Preview
Filed
GR 10/4/2021 1:58 PM
Beverley McGrew Walker
District Clerk
Fort Bend County, Texas
Ashley Alaniz
CAUSE NO. 15-DCV-223679
KNUT ARVID JOHANSON § IN THE DISTRICT COURT OF
Plaintiff, §
vi FORT BEND COUNTY, TEXAS
CENTRAL MUTUAL INSURANCE
COMPANY AND
TREVOR LINHART
Defendants. 458" JUDICIAL DISTRICT
DEFENDANTS’ SECOND MOTION FOR SUMMARY JUDGMENT
Defendants, Central Mutual Insurance Company (“Central”) and Trevor Linhart, file this
Second Motion for Summary Judgment, and in support of same would show the following:
INTRODUCTION
This lawsuit involves a dispute over the amount of loss sustained to the property at 2010
Dowling Drive, Richmond, Texas 77469, belonging to Plaintiff, Knut Arvid Johanson (“Johanson”),
as a result of a wind and hail storm that hit the Richmond area on or about April 16, 2015. Summary
judgment in Central’s favor dismissing all of Johanson’s claims is required under Texas law, because
the dispute over the amount of loss went through the appraisal required by Johanson’s insurance
contract, and Central timely paid the amount owed pursuant to the appraisal award. Under Texas
law, this would preclude, as a matter of law, the contractual and extra-contractual causes of action
asserted by Johanson, as the following illustrates. Defendant, Trevor Linhart, would likewise be
entitled to summary judgment, since there is no conduct of his that in any way caused any damage
or harm whatsoever to Johanson.
EVIDENCE SUPPORTING MOTION
Part of the evidence supporting this motion includes the pleadings and evidence already on
DEFENDANTS’ SECOND MOTION FOR SUMMARY JUDGMENT - Pack I
file in this matter or filed as of the time of the hearing on this motion. Other evidence offered in
support of this motion is that evidence attached to and filed as part of this motion. That evidence,
along with this motion, consists of one pdf document comprising a total of 188 pages. The evidence
attached to this motion is pages 20-188 of that pdf document. References to such evidence will be
made by reference to the page(s) being relied upon, with such being placed in parenthesis.
The evidence attached to this motion consists of the following:
Ex. A Affidavit of Mark West (20-21);
Ex B Appraisal Award signed by both appraisers (22);
Ex Affidavit of Central adjuster David Massey (23-26);
Ex. Copy of Central Policy No. FMH 5601875 (27-101);
Ex. Copy of Central’s Check No. 919723 in the amount of $13,241.11 (102-103);
Ex. Copy of Check No. 921177 in the amount of $3,853.27 (104);
Ex Copy of Central’s Russell Bowman’s September 5, 2018 letter to James
Willis and copy of Central Check No. 921177 enclosed with same (105-109);
Ex. Affidavit of Wayne Walters (110-111);
Ex. Copy of Wayne Walters’ April 26, 2016 letter to Richard D. Daly and copy
of Central Check No. 919723 enclosed with same (112-113);
Ex. Affidavit of Russell J. Bowman (114-115);
Ex. Plaintiff's First Amended Response to Request for Disclosure (116-185); and
Ex. Austin vy. State Farm Lloyds, No. 1:16-CV-447-DAE, 2018 WL 6588571,
at*3 (W.D. Tex. Nov. 9, 2018) (186-188).
DEFENDANTS’ SECOND MOTION FOR SUMMARY JUDGMENT - Pacr 2
UNDISPUTED FACTS
The evidence attached to this motion shows the following facts are undisputed:
QQ) Johanson alleges his property located at 2010 Dowling Drive, Richmond, Texas
77469 was damaged by wind and hail on or about April 16, 2015. (para. 9 of
Johanson’s Original Petition filed on May 26, 2015)
(2) At the time of that April 16, 2015 storm, Johanson’s property located at 2010
Dowling Drive, Richmond, Texas 77469 was insured under a policy issued by
Central, being Policy No. FMH 5601875. (27).
3) Johanson’s insurance contract contains a deductible of $2,100. (27).
(4) Disagreement arose between Central and Johanson over the amount of loss to
Johanson’s property from the April 16, 2015 storm damage, so that Central
demanded appraisal under Johanson’s insurance contract to resolve that dispute. (See
Central’s Motion for Appraisal filed on June 12, 2015).
(5) An appraisal award was entered, signed by Mr. Johanson’s appraiser, Shannon
Kimmel, on April 21, 2016, and by Central’s appraiser, Mark West, on April 22,
2016. (21-22).
(6) The appraisal award was for a replacement cost loss of $19,176.38, with depreciation
of $3,835.27, and an actual cash value loss of $15,341.04. (22)
7) Central received the appraisal award on April 22, 2016. (24).
(8) Pursuant to the appraisal award, Central issued payment (Check No. 919723) on
April 25, 2016 to Johanson for $13,241.11 (being the $19,176.38 replacement cost
loss amount in the appraisal award, less the depreciation of $3,835.27 in the award,
and less the $2,100 policy deductible). (24-25 & 102-103).
(9) Central’s Check No. 919723 was made payable to “Knut Arvid Johanson Jr. and
Eleanor Johanson and Daly and Black P.C.” (24 & 102)
(10) On April 26, 2016, Central Check No. 919723 was hand delivered to Johanson’s
attorney of record, Richard D. Daly at Daly & Black, P.C., along with the April 26,
2016 letter from Central’s attorney. (111-113).
ay Central’s Check No. 919723 was negotiated and cleared Central’s bank on March 24,
2017. (24-25 & 102-103).
DEFENDANTS’ SECOND MOTION FOR SUMMARY JUDGMENT - Pace 3
(12) In an effort to try to bring this matter to a conclusion, Central issued payment (Check
No. 921177) on August 31, 2018 to “Knut Arvid Johanson Jr. and Eleanor Johanson
and Daly and Black P.C.” for the amount of $3,835.27, being the amount of
depreciation in the appraisal award. (25 & 104).
(13) Central’s Check No. 921177 was delivered to Plaintiff's attorney on September 10,
2018. (105-109 & 114-115).
(14) Plaintiff Johanson is deceased. (118).
SUMMARY OF ARGUMENT
The evidence to this motion is undisputed that less than five business days after Central
received the appraisal award, payment of the actual cash value loss of the award (which would be
the replacement cost loss in the award less the depreciation in the award), less the policy deductible
was received by Johanson’s attorney. In addition, such evidence also shows that even though
nothing has been presented to Central to show the depreciation portion of the award would be owed
by Central, that amount has been paid by Central. The evidence shows that Central has paid the
entire possible amount that could be owed under the insurance contract to Johanson, even though
Johanson has yet to provide anything showing the damaged property has been repaired and/or
replaced, and the cost of such, which would be required to entitle Johanson to recover replacement
cost, i.e., the withheld depreciation in the appraisal award. As will be further shown, the undisputed
evidence to this motion requires that all of the claims asserted by Johanson against Central be
dismissed because: (1) payment of the appraisal award precludes Johanson’s breach of contract and
extra-contractual claims; and (2) Johanson’s death precludes the claims for interest and attorney’s
fees under the Prompt Payment of Claims Act, because such claims are personal to Johanson, which
extinguished at his death. The claims against Linhart should be dismissed for the same reason, and
because there is no conduct of his that caused any damage to Johanson whatsoever. Therefore,
DEFENDANTS’ SECOND MOTION FOR SUMMARY JUDGMENT - Pace 4
Central, as well as Linhart, are entitled to summary judgment dismissing Johanson’s lawsuit with
prejudice.
PERTINENT POLICY PROVISIONS
The Central insurance contract contains several provisions pertinent to this matter. One such
provision is the appraisal clause of the contract, which provides:
Appraisal
If you and we disagree on the amount of loss, either may demand an
appraisal of the loss. In this event, each party will choose a
competent and impartial appraiser within 20 days after receiving a
written request from the other. The two appraisers will choose an
umpire. If they cannot agree upon an umpire within 15 days, you or
we may request that the choice be made by a judge of a court of
record in the state where the “residence premises” is located. The
appraisers will separately set the amount of loss. If the appraisers
submit a written report of an agreement to us, the amount agreed
upon will be the amount of loss. If they fail to agree, they will submit
their differences to the umpire. A decision agreed to by any two will
set the amount of loss.
Each party will:
1. Pay its own appraiser; and
2. Bear the other expenses of the appraisal and umpire equally.
(44).
Another pertinent provision is the “Loss Payment” provision, which is contained in the
“SPECIAL PROVISIONS -TEXAS” endorsement. This provision states:
J. Loss Payment
We will adjust all losses with you. We will pay you unless some
other person is named in the Policy or is legally entitled to payment.
If we notify you that we will pay your claim, or part of your claim, we
DEFENDANTS’ SECOND MOTION FOR SUMMARY JUDGMENT - Pace 5
must pay within five “business days” after we notify you. Ifpayment
of your claim or part of your claim requires the performance of an act
by you, we must pay within five “business days” after the date you
perform the act.
(72).
ARGUMENT AND AUTHORITIES - SUMMARY JUDGMENT FOR CENTRAL
A. Johanson’s Breach of Contract Claim
Johanson has asserted a claim against Central for breach of contract. (paragraph 15 of
Johanson’s Petition filed on May 26, 2015). By the December 5, 2016 Order entered in this matter,
Central has been granted summary judgment dismissing that claim. Further showing summary
judgment dismissing that claim is correct is that with Central’s payment of the depreciation amount
of the appraisal award, even though Johanson has yet to provide anything to show entitlement to
recovery of the depreciation, there would be absolutely no breach of contract claim whatsoever
which Johanson could assert against Central.
1 Only Actual Cash Value Loss Owed Upfront
The replacement cost coverage of the Central policy states as follows:
2. Buildings covered under Coverage A or B at replacement cost
without deduction of depreciation, subject to the following:
If, at the time of loss, the amount of insurance in
this policy on the damaged building is 80% or
more of the full replacement cost of the building
immediately before the loss, we will pay the cost to
repair or replace, without deduction for
depreciation, but not more than the least of the
following amounts:
1) The limit of liability under this policy that
applies to the building;
2) The replacement cost of that part of the
DEFENDANTS’ SECOND MOTION FOR SUMMARY JUDGMENT - PAGE 6
building damaged with material of like
kind and quality and for like use; or
3) The necessary amount actually spent to
repair or replace the damaged building.
