Preview
Electronically Filed
4/18/2024 5:07 PM
Hidalgo County District Clerks
Reviewed By: Armando Cantu
C-1833-24-A
CAUSE NO. ______________
H2183301 LLC DBA ALOHA INN § IN THE DISTRICT COURT
MCALLEN TX §
§
PLAINTIFF, §
§
§
VS. § HIDALGO COUNTY, TEXAS
§
§
ATEGRITY SPECIALTY INSURANCE §
COMPANY AND RICHARD DE LEON §
§
DEFENDANTS. § __________ JUDICIAL DISTRICT
PLAINTIFF’S ORIGINAL PETITION AND JURY DEMAND
TO THE HONORABLE JUDGE OF SAID COURT:
COMES NOW, H2183301 LLC, DBA Aloha Inn McAllen, TX (“Plaintiff”), and files this
Plaintiff’s Original Petition, complaining of Ategrity Specialty Insurance Company and Richard De
Leon (collectively, “Defendants”), and for cause of action, Plaintiff respectfully shows the following:
A. DISCOVERY CONTROL PLAN
1. Plaintiff intends to conduct discovery under Level 3 of the Texas Rules of Civil
Procedure.
B. PARTIES
2. Plaintiff, a Domestic Limited Liability Company, has its principal place of business in
Hidalgo County, Texas.
3. Defendant, Ategrity Specialty Insurance Company, is incorporated under the laws of
the State of Delaware with its principal place of business at 14000 N Pima Rd, Suite 200, Scottsdale,
AZ 85260. Pursuant to Texas Insurance Code § 804.201, Ategrity may be served with process by
serving the Texas Commissioner of Insurance, Texas Department of Insurance, 333 Guadalupe Street,
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Hidalgo County District Clerks
Reviewed By: Armando Cantu
C-1833-24-A
Austin, Texas 78701, as Ategrity Specialty Insurance Company’s agent for service of process. The
Commissioner will then forward the citation and petition to the officer authorized and directed to
accept service of process, Michael D. Miller, of Ategrity Specialty Insurance Company at 14000 N
Pima Rd, Suite 200, Scottsdale, Arizona 85260.
4. Defendant Richard De Leon, an insurance adjuster assigned to the subject loss by
Ategrity Specialty Insurance Company, may be served at 1134 Bianca Ct, Alamo, TX 78516. Plaintiff
requests service at this time.
C. JURISDICTION
5. The Court has jurisdiction over the Defendants because they engage in the business of
insurance in the State of Texas, and the causes of action arise out of their business activities in the State
of Texas, specifically in Hidalgo County, with reference to this case.
D. VENUE
6. Venue is proper in Hidalgo County, Texas, as the insured property is situated there,
pursuant to Tex. Civ. Prac. & Rem. Code § 15.032.
E. CONDITIONS PRECEDENT AND NOTICE
7. All conditions precedent to recovery have been performed, waived, or have occurred.
8. On October 25, 2022, Defendant received a pre-suit notice complying with Texas
Insurance Code § 542A.003.
F. AGENCY AND RESPONDEAT SUPERIOR
9. Whenever this petition alleges that Defendants committed any act or omission, it
implies that Defendants themselves, or through its agents, officers, servants, employees, or
representatives, committed such act or omission with full authorization or ratification of Defendants,
or it was done in the normal routine, course, and scope of the agency or employment of Defendants or
Electronically Filed
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Hidalgo County District Clerks
Reviewed By: Armando Cantu
C-1833-24-A
its representatives.
G. FACTS
10. Plaintiff is the named insured under a property insurance policy—01-C-PK-
P20023560-01 (the “Policy”)—issued by Defendant Ategrity Specialty Insurance Company. The
Policy insures, among other things, against losses from storm damage to Plaintiff’s property,
specifically the real property and improvements located at 301 E US Highway 83 McAllen, TX 78501
(the “Property”), a hotel operating under the name Aloha Inn McAllen, TX.
