Kenneth R. Cade v. State Farm Lloyds

NO. 12-23-00285-CV

IN THE COURT OF APPEALS

TWELFTH COURT OF APPEALS DISTRICT

TYLER, TEXAS

KENNETH R. CADE, § APPEAL FROM THE 173RD
APPELLANT

V. § JUDICIAL DISTRICT COURT

STATE FARM LLOYDS,
APPELLEE § HENDERSON COUNTY, TEXAS

MEMORANDUM OPINION

Kenneth R. Cade appeals the trial court’s order granting summary judgment against him
and in favor of State Farm Lloyds. He asserts nine issues on appeal. We affirm.

BACKGROUND
On April 18, 2019, a windstorm blew a large tree onto a portion of the house at 315
Noonday Drive in Chandler, Texas. The house was owned by Kenneth and Barbara Cade 1 and
insured, along with its contents, by State Farm. Following notification of the claim, State Farm
initiated several inspections of the property. State Farm’s inspectors determined that the fallen
tree caused only a portion of the damage to the house. State Farm issued payment for the repairs
it deemed caused by the tree and windstorm totaling approximately $30,000. Approximately
eighteen months after the windstorm, Cade mentioned his personal property for the first time.
He claimed that several items of personal property inside the house were damaged or destroyed.

1
Barbara Cade passed away in December 2020.
Cade also urged that the house was a total loss and that State Farm failed to adequately
compensate him for it.
The Cades filed suit against State Farm on October 22, 2020, five days after selling the
house, asserting claims for breach of contract and violations of the Texas Insurance Code and
Deceptive Trade Practices Act. State Farm later filed two traditional motions for summary
judgment, one for the personal property claim and one for the real property claim. In the
motions, State Farm alleged that (1) any further damage to the house was not caused by the
windstorm, (2) the house contained no personal property of value, and (3) the Cades failed to
comply with certain conditions precedent in the policy. In response, Cade argued that State Farm
failed to prove it was prejudiced by any failure to comply with conditions precedent. Following
a hearing, the trial court granted both motions without specifying the grounds for its ruling. This
appeal followed.

SUMMARY JUDGMENT
In all nine issues, Cade contends the trial court erred in granting summary judgment in
favor of State Farm.
Standard of Review and Applicable Law
Because summary judgment is a question of law, a trial court’s summary judgment
decision is reviewed de novo. See Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex.
2005); Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003);
McMahon Contracting, L.P. v. City of Carrollton, 277 S.W.3d 458, 467–68 (Tex. App.—Dallas
2009, pet. denied). The standard of review for a traditional summary judgment motion pursuant
to Texas Rule of Civil Procedure 166a(c) is threefold: (1) the movant must show there is no
genuine issue of material fact and he is entitled to judgment as a matter of law; (2) in deciding
whether there is a disputed, material fact issue precluding summary judgment, the court must
take as true evidence favorable to the nonmovant; and (3) the court must indulge every
reasonable inference from the evidence in favor of the nonmovant and resolve any doubts in the
nonmovant’s favor. See TEX. R. CIV. P. 166a(c); Nixon v. Mr. Prop. Mgmt. Co. Inc., 690 S.W.2d
546, 548–49 (Tex. 1985); Montgomery v. Kennedy, 669 S.W.2d 309, 311 (Tex. 1984);
Hightower v. Baylor Univ. Med. Ctr., 251 S.W.3d 218, 221–22 (Tex. App.—Dallas 2008, pet.
struck). We are not required to ascertain the credibility of affiants or to determine the weight of

