To Plead & Prove a Tort of Bad Faith Claim There Must Be Evidence
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Refusal to Pay the Amount the Insured Deems Appropriate Is Nothing More than a Good Faith Coverage Dispute.
Posted on March 30, 2022 by Barry Zalma
In Vernon Humphries and Rebecca Humphries v. State Farm Lloyds, Civil Action No. 3:20-CV-01163-X, United States District Court, N.D. Texas, Dallas Division (March 9, 2022) State Farm Lloyd’s (State Farm) successfully moved the USDC for partial summary judgment on Vernon and Rebecca Humphries’ suit for breach of the duty of good faith and fair dealing and related statutory claims.
FACTUAL BACKGROUND
In October 2019, Vernon and Rebecca Humphries submitted a claim to State Farm under their homeowners insurance policy for damages sustained in a tornado. Shortly thereafter, an independent adjuster named Chris Chivers inspected the property, confirming that wind had blown the chimney into the back slope of the roof. Based on his inspection, Chivers wrote a repair estimate of $51,299.76. On the same day, State Farm claim representative Ed Hand inspected for personal property damage. Hand wrote a personal contents inventory summary totaling $3,162.88, and, after subtracting depreciation, State Farm issued $2,117.82 to the Humphries for personal property damage.
In January 2020, the Humphries sent State Farm a Texas Deceptive Trade Practices Act (DTPA) demand and a Texas Insurance Code Chapter 542A notice letter, alleging actual damages of $120,370.41, and with a total DTPA demand of $365,511.23. In response, State Farm scheduled a second inspection and asked the Humphries to send the estimate that provided the basis for the $120,370.41 in actual damages, but the Humphries did not do so. In March 2020, State Farm claim representative Bryon Turner conducted a second inspection of the property. Based on additional damage he found, Turner wrote a new repair estimate of $66,177.38, and State Farm issued a supplemental payment to the Humphries to make up for the discrepancy between State Farm’s first and second estimate. At that time, State Farm also told the Humphries that, based on the status of repairs, it would continue paying for the Humphries temporary housing until June 10, 2020.
Unsatisfied, the Humphries filed suit against State Farm in Texas state court in April, 2020, and State Farm removed the case to Federal Court. Since filing suit, the Humphries changed the amount they claim is necessary for repairs five times based on different estimates by their expert, Duane Smith, settling on $247,138.71, more than double their original claim. This increase seems to be due in significant part to a report they obtained from an electrician after filing suit, which claims that rewiring is necessary throughout the entire house. Meanwhile, at Mr. Humphries’s deposition, the Humphries produced an $80,000 contract between the Humphries and a contractor, HNL. According to Mr. Humphries, this contract covers all necessary repairs as well as some additional items, including installing an outdoor pergola that the Humphries did not have before the storm. For its part, State Farm has also changed its estimate since this suit was filed and it conducted a further inspection, arriving at $70,200.90. State Farm issued another supplemental payment reflecting this new estimate.
Analysis
The Humphries predicate their claim of bad faith on their characterization of State Farm’s investigation as outcome-oriented and pretextual. But the Humphries “[do] not provide any expert testimony, proof of standard industry practice, or legal authority” whatsoever to support their claim that State Farm’s investigation was not conducted adequately and in good faith. For example, the Humphries argue that the length of time the adjuster spent on the initial inspection was unreasonably short, but point to no evidence indicating that it was at all atypical by State Farm or industry-wide standards. Similarly, they contend that State Farm should have sent an engineer rather than an adjustor to conduct the first inspection because structural damage was involved and should also have at some point sent an electrician, but fail to allege that State Farm’s decisions represented a deviation from standard practice.
While the Humphries characterize Mr. Humphries’s lack of expertise as a feature of their argument, it is in fact a flaw. For there is no factual or legal basis to equate Mr. Humphries’ opinion with expert testimony or reasonable industry standards capable of challenging the reliability of an adjustor’s work. Allowing an interested layman’s negative opinion of a technical investigation to serve as adequate evidence of the investigator’s bad faith would be deeply problematic.
Here the Humphries present no investigative standards against which State Farm’s investigation can be judged deficient, much less purposefully so. In sum, the Humphries fail to point to any evidence suggesting that State Farm’s refusal to pay the Humphries the amount they deem appropriate reflects anything more than a good faith coverage dispute.