11. During the policy period, on or about April 28, 2023, a storm caused damage to the
Property covered under the Policy, with winds reaching 85 mph and hail up to 2.5 inches in diameter,
as reported by the National Weather Service. The Property sustained widespread damage, notably to
the shingle roof and the outdoor sign, with evident signs such as torn ridge caps, lifted, creased, and
torn shingles on all roof slopes, and exposure of the underlayment, which allowed water infiltration,
causing internal damage.
12. After noticing the damage, Plaintiff contacted Defendant Ategrity Specialty Insurance
Company to notify them of the damage.
13. On or about May 22, 2023, Plaintiff reported a loss to Defendant Ategrity Specialty
Insurance Company against the Policy for roof damage, exterior damage, and interior water damage
sustained by the Property due to the storm. Defendant Ategrity Specialty Insurance Company assigned
claim number 01CCP2023001225 (the “Claim”) to the loss.
14. Plaintiff requested that Defendant Ategrity Specialty Insurance Company honor its
contractual obligations to cover the cost of repairs to the Property.
15. Defendant Ategrity Specialty Insurance Company assigned adjuster Richard De Leon
to inspect and adjust the loss. On June 21, 2023, Richard De Leon inspected the Property but conducted
Electronically Filed
4/18/2024 5:07 PM
Hidalgo County District Clerks
Reviewed By: Armando Cantu
C-1833-24-A
only a cursory assessment. Despite clear evidence, he concluded the damage was negligible and
misinterpreted key damage indicators. His approach seemed dismissive, misleading Plaintiff about the
policy’s coverage, and resulted in an underpayment and partial denial of the claim by Defendant
Ategrity Specialty Insurance Company, based on Richard De Leon's report, by June 18, 2023.
16. Thus, Ategrity Specialty Insurance Company and Richard De Leon aimed to deny
properly-covered damages by conducting a biased, unfair, and inequitable evaluation of Plaintiff’s
losses on the Property.
17. Defendant Ategrity Specialty Insurance Company failed to fulfill its contractual
obligation to adequately compensate Plaintiff under the Policy terms, constituting a breach of the
insurance contract between Defendant and Plaintiff.
18. Despite the Property sustaining obvious damage from a covered occurrence,
Defendants misrepresented the scope of damage to the Property and the coverage under the Policy.
19. Defendants failed to make a fair attempt to settle Plaintiff’s claim, even though they
were aware of their liability to Plaintiff under the Policy.
20. Defendants refused to adequately compensate Plaintiff under the Policy terms and failed
to conduct a reasonable investigation of the claim.
21. Defendants failed to offer Plaintiff a reasonable explanation for the denial of Plaintiff’s
claim.
22. Defendants did not timely acknowledge Plaintiff’s claim, begin an investigation, or
request all information reasonably necessary to investigate the claim within the statutorily mandated
time of receiving notice of the claim.
23. Defendants failed to accept or deny Plaintiff’s full and entire claim within the statutorily
mandated time of receiving all necessary information.
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Hidalgo County District Clerks
Reviewed By: Armando Cantu
C-1833-24-A
24. Defendants delayed the full payment of Plaintiff’s claim longer than allowed, and to
date, Plaintiff has not received full payment for the claim.
25. Since the time Plaintiff’s claim was presented to Defendant Ategrity Specialty
Insurance Company, the liability of Defendant to pay the full claim according to the Policy terms has
been reasonably clear. Yet, Defendant Ategrity Specialty Insurance Company has refused to pay,
without any reasonable basis that a reasonable insurance company would have relied on to deny the
claim. This conduct is a violation of Defendant Ategrity Specialty Insurance Company’s duty of good
faith and fair dealing.
26. Plaintiff has suffered damages due to Defendants’ actions described above, which also
caused a delay in Plaintiff’s ability to fully repair the Property, resulting in additional damages.
