Unreported / Non-Citable
Background
Girma Abesu held property insurance with Allstate from May 30, 2023 to May 30, 2024. On September 1, 2023, he filed a claim for water damage to his home’s interior allegedly caused by a burst waterline in the laundry room on August 29, 2023. The first adjuster, Gregory Hunter, inspected the property, took moisture readings, attributed the loss to the burst waterline, but failed to photograph or adequately document the damage. After Hunter left Allstate, a second adjuster, Andrew Ramirez, took over the case and found demolished materials with no pre-demolition photographs, no moisture readings from Hunter’s inspection, and no file notes.
On October 19, 2023, Allstate denied part of Abesu’s claim and paid $3,100.31 out of the available $1,273.47 in recoverable depreciation coverage. Abesu then filed suit alleging three claims: breach of contract, violation of the Texas Prompt Payment of Claims Act (PPCA), and violations of Chapter 541 of the Texas Insurance Code governing unfair and deceptive insurance practices.
The district court granted Allstate’s motion for summary judgment on all claims. On the breach of contract claim, the court found that Abesu failed to establish that the damages were covered under the policy terms. Allstate’s expert, Kevin Maxwell, concluded based on independent inspection and review of prior claims that the home had “long-term, ongoing failure of the water supply lines” and that some damage was pre-existing. The court rejected Abesu’s reliance on an appraiser, holding that appraisers in Texas can only determine the amount of loss, not causation—causation is reserved for courts. Under Texas’s concurrent-causation doctrine, when both covered and uncovered causes of loss exist and are inseparable, the insured bears the burden to segregate the damage between the two causes. The court found Abesu provided no evidence to segregate the August 2023 covered loss from the pre-existing and ongoing damage from prior claims and supply line failures.
On the PPCA claim, the court held that Allstate did not violate the prompt payment statute because it did not wrongfully delay payment of benefits to which Abesu was entitled. Since the court determined Abesu was not entitled to coverage, extra-contractual claims do not survive. On the Chapter 541 claims, the court rejected all seven violations alleged. Claims for misrepresentation of policy terms (sections 541.051, 541.060(a)(1), and 541.061) failed because Abesu never identified any specific untrue or omitted statements or misrepresented policy provisions—he merely disputed coverage. Claims for unfair settlement practices (sections 541.060(a)(2)–(4) and (7)) all failed because Allstate had a reasonable basis for denial based on its expert report, provided timely explanations, and conducted a reasonable investigation. The court found that a coverage dispute does not constitute a misrepresentation or unfair settlement practice.