2
evidence in the affidavits, depositions, exhibits, and other summary judgment proof. See
Gulbenkian v. Penn, 252 S.W.2d 929, 932 (Tex. 1952); Palestine Herald-Press Co. v. Zimmer,
257 S.W.3d 504, 508 (Tex. App.—Tyler 2008, pet. denied).
Further, all theories in support of or in opposition to a motion for summary judgment
must be presented in writing to the trial court. See TEX. R. CIV. P. 166a(c). If the trial court’s
order granting summary judgment does not specify the grounds relied on for its ruling, we will
affirm it if any of the theories advanced are meritorious. State Farm Fire & Cas. Co. v. S.S.,
858 S.W.2d 374, 380 (Tex. 1993).
When a party moves for summary judgment on multiple grounds and the trial court’s
summary judgment order does not specify the ground or grounds upon which it was based, the
appealing party must negate all possible grounds upon which the order could have been based.
See Star–Telegram, Inc. v. Doe, 915 S.W.2d 471, 473 (Tex. 1995); Jarvis v. Rocanville Corp.,
298 S.W.3d 305, 313 (Tex. App.—Dallas 2009, pet. denied). This can be accomplished by
asserting a separate issue challenging each possible ground. Jarvis, 298 S.W.3d at 313.
Alternatively, a party can raise an issue which broadly asserts that the trial court erred by
granting summary judgment and within that issue provide argument negating all possible
grounds upon which summary judgment could have been granted. See Star–Telegram, 915
S.W.2d at 473; Jarvis, 298 S.W.3d at 313. This is sometimes referred to as a Malooly issue. 2
See e.g., Rangel v. Progressive Cty. Mutual Insurance Company, 333 S.W.3d 265, 269–70
(Tex. App.—El Paso 2010, pet. denied). It is not sufficient to merely raise a general issue as the
appellant must also support the issue with argument and authorities challenging each ground. Id.
at 270 (citing Cruikshank v. Consumer Direct Mortgage, Inc., 138 S.W.3d 497, 502–03 (Tex.
App.—Houston [14th Dist.] 2004, pet. denied) (a general Malooly issue statement only preserves
a complaint if the ground challenged on appeal is supported by argument)). If the appellant fails
to challenge each ground on which summary judgment could have been granted, we must uphold
the summary judgment on the unchallenged ground. Star–Telegram, Inc., 915 S.W.2d at 473;
Jarvis, 298 S.W.3d at 313.
To prove a breach of contract claim, the following elements must be satisfied: 1) a valid
contract, 2) the plaintiff performed or tendered performance, 3) the defendant breached the

2
Malooly Bros., Inc. v. Napier, 461 S.W.2d 119, 121 (Tex. 1970).

3
contract, and 4) the plaintiff was damaged by the breach. Critchfield v. Smith, 151 S.W.3d 225,
233 (Tex. App.—Tyler 2004, pet. denied).
House/Dwelling Claim
In his first and seventh issues, Cade asserts the trial court erred in granting State Farm’s
summary judgment motion on the house/dwelling claim. Specifically, in his seventh issue, he
claims the summary judgment motion did not conclusively negate an essential element of Cade’s
breach of contract claim. 3
In its motion for summary judgment, State Farm argued that Cade failed to comply with a
specific policy condition requiring a sworn proof of loss. It also contended that the evidence
established that any further damages to the house were not caused by the tree and windstorm and
instead resulted from a lack of maintenance. Therefore, according to State Farm, it paid for what
was covered under the policy and did not breach the contract. State Farm attached reports and
affidavits from its adjusters, inspectors, and experts to its motion for summary judgment. It also
included Cade’s deposition testimony. Cade attached no additional evidence to his response.
State Farm adjuster Stephen Stinnett conducted an initial inspection on May 20 and 22,
2019. Barbara was present the first day, while Kenneth was not present either day. Stinnett went
inside the home on May 20 to investigate damage to the interior potentially caused by the
windstorm. Based on his observations, Stinnett concluded that the house had been abandoned
for many years. Specifically, Stinnett observed the following:

The pier and beam foundation of the house was rotted. The walls and framing of the house were
rotted. Ceilings in many rooms of the house were collapsing and same was not due to the
04/18/2019 windstorm. There was a great deal of nasty debris scattered throughout the entire
house. The house was filled with stray cats and I noticed an old, overflowing litter box. They
appeared to be feral cats. The house was in bad shape and had been neglected for quite some time.
I did not see or observe any personal property, including any furniture, of any significant monetary
value inside the house. Everything inside the house was simply in very bad shape and little more
than junk. The house was in a deplorable condition, inside and out.

