to affirm or deny. If a formal denial were required to bring suit, then insurers could indefinitely delay any decision and thereby evade liability. And courts have rejected the notion that insurers may avoid liability through delay or inaction. See Knott, 128 S.W.3d at 222. Moreover, interpreting section 541.060(a)(4)(A) to require a formal denial would render the word “affirm” superfluous: If a plaintiff had to wait until the insurer formally denied coverage, then it would be impossible to bring a claim for failure to affirm within a reasonable time. And courts must avoid statutory constructions that render any term or provision meaningless. United States v. Block, 635 F.3d 721, 723–24 (5th Cir. 2011) (“It is a basic precept of statutory construction that we should not construe statutes in a way that renders words or clauses superfluous.” (quoting Wheeler v. Pilgrim's Pride Corp., 591 F.3d 355, 375 (5th Cir. 2009) (cleaned up))).

Accordingly, the Court holds that Lopez's section 541.060(a)(4)(A) claim did not require a formal denial of coverage to accrue. Therefore, this claim is ripe, and the Court has subject matter jurisdiction to consider it. State Farm offers two arguments for why it is entitled to summary judgment on this claim.

First, it contends that all of Lopez's statutory claims fail because there was a bona fide dispute about whether the Property sustained water damage, citing Burns's expert report. Mot. Summ. J. ¶¶ 2–4, 13. And in Texas, the existence of a bona fide dispute—i.e., a reasonable basis for denying or delaying payment—can preclude extra-contractual liability, even if the insurer's decision is ultimately found to be incorrect. Higginbotham v. State Farm Mut. Auto. Ins. Co., 103 F.3d 456, 459–60 (5th Cir. 1997) (citations omitted); Hall Arts Ctr. Off. V. Hanover Ins. Co., 327 F. Supp. 3d 979, 999 (N.D. Tex. 2018).

But that principle applies only to liability based on denial or delay of payment. See Higginbotham, 103 F.3d at 459 (citing Lyons v. Millers Cas. Ins. Co., 866 S.W.2d 597, 600 (Tex. 1993)); see also Richardson E. Baptist Church v. Phila. Indem. Ins. Co., No. 14-cv-1491, 2016 WL 1242480, at *11 (Tex. Ap. Mar. 30, 2016) (citing U.S. Fire Ins. Co. v. Williams, 955 S.W.2d 267, 268 (Tex. 1997)). Lopez's claim under section 541.060(a)(4)(A) is not based on a delayed payment. Nor is it based on a denial of coverage. It is grounded in a delayed coverage decision. These are distinct inquiries. See Hall Arts, 327 F. Supp. 3d at 1000 (explaining that a twenty-eight-month delay in denying coverage was a separate issue from whether the denial itself was reasonable). The first argument therefore fails.

Second, State Farm provides a timeline to justify the delay. It states that the claim was reported on September 6, 2023, and that it began attempting to contact Lopez two days later, on September 8. Mot. Summ. J. ¶ 4. But it was only able to reach her public adjuster, whom it informed that direct contact with Lopez was needed, to confirm that she wished to proceed through the adjuster. Id. The adjuster refused to assist. Id. State Farm then received a letter of representation on November 2 and inspected the property on January 16, 2024. Id. It claims, however, that Lopez's absence during the inspection “prevented [it] from obtaining the information it needed to evaluate the claim.” Id.

But while detailed, this explanation is ultimately incomplete. State Farm does not explain why speaking to Lopez was necessary to determine whether to affirm or deny coverage. It also does not explain the more than two-month gap between its receipt of the letter of representation on November 2 and its inspection on January 16. Finally, it provides no support for its assertion that Lopez's absence during the inspection prevented it from evaluating the claim—nor does it explain what information was missing or why that information could not be obtained otherwise. See id.¶ 4.

Section 541.060(a)(4)(A) does not define what constitutes an “unreasonable time,” but here, Lopez filed suit five months after submitting her claim and still had not received a coverage determination. Courts have found that delays of similar length may be unreasonable. For instance, in First Christian Church v. Church Mutual Insurance Co., the court denied summary judgment where the insurer waited slightly more than six months to issue a coverage decision. No. 23-cv-342, 2024 WL 3631080, at *8 (E.D. Tex. July 10, 2024), adopted 2024 WL 3625833 (July 31, 2024). Although the insurer cited “multiple potentially reasonable circumstances” for the delay, it failed to provide any evidence showing that a six-month delay was reasonable under the circumstances, and the court concluded that the issue presented a factual dispute for the jury. Id.; see also Winterfield United Methodist Church v. Church Mut. Ins. Co., S.I., No. 23-cv-558, 2024 WL 5356135, at *11 (E.D. Tex. Dec. 17, 2024) (similar), adopted, 2025 WL 63670 (Jan. 9, 2025).

