Priority Investor Loans, LLC v. Shull et al

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
PRIORITY INVESTOR LOANS,
LLC,
Plaintiff,
V.
BRAD SHULL, et. al.,
Defendants.
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§ 	Civil Action No. H-25-2604
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ORDER
Pending before the Court are Defendants' Brad Shull and Shull & Associates
LLC's First Amended Motion to Dismiss and Motion to Strike (Document No. 14)
and Defendant JPMorgan Chase Bank, N.A's Motion to Dismiss (Document No.
15). Having considered the motions, submissions, and applicable law, the Court
finds that both motions should be granted.
I. 	BACKGROUND
This is a matter involving an insurance dispute. Plaintiff Priority Investor
Loans, LLC ("Plaintiff') had a mortgage on three buildings owned by a non-party
to 	this 	matter, 	Curvy 	Management, 	LLC 	("Curvy"). 	Curvy 	insured 	the
aforementioned buildings for fire damage through a policy (the "Policy") with
Defendant Zurich American Insurance ("Zurich"). The Policy was issued to Curvy
with a mortgage holders' endorsement in favor of Plaintiff stating that Zurich was
United States District Court
Southern District of Texas
ENTERED
February 10, 2026
Nathan Ochsner, Clerk
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. to "pay for covered loss or damage to Covered Property to the mortgage holder( s)
designated in the Schedule." 1 On March 10, 2024, the buildings were damaged by
fire. Plaintiff alleges that "[a]fter the fire, the buildings were foreclosed on by
Priority due to failure of Curvy to make the required mortgage payments." 2 Plaintiff
further alleges that Zurich incorrectly issued checks covering part of the fire loss to
an insurance adjuster. 3 The alleged insurance adjuster is Defendant Brad Sh~n-J
("Shull"), the owner of Defendant Brad Shull & Associates LLC ("Shull LLC").
Lastly, Plaintiff alleges that Defendant JPMorgan Chase Bank ("Chase") cashed the
check without Plaintiffs endorsement. 4
Based on the foregoing, on May 5, 2025, Plaintiff filed suit in the 270th
District Court of Harris County, Texas asserting)claims against Defendants Shull
//
and Shull LLC for: (I) conversion; (2) violation of the Texas_ Theft Liability Act;
1 Defendant American Zurich Insurance Company's Notice of Removal, Document
No. 1, Exhibit D-1 at 7 (Plaintiff's Complaint).
2 Plaintiff's Complaint, Document No. 1, Exhibit D-1 at 6-7. The Court notes that
this timeline is disputed. "However, Priority proceeded with a foreclosure sale on or about
November 7, 2023. The fire that is the subject of this suit happened after the foreclosure
sale and occurred on or about March 10, 2024." Defendants' Brad Shull and Shull &
Associates LLC 's First Amended Motion to Dismiss and Motion to Strike, Document No.
14 at 10.
3 See Plaintiff's Complaint, Document No. 1, Exhibit D-1 at 7.
4 See Plaintiff's Complaint, Document No. 1, Exhibit D-1 at 7-8.
2
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and (3) violations of the Texas Insurance Code. 5 Additionally, Plaintiff asserts
claims against Defendant Zurich for breach of contract and Defendant Chase for
"breach of its duty of care." 6 On June 5, 2025, the case was removed to this Court
pursuant to diversity jurisdiction. 7 On September 12, 2025, Defendants Shull and
Shull LLC filed a motion to dismiss for failure to state a claim upon which relief can
be granted. 8 On September 18, 2025, Defendants Shull and Shull LLC filed their
amended motion to dismiss for failure to state a claim upon which relief can be
granted. 9 On November 10, 2025, Defendant Chase filed a motion to dismiss for
failure to state a claim upon which relief can be granted. 10 Plaintiff did not respond
to any of the motions to dismiss by the date required under the Federal Rules of Civil
Procedure.
5 See Plaintiff's Complaint, Document No. 1, Exhibit D-1 at 8-10.
6 See Plaintiff's Complaint, Document No. 1, Exhibit D-1 at 11-12.
7
See 	Defendant 	American 	Zurich 	Insurance 	Company's 	Notice 	of Removal,
Document No. 1 at 1.
