IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF TEXAS

BEAUMONT DIVISION

JOHN GUILES and JENNIFER GUILES,

Plaintiffs,

v.

GEOVERA ADVANTAGE INSURANCE 

SERVICES, INC.,

Defendant.

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CIVIL ACTION NO. 1:23-CV-289-MACCLS

REPORT AND RECOMMENDATION ON

DEFENDANT’S MOTION FOR SUMMARY JUDGMENT (Doc. #15) 

Pursuant to 28 U.S.C. § 636 and the Local Rules of Court for the Assignment of Duties to 

United States Magistrate Judges, the district court referred this proceeding to the undersigned 

magistrate judge to conduct all pretrial proceedings, to enter findings of fact and recommend 

disposition on case-dispositive matters, and to determine non-dispositive matters. 28 U.S.C. 

§ 636(b)(1); E.D. TEX. LOC. R. CV-72. Pending before the court is Defendant’s Motion for 

Summary Judgment (Doc. #15.) After thorough review, the undersigned recommends granting

the motion in full.

I. Plaintiff’s Claims and Procedural Background

In February 2021, Plaintiffs’ home was allegedly damaged when pipes in their attic burst

during a freeze event known as Winter Storm Uri. (Doc. #16-1.) Plaintiffs sought to enforce 

coverage under their Texas Homeowner’s Policy number GC00017873 issued by Defendant. (Id.) 

On Defendant’s behalf, Team One Adjusting Services, LLC, investigated Plaintiffs’ insurance 

claim and prepared an estimate to repair damage to the master bedroom, master closets, and master 

bathroom. By letter on March 7, 2021, Defendant informed Plaintiffs it would issue payment in 

the amount of $5,058.50. (Doc. #16-2.) On March 15, 2021, Plaintiffs called Defendant to report 

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that there was damage to areas of the house unaddressed by Team One’s inspection report. (Doc. 

#16-1 at 4.) Team One then prepared a supplemental report that encompassed plumbing issues, 

the kitchen, dining room, laundry room, mechanical room, living room, and hallway. Defendant 

then informed Plaintiffs it would pay an additional $8,758.79.1 (Doc. #16-4.)

Sometime thereafter, Plaintiffs then hired a general contractor to assess their home. (Doc. 

#16-1 at 6.) This contractor estimated repairs to Plaintiffs’ home would cost $78,105.48. (Id.) 

Plaintiff informed Defendant of this estimate on July 27, 2021. (Id.) On August 7, 2021, 

Defendant informed Plaintiffs that it would not inspect the home for a third time but would 

investigate the contractor’s estimates. (Id. at 7.) Defendants paid Plaintiffs an additional $6,000 

on August 19, 2021, which they believed would close Plaintiffs’ claim. (Id. at 8.) Then, on 

October 15, 2021, Plaintiffs invoked appraisal under their insurance contract and designated their 

appraiser. Defendant designated their appraiser on October 15, 2021. On March 18, 2022, the 

appraisers reached an impasse and chose Paul Poncio as umpire. On August 26, 2022, the appraisal 

panel, consisting of both appraisers and the umpire, found that the total cost to repair Plaintiffs’ 

home totaled $45,614.43, that Defendant had previously paid $20,947.96, and that Defendant 

owed Plaintiffs $24,666.47 under the policy. Defendant paid the appraisal award on September 8, 

2022. 

On September 28, 2022, Plaintiffs sent a demand letter to Defendant requesting $3,601.98 

in fees for violation of the Texas Prompt Payment of Claims Act (TPPCA) and $7,425.00 for

attorney’s fees. (Doc. #15-5.) Plaintiff then filed suit in Texas state court on November 28, 2022, 

alleging the following claims against Defendant: (1) breach of contract, (2) violations of Unfair 

1 On March 24, 2021, Defendant GeoVera sent Plaintiff a letter claiming that after the $8,758.79 payment, “the total 

amount paid to date for this claim” was $14,947.96. (Doc. #16-4 at 1.) It appears a $1,130.67 “prior payment” for 

“mitigation occurred sometime before the March 24, 2021, letter, explaining the $14,947.96 figure. (Id. at 4-5.)

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Settlement Practices Act, (3) violations of the TPPCA, and (4) breach of the duty of good faith and 

fair dealing. On July 26, 2023, Defendant removed this suit to federal court on diversity grounds. 

