Blanton v. State Farm Lloyds

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
JOHN BLANTON,
Plaintiff,
v.
STATE FARM LLOYDS,
Defendants.
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CIVIL ACTION NO. H-25-00026
MEMORANDUM AND OPINION
This is one of many first-party homeowners’ insurance disputes that follow severe wind
and rain or hail storms. Following damage to his home from Hurricane Beryl, the plaintiff, John
Blanton, sued the defendant, State Farm Lloyds, for underpaying his insurance claim. 	(Docket
Entry No. 1-2). 	State Farm has moved for partial summary judgment on Blanton’s claims for
violation of § 541 of the Texas Insurance Code. (Docket Entry No. 16). Based on the pleadings,
the record, the motion, and the applicable law, the court grants the motion for partial summary
judgment. The reasons are explained below.
I. 	Background
On July 8, 2024, Hurricane Beryl hit the Houston area. (Docket Entry No. 16-1 ¶ 5). Four
days later, Blanton filed a claim for property damage allegedly caused by the hurricane. 	(Id.).
Blanton had previously filed a claim for wind damage on May 16, 2024. (Id. ¶ 6). On July 22,
2024, a State Farm adjuster inspected the property with Blanton’s contractor present. 	(Id. ¶ 7;
Docket Entry No. 16-5 at 6). The adjuster found no new wind damage to Blanton’s fence but did
find covered wind damage to Blanton’s roof. 	(Docket Entry No. 16-1 ¶ 7). 	No damage to the
interior was reported, although Blanton had asserted in his claim that there was some interior
United States District Court
Southern District of Texas
ENTERED
February 21, 2026
Nathan Ochsner, Clerk
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damage and that he had put buckets underneath where the water was coming into the house.
(Docket Entry No. 17-1 at 7, 9).
On July 25, 2024, State Farm issued its decision letter that Blanton was entitled to $2,416
in replacement cost benefits. (Docket Entry No. 16-1 ¶ 8). State Farm calculated this amount by
subtracting the deductible from Blanton’s roof-replacement costs. (Docket Entry No. 16-1 ¶ 8).
On August 12, 2024, State Farm received a demand letter from Blanton’s attorney stating that the
covered property damage was $35,000, although no description of the alleged damages was
included in the letter. (Id. ¶ 9). Blanton did not respond to State Farm’s attempts to contact him
to ask him about the difference. (Id.).
On November 22, 2024, Blanton sued State Farm in Texas state court. (Docket Entry No.
1-2). 	Blanton asserted claims for breach of contract and violations of the Prompt Payment of
Claims Statute and of Chapter 541 of the Texas Insurance Code. (Id. ¶¶ 13–22). State Farm now
moves for partial summary judgment on Blanton’s claims for violations of Chapter 541. (Docket
Entry No. 16). In response, Blanton waives his claim for violation of § 541.061 but asserts that
there remain genuine factual disputes material fact to his claims under § 541.060. (Docket Entry
No. 17).
II. 	The Legal Standard
“Summary judgment is appropriate where ‘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.’”
Springboards to Educ., Inc. v. Pharr-San Juan-Alamo Indep. Sch. Dist., 33 F.4th 747, 749 (5th
Cir. 2022) (quoting FED. R. CIV. P. 56(a)). “A fact is material if it ‘might affect the outcome of
the suit.’” Thomas v. Tregre, 913 F.3d 458, 462 (5th Cir. 2019), as revised (Jan. 25, 2019) (quoting
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). “A factual dispute is genuine ‘if the
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evidence is such that a reasonable jury could return a verdict for the nonmoving party.’” 	Id.
(quoting Anderson, 477 U.S. at 248). 	When considering a motion for summary judgment, the
court “must consider all facts and evidence in the light most favorable to the nonmoving party”
and “must draw all reasonable inferences in favor of the nonmoving party.” Ion v. Chevron USA,
Inc., 731 F.3d 379, 389 (5th Cir. 2013).
III. 	Analysis
Blanton brings his claims under multiple subsections of § 541.060. Although he does not
identify the subsections at issue in his complaint, his claims appear to be that State Farm:
1. 	Misrepresented to him a material fact or policy provision relating to coverage at issue,
in violation of § 541.060(a)(1);
2. 	Failed to attempt in good faith to effectuate a prompt, fair, and equitable settlement of
a claim with respect to which the insurer’s liability had become reasonably clear, in
violation of § 541.060(a)(2)(A);
3. 	Failed to promptly provide to him a reasonable explanation of the basis in the policy,
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, in violation of § 541.060(a)(3);
4. 	Failed within a reasonable time to affirm or deny coverage of a claim to him or submit
a reservation of rights to him, in violation of § 541.060(a)(4); and
5. 	Refused to pay the claim without conducting a reasonable investigation with respect to
the claim, in violation of § 541.060(a)(7).
(Docket Entry No. 1-2 ¶¶ 17–22). State Farm moves for summary judgment on the grounds that
there is no evidence that State Farm engaged in any of the wrongful conduct listed in Blanton’s
petition and that the evidence shows only a bona fide dispute that cannot support a claim under
§ 541.060. (Docket Entry No. 16 at 5).