Stinnett also took photographs of the inside and outside of the home. Notwithstanding the
dilapidated nature of the house, Stinnett found covered damage and State Farm issued a check
for $22,529.49 based on his findings. Cade returned this check to State Farm.

3
The argument on these two issues is lacking; however, we generously construe Cade’s brief as attacking
all possible grounds for summary judgment.

4
Brandon Foard, another State Farm adjuster, inspected the house on April 3, 2020.
Neither Kenneth nor Barbara was present; however, Robbie Reece with Reece Roofing and
Remodeling attended. Foard conducted an inspection of the house’s exterior and noted damage
to the front, left, and right elevations. Foard also made the following notes:

I also noted the rear elevation and addition on the north/left side of the house were not damaged by
the 4/18/2019 windstorm. Significantly, I further noted that the house had a lot of pre-existing
damage caused by rot, wear, tear, deterioration, lack of maintenance, long-term settlement, and
much neglect. I observed feral cats going in and out of broken windows and crawlspace areas. It
was obvious to me that no one had lived in the house for a long time and that the house had been
in a deplorable condition for many years.

Foard discussed Reece’s repair estimate with Reece at the inspection. Reece’s estimate was for a
lump sum of $127,500. According to Foard, Reece was unable to break down the estimate into
line items. Therefore, Foard could not reconcile Reece’s repair estimate. However, based on
Foard’s inspection, State Farm issued a supplemental payment of $7,614.79 and a statutory
interest payment of $646.74. Cade returned this check as well.
Brian Sattler, an engineer with EFI Global, Inc., inspected the interior and exterior of the
home on March 28, 2021, and prepared a report. While Sattler did observe damage caused by
the windstorm and tree, he also observed the following damage unrelated to the windstorm:

Structural damage to the wall framing due to the tree impact was limited to the framing around the
front door. There was no evidence observed to suggest racking of the structure due to tree impact,
as was alleged by the insured’s engineer.

Water damage to the drywall was observed in front room and kitchen area, consistent with being
causally related to the tree impact. Additional water damage was observed in the north room and
bedroom closet, away from the location of tree impact. No evidence of tree impact damage was
observed to the composition shingle roof covering over these portions of the residence, indicating
water intrusion in these areas was unrelated to the tree impact.

The front roof slope was covered with multiple layers of tarps and was not able to be directly
examined during EFI’s site visit. It is assumed that the damage to the front roof slope is consistent
with tree impact, as reported. Expected repairs to this portion of the roof would include replacing
damaged rafters and braces, replacing the sheathing, and replacing the shingles. There was no
evidence of damage to the shingles on the remaining portion of the roof, and replacement of the
shingles can be limited to the front slope and the east-to-west ridge cap shingles.

While structural repairs necessary as a result of the reported tree impact are limited to the front
wall of the residence and the front roof slope, years or possibly decades of neglect and deferred
maintenance have resulted in severe rot and deterioration throughout the property. The wood
siding and wall framing was rotted/deteriorated completely through in numerous locations,
especially at the east perimeter of the residence, away from the tree impact location. As a result, it
may be difficult to find a reputable contractor willing to perform repairs while keeping a scope
limited to the observable tree impact damage.

5
Severe damage to the interior of the residence and the contents was observed due to an
apparent/posssible case of animal hoarding. Nearly every surface within the residence was
covered with animal feces and urine. Additionally, the apparent remains of several dead cats and
rodents were found in the residence. It was also observed that apparent vultures were accessing
the interior of the residence through a hole in the siding at the east perimeter of the structure,
unrelated to the tree impact.