So too here. State Farm has offered possible explanations for the delay, but without supporting evidence—such as industry standards, internal timelines, or testimony justifying the need for Lopez's participation—the Court cannot conclude as a matter of law that a five-month delay was reasonable. That is a question for the jury. Accordingly, State Farm is not entitled to summary judgment on Lopez's claim under section 541.060(a)(4)(A).

3. Though ripe for adjudication, State Farm is entitled to summary judgment on Lopez's fraud claims.

Finally, Lopez brings three different fraud claims: (1) common law fraud, (2) fraud by nondisclosure, and (3) “fraud in sale of insurance policy.” Compl. ¶¶ 72–94. State Farm responds only that Lopez “has no evidence of any of the ․ elements of fraud.” Mot. Summ. J. ¶ 16.

As an initial matter, a cause of action for fraud accrues on the date that the defendant makes the allegedly false representation. Hernandez v. Frazier, No. 5:11-cv-9-FB, 2012 WL 12896913, at *16 (W.D. Tex. Jan. 26, 2012), adopted, 2012 WL 12895539 (Sept. 19, 2012) (citing Seureau v. ExxonMobil Corp., 274 S.W.3d 206, 226 (Tex. App. 2008)); Gallagher v. Wells Fargo Bank, N.A., No. 12-cv-30, 2012 WL 13020349, at *2 (N.D. Tex. July 12, 2012) (citation omitted). Because Lopez alleges that the misrepresentation occurred before she filed her Complaint, the jurisdictional defects that bar many of her other claims do not preclude consideration of her fraud claims. See Compl. ¶ 94(c) (misrepresentation made on August 13, 2022).

To state a claim for common law fraud under Texas law, a plaintiff must show that the defendant (1) knowingly or recklessly made a materially false representation; (2) intended the plaintiff to act upon that representation; and (3) the plaintiff justifiably relied on the representation and suffered injury as a result. W. Loop Hosp., LLC v. Hous. Galleria Lodging Assocs., LLC, 649 S.W.3d 461, 484 (Tex. App. 2022).

Fraud by nondisclosure is a “subcategory of fraud” that requires all the same elements as fraud by affirmative misrepresentation, with the distinction that the misrepresentation may consist of a material omission despite a duty to disclose. SED Holdings, LLC v. 3 Star Props., LLC, No. 17-cv-1655, 2018 WL 11429880, at *7 (S.D. Tex. Dec. 17, 2018) (citing Schlumberger Tech. Corp v. Swanson, 959 S.W.2d 171, 181 (Tex. 1997)), aff'd sub nom., Matter of 3 Star Props, L.L.C., 6 F.4th 595 (5th Cir. 2021). To prevail on such a claim, a plaintiff must show that (1) the defendant deliberately failed to disclose material facts; (2) the defendant had a duty to disclose such facts; (3) the plaintiff was unaware of the facts and lacked an equal opportunity to discover them; (4) the defendant intended the plaintiff to act or refrain from acting based on the nondisclosure; and (5) the plaintiff relied on the nondisclosure to their detriment. Matter of Clem, 124 F.4th 341, 349 (5th Cir. 2024) (citing Bombardier Aerospace Corp v. SPEP Aircraft Holdings, LLC, 572 S.W.3d 213, 219–20 (Tex. 2019)).

As for Lopez's third theory—“fraud in sale of insurance policy”—it does not appear that any such claim is recognized in the common law, the Texas Insurance Code, or the DTPA. The only cases in this Circuit referencing the theory appear to be brought by the same counsel representing Lopez. See Nelson v. Allstate Vehicle & Props. Ins. Co., No. 23-cv-1793, 2024 WL 3572957, at *5 (S.D. Tex. July 29, 2024); Rodriguez v. Allstate Vehicle & Prop. Ins. Co., No. 5:22-cv-693-FB, 2023 WL 12023405, at *1 (W.D. Tex. Feb. 12, 2023). In neither case did the court explicitly recognize or analyze “fraud in sale of insurance policy” as a distinct cause of action, and in Nelson, the claim was dismissed alongside the plaintiff's common law fraud claim for the same deficiencies. 2024 WL 3572957, at *8. Accordingly, the Court does not consider “fraud in sale of insurance policy” as a standalone claim, addressing it only insofar as it overlaps with the common law fraud and fraud by nondisclosure claims.

