Case 5:22-cv-00110-H-BQ Document 1-9 Filed 06/09/22 Page 1 of 14 PageID 36
The State ofTexas

Service of Process

P.O. Box 12079

Austin, Texas 78711-2079

Phone: 512-463-5560

Fax: 512-463-0873

Dial 7-1-1 For Relay Services

www.sos.texas.gov

John B. Scott

Secretary of State

May 12, 2022 2022-338483-1

Include reference number Covington in all correspondence Specialty Insurance Company

Senior Claims Officer of RSUI Group, Inc., or his designee

945 East Paces Ferry Rd

Atlanta, GA 30326-1160

r" Q RE: -y Hart Chesnutt, EEC vs Covington Specialty Insurance Company

District Court of Dallas County, Texas

Cause No. DC2022CV0407

Dear Sir/Madam,

Pursuant to the Laws of Texas, we forward herewith by CERTIFIED MAIL, return receipt

requested, a copy ofthe process received by the Secretary of State ofthe State of Texas on April

25, 2022.

CERTIFIED MAIL #71901046470101414561

Refer correspondence to:

Matthew R Pearson

Gravely & Pearson LLP

425 Soledad St

Suite 600

San Antonio, TX 78205

Sincerely,

Service of Process

Government Filings

512-463-1662

GF/mo

Enclosure

Case 5:22-cv-00110-H-BQ Document 1-9 Filed 06/09/22 Page 2 of 14 PageID 37
t

RECEIVED

SECRETARY OF STATE

APR 2 5 2022

CITATION

THE STATE OF TEXAS Service of Process

TO: Covington Specialty Insurance Company

Senior Claims Officer of RSUI Group, Inc., or his designee

945 East Paces Ferry' Rd Atlanta, Georgia 30326-1160

By Serving ofProcess: Secretary ofState

P. O. Box 12079 Austin, Texas 78711-2079

Defendant Greetings:

NOTICE

You have been sued. You may employ an attorney. If you or your attorney do not file a

written answer with the clerk who issued this citation by 10 a.m. on the Monday following

the expiration of twenty days after you have been serv ed this citation and petition, a default

judgment may be taken against you. In addition to filing a written answer with the clerk, you

may be required to make initial disclosures to the other parties ofthis suit. These disclosures

generally must be made no later than 30 days after you file your answer with the clerk. Find

out more at TexasLawHelp.org

Said Plaintiffs Original Petition was filed in the 99th District Court ofLubbock County, Texas,

on April 7, 2022. The file number of said suit being Cause Number DC-2022-CV-0407. and

styled:

Hart Chesnutt, LLC,

Plaintiff

V.

Covington Specialty Insurance Company,

Defendants

The nature of Plaintiffs demand is set out and shown by a true and correct copy ofthe Original

Petition, accompanying this citation, and made a part thereof.

Plaintiffis represented by:

Jarryd s. Morton 425 Soledad, Suite 600 San Antonio, Texas 78205 (210) 732-7766

The officer executing this citation shall promptly serve the same according to requirements oflaw,

and the mandates hereof, and make due return as the law directs.

Issued and given under my hand and seal of said Court at Lubbock County, Texas, this Monday,

April 18. 2022, at 9:00 AM.

Sara L. Smith, District Clerk

99th District Court

P.O. Box 10536 (79408)

904 Broadway

Lubbock. Texas 79401

By. Deputy

~7/ Jamie Horton

338433

Case 5:22-cv-00110-H-BQ Document 1-9 Filed 06/09/22 Page 3 of 14 PageID 38
t

i

Filed 4/7/2022 10:19AM

Sara L. Smith

Lubbock County - 99th District Court

Lubbock xas

DC-2022-CV-0407

CAUSE NO.

HART CHESNUTT, EEC § IN THE DISTRICT COURT

§

Plaintiff, §

§

v. §

§ 99TH JUDICIAL DISTRICT

COVINGTON SPECIALTY INSURANCE §

COMPANY, §

§

Defendant. § LUBBOCK COUNTY, TEXAS

PLAINTIFF’S ORIGINAL PETITION

TO THE HONORABLE JUDGE OF SAID COURT:

Plaintiff HART CHESNUTT, LLC (“Plaintiff’) files this Original Petition against

Defendant COVINGTON SPECIALTY INSURANCE COMPANY (“Defendant” and

“COVINGTON SPECIALTY”) and for causes of action would respectfully show the Court the

following:

I. Discovery Level

1. Pursuant to Rule 190 of the Texas Rules of Civil Procedure, Plaintiff intends to

conduct discovery under Level 3.

