707 FWY Investments LLC v. Ategrity Specialty Insurance Company

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IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
FORT WORTH DIVISION
707 FWY INVESTMENTS LLC 	§
§
Plaintiff, 	§
§
v. 	§ 	Civil Action No. 4:25-CV-00114-O
§
ATEGRITY SPECIALTY INSURANCE
COMPANY
§
§
§
Defendant. 	§
ORDER
Before the Court are Defendant’s Motion for Partial Summary Judgment (ECF No. 26),
Brief in Support (ECF No. 27), and Appendix in Support (ECF No. 28) filed on September 29,
2025; Plaintiff’s Motion for Partial Summary Judgment (ECF No. 29), Brief in Support (ECF No.
30), and Appendix in Support (ECF No. 31) filed on September 29, 2025; Plaintiff’s Response to
Defendant’s Motion (ECF No. 32), Brief in Support (ECF No. 33), and Appendix in Support (ECF
No. 34) filed on October 20, 2025; Defendant’s Response to Plaintiff’s Motion (ECF No. 35) filed
October 22, 2025; Plaintiff’s Reply (ECF No. 41) and Appendix in Support (ECF No. 42) filed on
December 16, 2025; Defendant’s Reply (ECF No. 43) and Appendix in Support (ECF No. 44)
filed on December 16, 2025; Defendant’s Motion to Strike Plaintiff’s Expert Monty Stone (ECF
No. 45) filed on December 22, 2025; Plaintiff’s Response to Defendant’s Motion to Strike (ECF
No. 51) filed on December 29, 2025; and Defendant’s Reply to its Motion to Strike (ECF No. 55)
filed on December 31, 2025. Having reviewed the briefing and applicable case law, Defendant’s
Motion for Partial Summary Judgment (ECF No. 26) is GRANTED, Plaintiff’s Motion for Partial
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Summary Judgment (ECF No. 29) is GRANTED in part and DENIED in part, and Defendant’s
Motion to Strike (ECF No. 45) is DENIED.
I. 	BACKGROUND
This case involves allegations of underpayment and nonpayment under an insurance policy.
Defendant, Ategrity Specialty Insurance Company (“Defendant”), issued Policy No. 01-C-PK-
P20064154-0 to Plaintiff, 707 FWY Investments, LLC (“Plaintiff”), with effective dates of
September 12, 2022, to September 12, 2023 (the “Policy”).1 The Policy covered Plaintiff’s
property that Plaintiff leased out to commercial tenants.2
On April 14, 2023, the roof partially collapsed,3 and Plaintiff filed a claim for a partial
collapse and other damage “including but not limited to the supporting concrete tilt walls and steel
bar roof joists.”4 Plaintiffs also claimed damage to the roof’s surfacing, sub-surfacing, and the
building interior due to water that entered the structure after several severe wind and rainstorms.5
Defendant assigned it a claim number and inspected the property on May 1, 2023.6 On
May 5, 2023, Defendant sent an engineer from HAAG engineering (“HAAG”) to Plaintiff’s
Property to evaluate the damage.7 On May 24, 2025, before HAAG finished its written report,
Defendant issued a denial to Plaintiffs. Defendant cited HAAG’s findings as the basis for the
denial,8 and stated that “inadequate design and inadequate maintenance are not covered causes of
loss under the policy.”9 Plaintiff requested a copy of HAAG’s findings, but Defendant refused to
1 Notice of Removal Ex. A (Pl.’s Original Petition) 1, ECF No. 1-4.
2 Def.’s Br. Supp. Mot. Partial Summ. J. 2, ECF No. 27.
3 Pl.’s Br. Supp. Mot. Partial Summ. J. 2, ECF No. 30.
4 Notice of Removal Ex. A (Pl.’s Original Petition) 3, ECF No. 1-4.
5 Id.
6 Id.; Pl.’s Br. Supp. Mot. Partial Summ. J. 2, ECF No. 30.
7 Notice of Removal Ex. A (Pl.’s Original Petition) 3, ECF No. 1-4; Pl.’s Br. Supp. Mot. Partial Summ. J.
2, ECF No. 30.
8 Id.
9 Pl.’s Br. Supp. Mot. Partial Summ. J. 2, ECF No. 30.
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provide them, claiming it based its findings on an oral report.10 On or about June 6, 2023, the
inspected section of Plaintiff’s roof fully collapsed.11 On September 17, 2023, Defendant internally
noted the full collapse and planned to close the claim because the “claim was already denied based
on [independent adjuster] observations and [the] engineer further confirmed no covered causes of
loss exist.”12
Meanwhile, Plaintiff hired its own engineer who discovered that joists in the roof were cut,
causing the roof to collapse.13 Allegedly, the commercial tenants leasing out Plaintiff’s structure
tried to enlarge the garage door of this structure and cut certain joists in the roof doing so, which
caused the roof to start to cave in and then fully collapse.14
Nearly a year later, on September 12, 2024, the same day that Plaintiff sent Defendant a
notice and demand for prompt payment, Defendant re-opened the claim and confirmed that
Plaintiff’s claim—which it previously denied—was covered by the Policy.15 Defendant attributes
its change to the fact that “new information” from Plaintiff’s engineer’s report that “the actions of
a third-party [] affected the structural integrity of the roof,” which is a covered cause of loss.16
Defendant sent HAAG back to the property to inspect and provide an estimate for repairs.17
HAAG concluded 1) that the damage was minimal, 2) that the roof did not need to be fully
replaced, and 3) recommended that Defendant tender $300,00018—which Plaintiff claims is far
less than required.
10 Def.’s Br. Supp. Mot. Partial Summ. J. 2, ECF No. 27; Notice of Removal Ex. A (Pl.’s Original Petition)
4, ECF No. 1-4.
11 Pl.’s Br. Supp. Mot. Partial Summ. J. 2, ECF No. 30.
12 Id.
13 Pl.’s Reply 2, ECF No. 41.
14 Def.’s Br. Supp. Mot. Partial Summ. J. 2, ECF No. 27; Def.’s Reply 4, ECF No. 43.
15 Pl.’s Br. Supp. Mot. Partial Summ. J. 2, ECF No. 30.
16 Def.’s Resp. 5, ECF No. 35.
17 Notice of Removal Ex. A (Pl.’s Original Petition) 5, ECF No. 1-4.
18 Id.
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Because Defendant initially denied the claim, Plaintiff alleges it spent over $150,000 in
out-of-pocket expenses to temporarily repair and demolish portions of the building and to hire an
independent structural engineer.19 Plaintiff also claims the loss of significant rental income it could
have received had Defendant made timely payment.20 In addition to breach of contract, Plaintiff
brought claims under the Texas Insurance Code, Deceptive Trade Practices Act, and common law
bad faith.
Plaintiff’s extra-contractual claims are that Defendant misrepresented what the policy
covered after the loss, performed an unreasonable investigation, and manipulated the investigation
to avoid payment.21 Defendant claims it changed its position once it was made aware that a third-
party had severely compromised the stability of the building, which is a covered loss.22
Defendant moved for partial summary judgment on Plaintiff’s extra-contractual claims,
except for the prompt payment statute claim.23 Defendant “did not move for summary judgment
on the breach of contract claim because fact issues exist as to the scope and dollar amount of the
covered damages.”24 On the same day, Plaintiff moved for summary judgment on several of
Defendant’s affirmative defenses. Defendant also filed a motion to strike Plaintiff’s expert, Monty
Stone, a public adjuster designated to testify on causation.25 The motions are now ripe for the
Court’s review.
