TLS&S has obtained summary judgment on behalf of Alterra Excess & Surplus Insurance Company and Engle Martin in the United States District Court for the Southern District of Texas.
Plaintiff sought an adjudication of coverage for a claim of alleged water damage to commercial property. After investigating, Alterra denied coverage on the grounds that the claimed interior damage was not caused by a storm, the roof did not show evidence of wind damage, and the leaks appeared to be an ongoing issue. Plaintiff then sold the property for a profit without having repaired the alleged storm damage. One month later, Plaintiff filed suit against Alterra and Alterra’s third-party administrator, Engle Martin, alleging that the storm damage arose from a covered cause of loss under the policy. The suit also asserted bad faith as well as multiple violations of the Texas Insurance Code.
After conducting written and oral discovery, TLS&S filed two motions for summary judgment, one on behalf of Engle Martin individually, and a second on behalf of both defendants. In the first motion, TLS&S argued that plaintiff had no claim for breach of fiduciary duty against Engle Martin, a stranger to the insurance contract. TLS&S further argued that Sections 541 and 542 of the Insurance Code do not apply to third-party adjusters. In the second motion on behalf of both defendants, TLS&S argued that plaintiff failed to present evidence that the property sustained damage from a covered cause of loss during the policy period.
Both motions for summary judgment were granted. Song v. Alterra Excess & Surplus Ins. Co., Case No. 7:12-cv-00118.