II. Venue

2. Venue is appropriate in Lubbock County, Texas because all or part of the events

giving rise to the causes of action occurred in Lubbock County, Texas and the property which is

the subject ofthis suit is located in Lubbock County, Texas.

III. Parties

3. Plaintiff is a domestic limited liability corporation whose principal place of

business is in Lubbock County, Texas.

Plaintiffs Original Petition Page 1 of9

Case 5:22-cv-00110-H-BQ Document 1-9 Filed 06/09/22 Page 4 of 14 PageID 39
4. Defendant COVINGTON SPECIALTY INSURANCE COMPANY is in the

business of insurance in the State of Texas. The insurance business done by COVINGTON

SPECIALTY INSURANCE COMPANY in Texas includes, but is not limited to, the following:

The making and issuing of contracts ofinsurance with Plaintiff;

The taking or receiving of application for insurance, including Plaintiffs

application for insurance;

The receiving or collection ofpremiums, commissions, membership fees,

assessments, dues or other consideration for any insurance or any part

thereof, including any such consideration or payments from Plaintiff; and

The issuance or delivery of contracts of insurance to residents of this stale

or a person authorized to do business in this state, including Plaintiff.

5. Defendant COVINGTON SPECIALTY INSURANCE COMPANY is a surplus

lines insurance company. COVINGTON SPECIALTY INSURANCE COMPANY regularly and

systematically conducts business in the State ofTexas but does not maintain an agent for service.

Accordingly, Defendant may be served with process by serving the Texas Secretary of State via

Service of Process, Secretary of State, P.O. Box 12079, Austin, Texas 78711-2079, by Certified

Mail, Return Receipt Requested, who can forward process to the Senior Claims Officer of RSUI

Group. Inc., 945 East Paces Ferry Rd., Atlanta, Georgia 30326-1160 or his designee. Plaintiff

requests that citation be issued and that service be made by certified mail, return receipt

requested.

IV. Nature of the Case; Relief Sought

6. This is a first-party insurance case stemming from extensive damage to Plaintiffs

property from a severe weather event in May 2020. Plaintiffseeks damages for breach of contract

and violations ofthe Prompt Payment Act, Texas Insurance Code Section 542.051 et seq. Plaintiff

also seeks its attorneys’ fees, compensatory damages, statutory penalties, enhanced damages, costs

Plaintiffs Original Petition Page 2 of 9

Case 5:22-cv-00110-H-BQ Document 1-9 Filed 06/09/22 Page 5 of 14 PageID 40
of court and pre- and post-judgment interest. As required by Rule 47(c)(1) of the Texas Rules of

Civil Procedure, Plaintiff seeks monetary relief of $250,000 or less, excluding interest, statutory

or punitive damages and penalties, and attorney fees and costs.

V. Background Facts

7. Plaintiffowns the property located at 524 E. 46th Street, Lubbock, Texas 79404 (the

“Property”). At all relevant times, the Property was covered by a policy of insurance, numbered

VBA715087 00, issued by COVINGTON SPECIALTY (the “Policy”). The Policy covered the

Property against loss by wind and hail damage, among other perils.

8. As a consequence of a severe storm event on May 20, 2020, the Property sustained

extensive hail damage. The damage is covered under the Policy issued by COVINGTON

SPECIALTY.

9. Plaintiff gave timely notice to COVINGTON SPECIALTY. Plaintiffhas faithfully

paid all the premiums under the above-referenced Policy, and Plaintiff cooperated with

COVINGTON SPECIALTY’S investigation of Plaintiffs claims.

10. COVINGTON SPECIALTY assigned the claim to adjusters to investigate, report

on and adjust the loss.

11. The adjusters assigned to the claim performed a rudimentary and inadequate

inspection of Plaintiffs property.