19 Id. at 4.
20 Id.
21 Id. at 4–5.
22 Def.’s Resp. 2, ECF No. 35.
23 The prompt payment statute, TEX. I NS . CODE § 542.051, requires an underlying breach of contract or
finding of liability. See Barbara Techs. Corp. v. State Farm Lloyds, 589 S.W.3d 806, 819–20 (Tex. 2019).
Defendant did not move for judgement on Plaintiff’s breach of contract claim.
24 Def.’s Reply 1, ECF No. 43.
25 Def.’s Mot. Strike, ECF No. 45.
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II. 	LEGAL STANDARD
A. Federal Rule of Civil Procedure 56(a)
The Court may grant summary judgment when the pleadings and evidence show “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). Summary judgment is not “a disfavored procedural shortcut, but rather
. . . an integral part of the Federal Rules as a whole, which are designed to secure the just, speedy
and inexpensive determination of every action.” Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986)
(internal quotation marks and citation omitted).
“[T]he substantive law will identify which facts are material.” Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986). A genuine dispute as to any material fact exists “if the evidence is
such that a reasonable jury could return a verdict for the nonmoving party.” Id. The movant must
inform the court of the basis for its motion and demonstrate from the record that no genuine dispute
as to any material fact exists. Celotex, 477 U.S. at 323. The Court must view the evidence in the
light most favorable to the nonmovant. Ion v. Chevron USA, Inc., 731 F.3d 379, 389 (5th Cir. 2013).
And if there appears to be some support for disputed allegations, such that “reasonable minds could
differ as to the import of the evidence,” the Court must deny the motion for summary judgment.
Anderson, 477 U.S. at 250.
“The party opposing summary judgment is required to identify specific evidence in the
record and to articulate the precise manner in which that evidence supports his or her claim.” Ragas
v. Tenn. Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir. 1998). “The opposing parties’ failure to
produce proof as to any essential element of a claim renders all other facts immaterial.” 2223
Lombardy Warehouse, LLC v. Mount Vernon Fire Ins. Co., No. 3:17-CV-2795-D, 2019 WL
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1583558, at *6 (N.D. Tex. Apr. 12, 2019) (Fitzwater, J.). Summary judgment is mandatory if the
parties fail to meet this burden. Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994).
B. Federal Rule of Evidence 702
Federal Rule of Evidence 702 governs the admissibility of expert testimony, requiring that
testimony be both relevant and reliable. The district court is charged with making this preliminary
determination as a gatekeeping function that filters the evidence the trier of fact consider. It
provides:
A witness who is qualified as an expert by knowledge, skill, experience, training,
or education may testify in the form of an opinion or otherwise if:
(a) the expert’s scientific, technical, or other specialized knowledge will help the trier
of fact to understand the evidence or to determine 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’s opinion reflects a reliable application of the principles and methods to
the facts of the case.
FED. R. EVID. 702. Rule 702 incorporates the principles articulated by the Supreme Court in
Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993). Under Daubert, expert
testimony is admissible only if the proponent, who bears the burden of proof, demonstrates that:
(1) the expert is qualified; (2) the evidence is relevant to the suit; and (3) the evidence is reliable.
See Watkins v. Telsmith, Inc., 121 F.3d 984, 988–89 (5th Cir. 1997).
The first requirement is that the expert must be qualified. “Before a district court may allow
a witness to testify as an expert, it must be assured that the proffered witness is qualified to testify
by virtue of his ‘knowledge, skill, experience, training, or education.’” United States v. Cooks, 589
F.3d 173, 179 (5th Cir. 2009) (quoting Rule 702). “A district court should refuse to allow an expert
witness to testify if it finds that the witness is not qualified to testify in a particular field or on a
given subject.” Id.
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The second requirement is that the expert’s testimony must be relevant. Relevant expert
testimony “assist[s] the trier of fact to understand the evidence or to determine a fact in issue.”
Pipitone v. Biomatrix, Inc., 288 F.3d 239, 245 (5th Cir. 2002). This requirement asks whether an
expert’s “reasoning or methodology properly can be applied to the facts in issue.” Knight v. Kirby
Inland Marine Inc., 482 F.3d 347, 352 (5th Cir. 2007).
The third requirement is that the expert’s testimony must be reliable. “Reliability is
determined by assessing ‘whether the reasoning or methodology underlying the testimony is
scientifically valid.’” Knight, 482 F.3d at 352 (quoting Daubert, 509 U.S. at 592–93)). Daubert
lists five non-exhaustive factors to assess the reliability of expert testimony:
1. 	Whether the theory of technique has been tested;
2. 	Whether the theory or technique has been subjected to peer review and
publication;
3. 	The known or potential rate of error of the method used;
4. 	The existence and maintenance of standards and controls in the methodology;
and
5. 	Whether the theory or method has been generally accepted by the scientific
community.
Daubert, 509 U.S. 593–95. In determining these factors, a district court has wide latitude and
considerable discretion. See Kumho Tire Co., Ltd. v. Carmichael, 526 U.S. 137, 152 (1999).
III. 	ANALYSIS
A. Defendant’s Motion for Partial Summary Judgment
Defendant moves for summary judgment against Plaintiff’s extra-contractual claims
brought 	under 	the 	Deceptive 	Trade 	Practices 	Act, 	Texas 	Insurance 	Code 	§§ 	541.061,
541.060(a)(1), 541.060(a)(2), 541.060(a)(3), 541.060(a)(5), 541.060(a)(7), and common law bad
faith.26 For the reasons stated below, Defendant’s motion is GRANTED.
26 See Def.’s Mot. Partial Summ. J., ECF No. 26.
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1. 	Deceptive Trade Practices Act
As an initial matter, there is a dispute regarding which DTPA claims Plaintiff brings.
Defendant argues that Plaintiff fails to specify which claims it brings under the DTPA, but assumes
for 	purposes 	of 	its 	motion 	that 	Plaintiff 	brought 	claims 	under 	§§ 	17.50(a)(1)(3) 	and
17.50(a)(1)(4).27 In its response, Plaintiff defends claims under both §§ 17.50(a)(1)(3) and
17.50(a)(1)(4).28 However, Plaintiff’s complaint only mentions the § 17.50(a)(1)(3) claim.29
Therefore, the § 17.50(a)(1)(4) claim cannot be asserted in a summary judgment motion, and the
Court only addresses the § 17.50(a)(1)(3) claim. See Martinez v. Prudential Ins. Co. of Am., 615
F. Supp. 3d 519, 541 (S.D. Tex. 2022) (Crane, J.) (“[C]ourts in this circuit routinely decline to
consider new claims asserted at the summary-judgment stage of litigation.”).