If the building is rebuilt at a new premises, the cost
described in 2) above is limited to the cost which
would have been incurred if the building had ben built
at the original premises.
b. If, at the time of loss, the amount of insurance in this
policy on the damaged building is less than 80% of
the full replacement cost of the building immediately
before the loss, we will pay the greater of the
following amounts, but not more than the limit of
liability under this policy that applies to the building:
1) The actual cash value of that part of the
building damaged; or
2) That proportion of the cost to repair or
replace, without deduction for depreciation,
that part of the building damaged, which the
total amount of insurance in this policy on the
damaged building bears to 80% of the
replacement cost of the building.
Cc To determine the amount of insurance required to
equal 80% of the full replacement cost of the building
immediately before the loss, do not include the value
of:
1) Excavations, footings, foundations, piers, or
any other structures or devices that support all
or part of the building, which are below the
undersurface of the lowest basement floor;
2) Those supports in 1) above which are below
the surface of the ground inside the foundation
walls, if there is no basement; and
3 Underground flues, pipes, wiring and drains.
d. We will pay no more than the actual cash value of
the damage until actual repair or replacement is
complete. Once actual repair or replacement is
complete, we will settle the loss as noted in 2.a. and
DEFENDANTS’ SECOND MOTION FOR SUMMARY JUDGMENT - PAGE 7
b. above.
However, if the cost to repair or replace the damage is
both:
1) Less than 5% of the amount of insurance in
this policy on the building; and
2) Less than $2500;
we will settle the loss as noted in 2.a. and b. above
whether or not actual repair or replacement is
complete.
ee You may disregard the replacement cost loss
settlement provisions and make claim under this
policy for loss to buildings on an actual cash value
basis. You may then make claim for any additional
liability according to the provisions of this Condition
D. Loss Settlement, provided you notify us, within
180 days after the date of loss, of your intent to repair
or replace the damaged building.
(44) (Emphasis added).
This language is clear and unambiguous. This was so held in Ghoman v. New Hampshire
Ins. Co., 159 F.Supp.2d 928, 932 (N.D.Tex. 2001) (applying Texas law), citing Kolls v. Aetna
Casualty and Surety Co., 378 F.Supp. 392, 397 (S.D.lowa), aff'd, 503 F.2d 569 (8th Cir.1974);
Huggins v. Hanover Insurance Co., 423 So0.2d 147, 150 (Ala.1982); Higgins v. Insurance Co. of
North America, 256 Or. 151, 469 P.2d 766, 774 (1970).
As the Court noted in Ghoman, replacement cost coverage like that of the Central policy
allows the insured to either make a claim for replacement costs up to the policy limits, or actual cash
value supplemented by additional replacement cost coverage. Ghoman, 159 F.Supp.2d at 932. As
the Court noted further in Ghoman, the purpose of this two-step process is to enable the insured to
obtain funds “to begin the process of repair or replacement, at which point [the insured] could submit
claims for expenditures that went above the actual cash value of the loss.” Ghoman, at 933, citing,
DEFENDANTS’ SECOND MOTION FOR SUMMARY JUDGMENT - Pace 8
Fraley vy. Allstate Insurance Co., 97 Cal.Rptr.2d 386, 390, 81 Cal.App.4th 1282, 1290 (2000),
quoting Myers v. Allstate Insurance Co., 989 F.Supp. 1250, 1254 (C.D.Cal.1997). See also, D &
S Realty, Inc. v. Markel Insurance Company, 284 Neb. 1, 816 N.W.2d 1, 12 (2012) (noting that
where insured has contracted for replacement cost coverage, the insured will normally be entitled
under the policy to an immediate payment representing the actual cash value of the loss, which can
be used as seed money to start the repairs).
The fact that the term “actual cash value” is not specifically defined in the Central policy
does not make the policy ambiguous. As was noted in Ghoman, the term “actual cash value” means
repair or replacement cost, less depreciation. See also Tolar v. Allstate Texas Lloyd’s Company, 772
F.Supp.2d 825, 831 (N.D. Tex. 2011) (noting that “actual cash value” under Texas law means
replacement cost less depreciation).
The replacement cost coverage is clear that nothing is owed for replacement cost until the
damaged property is actually replaced. (44). Under Texas law, this provision is enforced as written.
Namely, the insured is not entitled to recover replacement cost damages until the insured has actually
repaired or replaced the damaged property. Fitzhugh 25 Partners v. KILN Syndicate KLN, 261
S.W.3d 861 (Tex.App.-Dallas 2008, rev. denied). As shown by Central’s First Amended Answer
filed on October 1, 2018, Central has denied Johanson has complied with this provision, requiring
that Johanson present proof of compliance with this provision.
Fitzhugh is like countless other courts which hold the insured is bound to comply with the
repair/replace condition before the insured can recover replacement costs. See Versai Management
Corp. v. Clarendon America Ins., 597 F.3d 729 (5" Cir. 2010); Kolls v. Aetna Casualty and Surety
Company, 503 F.2d 569 (8" Cir. 1974); Bourazak v. North River Insurance Company, 379 F.2d 530
DEFENDANTS’ SECOND MOTION FOR SUMMARY JUDGMENT - Pace 9
(7" Cir. 1967); Huggins v. Hanover Ins. Co., 423 So.2d 147 (Ala. 1982); Rhodes v. Farmers Ins.
Co.,79 Ark. App. 230, 86 S.W.3d 401 (2002); Higginbotham v. Am. Family Ins. Co., 143 Ul.App.3d
398, 493 N.E.2d 373, 97 Ill.Dec. 710 (1986); Burchett v. Kansas Mut. Ins. Co., 30 Kan.App.2d 826,
48 P.3d 1290 (2002); Porter v. Shelter Mut. Ins. Co., 242 S.W.3d 385 (Mo.App. 2007); Nicolaou
v. Vermont Mut. Ins. Co., 155 N.H. 724, 931 A.2d 1265 (2007); De Lorenzo v. Bac Agency Inc., 256
A.D.2d 906, 681 N.Y.S.2d 846 (1998); Bratcher v. State Farm Fire & Cas. Co., 961 P.2d 828
(Okla.1998); Burton v. Republic Ins. Co., 845 A.2d 889 (Pa.Super. 2004); Saleh v. Farmers Ins.
Exchange, 133 P.3d 428 (Utah 2006); Hess v. North Pacific Ins. Co., 122 Wash.2d 180, 859 P.2d
586 (1993).
The replacement cost coverage of the Central policy is exactly like that of the cases discussed
above. As those cases show, under replacement cost coverage like that of the Central policy, the
insured initially receives payment for the actual cash value loss to the damaged property (less any
applicable deductible), with the chance to make an additional claim under the replacement cost
coverage for the withheld depreciation, should the insured have the damaged property repaired or
replaced. As the actual cash value loss for the damaged property is the cost to repair/replace that
particular property, less depreciation, Central, after receiving the appraisal award and in compliance
with the contract, paid Johanson $13, 241.11, which was the actual cash value loss (replacement cost
less depreciation) less the policy deductible. (24 & 102-103). Johanson (through his attorney since
he is represented by counsel) received that payment less than five business days from when the
award was rendered, making Central’s payment of the award timely. (110-113). This would
preclude the breach of contract, Insurance Code Chapter 541 unfair settlement practices claims, and
DTPA claims asserted by Johanson in this lawsuit against Central as a matter of law.
DEFENDANTS’ SECOND MOTION FOR SUMMARY JUDGMENT - PacE 10
2. Payment of Appraisal Award Precludes
Breach of Contract Claim as a Matter of Law
Based on the provisions of the replacement cost coverage that replacement cost is not owed
until the damaged property is repaired or replaced, courts hold that payment of the actual cash value
loss suffices as payment of an appraisal award where the insured has not yet replaced or repaired the
damaged property. Ortiz v. State Farm Lloyds, 589 S.W.3d 127, 132 (Tex. 2019) (affirming court
of appeals’ holding no breach of contract by insurer as a matter of law where insurer only paid actual
cash value loss of appraisal award)'; Mainali Corp. v. Covington Specialty Ins. Co., 872 F.3d 255,
257 (5" Cir. 2017); Lakeside FBBC, LP v. Everest Indemnity Insurance Co.,__ F.Supp.3d__, 2020
WL 1814405, at *7-8 (W.D. Tex. 2020, appeal filed) (insurer’s payment of actual cash value loss
of appraisal award entitled insurer to summary judgment on insured’s breach of contract claim);
Durham v. Allstate Vehicle & Property Insurance Company, 2019 WL 764581, at *3 fn. 8 (S.D. Tex.
2019).
The undisputed evidence shows that Central timely paid the appraisal award. (24, 102-103
& 109-112). The Loss Payment clause in the contract states that “If we notify you that we will pay
your claim, or part of your claim, we must pay within 5 business days after we notify you.” (72). The
evidence shows that the appraisal award was received by Central on April 22, 2016, and Central
issued payment (Check No. 919723) to Johanson for the actual cash value amount of the appraisal
award (less the policy deductible) on April 25, 2016. (24, 102-103 & 110-113). This payment was
‘Although not reflected by the Texas Supreme Court’s opinion, the court of appeals’
opinion in Ortiz clearly reflects the payment made by the insurer was for the actual cash value
loss of the appraisal award. See Ortiz v. State Farm Lloyds, 568 8.W.3d 156, 158 (Tex.App.-San
Antonio 2017).
DEFENDANTS’ SECOND MOTION FOR SUMMARY JUDGMENT - Pace 11
received by Johanson’s attorney, along with the letter conveying Central’s acceptance of the award,
on April 26, 2016. (110-113).
Since Central notified Johanson it would be making payment on the award at the same time
it made the payment, all within less than five business days from the date of he award, Central’s
acceptance of the appraisal award and payment of same were clearly timely. See McEntyre v. State
Farm Lloyds, Inc., 2016 WL 6071598, at *5 (E.D.Tex. 2016) (holding that the time to pay an
appraisal award did not begin to run until the insurer stated that it would pay the award); Gabriel v.
Allstate Texas Lloyds, 2013 WL 7885700, at *6 (S.D.Tex. 2013) (same).