12. Instead of hiring EFI Global to do an independent analysis of Plaintiffs loss,

COVINGTON SPECIALTY hired EFI Global’s engineers to rubber stamp its basis for

underpaying Plaintiffs claim and to convince Plaintiffthat its roof damages were caused by poor

maintenance, wear and tear and/or deterioration and not the storm at issue, even though Defendant

reasonably should have known they were. COVINGTON SPECIALTY knew EFI Global would

Plaintiffs Original Petition Page 3 of9

Case 5:22-cv-00110-H-BQ Document 1-9 Filed 06/09/22 Page 6 of 14 PageID 41
provide reports based on inadequate information, which Defendant could use as a pretext for

underpaying Plaintiffs claim, and knew that the substandard investigations EFI Global would

perform and did perform were not reasonable. By way of example, the biased investigations

conducted by EFI Global were limited to visual observations ofthe property damage only, without

obtaining any microscopic analysis onsite and/or chemical testing of Plaintiffs metal roof and

without obtaining any samples of Plaintiffs metal roof for laboratory microscopic analysis and/or

other laboratory testing.

13. COVINGTON SPECIALTY concluded its investigation on or about October 27,

2020, adjusted Plaintiffs claim, and determined that Plaintiffwas owed $0.00 ($11,277.64 RCV

- 6,025.15 depreciation - $9,500 deductible) for covered hail-related damages to the Property.

14. Plaintiffprovided information to the adjusters and opportunities for the adjusters to

inspect the property. Plaintiff permitted Defendant’s representatives to inspect the property on at

least three occasions in July and August 2020 and January 2022.

15. By underpaying and/or effectively denying Plaintiffs claim, COVINGTON

SPECIALTY forced Plaintiffto incur more than $9,000 in costs to complete its own investigation

and independent inspection of the Property and analysis of the extent of damage caused by the

storm in question. Plaintiff hired Dr. Fei of PMI Specialists, a metallurgical engineer, and Art

Boutin, a causation and damages building consultant to investigate its loss. Mr. Boutin fully

inspected the roof system, and Dr. Fei obtained samples of the roof for laboratory microscopic

analysis and testing. Dr. Fei’s report and Boutin’s cost of repairs estimate were provided to

COVINGTON SPECIALTY on or about November 22, 2021. Dr. Fei's laboratory testing

confirmed Plaintiffs roofs were functionally damaged by hail during the subject storm event.

COVINGTON SPECIALTY has underpaid Plaintiff by approximately $188,765.61.

Plaintiffs Original Petition Page 4 of 9

Case 5:22-cv-00110-H-BQ Document 1-9 Filed 06/09/22 Page 7 of 14 PageID 42
16. In response, COVINGTON SPECIALTY hired a second engineer with ProNet

Group, who merely conducted the same cursory investigation of COVINGTON SPECIALTY'S

first engineer. Specifically, on or about January 19, 2022, the ProNet engineer performed a visual

inspection only of Plaintiffs Property and once again, failed to perform any microscopic analysis

onsite and/or chemical testing of Plaintiffs metal roof, and failed to obtain any samples of

Plaintiffs metal rooffor laboratory analysis and/or other microscopic testing - despite the fact that

the ProNet Group engineer acknowledged and knew that hail fell at Plaintiffs Property during the

stonn at issue, resulting in visible physical impacts and indentations ofthe Property, including the

to the roof and an exterior wall.

17. COVINGTON SPECIALTY failed to conduct a full and fair and reasonable

investigation of Plaintiffs claim, including as to the full scope and extent of covered losses and

damages of Plaintiffs insured Property and as to the reasonable and necessary scopes of repairs

of all such Property. Instead, COVINGTON SPECIALTY, its adjusters, and hired engineers

limited their investigation activities to visual observations only, without obtaining any microscopic

analysis and/or chemical testing of Plaintiffs metal roof and without obtaining any samples of

Plaintiffs metal roof for laboratory microscopic analysis and/or other laboratory testing.

COVINGTON SPECIALTY did this inadequate assessment despite plainly visible and extensive

damage to the Property. COVINGTON SPECIALTY conducted this results-oriented, myopic

investigation to conclude that there was cosmetic damage only to the Property’s roof(s), thereby

undervaluing the claim and drastically reducing COVINGTON SPECIALTY’S exposure under the

Policy and further violating the terms ofthe insurance Policy by failing to pay for all the covered

damage caused by the stonn at issue.