Plaintiff 	alleges 	that 	Defendant 	acted 	deceptively 	and 	unconscionably 	under 	§
17.50(a)(1)(3), using its superior knowledge and control of the claim to mislead Plaintiff.30 Section
17.50(a)(1)(3) provides a consumer with a basis to sue where an unconscionable action causes
economic damage or damages for mental anguish. TEX. BUS . & COM. CODE ANN . § 17.50(a)(1)(3).
Acting unconscionably means “an act or practice which, to a consumer’s detriment, takes
advantage of the lack of knowledge, ability, experience, or capacity of the consumer to a grossly
unfair degree.” TEX. BUS . & COM. CODE ANN . § 17.45(5).
Defendant argues the § 17.50(a)(1)(3) unconscionability claim fails because it sold “a
policy which covered exactly what it said it would.”31 Defendant cites to one case: Mobile Cnty.
Mut. Ins. Co. v. Jewell, 555 S.W.2d 903, 911 (Tex. Civ. App. — El Paso 1977, writ ref’d n.r.e.). It
27 Def.’s Br. Supp. Mot. Partial Summ. J. 10, ECF No. 27.
28 Pl.’s Resp. 15, ECF No. 33.
29 Notice of Removal Ex. A (Pl.’s Original Petition) 11, ECF No. 1-4.
30 Pl.’s Resp. 15, ECF No. 33.
31 Def.’s Br. Supp. Mot. Partial Summ. J. 10, ECF No. 27.
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is unclear why Defendant relies on this case which does not bear on the meaning of
unconscionability under § 17.50(a)(1)(3).
Plaintiff cites two cases, but again, neither has anything to do with unconscionability—
both concern bad faith claims.32 Plaintiff points to specific record evidence to support its
allegations that “Defendant deliberately withheld material and unfavorable information from its
own adjuster, engineer, and the insured to reach its predetermined outcome of the claim . . . .”33
However, even if all true, the evidence Plaintiff cites cannot satisfy the statutory standard.
A Texas DTPA unconscionability claim requires that the seller take advantage of the
consumer at the time of sale, not some later time. See Tolbert ex. rel. Tolbert v. Nat’l Union Fire
Ins. Co. of Pittsburgh, 657 F.3d 262, 272 (5th Cir. 2011) (“In any event, the Supreme Court of
Texas has held that unconscionability requires that the seller take advantage of lack of knowledge,
ability, experience, or capacity of a person at the time of the sale.” (internal quotation marks and
citation omitted) (emphasis in original)); see also Parkway Co. v. Woodruff, 901 S.W.2d 434, 441
(Tex. 1995) (explaining that under the DTPA “unconscionability requires that the seller take
advantage of special skills and training at the time of the sale”).
Here, Plaintiff’s unconscionability claim fails because it is “‘premised on conduct that
occurred . . . after the inception of coverage under the [Policy].’” CapLOC LLC v. Liberty Mut.
Ins. Europe Limited, No. 3:20-cv-3372-B, 2021 WL 2551591, at *11 (N.D. Tex. June 22, 2021)
(Boyle, J.) (ellipsis and alteration in original) (citing Tolbert, 657 F.3d at 272). Plaintiff’s
allegations that Defendant essentially manufactured the outcome of the investigation “relate[s
32 Pl.’s Resp. 14, ECF No. 33 (citing Winterfield United Methodist Church v. Church Mut. Ins. Co., No.
6:23-cv-558-JDK, 2025 WL 63670 (E.D. Tex. Jan. 9, 2025) (Kernodle, J.) and First Christian Church
Disciples of Christ of Tyler v. Church Mut. Ins. Co., No. 6:23-cv-342-JDK-JDL, 2024 WL 3631080 (E.D.
Tex. Jul. 10, 2024) (Love, Mag. J.)).
33 Pl.’s Resp. 14, ECF No. 33.
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only] to the handling of [the] claim for coverage—not to the sale of the Policy.” CapLOC LLC,
No. 3:20-cv-3372-B, 2021 WL 2551591, at *11 (N.D. Tex. June 22, 2021) (Boyle, J.). Therefore,
Defendant’s motion for summary judgment on the DTPA claim is GRANTED.
2. 	Texas Insurance Code §§ 541.060(a)(1) and 541.061
Plaintiff 	makes 	claims 	of 	misrepresentation 	under 	the 	Texas 	Insurance 	Code 	§§
541.060(a)(1) 	and 	541.061. 	Texas 	Insurance 	Code 	§ 	541.060(a)(1) 	makes 	actionable 	a
misrepresentation to a policyholder about a material fact or policy provision related to the coverage
at issue. Section 541.061 makes actionable an insurer’s misrepresentation of policy provisions.
Tex. Ins. Code. Ann. § 541.061.
Plaintiff’s misrepresentation claim is essentially this: 1) Defendant lied to its own
independent adjuster and engineer before inspection because it misstated the policy when it said
partial collapses weren’t covered under the policy, and 2) Defendant lied to Plaintiff when it said
the damage was not due to a covered cause under the policy.34 Plaintiff points to evidence that
Defendant “told its own independent adjuster that ‘[p]atrial collapse is not collapse in policy’ and
never provided him with a copy of the Policy despite [his] request.”35 Moreover, Defendant told
the independent adjuster “‘[t]here is coverage for collapse, but I don’t think it applies by the
[independent adjuster’s] description (not completely collapsed).”36
Defendant argues that Plaintiff’s §541.060(a)(1) claims fail for three reasons: 1) the
statements being alleged are post-loss statements—i.e., they could not have induced someone to
purchase coverage; (2) the statements Plaintiff references are about the facts underlying the loss,
34 Id. at 8–9; see also Notice of Removal Ex. A (Pl.’s Original Petition) 8, ECF No. 1-4.
35 Pl.’s Resp. 8, ECF No. 33.
36 Id.
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not the coverage or the contract; and 3) Plaintiff cannot show it relied to its detriment on any of
the misrepresentations.37
Plaintiff responds that “Defendant points to no competent evidence that negates any
element of Plaintiff’s § 541.060 misrepresentation claims[,]”38 and argues that post-loss statements
are not unqualifiedly barred.39 Plaintiff’s response does not address whether detrimental reliance
is a necessary element and fails to defend the § 541.061 claim altogether.40
The Court agrees with Defendant for its third reason; Plaintiff’s misrepresentation claims
fail because Plaintiff nowhere alleges that it did anything differently based on Defendant’s
misrepresentations.41 See ValTex Props. LLC v. Central Mutual Insurance Co., No. 3:20-CV-1992-
B, 2020 WL 6781944, at *3 (N.D. Tex. Nov. 18, 2020) (Boyle, J.) (“[Plaintiff]’s § 541.060(a)(1)
claims fail because [Plaintiff] has not alleged that it relied to its detriment on any of the
misrepresentations.”); see also Provident Am. Ins. Co. v. Castaneda, 988 S.W.2d 189, 200 (Tex.
1998) (requiring detrimental reliance for misrepresentations under the predecessor to the later-
codified Chapter 541 of the Texas Insurance Code); see also Taboada v. State Farm Lloyds, No.
2:18-cv-452, 2020 WL 264688, at *3 (S.D. Tex. Jan. 17, 2020) (Ramos, J.) (citing Provident for
the rule that detrimental reliance is required for misrepresentation claims under § 541.060(a)(1)).
