J&R MULTIFAMILY GROUP, LTD. DBA THE WORTHINGTON AT THE BELTWAY v. LANDMARK AMERICAN INSURANCE COMPANY
CIVIL ACTION NO. H-24-2616
IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION
January 13, 2026
Lee H. Rosenthal, Senior United States District Judge
ENTERED January 13, 2026, Nathan Ochsner, Clerk
Wear and tear or wind and hail? This common question in Texas insurance cases is at the heart of the dispute between the plaintiff, J&R Multifamily Group, Ltd. dba The Worthington at the Beltway, and its insurance provider, the defendant Landmark American Insurance Company. J&R alleges that Landmark failed to pay the insurance benefits due after severe weather allegedly caused extensive damage to the property. (Docket Entry No. 1-5). In turn, Landmark contends that the roof replacements and several other repairs J&R demanded are not covered under the policy and that Landmark has already paid J&R for the covered losses. Landmark moved for summary judgment. (Docket Entry No. 16). Based on the motion, the response and reply, the record, and the applicable law, the court grants in part and denies in part Landmark’s motion for summary judgment. The reasons are explained below.
I. Background
J&R manages property at 1350 Greens Parkway in Houston that was covered by a Landmark-issued insurance policy. (Docket Entry No. 1-5 ¶¶ 10, 11). The property “is a multi
J&R had a Landmark insurance policy with an effective date of May 17, 2023. (Docket Entry 30-1 at 2). The policy covered buildings, personal property, and business income at the Worthington, subject to several endorsements. (Docket Entry No. 30-1 at 2). Relevant endorsements included limitations on roof surfacing coverage and an exclusion for preexisting damage. (Id. at 23, 35). The roof endorsement provided replacement cost value coverage for roofs younger than 12 years old on the date of loss and actual cash value for older roofs. (Id. at 23). Cosmetic roof damages were not covered. (Id.).
On June 8, 2023, a storm rolled through the Greater Houston area. (Docket Entry No. 1-5 ¶ 12). On July 13, 2023, J&R notified Landmark that wind and hail had caused “damages to the roof and exterior elevations” at the Worthington.2 (Docket Entry No. 16-5 at 2). Landmark informed J&R the next day that a claim number, file handler, and independent adjuster had been assigned. (Docket Entry No. 16-6 at 2). Landmark assigned Lance Grigar, an adjuster at Engle Martin, and Matthew Oestrike, an engineer with Nelson Forensics, LLC, to investigate J&R’s claim. (Docket Entry No. 16-7 at 2; Docket Entry No. 16-14 at 2). On July 18, 2023, Grigar contacted J&R to schedule inspection dates. (Docket Entry No. 16-15 at 4–5). Both parties agreed to August 7–10, 2023, as the dates for inspection. (Id. at 2).
On September 13, 2023, Nelson Forensics produced an engineering report to Engle Martin. (Docket Entry No. 16-8). The report concluded that the roof damage was “attributed to wind in
The next day, Grigar asked to reinspect the Worthington to assist in “calculat[ing] the per building deductibles.” (Docket Entry No. 16-17 at 2). Grigar wanted to compare the locations with the unit listing and square footages that J&R provided to Engle Martin after the initial onsite inspection. (Id.). Landmark alleged that a discrepancy between the number of buildings at the Worthington delayed the calculation of per-building deductibles.4 (Docket Entry No. 31 at 8–9) (see also Docket Entry No. 16-19 at 2). The parties eventually agreed on a method of calculation on December 6, 2023. (See Docket Entry No. 16-20 at 4).
On December 15, 2023, Grigar informed J&R via email that its claim—less depreciation and deductible—was valued at $18,094.01. (Docket Entry No. 16-21 at 5). This total was calculated by subtracting the deductible and the applicable depreciation from Landmark’s determination of $181,068.48 as the figure for the loss to the buildings. (Id.). On January 23, 2024, J&R emailed Grigar, stating that it “d[id] not agree with [Engle Martin’s] estimate or the engineering report.” (Docket Entry No. 16-23 at 2). On January 24, 2024, Landmark issued a check to J&R for $18,094.01. (Docket Entry No. 16-9 at 2).
On June 13, 2024, J&R sued Landmark in state court. (Docket Entry No. 1-5). J&R asserted causes of action for breach of contract, violations of the Texas Insurance Code, and violations of the Deceptive Trade Practices Act. (Id.). Landmark later removed on the basis of diversity jurisdiction. (Docket Entry No. 1). On May 23, 2025, Landmark moved for summary judgment and to strike the testimony of Earle and Phelps. (Docket Entry Nos. 15, 16, 17). The court denied the motions to strike. (Docket Entry No. 26). J&R responded to the summary judgment motion, (Docket Entry No. 30), and Landmark filed a reply. (Docket Entry No. 31).