And Lopez's common law fraud and fraud by nondisclosure claims, too, rest on the same core factual allegations. Lopez alleges that State Farm falsely represented that it would pay the full value of any covered claim, minus the deductible, despite having no intention of doing so.³ Compl. ¶¶ 78–79, 81. She further alleges that State Farm made this promise to induce her to purchase the policy, and that she relied on it when doing so. Id. The only difference in her fraud by nondisclosure claim is that she alleges that State Farm deliberately concealed its intention not to fully honor future claims. Id. ¶ 83.

Under Texas law, a promise of future performance is actionable as fraud only if it was made with no intention of being fulfilled at the time it was made. Ochoa v. Bradfute Enters., LLC, No. 3:24-cv-228-KC, 2025 WL 841752, at *12 (W.D. Tex. Mar. 11, 2025) (citations omitted). This requires “proof that the defendant lacked intention to perform at the time the promise was made.” Evans v. United Air Lines, Inc., 62 F.3d 395 (5th Cir. 1995) (citing Crenshaw v. Gen. Dynamics Corp., 940 F.2d 125, 128 (5th Cir. 1991)). Although such intent is typically proven by direct evidence, courts have recognized that, in “appropriate circumstances,” it may be inferred. U.S. ex rel. Willard v. Humana Health Plan of Tex. Inc., 336 F.3d 375, 386 (5th Cir. 2003). But “mere failure to perform a promise is not evidence of fraud.” Frost v. Am. Lung. Assoc. of Cent. States, No. 09-cv-310, 2009 WL 10693216, at *5 (S.D. Tex. Nov. 5, 2009), adopted, 2010 WL 11578868 (Mar. 3, 2010); Gulf Commc'ns, LLC v. Bus. Telecom, Inc., No. 98-cv-2444, 1999 WL 1044509, at *4 (N.D. Tex. Nov. 17, 1999) (citing Performance Printing Corp. v. Upper Deck Co., No. 98-cv-35, 1999 WL 184125, at *3 (N.D. Tex. Mar. 29, 1999)). Rather, it is a fact “to be considered with other facts to establish intent.” Gulf Commc'ns, 1999 WL 1044509, at *4 (quoting Spoljaric v. Percival Tours, Inc., 708 S.W.2d 432, 435 (Tex. 1986)). At summary judgment, therefore, a plaintiff must point to additional evidence from which a finder of fact could determine that the defendant made the representation with the intent to deceive. Frost, 2009 WL 10693216, at *5.

But Lopez provides no evidence of fraud beyond alleged nonperformance.⁴ Instead, she states that her “fraud claims are based on information that has been requested from State Farm in discovery but not yet received.” Resp. Mot. Summ. J. ¶ 32. She further notes “that discovery is the subject of a [pending] motion to compel,” and that she would “seek leave to supplement her summary judgment response” once the Motion is ruled on. Id. But that Motion was granted in part and denied in part on February 26, 2025, by United States Magistrate Judge Anne. T Berton, Feb. 26, 2025, Order, ECF No. 48, and Lopez has not sought leave to supplement her Response. Therefore, given the absence of competent evidence of an intent to deceive, State Farm's Motion is granted in part and Lopez's fraud claims are dismissed.

4. Lopez may supplement her pleadings by setting out post-filing events under Federal Rule of Civil Procedure 15(d).

Finally, the Court considers whether Lopez should be granted leave to file a supplemental pleading to cure the jurisdictional defects discussed above. Under Federal Rule of Civil Procedure 15(d), “[o]n motion and reasonable notice, the court may, on just terms, permit a party to serve a supplemental pleading setting out any transaction, occurrence, or event that happened after the date of the pleading to be supplemented.” The Rule expressly allows supplementation even where the original pleading was defective in stating a claim. Fed. R. Civ. P. 15(d). There is, however, a circuit split as to whether Rule 15(d) allows plaintiffs to cure jurisdictional defects through post-filing developments. See Scahill v. D.C., 909 F.3d 1177, 1183–84 (D.C. Cir. 2018) (collecting cases). Some courts permit supplementation; others dismiss the case and require the plaintiff to file a new lawsuit. Id. The Fifth Circuit has not directly addressed the issue. See id.

