NORTHERN DISTRICT RE-AFFIRMS THAT STATUTE-BASED, INDEPENDENT INJURY FOR EXTRA-CONTRACTUAL INSURANCE CLAIMS ARE EXTREMELY RARE

Mid last week, the United States District Court for the Northern District of Texas, Fort Worth Division, held that a couple’s extra-contractual claims were moot once their policy-based damages were paid.

In McNeely et. al. v. State Farm, 2022 WL14915590 the plaintiffs suffered roof damage from a hailstorm.  (N.D. Tex. October 25, 2022).  They filed a claim with State Farm, and State Farm initially refused to pay.  The McNeely’s sued, and over the course of two years, State Farm paid the cash value of the hail damage, late payment penalties pursuant to the Texas Prompt Claim Act, and $19,420 for the McNeely’s attorney’s fees.  State Farm then moved, and was granted, summary judgment for the McNeely’s extra-contractual claims.  The Court agreed with State Farm that the McNeely’s were provided everything due to them, including late fees and attorney’s fees, under their insurance policy and that they had no independent injury or damages outside of their policy benefits.  Notably, the Court disagreed with the McNeely’s argument that State Farm’s delay created an independent injury in the form of an increased cost to replace their roof.  Instead, the Court affirmed that the occurrence of a statutory violation (like violation of the Prompt Payment Act) “would be rare, and we in fact have yet to encounter one.”