H. CAUSES OF ACTION
i. Breach of Contract
27. Each of the foregoing paragraphs is incorporated by reference herein.
28. Plaintiff entered into a valid and enforceable written insurance contract with Defendant
Ategrity Specialty Insurance Company, governed by Texas law. The contract stipulated that Plaintiff
would pay policy premiums and Defendant Ategrity Specialty Insurance Company, as the insurer,
would provide coverage and pay for storm-related damage by the deadlines mandated by the Prompt
Payment of Claims Statute and the insurance contract. Plaintiff fulfilled its contractual obligations by
making the required policy premium payments. Defendant Ategrity Specialty Insurance Company
materially breached the insurance contract by failing to provide adequate coverage following the claim
filed by Plaintiff and by not properly adjusting the loss, paying for the value of lost or damaged
property, or repairing, rebuilding, or replacing the property with materials of like kind and quality, and
by wrongfully denying or underpaying the claim without conducting a reasonable investigation.
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Hidalgo County District Clerks
Reviewed By: Armando Cantu
C-1833-24-A
ii. Prompt Payment of Claims Statute
29. Each of the foregoing paragraphs is incorporated by reference in the following:
30. The failure of Defendant Ategrity Specialty Insurance Company to pay for Plaintiff
losses and/or to follow the statutory time guidelines for accepting or denying coverage constitutes a
violation of § 542.051 et seq. of the Texas Insurance Code.
31. Plaintiff has complied with Defendant Ategrity Specialty Insurance Company’s
reasonable requests for documentation and examination under oath.
32. Plaintiff, therefore, in addition to Plaintiff’s claims for damages, are entitled to interest
and attorneys’ fees as set forth in § 542.060 of the Texas Insurance Code.
iii. Violation of the Texas Insurance Code and DTPA
33. Each of the foregoing paragraphs is incorporated by reference in the following:
34. Defendants are required to comply with Chapter 541 of the Texas Insurance Code.
35. Defendants violated § 541.051 of the Texas Insurance Code by:
1) making statements misrepresenting the terms and/or benefits of the policy.
36. Defendants violated § 541.060 by:
1) misrepresenting to Plaintiff a material fact or policy provision relating to
coverage at issue;
2) failing to attempt in good faith to effectuate a prompt, fair, and equitable
settlement of Plaintiff respective claims with respect to which the insurer’s liability had become
reasonably clear;
3) failing to promptly provide to Plaintiff a reasonable explanation of the basis in
the policy, in relation to the facts or applicable law, for the insurer’s denial of their respective
claims or offer of a compromise settlement of a claim;
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Hidalgo County District Clerks
Reviewed By: Armando Cantu
C-1833-24-A
4) failing within a reasonable time to affirm or deny coverage of Plaintiff’s
respective claims or submit a reservation of rights to Plaintiff; and
5) refusing to pay the claims without conducting reasonable investigations with
respect to the claims;
37. Defendants violated § 541.061 by:
1) Misrepresenting to Plaintiff a material fact or policy provision relating to the
coverage at issue;
2) Failing to attempt in good faith to effectuate a prompt, fair, and equitable
settlement of Plaintiff's claims, for which the insurer's liability had become reasonably clear;
3) Failing to promptly provide to Plaintiff a reasonable explanation of the basis in
the policy, in relation to the facts or applicable law, for the insurer's denial of their claims or
offer of a compromise settlement;
4) Failing within a reasonable time to affirm or deny coverage of Plaintiff's claims
or submit a reservation of rights to Plaintiff; and
5) Refusing to pay the claims without conducting reasonable investigations.
