No Response to Motion Guarantees Loss
Post 5055
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In Great Little Minds Academy, LLC v. Atlantic Casualty Insurance Company, Civil Action No. 4:23-CV-1875, United States District Court, S.D. Texas, Houston Division (April 17, 2025) Defendant Atlantic Casualty Insurance Company’s (“Atlantic”) moved for summary judgment.
BACKGROUND
Atlantic’s summary judgment evidence establishes that GLMA purchased a commercial lines insurance policy from Atlantic (“the policy”) that contained the following coverage exclusion (“the freeze exclusion”):
“2. We will not pay for loss or damage caused by or resulting from any of the following: …
"g. Water, other liquids, powder or molten material that leaks or flows from plumbing, heating, air conditioning or other equipment (except fire protective systems) caused by or resulting from freezing, unless:
"(1) You do your best to maintain heat in the building or structure; or
"(2) You drain the equipment and shut off the supply if the heat is not maintained.”
When Winter Storm Uri struck Houston in February of 2021, the property insured by the policy suffered water damage after a pipe froze and burst. At the time of the storm, the insured property was vacant and had been vacant since its acquisition by GLMA in November of 2020. The insured property used two natural gas furnaces for central heating, but GLMA had not activated natural gas service for the insured property when Uri hit. Moreover, no one had shut off the water supply or drained the pipes at the insured property to prepare for the storm.
GLMA made a claim on the policy; and Atlantic denied the claim, citing the freeze exclusion. GLMA then sued.
SUMMARY JUDGMENT
The movant’s initial summary judgment burden depends on whether the movant will bear the burden of proof at trial. The movant may meet its burden by pointing out the absence of evidence supporting the non-movant’s case. If the movant meets its initial burden, the non-movant must go beyond the pleadings and designate specific facts showing that there is a genuine issue of material fact for trial.
BREACH OF CONTRACT
Atlantic’s evidence shows that the policy’s freeze exclusion unambiguously bars coverage for GLMA’s claim. On the record before the court, GLMA’s claim for breach of the insurance contract failed because the evidence conclusively showed that Atlantic did not breach the insurance contract.
In Texas insurance policies are construed in accordance with the same rules as contracts generally. If the insurer relies on a coverage exclusion to deny coverage, then it bears the burden of proving the applicability of the exclusion. Once the insurer proves that an exclusion applies, the burden shifts back to the insured to show that the claim falls within an exception to the exclusion. Coverage exclusions are construed narrowly, and any ambiguities are resolved in the insured’s favor.
Atlantic’s evidence showed that the water damage to GLMA’s insured property was caused by a frozen pipe that burst, triggering the freeze exclusion and shifting the burden to GLMA to prove that at least one of the two listed exceptions to the freeze exclusion applies. GLMA did not respond to Atlantic’s motion for summary judgment, so it consequently failed to carry its burden to create a genuine issue of material fact on the question of whether one of the exceptions applies.
EXTRACONTRACTUAL CAUSES OF ACTION
GLMA’s numerous extracontractual causes of action also failed because the evidence showed that Atlantic did nothing more than promptly deny a claim that was not covered under the policy. The motion for summary judgment filed by Defendant Atlantic Casualty Insurance Company was granted.
ZALMA OPINION
Insurance policies are contracts and motions for summary judgment are designed to save the courts and the litigants the time necessary to resolve their dispute by trial. Atlantic’s motion established that the loss resulted from frozen pipes that burst because the insured failed to heat the structure or drain the pipes. since there was no breach of contract there could be no claims for bad faith or extracontractual damages. GLMA failed to respond because there were no facts in its favor and the attempt to scare Atlantic into a settlement did not work.
(c) 2025 Barry Zalma & ClaimSchool, Inc.
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Happy Law Day
ZIFL – Volume 30, Issue 9 – May 1, 2026
Read the full article at https://www.linkedin.com/pulse/zalmas-insurance-fraud-letter-may-1-2026-barry-zalma-esq-cfe-2tywc, see the video at at and at https://zalma.com/blog plus more than 5300 posts.
THE SOURCE FOR THE INSURANCE FRAUD PROFESSIONAL
ZIFL – Volume 30, Issue 9 – May 1, 2026
Zalma’s Insurance Fraud Letter (ZIFL) continues its 30th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year and is written by Barry Zalma.
