1

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF TEXAS

TYLER DIVISION

FIRST CHIRSTIAN CHURCH 

(DISCIPLES OF CHRIST) OF TYLER,

Plaintiff,

v. 

CHURCH MUTUAL INSURANCE 

COMPANY S.I.,

Defendant.

§

§

§

§

§

§

§

§

§

§

CIVIL ACTION NO. 6:23-CV-00342-JDKJDL

REPORT AND RECOMMENDATION OF

UNITED STATES MAGISTRATE JUDGE

Before the court is Plaintiff First Christian Church of Tyler’s partial motion for summary 

judgment. (Doc. No. 20.) Defendant Church Mutual Insurance Company filed a response. (Doc. 

No. 27.) For the reasons stated herein, the court RECOMMENDS that Plaintiff’s partial motion 

for summary judgment (Doc. No. 20) be DENIED.

BACKGROUND

I. Procedural History

This case arises out of an insurance claim for wind and hail damage to Plaintiff’s property 

in 2020.1 Defendant insured Plaintiff’s property during the period in which the alleged damage 

occurred but ultimately denied Plaintiff’s claim. (Doc. No. 4, at ¶¶ 8, 24–28.) Plaintiff then filed 

this lawsuit against Defendant in Texas state court on June 5, 2023, asserting claims for breach of 

contract, violations of Chapters 541 and 542 of the Texas Insurance Code, violations of the Texas 

1 Plaintiffs’ complaint does not state exactly when the alleged hailstorm occurred, see Doc. No. 4, but other filings by 

the parties seem to agree that the date of loss is April 12, 2020. See Doc. No. 28, at 4; Doc. No. 28-3, at 1.

Case 6:23-cv-00342-JDK Document 45 Filed 07/10/24 Page 1 of 11 PageID #: 3580
2

Deceptive Trade Practices Act, and violations of Defendant’s common law duty of good faith and 

fair dealing. Id. at ¶¶ 32–81. On July 11, 2023, Defendant removed the case to federal court based 

on diversity jurisdiction. (Doc. No. 1.) Plaintiff seeks relief in the form of actual, consequential, 

and exemplary damages, statutory interest, attorney’s fees, costs of court, pre- and post-judgment 

interest, and such other and further relief to which Plaintiff is entitled. (Doc. No. 4 at 14.)

Defendant filed an amended answer (Doc. No. 15) on October 30, 2024, asserting various

affirmative defenses, including failure to mitigate damages, excluded damages, failure to satisfy 

conditions precedent, prior material breach, and deductible offset. 

II. Motion for Summary Judgment

Plaintiff moves for summary judgment with respect to four of Defendant’s affirmative 

defenses: (1) failure to mitigate damages, (2) failure to satisfy conditions precedent, (3) prior 

material breach, and (4) deductible offset. The court will address each affirmative defense in turn.

a. Failure to Mitigate Damages

Defendant alleges that Plaintiff failed to exercise reasonable care in mitigating its damages 

by failing to maintain the property and failing to repair the damage to the property following the 

storm. (Doc. No. 15, at ¶ 90.) Plaintiff argues that Defendant has no evidence that Plaintiff failed 

to mitigate damages. (Doc. No. 20, at 5.) In support, Plaintiff claims that it hired Cable Roofing to 

make minor repairs to the roof following the storm. (Doc. No. 20-4, at 6.) Plaintiff’s expert, Bryan 

Hill, documented and photographed “repairs made to the TPO roofing along the northern perimeter 

of the upper roof.” (Doc. No. 20-3, at 9, 87.) Further, Plaintiff hired Mr. Hill to inspect the property 

in an effort to get Defendant to pay for the damages. Id. at 2.

Defendant responds that mitigation of damages is a jury question. (Doc. No. 27, at 7.) 

Regardless, Defendant asserts that evidence in the record raises a genuine dispute about whether 

Plaintiff reasonably mitigated damages following the storm. Id. at 8. Although Plaintiff claims it 

Case 6:23-cv-00342-JDK Document 45 Filed 07/10/24 Page 2 of 11 PageID #: 3581
3

hired Cable’s Roofing to make minor repairs to the roof, Defendant asserts that Plaintiff has not 

provided any receipts or other evidence showing when these repairs were made or their scope. Id. 

Defendant asserts that the hailstorm which allegedly caused the damage to Plaintiff’s property 

occurred on April 12, 2020, but Plaintiff did not submit the insurance claim until November 24, 

2020—over seven months later. See Doc. No. 20-2, at 2 (Church Mutual Letter Declining 

Coverage); Doc. No. 20-3, at 2 (Report of Bryan Hill); Doc. No. 27-2, at 2 (Church Mutual 

Acknowledgement of Claim). As such, it is unclear when these alleged repairs were made. Nor 

did Plaintiff submit any invoices or other evidence of expenses incurred in mitigating damages 

following the storm, despite the Policy providing for a right of reimbursement for such expenses. 