Plaintiffs Original Petition Page 5 of9

Case 5:22-cv-00110-H-BQ Document 1-9 Filed 06/09/22 Page 8 of 14 PageID 43
18. COVINGTON SPECIALTY wholly failed to estimate the complete cost ofrepair

to the Property.

19. COVINGTON SPECIALTY has failed and refused to pay Plaintiff in accordance

with its promises under the Policy and has wrongfully underpaid Plaintiffs claims for the Property.

In addition, COVINGTON SPECIALTY violated the Prompt Payment ofClaims Act, Texas Ins.

Code § 542.055 et. seq., and statutory prompt payment penalties should be calculated from the

time Defendant issued its original claims determination and payment decision letters in October

2020.

20. The amount of Plaintiffs damages is well established and has been provided to

Defendant. Plaintiffs covered property damage has not been paid despite Plaintiff having

perfonned all conditions precedent to recovery under the Policy.

21. COVINGTON SPECIALTY forced Plaintiff to file this suit by offering

substantially less than the amount of covered damages. Thus, Defendant failed to meet its

obligation under the Policy regarding investigation and payment of the claim without delay. This

conduct is in violation of Section 542.058 ofthe Texas Insurance Code and Defendant is liable for

damages as provided by Section 542.060.

VI. Claims Against Defendant Covington Specialty Insurance Company

22. Declaratory Judgment. Plaintiff re-alleges the foregoing paragraphs. Pursuant to

the Texas Declaratory Judgment Act. Plaintiff is entitled to a declaration that the Policy provides

coverage for the cost to repair the damaged property, less only a deductible, among other things.

In the alternative, Plaintiff asserts that the Policy is ambiguous and must be interpreted in favor of

coverage and against COVINGTON SPECIALTY.

Plaintiffs Original Petition Page 6 of 9

Case 5:22-cv-00110-H-BQ Document 1-9 Filed 06/09/22 Page 9 of 14 PageID 44
23. Breach of Contract. Plaintiff re-alleges the foregoing paragraphs. The acts and

omissions of COVINGTON SPECIALTY and its agents constitute a breach and/or anticipatory

breach of COVINGTON SPECIALTY’S insurance contract with Plaintiff. Plaintiff has satisfied

all conditions precedent to the fulfillment ofits contractual demands. Accordingly, Plaintiffbrings

an action for breach of contract against COVINGTON SPECIALTY pursuant to Texas statutoryand common law, including Chapter 38 ofthe Texas Civil Practice and Remedies Code, and seek

all of its damages for such breach, including actual damages, consequential damages, attorneys'

fees, prejudgment interest, other litigation expenses and costs of court.

24. Violations of the Texas Insurance Code. Plaintiff re-alleges the foregoing

paragraphs. At all pertinent times, Covington Specialty was engaged in the business ofinsurance

as defined by the Texas Insurance Code. The acts and omissions of Covington Specialty and its

agents constitute one or more violations of the Texas Insurance Code. More specifically,

COVINGTON SPECIALTY has, among other violations, violated the following provisions ofthe

Code:

a. Texas Insurance Code, Chapter 542, Subchapter B, the Prompt Payment of

Claims Act.

25. As a result ofthe foregoing conduct, which was and is/are the producing cause(s)

of injury and damage to Plaintiff Plaintiff has suffered damages including, without limitation,

actual damages, economic damages, and consequential damages. Plaintiff is entitled to seek not

only its actual damages but also court costs and reasonable and necessary attorneys’ fees.

26. COVINGTON SPECIALTY has violated the Prompt Payment of Claims Act,

section 542.051, e/se#. ofthe Texas Insurance Code. Accordingly, as additional damages, Plaintiff

also seeks interest on the unpaid amount ofthe claims from the date ofDefendant’s original claim

determination and payment decision in October 2020 at the statutory rate as a penalty, plus

Plaintiffs Original Petition Page 7 of 9

Case 5:22-cv-00110-H-BQ Document 1-9 Filed 06/09/22 Page 10 of 14 PageID 45
reasonable and necessary attorneys’ fees incurred as a result of COVINGTON SPECIALTY'S

violations.