DOJ Creates National Fraud Enforcement Division
Will the Feds Take on Insurance Fraud? Possibly as Part of a National Anti-Fraud Effort
On April 7, 2026, the Acting Attorney General, Todd Blanche, issued a memorandum establishing the Department of Justice National Fraud Enforcement Division (NFED). The memo describes an ambitious, but perhaps redundant, vision for this ...
When Abalone Died As a Result of Multiple Causes The Efficient Proximate Cause Requires Payment
Post number 5345
Read the full article at https://www.linkedin.com/pulse/efficient-proximate-cause-doctrine-saves-claim-barry-zalma-esq-cfe-yndlc, see the video at and at and at https://zalma.com/blog plus more than 5300 posts.
In American Abalone Farms, LLC v. Star Insurance Company et al., H052643, California Court of Appeals, Sixth District (April 27, 2026) the Court of Appeals dealt with an insurance coverage issue that required application of the efficient proximate cause doctrine.
FACTS
American Abalone Farms, LLC ("American Abalone" ) operates an aquaculture farm in Santa Cruz County, California, raising abalone in tanks. In August 2020, the CZU Lightning Complex Fires led to a prolonged power outage and road closures near the farm. As a result, the farm’s water pumps failed, causing the death of most of the ...
Breach of a Specific Condition Precedent Is a Complete Defense
See the video at and at and at https://zalma.com/blog plus more than 5300 posts.
In United Services Automobile Association and State Farm Mutual Automobile Insurance Company v. Anthony Wenzell, 2026 CO 25 (Colo. Apr. 27, 2026) Anthony Wenzell was rear-ended in a car accident. He had a significant prior 2014 accident that required back surgery.
Wenzell claimed underinsured-motorist (UIM) benefits under three policies: (1) the tortfeasor’s liability policy, (2) his own primary UIM policy with State Farm, and (3) an excess UIM policy issued by USAA (under his brother’s policy, which contained an “other insurance” clause making USAA’s coverage excess over any collectible insurance).
After receiving the claims, both USAA and State Farm repeatedly requested that Wenzell execute comprehensive medical-release authorizations so they could obtain his full medical records and ...
It is Fraud to Make the Same Claim Twice
Read the full article at https://www.linkedin.com/pulse/fraud-make-same-claim-twice-barry-zalma-esq-cfe-c4g8c and at https://zalma.com/blog.
Chutzpah: After Being Paid for a New Roof Insured Makes Second Claim For Same Damages
Post number 5347
No One is Entitled to be Paid for the Same Loss Twice
In Mohammed Ali Khalili v. State Farm Lloyds, No. 14-25-00611-CV, Court of Appeals of Texas (April 30, 2026) Khalili maintained a State Farm Lloyds homeowners insurance policy for decades. In 2008 he filed a roof-damage claim; State Farm paid him to replace the entire roof (shingles and gutters). Khalili never replaced the roof and repeated his claim.
BACKGROUND
In 2021 he filed a second roof claim. State Farm’s inspectors found the roof “very old” with extensive non-storm-related damage. The claim was denied because (1) the damage did not exceed the deductible and (2) State Farm had already paid for a full roof replacement.
PROCEDURAL HISTORY
State Farm filed motion for summary...
It is Fraud to Make the Same Claim Twice
Read the full article at https://www.linkedin.com/pulse/fraud-make-same-claim-twice-barry-zalma-esq-cfe-c4g8c and at https://zalma.com/blog.
Chutzpah: After Being Paid for a New Roof Insured Makes Second Claim For Same Damages
Post number 5347
No One is Entitled to be Paid for the Same Loss Twice
In Mohammed Ali Khalili v. State Farm Lloyds, No. 14-25-00611-CV, Court of Appeals of Texas (April 30, 2026) Khalili maintained a State Farm Lloyds homeowners insurance policy for decades. In 2008 he filed a roof-damage claim; State Farm paid him to replace the entire roof (shingles and gutters). Khalili never replaced the roof and repeated his claim.
BACKGROUND
In 2021 he filed a second roof claim. State Farm’s inspectors found the roof “very old” with extensive non-storm-related damage. The claim was denied because (1) the damage did not exceed the deductible and (2) State Farm had already paid for a full roof replacement.
PROCEDURAL HISTORY
State Farm filed motion for summary...
What Must be Done after Notice of a Claim is Received by the Insurer
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A first party property policy does not insure property: it insures a person, partnership, corporation or other entity against the risk of loss of the property. Before an insured can make a claim for indemnity under a policy of first party property insurance the insured must prove that there was damage to property the risk of loss of which was insured by the policy. The obligation imposed on the insured ...
