Redwood Fire and Casualty Insurance Company v. Reyna et al

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
REDWOOD FIRE AND
CASUALTY INSURANCE
COMPANY,
Plaintiff,
VS.
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CIVIL NO. 4:24-CV-03588
ROBERT REYNA, et al.,
Defendants.
ORDER 1
This is a declaratory judgment action seeking a declaration of the parties’
rights and obligations under an automobile insurance contract. Pending before the
Court is Plaintiff Redwood Fire and Casualty Insurance Company’s (“Plaintiff” or
“Redwood”) motion for summary judgment seeking a declaration that Robert and
Mary Reyna (“Defendants” or “Reyna”) cannot recover Uninsured/Under Insured
Motorist (“UM/UIM”) benefits under the policy and, therefore, the Reynas are not
entitled to any relief on their counterclaim. ECF No. 20 at 5. 2 Having carefully
1 On March 5, 2025, based on the parties’ consent, the case was transferred to this Court to conduct
all proceedings pursuant to 28 U.S.C. § 636(c). Order Transferring, ECF No. 15.
2 Defendants filed a response, ECF No. 21, Plaintiff filed a reply, ECF No. 23, and Supplementary
Evidence, ECF No. 25. Defendant filed a Sur-reply. ECF No. 26.
United States District Court
Southern District of Texas
ENTERED
March 26, 2026
Nathan Ochsner, Clerk
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reviewed the pleadings, briefing, evidence, and applicable law, the Court finds that
Plaintiff has failed to carry its summary judgment burden and denies Plaintiff’s
motion.
I. 	BACKGROUND
These are the undisputed facts. Robert Reyna was in a car accident on
October 12, 2011, and he filed a claim with Plaintiff, his insurer. ECF No. 20 at 9;
ECF No. 21 at 8. On October 25, 2011, Plaintiff informed Defendants that it had
assigned claim investigation to The Littleton Group, who then advised Plaintiff that
Barbara Rankin would handle the file for Littleton. ECF No. 21-1 at 21–22. The next
day, the law firm Defendants hired for bodily injuries related to the accident,
Bannwart & Associates, 3 advised Rankin that the Reynas had retained it, and
requested information for making a Personal Injury Protection (“PIP”) coverage
claim. Id. at 30. Over the next two years, Rankin managed the file for PIP purposes,
regularly noting communication difficulties with Bannwart. Id. at 24–27, 31–32, 44–
45, 58–59, 74, 76–77. After months of silence, she notified Bannwart on March 7,
2012, that she would close the PIP file three weeks later if she did not hear from
Bannwart. Id. at 80–81. After those three weeks passed in silence, she closed the PIP
file on March 28, 2012. Id. at 86–87. In July 2013, Bannwart sent the requested PIP
3 A different law firm represents Defendants in this case.
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documents. Id. at 93. Plaintiff asked Rankin to reopen Littleton’s file and process
the claim. Id. at 91–92. A PIP check issued on September 26, 2013. Id. at 96.
Two years passed and on June 29, 2015, Bannwart sent Littleton a letter,
notifying her Defendants intended to pursue a UM/UIM claim. Id. at 98–100; ECF
No. 20-3 at 1; ECF No. 20-4 at 1. Rankin replied in acknowledgement and stated
Littleton would “await further contact” from Bannwart as to settlement efforts with
the other driver. ECF No. 20-4 at 1; ECF No. 21-1 at 99. Eleven days later, Bannwart
requested Plaintiff reissue the September 2013 PIP check because it had expired.
ECF No. 21-1 at 101. Rankin’s reports to Plaintiff show there was no further
communication from Bannwart between October 27, 2015, and February 25, 2016.