(Doc. #1.) The undersigned held a case management conference on September 20, 2023, where 

Plaintiffs informed the court they would file an amended federal-style complaint. On October 18, 

2023, Defendant paid Plaintiffs $8,320.37 for interest calculated in compliance with the formula 

set forth in the TPPCA. (Doc. #15-6.)

Plaintiffs filed their amended, operative complaint on December 11, 2023, alleging six 

violations of the Unfair Settlement Practices Act codified in Chapter 541 of the Texas Insurance 

Code and the breach of the common law duty of good faith and fair dealing.2 (Doc. #13.) No 

claim under the Texas Prompt Payment of Claims Act was included in the amended complaint. 

Defendant filed this instant motion for summary judgment on January 1, 2024, arguing its payment 

of the appraisal award and statutory interest and Plaintiff’s failure to allege an independent injury

bar any further recovery. (Doc. #15.) A response and reply have been filed. (Docs. #16, #17.) 

This matter is ripe for review.

II. Legal Standard

Summary judgment should only be granted if the moving party can show that “there is no 

genuine dispute as to any material fact and that the movant is entitled to judgment as a matter of 

law.” FED. R. CIV. P. 56(a). This rule places the initial burden on the moving party to identify 

those portions of the record which it believes demonstrate the absence of a genuine dispute of 

material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986); Stults v. Conoco, Inc. 76 

F.3d 651, 655-56 (5th Cir. 1996) (citations omitted). A dispute is genuine if the evidence is 

sufficient for a reasonable jury to return a verdict for the non-moving party. Anderson v. Liberty 

2 The undersigned notes that Plaintiffs’ Counts Two and Three refer to the same subsection of the Texas Insurance 

Code and are completely identical.

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Lobby, Inc., 477 U.S. 242, 255-56 (1986). A fact is material when it is relevant or necessary to 

the ultimate conclusion of the case. Id. at 248. The movant’s burden is only to point out the 

absence of evidence supporting the nonmovant’s case. Skotak v. Tenneco Resins, Inc., 953 F.2d 

909, 913 (5th Cir.); cert. denied, 506 U.S. 832 (1992). 

Once the moving party has carried its burden of demonstrating that the absence of a genuine 

dispute of material fact, the nonmoving party bears the burden of coming forward with “specific 

facts showing that there is a genuine issue for trial.” Matsushita Elec. Indus. Co. v. Zenith Radio 

Corp., 475 U.S. 574, 587 (1986). In considering a motion for summary judgment, “the evidence 

of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor.” 

Liberty Lobby, Inc., 477 U.S. at 255. However, the non-movant may not rest on mere allegations 

or denials of its pleadings but must respond by setting forth specific facts indicating a genuine 

issue for trial. Webb v. Cardiothoracic Surgery Assocs. of N. Tex., P.A., 139 F.3d 532, 536 (5th 

Cir. 1998). The court must consider all the evidence but refrain from making any credibility 

determinations or weighing the evidence. See Turner v. Baylor Richardson Med. Ctr., 476 F.3d 

337, 343 (5th Cir. 2007) (citation omitted). 

Mere conclusory allegations are not competent summary judgment evidence, and thus are 

insufficient to defeat a motion for summary judgment. Eason v. Thaler, 73 F.3d 1322, 1325 (5th 

Cir. 1996). Unsubstantiated assertions, improbable inferences, and unsupported speculation are 

not competent summary judgment evidence. See Forsyth v. Barr, 19 F.3d 1527, 1533 (5th Cir.), 

cert. denied, 513 U.S. 871 (1994). The party opposing summary judgment is required to identify 

specific evidence in the record and articulate the precise manner in which that evidence supports 

his claim. Ragas v. Tenn. Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir. 1998). Rule 56 does not 

impose a duty on the court to “sift through the record in search of evidence” to support the 

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nonmovant’s opposition to the motion for summary judgment. Id.; see also Skotak, 953 F.2d at 

915–16 & n.7; FED. R. CIV. P. 56(c)(3) (“[T]he court need consider only the cited materials.”). If 

the nonmoving party fails to make a showing sufficient to establish the existence of an element 

essential to its case and on which it will bear the burden of proof at trial, summary judgment must 

be granted. Celotex, 477 U.S. at 322–23.