The Court is unaware of and has yet to find any cases applying the detrimental reliance
requirement to § 541.061 claims. However, the Court need not resolve that issue because Plaintiff
does not defend the § 541.061 claim anywhere in the briefing.42 And “[t]his circuit’s well-settled
37 Def.’s Br. Supp. Partial Mot. Summ. J. 5, ECF No. 27.
38 Pl.’s Resp. 15, ECF No. 33.
39 Id. at 10.
40 See generally Pl.’s Resp., ECF No. 33.
41 Def.’s Br. Supp. Mot. Partial Summ. J. 5, ECF No. 27. The Court need not address whether post-loss
statements are actionable under the statute.
42 See generally Pl.’s Resp., ECF No. 33.
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precedent instructs that a party abandons a claim by failing to defend it in response to motions to
dismiss and other dispositive pleadings.” McClelland v. Katy Indep. Sch. Dist., 63 F.4th 996, 1010
(5th Cir. 2023). Therefore, the Defendant’s motion as to Plaintiff’s §§ 541.060(a)(1) and 541.061
claims is GRANTED.
3. 	Texas Insurance Code §§ 541.060(a)(2), 541.060(a)(7) and Common Law Bad Faith
Plaintiff brings claims under Texas Insurance Code §§ 541.060(a)(2), 541.060(a)(7) and
for common law bad faith. Under § 541.060(a)(2), an insured party has a cause of action when the
insurer fails “to attempt in good faith to effectuate a prompt, fair, and equitable settlement of . . . a
claim with respect to which the insurer’s liability has become reasonably clear.” Tex. Ins. Code.
Ann. § 541.060(a)(2). “The statutory standard is identical to the common-law bad faith standard.”
Mid-Century Ins. of Tex. v. Boyte, 80 S.W.3d 546, 549 (Tex. 2002). Under § 541.060(a)(7), an
insurer may not “refus[e] to pay a claim without conducting a reasonable investigation with respect
to the claim.” Tex. Ins. Code. Ann. § 541.060(a)(7).
Because the Court has found there was a bona fide dispute, and for the same reasons
discussed infra—Section III.B.3., Plaintiff cannot sustain a cause of action predicated on bad faith
or unreasonable investigation. See Patton v. Meridian Sec. Ins. Co., 617 F. Supp. 3d 516, 533 (N.D.
Tex. Jul. 28, 2022) (Fish, J.) (“If the insurer has a reasonable basis to deny or delay payment of a
claim, even if that basis is eventually determined by the fact finder to be erroneous, the insurer is
not liable for the tort of bad faith.”). Therefore, Defendant’s motion as to the §§ 541.060(a)(2),
541.060(a)(7) and common law bad faith claims is GRANTED.
4. 	Section 541.060(a)(3)
The Texas Insurance Code § 541.060(a)(3) makes it an unfair or deceptive act or practice
to fail to “promptly provide [] a policyholder a reasonable explanation of the basis in the policy,
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in relation to the facts or applicable law, for the insurer’s denial of a claim or offer of a compromise
settlement of a claim.” Tex. Ins. Code. Ann. § 541.060(a)(3).
Plaintiff argues that Defendant did not provide a reasonable explanation because it “recited
generic provisions without applying them to the actual condition of Plaintiff’s roof.”43 Moreover,
“Defendant did not attach the independent adjuster report or the engineer report [to the denial
letter], and the engineer report could not have been attached because it was not finalized until
[later].”44 Plaintiff cites no case law to support its argument. Defendant argues that it did provide
a reasonable basis for denial because it has stated the specific policy language at issue.45 Moreover,
Defendant relies on Mid-Continent Cas. Co. v. Eland Energy, Inc., for the proposition that “[t]he
statute does not obligate an insurer to provide an insured every piece of information or every
written document the insurer has regarding the offer or the investigation.” 795 F. Supp. 2d 493,
534 (N.D. Tex. 2011) (Fitzwater, J.) aff’d, 709 F.3d 515 (5th Cir. 2013).
The Court is unaware of any case law interpreting § 541.060(a)(3) of the Texas Insurance
Code as requiring a Defendant to provide the expert report it used in its denial to avoid liability.
Instead, the facts indicate that Defendant’s denial letter was at least reasonable because they cited
to the relevant excerpts of the policy and explained the factual findings. Therefore, Defendant’s
motion is GRANTED as to the § 541.060(a)(3) claim.
5. 	Texas Insurance Code § 541.060(a)(5)
The Texas Insurance Code makes actionable “refusing, failing, or unreasonably delaying a
settlement offer under applicable first-party coverage on the basis that other coverage may be
available or that third parties are responsible for the damages suffered.” Tex. Ins. Code. Ann. §
43 Id. at 20.
44 Id.
45 Def.’s Br. Supp. Mot. Partial Summ. J. 8, ECF No. 27.
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541.060(a)(5). Defendant argues that Plaintiff has no evidence to support this claim because
Defendant did not know a third party could have been responsible for the damage until Plaintiff
hired its own engineer and provided its report to Defendant.46 And when Defendant did find out
about the actions of third party, it paid the claim.47
Plaintiff raises that there is a factual issue as to whether Defendant should have known
about the third-party’s actions: “[i]f Defendant had conducted a thorough investigation at the
outset, it would have discovered the cut joists that caused the structural failure and recognized the
covered loss long before Plaintiff was forced to fund its own investigation and determine the
cause.”48 While that may be true—whether Defendant should have known is not the factual
question for a § 541.060(a)(5) claim.
The Court agrees with Defendant’s reliance on Barron v. Cent. Sur. Co., No. 1:22-cv-144-
MAC-ZJH, 2024 WL 2807224, at *6 (E.D. Tex. May 9, 2024) (Hawthorn, J.) report and
recommendation adopted, No. 1:22-cv-144-MAC-ZJH, 2024 WL 3861357 (Crone, J.) that
plaintiff has “introduced no evidence establishing that [defendant] attempted to justify its denial
of policy benefits on a third party’s negligence.” Here, the denial letter does not indicate denial for
the reason that other coverage may be available or that third parties are responsible for the
damage.49 The denial letter states that “the causes of damage to the roof, inadequate design and
inadequate maintenance are not covered causes of loss under the policy.”50 Plaintiff offers no
evidence indicating the contrary. Therefore, no material fact issues exist as to this claim, and
Defendant’s partial motion for summary judgment on § 541.060(a)(5) is GRANTED.
46 Id. at 13.
47 Id.
48 Pl.’s Resp. 25, ECF No. 32.
49 Pl.’s App. Supp. Mot. Partial Summ. J., Ex. F. (denial letter) App. 249, ECF No. 31-6.
50 Id.
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B. Plaintiff’s Motion for Partial Summary Judgment
Plaintiff moves for summary judgment on Defendant’s affirmative defenses of (1) failure
to satisfy conditions precedent; (2) policy exclusions; (3) bona fide dispute; (4) concurrent
causation; (5) estoppel; (6) waiver; (7) and limitation of punitive and exemplary damages.51 For
the reasons below, Plaintiff’s motion is GRANTED in part and DENIED in part.