In order to process any claim by Johanson for the amount of depreciation contained in the
appraisal award, he would be required to have the damaged property that was the subject of the
appraisal repaired and/or replaced, and provide Central the documents showing the cost of such
work. (24 & 44). Central has never received anything from Johanson, his attorney(s), or anyone else
that the damaged property that is the subject of the appraisal award was ever repaired or replaced,
and if it was, the cost of such work. (25). Despite this, Central issued a payment on August 31,
2018 (Check No. 921177 payable to “Knut Arvid Johanson Jr. and Eleanor Johanson and Daly and
Black P.C.”) for the $3,835.27 depreciation contained in the appraisal award. (25 & 104). This
check was unconditionally tendered. (108). On September 5, 2018, that check, along with the
September 5, 2018 letter from Central’s attorney, Russell J. Bowman, enclosing that check, were
mailed by certified mail, return receipt requested, to Johanson’s attorney, James Willis with Daly
& Black, P.C., which items were delivered on September 10, 2018. (114-115). With the payment
of the depreciation in the award being made by Central, even though such is not yet owed under the
insurance contract, this would further show the December 5, 2016 order granting Central summary
DEFENDANTS’ SECOND MOTION FOR SUMMARY JUDGMENT - Pace 12
judgment dismissing Johanson’s breach of contract claim is proper, as there is absolutely nothing
whatsoever that Johanson can recover under the insurance contract.
B Appraisal Precludes Any Extra-Contractual Claims
Johanson has asserted extra-contractual claims against Central for violations of Sections
541.051, 541.060, and 541.061 of the Texas Insurance Code, and for violation of the Texas
Deceptive Trade Practices Act. (See paras. 18-24 of Plaintiff's Original Petition filed on May 26,
2015). Summary judgment dismissing those claims is appropriate.
Texas law is clear that where an insurer has timely paid an appraisal award, this precludes
any claim against the insurer for unfair settlement practices, breach of the duty of good faith and fair
dealing, or DTPA claims as a matter of law. Ortiz, 589 S.W.3d at 133-35; Perry v. United Service.
Auto. Ass’n, 602 S.W.3d 915, 917 fn. 2 (Tex. 2020). See also Lopez v. Allstate Texas Lloyds, No.
7:18-CV-260, 2020 WL 292342, at *9 (S.D. Tex. Jan. 21, 2020) (granting summary judgment on
extra-contractual claims where insurer paid appraisal award because that payment provides all policy
benefits to which the insured is entitled); Dunne v. Allstate Vehicle and Prop. Ins. Co., No. H-18-
4519, 2020 WL 130101, at *2, (S.D. Tex. Jan. 10, 2020) (same); Alcala v. Republic Lloyds, No. 13-
18-26-CV, 2020 WL 830840, at *3 (Tex.App.-Corpus Christi Feb. 20, 2020, no pet.) (citing Ortiz
to grant summary judgment on statutory bad faith claims under both Insurance Chapter 541 and the
DTPA).
As the evidence in this matter is undisputed that the appraisal award was timely paid by
Central, this would require that all of Johanson’s extra-contractual claims against Central, including
his claims for unfair settlement practices under Chapter 541 of the Texas Insurance Code and his
claims under the Deceptive Trade Practices Act, be dismissed with prejudice.
DEFENDANTS’ SECOND MOTION FOR SUMMARY JUDGMENT - Pace 13
Cc. Johanson’s Death Extinguishes His Chapter 542.051 Claims
Johanson’s remaining claim against Central is for interest and attorney’s fees under Insurance
Code Section 542.060 of the Prompt Payment of Claims Act (hereinafter referred to as the “Act”).
(para. 27 of Johanson’s Petition filed on May 26, 2015). Johanson’s First Amended Disclosure
Response served on March 30, 2021 shows Johanson is deceased, as that amended response shows
the correct plaintiff in this suit is Michael Johanson, who is described as Johanson’s Personal
Representative and executor of Johanson’s estate. (118). Summary judgment dismissing any claim
by Johanson for relief under Insurance Code Section 542.060 is required, because such claim became
extinguished on Johanson’s death.
No Texas survival statute exists that covers extra-contractual claims in the insurance context,
and the Texas Insurance Code does not contain any provision regarding whether claims raised under
Chapter 542 survive the death of an insured. Absent a statute providing to the contrary, a cause of
action that is penal or personal in nature does not survive the death of the person having such cause
of action. Belt v. Oppenheimer, Blend, Harrison & Tate, Inc., 192 S.W.3d 780, 784 (Tex. 2006).
Courts addressing the issue hold that causes of action under the Insurance Code are personal
and do not survive the insured’s death. These cases include Mendoza v. Am. Nat. Ins. Co., 932
S.W.2d 605, 609 (Tex.App.-San Antonio 1996, no writ); (concluding claims under Chapter 541 of
the Texas Insurance Code do not survive and cannot be brought by a representative of the estate);
Launius y. Allstate Ins. Co., No. 3:06-CV-579-B, 2007 WL 1135347, at *6 (N.D. Tex. April 17,
2007) (same); and Austin v. State Farm Lloyds, No. 1:16-CV-447-DAE, 2018 WL 6588571, at*3
(W.D. Tex. Nov. 9, 2018) (concluding claims under the Act do not survive the insured’s death).
Austin is of particular relevance, because the court held that the Act is a penal statute, so that
DEFENDANTS’ SECOND MOTION FOR SUMMARY JUDGMENT - PAcE 14
claims brought under it do not survive the insured’s death. The court’s reasoning in reaching that
conclusion is sound, and follows Texas law.
Chapter 542 of the Texas Insurance Code provides that when an insurer fails to timely pay
aclaim by an insured, the insurer is liable not just for the amount due on the claim but also “interest
on the amount of the claim at the rate of 18 percent a year as damages, together with reasonable
attorney’s fees.” Tex. Ins. Code § 542.060(a). The Texas Supreme Court has characterized this
section as “penal in nature,” State Farm Life Ins. Co. v. Martinez, 216 S.W.3d 799, 805 (Tex. 2007).
Consistent with Martinez, the Dallas Court of Appeals has squarely held that the statutory
18% interest awarded as damages under the Prompt Payment Act is exemplary damages, not actual
damages. Texas Farmers Ins. Co. v. Cameron, 24 S.W.3d 386, 399 (Tex.App.-Dallas 2000, rev.
denied) (holding that “damages” under Texas Insurance Code article 21.55 § 6”, the previous version
of Tex. Ins. Code § 542.060, means exemplary damages, rather than actual damages). See also, J.
C. Penney Life Ins. Co. v. Heinrich, 32 S.W.3d 280, 289 (Tex.App.- San Antonio 2000); Tex. Civ.
Prac. & Rem. Code § 41.001(4) (defining “exemplary damages” as “any damages awarded as a
penalty or by way of punishment but not for compensatory purposes,” including punitive damages).
The Texas Supreme Court has also characterized statutes permitting the award of attorneys’
fees as penal in nature. See Med. City Dallas, Ltd. v. Carlisle Corp., 251 S.W.3d55, 58 (Tex. 2008);
New Amsterdam Cas. Co. v. Tex. Indus., Inc., 414 S.W.2d 914, 915 (Tex. 1967). These relevant
precedents demonstrate that the interest and attorney fees provisions in § 542.060 make it a “penal”
statute. Because the statute is penal in nature, the court in Austin correctly concluded the insured’s
*Article 21.55 was repealed in 2003 and recodified at §§ 542.051 through 542.061 of the
Texas Insurance Code, effective April 1, 2005.
DEFENDANTS’ SECOND MOTION FOR SUMMARY JUDGMENT - Pace 15
claims under the Act did not survive the insured’s death. This is because under Texas common law,
if the sum sued for is a penalty, the cause of action for such dies with the death of the plaintiff.
Johnson y. Rolls, 97 Tex. 453, 79 8.W. 513, 514 (1904); Whorton v. Nevitt, 42 S.W.2d 1056, 1057
(Tex.Civ.App.-1931, no writ) (noting that in absence of a statute to the contrary, cause of action for
a statutory penalty does not survive the death of the plaintiff).
The court’s conclusion in Austin is further supported by a line of cases holding that claims
under chapter 542 are personal to the insured. See Evanston Ins. Co. v. ATOFINA Petrochemicals,
Inc., 256 S.W.3d 660, 675 (Tex. 2008) (noting that the Texas legislature “intended that article 21.55
apply to claims personal to the insured”); Lamar Homes, Inc. v. Mid-Continent Cas. Co., 242 8.W.3d
1, 19-20 (Tex. 2007) (reviewing history of Chapter 542 and concluding that the legislators intended
chapter 542 apply to claims personal to the insured); First Nat. Bank of Kerrville v. Hackworth, 673
S.W.2d 218, 220 (Tex.App.-San Antonio 1984) (“The right to recover punitive damages is
considered a purely personal right.”); see also Am. S. Ins. Co. v. Buckley, 748 F.Supp.2d 610, 626
(E.D. Tex. 2010) (noting statutory remedies under chapter 542 of the Texas Insurance Code are
personal and punitive in nature and the Insurance Code makes no provision for assignability of such
claims).
Johanson’s death extinguishes his claim for interest and attorney’s fees under the Act.
Therefore, summary judgment dismissing that claim is required. As that leaves no other claim of
Johanson against Central viable, summary judgment dismissing Johanson’s lawsuit against Central
is required.
ARGUMENT AND AUTHORITIES - SUMMARY JUDGMENT FOR LINHART
Johanson has asserted claims against Linhart for violation of Sections 541.051, 541.060, and
DEFENDANTS’ SECOND MOTION FOR SUMMARY JUDGMENT - PAcE 16
541.061 of the Texas Insurance Code and for violation of the Texas Deceptive Trade Practices Act.
(See paras. 18-23(1) of Plaintiff's Original Petition filed on May 26, 2015). Johanson also asserts
that he is entitled to exemplary or treble damages under the DTPA and Section 541.152(a) - (b) of
the Texas Insurance Code for Linhart’s conduct allegedly being committed knowingly. (para. 24 of
Johanson’s Original Petition filed on May 26, 2015). Linhart is entitled to summary judgment
dismissing all of these claims.