8 See Defendants' Brad Shull and Shull & Associates LLC 's Motion to Dismiss and
Motion to Strike, Document No. 10 at 1.
9 See Defendants' Brad Shull and Shull & Associates LLC 's First Amerzded Motion
to Dismiss and Motion to Strike, Document No. 14 at 1.
10 See Defendant JPMorgan Chase Bank, NA 's Motion to Dismiss, Document No.
15 at 1.
3
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II. 	STANDARD OF REVIEW
Rule 12(b)(6) allows dismissal if a plaintiff fails "to state a claim upon which
relief can be granted." Fed. R. Civ. P. 12(b)(6). Under Rule 8(a)(2), a pleading must
contain "a short and plain statement of the claim showing that the pleader is entitled
to relief." Fed. R. Civ. P. 8(a)(2). Although "the pleading standard Rule 8 announces
does not require 'detailed factual allegations,' ... it demands more than ... 'labels
and conclusions."' Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell At!.
Corp. 	v. 	Twombly, 	550 U.S. 544, 555 (2007)). "[A] formulaic recitation of the
elements of a cause of action will not do." Id. (quoting Twombly, 550 U.S. at 555).
In deciding a Rule 12(b)(6) motion to dismiss for failure to state a claim, "[t]he
'court accepts all well-pleaded facts as true, viewing them in the light most favorable
to the plaintiff."' In re Katrina Canal Breeches Litig., 495 F.3d 191, 205 (5 th Cir.
2007) (quoting Martin K Eby Constr. Co. v. Dall. Area Rapid Transit, 369 F.3d 464,
467 (5 th Cir. 2004)). To survive the motion, a plaintiff must plead "enough facts to
state a claim to relief that is plausible on its face." 	Twombly, 	550 U.S. at 570.
"Conversely, 'when the allegations in a complaint, however true, could not raise a
claim of entitlement to relief, this basic deficiency should ... be exposed at the point
of minimum expenditure of time and money by the parties and the court."' Cuvillier
• v. Taylor, 503 F.3d 397, 401 (5 th Cir. 2007) (quoting Twombly, 550 U.S. at 558).
4
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III. LAW & ANALYSIS
The Court will consider, in tum, (A) Defendants Shull and Shull LLC's
motion to dismiss, and (B) Defendant Chase's motion to dismiss. Plaintiff did not
•respond to either motion to dismiss by the time required under the Federal Rules of
Civil Procedure. See Fed. R. Civ. P. 12(a). Pursuant to Local Rule 7.4, failure to
timely respond is taken as a representation of no opposition. S.D. Tex. Local R. 7.4.
Regardless of Plaintiffs failure to respond, the Court will consider, in tum, the merit
of Plaintiffs claims against Defendants Shull, Shull LLC, and Chase.
A. 	Defendants Shull and Shull LLC 's Motion to Dismiss (Document No. 14)
Defendants Shull and Shull LLC move to dismiss all of Plaintiffs claims
contending that "Plaintiff fails to adequately allege facts sufficient to establish a
cognizable cause of action." 11 Defendants Shull and Shull LLC further contend that
"Plaintiffs claims agai~st Movants should be dismissed because they do not allege
facts that prove they have standing to sue Movants." 12 Plaintiff offers no rebuttal.
Establishing standing "involves b.oth constitutional limitations on federal-
court jurisdiction and prudential limitations on its exercise." Warth v. Seldin, 422
U.S. 490, 498 (1975) (citing Barrows v. Jackson, 346 U.S. 249, 255-256 (1953)).
11 Defendants' Brad Shull and Shull & Associates LLC 's First Amended Motion to
Dismiss and Motion to Strike, Document No. 14 at 6.
12 Defendants' Brad Shull and Shull & Associates LLC 's First Amended Motion to
Dismiss and Motion to Strike, Document No. 14 at 16.
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"To satisfy the 'case' or 'controversy' requirement of Article III, which is the
'irreducible 	constitutional 	minimum' 	of standing, 	a 	plaintiff must, 	generally
speaking, demonstrate that he has suffered 'injury in fact,' that the injury is 'fairly
traceable' to the actions of the defendant, and that the injury will likely be redressed
by a favorable decision. 	Bennet v. 	Spear, 	520 U.S. 	154, 	162 (1997) (citation
omitted). The question of standing is "a threshold inquiry to adjudication." McClure
v. Ashcroft, 335 F.3d 404, 408 (5th Cir. 2003) (citation omitted).