See Doc. No. 27-1, at 12. Further, Defendant’s expert, Daniel Hillner’s, inspection of the property 

also revealed several non-storm related maintenance defects that allegedly caused the roof leaks. 

See Doc. No. 27-4, at 12.

b. Failure to Satisfy Conditions Precedent

Defendant claims that Plaintiff failed to comply with the terms of the property conditions 

provision of the Policy, including (1) making repairs to the damaged property before seeking 

payment of benefits on a Replacement Cost (“RCV”) basis; or (2) in the alternative, making a 

claim on an Actual Cash Value (“ACV”) basis, and then seeking additional funds on a 

Replacement Cost (“RCV”) basis within 180 days of the loss. (Doc. No. 15, at 11–12); (Doc. No. 

27, at 11–13.) According to Defendant, Plaintiff did neither, so Plaintiff is not entitled to benefits 

on an RCV basis. Further Defendant asserts that Plaintiff’s seven-month delay in providing notice 

of the loss constitutes a failure to satisfy a condition precedent under the Policy, and genuine fact 

issues exist as to whether Defendant was prejudiced by the delay. (Doc. No. 27, at 16–17.)

Case 6:23-cv-00342-JDK Document 45 Filed 07/10/24 Page 3 of 11 PageID #: 3582
4

In its motion, Plaintiff argues that it was not required to fully replace the roof as a condition 

precedent to payment of benefits on an RCV basis because Defendant prevented Plaintiff from 

fully replacing the roof by refusing to pay any benefits under the policy at all. (Doc. No. 20, at 6.) 

c. Prior Material Breach

Defendant asserts that Plaintiff’s failure to mitigate damages constitutes a prior material 

breach of the Policy. (Doc. No. 15, at ¶ 90); (Doc. No. 27, at 16.) The parties’ motion and response 

make substantially the same arguments as those concerning failure to mitigate damages, except 

Defendant also asserts that Plaintiff’s delay in providing notice of the loss also constitutes a prior 

material breach and that any prejudice from delay is a question for the jury. (Doc. No 27, at 16–

17.) 

d. Deductible Offset

Defendant asserts that any recovery of benefits is subject to a deductible as stated in the 

Policy. (Doc. No. 15, at ¶ 98–99); (Doc. No. 27, at 18–19.) In is motion, Plaintiff argues that a 

deductible offset is not a “true affirmative defense.” (Doc. No. 20, at 7.) Regardless, Plaintiff 

asserts that Defendant cannot claim the Policy deductible as an affirmative defense because 

Defendant paid nothing, so no deductible was ever due or subtracted from Plaintiff’s benefits 

payment. Id. Further, Plaintiff suggests that payment of a deductible is usually only asserted as an 

affirmative defense in cases involving third party cost of defense coverage, not in cases involving 

first party insurance coverage. Id. 

Defendant responds that even if Defendant had not denied Plaintiff’s claim, any recovery 

under the Policy would still be subject to the terms of the Policy, including application of the 

deductible before payment of benefits. (Doc. No. 27, at 18.) Thus, any damages award for unpaid 

benefits must be reduced by the applicable deductible. Id. at 19. 

Case 6:23-cv-00342-JDK Document 45 Filed 07/10/24 Page 4 of 11 PageID #: 3583
5

LEGAL STANDARD

A motion for summary judgment should be granted if the record, taken as a whole,

“shows that there is no genuine issue as to any material fact and the movant is entitled to

judgment as a matter of law.” Fed. R. Civ. P. 56. The Supreme Court has interpreted the plain

language of Rule 56 as mandating “the entry of summary judgment, after adequate time for

discovery and upon motion, against a party who fails to make a showing sufficient to establish

the existence of an element essential to that party’s case, and on which that party will bear the

burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).

“[T]he party moving for summary judgment must ‘demonstrate the absence of a genuine

issue of material fact,’ but need not negate the elements of the nonmovant’s case.” Little v.

Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc) (quoting Celotex, 477 U.S. at

323–25). A fact is material if it might affect the outcome of the suit under the governing law.