A. Insurance Code and DTPA Claims
As to Johanson’s claims against Linhart for violations of Chapter 541 of the Insurance Code,
as well as Johanson’s claims against Linhart under the Deceptive Trade Practices Act, summary
judgment dismissing those claims with prejudice should be granted. This is because as the
undisputed summary judgment evidence highlighted above shows, Johanson received all benefits
to which he is entitled under his insurance contract with Central. Appraisal determined the amount
of loss and Johanson was paid everything that could possibly be owed to him pursuant to the
appraisal award. Therefore, no conduct of Mr. Linhart was a proximate or producing cause of any
damage to Johanson. Johanson would be required to prove damage suffered from Linhart’s conduct,
in order to prevail on his Insurance Code and DTPA claims against Linhart. Tex. Ins. Code 541.151;
Meza v. Underwriters at Lloyd’s of London Syndicate 2488, No. DR-14-CV-087-AM-VRG, 2015
WL 13283045, at *5 (W.D. Tex. April 1, 2015); Kish v. Van Note, 692 S.W.2d 463, 466 (Tex. 1985)
(holding damages recoverable under DTPA are those sustained as a result of the defendant’s
deceptive act or practice). Since the undisputed evidence shows no conduct of Linhart caused
Johanson any damages, Johanson’s suit against Linhart must be dismissed.
Further, as demonstrated above, Johanson’s Chapter 541 Insurance Code claims against
DEFENDANTS’ SECOND MOTION FOR SUMMARY JUDGMENT - Pac 17
Linhart do not survive his death, so those claims against him should be dismissed. Likewise,
Johanson’s DTPA claims against Linhart do not survive his death. Boudreaux v. Corium Intern.,
Inc., No. 3:12-cv-2644-M, 2013 WL 1890269, at *3 (N.D. Tex. May 7, 2013). For these additional
reasons, all of Johanson’s claims against Linhart must be dismissed, with prejudice.
B. No Evidence Motion
Adequate time for discovery has passed. As indicated above, Johanson has the burden of
proof of showing Linhart engaged in conduct that caused Johanson damage. Johanson cannot show
any conduct of Mr. Linhart that was a producing or proximate cause of any damage to Johanson.
Therefore, under Rule 166a(i) of the Texas Rules of Civil Procedure, summary judgment should be
granted in Mr. Linhart’s favor, dismissing with prejudice all of Johanson’s claims asserted against
Mr. Linhart.
CONCLUSION AND PRAYER
For all of the above reasons, Defendants, Central Mutual Insurance Company and Trevor
Linhart, pray that this motion be granted in its entirety, and that after all due proceedings be had, that
summary judgment be granted in their favor, dismissing with prejudice all of Plaintiff's causes of
action asserted against them in this lawsuit, for the entry of a final order/judgment dismissing
Plaintiff's lawsuit with prejudice, and for any and all other relief to which Defendants may be
entitled, at law or in equity.
Respectfully submitted,
/S/Russell J. Bowman
Russell J. Bowman
Texas State Bar No. 02751550
800 West Airport Freeway, Suite 860
DEFENDANTS’ SECOND MOTION FOR SUMMARY JUDGMENT - PAcE 18
Irving, Texas 75062
(214) 922-0220
(214) 922-0225 (FAX)
E-Mail: russelljbowman@sbcglobal.net
ATTORNEY FOR DEFENDANTS
CERTIFICATE OF SERVICE
This is to certify that on October 4, 2021, I served a copy of the foregoing document on all
counsel of record, as indicated below:
Mr. James Willis VIA E-MAIL: jwillis@dalyblack.com
DALY & BLACK, P.C.
2211 Norfolk Street, Suite 800
Houston, Texas 77098
S/Russell J. Bowman
Russell J. Bowman
DEFENDANTS’ SECOND MOTION FOR SUMMARY JUDGMENT - PAcE 19
CAUSE NO. 15-DCV-223679
KNUT ARVID JOHANSON § IN THE DISTRICT COURT OF
Plaintiff,
¥. FORT BEND COUNTY, TEXAS
CENTRAL MUTUAL INSURANCE
COMPANY AND
TREVOR LINHART
Defendants. § 268™ JUDICIAL DISTRICT
AFFIDAVIT OF MARK WEST
STATE OF TEXAS § re x
§ i
COUNTY OF HARRIS §
Before me, the undersigned notary public, personally came and appeared Mark West, who
being sworn under oath, did state the following:
1 “My name is Mark West. I am over the age of 21 and have never been convicted ofa felony
c or crime involving moral turpitude. I am not suffering under any mental or physical
disabilities that would prevent me from making this affidavit. All of the facts recited in this
affidavit are true and correct and are based on my personal knowledge. Such facts were
gained in my capacity as the appraiser for Defendant, Central Mutual Insurance Company
(“Central”) in connection with the appraisal that was conducted concerning the claim made
by Plaintiff, Knut Arvid Johanson, to Central for wind and/or hail damage occurring on or
about April 16, 2015 to Mr. Johanson’s property located at 2010 Dowling Drive, Richmond,
Texas 77469-5114.
After being selected by Central to serve as its appraiser for the appraisal concerning the claim
made by Knut Arvid Johanson to Central for wind and/or hail damage occurring on or about
April 16,2015 to Mr. Johanson’s property located at 2010 Dowling Drive, Richmond, Texas
77469-5114, myself and Mr. Johanson’s appraiser, Shannon Kimmel, agreed for Mr. Clay
Morrison to serve as umpire.
Attached as Exhibit “B” to this affidavit and expressly made a part hereof is a true and
correct copy of the appraisal award signed by myself and Mr. Johanson’s appraiser, Shannon
Kimmel, for the appraisal that was conducted concerning Mr. Johanson’s claim to Central
for the wind and/or hail damage occurring on or about April 16, 2015 to Mr. Johanson’s-
property located at located at 2010 Dowling Drive, Richmond, Texas 77469-5114.
NXted—
FURTHER AFFIANT SAYETH NOT.”
Mark We; NO
SUBSCRIBED AND SWORN TO BEFORE ME, o1 i day of
2018, to certify which witness my hand and seal of office.
My commission expires: 1-30-04 the State of Texas
MARTE, STASTAY
MARIE STASTNY Printed Name of Notary
Notary Public, Seate of Tans
<9 Notary (D ea
04-80-2021
‘AFFIDAVIT OF MARK WEST - Page 2
Appraisal Award
w
Insured: Arvid Johanson
surance Company: Central
Chin
Loss Address: 210 Dowling Drive, Richmond, TX 77469
We, the undersigned, pursuant to the Appraisal Appointment, DO HEREBY CERTIFY.
that we truly and conscientiously performed the duties assigned and do hereby award as
the amount of the loss to said property as a result of wind and hail under the above cited
claim number.
lou
as fee
ds $3,835.27 $15,341.04.
Special Provisions: The appraisal panel did not consider deductibles, any prior payments,
any code upgrade requirements or law & ordinance enforcement. The appraisal panel did
not consider or appraise any interior damages.
6
/\
pp
Umpire
Signature/Clay Morrison
EXHIBIT
se
CAUSE NO. 15-DCV-223679
KNUT ARVID JOHANSON § IN THE DISTRICT COURT OF
Plaintiff,
v. FORT BEND COUNTY, TEXAS
CENTRAL MUTUAL INSURANCE
COMPANY AND
TREVOR LINHART
Defendants. § 268™ JUDICIAL DISTRICT
AFFIDAVIT OF DAVID MASSEY Bu Wv
gC
STATE OF TEXAS §
§
COUNTY OF DALLAS §
Before me, the undersigned notary public, personally came and appeared David Massey, who
being sworn under oath, did state the following:
1 “My name is David Massey. I am over the age of 18 and have never been convicted of a
felony or crime involving moral turpitude. | am not suffering under any mental or physical
disabilities that would prevent me from making this affidavit. All of the facts recited in this
affidavit are true and correct and are based on my personal knowledge. Such facts were
gained in my capacity as an adjuster with Defendant, Central Mutual Insurance Company
(“Central”) who was assigned to the insurance claim of Plaintiff, Knut Arvid Johanson
(“Johanson”) made to Central that is involved in this lawsuit for wind and/or hail damage
occurring on or about April 16, 2015 to Mr. Johanson’s property located at 2010 Dowling
Drive, Richmond, Texas 77469-5114.
Attached as Exhibit “D” to this affidavit and expressly made a part hereof is a true and
correct copy of the insurance policy (No. FMH 5601875) issued by Central to Mr. Johanson
that is involved in this lawsuit.
On April 22, 2016 I received a copy of the appraisal award made concerning Mr. Johanson’s-
insurance claim involved in this lawsuit. A true and correct copy of that appraisal award I
$3,835.27, that would result in an actual cash value loss of $15,341.11. After applying the.
repaired or replaced. The depreciation portion of the appraisal award is withheld until Mr.
Central on April 26, 2016 payable to “Knut Arvid Johanson Jr, and Eleanor Johanson and-
Daly and Black P.C.” Eleanor Johanson was included as a payee on that check, because she
is also a named insured under Policy No. FMH 5601875 issued by Central that is involved
in this lawsuit. This check (Number 919723) was issued to pay the amount owed under
Policy FMH 5601875 for the actual cash value loss portion of the appraisal award, less the
policy deductible, based on the appraisal award rendered concerning Mr. Johanson’s
insurance claim involved in this lawsuit. That check (Number 919723) was negotiated and
AFFIDAVIT OF DAVID MASSEY - Page 2
cleared Central’s bank on March 24, 2017, I sent that check to Central’s attorney at the time,
Wayne Walters, to have same provided to Mr. Johanson’s attorney of record, Richard D.
Daly at Daly & Black, P.C.
As of the date of the signing of this affidavit, Central has not received anything from Mr.
Johanson, his attorney(s), or anyone that the damaged property that was the subject of the
appraisal award rendered concerning this matter has been repaired or replaced, and if'so, the
cost of such work, which items would be needed to determine what amount of the
depreciation portion of the appraisal award, if any, Mr. Johanson may be entitled to under
the replacement cost coverage of Policy No. EB issued by Central. In an effort
to try to bring this matter to a conclusion, Central issued payment (Check No. 921177) on
August 31, 2018 to “Knut Arvid Johanson Jr. and Eleanor Johanson and Daly and Black
P.C,” for the amount of $3,835.27, being the amount of depreciation in the appraisal award.