“Summary judgment is appropriate where ‘the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.’” Springboards to Educ., Inc. v. Pharr-San Juan-Alamo Indep. Sch. Dist., 33 F.4th 747, 749 (5th Cir. 2022) (quoting
The moving party “always bears the initial responsibility of informing the district court of the basis for its motion” and pointing to record evidence demonstrating that there is no genuine dispute of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986); see also
“Once the moving party has initially shown that there is an absence of evidence to support the non-moving party’s cause, the non-movant must come forward with specific facts showing a
The movant is entitled to judgment as a matter of law when “the nonmoving party has failed to make a sufficient showing on an essential element of [its] case with respect to which [it] has the burden of proof.” Celotex Corp., 477 U.S. at 323. But “[i]f ‘reasonable minds could differ’ on ‘the import of the evidence,’ a court must deny the motion.” Sanchez v. Young County, 956 F.3d 785, 791 (5th Cir. 2020) (quoting Anderson, 477 U.S. at 250–51).
III. Analysis
A. The Breach of Contract Claim
Sitting in diversity, the court “must apply Texas law as interpreted by Texas state courts.” Mid-Continent Cas. Co. v. Swift Energy Co., 206 F.3d 487, 491 (5th Cir. 2000). An insured claiming breach of an insurance contract must prove: “(1) the existence of a valid contract; (2) performance or tendered performance by the plaintiff; (3) breach of the contract by the defendant; and (4) damages sustained by the plaintiff as a result of the breach.” Certain Underwriters at Lloyd’s of London v. Lowen Valley View, L.L.C., 892 F.3d 167, 170 (5th Cir. 2018) (quoting Smith Int’l., Inc. v. Egle Grp., LLC, 490 F.3d 380, 387 (5th Cir. 2007)).
1. Claimed Loss Valuation
Landmark argues that J&R cannot recover, either in whole or in part, for the roof damage because J&R applied the wrong valuations. Landmark first argues that J&R’s recovery is limited to actual cash value, rather than replacement cash value, for the roofs for Buildings 2 through 12 because the uncontradicted summary judgment evidence shows that those roofs were more than 12 years old when the storm occurred, and the policy allows only actual cash value for roofs more than 12 years old.5 (Docket Entry No. 16 at 17). Landmark then argues that J&R “cannot satisfy its burden to prove its claimed damages are covered under the policy” in any event because its calculations were based on a January 2025 price list, rather than a June 2023 price list. (Id. at 18).6
In response, J&R argues that the issue of replacement cash value versus actual cash value is “immaterial” because J&R’s actual damages remain capped by the policy’s $2.5 million hail/wind
The court concludes that J&R may recover only actual cash value for the roofs of Buildings 2 through 12. J&R has pointed to no evidence that the roofs on Buildings 2 through 12 were less than 12 years old. By contrast, Landmark has pointed to evidence demonstrating that these roofs were more than 12 years old. (Docket Entry No. 16 at 17) (citing Docket Entry No. 16-4; Docket Entry No. 16-11 at 32; Docket Entry No. 16-27 at 64; Docket Entry No. 16-25 at 15–16; Docket Entry No. 16-8 at 40). Because the record does not show a genuine factual dispute material to determining that the roofs on Buildings 2 through 12 were less than 12 years old on the date of loss or that an exception applies, J&R’s recovery is limited to actual cash value. April Point S. Prop. Owner’s Ass’n, Inc. v Third Coast Ins. Co., Civ. Action No. H-23-2654, 2024 WL 3418009, at *3 (S.D. Tex. July 15, 2024).
The court also concludes that the dispute about the date of loss pricing is not fatal to J&R’s breach of contract claim at this stage. While the policy is clear that J&R can only collect damages valued “as of the time of loss,” (Docket Entry No. 30-1 at 23), as the court noted in denying Landmark’s motion to strike Earle’s report, there is no record evidence to support an inference that the January 2025 price list is materially different than the June 2023 price list.8 (Docket Entry No. 26 at 3–4). Landmark is entitled to summary judgment limiting the damages to the costs of repair as of the date and place of loss, but it is not entitled to summary judgment on the entire breach of contract claim based on the use of the January 2025 price list. See April Point, 2024 WL 3418009,
2. The Claim for Interior Damages
Landmark asserts that J&R is not entitled to coverage for interior damage. (Docket Entry No. 16 at 18). Landmark points to repeated statements that J&R made assuring Landmark that it was not seeking coverage for interior damages. (Id.) (citing Docket Entry Nos. 16-16, 16-33). Landmark states that despite these assurances, Earle’s estimate includes repair costs for interior damage. (Id.) (citing Docket Entry No. 16-30). In response, J&R notes that Earle’s report includes only one interior item in need of repair, a single laundry room. (Docket Entry No. 30 at 6).