Here, the Court has reviewed Plaintiffs Complaint in detail. In doing so, the
Court has considered each of Plaintiffs claims against Defendants Shull and Shull
LLC for conversion, violation of the Texas Theft Liability Act, and violations of the
Texas Insurance Code. In moving to dismiss Plaintiffs claims, Defendants Shull and
Shull LLC (the "Shull Defendants") contend that they "were hired on July 18, 2024,
by Curvy to negotiate with the insurance company on their behalf' and that the
contract clearly stated that Defendant Shull LLC "REPRESENT THE INSURED
ONLY." 13 With respect to 	the 	claims 	brought by Plaintiff against the 	Shull
Defendants, the Shull Defendants further contend that "Plaintiff failed to allege facts
that would show that Plaintiff was entitled to relief from Movants" and that "[t]he
contract between Curvy and Movants clearly states that the recovery would come
13 Defendants' Brad Shull and Shull & Associates LLC 's First Amended Motion to
Dismiss and Motion to Strike, Document No. 14 at 17 (emphasis in original).
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from the insurance policies not covered in the policies of the insured." 14 Plaintiff
offers no rebuttal.
In addition to the Shull Defendants' standing argument, the Shull Defendants
further contend that Plaintiffs Complaint is insufficient because "Plaintiff not only
fails to clarify their property rights but also fails to attach the alleged insurance
policy to the actual petition." 15 The Shull Defendants further cite inaccuracies in the
Complaint contending that "failure to 	provide clear dates 	regarding the 	fire,
foreclosure, and insurance coverage fails to adequately notice the Movants of the
claims asserted against them." 16 Plaintiff offers no rebuttal.
A review of the record in this matter reveals that Plaintiff did not attach the
Policy in question, but rather, referenced only one sentence from the entire Policy. 17
Furthermore, 	the 	Court's 	independent 	review 	of the 	record 	reveals 	that the
foreclosure sale happened on November 7, 2023, well before the fire on March 10,
14 Defendants' Brad Shull and Shull & Associates LLC 's First Amended Motion to
Dismiss and Motion to Strike, Document No. 14 at 17-18.
15 Defendants' Brad Shull and Shull & Associates LLC's First Amended Motion to
Dismiss and Motion to Strike, Document No. 14 at 15.
16 Defendants' Brad Shull and Shull & Associates LLC 's First Amended Motion to
Dismiss and Motion to Strike, Document No. 14 at 16.
17 See Plaintiff's Complaint, Document No. 1, Exhibit D-1 at 7 ("Under Section 5.b.
of the references insurance policy, Zurich was obligated to 'pay for covered loss or damage
to Covered Property to the mortgage holder(s) designated in the Schedule[.]").
7
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2024. 18 The Court notes this inconsistency with Plaintiffs Complaint which states,
in relevant part, 	that 	"[a]fter the 	fire, 	the 	buildings 	were 	foreclosed 	on 	by
Priority[.]" 19
Based on the foregoing, the Fifth Circuit and Supreme Court's clear guidance
that the question of standing is a preliminary inquiry for adjudication, and the clear
language of Federal Rule of Civil Procedure Rule 8(a)(2), the Court finds that
Plaintiffs claims against Defendants Shull and Shull LLC should be dismissed. The
Court will now consider Defendant Chase's motion to dismiss.
B. 	Defendant Chase's Motion to Dismiss (Document No. 15)
Defendant Chase moves to dismiss Plaintiffs "breach of its duty of care"
claim contending that: (1) Plaintiff failed to state a claim; (2) the negligence claim
is preempted by the UCC; and (3) "Plaintiff failed to plead that it was a holder of the
check. " 20 Plaintiff offers no rebuttal.
18 See Defendants' Brad Shull and Shull & Associates LLC's First Amended Motion
to Dismiss and Motion to Strike, Document No. 14, Exhibit 7 at 3 ("WHEREAS, at such
. sale the Property was sold to Priority Investor Loans, LLC[.]").