A true and correct copy of this check (Number 921177) is attached to this affidavit as Exhibit
“B”. I provided that check to Central’s current attorney, Russell J. Bowman, to provide to
Mr. Johanson’s attorney.
The original Check Number 921177 issued by Central did not contain the “VOID” words that
are on the copy which is attached as Exhibit “F”. As a security feature, when a Central check
like Number 921177 is written on that account of Central’s account with Chase Bank, as a
security feature, when a photocopy of such check is made, the copy will automatically show
the “VOID” words on the copy, to prevent any copy of the check from being us
Preview
Filed GR 10/4/2021 1:58 PM Beverley McGrew Walker District Clerk Fort Bend County, Texas Ashley Alaniz CAUSE NO. 15-DCV-223679 KNUT ARVID JOHANSON § IN THE DISTRICT COURT OF Plaintiff, § vi FORT BEND COUNTY, TEXAS CENTRAL MUTUAL INSURANCE COMPANY AND TREVOR LINHART Defendants. 458" JUDICIAL DISTRICT DEFENDANTS’ SECOND MOTION FOR SUMMARY JUDGMENT Defendants, Central Mutual Insurance Company (“Central”) and Trevor Linhart, file this Second Motion for Summary Judgment, and in support of same would show the following: INTRODUCTION This lawsuit involves a dispute over the amount of loss sustained to the property at 2010 Dowling Drive, Richmond, Texas 77469, belonging to Plaintiff, Knut Arvid Johanson (“Johanson”), as a result of a wind and hail storm that hit the Richmond area on or about April 16, 2015. Summary judgment in Central’s favor dismissing all of Johanson’s claims is required under Texas law, because the dispute over the amount of loss went through the appraisal required by Johanson’s insurance contract, and Central timely paid the amount owed pursuant to the appraisal award. Under Texas law, this would preclude, as a matter of law, the contractual and extra-contractual causes of action asserted by Johanson, as the following illustrates. Defendant, Trevor Linhart, would likewise be entitled to summary judgment, since there is no conduct of his that in any way caused any damage or harm whatsoever to Johanson. EVIDENCE SUPPORTING MOTION Part of the evidence supporting this motion includes the pleadings and evidence already on DEFENDANTS’ SECOND MOTION FOR SUMMARY JUDGMENT - Pack I file in this matter or filed as of the time of the hearing on this motion. Other evidence offered in support of this motion is that evidence attached to and filed as part of this motion. That evidence, along with this motion, consists of one pdf document comprising a total of 188 pages. The evidence attached to this motion is pages 20-188 of that pdf document. References to such evidence will be made by reference to the page(s) being relied upon, with such being placed in parenthesis. The evidence attached to this motion consists of the following: Ex. A Affidavit of Mark West (20-21); Ex B Appraisal Award signed by both appraisers (22); Ex Affidavit of Central adjuster David Massey (23-26); Ex. Copy of Central Policy No. FMH 5601875 (27-101); Ex. Copy of Central’s Check No. 919723 in the amount of $13,241.11 (102-103); Ex. Copy of Check No. 921177 in the amount of $3,853.27 (104); Ex Copy of Central’s Russell Bowman’s September 5, 2018 letter to James Willis and copy of Central Check No. 921177 enclosed with same (105-109); Ex. Affidavit of Wayne Walters (110-111); Ex. Copy of Wayne Walters’ April 26, 2016 letter to Richard D. Daly and copy of Central Check No. 919723 enclosed with same (112-113); Ex. Affidavit of Russell J. Bowman (114-115); Ex. Plaintiff's First Amended Response to Request for Disclosure (116-185); and Ex. Austin vy. State Farm Lloyds, No. 1:16-CV-447-DAE, 2018 WL 6588571, at*3 (W.D. Tex. Nov. 9, 2018) (186-188). DEFENDANTS’ SECOND MOTION FOR SUMMARY JUDGMENT - Pacr 2 UNDISPUTED FACTS The evidence attached to this motion shows the following facts are undisputed: QQ) Johanson alleges his property located at 2010 Dowling Drive, Richmond, Texas 77469 was damaged by wind and hail on or about April 16, 2015. (para. 9 of Johanson’s Original Petition filed on May 26, 2015) (2) At the time of that April 16, 2015 storm, Johanson’s property located at 2010 Dowling Drive, Richmond, Texas 77469 was insured under a policy issued by Central, being Policy No. FMH 5601875. (27). 3) Johanson’s insurance contract contains a deductible of $2,100. (27). (4) Disagreement arose between Central and Johanson over the amount of loss to Johanson’s property from the April 16, 2015 storm damage, so that Central demanded appraisal under Johanson’s insurance contract to resolve that dispute. (See Central’s Motion for Appraisal filed on June 12, 2015). (5) An appraisal award was entered, signed by Mr. Johanson’s appraiser, Shannon Kimmel, on April 21, 2016, and by Central’s appraiser, Mark West, on April 22, 2016. (21-22). (6) The appraisal award was for a replacement cost loss of $19,176.38, with depreciation of $3,835.27, and an actual cash value loss of $15,341.04. (22) 7) Central received the appraisal award on April 22, 2016. (24). (8) Pursuant to the appraisal award, Central issued payment (Check No. 919723) on April 25, 2016 to Johanson for $13,241.11 (being the $19,176.38 replacement cost loss amount in the appraisal award, less the depreciation of $3,835.27 in the award, and less the $2,100 policy deductible). (24-25 & 102-103). (9) Central’s Check No. 919723 was made payable to “Knut Arvid Johanson Jr. and Eleanor Johanson and Daly and Black P.C.” (24 & 102) (10) On April 26, 2016, Central Check No. 919723 was hand delivered to Johanson’s attorney of record, Richard D. Daly at Daly & Black, P.C., along with the April 26, 2016 letter from Central’s attorney. (111-113). ay Central’s Check No. 919723 was negotiated and cleared Central’s bank on March 24, 2017. (24-25 & 102-103). DEFENDANTS’ SECOND MOTION FOR SUMMARY JUDGMENT - Pace 3 (12) In an effort to try to bring this matter to a conclusion, Central issued payment (Check No. 921177) on August 31, 2018 to “Knut Arvid Johanson Jr. and Eleanor Johanson and Daly and Black P.C.” for the amount of $3,835.27, being the amount of depreciation in the appraisal award. (25 & 104). (13) Central’s Check No. 921177 was delivered to Plaintiff's attorney on September 10, 2018. (105-109 & 114-115). (14) Plaintiff Johanson is deceased. (118). SUMMARY OF ARGUMENT The evidence to this motion is undisputed that less than five business days after Central received the appraisal award, payment of the actual cash value loss of the award (which would be the replacement cost loss in the award less the depreciation in the award), less the policy deductible was received by Johanson’s attorney. In addition, such evidence also shows that even though nothing has been presented to Central to show the depreciation portion of the award would be owed by Central, that amount has been paid by Central. The evidence shows that Central has paid the entire possible amount that could be owed under the insurance contract to Johanson, even though Johanson has yet to provide anything showing the damaged property has been repaired and/or replaced, and the cost of such, which would be required to entitle Johanson to recover replacement cost, i.e., the withheld depreciation in the appraisal award. As will be further shown, the undisputed evidence to this motion requires that all of the claims asserted by Johanson against Central be dismissed because: (1) payment of the appraisal award precludes Johanson’s breach of contract and extra-contractual claims; and (2) Johanson’s death precludes the claims for interest and attorney’s fees under the Prompt Payment of Claims Act, because such claims are personal to Johanson, which extinguished at his death. The claims against Linhart should be dismissed for the same reason, and because there is no conduct of his that caused any damage to Johanson whatsoever. Therefore, DEFENDANTS’ SECOND MOTION FOR SUMMARY JUDGMENT - Pace 4 Central, as well as Linhart, are entitled to summary judgment dismissing Johanson’s lawsuit with prejudice. PERTINENT POLICY PROVISIONS The Central insurance contract contains several provisions pertinent to this matter. One such provision is the appraisal clause of the contract, which provides: Appraisal If you and we disagree on the amount of loss, either may demand an appraisal of the loss. In this event, each party will choose a competent and impartial appraiser within 20 days after receiving a written request from the other. The two appraisers will choose an umpire. If they cannot agree upon an umpire within 15 days, you or we may request that the choice be made by a judge of a court of record in the state where the “residence premises” is located. The appraisers will separately set the amount of loss. If the appraisers submit a written report of an agreement to us, the amount agreed upon will be the amount of loss. If they fail to agree, they will submit their differences to the umpire. A decision agreed to by any two will set the amount of loss. Each party will: 1. Pay its own appraiser; and 2. Bear the other expenses of the appraisal and umpire equally. (44). Another pertinent provision is the “Loss Payment” provision, which is contained in the “SPECIAL PROVISIONS -TEXAS” endorsement. This provision states: J. Loss Payment We will adjust all losses with you. We will pay you unless some other person is named in the Policy or is legally entitled to payment. If we notify you that we will pay your claim, or part of your claim, we DEFENDANTS’ SECOND MOTION FOR SUMMARY JUDGMENT - Pace 5 must pay within five “business days” after we notify you. Ifpayment of your claim or part of your claim requires the performance of an act by you, we must pay within five “business days” after the date you perform the act. (72). ARGUMENT AND AUTHORITIES - SUMMARY JUDGMENT FOR CENTRAL A. Johanson’s Breach of Contract Claim Johanson has asserted a claim against Central for breach of contract. (paragraph 15 of Johanson’s Petition filed on May 26, 2015). By the December 5, 2016 Order entered in this matter, Central has been granted summary judgment dismissing that claim. Further showing summary judgment dismissing that claim is correct is that with Central’s payment of the depreciation amount of the appraisal award, even though Johanson has yet to provide anything to show entitlement to recovery of the depreciation, there would be absolutely no breach of contract claim whatsoever which Johanson could assert against Central. 