The court grants summary judgment to State Farm on all the § 541.060 claims. First, as to
the § 541.060(a)(1) claim, Blanton has pointed to no relevant misrepresentation. To the extent that
Blanton is relying on State Farm’s now-disputed assertion that there was no interior damage, that
is not a misrepresentation about the policy but rather about the facts that caused the claim, and not
the kind of misrepresentation that is actionable under § 541.060(a)(1) under the majority
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interpretation of the statute.1 See Goyen v. Prop. & Cas. Ins. Co. of Hartford, No. 3:24-cv-03024,
2025 WL 2592526, at *4–5 (N.D. Tex. Sep. 6, 2025) (granting a motion to dismiss because the
plaintiff’s assertion that the premises were not “properly inspected” and that the insurer’s payment
was insufficient could not state a claim under § 541.060(a)(1)); see also Abood Grp., Inc. v.
Hartford Underwriters Ins. Co., No. 3:23-CV-01838, 2024 WL 4378437, at *4 (N.D. Tex. June
10, 	2024) 	(explaining 	that 	under 	the 	majority 	interpretation 	of 	this 	provision, 	“only
misrepresentations about the ‘details of a policy, not the facts giving rise to a claim for coverage,’
are actionable under Section 541.060(a)(1)” (quoting Messersmith v. Nationwide Mut. Fire Ins.
Co., 10 F. Supp. 3d 721, 724 (N.D. Tex. 2014))).
Next, the § 541.060(a)(2)(A) claim—often referred to as a “bad faith claim.” Olschwanger
v. State Farm Lloyds, No. 4:19-CV-00933, 2021 WL 3877689, at *6 (E.D. Tex. July 30, 2021),
report and recommendation adopted, 2021 WL 3858061 (E.D. Tex. Aug. 30, 2021). To recover
on this claim, “the insured must establish the absence of a reasonable basis for denying or delaying
payment of the claim, and that the insurer knew, or should have known, that there was no
reasonable basis for denying or delaying payment of the claim.” Id. Similarly, § 541.060(a)(7)
claims “require the insured to demonstrate that the insurer acted in bad faith in denying an
insurance claim.” 	Neito v. State Farm, 722 F. Supp. 3d 653, 658 (S.D. Tex. 2024). 	“At the
summary judgment stage, the evidence supporting bad faith must be ‘reasonably clear’, rather than
simply revealing a ‘bona fide coverage dispute.’” Id. (quoting Chavez v. State Farm Lloyds, 746
F. App’x 337, 342 (5th Cir. 2018).
1 Blanton does not clearly argue that the minority interpretation should apply; like State Farm, Blanton does
make any specific arguments as to the particular subsections of §541.060 but rather argues generally that
State Farm violated § 541.060 by improperly handling his claim. As in Goyen, “because no party advocates
for the minority interpretation, the [c]ourt will apply the majority interpretation.” 2025 WL 2592526, at
*4.
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The evidence here shows that State Farm did not deny Blanton’s claim. Instead, State Farm
sent a decision letter and payment for what State Farm calculated as the covered repair costs less
the deductible. These were sent to Blanton less than fourteen days after Blanton reported his claim.
When State Farm received a letter stating that Blanton believed his claim was handled erroneously,
it tried to assist Blanton, but he did not respond other than by filing this lawsuit. State Farm also
concluded that the deck and fence damage were from a different incident and claim, not the
Hurricane Beryl damage claim. Clayton Boone, Blanton’s contractor, testified that the fence and
deck he built in May 2024 needed no further repairs. 	(Docket Entry No. 16-5 at 6). 	Although
Blanton now asserts that State Farm ignored interior water damage, Boone testified that although
he disagreed with State Farm’s findings, there was nothing the adjuster did at the July 22, 2024,
inspection that he believed was inappropriate or incorrect. (Docket Entry No. 16-5 at 6). In short,
there is no “reasonably clear” evidence of bad faith.
Finally, as to the § 541.060(a)(3) and (a)(4) claims, Blanton has pointed to no facts to
support an argument that State Farm violated these sections by failing to reasonably explain its
denial of Blanton’s claim or its offer of a compromise settlement, or that State Farm did not affirm
its coverage of Blanton’s claim promptly. 	“Sections 541.060(a)(3) and (a)(4) focus on the
adequacy and timeliness of communications, not the reasonableness of coverage decisions.”
Hansen v. State Farm Lloyds, No. 4:22-CV-03833, 2025 WL 963079, at *6 (S.D. Tex. Mar. 28,
2025). Blanton argues only that State Farm’s claim decision “was based on selectively gathered
information, not a fair evaluation of the evidence.” 	(Docket Entry No. 17 at 6). 	There are no
arguments nor factual assertions that State Farm’s communications were inadequate and untimely,
only that Blanton believed its decision was unreasonable.
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IV. 	Conclusion
The court grants State Farm’s motion for partial summary judgment. (Docket Entry No.
16). The case will proceed as to the remaining claims.
SIGNED on February 21, 2026, at Houston, Texas.
________________________________
Lee H. Rosenthal
Senior United States District Judge
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