III. Discussion

A. Evidentiary Objections

As a threshold matter, Defendant objects to (1) Exhibits A through I as “doctored with 

yellow highlighting,” and (2) Plaintiff’s Exhibit E as conclusory. (Doc. #17 at 3-4.) The 

undersigned overrules the first objection, as the local rules of this court advise that “Counsel are 

strongly encouraged to highlight or underline the cited portion of any attached evidentiary 

materials” to a motion for summary judgment or a response. E.D. TEX. LOC. R. CV-56(d). As for 

the second objection, the undersigned finds that Plaintiff’s Exhibit E (doc. #16-5) is impermissibly 

conclusory as it merely states a topline quote of $78,105.48 for home repairs without any context 

of what went into the quote. The undersigned notes, however, that the contractor’s $78,105.48 

quote is referenced in other exhibits and is admissible to the extent it is referenced in those exhibits. 

See, e.g., (Doc. #16-1 at 6.)

B. Claims Under Chapter 541 of the Texas Insurance Code

Plaintiffs allege Defendant violated the Unfair Settlement Practices Act, codified in 

Chapter 541 of the Texas Insurance Code, by (1) conducting an outcome driven investigation, (2) 

mispresenting their claim, (3) breaching its duty of good faith, (4) failing to confirm or deny claims 

in a reasonable time, and (5) failing to provide prompt explanations. (Doc. #13 at 10-15.) 

Defendant arguesthat Plaintiffs’ claims under Chapter 541 should be dismissed because Defendant 

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has fulfilled its contractual obligations and Plaintiffs do not assert an independent injury. (Doc. 

#15 at 6-9). The undersigned notes that much of Defendant’s motion for summary judgment is 

dedicated to the impact of an insurer’s payment of an appraisal award and statutory interest on an 

insured’s claims under the TPPCA (Chapter 542 of the Texas Insurance Code), claims which 

Plaintiffs did not raise in their operative complaint. (Doc. #15 at 9-12.) 

To establish damages under Chapter 541 of the Texas Insurance Code, a party must 

establish either (1) a right to receive benefits under the policy, or (2) an injury independent of a 

right to benefits. In re State Farm Mut. Auto. Ins. Co., 629 S.W.3d 866, 872-73 (Tex. 2021) (citing 

USAA Tex. Lloyds Co. v. Menchaca, 545 S.W.3d 479, 500 (Tex. 2018)). “[T]here is no alternative 

to these two pathways.” In re State Farm, 629 S.W.3d at 873. An injury is not independent if 

“claims are predicated on the loss being covered under the insurance policy, or if the damages flow 

or stem from the denial of the claim for policy benefits.” Menchaca, 545 S.W.3d at 500 (internal 

quotations omitted).

The parties do not dispute that Defendant paid Plaintiffs the amount required in the 

appraisal agreement and statutory interest. (Docs. #15-5, #16-7.) Defendants have, therefore,

fulfilled their contractual obligations under the policy. Ortiz v. State Farm Lloyds, 589 S.W.3d 

127, 132-33 (Tex. 2019) (affirming summary judgment on common law bad faith claims when an 

insurer paid an award under an appraisal agreement). Additionally, in the instant motion, 

Defendant alleges that Plaintiffs fail to raise an independent injury from what they believed was 

owed under the policy. (Doc. #15 at 8-9.) Plaintiffs respond citing Menchaca to note that Chapter 

541 provides independent causes of action and that that damages under Chapter 541 are “commonlaw damages” independent from any contractual claims. (Doc. #16 at 9-10.) Plaintiffs’ 

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observation is correct but it fails to address all that is required to bring a claim under Chapter 541 

of the Texas Insurance Code.

The Texas Supreme Court in Menchaca explains that Chapter 541 provides causes of 

actions for extracontractual claims, but that damages may only be recovered for such claims if “the 

violation [of Chapter 541] causes an injury that is independent from the loss of the benefits.” 

Menchaca, 545 S.W.3d at 500. In their response to the instant motion, Plaintiffs do not articulate 

any facts to counter Defendant’s assertion that Plaintiffs have not alleged an independent injury. 

This alone could be fatal to Plaintiffs’ claims under the Texas Insurance Code, as the local rules 

of this court provide that a “party’s failure to oppose a motion in the manner prescribed herein 

creates a presumption that the party does not controvert the facts set out by movant and has no 

evidence to offer in opposition to the motion.” E.D. TEX. LOC. R. CV-7(d).