1 Only Actual Cash Value Loss Owed Upfront The replacement cost coverage of the Central policy states as follows: 2. Buildings covered under Coverage A or B at replacement cost without deduction of depreciation, subject to the following: If, at the time of loss, the amount of insurance in this policy on the damaged building is 80% or more of the full replacement cost of the building immediately before the loss, we will pay the cost to repair or replace, without deduction for depreciation, but not more than the least of the following amounts: 1) The limit of liability under this policy that applies to the building; 2) The replacement cost of that part of the DEFENDANTS’ SECOND MOTION FOR SUMMARY JUDGMENT - PAGE 6 building damaged with material of like kind and quality and for like use; or 3) The necessary amount actually spent to repair or replace the damaged building. If the building is rebuilt at a new premises, the cost described in 2) above is limited to the cost which would have been incurred if the building had ben built at the original premises. b. If, at the time of loss, the amount of insurance in this policy on the damaged building is less than 80% of the full replacement cost of the building immediately before the loss, we will pay the greater of the following amounts, but not more than the limit of liability under this policy that applies to the building: 1) The actual cash value of that part of the building damaged; or 2) That proportion of the cost to repair or replace, without deduction for depreciation, that part of the building damaged, which the total amount of insurance in this policy on the damaged building bears to 80% of the replacement cost of the building. Cc To determine the amount of insurance required to equal 80% of the full replacement cost of the building immediately before the loss, do not include the value of: 1) Excavations, footings, foundations, piers, or any other structures or devices that support all or part of the building, which are below the undersurface of the lowest basement floor; 2) Those supports in 1) above which are below the surface of the ground inside the foundation walls, if there is no basement; and 3 Underground flues, pipes, wiring and drains. d. We will pay no more than the actual cash value of the damage until actual repair or replacement is complete. Once actual repair or replacement is complete, we will settle the loss as noted in 2.a. and DEFENDANTS’ SECOND MOTION FOR SUMMARY JUDGMENT - PAGE 7 b. above. However, if the cost to repair or replace the damage is both: 1) Less than 5% of the amount of insurance in this policy on the building; and 2) Less than $2500; we will settle the loss as noted in 2.a. and b. above whether or not actual repair or replacement is complete. ee You may disregard the replacement cost loss settlement provisions and make claim under this policy for loss to buildings on an actual cash value basis. You may then make claim for any additional liability according to the provisions of this Condition D. Loss Settlement, provided you notify us, within 180 days after the date of loss, of your intent to repair or replace the damaged building. (44) (Emphasis added). This language is clear and unambiguous. This was so held in Ghoman v. New Hampshire Ins. Co., 159 F.Supp.2d 928, 932 (N.D.Tex. 2001) (applying Texas law), citing Kolls v. Aetna Casualty and Surety Co., 378 F.Supp. 392, 397 (S.D.lowa), aff'd, 503 F.2d 569 (8th Cir.1974); Huggins v. Hanover Insurance Co., 423 So0.2d 147, 150 (Ala.1982); Higgins v. Insurance Co. of North America, 256 Or. 151, 469 P.2d 766, 774 (1970). As the Court noted in Ghoman, replacement cost coverage like that of the Central policy allows the insured to either make a claim for replacement costs up to the policy limits, or actual cash value supplemented by additional replacement cost coverage. Ghoman, 159 F.Supp.2d at 932. As the Court noted further in Ghoman, the purpose of this two-step process is to enable the insured to obtain funds “to begin the process of repair or replacement, at which point [the insured] could submit claims for expenditures that went above the actual cash value of the loss.” Ghoman, at 933, citing, DEFENDANTS’ SECOND MOTION FOR SUMMARY JUDGMENT - Pace 8 Fraley vy. Allstate Insurance Co., 97 Cal.Rptr.2d 386, 390, 81 Cal.App.4th 1282, 1290 (2000), quoting Myers v. Allstate Insurance Co., 989 F.Supp. 1250, 1254 (C.D.Cal.1997). See also, D & S Realty, Inc. v. Markel Insurance Company, 284 Neb. 1, 816 N.W.2d 1, 12 (2012) (noting that where insured has contracted for replacement cost coverage, the insured will normally be entitled under the policy to an immediate payment representing the actual cash value of the loss, which can be used as seed money to start the repairs). The fact that the term “actual cash value” is not specifically defined in the Central policy does not make the policy ambiguous. As was noted in Ghoman, the term “actual cash value” means repair or replacement cost, less depreciation. See also Tolar v. Allstate Texas Lloyd’s Company, 772 F.Supp.2d 825, 831 (N.D. Tex. 2011) (noting that “actual cash value” under Texas law means replacement cost less depreciation). The replacement cost coverage is clear that nothing is owed for replacement cost until the damaged property is actually replaced. (44). Under Texas law, this provision is enforced as written. Namely, the insured is not entitled to recover replacement cost damages until the insured has actually repaired or replaced the damaged property. Fitzhugh 25 Partners v. KILN Syndicate KLN, 261 S.W.3d 861 (Tex.App.-Dallas 2008, rev. denied). As shown by Central’s First Amended Answer filed on October 1, 2018, Central has denied Johanson has complied with this provision, requiring that Johanson present proof of compliance with this provision. Fitzhugh is like countless other courts which hold the insured is bound to comply with the repair/replace condition before the insured can recover replacement costs. See Versai Management Corp. v. Clarendon America Ins., 597 F.3d 729 (5" Cir. 2010); Kolls v. Aetna Casualty and Surety Company, 503 F.2d 569 (8" Cir. 1974); Bourazak v. North River Insurance Company, 379 F.2d 530 DEFENDANTS’ SECOND MOTION FOR SUMMARY JUDGMENT - Pace 9 (7" Cir. 1967); Huggins v. Hanover Ins. Co., 423 So.2d 147 (Ala. 1982); Rhodes v. Farmers Ins. Co.,79 Ark. App. 230, 86 S.W.3d 401 (2002); Higginbotham v. Am. Family Ins. Co., 143 Ul.App.3d 398, 493 N.E.2d 373, 97 Ill.Dec. 710 (1986); Burchett v. Kansas Mut. Ins. Co., 30 Kan.App.2d 826, 48 P.3d 1290 (2002); Porter v. Shelter Mut. Ins. Co., 242 S.W.3d 385 (Mo.App. 2007); Nicolaou v. Vermont Mut. Ins. Co., 155 N.H. 724, 931 A.2d 1265 (2007); De Lorenzo v. Bac Agency Inc., 256 A.D.2d 906, 681 N.Y.S.2d 846 (1998); Bratcher v. State Farm Fire & Cas. Co., 961 P.2d 828 (Okla.1998); Burton v. Republic Ins. Co., 845 A.2d 889 (Pa.Super. 2004); Saleh v. Farmers Ins. Exchange, 133 P.3d 428 (Utah 2006); Hess v. North Pacific Ins. Co., 122 Wash.2d 180, 859 P.2d 586 (1993). The replacement cost coverage of the Central policy is exactly like that of the cases discussed above. As those cases show, under replacement cost coverage like that of the Central policy, the insured initially receives payment for the actual cash value loss to the damaged property (less any applicable deductible), with the chance to make an additional claim under the replacement cost coverage for the withheld depreciation, should the insured have the damaged property repaired or replaced. As the actual cash value loss for the damaged property is the cost to repair/replace that particular property, less depreciation, Central, after receiving the appraisal award and in compliance with the contract, paid Johanson $13, 241.11, which was the actual cash value loss (replacement cost less depreciation) less the policy deductible. (24 & 102-103). Johanson (through his attorney since he is represented by counsel) received that payment less than five business days from when the award was rendered, making Central’s payment of the award timely. (110-113). This would preclude the breach of contract, Insurance Code Chapter 541 unfair settlement practices claims, and DTPA claims asserted by Johanson in this lawsuit against Central as a matter of law. DEFENDANTS’ SECOND MOTION FOR SUMMARY JUDGMENT - PacE 10 2. Payment of Appraisal Award Precludes Breach of Contract Claim as a Matter of Law Based on the provisions of the replacement cost coverage that replacement cost is not owed until the damaged property is repaired or replaced, courts hold that payment of the actual cash value loss suffices as payment of an appraisal award where the insured has not yet replaced or repaired the damaged property. Ortiz v. State Farm Lloyds, 589 S.W.3d 127, 132 (Tex. 2019) (affirming court of appeals’ holding no breach of contract by insurer as a matter of law where insurer only paid actual cash value loss of appraisal award)'; Mainali Corp. v. Covington Specialty Ins. Co., 872 F.3d 255, 257 (5" Cir. 2017); Lakeside FBBC, LP v. Everest Indemnity Insurance Co.,__ F.Supp.3d__, 2020 WL 1814405, at *7-8 (W.D. Tex. 2020, appeal filed) (insurer’s payment of actual cash value loss of appraisal award entitled insurer to summary judgment on insured’s breach of contract claim); Durham v. Allstate Vehicle & Property Insurance Company, 2019 WL 764581, at *3 fn. 8 (S.D. Tex. 2019). The undisputed evidence shows that Central timely paid the appraisal award. (24, 102-103 & 109-112). The Loss Payment clause in the contract states that “If we notify you that we will pay your claim, or part of your claim, we must pay within 5 business days after we notify you.” (72). The evidence shows that the appraisal award was received by Central on April 22, 2016, and Central issued payment (Check No. 919723) to Johanson for the actual cash value amount of the appraisal award (less the policy deductible) on April 25, 2016. (24, 102-103 & 110-113). This payment was ‘Although not reflected by the Texas Supreme Court’s opinion, the court of appeals’ opinion in Ortiz clearly reflects the payment made by the insurer was for the actual cash value loss of the appraisal award. See Ortiz v. State Farm Lloyds, 568 8.W.3d 156, 158 (Tex.App.