Id. at 105–06, 111–12, 114–15, 117–18. Rankin sent Bannwart a letter dated
February 25, 2016, requesting an update on settlement. Id. at 119–20; ECF No. 20-
5 at 1–2. Rankin’s March 2016 report to Plaintiff stated she received no response as
of that date. ECF No. 21-1 at 122–23. She sent another letter to Bannwart that same
day. Id. at 124–25; ECF No. 20-6 at 1–2.
On April 6, 2016, Plaintiff instructed Rankin to close her file and advise
Bannwart that all future correspondence should be to Plaintiff’s claims examiner,
Jon Deacon. ECF No. 21-1 at 126. She did so and sent a letter to Bannwart, on
April 11, 2016, that provided Deacon’s contact information and then sent Deacon a
final report. Id. at 129–32; ECF No. 20-7 at 1–2. Two weeks later, on April 22, 2016,
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Rankin emailed Deacon with attachments related to Defendants’ settlement with the
other driver. ECF No. 21-1 at 134. The settlement documents were dated July 22,
2015, nine months earlier. ECF No. 20-8 at 20, 31. A UM/UIM demand letter
followed, dated August 12, 2016. ECF No. 20-9 at 1; ECF No. 21-1 at 138. Plaintiff
responded on August 31, 2016, requesting documents to fully evaluate the claim.
ECF No. 20-10 at 1–2; ECF No. 21-1 at 145–46.
Bannwart answered on September 14, 2016, stating in relevant part that the
requested documents would be provided as applicable. ECF No. 20-11 at 1; ECF
No. 21-1 at 153. Plaintiff’s October 5, 2016 reply reiterated the need for documents
“to fully evaluate the demand presented.” ECF No. 20-12 at 1–2; ECF No. 21-1
at 161–62. In July 2017, Plaintiff hired outside counsel, Goldman and Associates,
who notified Bannwart it had been retained “to assist [Redwood] in addressing” the
Reynas’ UM/UIM claim. ECF No. 21-1 at 198. Goldman advised in that same letter
that 	since 	Bannwart’s 	September 	2016 	letter, 	there 	had 	been 	“no 	further
correspondence or contact” regarding the claim. 	Id. 	Bannwart 	responded 	on
October 20, 2016, attaching what they had provided Plaintiff in September 2016. Id.
at 176–78. At some point between October 20, 2017, and October 1, 2018, Bannwart
asked Goldman whether Plaintiff continued to assert a coverage defense. Id. at 187.
On October 1, 2018, Goldman advised that Plaintiff was “in the process of
evaluating and reviewing all of the medical records and bills” and asked for further
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medical documentation. Goldman sent a follow up on November 29, 2018. Id.
at 194. Bannwart failed to respond for six years, until July 31, 2024, when he sent
another UM/UIM demand letter. Id. at 179–85.
This action for declaratory judgment followed two months later, on September
24, 2024. Pl.’s Original Compl., ECF No. 1. Defendants filed an answer and
counterclaim seeking declaratory judgment and amended both. Defs.’ First Am.
Answer & Countercl., ECF No. 13. Plaintiff now seeks summary judgment on its
declaratory judgment action and the Reynas’ counterclaim. Pl.’s Mot., ECF No. 20.
II. 	SUMMARY JUDGMENT STANDARD
Pursuant to Rule 56 of the Federal Rules of Civil Procedure, “[s]ummary
judgment is appropriate ‘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.’”
Ballentine v. Broxton Grievance Dep't Vicki Cundiff, 155 F.4th 462, 467 (5th Cir.
2025) (quoting F ED. R. CIV. P. 56(a)). “A dispute as to a material fact is ‘genuine’ if
the evidence is such that a reasonable jury could return a verdict for the nonmoving
party.” Id. (internal quotation marks omitted). “A fact is ‘material’ if its resolution
in favor of one party might affect the outcome of the lawsuit under governing law.”
Saketkoo v. Adm’rs of Tulane Educ. Fund, 31 F.4th 990 (5th Cir. 2022) (internal
quotation marks omitted).