While “[j]udges are not like pigs, hunting for truffles buried in the record,” the undersigned 

notes Plaintiffs never plead any injuries independent of Defendant’s alleged breach of contract. 

United States v. del Carpio Frescas, 932 F.3d 324, 331 (5th Cir. 2019) (quotation and citation 

omitted). In Plaintiffs’ amended complaint, they request damages including “the amount of the 

improperly or denied payments for Plaintiff’s covered claims which resulted from each of 

Defendant’s violations, mental anguish, court costs, consequential damages not covered by 

Plaintiffs’ Policy, and attorney’s fees.” (Doc. #13 at 16-17) (emphasis added). This is not enough 

for independent injury claims under Chapter 541 to survive a motion for summary judgment. See

Ortiz, 589 S.W.3d at 135 (observing attorney’s fees and court costs are not independent injuries); 

Blue Star Sports Holdings, Inc. v. Fed. Ins. Co., 658 F. Supp. 3d 351, 358 (E.D. Tex. 2023) (noting 

emotional distress is not an independent injury for Chapter 541 purposes); Arnold v. State Farm 

Lloyds, No. CV H-22-3044, 2023 WL 2457523, at *3 (S.D. Tex. Mar. 10, 2023) (granting insurer’s 

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motion for summary judgment on insured’s Chapter 541 claims, including those for mental 

anguish). But see Burgess v. Allstate Fire & Cas. Ins. Co., 641 S.W.3d 474, 486 (Tex. App.—

Austin 2021) (holding Plaintiff’s claim for mental anguish under Chapter 541 survives summary 

judgment where Plaintiff specifically alleged her mental anguish was an independent injury). The 

undersigned is persuaded by the relevant caselaw holding that mental anguish is not an 

independent injury under Chapter 541. The court should, therefore, grant Defendant’s Motion for 

Summary Judgment as to Plaintiffs’ claims under Chapter 541 of the Texas Insurance Code.

C. Common Law Claim

Plaintiffs also allege a common law claim for a breach of the duty of good faith and fair 

dealing. (Doc. #13 at 16.) Defendant again argues that such a claim fails because Plaintiffs are 

not owed anything under the insurance contract and have failed to raise an independent injury. 

(Doc. #15 at 8 n.23.) Plaintiffs respond by correctly noting a common law tort, such as the alleged 

breach of duty here, is an independent cause of action. (Doc. #16 at 11-12.) The independent 

injury rule articulated above, however, equally applies to a common law bad faith claim in the 

insurance context. Menchaca, 545 S.W.3d at 500 (collecting cases). Accordingly, the court should 

grant Defendant’s motion as to Plaintiffs’ common law claim.

IV. Conclusion

The undersigned finds that (1) there is no genuine dispute to the material fact that Plaintiffs 

have no live claims to recover under their insurance contract with Defendant, (2) Plaintiffs failed 

to plead or otherwise factually assert an independent injury, and (3) Plaintiffs, therefore, did not 

assert any viable common law claims or statutory claims under Chapter 541. As Plaintiffs raise 

no other claims, the court should enter final judgment.

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V. Recommendation

The court should GRANT Defendant’s Motion for Summary Judgment (doc. #15) in full. 

VI. Objections

Within fourteen (14) days after service of the magistrate judge’s report, any party must 

serve and file specific written objections to the findings and recommendations of the magistrate 

judge. 28 U.S.C. § 636(b)(1)(C). To be specific, an objection must identify the specific finding 

or recommendation to which objection is made, state the basis for the objection, and specify the 

place in the magistrate judge’s report and recommendation where the disputed determination is 

found. An objection that merely incorporates by reference or refers to the briefing before the 

magistrate judge is not specific. Without leave of court, objections are limited to eight (8) pages. 

E.D. TEX. LOC. R. CV-72(c).

Failure to file specific, written objections will bar the party from appealing the unobjectedto factual findings and legal conclusions of the magistrate judge that are accepted by the district 

court, except upon grounds of plain error, provided that the party has been served with notice that 

such consequences will result from a failure to object. Douglass v. United Services Auto. Ass’n,

79 F.3d 1415, 1417 (5th Cir. 1996) (en banc), superseded by statute on other grounds; 28 U.S.C. 

§ 636(b)(1) (extending the time to file objections from ten to fourteen days).

.

___________________________________

Christine L Stetson

UNITED STATES MAGISTRATE JUDGE SIGNED this the 24th day of April, 2024.

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