Accordingly, the Court granted State Farm’s motion for partial summary judgment on the Humphries’ common law breach of the duty of good faith and fair dealing and related statutory claims. The breach of contract action will proceed.
ZALMA OPINION
It takes more than an upset insured to bring a case for bad faith. Although Mr. Humphries was certain the adjuster was inadequate that is not evidence any more than his lack of expertise would allow him to prove a medical malpractice claim even though he knew nothing about medicine. This case teaches that to prove a bad faith claim it is necessary to present expert testimony that the insurer failed to act within the custom and practice of the industry or acted wrongfully and in bad faith. Rather, the fact that State Farm raised the amounts it paid to the Humphries when evidence was presented to them, they immediately and in good faith paid.
(c) 2022 Barry Zalma & ClaimSchool, Inc.
Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 54 years in the insurance business. He is available at http://www.zalma.com and [email protected].
Over the last 54 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created a library of books and other materials to make it possible for insurers and their claims staff to become insurance claims professionals.
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Convicted Criminal Seeks to Compel Receiver to Protect his Assets
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Deerpass Trucking, an interstate motor carrier, leased the tractor from Deerpass Farms Services, LLC, and hauled cargo for Conserv FS, Inc. under a trailer interchange agreement. The tractor was insured by Great West Casualty Company with a $1 million policy limit, while the trailer was insured by Nationwide Agribusiness Insurance Company with a $2 million ...
Opiod Producer Seeks Indemnity from CGL Insurers
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Read the full article at https://lnkd.in/guNhStN2, see the full video at https://lnkd.in/gYqkk-n3 and at https://lnkd.in/g8U3ehuc, and at https://zalma.com/blog plus more than 5250 posts.
Insurers Exclude Damages Due to Insured’s Products
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KEY FACTS
Beginning as early as 2014, thousands of opioid suits were filed by governments, third parties, and individuals alleging harms tied to opioid manufacturing and marketing.
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Passover for Americans
Posted on February 19, 2026 by Barry Zalma
“The Passover Seder For Americans”
For more than 3,000 years Jewish fathers have told the story of the Exodus of the enslaved Jews from Egypt. Telling the story has been required of all Jewish fathers. Americans, who have lived in North America for more than 300 years have become Americans and many have lost the ability to read, write and understand the Hebrew language in which the story of Passover was first told in the Torah. Passover is one of the many holidays Jewish People celebrate to help them remember the importance of G_d in their lives. We see the animals, the oceans, the rivers, the mountains, the rain, sun, the planets, the stars, and the people and wonder how did all these wonderful things come into being. Jews believe the force we call G_d created the entire universe and everything in it. Jews feel G_d is all seeing and knowing and although we can’t see Him, He is everywhere and in everyone.We understand...
Passover for Americans
Posted on February 19, 2026 by Barry Zalma
Read the full article at https://www.linkedin.com/pulse/passover-americans-barry-zalma-esq-cfe-5vgkc.
“The Passover Seder For Americans”
For more than 3,000 years Jewish fathers have told the story of the Exodus of the enslaved Jews from Egypt. Telling the story has been required of all Jewish fathers. Americans, who have lived in North America for more than 300 years have become Americans and many have lostthe ability to read, write and understand the Hebrew language in which the story of Passover was first told in the Torah.
Passover is one of the many holidays Jewish People celebrate to help them remember the importance of G_d in their lives. We see the animals, the oceans, the rivers, the mountains, the rain, sun, the planets, the stars, and the people and ...
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Posted on January 30, 2026 by Barry Zalma
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When Experts for Both Sides Agree That Two Causes Concur to Cause a Wall to Collapse Exclusion Applies
In Lido Hospitality, Inc. v. AIX Specialty Insurance Company, No. 1-24-1465, 2026 IL App (1st) 241465-U, Court of Appeals of Illinois (January 27, 2026) resolved the effect of an anti-concurrent cause exclusion to a loss with more than one cause.
Facts and Background
Lido Hospitality, Inc. operates the Lido Motel in Franklin Park, Illinois. In November 2020, a windstorm caused one of the motel’s brick veneer walls to collapse. At the time, Lido was insured under a policy issued by AIX Specialty Insurance Company which provided coverage for windstorm damage. However, the policy contained an exclusion for any loss or damage directly or indirectly resulting from ...