1. 	Failure to Satisfy Conditions Precedent
Under Federal Rule of Civil Procedure 9(c), a party denying that a condition precedent has
occurred must do so with particularity. FED. R. CIV. P. 9(c). In its notice of removal, Defendant
asserts as an affirmative defense that not all conditions precedent were satisfied—namely,
appraisal.52 Defendant mentions no other specific conditions precedent.
Plaintiff argues that under the Policy, appraisal is merely optional and not a prerequisite to
recovery.53 Plaintiff adds that “[a]lthough no other specific conditions precedent were named by
Defendant . . . 	Defendant’s corporate representative confirmed no other potential conditions
precedent were at issue.”54 In its response, Defendant explains that it has since “withdraw[n]
[appraisal] as a ground for its defense” because—in Defendant’s words—the dispute is “more
about the scope of covered damage than amount and appraisal would not be helpful.”55 Therefore
Plaintiff’s Motion is GRANTED as to appraisal.
In its response to Plaintiff’s motion, Defendant asserts for the first time that Plaintiff does
not satisfy all conditions precedent because Plaintiff failed to mitigate its losses.56 However,
51 Pl.s’ Br. Supp. Partial Mot. Summ. J. 1, ECF No. 30.
52 Notice of Removal Ex. C (Def.’s Original Ans.) 1, ECF No. 1-6.
53 Pl.’s Br. Supp. Partial Mot. Summ. J. 5, ECF No. 30.
54 Id.
55 Def.’s Resp. 3, ECF No. 35.
56 Id.
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Defendant never argued this defense in its answer.57 Because Defendant did not deny that condition
precedent with particularity in its answer, it is questionable whether it can be raised in response to
a motion for summary judgment. See FED. R. CIV. P. 8(c) (“In responding to a pleading, a party
must affirmatively state any avoidance or affirmative defense . . . .”); see Allied Chem. Corp. v.
Mackay, 695 F.2d 854, 855–56 (5th Cir. 1983) (“Where the matter is raised in the trial court in a
manner that does not result in unfair surprise, however, technical failure to comply precisely with
Rule 8(c) is not fatal.”).
Because Plaintiff does not argue unfair surprise, and responds to Defendant’s argument in
the briefing, the Court addresses the mitigation condition precedent. Plaintiff cites to deposition
testimony from Defendant’s corporate representative indicating mitigation is not at issue.58
Specifically, Plaintiff points to the corporate representative’s statement: “[t]hat’s correct” in
response to the question: “Ategrity is not saying that the plaintiff failed to mitigate its losses,
resulting in the claim; correct?”59 Defendant argues that the corporate representative’s statement
does not foreclose the argument because the statement could mean “that the insured’s failure to
mitigate may have increased the magnitude of the loss[,]” even if it did not cause it.60 Defendant
also quotes its engineer’s statement that if the property had been properly shored—i.e., stabilized—
he would not have expected the roof to completely collapse.61 In response, Plaintiff relies on argues
it could not have been expected to act any differently because Defendant’s adjuster testified that
he did not recommend shoring at the first inspection because the roof did not appear to be in danger
of immediate collapse.62
57 See generally Notice of Removal Ex. C. (Def.’s Original Ans.), ECF No. 1-6.
58 Pl.’s Br. Supp. Partial Mot. Summ. J. 9, ECF No. 30.
59 Def.’s Resp. 2–3, ECF No. 35.
60 Id. at 3 (emphasis in original).
61 Id.
62 Pl.’s Reply 4–5, ECF No. 41.
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Because Plaintiff there is genuine issue of material fact regarding the adequacy of its
shoring, Plaintiff’s motion is DENIED as to mitigation of damages. Defendant’s mitigation
affirmative defense survives this motion.
2. 	Policy Exclusions
Under Texas law, a policy exclusion is an affirmative defense. See Standard Waste Sys. Ltd.
v. Mid-Continent Cas. Co., 612 F.3d 394, 398 (5th Cir. 2010). “The insured bears the initial burden
of showing that its loss is covered, while the insurer bears the burden of establishing that a policy
exclusion applies.” See Balfour Beatty Constr. L.L.C. v. Liberty Mut. Fire Ins. Co., 968 F.3d 504,
509 (5th Cir. 2020). Because Defendant bears the burden of proof on its affirmative defense,
Plaintiff is not required to preemptively negate that every policy exclusion applies. See JAW The
Pointe, L.L.C. v. Lexington Ins. Co., 460 S.W.3d 597, 603 (“[T]he party suing on such contract
shall never be required to allege that the loss was not due to a risk or cause coming within any of
the exceptions . . . .”). Rather, Defendant must plead and prove that specific exclusions apply.
In Defendant’s answer, Defendant makes the broad statement that even if there was
property damage which occurred during the Policy period, it fell under an exclusion.63 Plaintiff
moves for judgment against Defendant on this defense because Defendant failed to plead which of
Plaintiff’s claims were barred by what exclusions.64 Plaintiff argues that other than a one-liner in
63 Notice of Removal Ex. C (Def.’s Original Ans.) 3, ECF No. 1-6.
64 Pl.’s Reply 2, ECF No. 41.
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Defendant’s answer about structural support not being covered,65 Defendant “simply copied and
pasted the Policy language without any specific allegations.”66
In Defendant’s response, it states that it “never agreed that the foundation and land were
covered property” and that “[p]roperty that is not covered property under the Policy, such as
foundations and land, are still not covered by the Policy regardless of whether [Defendant] accepts
that a covered cause of loss occurred.”67 Defendant points to foundation damage as an exclusion,
but then in the same sentence points to its engineer’s deposition stating, “there was no damage to
the . . . foundation.”68
Plaintiff does not address whether there was or was not any damage to the foundation, but
instead argues “[i]f [Defendant] truly intended to rely on a foundation/land exclusion as a basis for
denial or as a live limitation on Plaintiff’s recovery, it should have said so in its letters, in its
[a]nswer, its discovery responses, or through its corporate representative.”69 Plaintiff claims that
“[f]ollowing discovery, it is clear that Defendant does not have any evidence to support this
affirmative defense because coverage is not in dispute . . . .”70 Plaintiff argues that the corporate
representative’s statements are conclusive that Defendant is not disputing coverage under the
Policy for this claim.71 Plaintiff’s point is well-taken, but since Plaintiff does not contest whether
the foundation was damaged, the Court accepts Defendant’s version of the facts as true.
65 The only specific reference to a policy exclusion in Defendant’s answer is that “it was not the weight of
rain that caused the collapse, but rather the removal of a structural support for which coverage is excluded.”
Notice of Removal Ex. C (Def.’s Original Ans.) 5, ECF No. 1-6. This statement does not align with any of
Defendant’s subsequent briefing or its letter accepting the claim. See Pl.’s App. Supp. Partial Mot. Summ.
J. Ex. H (Second Letter from Ategrity insurance Company) App. 259–63, ECF No. 31-8 (finding coverage).
Therefore, Defendant has abandoned this argument.