Merritt-Campbell, Inc. v. RxP Prods., Inc., 164 F.3d 957, 961 (5th Cir. 1999). Issues of material

fact are genuine if “the evidence is such that a reasonable jury could return a verdict for the

nonmoving party.” Id. If the moving party does not have the ultimate burden of persuasion, the 

party “must either produce evidence negating an essential element of the nonmoving party’s claim 

or defense or show that the nonmoving party does not have enough evidence of an essential 

element to carry its ultimate burden of persuasion at trial.” Nissan Fire & Marine Ins. Co., Ltd. v. 

Fritz Cos., Inc., 210 F.3d 1099, 1102 (9th Cir. 2000); see also Duplantis v. Shell Offshore, Inc., 

948 F.2d 187, 190 (5th Cir. 1991). 

If the moving party “fails to meet this initial burden, the motion must be denied, regardless

of the nonmovant’s response.” Little, 37 F.3d at 1075. If the movant meets this burden, Rule 56

requires the opposing party to go beyond the pleadings and to show by affidavits, depositions,

answers to interrogatories, admissions on file, or other admissible evidence that specific facts

Case 6:23-cv-00342-JDK Document 45 Filed 07/10/24 Page 5 of 11 PageID #: 3584
6

exist over which there is a genuine issue for trial. EEOC v. Texas Instruments, Inc., 100 F.3d

1173, 1180 (5th Cir. 1996); Wallace v. Texas Tech. Univ., 80 F.3d 1042, 1046–47 (5th Cir.

1996). The nonmovant’s burden may not be satisfied by conclusory allegations, unsubstantiated

assertions, metaphysical doubt as to the facts, or a mere scintilla of evidence. Matsushita Elec.

Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986); Wallace, 80 F.3d at 1047; Little, 37 

F.3d at 1075.

When ruling on a motion for summary judgment, the Court is required to view all

justifiable inferences drawn from the factual record in the light most favorable to the nonmoving

party. Matsushita, 475 U.S. at 587. However, the Court will not, “in the absence of any proof,

assume that the nonmoving party could or would prove the necessary facts.” McCallum

Highlands, Ltd. v. Washington Capital Dus, Inc., 66 F.3d 89, 92 (5th Cir. 1995). 

DISCUSSION

I. Failure to Mitigate Damages

Defendant argues that Plaintiff failed to mitigate damages by failing to reasonably maintain 

and repair the roofs on the property before and after the storm. Plaintiff’s motion claims that it 

acted reasonably to mitigate any damage to the roofs and that Defendant has no evidence to the 

contrary. For instance, Plaintiff hired Cable Roofing to make minor repairs to the roof following 

the storm. (Doc. No. 20-4, at 6.) Plaintiff’s expert, Bryan Hill, documented and photographed 

“repairs made to the TPO roofing along the northern perimeter of the upper roof.” (Doc. No. 20-

3, at 9, 87.) And Plaintiff hired Mr. Hill to inspect the property in an effort to get Defendant to pay 

for the damages. (Doc. No. 20, at 5.) 

Texas recognizes mitigation of damages as an affirmative defense in breach of contract 

cases. See, e.g., Wyde v. Francesconi, 566 S.W.3d 890, 895 (Tex. App. 2018) (collecting cases). 

“The doctrine of mitigation of damages prevents a party from recovering for damages resulting 

Case 6:23-cv-00342-JDK Document 45 Filed 07/10/24 Page 6 of 11 PageID #: 3585
7

from a breach of contract that could be avoided by reasonable efforts on the part of the plaintiff.”

Id.; see also Gunn Infiniti, Inc. v. O’Byrne, 996 S.W.2d 854, 857 (Tex. 1999) (“Under mitigation 

principles, the long-standing law of [Texas] requires a claimant to mitigate damages if it can do so 

with ‘trifling expense or with reasonable exertions.’” (quoting Great Am. Ins. Co. v. North Austin 

Mun. Util. Dist. No. 1, 908 S.W.2d 415, 426 (Tex. 1995))).

Here, although Plaintiff claims it took some action to mitigate damages following the 

storm, Plaintiff did not provide any receipts or other documents showing when the alleged repairs 

were made or the scope of any repairs. The fact that Plaintiff waited over seven months to file the 

insurance claim raises additional questions about the nature and extent of any mitigative measures 

taken after the storm. See Doc. No. 27-2, at 2 (Church Mutual Acknowledgment of Claim Letter, 

Nov. 24, 2020). Further, the report of Defendant’s expert, David Hillner, indicates that the water 

damage to the buildings may be the result of inadequate maintenance of the roofing. See Doc. No. 