38. Defendant Ategrity Specialty Insurance Company has violated the Texas Deceptive
Trade Practices Act (the “DTPA”) in the following respects:
1) Defendant Ategrity Specialty Insurance Company represented that the
agreements conferred or involved rights, remedies, or obligations that they did not have or
involve, or which were prohibited by law;
2) Defendant Ategrity Specialty Insurance Company failed to disclose information
concerning goods or services known at the time of the transaction when such failure to disclose
was intended to induce Plaintiff into a transaction that they would not have entered into had the
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Hidalgo County District Clerks
Reviewed By: Armando Cantu
C-1833-24-A
information been disclosed;
3) Defendant Ategrity Specialty Insurance Company, by accepting insurance
premiums but refusing without a reasonable basis to pay benefits due and owing, engaged in
an unconscionable action or course of action as prohibited by the DTPA § 17.50(a)(1)-(3),
taking advantage of Plaintiff’s lack of knowledge, ability, experience, and capacity to a grossly
unfair degree, resulting in a gross disparity between the consideration paid in the transaction
and the value received, in violation of Chapter 541 of the Insurance Code.
4) Defendant Ategrity Specialty Insurance Company knowingly committed the
acts complained of. Plaintiff is entitled to exemplary and/or treble damages pursuant to the
DTPA and Texas Insurance Code § 541.152(a)-(b).
iv. Attorney’s Fees
39. Plaintiff engaged the undersigned attorney to prosecute this lawsuit against Defendants
and agreed to pay reasonable attorney’s fees and expenses through trial and any appeal.
40. Plaintiff is entitled to recover reasonable and necessary attorney’s fees pursuant to Tex.
Civ. Prac. & Rem. Code §§ 38.001–38.003 because Plaintiff is represented by an attorney, presented
the claim to Defendant Ategrity Specialty Insurance Company, and Defendant Ategrity Specialty
Insurance Company did not tender the just amount owed before the expiration of the 30th day after the
claim was presented.
41. Plaintiff further prays that they be awarded all reasonable attorney’s fees incurred in
prosecuting their causes of action through trial and any appeal pursuant to Sections 541.152 and
542.060 of the Texas Insurance Code.
Electronically Filed
4/18/2024 5:07 PM
Hidalgo County District Clerks
Reviewed By: Armando Cantu
C-1833-24-A
I. STATEMENT OF RELIEF
42. As required by Rule 47(b) of the Texas Rules of Civil Procedure, Plaintiff’s counsel
states that the damages sought are within the jurisdictional limits of this Court. As required by Rule
47(c)(3) of the Texas Rules of Civil Procedure, Plaintiff’s counsel states that Plaintiff is seeking
monetary relief of over $250,000.00 but not more than $1,000,000.00. A jury will ultimately determine
the amount of monetary relief actually awarded. Plaintiff also seeks prejudgment and post-judgment
interest at the highest legal rate.
J. RESERVATION OF RIGHTS
43. Plaintiff reserves the right to prove the amount of damages at trial. Plaintiff reserves the
right to amend their petition to add additional counts upon further discovery and as the investigation
continues.
K. JURY DEMAND
44. Plaintiff hereby requests that all causes of action alleged herein be tried before a jury
consisting of citizens residing in Hidalgo County, Texas. Plaintiff hereby tenders the appropriate jury
fee.
I. PRAYER
WHEREFORE, PREMISES CONSIDERED, Plaintiff, H2183301 LLC DBA Aloha Inn
McAllen, TX, prays that, upon final hearing of the case, they recover all damages from and against
Defendants Ategrity Specialty Insurance Company and Richard De Leon that may reasonably be
established by a preponderance of the evidence, and that Plaintiff be awarded attorney’s fees through
trial and appeal, costs of court, prejudgment interest, post-judgment interest, and such other and further
relief, general or special, at law or in equity, to which Plaintiff may show themselves to be justly
entitled.