To be sure, the Fifth Circuit has held that “the amendment process cannot ‘be used to create jurisdiction retroactively where it did not previously exist.’ ” U.S. ex rel. Jamison v. McKesson Corp., 649 F.3d 322, 328 (5th Cir. 2011) (quoting Aetna Cas. & Sur. Co. v. Hillman, 796 F.2d 770, 775 (5th Cir. 1986)); see also Fed. Recovery Servs., Inc. v. United States, 72 F.3d 447, 453 (5th Cir. 1996). But that line of authority involves amendment under Rule 15(a), not supplementation under Rule 15(d). The two are distinct: While an amended pleading replaces the original and concerns pre-filing events, a supplemental pleading adds to the original and addresses events that occurred afterward. See Habitat Educ. Ctr., Inc. v. Kimbell, 250 F.R.D. 397, 401 (E.D. Wis. 2009) (citation omitted); see also Korb v. Haystings, 860 F. App'x 222, 226 n.5 (3d Cir. 2021). And some courts have expressly held that while jurisdictional defects cannot be cured under Rule 15(a), they may be under Rule 15(d). See, e.g., Northstar Fin. Advisors Inc. v. Schwab Invs., 779 F.3d 1036, 1043–46 (9th Cir. 2015).

Further, Fifth Circuit caselaw bars curative amendment only in cases of complete jurisdictional failure—where the court lacked subject-matter jurisdiction over the entire action, or, similarly, where the plaintiff lacked standing to assert any claim. See, e.g., McKesson, 649 F.3d at 332; Aetna, 796 F.2d at 776; Fed. Recovery, 72 F.3d at 453–54. And, in those circumstances, the logic is persuasive: A court without jurisdiction has no authority to act—not even to grant leave to amend or supplement. See, e.g., Narkin v. Reagan, No. 06-cv-449, 2006 WL 2591036, at *1 (S.D. Tex. Sept. 7, 2006) (citing Morongo Band of Missian Indians v. Cal. State Bd. of Equalization, 858 F.2d 1376, 1380 (9th Cir. 1988)). And a plaintiff who fails to establish standing to pursue any of their claims likewise fails to establish a basis to invoke the court's power to grant leave to amend. See Summit Off. Park, Inc. v. U.S. Steel Corp., 639 F.3d 1278, 1282 (5th Cir. 1981).

That is not the case here. It is undisputed that the Court has jurisdiction over several of Lopez's original claims against State Farm—including one that remains pending post-summary judgment. The Court thus has the power to act in this lawsuit, and Lopez has the capacity to seek relief. The rationale underlying the Fifth Circuit's bar on retroactive jurisdictional amendment therefore does not apply here, where jurisdiction has existed over this case, broadly, from the outset, even if it has never existed as to the initially unaccrued claims.

Finally, practical considerations also support allowing supplementation. State Farm appears to acknowledge that it has now denied Lopez's insurance claim, see Mot. Summ. J. ¶ 13–14 (arguing that a bona fide dispute undermines Lopez's contention that State Farm wrongfully denied coverage), triggering the accrual and constitutional ripeness of the causes of action which the Court dismisses for lack of jurisdiction. Prohibiting supplementation in this context would force a plaintiff “to go through the unnecessary hassle and expense of filing a new lawsuit when events subsequent to filing the original complaint have fixed the jurisdictional problem.” Scahill, 909 F.3d at 1184. That logic applies with even greater force here, where the coverage delay claim remains pending. Requiring Lopez to file an entirely separate lawsuit to pursue her breach of contract and other denial-dependent claims would be an enormous waste of resources for the parties and the Court.