27-4, at 12. Accordingly, there are genuine issues of material fact which preclude summary 

judgment on Defendant’s mitigation of damages defense. See First Baptist Church Mineloa Texas 

v. Church Mutual Ins. Co., No. 6:20-CV-00403, Doc. No. 50, at 2–3 (E.D. Tex. Oct. 7, 2022) 

(denying plaintiff’s motion for summary judgment on mitigation of damages where roof repairs 

were made more than nine months after the date of loss, plaintiff failed to submit an insurance 

claim for over six months after the date of loss, and plaintiff had not submitted any documentation 

of expenses related to roof repairs after the date of loss); see also Marshall Mall Invs. LP v. Allied 

Prop. & Cas. Ins. Co., No. 2:21-CV-00109-RWS, 2023 WL 3686841, at *3 (E.D. Tex. Mar. 1, 

2023) (“Defendant has raised a genuine issue of material fact regarding mitigation by presenting 

evidence of prior roof leaks, workmanship issues, and deferred maintenance.”).

Case 6:23-cv-00342-JDK Document 45 Filed 07/10/24 Page 7 of 11 PageID #: 3586
8

II. Failure to Satisfy Conditions Precedent

Defendant claims that Plaintiff failed to comply with multiple conditions precedent to 

payment of benefits under the Policy. Although the parties’ arguments mainly focus on whether 

Plaintiff was required to fully repair the damaged roofs before seeking certain benefits under the 

policy, Defendant also maintains that plaintiff failed to comply with a separate precondition to 

performance—to give timely notice of the loss. (Doc. No. 27, at 17.) 

“A condition precedent is an event that must happen or be performed before a right can 

accrue to enforce an obligation.” James Constr. Grp., LLC v. Westlake Chem. Corp., 650 S.W.3d 

392, 404 (Tex. 2022) (citations omitted). Under Texas law, a prompt notice provision is a condition 

precedent to the insurer’s performance under the policy. Blanton v. Vesta Lloyds Ins. Co., 185 

S.W.3d 607, 611 (Tex. App. 2006). However, “an insured’s failure to timely notify its insurer of a 

claim or suit does not defeat coverage if the insurer was not prejudiced by the delay.” PAJ, Inc. v. 

Hanover Ins. Co., 243 S.W.3d 630, 636–37 (Tex. 2008); see also Matador Petroleum Corp. v. St. 

Paul Surplus Lines Ins. Co., 174 F.3d 653, 658 (5th Cir. 1999) (where notice of a claim is 

subsidiary to the event that triggers coverage, Texas courts require prejudice from an insured’s 

delay in giving notice).

Here, the Policy required Plaintiff to give Defendant “prompt notice” of the loss. (Doc. No. 

27-1, at 12.) But Plaintiff did not provide notice of the loss until seven months later. See Doc. No. 

27-2, at 2 (Church Mutual Acknowledgment of Claim Letter, Nov. 24, 2020). Plaintiff’s motion 

does not address the late notice issue at all. It is the movant’s burden on summary judgment to 

show the absence of a genuine issue of material fact and that the movant is entitled to summary 

judgment as a matter of law. See Fed. R. Civ. P. 56; Liquid Air Corp., 37 F.3d at 1075. 

Regardless, Brandon Hillner’s report indicates that inadequate maintenance of the roof may have 

caused or contributed to the roof leaks. And as noted above, Plaintiff has provided no evidence of 

Case 6:23-cv-00342-JDK Document 45 Filed 07/10/24 Page 8 of 11 PageID #: 3587
9

when and to what extent any maintenance or repairs of the roofs were made. Ultimately, whether

Defendant was prejudiced by the delay is a fact issue for the jury. See First Baptist Church Mineloa 

Texas, No. 6:20-CV-00403, Doc. No. 50, at 4 (minimal repairs and six-month delay in giving 

notice created fact issue regarding prejudice from delay). Accordingly, there are genuine issues of 

material fact which preclude summary judgment on Defendant’s failure to satisfy conditions 

precedent defense.

III. Prior Material Breach

Defendant asserts that Plaintiff’s failure to mitigate damages constitutes a prior material 

breach of the Policy. (Doc. No. 15, at ¶ 97). Plaintiff’s motion again asserts that it acted reasonably 

to mitigate any damage to the property and that Plaintiff has no evidence to the contrary, or in the 

alternative, that any failure to take mitigative measures only occurred after Defendant breached its 

duty to pay benefits under the Policy. (Doc. No. 20, at 6–7.)

Texas law recognizes prior material breach as an affirmative defense in contract cases. See, 

e.g., Blackstone Med., Inc. v. Phoenix Surgicals, L.L.C., 470 S.W.3d 636, 646 (Tex. App. 2015)

(“When one party to a contract commits a material breach of that contract, the other party is 

excused from any obligation to perform.”). Generally, whether a breach is material is a question 

of fact. Leonard v. Knight, 551 S.W.3d 905, 910 (Tex. App. 2018). “In determining the materiality 

of a breach, courts consider, among other things, the extent to which the non-breaching party will 

be deprived of the benefit that it reasonably could have anticipated from full performance.” Id. 