Electronically Filed
4/18/2024 5:07 PM
Hidalgo County District Clerks
Reviewed By: Armando Cantu
C-1833-24-A
Respectfully submitted,
ZAR LAW FIRM
/s/Matthew M. Zarghouni
Matthew Zarghouni
State Bar No. 24086085
17 S. Briar Hollow Ln, Suite 400A
Houston, Texas 77027
Office: (713) 333-5533
Fax: (281) 888-3150
Matt@zar-law.com
Service@zar-law.com
ATTORNEY FOR PLAINTIFF
Preview
Electronically Filed 4/18/2024 5:07 PM Hidalgo County District Clerks Reviewed By: Armando Cantu C-1833-24-A CAUSE NO. ______________ H2183301 LLC DBA ALOHA INN § IN THE DISTRICT COURT MCALLEN TX § § PLAINTIFF, § § § VS. § HIDALGO COUNTY, TEXAS § § ATEGRITY SPECIALTY INSURANCE § COMPANY AND RICHARD DE LEON § § DEFENDANTS. § __________ JUDICIAL DISTRICT PLAINTIFF’S ORIGINAL PETITION AND JURY DEMAND TO THE HONORABLE JUDGE OF SAID COURT: COMES NOW, H2183301 LLC, DBA Aloha Inn McAllen, TX (“Plaintiff”), and files this Plaintiff’s Original Petition, complaining of Ategrity Specialty Insurance Company and Richard De Leon (collectively, “Defendants”), and for cause of action, Plaintiff respectfully shows the following: A. DISCOVERY CONTROL PLAN 1. Plaintiff intends to conduct discovery under Level 3 of the Texas Rules of Civil Procedure. B. PARTIES 2. Plaintiff, a Domestic Limited Liability Company, has its principal place of business in Hidalgo County, Texas. 3. Defendant, Ategrity Specialty Insurance Company, is incorporated under the laws of the State of Delaware with its principal place of business at 14000 N Pima Rd, Suite 200, Scottsdale, AZ 85260. Pursuant to Texas Insurance Code § 804.201, Ategrity may be served with process by serving the Texas Commissioner of Insurance, Texas Department of Insurance, 333 Guadalupe Street, Electronically Filed 4/18/2024 5:07 PM Hidalgo County District Clerks Reviewed By: Armando Cantu C-1833-24-A Austin, Texas 78701, as Ategrity Specialty Insurance Company’s agent for service of process. The Commissioner will then forward the citation and petition to the officer authorized and directed to accept service of process, Michael D. Miller, of Ategrity Specialty Insurance Company at 14000 N Pima Rd, Suite 200, Scottsdale, Arizona 85260. 4. Defendant Richard De Leon, an insurance adjuster assigned to the subject loss by Ategrity Specialty Insurance Company, may be served at 1134 Bianca Ct, Alamo, TX 78516. Plaintiff requests service at this time. C. JURISDICTION 5. The Court has jurisdiction over the Defendants because they engage in the business of insurance in the State of Texas, and the causes of action arise out of their business activities in the State of Texas, specifically in Hidalgo County, with reference to this case. D. VENUE 6. Venue is proper in Hidalgo County, Texas, as the insured property is situated there, pursuant to Tex. Civ. Prac. & Rem. Code § 15.032. E. CONDITIONS PRECEDENT AND NOTICE 7. All conditions precedent to recovery have been performed, waived, or have occurred. 8. On October 25, 2022, Defendant received a pre-suit notice complying with Texas Insurance Code § 542A.003. F. AGENCY AND RESPONDEAT SUPERIOR 9. Whenever this petition alleges that Defendants committed any act or omission, it implies that Defendants themselves, or through its agents, officers, servants, employees, or representatives, committed such act or omission with full authorization or ratification of Defendants, or it was done in the normal routine, course, and scope of the agency or employment of Defendants or Electronically Filed 4/18/2024 5:07 PM Hidalgo County District Clerks Reviewed By: Armando Cantu C-1833-24-A its representatives. G. FACTS 10. Plaintiff is the named insured under a property insurance policy—01-C-PK- P20023560-01 (the “Policy”)—issued by Defendant Ategrity Specialty Insurance Company. The Policy insures, among other things, against losses from storm damage to Plaintiff’s property, specifically the real property and improvements located at 301 E US Highway 83 McAllen, TX 78501 (the “Property”), a hotel operating under the name Aloha Inn McAllen, TX. 11. During the policy period, on or about April 28, 2023, a storm caused damage to the Property covered under the Policy, with winds reaching 85 mph and hail up to 2.5 inches in diameter, as reported by the National Weather Service. The Property sustained widespread damage, notably to the shingle roof and the outdoor sign, with evident signs such as torn ridge caps, lifted, creased, and torn shingles on all roof slopes, and exposure of the underlayment, which allowed water infiltration, causing internal damage. 