As a result, Sattler concluded that the structural repairs necessary due to the tree impact were
limited to the front of the house and did not include the entire house.
Gary Boyd, a roofer with Boyd, Inc., inspected the house on the same day as Sattler. In
his report, Boyd opines that “[t]he dwelling has not been habitable by human beings for a long
time. The dwelling was beyond saving or repairing well before the tree fell on it.” He also
determined that the “dwelling is unrepairable due to age, wear and tear, deferred maintenance,
dry rot and long term animal infestation.”
In his deposition, Cade maintained that his wife lived at the home. However, he had not
lived there since 2008, when he moved to his mother’s house after she died. Cade testified that
Barbara lived at both the house at 315 Noonday Drive and an adjacent house at 305 Noonday
Drive. He claimed that she was “trying to take care of both” homes, so she alternated staying
between the two homes. There had been no water service to the home for at least seven years,
and Cade admitted to having no personal knowledge as to the home’s pre-storm condition.
State Farm also attached a copy of the insurance policy as summary judgment evidence.
The policy detailed that it did not cover damages for deterioration, neglect, inadequate
maintenance, or vermin, rodents, or domestic animals. The summary judgment evidence did
not include either an affidavit or estimate from Reece or an expert report on Cade’s behalf.
Based on the evidence before the trial court, State Farm conclusively established that it
paid $30,791.02 to repair the house for covered losses resulting from the windstorm. The
evidence also showed that any further damages to the house were not caused by the windstorm
but from neglect and lack of maintenance, which the policy did not cover. Cade presented no
evidence to support his contention that the house was a total loss because of the windstorm.
Therefore, we conclude the trial court properly granted summary judgment on the
house/dwelling claim. Cade’s first and seventh issues are overruled.
Personal Property Claim
In his fourth issue, Cade contends that State Farm failed to prove prejudice by his failure
to comply with certain policy conditions. In its answer and motion for summary judgment,

6
State Farm alleged that it was excused from covering any personal property damage because
Cade failed to comply with mandatory terms and conditions under the policy. Specifically,
State Farm urged that Cade failed to: (1) give immediate notice to State Farm; (2) protect the
property from further damage or loss; (3) prepare an inventory of damaged personal property
showing in detail the quantity, description, age, replacement cost, and amount of loss
substantiated by bills, receipts, and related documents; (4) comply with requests for exhibitions
of the damaged property, records, documents, and statements; and (5) submit a signed, sworn
proof of loss within 91 days of the loss.
It is undisputed that Cade did not comply with the conditions regarding his personal
property claim. He did not notify State Farm of his personal property claim until September
2020, one month before filing suit. In addition, while he testified regarding some of the
house’s contents, he did not testify in detail regarding all of the items, and he could not support
any of his claimed values. Furthermore, by his own admission, Cade did not remove any of the
home’s contents until “much, much later.”
The parties dispute whether State Farm must show it was prejudiced by Cade’s failure to
comply with these provisions. In PAJ, Inc. v. Hanover Ins. Co., the Texas Supreme Court
held that 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.” 243 S.W.3d 630, 636-37 (Tex. 2008).
This notice-prejudice rule prevents an insurer from denying coverage based on untimely notice.
Id. at 636. However, the effects of PAJ on other insurance policy provisions is less clear.
Federal cases have determined that an insured’s failure to provide a sworn proof of loss is
subject to the notice-prejudice rule. See Cunningham v. Allstate Vehicle & Prop. Ins. Co.,
Civil Action No. 4:18-CV-4, 2018 WL 2020723, at *2-3 (E.D. Tex. May 1, 2018) (discussing
federal district court interpretation and application of notice-prejudice rule in proof of loss
cases); but see GuideOne Mut. Ins. Co. v. First Baptist Church of Brownfield, 495 F. Supp.
3d 428, 437-38 (N.D. Tex. 2020) (declining to extend notice-prejudice rule to appraisal
context). At least one Texas appellate court has held that a proof of loss provision is a
condition precedent to coverage and does not require a showing of prejudice. City of
Spearman v. Tex. Mun. League Intergovernmental Risk Pool, 601 S.W.3d 72, 75 (Tex.
App.—Amarillo 2020, pet. denied). The Texas Supreme Court has not explicitly extended the
notice-prejudice rule to the proof of loss provision.