Here, as noted above, there are genuine fact issues regarding mitigation of damages. 

Further, the Policy required Plaintiff to give Defendant prompt notice of the loss. But Plaintiff did 

not provide notice of the loss until seven months later. Accordingly, there are genuine issues of 

material fact that preclude summary judgment on Defendant’s prior material breach defense. 

Case 6:23-cv-00342-JDK Document 45 Filed 07/10/24 Page 9 of 11 PageID #: 3588
10

IV. Deductible Offset

Defendant asserts that any recovery of benefits is subject to a deductible as stated in the 

Policy. (Doc. No. 15, at ¶ 98–99); (Doc. No. 27, at 18–19.) Plaintiff’s motion argues that deductible 

offset is not a true affirmative defense, or alternatively, that no benefits were paid, so no deductible 

is owed. (Doc. No. 20, at 7–8.)

Under Texas law, a deductible offset may be asserted as an affirmative defense in insurance 

cases. See Tex. Ins. Code § 554.002 (In a suit under an insurance contract, “an exception to 

coverage claimed by the insurer . . . constitutes an avoidance or an affirmative defense.”); Brown 

v. Am. Transfer & Storage Co., 601 S.W.2d 931, 936 (Tex. 1980) (“The right of offset is an 

affirmative defense. The burden of pleading offset and of proving facts necessary to support it are 

on the party making the assertion.”); see also Allstate Fire & Cas. Ins. Co. v. Alfred, No. 09-18-

00357-CV, 2019 WL 6205154, at *2 (Tex. App. Nov. 21, 2019) (same).

Here, Defendant’s answer and response to the motion for summary judgment reference the 

Deductible Provision as stated in the Policy.2 The Property Coverage Part Declarations Page states 

that the Policy deductible is $5,000, except the deductible is $10,000 when the covered loss is for 

windstorm or hail damage.3 To the extent that any recovery of benefits under the Policy are subject 

2 The Deductible Provision reads:

In any one occurrence of covered loss or damage (hereinafter referred to as loss), we will first reduce 

the amount of loss if required by the Coinsurance Condition or the Agreed Value Optional Coverage. 

If the adjusted amount of loss is less than or equal to the Deductible, we will not pay for that loss. 

If the adjusted amount of loss exceeds the Deductible, we will then subtract the Deductible from the 

adjusted amount of loss, and will pay the resulting amount or the Limit of Insurance, whichever is 

less.

(Doc. No. 27-1, at 21.) 

3 Page 3 of the Property Coverage Part Declarations Page reads: 

ITEM 2. DEDUTIBLE – OCCURRENCE: 5,000 EXCEPT AS FOLLOWS:

$10,000 WINDSTORM OR HAIL A 149.1 – APPLIES TO PREM.: 001 BLDG.: 001

Case 6:23-cv-00342-JDK Document 45 Filed 07/10/24 Page 10 of 11 PageID #:

3589
11

to a deductible, Defendant is entitled to present that evidence to a jury. Accordingly, there are 

genuine issues of material fact that preclude summary judgment on Defendant’s deductible offset 

defense.

CONCLUSION

For the reasons stated above, the court RECOMMENDS that Defendants’ partial motion 

for summary judgment (Doc. No. 20) be DENIED. Within fourteen (14) days after receipt of the 

Magistrate Judge’s Report, any party may serve and file written objections to the findings and 

recommendations contained in the Report. A party’s failure to file written objections to the 

findings, conclusions, and recommendations contained in this Report within 14 days after service 

shall bar that party from de novo review by the district judge of those findings, conclusions, and 

recommendations and, except upon grounds of plain error, from attacking on appeal the 

unobjected-to proposed factual findings and legal conclusions accepted and adopted by the district 

court. Douglass v. United Servs. Auto. Ass’n, 79 F.3d 1415, 1430 (5th Cir. 1996) (en banc), 

superseded on other grounds by statute, 28 U.S.C. § 636(b)(1) (extending the time to file 

objections from ten to fourteen days).

$10,000 WINDSTORM OR HAIL A 149.1 – APPLIES TO PREM.: 001 BLDG.: 002.”

Id. at 8. 

So ORDERED and SIGNED this 10th day of July, 2024.

Case 6:23-cv-00342-JDK Document 45 Filed 07/10/24 Page 11 of 11 PageID #:

3590