66 Pl.’s Br. Supp. Partial Mot. Summ. J. 10, ECF No. 30.
67 Def.’s Resp. 4, ECF No. 35.
68 Id.; Def.’s App. Supp. Mot. Partial Summ. J. Ex. C (Teasdale Dep.) 91:8–16, App. 058, ECF No. 28-1.
69 Pl.’s Reply 6, ECF No. 41.
70 Id.
71 Id.
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Further, if there is no damage to the foundation, then it is unclear why Defendant ever
asserted that an exception for foundation damage would apply. Under the Policy’s section titled
“Property Not Covered,” subsection “g” specifies that “[f]oundations of buildings, structures,
machinery or boilers if their foundations are below: (1) [t]he lowest basement floor; or (2) [t]he
surface of the ground, if there is no basement” are not covered.72 Since there is no damage to the
foundation, the exception regarding foundations does not apply.
Defendant also contends that “Plaintiff is conflating the acceptance portion of the claim,
with the acceptance of all of Plaintiff’s claimed damage” and that “[e]ven though this case is about
the dollar amount of the covered damage, in part, it is also about the scope of the damage from
collapse.”73 If this case really is about what is in the scope of certain policy exclusions, Defendant
has failed to argue so.
If there are any other relevant policy exclusions, Defendant has not raised them before the
Court and has failed to produce any significant probative evidence demonstrating a triable fact as
their applicability. Plaintiff argues “[a]t this stage, ‘copy and paste’ is not enough. Ategrity has had
every opportunity in its Answer, discovery responses, and now its Response to this motion to say,
plainly, which specific provision it is relying on and how it applies.”74 The Court agrees. Therefore,
Plaintiff’s motion as policy exclusions is GRANTED.
3. 	Bona Fide Dispute
“Under Texas law, there is a duty on the part of the insurer to deal fairly and in good faith
with an insured in the processing of claims.” See Blueitt v. Crestbrook Ins. Co., 643 F. Supp. 3d
651, 658 (N.D. Tex. 2022) (O’Connor, J.) (citing Arnold v. National Cnty. Mut. Fire Ins. Co., 725
72 Pl.’s App. Supp. Mot. Partial Summ. J. Ex. B (Policy) App. 142, ECF No. 31-2.
73 Def.’s Resp. 4, ECF No. 35.
74 Pl.’s Reply 6, ECF No. 41.
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S.W.2d 165, 167 (Tex. 1987)). An insurer breaches this duty if it denied a claim when its liability
had “become reasonably clear.” See State Farm Fire & Cas. Co. v. Simmons, 963 S.W.2d 42, 44
(Tex. 1998). “Evidence establishing only a bona fide coverage dispute does not demonstrate bad
faith.” Id. Further, the bona fide dispute rule is not a true affirmative defense because the insured
party—here, Plaintiff—bears the burden to show the absence of a bona fide dispute.
The bad faith inquiry is determined by viewing the facts available to the insurer at the time
the claim was denied. Viles v. Sec. Nat’l Ins. Co., 788 S.W.2d 566, 567 (Tex. 1990). Bad faith does
not focus on the validity of the claim but, rather, on the “reasonableness of the insurer’s conduct
in rejecting the claim.” Lyons v. Millers Cas. Ins. Co. of Tex., 866 S.W.2d 597, 601 (Tex. 1993). If
the insurer’s conduct is reasonable, it will not be liable for bad faith even where the basis for its
determination “is eventually determined by the factfinder to be erroneous.” Id. at 600. “In other
words, a genuine dispute over the scope of insurance coverage is an inherently reasonable basis
for denying coverage.” Irving v. Meridian Sec. Ins. Co., 649 F. Supp. 3d 293, 298 (N.D. Tex. 2022)
(O’Connor, J.).
The test is objective and asks whether “a reasonable insurer under similar circumstances
would have delayed or denied the claimant’s benefits.” Eagle Oil & Gas Co. v. Travelers Prop.
Cas. Co. of Am., No. 7:12-cv-00133-O, 2014 WL 3406686, at *19 (N.D. Tex. July 14, 2014)
(O’Connor, J.) (quoting Nunn v. State Farm Mut. Auto. Ins. Co., 729 F. Supp. 2d 801, 807 (N.D.
Tex. 2010)). However, the Texas Supreme Court has “never held that the mere fact that an insurer
relies upon an expert’s report to deny a claim automatically forecloses bad faith recovery as a
matter of law.” State Farm Lloyds v. Nicolau, 951 S.W.2d 444, 448 (Tex. 1997). “Instead, [the
Texas Supreme Court has] repeatedly acknowledged that an insurer’s reliance upon an expert’s
report, standing alone, will not necessarily shield the carrier if there is evidence that the report was
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not objectively prepared or the insurer’s reliance on the report was unreasonable.” Id. (citing Lyons
v. Millers Casualty Ins. Co., 866 S.W.2d 597, 601 (Tex. 1993)).
Plaintiff argues there is no bona fide dispute because Defendant performed an unreasonable
investigation, with the intention of denying Plaintiff’s claim, and withheld and misrepresented
material information regarding Plaintiff’s claim.75 As support, Plaintiff points to evidence showing
that Defendant told the independent adjuster and engineer investigating the loss that partial
collapses weren’t covered under the policy—which is an objectively untrue statement about the
Policy.76 Also, the claim was denied nearly a month before the written report was finalized.77 When
these investigations led to a denial, Plaintiff requested the engineering report that allegedly formed
the basis for Defendant’s denial.78 Plaintiff was refused access because Defendant said the report
was internal work product that was “not distributable currently.”79 Defendant’s corporate
representative agrees with Plaintiff that the findings were not attached to the denial letter and that
they should have been shared.80 Later, after the roof completely collapsed, Plaintiff hired an expert
who discovered that the cause of the collapse was actually cuts made to the roof joists—a cause
that would have been covered all along.81 Plaintiff also cites to deposition testimony from
Defendant’s engineer admitting that nothing should have prevented him from identifying the cut
joists as the true cause of the collapse in his investigation.82 Plaintiff argues this evidence suggests
the investigation was pretextual and therefore, unreasonable.
75 Pl.’s Br. Supp. Mot. Partial Summ. J. 12, ECF No. 30.
76 Id.
77 Pl.’s Resp. 26, ECF No. 32.
78 Pl.’s Br. Supp. Mot. Partial Summ. J. 12, ECF No. 30.
79 Id.
80 Id.
81 Pl.’s Resp. 23, ECF No. 32.
82 Id.
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Defendant argues that it was not aware of the true cause of loss—the third-party affecting
the structural integrity of the roof—until Plaintiff sent its pre-suit letter.83 Further, Defendant
contends that it was merely relying on the opinion of its expert and once it was aware of cuts to
the roof joists, it changed its position.84 Defendant suggests Plaintiff may have known about the
cut joists and did not tell Defendant until later—although, this fact is disputed.85 Defendant was
under no obligation at law or under the policy to provide a copy of the expert’s report.86 Lastly,
Defendant argues that it does not matter if the engineer was told a lie about partial collapses
because the engineer testified that he is not involved in coverage determinations and does not pay
attention to comments about coverage if they are made.87
In their briefing, the parties also largely debate the application of one case: Marshall Mall
Invs. LP v. Allied Prop. & Cas. Ins. Co., No. 2:21-CV-00109-RWS, 2023 WL 3686841, at *2 (E.D.