-San Antonio 2017). DEFENDANTS’ SECOND MOTION FOR SUMMARY JUDGMENT - Pace 11 received by Johanson’s attorney, along with the letter conveying Central’s acceptance of the award, on April 26, 2016. (110-113). Since Central notified Johanson it would be making payment on the award at the same time it made the payment, all within less than five business days from the date of he award, Central’s acceptance of the appraisal award and payment of same were clearly timely. See McEntyre v. State Farm Lloyds, Inc., 2016 WL 6071598, at *5 (E.D.Tex. 2016) (holding that the time to pay an appraisal award did not begin to run until the insurer stated that it would pay the award); Gabriel v. Allstate Texas Lloyds, 2013 WL 7885700, at *6 (S.D.Tex. 2013) (same). In order to process any claim by Johanson for the amount of depreciation contained in the appraisal award, he would be required to have the damaged property that was the subject of the appraisal repaired and/or replaced, and provide Central the documents showing the cost of such work. (24 & 44). Central has never received anything from Johanson, his attorney(s), or anyone else that the damaged property that is the subject of the appraisal award was ever repaired or replaced, and if it was, the cost of such work. (25). Despite this, Central issued a payment on August 31, 2018 (Check No. 921177 payable to “Knut Arvid Johanson Jr. and Eleanor Johanson and Daly and Black P.C.”) for the $3,835.27 depreciation contained in the appraisal award. (25 & 104). This check was unconditionally tendered. (108). On September 5, 2018, that check, along with the September 5, 2018 letter from Central’s attorney, Russell J. Bowman, enclosing that check, were mailed by certified mail, return receipt requested, to Johanson’s attorney, James Willis with Daly & Black, P.C., which items were delivered on September 10, 2018. (114-115). With the payment of the depreciation in the award being made by Central, even though such is not yet owed under the insurance contract, this would further show the December 5, 2016 order granting Central summary DEFENDANTS’ SECOND MOTION FOR SUMMARY JUDGMENT - Pace 12 judgment dismissing Johanson’s breach of contract claim is proper, as there is absolutely nothing whatsoever that Johanson can recover under the insurance contract. B Appraisal Precludes Any Extra-Contractual Claims Johanson has asserted extra-contractual claims against Central for violations of Sections 541.051, 541.060, and 541.061 of the Texas Insurance Code, and for violation of the Texas Deceptive Trade Practices Act. (See paras. 18-24 of Plaintiff's Original Petition filed on May 26, 2015). Summary judgment dismissing those claims is appropriate. Texas law is clear that where an insurer has timely paid an appraisal award, this precludes any claim against the insurer for unfair settlement practices, breach of the duty of good faith and fair dealing, or DTPA claims as a matter of law. Ortiz, 589 S.W.3d at 133-35; Perry v. United Service. Auto. Ass’n, 602 S.W.3d 915, 917 fn. 2 (Tex. 2020). See also Lopez v. Allstate Texas Lloyds, No. 7:18-CV-260, 2020 WL 292342, at *9 (S.D. Tex. Jan. 21, 2020) (granting summary judgment on extra-contractual claims where insurer paid appraisal award because that payment provides all policy benefits to which the insured is entitled); Dunne v. Allstate Vehicle and Prop. Ins. Co., No. H-18- 4519, 2020 WL 130101, at *2, (S.D. Tex. Jan. 10, 2020) (same); Alcala v. Republic Lloyds, No. 13- 18-26-CV, 2020 WL 830840, at *3 (Tex.App.-Corpus Christi Feb. 20, 2020, no pet.) (citing Ortiz to grant summary judgment on statutory bad faith claims under both Insurance Chapter 541 and the DTPA). As the evidence in this matter is undisputed that the appraisal award was timely paid by Central, this would require that all of Johanson’s extra-contractual claims against Central, including his claims for unfair settlement practices under Chapter 541 of the Texas Insurance Code and his claims under the Deceptive Trade Practices Act, be dismissed with prejudice. DEFENDANTS’ SECOND MOTION FOR SUMMARY JUDGMENT - Pace 13 Cc. Johanson’s Death Extinguishes His Chapter 542.051 Claims Johanson’s remaining claim against Central is for interest and attorney’s fees under Insurance Code Section 542.060 of the Prompt Payment of Claims Act (hereinafter referred to as the “Act”). (para. 27 of Johanson’s Petition filed on May 26, 2015). Johanson’s First Amended Disclosure Response served on March 30, 2021 shows Johanson is deceased, as that amended response shows the correct plaintiff in this suit is Michael Johanson, who is described as Johanson’s Personal Representative and executor of Johanson’s estate. (118). Summary judgment dismissing any claim by Johanson for relief under Insurance Code Section 542.060 is required, because such claim became extinguished on Johanson’s death. No Texas survival statute exists that covers extra-contractual claims in the insurance context, and the Texas Insurance Code does not contain any provision regarding whether claims raised under Chapter 542 survive the death of an insured. Absent a statute providing to the contrary, a cause of action that is penal or personal in nature does not survive the death of the person having such cause of action. Belt v. Oppenheimer, Blend, Harrison & Tate, Inc., 192 S.W.3d 780, 784 (Tex. 2006). Courts addressing the issue hold that causes of action under the Insurance Code are personal and do not survive the insured’s death. These cases include Mendoza v. Am. Nat. Ins. Co., 932 S.W.2d 605, 609 (Tex.App.-San Antonio 1996, no writ); (concluding claims under Chapter 541 of the Texas Insurance Code do not survive and cannot be brought by a representative of the estate); Launius y. Allstate Ins. Co., No. 3:06-CV-579-B, 2007 WL 1135347, at *6 (N.D. Tex. April 17, 2007) (same); and Austin v. State Farm Lloyds, No. 1:16-CV-447-DAE, 2018 WL 6588571, at*3 (W.D. Tex. Nov. 9, 2018) (concluding claims under the Act do not survive the insured’s death). Austin is of particular relevance, because the court held that the Act is a penal statute, so that DEFENDANTS’ SECOND MOTION FOR SUMMARY JUDGMENT - PAcE 14 claims brought under it do not survive the insured’s death. The court’s reasoning in reaching that conclusion is sound, and follows Texas law. Chapter 542 of the Texas Insurance Code provides that when an insurer fails to timely pay aclaim by an insured, the insurer is liable not just for the amount due on the claim but also “interest on the amount of the claim at the rate of 18 percent a year as damages, together with reasonable attorney’s fees.” Tex. Ins. Code § 542.060(a). The Texas Supreme Court has characterized this section as “penal in nature,” State Farm Life Ins. Co. v. Martinez, 216 S.W.3d 799, 805 (Tex. 2007). Consistent with Martinez, the Dallas Court of Appeals has squarely held that the statutory 18% interest awarded as damages under the Prompt Payment Act is exemplary damages, not actual damages. Texas Farmers Ins. Co. v. Cameron, 24 S.W.3d 386, 399 (Tex.App.-Dallas 2000, rev. denied) (holding that “damages” under Texas Insurance Code article 21.55 § 6”, the previous version of Tex. Ins. Code § 542.060, means exemplary damages, rather than actual damages). See also, J. C. Penney Life Ins. Co. v. Heinrich, 32 S.W.3d 280, 289 (Tex.App.- San Antonio 2000); Tex. Civ. Prac. & Rem. Code § 41.001(4) (defining “exemplary damages” as “any damages awarded as a penalty or by way of punishment but not for compensatory purposes,” including punitive damages). The Texas Supreme Court has also characterized statutes permitting the award of attorneys’ fees as penal in nature. See Med. City Dallas, Ltd. v. Carlisle Corp., 251 S.W.3d55, 58 (Tex. 2008); New Amsterdam Cas. Co. v. Tex. Indus., Inc., 414 S.W.2d 914, 915 (Tex. 1967). These relevant precedents demonstrate that the interest and attorney fees provisions in § 542.060 make it a “penal” statute. Because the statute is penal in nature, the court in Austin correctly concluded the insured’s *Article 21.55 was repealed in 2003 and recodified at §§ 542.051 through 542.061 of the Texas Insurance Code, effective April 1, 2005. DEFENDANTS’ SECOND MOTION FOR SUMMARY JUDGMENT - Pace 15 claims under the Act did not survive the insured’s death. This is because under Texas common law, if the sum sued for is a penalty, the cause of action for such dies with the death of the plaintiff. Johnson y. Rolls, 97 Tex. 453, 79 8.W. 513, 514 (1904); Whorton v. Nevitt, 42 S.W.2d 1056, 1057 (Tex.Civ.App.-1931, no writ) (noting that in absence of a statute to the contrary, cause of action for a statutory penalty does not survive the death of the plaintiff). The court’s conclusion in Austin is further supported by a line of cases holding that claims under chapter 542 are personal to the insured. See Evanston Ins. Co. v. ATOFINA Petrochemicals, Inc., 256 S.W.3d 660, 675 (Tex. 2008) (noting that the Texas legislature “intended that article 21.55 apply to claims personal to the insured”); Lamar Homes, Inc. v. Mid-Continent Cas. Co., 242 8.W.3d 1, 19-20 (Tex. 2007) (reviewing history of Chapter 542 and concluding that the legislators intended chapter 542 apply to claims personal to the insured); First Nat. Bank of Kerrville v. Hackworth, 673 S.W.2d 218, 220 (Tex.App.-San Antonio 1984) (“The right to recover punitive damages is considered a purely personal right.”); see also Am. S. Ins. Co. v. Buckley, 748 F.Supp.2d 610, 626 (E.D. Tex. 2010) (noting statutory remedies under chapter 542 of the Texas Insurance Code are personal and punitive in nature and the Insurance Code makes no provision for assignability of such claims). Johanson’s death extinguishes his claim for interest and attorney’s fees under the Act. Therefore, summary judgment dismissing that claim is required. As that leaves no other claim of Johanson against Central viable, summary judgment dismissing Johanson’s lawsuit against Central is required. ARGUMENT AND AUTHORITIES - SUMMARY JUDGMENT FOR LINHART Johanson has asserted claims against Linhart for violation of Sections 541.051, 541.060, and DEFENDANTS’ SECOND MOTION FOR SUMMARY JUDGMENT - PAcE 16 541.061 of the Texas Insurance Code and for violation of the Texas Deceptive Trade Practices Act. (See paras. 