The court agrees with Landmark. During the claim investigation, J&R assured Landmark that it “wishe[d] to focus solely on the exterior damage and d[id] not want to claim the interior, which is relatively minor.” (Docket Entry No. 16-16 at 2). J&R’s response that Earle’s estimate included only minor claims for interior damages is irrelevant and fails to raise a genuine issue of material fact as to whether Landmark could have committed a breach of contract for failing to cover claims that J&R expressly stated it did not wish to pursue.
3. The Claim for Hail Damage
Landmark next argues that J&R cannot recover for “[n]on-[e]xistent” hail damage. (Docket Entry No. 16 at 19). Landmark points out that Earle’s report included repair costs for “hail damage,” even though Earle had “deferr[ed] all weather causation to” Phelps. Phelps’s report had concluded that “high winds during the storm have caused the damage to the roofs at the
In response, J&R asserts that the only damages in Earle’s report arguably attributable to hail alone are exterior paint finishes, and those damages are “wholly consistent” with damage caused by wind-borne debris. (Docket Entry No. 30 at 7). Landmark replies that since “all experts agree that no hail fell” on the Worthington on the alleged date of loss, damage attributable to hail must have “pre-dated the policy period.” (Docket Entry No. 31 at 5).
Based on the summary judgment record, J&R may seek damages consistent with hail impacts that the evidence shows are actually the result of wind-related debris impacts from the storm. Because J&R has not pointed to specific facts in the record establishing a genuine dispute as to whether hail fell on the date of loss, J&R may not recover for damage solely from hail.
4. The Anti-Concurrent-Causation Clause
Under Texas law, an anti-concurrent-causation clause and an exclusion, “read together, exclude from coverage any damage caused by a combination” of covered and non-covered perils. JAW The Pointe, L.L.C. v. Lexington Ins. Co., 460 S.W.3d 597, 608 (Tex. 2015) (quoting ARM Props. Mgmt. Grp. v. RSUI Indem. Co., 400 F. App’x 938, 941 (5th Cir. 2010)). “To determine coverage under the policy, [courts] look first to ‘the language of the policy because [courts] presume parties intend what the words of their contract say.’” Id. (quoting Gilbert Tex. Constr., L.P. v. Underwriters at Lloyd’s London, 327 S.W.3d 118, 126 (Tex. 2010)).
J&R’s policy contains an exclusion for “loss or damage which occurs during [the] Policy period, but was caused directly or indirectly by pre-existing damage which pre-dated” the policy. (Docket Entry No. 30-1 at 35). That loss “is excluded regardless of any other cause or event that
Expert reports and testimony in the record show that whether preexisting damage caused any of the claimed loss is genuinely disputed. Earle’s report attributes “the direct cause of the damage sustained” to the storm. (Docket Entry No. 30-8 at 8, 9, 23). Phelps’s report also concludes that the wind storm “caused the damage to the roofs.” (Docket Entry No. 30-9 at 109). Jay Shani, J&R’s corporate representative, testified that the roof was in good condition before the wind storm. (Docket Entry No. 16-10 at 171).9 By contrast, the Nelson Forensics report opines that J&R’s claimed loss is “attributed to wind in conjunction with” wear and tear before the date of loss. (Docket Entry No. 16-8 at 41). And the BSC Forensics report asserts that the buildings “exhibited conditions associated with deferred maintenance, improper maintenance, and/or deficiencies that were unrelated to hail impacts and/or the effects of wind.” (Docket Entry No. 16-25 at 43). Viewed in the light most favorable to J&R, the dueling expert evidence creates a genuine factual dispute material to determining whether the storm caused all or only part of the roof damage
Landmark also argues that, under All Saints Cath. Church v. United Nat. Ins. Co., 257 S.W.3d 800, 802 (Tex. App.—Dallas 2008, no pet.), J&R is not entitled to a full roof replacement because the policy covers only the shingles specifically damaged by the storm. (Docket Entry No. 16 at 22–25). But the question in All Saints was whether the doctrine of concurrent causation entitled the insured to the full cost of a roof replacement when both a covered and non-covered peril (defective tiles) caused the loss. 257 S.W.3d at 804. The answer was that the insured was entitled to recover only the portion of damage caused solely by the covered peril. Id. Notably, there was no dispute in All Saints about whether the non-covered peril caused any of the claimed loss. See id. (“Part of the loss of the roof resulted from a covered peril[,] the hailstorm, while part of the loss resulted from non-covered perils[,] wear and tear and latent defects.”); see also Douglas v. Landmark Am. Ins. Co., No. 22-cv-00167, 2024 WL 4101934, at *2–4 (W.D. Tex. July 7, 2024) (“Landmark applies an oversimplified understanding of the [concurrent-causation] doctrine by citing All Saints Catholic Church.”). A review of the record in the light most favorable to J&R
5. The Allocation of Damages
Finally, Landmark argues that J&R failed to allocate its damages between covered and non-covered perils. (Docket Entry No. 16 at 25–26). This argument is intertwined with the causation question. J&R contends that the wind storm was the sole cause of its claimed loss. (Docket Entry No. 30 at 8–10). Implicit in this theory is a complete allocation of damages to the covered event: the wind storm. See Kabir Marina, 2022 WL 19517466, at *2–3. There is sufficient evidence to establish a genuinely disputed causation question for a jury. If the jury agrees with J&R’s sole causation theory, then J&R has properly allocated its damages.