Accordingly, in the absence of controlling Fifth Circuit authority to the contrary, the Court holdsthat because it has jurisdiction over at least one of Lopez's claims, Rule 15(d) permits her to file a supplemental pleading to cure jurisdictional defects in her other claims, based on post-filing events. See Mathews v. Diaz, 426 U.S. 67, 75 n.9 (1976) (“Although the defect in [plaintiff's] allegations must be cured by supplemental pleading, instead of amended pleading, the statutory purpose of avoiding needless sacrifice to defective pleading applies equally to this case.” (citations omitted)); cf. Foman v. Davis, 371 U.S. 178, 181–82 (1962) (it is “too late in the day and entirely contrary to the spirit of the Federal Rules of Civil Procedure for decisions on the merits to be avoided on the basis of such mere technicalities”).

Lopez's claims are therefore dismissed without prejudice to filing a supplemental pleading identifying when and how her insurance claim was denied, and thus when her jurisdictionally barred causes of action accrued. See Debut Sols. LLC v. Axion Structural Innovations, LLC, No. 21-cv-56, 2021 WL 11723751, at *7 (S.D. Tex. Dec. 23, 2021) (sua sponte granting leave to supplement); see also Witkowich v. Gonzales, 541 F. Supp. 2d 572, 590 (S.D.N.Y. 2008) (same).

III. CONCLUSION

For the foregoing reasons, State Farm's Motion for Summary Judgment, ECF No. 40, is GRANTED in part and DENIED in part. The Motion is DENIED as to Lopez's claim under section 541.060(a)(4)(A) of the Texas Insurance Code, which remains pending. The Motion is GRANTED as to Lopez's common law fraud, fraud by nondisclosure, and fraud in the sale of insurance policy claims, which are dismissed with prejudice.

IT IS FURTHER ORDERED that Lopez's claims for breach of contract, breach of the duty of good faith and fair dealing, and her remaining claims under the Texas Insurance Code and the DTPA are DISMISSED without prejudice for lack of subject-matter jurisdiction.

IT IS FURTHER ORDERED that Lopez may file a supplemental pleading reasserting the claims dismissed for lack of subject matter jurisdiction, by no later than May 8, 2025. Factual allegations in any such supplemental pleading must be limited to the issue of whether, when, and how her insurance claim was denied. Lopez is CAUTIONED that a supplemental pleading that exceeds the scope for which she has been granted leave will be stricken.

IT IS FURTHER ORDERED that if Lopez files a supplemental pleading, State Farm may file another motion for summary judgment, by no later than May 22, 2025.

IT IS FURTHER ORDERED that Lopez's Motion in Limine, ECF No. 36, is DENIED.

IT IS FURTHER ORDERED that the Trial Preparation Order, ECF No. 10, and all deadlines and proceedings set therein, are VACATED, to be reset upon submission of any supplemental pleadings and resolution of any further dispositive motions.

SO ORDERED.

FOOTNOTES

1.   While Lopez initially contended that both of State Farm's expert reports—Burns's and Berryhill's—should be excluded for untimeliness, she ultimately withdrew that argument. Reply Mot. Limine 1. Accordingly, the Court does not consider it.

2.   Some courts have noted a split of authority on whether ripeness is evaluated at the time of filing or at the time of decision. See Wisconsin Bell, Inc. v. Bridge, 334 F. Supp. 2d 1127, 1137 (W.D. Wis. 2004). But this supposed disagreement appears to stem from imprecise usage of the term “ripeness,” which courts often employ to refer to both constitutional and prudential ripeness. Only the former is jurisdictional. Simmonds, 326 F.3d at 357; Wilderness Soc. v. Kane County, 632 F.3d 1162, 1168 n.1 (10th Cir. 2011). By contrast, prudential ripeness is discretionary and may be assessed based on present circumstances. See Shelske v. Austin, 649 F. Supp. 3d 254, 278 (N.D. Tex. 2022) (“Unlike constitutional ripeness, prudential ripeness depends on the ‘situation now’ rather than the situation at the time of filing.”) (quoting Blanchette v. Conn. Gen. Ins. Corps., 419 U.S. 102, 140 (1974)).

3.   What befell Lopez is allegedly part of a broader corporate strategy by State Farm, in collaboration with nonparty McKinsey & Company, to maximize profits to the detriment of their insureds. See Compl. ¶¶ 78–80.

4.   While it is undisputed that State Farm did not cover Lopez's damages, this does not necessarily constitute nonperformance: State Farm disputes whether the damages were covered in the first place, and thus denies that it breached any promise to pay for covered damages. See Answer ¶ 12, ECF No. 4.

Kathleen Cardone, Judge