18-23(1) of Plaintiff's Original Petition filed on May 26, 2015). Johanson also asserts that he is entitled to exemplary or treble damages under the DTPA and Section 541.152(a) - (b) of the Texas Insurance Code for Linhart’s conduct allegedly being committed knowingly. (para. 24 of Johanson’s Original Petition filed on May 26, 2015). Linhart is entitled to summary judgment dismissing all of these claims. A. Insurance Code and DTPA Claims As to Johanson’s claims against Linhart for violations of Chapter 541 of the Insurance Code, as well as Johanson’s claims against Linhart under the Deceptive Trade Practices Act, summary judgment dismissing those claims with prejudice should be granted. This is because as the undisputed summary judgment evidence highlighted above shows, Johanson received all benefits to which he is entitled under his insurance contract with Central. Appraisal determined the amount of loss and Johanson was paid everything that could possibly be owed to him pursuant to the appraisal award. Therefore, no conduct of Mr. Linhart was a proximate or producing cause of any damage to Johanson. Johanson would be required to prove damage suffered from Linhart’s conduct, in order to prevail on his Insurance Code and DTPA claims against Linhart. Tex. Ins. Code 541.151; Meza v. Underwriters at Lloyd’s of London Syndicate 2488, No. DR-14-CV-087-AM-VRG, 2015 WL 13283045, at *5 (W.D. Tex. April 1, 2015); Kish v. Van Note, 692 S.W.2d 463, 466 (Tex. 1985) (holding damages recoverable under DTPA are those sustained as a result of the defendant’s deceptive act or practice). Since the undisputed evidence shows no conduct of Linhart caused Johanson any damages, Johanson’s suit against Linhart must be dismissed. Further, as demonstrated above, Johanson’s Chapter 541 Insurance Code claims against DEFENDANTS’ SECOND MOTION FOR SUMMARY JUDGMENT - Pac 17 Linhart do not survive his death, so those claims against him should be dismissed. Likewise, Johanson’s DTPA claims against Linhart do not survive his death. Boudreaux v. Corium Intern., Inc., No. 3:12-cv-2644-M, 2013 WL 1890269, at *3 (N.D. Tex. May 7, 2013). For these additional reasons, all of Johanson’s claims against Linhart must be dismissed, with prejudice. B. No Evidence Motion Adequate time for discovery has passed. As indicated above, Johanson has the burden of proof of showing Linhart engaged in conduct that caused Johanson damage. Johanson cannot show any conduct of Mr. Linhart that was a producing or proximate cause of any damage to Johanson. Therefore, under Rule 166a(i) of the Texas Rules of Civil Procedure, summary judgment should be granted in Mr. Linhart’s favor, dismissing with prejudice all of Johanson’s claims asserted against Mr. Linhart. CONCLUSION AND PRAYER For all of the above reasons, Defendants, Central Mutual Insurance Company and Trevor Linhart, pray that this motion be granted in its entirety, and that after all due proceedings be had, that summary judgment be granted in their favor, dismissing with prejudice all of Plaintiff's causes of action asserted against them in this lawsuit, for the entry of a final order/judgment dismissing Plaintiff's lawsuit with prejudice, and for any and all other relief to which Defendants may be entitled, at law or in equity. Respectfully submitted, /S/Russell J. Bowman Russell J. Bowman Texas State Bar No. 02751550 800 West Airport Freeway, Suite 860 DEFENDANTS’ SECOND MOTION FOR SUMMARY JUDGMENT - PAcE 18 Irving, Texas 75062 (214) 922-0220 (214) 922-0225 (FAX) E-Mail: russelljbowman@sbcglobal.net ATTORNEY FOR DEFENDANTS CERTIFICATE OF SERVICE This is to certify that on October 4, 2021, I served a copy of the foregoing document on all counsel of record, as indicated below: Mr. James Willis VIA E-MAIL: jwillis@dalyblack.com DALY & BLACK, P.C. 2211 Norfolk Street, Suite 800 Houston, Texas 77098 S/Russell J. Bowman Russell J. Bowman DEFENDANTS’ SECOND MOTION FOR SUMMARY JUDGMENT - PAcE 19 CAUSE NO. 15-DCV-223679 KNUT ARVID JOHANSON § IN THE DISTRICT COURT OF Plaintiff, ¥. FORT BEND COUNTY, TEXAS CENTRAL MUTUAL INSURANCE COMPANY AND TREVOR LINHART Defendants. § 268™ JUDICIAL DISTRICT AFFIDAVIT OF MARK WEST STATE OF TEXAS § re x § i COUNTY OF HARRIS § Before me, the undersigned notary public, personally came and appeared Mark West, who being sworn under oath, did state the following: 1 “My name is Mark West. I am over the age of 21 and have never been convicted ofa felony c or crime involving moral turpitude. I am not suffering under any mental or physical disabilities that would prevent me from making this affidavit. All of the facts recited in this affidavit are true and correct and are based on my personal knowledge. Such facts were gained in my capacity as the appraiser for Defendant, Central Mutual Insurance Company (“Central”) in connection with the appraisal that was conducted concerning the claim made by Plaintiff, Knut Arvid Johanson, to Central for wind and/or hail damage occurring on or about April 16, 2015 to Mr. Johanson’s property located at 2010 Dowling Drive, Richmond, Texas 77469-5114. After being selected by Central to serve as its appraiser for the appraisal concerning the claim made by Knut Arvid Johanson to Central for wind and/or hail damage occurring on or about April 16,2015 to Mr. Johanson’s property located at 2010 Dowling Drive, Richmond, Texas 77469-5114, myself and Mr. Johanson’s appraiser, Shannon Kimmel, agreed for Mr. Clay Morrison to serve as umpire. Attached as Exhibit “B” to this affidavit and expressly made a part hereof is a true and correct copy of the appraisal award signed by myself and Mr. Johanson’s appraiser, Shannon Kimmel, for the appraisal that was conducted concerning Mr. Johanson’s claim to Central for the wind and/or hail damage occurring on or about April 16, 2015 to Mr. Johanson’s- property located at located at 2010 Dowling Drive, Richmond, Texas 77469-5114. NXted— FURTHER AFFIANT SAYETH NOT.” Mark We; NO SUBSCRIBED AND SWORN TO BEFORE ME, o1 i day of 2018, to certify which witness my hand and seal of office. My commission expires: 1-30-04 the State of Texas MARTE, STASTAY MARIE STASTNY Printed Name of Notary Notary Public, Seate of Tans <9 Notary (D ea 04-80-2021 ‘AFFIDAVIT OF MARK WEST - Page 2 Appraisal Award w Insured: Arvid Johanson surance Company: Central Chin Loss Address: 210 Dowling Drive, Richmond, TX 77469 We, the undersigned, pursuant to the Appraisal Appointment, DO HEREBY CERTIFY. that we truly and conscientiously performed the duties assigned and do hereby award as the amount of the loss to said property as a result of wind and hail under the above cited claim number. lou as fee ds $3,835.27 $15,341.04. Special Provisions: The appraisal panel did not consider deductibles, any prior payments, any code upgrade requirements or law & ordinance enforcement. The appraisal panel did not consider or appraise any interior damages. 6 /\ pp Umpire Signature/Clay Morrison EXHIBIT se CAUSE NO. 15-DCV-223679 KNUT ARVID JOHANSON § IN THE DISTRICT COURT OF Plaintiff, v. FORT BEND COUNTY, TEXAS CENTRAL MUTUAL INSURANCE COMPANY AND TREVOR LINHART Defendants. § 268™ JUDICIAL DISTRICT AFFIDAVIT OF DAVID MASSEY Bu Wv gC STATE OF TEXAS § § COUNTY OF DALLAS § Before me, the undersigned notary public, personally came and appeared David Massey, who being sworn under oath, did state the following: 1 “My name is David Massey. I am over the age of 18 and have never been convicted of a felony or crime involving moral turpitude. | am not suffering under any mental or physical disabilities that would prevent me from making this affidavit. All of the facts recited in this affidavit are true and correct and are based on my personal knowledge. Such facts were gained in my capacity as an adjuster with Defendant, Central Mutual Insurance Company (“Central”) who was assigned to the insurance claim of Plaintiff, Knut Arvid Johanson (“Johanson”) made to Central that is involved in this lawsuit for wind and/or hail damage occurring on or about April 16, 2015 to Mr. Johanson’s property located at 2010 Dowling Drive, Richmond, Texas 77469-5114. Attached as Exhibit “D” to this affidavit and expressly made a part hereof is a true and correct copy of the insurance policy (No. FMH 5601875) issued by Central to Mr. Johanson that is involved in this lawsuit. On April 22, 2016 I received a copy of the appraisal award made concerning Mr. Johanson’s- insurance claim involved in this lawsuit. A true and correct copy of that appraisal award I $3,835.27, that would result in an actual cash value loss of $15,341.11. After applying the. repaired or replaced. The depreciation portion of the appraisal award is withheld until Mr. Central on April 26, 2016 payable to “Knut Arvid Johanson Jr, and Eleanor Johanson and- Daly and Black P.C.” Eleanor Johanson was included as a payee on that check, because she is also a named insured under Policy No. FMH 5601875 issued by Central that is involved in this lawsuit. This check (Number 919723) was issued to pay the amount owed under Policy FMH 5601875 for the actual cash value loss portion of the appraisal award, less the policy deductible, based on the appraisal award rendered concerning Mr. Johanson’s insurance claim involved in this lawsuit. That check (Number 919723) was negotiated and AFFIDAVIT OF DAVID MASSEY - Page 2 cleared Central’s bank on March 24, 2017, I sent that check to Central’s attorney at the time, Wayne Walters, to have same provided to Mr. Johanson’s attorney of record, Richard D. Daly at Daly & Black, P.C. As of the date of the signing of this affidavit, Central has not received anything from Mr. Johanson, his attorney(s), or anyone that the damaged property that was the subject of the appraisal award rendered concerning this matter has been repaired or replaced, and if'so, the cost of such work, which items would be needed to determine what amount of the depreciation portion of the appraisal award, if any, Mr. Johanson may be entitled to under the replacement cost coverage of Policy No. EB issued by Central. In an effort to try to bring this matter to a conclusion, Central issued payment (Check No. 921177) on August 31, 2018 to “Knut Arvid Johanson Jr. and Eleanor Johanson and Daly and Black P.C,” for the amount of $3,835.27, being the amount of depreciation in the appraisal award. A true and correct copy of this check (Number 921177) is attached to this affidavit as Exhibit “B”. I provided that check to Central’s current attorney, Russell J. Bowman, to provide to Mr. Johanson’s attorney. The original Check Number 921177 issued by Central did not contain the “VOID” words that are on the copy which is attached as Exhibit “F”. As a security feature, when a Central check like Number 921177 is written on that account of Central’s account with Chase Bank, as a security feature, when a photocopy of such check is made, the copy will automatically show the “VOID” words on the copy, to prevent any copy of the check from being us