In seeking summary judgment, the “moving party ‘always bears the initial
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responsibility of informing the district court of the basis for its motion’ and pointing
to record evidence demonstrating that there is no genuine dispute of material fact.”
Sweat v. Hou. Methodist Hosp., No. CV H-24-775, 2025 WL 2697111, at *3 (S.D.
Tex. Sept. 22, 2025) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)).
When the non-movant bears the burden of proof at trial, the movant “may merely
point to the absence of evidence and thereby shift to the non-movant the burden of
demonstrating by competent summary judgment proof that there is an issue of
material fact warranting trial.” Id. (internal quotation marks omitted); see also
Celotex, 477 U.S. at 325.
If the movant fails to meet its initial burden, the motion for summary judgment
must be denied, regardless of the non-movant’s response. See id. (quoting Sanchez
v. Young County, 956 F.3d 785, 791 (5th Cir. 2020). The non-movant “must ‘go
beyond the pleadings and by [their] own affidavits, or by the depositions, answers
to interrogatories, and admissions on file, designate specific facts showing that there
is a genuine issue for trial.’” Fiesta Mart, LLC v. Willis of Ill., Inc., 728 F. Supp. 3d
458, 	465 	(S.D. 	Tex. 	2024) 	(quoting 	Nola 	Spice 	Designs, 	L.L.C. 	v. 	Haydel
Enterprises, Inc., 783 F.3d 527, 536 (5th Cir. 2015)). The non-movant must identify
specific evidence in the record and precisely articulate how that evidence supports
its claim. Diamond Servs. Corp. v. RLB Contracting, Inc., 113 F.4th 430, 444 (5th
Cir. 2024) (quoting Forsyth v. Barr, 19 F.3d 1527, 1537 (5th Cir. 1994)). This
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burden “will not be satisfied by ‘some metaphysical doubt as to the material facts,
by conclusory allegations, by unsubstantiated assertions, or by only a scintilla of
evidence.’” Fiesta Mart, LLC, 728 F. Supp. 3d at 465 (quoting Boudreaux v. Swift
Transp. Co., 402 F.3d 536, 540 (5th Cir. 2005)). A party who fails to adequately
brief 	their 	argument 	is 	deemed 	to 	have 	waived 	that 	argument. 	Wiseman 	v.
Schlumberger Tech. Corp., No. 4:23-CV-56, 2025 WL 2612733, at *6 n.18 (S.D.
Tex. Mar. 20, 2025) (citing United States v. Scroggins, 599 F.3d 433, 446–47 (5th
Cir. 2010)). However, the court must draw all reasonable inferences in the light most
favorable to the non-moving party. Sweat, 2025 WL 2697111, at *3 (quoting Ion v.
Chevron USA, Inc., 731 F.3d 379, 389 (5th Cir. 2013)).
III. 	PLAINTIFF IS NOT ENTITLED TO SUMMARY JUDGMENT.
Plaintiff asks the Court to find that, by the insurance policy terms, Defendants
cannot recover as a matter of law. ECF No. 20 at 16–20. Its two proffered reasons
under the policy are first, the plain terms of the policy demonstrate there is no
coverage, and, alternatively, even if there were coverage, it is nevertheless barred by
policy exclusions. Id. Plaintiff also asks the Court for summary judgment as to
Defendants’ counterclaim because it is time-barred. 	Id. 	at 21–25. Defendants
respond that Plaintiff fails to show any prejudice resulting from Defendants’
settlement and cannot show prejudice, policy provisions that are inconsistent with
Texas law are unenforceable, and raising fact questions. ECF No. 21 at 20–27.
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Defendants respond to the limitations argument by stating the cause of action has
not yet accrued since Plaintiff has not denied the claim or, alternatively, whether and
when any constructive denial occurred is a question of fact. Id. at 28–32.
A declaratory judgment action seeks a judicial declaration as to “the rights
and 	other 	legal 	relations 	of 	any 	interested 	party 	seeking 	such 	declaration.”