12. After noticing the damage, Plaintiff contacted Defendant Ategrity Specialty Insurance Company to notify them of the damage. 13. On or about May 22, 2023, Plaintiff reported a loss to Defendant Ategrity Specialty Insurance Company against the Policy for roof damage, exterior damage, and interior water damage sustained by the Property due to the storm. Defendant Ategrity Specialty Insurance Company assigned claim number 01CCP2023001225 (the “Claim”) to the loss. 14. Plaintiff requested that Defendant Ategrity Specialty Insurance Company honor its contractual obligations to cover the cost of repairs to the Property. 15. Defendant Ategrity Specialty Insurance Company assigned adjuster Richard De Leon to inspect and adjust the loss. On June 21, 2023, Richard De Leon inspected the Property but conducted Electronically Filed 4/18/2024 5:07 PM Hidalgo County District Clerks Reviewed By: Armando Cantu C-1833-24-A only a cursory assessment. Despite clear evidence, he concluded the damage was negligible and misinterpreted key damage indicators. His approach seemed dismissive, misleading Plaintiff about the policy’s coverage, and resulted in an underpayment and partial denial of the claim by Defendant Ategrity Specialty Insurance Company, based on Richard De Leon's report, by June 18, 2023. 16. Thus, Ategrity Specialty Insurance Company and Richard De Leon aimed to deny properly-covered damages by conducting a biased, unfair, and inequitable evaluation of Plaintiff’s losses on the Property. 17. Defendant Ategrity Specialty Insurance Company failed to fulfill its contractual obligation to adequately compensate Plaintiff under the Policy terms, constituting a breach of the insurance contract between Defendant and Plaintiff. 18. Despite the Property sustaining obvious damage from a covered occurrence, Defendants misrepresented the scope of damage to the Property and the coverage under the Policy. 19. Defendants failed to make a fair attempt to settle Plaintiff’s claim, even though they were aware of their liability to Plaintiff under the Policy. 20. Defendants refused to adequately compensate Plaintiff under the Policy terms and failed to conduct a reasonable investigation of the claim. 21. Defendants failed to offer Plaintiff a reasonable explanation for the denial of Plaintiff’s claim. 22. Defendants did not timely acknowledge Plaintiff’s claim, begin an investigation, or request all information reasonably necessary to investigate the claim within the statutorily mandated time of receiving notice of the claim. 23. Defendants failed to accept or deny Plaintiff’s full and entire claim within the statutorily mandated time of receiving all necessary information. Electronically Filed 4/18/2024 5:07 PM Hidalgo County District Clerks Reviewed By: Armando Cantu C-1833-24-A 24. Defendants delayed the full payment of Plaintiff’s claim longer than allowed, and to date, Plaintiff has not received full payment for the claim. 25. Since the time Plaintiff’s claim was presented to Defendant Ategrity Specialty Insurance Company, the liability of Defendant to pay the full claim according to the Policy terms has been reasonably clear. Yet, Defendant Ategrity Specialty Insurance Company has refused to pay, without any reasonable basis that a reasonable insurance company would have relied on to deny the claim. This conduct is a violation of Defendant Ategrity Specialty Insurance Company’s duty of good faith and fair dealing. 26. Plaintiff has suffered damages due to Defendants’ actions described above, which also caused a delay in Plaintiff’s ability to fully repair the Property, resulting in additional damages. H. CAUSES OF ACTION i. Breach of Contract 27. Each of the foregoing paragraphs is incorporated by reference herein. 