Tex. Mar. 1, 2023) (Schroeder, J.). However, that case is of little help because there, the plaintiff
proffered an argument that in its entirety read, “[t]he bona fide dispute rule is not an affirmative
defense.” Id. The court held that Plaintiff failed to form a fully developed argument that shows
there is no genuine dispute as to any material fact. Id.
In contrast, Plaintiff in this case has put forward specific facts to support its theory. But
Plaintiff’s allegations, even if taken as true, do not necessarily create a genuine issue of material
fact. Here, Plaintiff argues that Defendant tried to influence the adjusters because it falsely stated
that partial collapses are not covered under the policy. Defendant counters that it does not matter
what false information about coverage was communicated to the engineers or adjusters, because
83 Def.’s Resp. 5, ECF No. 35.
84 Id.
85 Id. at 6.
86 Id.
87 Id.
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they only make findings but not the ultimate coverage decision.88 But, Defendant should have
highlighted that the statement about partial collapses is immaterial because the claim was never
denied for falling short of a full collapse.89 The denial letter states that “the causes of damage to
the roof, inadequate design and inadequate maintenance are not covered causes of loss under the
policy.”90 No reasonable inference can be made that the statement about partial collapses not being
covered—a type of loss—could have influenced the engineer to get the cause of the loss incorrect.
Additionally, the engineer’s testimony that he saw no reason why he could not have
discovered the cut joists beforehand does not tend to show bad faith. See, e.g. Irving v. Meridian
Sec. Ins. Co., 649. F. Supp. 3d 293 (N.D. Tex. 2022) (O’Connor, J.) (holding that even a “lack of
knowledge, perhaps even his admitted incompetence is arguably a reasonable basis . . . to deny or
delay payment”). Of course, an insurer cannot request its inspectors to ignore blatant realities and
shield itself from bad faith accusations by claiming a lack of knowledge. See Universe Life Ins.
Co. v. Giles, 950 S.W.2d 48, 56 n.5 (Tex. 1997) (“An insurer will not escape liability merely by
failing to investigate a claim so that it can contend that liability was never reasonably clear.” (citing
Arnold v. Nat’l Cnty. Mut. Fire Ins. Co., 725 S.W.2d 165, 167 (Tex. 1987))). But here, Plaintiff has
failed to show what Defendant’s engineer could have done or should have done in its original
investigation to find the cut joists. See Humphries v State Farm Lloyds, No. 3:20-cv-01163-X,
2022 WL 705860, at *7–9 (N.D. Tex. 2022) (Starr, J.) (no evidence of bad faith where plaintiff
merely asserted the investigation was outcome oriented and pretextual and offered no expert
testimony, proof of standard industry practice, or legal authority to support their claim).
88 Def.’s Resp. 7, ECF No. 35.
89 Pl.’s App. Supp. Mot. Partial Summ. J., Ex. F. (denial letter) 249, ECF No. 31-6.
90 Id.
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Lastly, Plaintiff points to Defendant’s failure to disclose the engineering report. Defendant
argues that neither the law nor the Policy mandated it to share the report with Plaintiffs,91 but this
is unavailing. Just because Defendant was not required to share it does not mean failure to do so
cannot reveal bias or bad faith.
Plaintiff cites two cases where a district court has held that an insurance company’s failure
to provide a report—despite any requirement that it must—was evidence of bad faith. See
Winterfield United Methodist Church v. Church Mut. Ins. Co., S.I., No. 6:23-cv-558-JDK, 2024
WL 5356135, at *9 (E.D. Tex. Dec. 17, 2024) (Love, J.), report and recommendation adopted, No.
6:23-cv-558-JDK, 2025 WL 63670 (E.D. Tex. Jan. 9, 2025) (Kernodle, J.); see also First Christian
Church of Tyler v. Church Mut. Ins. Co., No. 6:23-cv-342-JDK-JDL, 2024 WL 3631080, at *6
(E.D. Tex. Jul. 10, 2024) (Love, J.), report and recommendation adopted, No. 6:23-cv-342-JDK,
2024 WL 3625833 (Kernodle, J.). However, in both cases, the courts noted that “only disclosing
favorable information about a claim when the insurer knows of 	potentially unfavorable
information is evidence of bias.” Winterfield United Methodist Church, 2024 WL 5356135, at *9;
accord First Christian Church of Tyler, 2024 WL 3631080, at *6; see also Christian Heritage
School v. Central Mut. Ins. Co., No. 6:24-cv-45-JDK-JDL, 2025 WL 1341893, at *13 (Love, J.),
report and recommendation adopted, No. 6:24-cv-45-JDK-JDL, 2025 WL 1337537 (Kernodle, J.)
(“Moreover, the fact that the defendant withheld unfavorable information alone, did not dictate the
court’s decision.” (internal quotations and citations omitted)). Here, Plaintiff has failed to point
toward any facts indicating the report included potentially unfavorable information or anything
else to suggest that this was done in bad faith. Absent other evidence, Plaintiff fails to demonstrate
the lack of a bona fide dispute.
91 Def.’s Resp. 6, ECF No. 35.
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Therefore, Plaintiff’s motion for summary judgment is DENIED because Plaintiff fails to
show that the expert report supporting initial denial was not objectively prepared or that the
insurer’s reliance on it was unreasonable.
4. 	Concurrent Causation
Under Texas law, “the doctrine of concurrent causation is not an affirmative defense or an
avoidance issue; rather, it is a rule embodying the basic principle that insureds are not entitled to
recover under their insurance policies unless they prove their damage is covered by the policy.”
Markel American Ins. Co. v. Lennar Corp., 342 S.W.3d 704, 709 (Tex. Civ. App. — Houston [14th
Dist.] 2011). “The insured must attempt to segregate the loss caused by the covered peril from the
loss caused by the uncovered peril and secure a jury finding on the amount of damage attributable
to the different causes.” Id.
Plaintiff argues that testimony from Defendant’s corporate representative confirms that
concurrent causation is not at issue in this claim.92 Defendant responds that “Plaintiff is using the
corporate representative’s statement concerning the accepted scope of loss, as applying to
Plaintiff’s entire claim.”93 Defendant also contends that it was “unable to complete the deposition
of Plaintiff’s expert, Monty Stone, because of scheduling constraints. [Defendant] is not arguing
concurrent causation exists preventing recover [sic] to accepted [sic] portion of the claim, and it
has already paid that.”94 Defendant then offers that “[a]fter the conclusion of Monty Stone’s
deposition, [Defendant] will consider if this affirmative defense is moot, but it is premature at this
time to say [Defendant] should be precluded from asserting it.”95
92 Pl.’s Br. Supp. Mot. Partial Summ. J. 9, ECF No. 30.
93 Def.’s Resp. 7, ECF No. 35
94 Id.
95 Id. at 8.
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The Court declines Defendant’s request to delay ruling on this issue. “To obtain a
continuance of a motion for summary judgment in order to obtain further discovery, a party must
indicate to the court by some statement . . . why he needs additional discovery and how the
additional discovery will create a genuine issue of material fact.” Krim v. BancTexas Group, 989
F.2d 1435, 1442 (5th Cir. 1993). “The nonmoving party ‘may not simply rely on vague assertions
that additional discovery will produce needed, but unspecified facts.’” Id. (citing SEC v. Spence &
Green Chem. Co., 612 F.2d 896, 901 (5th Cir. 1980)). “If it appears that further discovery will not
produce evidence creating a genuine issue of material fact, the district court may, in the exercise
of its discretion, grant summary judgment.” Krim, 989 F.2d at 1442. Defendant has presented no
meaningful argument for why it needs to conduct additional discovery, or what it expects to
discover. Moreover, it appears that since filing its response, Defendant has deposed Monty Stone.96
Therefore, Plaintiff’s motion for summary judgment is GRANTED.