28 U.S.C. § 2201(a). The Declaratory Judgment Act does not itself confer federal
subject matter jurisdiction; there must be an independent basis for it. 	Mesa
Underwriters Specialty Ins. Co. v. GRIF, LLC, No. 4:23-CV-00852, 2024 WL
371547, at *2 (S.D. Tex. Jan. 31, 2024). Here, the basis for subject matter
jurisdiction is diversity jurisdiction; therefore, Texas law governs. ECF No. 1 ¶¶ 1–
3, 14; Guerrera v. United Fin. Cas. Co., 161 F.4th 913, 916 (5th Cir. 2025).
A. Plaintiff Is Not Entitled To Summary Judgment Based On The
Policy Terms Because It Has Not Carried Its Evidentiary Burden.
Plaintiff’s policy arguments relate to the issue of coverage generally and an
exclusion. ECF No. 20 at 16–20. First, Plaintiff asserts that the policy requires the
uninsured’s policy limits be exhausted, and that it be given notice of the proposed
settlement beforehand. Here, the undisputed evidence is that the Reynas settled with
the underinsured motorist for $950,000 on a $1,000,000 policy. ECF No. 21-1
at 134. The evidence also establishes that the Reynas did not give Redwood notice
of the settlement amount until nine months after they settled. ECF No. 20-8 at 20, 31.
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The policy language states:
2. With respect to damages resulting from an “accident” with a vehicle
described in Paragraph d. of the definition of “uninsured motor
vehicle”, we will pay under this coverage only if a. or b. below applies:
a. The limit of any applicable liability bonds or policies have
been exhausted by payment of judgments or settlements; or
b. A tentative settlement has been made between an “insured”
and the insurer of the vehicle described in Paragraph d. of the
definition of “uninsured motor vehicle” and we:
(1) 	Have 	been 	given 	prompt 	written 	notice 	of 	such
tentative settlement; and
(2) Advance payment to the “insured” in an amount equal
to the tentative settlement within 30 days after receipt of
notification.
ECF No. 20-2 at 5. Paragraph 2.a. is an exhaustion requirement; paragraph 2.b. is a
notice requirement. ACE Am. Ins. Co. v. Murco Wall Products, Inc., No. 4:22-CV-
01137-O, 2024 WL 346519 (N.D. Tex. Jan. 30, 2024) (referring to a requirement
that underlying coverage be exhausted as the “policy’s exhaustion requirement”)
(citing Planation Pipe Line Co. v. Highlands Ins. Co., 444 S.W.3d 307, 315 (Tex.
App.—Eastland 2014, pet. denied); RC Mgmt., Inc. v. Third Coast Ins. Co., No. SA-
24-CV-00711-XR, 2025 WL 1699951, at *3 (W.D. Tex. June 11, 2025) (referring
to a policy term requiring prompt notice of a claim as a “notice requirement”). The
issue before the Court is whether either requirement was met. ECF No. 20 at 16–20.
Although the evidence establishes that the Reynas settled for $50,000 less
than the policy limits, ECF No. 21-1 at 134, Texas law requires an automobile
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insurer 	to 	show 	more 	than 	an 	insured’s 	failure 	to 	comply 	with 	exhaustion
requirements; an insurer must also show that the failure to comply constituted a
material breach and thus prejudiced the insurer in some way. Alvarado v. State Farm
Mut. Auto. Ins. Co., No. 5-22-CV-00392-FB-RBF, 2023 WL 5512244, at *9 (W.D.
Tex. Aug. 9, 2023) (“It is for State Farm to explain, for example, how a policy-limits
settlement between an insured and the third-party motorist would prejudice its
subrogation rights, and how and whether a de minimus or relatively small difference
between the policy limits and settlement amount would justify a finding of prejudice
to the insurer”), adopted, No. CV SA-22-CA-392-FB, 2023 WL 5516312 (W.D.