28. Plaintiff entered into a valid and enforceable written insurance contract with Defendant Ategrity Specialty Insurance Company, governed by Texas law. The contract stipulated that Plaintiff would pay policy premiums and Defendant Ategrity Specialty Insurance Company, as the insurer, would provide coverage and pay for storm-related damage by the deadlines mandated by the Prompt Payment of Claims Statute and the insurance contract. Plaintiff fulfilled its contractual obligations by making the required policy premium payments. Defendant Ategrity Specialty Insurance Company materially breached the insurance contract by failing to provide adequate coverage following the claim filed by Plaintiff and by not properly adjusting the loss, paying for the value of lost or damaged property, or repairing, rebuilding, or replacing the property with materials of like kind and quality, and by wrongfully denying or underpaying the claim without conducting a reasonable investigation. Electronically Filed 4/18/2024 5:07 PM Hidalgo County District Clerks Reviewed By: Armando Cantu C-1833-24-A ii. Prompt Payment of Claims Statute 29. Each of the foregoing paragraphs is incorporated by reference in the following: 30. The failure of Defendant Ategrity Specialty Insurance Company to pay for Plaintiff losses and/or to follow the statutory time guidelines for accepting or denying coverage constitutes a violation of § 542.051 et seq. of the Texas Insurance Code. 31. Plaintiff has complied with Defendant Ategrity Specialty Insurance Company’s reasonable requests for documentation and examination under oath. 32. Plaintiff, therefore, in addition to Plaintiff’s claims for damages, are entitled to interest and attorneys’ fees as set forth in § 542.060 of the Texas Insurance Code. iii. Violation of the Texas Insurance Code and DTPA 33. Each of the foregoing paragraphs is incorporated by reference in the following: 34. Defendants are required to comply with Chapter 541 of the Texas Insurance Code. 35. Defendants violated § 541.051 of the Texas Insurance Code by: 1) making statements misrepresenting the terms and/or benefits of the policy. 36. Defendants violated § 541.060 by: 1) misrepresenting to Plaintiff a material fact or policy provision relating to coverage at issue; 2) failing to attempt in good faith to effectuate a prompt, fair, and equitable settlement of Plaintiff respective claims with respect to which the insurer’s liability had become reasonably clear; 3) failing to promptly provide to Plaintiff a reasonable explanation of the basis in the policy, in relation to the facts or applicable law, for the insurer’s denial of their respective claims or offer of a compromise settlement of a claim; Electronically Filed 4/18/2024 5:07 PM Hidalgo County District Clerks Reviewed By: Armando Cantu C-1833-24-A 4) failing within a reasonable time to affirm or deny coverage of Plaintiff’s respective claims or submit a reservation of rights to Plaintiff; and 5) refusing to pay the claims without conducting reasonable investigations with respect to the claims; 37. Defendants violated § 541.061 by: 1) Misrepresenting to Plaintiff a material fact or policy provision relating to the coverage at issue; 2) Failing to attempt in good faith to effectuate a prompt, fair, and equitable settlement of Plaintiff's claims, for which the insurer's liability had become reasonably clear; 3) Failing to promptly provide to Plaintiff a reasonable explanation of the basis in the policy, in relation to the facts or applicable law, for the insurer's denial of their claims or offer of a compromise settlement; 4) Failing within a reasonable time to affirm or deny coverage of Plaintiff's claims or submit a reservation of rights to Plaintiff; and 5) Refusing to pay the claims without conducting reasonable investigations. 