19 See Plaintiff's Complaint, Document No. 1, Exhibit D-1 at 6-7.
20 See Plaintiff's Complaint, Document No. 	1, Exhibit D-1 	at 	11; Defendant
JPMorgan Chase Bank, NA 's Motion to Dismiss, Document No. 15 at 5-8. Given the
Court's own independent review of Plaintiffs Complaint, the Court determines that
Plaintiff intends to bring a common law negligence claim against Defendant Chase. As
such, the Court will consider Plaintiffs negligence claim to the extent it can construe one.
8
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When exercising jurisdiction over a question based upon state law, federal
courts should apply the substantive law of that state. Crisalli v. ARX Holding Corp.,
177 F. App'x 417, 419 (5th Cir. 2006) (citing Erie R.R. Co. v. Tompkins, 304 U.S.
64, 72(1938)). Tortlawisamatterofstatelaw.SeeErieR.R. Co. v. Tompkins,304
U.S. 64, 87 (1938). To allege a negligence action under Texas law, a Plaintiff must
allege sufficient facts to show "a legal duty owed by one person to another, a breach
of that duty, and damages proximately caused by the breach." Nabors Drilling, USA,
Inc. v. Escoto, 288 S.W.3d 401,404 (Tex. 2009); Lane v. Halliburton, 529 F.3d 548,
565 (5th Cir. 2008) (applying Texas State law). Most pertinent here, "the UCC
preempts common law causes of action that supplant the provisions of the UCC in a
suit to recover losses involving negotiable instruments." AMX Enterprises, Inc. v.
Bank One, N.A., 196 S.W.3d 202, 207 (Tex. App.-Houston [1 st Dist.] 2006, pet.
denied).
Here, Defendant Chase contends that "Plaintiffs claims against Chase are
preempted by the UCC because they are based on allegations 	of transactions
governed by that statute." 21 Defendant further contends that "Plaintiff has not
pleaded 	a 	UCC 	claim; 	therefore, 	Plaintiffs 	claims 	against 	Chase 	must 	be
21 Defendant JPMorgan Chase Bank, NA 's Motion to Dismiss, Document No. 15
at 6.
9
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dismissed. " 22 Plaintiff offers no rebuttal. The Court has conducted an independent
review of Plaintiffs Complaint alleging that "JP Morgan Chase Bank, N.A. failed
in its duty of ordinary care by accepting and processing this check without Priority
Investor Loans endorsement." 23 In reviewing Plaintiffs Complaint, the Court finds
that Plaintiffs claim against Chase clearly attempts to recover losses related to a
negotiable instrument, specifically a check. Based on the foregoing and considering
the clear guidance of the Texas Appellate Court that the UCC preempts common law
causes of action, the Court finds that Plaintiffs claim against Defendant Chase is
preempted by the UCC. 	As such, the Court finds that Plaintiffs claim against
Defendant Chase should be dismissed. 24
IV. CONCLUSION
Based on the foregoing, the Court hereby
ORDERS that Defendants' Brad Shull and Shull & Associates LLC's First
Amended 	Motion 	to 	Dismiss 	and 	Motion 	to 	Strike 	(Document 	No. 	14) 	is
GRANTED. The Court further
22 Defendant JPMorgan Chase Bank, NA 's Motion to Dismiss, Document No. 15
at 7.
23 See Plaintiff's Complaint, Document No. 1, Exhibit D-1 at 12.
24 Considering the Court's finding that Plaintiffs claim against Defendant Chase is
preempted by the UCC, the Court declines to consider Defendant Chase's remaining
arguments related to the sufficiency of Plaintiffs Complaint.
10
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ORDERS that Defendant JPMorgan Chase Bank, N.A's Motion to Dismiss
(Document No. 15) is GRANTED. The Court further
ORDERS 	that 	Plaintiffs 	claims 	against 	Defendant 	Brad 	Shull 	are
DISMISSED WITHOUT PREJUDICE. The Court further
ORDERS that Plaintiffs claims against Defendant Shull & Associates LLC
are DISMISSED WITHOUT PREJUDICE. The Court further
ORDERS that Plaintiffs claim against JPMorgan Chase Bank, N.A's is
DISMISSED WITHOUT PREJUDICE.
SIGNED at Houston, Texas, on this~ day of February, 2026.
11
DAYID HITTNER
United States District Judge
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