27. Attornevs, fees. Plaintiff re-alleges the foregoing paragraphs. Plaintiff has been

required to engage the services ofthe undersigned attorneys and has agreed to pay its attorneys a

reasonable fee for services expended and to be expended in the prosecution of its claims against

COVINGTON SPECIALTY through the trial court and all levels ofthe appellate process. Plaintiff

seeks the recovery of all ofits attorneys' fees and expenses.

28. With respect to all causes of action asserted herein. Plaintiffseeks the recovery of

prejudgment and post-judgment interest.

VII. Conditions Precedent

29. All conditions precedent for Plaintiff to recover under the Policy has been or will

be met.

VIII. Jury Demand

30. Plaintiffrequests that a jury be convened to try the factual issues in these causes of

action and tender the appropriate fees.

IX. Reservation of Rights

31. Plaintiffspecifically reserves the right to bring additional causes of action against

COVINGTON SPECIALTY and to amend this Petition as necessary.

X. Prayer

WHEREFORE, Plaintiffseeks the following relief:

A. the Court’s declaration that the Policy provides coverage for the damage to the

Property, less only a deductible;

Plaintiffs Original Petition Page 8 of 9

Case 5:22-cv-00110-H-BQ Document 1-9 Filed 06/09/22 Page 11 of 14 PageID 46
B. alternatively, a ruling that the Policy is ambiguous and must be interpreted in favor

of coverage and in favor of Plaintiff;

C. damages against COVINGTON SPECIALTY INSURANCE COMPANY for

breach of contract, including actual damages, consequential damages, attorneys' fees, pre- and

post-judgment interest, other litigation expenses, enhanced damages, and costs of court;

D. statutory damages, including the applicable percentage of damages penalty for

violations ofTexas’ Prompt Payment ofClaims Act; and

E. any and all other financial relief and rulings to which Plaintiff may be entitled at

law and/or as a matter of equity.

Respectfully submitted.

PEARSON LEGAL, P.C.

425 Soledad, Suite 600

San Antonio, Texas 78205

Telephone: (210) 732-7766

Facsimile: (210) 229-9277

BY:

MATTHEW R. PEARSON

State Bar No. 00788173

Email: mnearsonra),pearsonlegalpc.com

JARRYD S. MORTON

State Bar No. 24102248

Email: imorton@pearsonlegalpc.com

ATTORNEYS FOR PLAINTIFF

HART CHESNUTT, LLC

Plaintiffs Original Petition Page 9 of 9

Case 5:22-cv-00110-H-BQ Document 1-9 Filed 06/09/22 Page 12 of 14 PageID 47
• »

Automated Certificate of eService

This automated certificate of service was created by the efiling system.

The filer served this document via email generated by the efiling system

on the date and to the persons listed below. The rules governing

certificates of service have not changed. Filers must still provide a

certificate of service that complies with all applicable rules.

Velma Owen on behalf of Matthew Pearson

Bar No. 00788173

vowen@pearsonlegalpc.com

Envelope ID: 63353199

Status as of 4/7/2022 10:24 AM CST

Case Contacts

Name BarNumber Email TimestampSubmitted Status

Matthew RPearson mpearson@pearsonlegalpc.com 4/7/2022 10:19:00 AM SENT

Jarryd Morton jmorton@pearsonlegalpc.com 4/7/2022 10:19:00 AM SENT

Velma L.Owen vowen@pearsonlegalpc.com 4/7/2022 10:19:00 AM SENT

Case 5:22-cv-00110-H-BQ Document 1-9 Filed 06/09/22 Page 13 of 14 PageID 48
?«5T>CL.*SS

CERTIFIED MAIL $006,532

ZIP 78701

041112204064

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SERVICE

Secretary of State

Service of Process

PO. Box 12079

Austin, Texas 78711-2079

7190 1046 4701 0141 4561

Return Receipt (Electronic)

2022338483-1

Covington Specialty Insurance Company

Senior Claims Officer ofRSUI Group, Inc., <

945 East Paces Ferry Rd

Atlanta, GA 30326-1160

Case 5:22-cv-00110-H-BQ Document 1-9 Filed 06/09/22 Page 14 of 14 PageID 49