7
However, in this case, assuming without deciding that State Farm must show prejudice by
Cade’s failure to comply with the policy conditions, we conclude that State Farm has in fact
demonstrated prejudice. Prejudice is shown when the purpose of a particular provision has
been impaired. Blanton v. Vesta Lloyds Ins. Co., 185 S.W.3d 607, 615 (Tex. App.—Dallas
2006, no pet.). The purpose of the provisions at issue is to allow the insurer “to properly
investigate the circumstances of the loss while the occurrence is fresh in the minds of
witnesses, to prevent fraud, and to enable it to form an intelligent estimate of its rights and
liabilities so that it may adequately prepare to defend any claim that may arise.” Hanover Ins.
Co. of N.Y. v. Hagler, 532 S.W.2d 136, 138 (Tex. Civ. App.—Dallas 1975, writ ref’d n.r.e.).
However, “an insurer must offer ‘more than the mere fact that it cannot employ its normal
procedures in investigating and evaluating the claim.’” Hamilton Props. v. Am. Ins. Co., Civil
Action No. 3:12-CV-5046-B, 2014 WL 3055801, at *9 (N.D. Tex. July 7, 2014) (quoting
Trumble Steel Erectors, Inc. v. Moss, 304 Fed. Appx. 236, 244 (5th Cir. 2008) (per curiam)).
The summary judgment evidence established that Cade did not claim personal property
damages until September 2020, when his attorney emailed State Farm adjuster Kelly Clark a
typed letter from Cade referring to “treasured antiques” in the home. The adjuster replied,
asking for a detailed inventory and other documentation. She also asked for the ages and
values of the items Cade claimed were damaged as well as photographs of the damaged
property. Clark did not receive a response. Cade sold the house and filed suit the next month.
In addition, State Farm had no opportunity to investigate Cade’s personal property claim.
While Stinnett went inside the home during his inspection and observed that the home did not
contain any personal property of value, he was not investigating the personal property. He, and
the other inspectors, investigated damage to the house itself. In short, State Farm was
completely unable to investigate Cade’s personal property claim. In addition, Cade admitted
leaving the damaged items in the house for years after the loss, making no effort to remove
them from the elements or protect them from further damage.
Based on the foregoing, we conclude that State Farm established prejudice by Cade’s
failure to comply with the policy conditions regarding the personal property claim. Therefore,
the trial court did not err in granting summary judgment on that claim. We overrule Cade’s
fourth issue.

8
DISPOSITION
Having overruled Cade’s first, fourth, and seventh issues, we affirm the trial court’s
judgment. 4

JAMES T. WORTHEN
Chief Justice

Opinion delivered September 30, 2024.
Panel consisted of Worthen, C.J., Hoyle, J., and Griffith, Retired J., Twelfth Court of Appeals, sitting by assignment.

4
Because our resolution of these issues is dispositive of Cade’s appeal, we need not address his remaining
issues. See TEX. R. APP. P. 47.1.

9
COURT OF APPEALS

TWELFTH COURT OF APPEALS DISTRICT OF TEXAS

JUDGMENT

SEPTEMBER 30, 2024

NO. 12-23-00285-CV

KENNETH R. CADE,
Appellant
V.
STATE FARM LLOYDS,
Appellee

Appeal from the 173rd District Court
of Henderson County, Texas (Tr.Ct.No. CV20-0598-392)

THIS CAUSE came to be heard on the appellate record and briefs filed
herein, and the same being considered, it is the opinion of this court that there was no error in the
judgment.
It is therefore ORDERED, ADJUDGED, and DECREED that the
judgment of the court below be in all things affirmed, and that all costs of this appeal are
hereby adjudged against the appellant, Kenneth R. Cade, for which execution may issue, and that
this decision be certified to the court below for observance.

James T. Worthen, Chief Justice.
Panel consisted of Worthen, C.J., Hoyle, J., and Griffith, Retired J., Twelfth Court of
Appeals, sitting by assignment.