MERE ALLEGATIONS OF BAD FAITH AND UNSUPPORTED INSURANCE CODE AND DTPA CLAIMS DISMISSED ON MOTION FOR SUMMARY JUDGMENT AND MOTION TO DISMISS FOR A FAILURE TO STATE A CLAIM

Last Tuesday and Wednesday, U.S. District Court Judge Micaela Alvarez in the Southern District of Texas, McAllen Division, once again emphasized that mere allegations of bad faith, fraud and statutory violations, or simple recitations of the statutes without more, will not support the claims asserted and survive judicial scrutiny. In Barbara Ochoa Corporation v. Acceptance Indemnity Ins. Corp., 2022 WL 4097346 (S.D. Tex. McAllen Div., September 7, 2022), the homeowner filed suit over disputed wind and hail damage following Hurricane Hanna and alleged causes of action for breach of contract and various extracontractual claims. The insurer filed a 12(b)(6) Motion to Dismiss for failure to state a claim. And applying a well-reasoned analysis under the rule, the contract, the pleadings and applicable law, the court dismissed with prejudice, the insured’s claims for violation of the Texas Insurance Code and Texas Deceptive Trade Practices - Consumer Protection Act. Only the breach of contract claim remains.

Similarly, in Kelly v. State Farm Lloyds, 2022 WL 4084435 (S.D. Tex. McAllen Div., September 6, 2022), in a homeowners insurance dispute arising from claim for property damage allegedly caused by Hurricane Hanna, the court considered State Farm’s partial motion for summary judgment arguing that the “case boils down to a bona fide coverage dispute, not a bad faith denial of coverage.” The court considered the insureds interrogatory responses and deposition testimony and agreed. Accordingly, the court granted summary judgment dismissing all extracontractual claims with prejudice.