Farah v. Chubb National Insurance Company et al

FRED FARAH,
Plaintiff,
vs.
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
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§ 	CIVIL ACTION NO. 4:24-CV-04899
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CHUBB NATIONAL INSURANCE
COMPANY, et al. ,
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Defendants. 	§
ORDER
This case was originally filed in state district court in Harris County, Texas. The defendant,
Chubb National Insurance company ("Defendant" or "Chubb"), removed the matter to this Court
and has now filed a Motion for Summary Judgment, (Doc. No. 8) , to which Plaintiff, Fred Farah
("Plaintiff' or "Farah"), has not responded in opposition. Having reviewed the motion, the record,
and the applicable law, the Court hereby GRANTS Defendant's Motion for Summary Judgment.
(Doc. No. 8) .
I.
Background Facts
Chubb points out that the correct insuring entity is ACE American Insurance Company
("ACE"). The Court therefore will refer to the insurance company as AC E.
This case arose from alleged damage to Plaintiffs boat caused by Hurricane Beryl. ACE,
a Chubb entity, was the insurer that insured Plaintiffs boat. It investigated Plaintiffs claim and
asked Plaintiff for additional information. Initially, Plaintiff cooperated with the investigation, but
he quickly became uncooperative and refused to provide further information. He has been equally
United States District Court
Southern District of Texas
ENTERED
April 21, 2026
Nathan Ochsner, Clerk
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uncooperative in moving this lawsuit forward. He did not attend the initial conference, has not
provided initial disclosures, and has not responded to Ch ubb 's di scovery requests.
In July of 2024, Farah notified Chubb that Beryl caused significant damage to his 2013
Corwnline 285. See (Doc. No. 8-2 at 6). He claimed that, at the time of the damage, he was out of
the country, and the boat was located at a shop for cleaning. (Id.). At the time of the notification,
Plaintiff had transferred the boat to an auto repair shop. (Id.). ACE assigned the claim to Thomas
Chambers to adjust. See (Doc. No. 8-3). Chambers requested photographs from Plaintiff, gathered
Plaintiffs repair estimate, and engaged a marine surveyor to evaluate the alleged damage. See
(Doc. No. 8 at 7- 8). The Plaintiffs repair estimate was provided by "Chad Car Care," which was
located on property owned by the Plaintiff. See (Doc. No. 8-2 at 3). It totaled $42,815. See (Doc.
No. 8-4). The marine surveyor reported back to Chambers that the damage to the boat was not
consistent with hurricane damage and the boat was trailered and located only two blocks from the
insured's property. See (Doc. Nos. 8-7, 8-2 at 5).
Eventually, 	Chambers sought additional information from 	Farah. 	This conversation
devolved when Farah started using profanity. See (Doc. No. 8-2 at 3). ACE ultimately sent Farah
a check for $6,785 representing the $7,565 worth of damage and related expenses that ACE
attributed to any covered loss minus the $780 deductible. See (Doc. Nos. 8-8 , 8-9). It is not clear
from the record that this check was ever negotiated. Regardless, a few months later, Plaintiff filed
this lawsuit.
II.
This Lawsuit
In this lawsuit, Plaintiff makes claims based upon breach of contract, violations of the
Texas Deceptive Trade Practices Act ("DTPA"), violations of Chapters 541 and 542 of the Texas
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Insurance Code ("Code"), also referred to as the Unfair Claims Settlement Practices Act and the
Prompt Payment of Claims Act, respectively, and violation of the duty of good faith and fair
dealing. Chubb has now filed its Motion for Summary Judgment on all claims.'
III.
Applicable Legal Standard
Summary judgment is warranted " if the movant shows 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). "The movant bears the burden of identifying those portions of the record it believes
demonstrate the absence of a genuine issue of material fact." Triple Tee Golf Inc. v. Nike, Inc.,
485 F.3d 253,261 (5th Cir. 2007) (citing Celotex Co rp. v. Catrett, 477 U.S. 317, 322- 25 (1986)).
Once a movant submits a properly supported motion, the burden shifts to the non-movant
to show that the court should not grant the motion. Celotex, 477 U.S. at 321 - 25. The non-movant
then must provide specific facts showing that there is a genuine dispute. Id. at 324; Matsushita
E lec. Indus. Co. v. Zenith Radio Co rp., 475 U.S. 574, 587 (1986). A dispute about a material fact
is genuine if "the evidence is such that a reasonable jury could return a verdict for the nonmoving
party." Anderson v. Liberty Lobby, In c., 477 U.S. 242, 248 (1986). The court must draw all
reasonable inferences in the light most favorable to the nonmoving party in deciding a summary
judgment motion. Id. at 255. The key question on summary judgment is whether there is evidence
raising an issue of material fact upon which a hypothetical, reasonable factfinder could find in
favor of the nonmoving party. Id. at 248. It is the responsibility of the parties to specifically point
the Court to the pertinent evidence, and its location, in the record that the party thinks are relevant.
1 Thomas Chambers was never served with process in this case and the time for doing so has long since
passed . Fed. R. Civ. P. 4(m). He is dismissed without prejudice.
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Malacara v. Garber, 353 F.3d 393 , 405 (5th Cir. 2003). It is not the duty of the Court to search
the record for evidence that might establish an issue of material fact. Id.