Tex. Aug. 25, 2023). Likewise, the evidence establishes that the Reynas failed to
give Redwood notice before they settled. ECF No. 20-8 at 20, 31. Nonetheless, the
prejudice requirement also applies to notice requirements. Alvarado, 2023 WL
5512244, at *9 (noting that Texas courts expressly rejected a position advanced in
an unpublished Fifth Circuit opinion finding that a failure to notify constituted
prejudice).
Plaintiff 	argues 	it 	was 	prejudiced 	because 	Defendants’ 	settlement
extinguished any potential subrogation rights it may have had. ECF No. 20 at 16–
20; see also ECF No. 23 at 9–10. Texas does acknowledge that extinguishment of
subrogation rights constitutes prejudice, but only where that right has some practical
value. See Alvarado, 2023 WL 5512244, at *9. Plaintiff’s sole evidence on prejudice
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is in a letter from its claims adjuster to Defendant’s counsel stating that because the
underinsured motorist was a commercial truck company, “there is a possibility that,
even if the settlement was near policy limits, additional funds were available based
upon the assets of the company.” ECF No. 20-12 at 1. This conclusory sentence in a
letter is a far cry from sufficient summary judgment evidence to establish that
Redwood suffered any prejudice. There is no showing that it could not pursue its
subrogation rights against the truck company, assuming it had any assets. Only nine
months had passed between the settlement and notification to Redwood. It makes no
showing that limitations had run on its claim. It makes no showing that it was in any
way barred from pursuing its claim or that it attempted to pursue the claim and failed.
Therefore, Plaintiff has not carried its burden to establish its entitlement to summary
judgment on the exhaustion requirement. Sweat, 2025 WL 2697111, at *3 (noting
that the “moving party ‘always bears the initial responsibility of informing the
district 	court 	of 	the 	basis 	for 	its 	motion’ 	and 	pointing 	to 	record 	evidence
demonstrating that there is no genuine dispute of material fact”).
The notice requirement position shares the same fate. Alvarado, 2023 WL
5512244, at *9. Plaintiff advances a similar argument: because Defendants failed to
notify Plaintiff of the tentative settlement, “[Plaintiff] could not, and did not, use the
procedure in Paragraph A.2.b. to protect its rights of recover against others.” ECF
No. 20 at 18. But again, Plaintiff offers no evidence to support that statement other
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than the conclusory sentence in the adjuster’s letter. ECF No. 20-12 at 1. Plaintiff
has not carried its initial burden for summary judgment on the notice requirement,
either. Sweat, 2025 WL 2697111, at *3.
Plaintiff’s last policy-based position is to argue that even if Defendants are
covered under the policy terms, their failure to obtain Plaintiff’s consent to settle
prior to settlement with the other driver triggers an exclusion that prevents their
entitlement. ECF No. 20 at 18–20. The exclusion states that “[Plaintiff does] not
provide [UIM] Insurance . . . for any claim settled without our consent.” ECF
No. 20-2 at 5. An insurer prevails on this position only by showing a final judgment
against the other driver that was obtained without the insurer’s consent. Alvarado,
2023 WL 5512244, at *6 (citing In re USAA Gen. Indem. Co., 629 S.W.3d 878, 886
n.27 (Tex. 2021)). Plaintiff has not presented any such judgment. It provided copies
of the settlement documents Defendants executed that agreed to dismiss the suit
against the other driver with prejudice. ECF No. 20-8 at 10–31. That is insufficient
to establish, as a matter of law, Plaintiff’s entitlement to summary judgment.
Alvarado, 2023 WL 5512244, at *6 (noting that a notice of nonsuit with prejudice
was insufficient to establish the insurer’s entitlement to summary judgment on lack
of consent).
Because Plaintiff has failed to carry its initial evidentiary burden as the
movant, it has failed to demonstrate its entitlement to summary judgment on the
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policy 	provisions. 	The 	Court 	denies 	Plaintiff’s 	motion 	on 	its 	claim 	against
Defendants.
