Time Bar Defeats Suits Against Insurer
Post 5247
Read the full article at https://lnkd.in/gupyuD33, see the video at https://lnkd.in/gSV8kf8S and at https://lnkd.in/gBrxCRDt, and at https://zalma.com/blog plus more than 5200 posts.
In Kevin J. Labudde v. The Phoenix Insurance Company, No. 7:21-CV-197-BO-BM, United States District Court, E.D. North Carolina, Southern Division (December 12, 2025) Defendant The Phoenix Insurance Company (Phoenix) moved for summary judgment, moved to exclude the testimony of Donald Dinsmore and Jerome Redmond, and moved to seal certain documents.
FACTS
Kevin J. Labudde’s home was damaged by Hurricane Matthew on October 8, 2016. He discovered additional mold damage in January 2017 and hired a contractor, who filed an insurance claim with Phoenix Insurance Company. Phoenix found hail damage (covered by the policy) but determined the cost was below the deductible and denied coverage for water intrusion and mold, citing policy exclusions for seepage.
Second Claim:
On December 13, 2019, water again intruded into the property. Labudde filed a second claim. Phoenix’s adjuster, Erin Crane, could not determine the water’s source and hired Vertex Engineering. Vertex concluded that the damage was due to construction defects, not a covered peril. Phoenix denied coverage for water intrusion but paid for mold remediation (up to the policy limit) and roof replacement due to hail.
Lawsuit:
Labudde sued Phoenix on September 9, 2021, alleging breach of contract, unfair claims settlement practices under North Carolina’s Unfair and Deceptive Trade Practices Act (UDTPA), and common law bad faith.
LAW – STATUTE OF LIMITATIONS
Breach of Contract & Bad Faith:
Both claims have a three-year statute of limitations, starting from the date of loss. Since the initial damage occurred in 2016 and the lawsuit was filed in 2021, these claims are time-barred.
Unfair Claims Settlement Practices (UDTPA):
This claim has a four-year statute of limitations, starting when the insurer denies coverage. The court found the claim time-barred as to the 2017 claim, but not clearly time-barred for the 2019 claim, so it allowed the 2019-related UDTPA claim to proceed.
Unfair and Deceptive Trade Practices (UDTPA)
To prove a UDTPA violation, a plaintiff must show:
1. An unfair or deceptive act or practice
2. In or affecting commerce
3. That proximately caused injury.
A practice is unfair when it offends established public policy as well as when the practice is immoral, unethical, oppressive, unscrupulous, or substantially injurious to consumers. A practice is deceptive if it has the capacity or tendency to deceive; proof of actual deception is not required.
If substantial aggravating circumstances accompany a breach of contract, then those circumstances can create a UDTPA claim.
The court found that Phoenix’s investigation and communication regarding the 2019 claim were adequate. Phoenix hired an outside expert, considered Labudde’s input, and communicated its decision. There was no evidence that Phoenix misled the engineer, withheld information, or failed to respond in a timely manner.
Expert Testimony
The court excluded portions of the plaintiff’s expert testimony on the UDTPA claim, finding it amounted to legal conclusions rather than helpful expert opinion.
Motion to Seal
The court granted Phoenix’s motion to seal certain documents containing proprietary business information, finding the need for confidentiality outweighed the public’s right of access.
CONCLUSION
The court granted summary judgment for Phoenix on all claims except the UDTPA claim related to the 2019 insurance claim, which was not clearly time-barred but ultimately failed on the merits. The court also granted the motion to seal certain documents and excluded some expert testimony.
ZALMA OPINION
Insurance claims created by a contractor rather than an insurance professional like a Public Insurance Adjuster or a lawyer, are often questionable. By the time Phoenix was sued the statute of limitations of the first claim had run and the second claim was not due to an insured against peril. When an insured is upset with the result of a claim he or she should consult with either a public insurance adjuster or an attorney. If the insurance professional suggests the claim denial was wrong then, before the running of the statute of limitations or a private limitation of action provision and then retain counsel to sue promptly. The summary judgment was granted because the insured did not follow that advice.
(c) 2025 Barry Zalma & ClaimSchool, Inc.
Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos.
Subscribe to my substack at https://lnkd.in/gmmzUVBy
Go to X @bzalma; Go to the InsuranceClaims Library – https://lnkd.in/gwEYk.
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
Read the full article at https://lnkd.in/gzvvdkMZ and at https://zalma.com/blog.
Below you will read from this post until you reach the the end of this blog post as the free part of an Excellence in Claims Handling post. To read the full article and receive all articles for members of Excellence in Claims Handling you should consider joining as a paid member to get full access to articles for members only, to our news, analysis, insurance coverage, claims, insurance fraud and insurance webinars, by clicking at the subscription link below.
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 ...