This Court's Local Rules state that " [f]ailure to respond to a motion will be taken as a
representation of no opposition." S. Dist. Tex. L.R. 7.4; see also Hanen L.R. 7(D). As stated above,
Plaintiffs failed to respond to Defendant's motion. Therefore, the local rules would allow the Court
to grant Defendant 's motion as it should be considered unopposed.
Nevertheless, the Fifth Circuit has explained that "although we have endorsed the adoption
of local rules that require parties to file responses to opposed motions, we have not approved the
automatic grant, upon failure to comply with such rules, of motions that are dispositive of the
litigation." See Johnson v. 	Pettiford, 442 F.3d 917, 918 (5th Cir. 2006) (citing Johnson v.
Louisiana, 757 F.2d 698, 707- 09 (5th Cir. 1985); Ramsey v. Signal Delivery Serv., 631 F.2d 1210,
1213- 14 (5th Cir. 1980)). In other words, where a party does not respond to a summary judgment
motion, such failure does not permit the court to enter a "default" summary judgment. Eversley v.
MBank Dall. , 843 F.2d 172, 174 (5th Cir. 1988). Thus, the Court will consider the merits of
Defendant's motion.
IV.
Analysis
A. Breach of Contract
Plaintiffs first cause of action is one for breach of contract. He generally claims that Chubb
is liable because it breached its insurance contract by failing to pay the claimed $42, 815 when it
instead paid $6 ,785. Chubb claims ACE complied with its contractual obligations by paying what
it did because most of Plaintiffs damage was due to everyday wear and tear, and that is not covered
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by the policy. Further, if not falling into that categor y, the damage was due to diminution in value
which is also not a covered loss.
Farah has not brought forth any evidence to raise an issue of material fact that would
suggest Chubb's Motion is incorrect. Therefore, this Court grants the Defendant's Motion on the
contract claim.
B. 	DTP A and Chapter 541 of the Code
Next, Plaintiff alleges that ACE violated various provisions of Section 541.060 of the
Texas Insurance Code and the DTPA. Specifically, Plaintiff claims that ACE made material
misrepresentations and committed other unfair practices in violation of these code provisions.
Since Plaintiff is unable to prove a breach of the Policy or that he is entitled to additional Policy
benefit s, however, his extra-contractual claims must necessari ly fail. USAA Tex . Lloyds Co. v.
Menchaca, 545 S.W.3d 479, 499- 500 (Tex. 2018). As the Supreme Court of Texas recently held:
"[a]n insured cannot recover any damages based on an insurer 's statutory violation unless the
insured establishes a right to receive benefits under the policy or an injury independent of a right
to benefits." Id. at 500.
C. 	Prompt Payment Violations
Plaintiff also claims that ACE violated various sections of Chapter 542 of the Texas
Insurance Code, more commonly known as the Prompt Payment of Claims Act. Those code
provisions, however, do not apply to marine insurance policies. The United States District Court
for the Eastern District of Texas recently considered this issue in Vollandt v. Axis Ins. Co. and
determined that the code "expressly excludes marine insurance policies," and, as such, "Plaintiff's
'prompt payment' claim under Chapter 542 is not legally cognizable and fails as a matter oflaw."
2022 WL 822020, at* 10 (E.D. Tex. Mar. 17 , 2022).
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D. Duty of Good Faith and Fair Dealing
Lastly, Plaintiff claims that ACE breached the duty of good faith and fair dealing. To
support this claim, Plaintiff must prove the following elements:
a. There was a breach of the underlying insurance policy;
b. The 	insurer' s 	liability 	to 	perform 	an 	alleged 	contractual 	obligation was
reasonably clear at the time of the insurer's conduct that is a ll eged as a breach of
the duty of good faith and fair dealing; and
c. At the time of the alleged breach of the duty of good faith and fair dealing, the
insurer knew or by the exercise of reasonable diligence should have known that its
liability was reasonably clear.
(Doc. No. 8 at 18); see Universe Life Ins. Co. v. Giles, 950 S.W.2d 48, 50- 51 (Tex. 1997); Nat'!
Union Fire Ins. Co. 	of Pittsburgh, 	Pa. 	v. 	Dominguez, 873 	S.W.2d 373 , 376 (Tex. 1994);
Higginbotham v. State Farm Mut. Auto. Ins. Co. , 103 F.3d 456, 459 (5th Cir. 1997).
A bona fide dispute about the insurer' s liability on the contract does not rise to the level of
bad faith. Higginbotham, 103 F.3d at 459. Additionally, as explained above, Plaintiff cannot show
that ACE breached the Policy at issue. Since he cannot prove a breach of the Policy, Plaintiff's
claim that ACE breached its duty of good faith and fair dealing must also fail. See Progressive
County Mut. Ins. Co. v. Boyd, 177 S.W.3d 919, 922 (Tex. 2005) ("Boyd's common-law bad-faith
claims are also negated by the determination in the breach of contract claim that there was no
coverage." ).
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V.
Conclusion
The Court hereby dismisses Thomas Chambers without prejudice. It further grants in total
Defendant 's Motion for Summary Judgment. (Doc. No. 8). A separate judgment will accompany
this order as per Rule 58(a) .
.\.-
Signed on this 	') \ Sday of April 2026.
Andrew S. Han en
United States District Judge
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