5. 	Estoppel and Waiver
Defendant asserted affirmative defenses of estoppel and waiver in its answer, on which
Plaintiff now moves for summary judgment.97 Defendant responds that these weren’t intended to
be affirmative defenses—they were only included “to provide notice to Plaintiff that Plaintiff
cannot use the doctrines . . . to change, re-write, or enlarge risks covered by a policy.”98 Since these
defenses were only pleaded out of an abundance of caution and Defendant offers no other
explanation for them, Plaintiff’s motion for summary judgment as to estoppel and waiver is
GRANTED.
96 Pl.’s Resp. to Mot. Strike, Ex. A (Monty Stone Dep), ECF No. 51-1.
97 Notice of Removal Ex. C (Def.’s Original Ans.) 3, ECF No. 1-6 (citing Ulico Cas. Co. v. Allied Pilots
Assoc., 262 S.W.3d 773, 778–79 (Tex. 2008) (discussing the “Wilkinson” exception from Farmers Texas
County Mut. Ins. Co. v. Wilkinson, 601 S.W.2d 520 (Tex. Civ. App. — Austin 1980, writ ref’d n.r.e.))).
98 Def.’s Resp. 8, ECF No. 35.
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6. 	Limitation of Punitive and Exemplary Damages
In its answer, Defendant asserts as an affirmative defense several caps on damages
amounts.99 Defendant names one cap on exemplary damages, which is irrelevant given the Court’s
finding of summary judgment against Plaintiff’s extra-contractual claims. See Tex. Civ. Prac. &
Rem. Code § 41.003(a) (exemplary damages may be awarded where there is clear and convincing
evidence of fraud, malice, or gross negligence). The other damages caps which Defendant asserts
are merely statements of law, and not affirmative defenses. Therefore, Plaintiff’s motion for
summary judgment is GRANTED.
C. Motion to Strike Plaintiff’s Expert Monty Stone
Plaintiff designated Monty Stone to testify as an expert in damages and causation.
Defendant moves to strike Monty Stone’s opinions on causation—but not damages—arguing 1)
he is not qualified, and 2) his testimony is not based on a reliable methodology.100
Defendant’s argument that Stone is unqualified rests on the fact he is not an engineer—he
is a public adjuster—and “working closely” with engineers is an insufficient basis to make one an
expert in engineering.101 Defendant also points to the fact that Stone was not certified as a roof
consultant or a roof observer at the time of the loss.102 Plaintiff responds that 1) Stone has been
upheld has an expert in the face of nearly identical challenges, and 2) Defendant’s quibble is better
suited for cross-examination.103
Under Federal Rule of Civil Procedure 702, a witness may be qualified as an expert by
“knowledge, skill, experience, training, or education.” FED. R. EVID. 702. Although Defendant
99 Notice of Removal Ex. C (Def.’s Original Ans.) 3, ECF No. 1-6.
100 See generally Def.’s Mot. Strike, ECF No. 45.
101 Def.’s Mot. Strike 4, ECF No. 45.
102 Id.
103 Pl.’s Resp. to Mot. Strike 1–2, ECF No. 51.
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makes an argument based on Stone’s lack of schooling, that is only one among many ways to be
qualified. See Patton v. Metropolitan Lloyds Ins. Co. of Texas, No. 5:21-cv-074-H, 2022 WL
2898946, at *4 (N.D. Tex. Feb. 14, 2022) (Hendrix, J.) (denying an identical expert qualification
challenge as to Monty Stone because despite not being an engineer, Stone had more than eighteen
years of experience). And while he is not currently licensed, he has been in the past and has
extensive work experience and training with identifying damage causation, reasonable repairs, and
reasonable costs.104 Stone was also formerly a HAAG Certified Roof Inspector—the same
company for which Defendant’s causation expert David Teasdale works.105 Because Stone is not
required to be an engineer to testify as to causation, Defendant’s arguments regarding Stone’s
experience are better suited for cross-examination, rather than a challenge based on qualification.
Defendant also objects to the reliability of Stone’s testimony, arguing that he provides only
“[g]eneral statements without concrete examples” which amounts to “ipse dixit[.]”106 Plaintiff
argues that “Defendant offers no comparison to other methodologies”107 and that Defendant’s own
engineer relied on the same methodology—visual inspection—and performed no testing.108 See
also Gun Barrell Jacksonville LLC v. Depositors Ins. Co.¸ No. 6:20-cv-469-JDK, 2021 WL
5154218, *3 (N.D. Tex. Oct. 9, 2021) (Kernodle, J.) (motion to strike denied when expert opinion
was based on “physical inspection of the property; [an] engineering report and exhibits; [his] own
experience, knowledge, skill and training; [his] assessment of the property and damage”).
Defendant presents no other reason for the Court to believe Stone’s physical inspection is not a
104 Id. at 6.
105 Id.
106 Def.’s Mot. Strike 6, ECF No. 45.
107 Pl.’s Resp. to Mot. Strike 6, ECF No. 51.
108 Id. at 2.
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proper methodology. In light of this, the Court finds no reason to think Stone’s methodology is
unreliable.
Therefore, the Court agrees with Plaintiff that “Defendant’s Motion essentially argues that
their expert is more credible than Plaintiff’s . . . .”109 “Vigorous cross-examination, presentation of
contrary evidence, and careful instruction on the burden of proof are the tradition and appropriate
means of attacking shaky but admissible evidence.” Daubert, 509 at 596. Defendant’s motion to
strike expert Monty Stone is DENIED.
IV. 	CONCLUSION
For the reasons stated above, Defendant’s Motion for Partial Summary Judgment (ECF No.
26) is GRANTED. Plaintiff’s Motion for Partial Summary Judgment (ECF No. 29) is GRANTED
as to Defendant’s affirmative defenses of policy exclusions, concurrent causation, estoppel, and
waiver, and DENIED as to the existence of a bona fide dispute and the condition precedent of
mitigation. And Defendant’s Motion to Strike (ECF No. 45) is DENIED.
Because this Order comes after the parties submitted their proposed pretrial order (ECF
No. 58), the parties are REQUIRED to re-submit their proposed pretrial order no later than
January 16, 2026. Specifically, the Court ORDERS the parties to explain what triable issue of
fact remains under the breach of contract claim and the mitigation affirmative defense.
SO ORDERED on this 9th day of January 2026.
109 Id. at 5.
Case 4:25-cv-00114-O Document 62 Filed 01/09/26 Page 29 of 29 PageID <pageID>