38. Defendant Ategrity Specialty Insurance Company has violated the Texas Deceptive Trade Practices Act (the “DTPA”) in the following respects: 1) Defendant Ategrity Specialty Insurance Company represented that the agreements conferred or involved rights, remedies, or obligations that they did not have or involve, or which were prohibited by law; 2) Defendant Ategrity Specialty Insurance Company failed to disclose information concerning goods or services known at the time of the transaction when such failure to disclose was intended to induce Plaintiff into a transaction that they would not have entered into had the Electronically Filed 4/18/2024 5:07 PM Hidalgo County District Clerks Reviewed By: Armando Cantu C-1833-24-A information been disclosed; 3) Defendant Ategrity Specialty Insurance Company, by accepting insurance premiums but refusing without a reasonable basis to pay benefits due and owing, engaged in an unconscionable action or course of action as prohibited by the DTPA § 17.50(a)(1)-(3), taking advantage of Plaintiff’s lack of knowledge, ability, experience, and capacity to a grossly unfair degree, resulting in a gross disparity between the consideration paid in the transaction and the value received, in violation of Chapter 541 of the Insurance Code. 4) Defendant Ategrity Specialty Insurance Company knowingly committed the acts complained of. Plaintiff is entitled to exemplary and/or treble damages pursuant to the DTPA and Texas Insurance Code § 541.152(a)-(b). iv. Attorney’s Fees 39. Plaintiff engaged the undersigned attorney to prosecute this lawsuit against Defendants and agreed to pay reasonable attorney’s fees and expenses through trial and any appeal. 40. Plaintiff is entitled to recover reasonable and necessary attorney’s fees pursuant to Tex. Civ. Prac. & Rem. Code §§ 38.001–38.003 because Plaintiff is represented by an attorney, presented the claim to Defendant Ategrity Specialty Insurance Company, and Defendant Ategrity Specialty Insurance Company did not tender the just amount owed before the expiration of the 30th day after the claim was presented. 41. Plaintiff further prays that they be awarded all reasonable attorney’s fees incurred in prosecuting their causes of action through trial and any appeal pursuant to Sections 541.152 and 542.060 of the Texas Insurance Code. Electronically Filed 4/18/2024 5:07 PM Hidalgo County District Clerks Reviewed By: Armando Cantu C-1833-24-A I. STATEMENT OF RELIEF 42. As required by Rule 47(b) of the Texas Rules of Civil Procedure, Plaintiff’s counsel states that the damages sought are within the jurisdictional limits of this Court. As required by Rule 47(c)(3) of the Texas Rules of Civil Procedure, Plaintiff’s counsel states that Plaintiff is seeking monetary relief of over $250,000.00 but not more than $1,000,000.00. A jury will ultimately determine the amount of monetary relief actually awarded. Plaintiff also seeks prejudgment and post-judgment interest at the highest legal rate. J. RESERVATION OF RIGHTS 43. Plaintiff reserves the right to prove the amount of damages at trial. Plaintiff reserves the right to amend their petition to add additional counts upon further discovery and as the investigation continues. K. JURY DEMAND 44. Plaintiff hereby requests that all causes of action alleged herein be tried before a jury consisting of citizens residing in Hidalgo County, Texas. Plaintiff hereby tenders the appropriate jury fee. I. PRAYER WHEREFORE, PREMISES CONSIDERED, Plaintiff, H2183301 LLC DBA Aloha Inn McAllen, TX, prays that, upon final hearing of the case, they recover all damages from and against Defendants Ategrity Specialty Insurance Company and Richard De Leon that may reasonably be established by a preponderance of the evidence, and that Plaintiff be awarded attorney’s fees through trial and appeal, costs of court, prejudgment interest, post-judgment interest, and such other and further relief, general or special, at law or in equity, to which Plaintiff may show themselves to be justly entitled. Electronically Filed 4/18/2024 5:07 PM Hidalgo County District Clerks Reviewed By: Armando Cantu C-1833-24-A Respectfully submitted, ZAR LAW FIRM /s/Matthew M. Zarghouni Matthew Zarghouni State Bar No. 24086085 17 S. Briar Hollow Ln, Suite 400A Houston, Texas 77027 Office: (713) 333-5533 Fax: (281) 888-3150 Matt@zar-law.com Service@zar-law.com ATTORNEY FOR PLAINTIFF