B. The Extra-Contractual Claims
1. The Bad Faith/Deceptive Trade Practices Act Claims
Texas law imposes on insurers “a common law duty to deal fairly and in good faith with its insured in the processing and payment of claims.” Aleman v. Zenith Ins. Co., 343 S.W.3d 817, 822 (Tex. App.—El Paso 2011, no pet.) (citing Republic Ins. Co. v. Stoker, 903 S.W.2d 338, 340 (Tex. 1995)). “An insurer will be liable if [it] denies a claim when the insurer knew or should have known that it was reasonably clear that the claim was covered.” Id. “An insurer may also breach its duty of good faith and fair dealing by failing to reasonably investigate a claim.” Id. The breach of the duty “‘focuses not on whether the claim was valid, but on the reasonableness of the insurer’s conduct’ in handling the claim.” Id. (quoting Lyons v. Millers Cas. Ins. Co. of Tex., 866 S.W.2d 597, 601 (Tex. 1993)).
If “the insurer has a reasonable basis to deny or delay payment of a claim, even if that basis is eventually determined by the fact finder to be erroneous, the insurer is not liable for the tort of
The record shows that Landmark responded within a day of J&R’s claim notification and retained an adjuster. (Docket Entry Nos. 16-5, 16-6, 16-7). The initial investigation began a few days later, with Engle Martin reaching out to J&R to schedule agreed-on inspection dates. (Docket Entry No. 16-15 at 4–5). The inspection occurred from August 7–10, 2023. (Id. at 2). Documentation discrepancies delayed the calculation of the total value of the Worthington and applicable policy deductibles. (Docket Entry Nos. 16-17, 16-19). On December 6, 2023, the parties agreed on the calculation method. (Docket Entry No. 16-20 at 3–4). Nine days later, Landmark provided its estimate of covered loss to J&R. (Docket Entry No. 16-21). On January 23, 2024, J&R notified Landmark of its disagreement. (Docket Entry No. 16-23). The next day, Landmark cut a check for the amount it estimated J&R was entitled to receive under the policy. (Docket Entry No. 16-9). The parties then disputed, via dueling experts, the cause of the loss and
2. Prompt Payment of Claims Act
J&R also brought claims for violation of multiple subsections of Chapter 542 of the Texas Insurance Code, otherwise known as the Prompt Payment of Claims Act. (Docket Entry No. 1-5 ¶¶ 31–34). To recover under this statute, “an insured must demonstrate the insurer’s (1) liability under the policy, and (2) failure to comply with” the statute. Advanced Indicator and Mfg., Inc. v. Acadia Ins. Co., 50 F.4th 469, 477 (5th Cir. 2022).
The court grants summary judgment to Landmark on some of J&R’s Chapter 542 claims and denies it on others. Specifically, the court grants summary judgment to Landmark on J&R’s claim under
The court also grants summary judgment to Landmark on J&R’s claims under
Next, the court grants summary judgment to Landmark on J&R’s claim under
The court denies Landmark’s request for summary judgment for J&R’s claims under
IV. Conclusion
Landmark’s motion for summary judgment, (Docket Entry No. 16), is granted in part and denied in part. The court denies summary judgment on the breach of contract claim. The court limits J&R’s potential recovery to actual cash value for Buildings 2 through 12 and denies recovery for interior or hail damage. The court grants summary judgment to Landmark on J&R’s claims for bad faith. The court grants summary judgment to Landmark on J&R’s claims for violations of Chapter 542 except the claim under
The claims for breach of contract and violation of § 542.058 will proceed to trial.
SIGNED on January 12, 2026, at Houston, Texas.
Lee H. Rosenthal
Senior United States District Judge