B. Plaintiff Is Not Entitled To Summary Judgment On Limitations
Grounds Because There Is A Fact Question On Accrual.
In Texas, an insurer’s contractual obligation on any UIM claim brought by an
insured is not triggered unless and until the insured is “legally entitled to recover”
such benefits. In re State Farm Mut. Auto. Ins. Co., 712 S.W.3d 53, 59 (Tex. 2025)
(quoting Tex. Ins. Code § 1952.106). The insured only becomes legally entitled to
recover such benefits when it obtains a judgment establishing the other driver’s
liability and UIM status. Id. (quoting Brainard v. Trinity Universal Ins. Co., 216
S.W.3d 809, 818 (Tex. 2006)). The insured can litigate those issues with the other
driver, or with its own insurer. Chapa v. Am. Honda Motor Co., No. 2:25-CV-00038,
2025 WL 2462801, at *3 (S.D. Tex. Aug. 27, 2025) (quoting Brainard, 216 S.W.3d
at 818). In litigating with their insurer, the insureds can also seek the requisite
judgment by a declaratory judgment action. In re State Farm, 712 S.W.3d at 61
(citing Allstate Ins. Co. v. Irwin, 627 S.W.3d 263, 265–66 (Tex. 2021)).
Here, the Reynas chose to sue their insurer. Plaintiff argues that it is entitled
to summary judgment on Defendants’ counterclaim because it is barred by the statute
of limitations because the Reynas did not sue until nearly ten years after their claim
accrued. ECF No. 20 at 22. Redwood claims that the cause of action against it
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accrued when the Reynas settled with the other driver and his insurance company.
Id. at 23–25. Defendants disagree, arguing that the cause of action does not accrue
until after a claim is denied by the insurer, which never happened here. ECF No. 21
at 28–30. Alternatively, they argue that any “constructive denial” that may have
occurred is a fact question precluding summary judgment. Id. at 30–32.
Statutes of limitation are considered substantive law for diversity purposes, so
state law governs. RPCG-GP I, LLC v. JPMorgan Chase Bank, N.A., No. 3:24-CV-
2325-B, 2025 WL 2174164, at *2 (N.D. Tex. July 31, 2025) (citing Tex. Soil
Recycling, Inc. v. Intercargo Ins., 273 F.3d 644, 649 (5th Cir. 2001)). In Texas,
insureds have four years to bring a first-party breach of contract claim against their
insurer for UIM benefits once the cause of action accrues. In re State Farm Mut.
Auto. Ins. Co., 614 S.W.3d 316, 348 (Tex. App.—Fort Worth 2020, no pet.) (quoting
Franco v. Allstate Ins. Co., 505 S.W.2d 789, 793 (Tex. 1974)).
Accrual dates are usually a question of law. Levy v. UNUM Grp., No. 22-
20660, 2023 WL 7442920, at *2 (5th Cir. Nov. 9, 2023) (citing Provident Life &
Accident Ins. Co. v. Knott, 128 S.W.3d 211, 221 (Tex. 2003)). “In the first-party
insurance context, a cause of action generally accrues when the insurer denies a
claim.” Goldberg v. Chubb Lloyd's Ins. Co. of Texas, No. 4:21CV3112, 2022 WL
2707759, at *3 (S.D. Tex. June 27, 2022) (citing Provident Life & Acc. Ins. Co. v.
Knott, 128 S.W.3d 211, 221 (Tex. 2002), adopted, No. 4:21-CV-3112, 2022 WL
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2704846 (S.D. Tex. July 12, 2022). “For limitations purposes, the denial of coverage
occurs on the date of the written notice of denial or the date the claim file is closed.”
Id. at *3 (citing De Jongh v. State Farm Lloyds, 664 F. App’x 405, 409 (5th Cir.
2016)). If there is no outright denial, the exact accrual date may become a fact
question, but only “when there is ‘ambiguity surrounding the insurer’s actions, such
as stringing an insured along without denying or paying a claim.’” Bustos v. Lloyds,
No. 4:19-CV-04812, 2020 WL 5745823, at *4 (S.D. Tex. July 13, 2020) (quoting
Chapa v. Allstate Texas Lloyds, No. 7:15-CV-30, 2015 WL 3833074, at *4 (S.D.
Tex. June 22, 2015)). However, where there is no clear denial date, “the date upon
which the insurer closed the file may be relied upon as ‘an objectively verifiable
event that unambiguously demonstrates’” that the insurer does not intend to pay the
claim such that the cause of action accrues. Kessler v. Allstate Fire & Cas. Ins. Co.,
No. 02-22-00440-CV, 2023 WL 5615808, at *3 (Tex. App.—Fort Worth Aug. 31,
2023, no pet.) (quoting Kuzniar v. State Farm Lloyds, 52 S.W.3d 759, 760 (Tex.
App.—San Antonio 2001, pet. denied)); accord Goldberg, 2022 WL 2707759, at
*2–3 (citing De Jongh, 664 F. App’x at 409).
The parties do not dispute that Plaintiff never paid the claim or outright denied
it. ECF No. 20 at 12, 14 (noting that no check was sent in response to Defendants’
2016 demand and no response was made to their 2024 demand); ECF No. 21 ¶¶ 75–
76 (noting that Plaintiff “never denied [Defendants’] claim”). However, there is not
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“an objectively verifiable event that unambiguously demonstrates” Plaintiff’s intent
not to pay the claim. Kessler, 2023 WL 5615808, at *3. Nothing in either party’s
evidence demonstrates that Plaintiff clearly took a step that could constitute a denial,
such as closing the file. See Goldberg, 2022 WL 2707759, at *3. To the contrary,
the evidence is that its third-party agent, Barbara Rankin, closed its file and referred
the Reynas to the company claims adjuster, Deacon, for further handling. ECF
No. 21-1 at 129-32. Rankin further instructed Reynas’ counsel to advise if the claim
has been resolved so that the company adjuster, Deacon, could close his file. Id. This
is direct evidence that the agent’s closing of its file did not amount to the insurance
company’s closing of the file or denial of the claim. Instead, the overwhelming
evidence demonstrates that, once notified of the claim, Plaintiff continued to
evaluate the claim and review the medical records as late as October and November
2018 and requested more information to fully process the claim. ECF No. 21-1
at 187, 194, 198. This is not a case where the insurer closed its file, denied the claim,
but invited further documentation, which would not be sufficient to negate its prior
denial. See Goldberg, 2022 WL 2707759, at *3.
While the Court could speculate that, at some point, Plaintiff closed the claim
file, the Court cannot conclusively determine whether and when that occurred to
trigger accrual of the Reyna’s cause of action. Likewise, since there was no outright
denial, the Court cannot determine at what point the Reynas should have been on
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notice that Redwood did not intend to pay their claim, amounting to a constructive
denial. Moreover, the Court must make all reasonable inferences in Defendants’
favor, as the non-movants. Sweat, 2025 WL 2697111, at *3. Therefore, the Court
cannot determine whether the statute of limitations has run—this is a fact question.
Bustos, 2020 WL 5745823, at *4. Thus, Plaintiff’s motion for summary judgment
on Defendants’ counterclaim is denied.
IV. 	CONCLUSION
Plaintiff has not demonstrated its entitlement to summary judgment, therefore,
its motion for summary judgment, ECF No. 20, is DENIED.
IT IS SO ORDERED.
Signed at Houston, Texas, on March 25, 2026.
______________________________
Dena Hanovice Palermo
United States Magistrate Judge
____________________________
Dena Hanovice Palermo
i 	d S 	M 	i 	J d
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