Mishra v. State Farm Fire and Casualty Company

UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ALABAMA

MIDDLE DIVISION

PRANAV MISHRA, et al., )

)

Plaintiffs, )

)

v. ) Case No. 4:23-cv-01537-SGC

)

STATE FARM FIRE AND )

CASUALTY COMPANY, )

)

Defendant. )

MEMORANDUM OPINION AND ORDER1

Plaintiffs Pranav Mishra and Mamta Mishra initiated this lawsuit against

State Farm Fire and Casualty Company in the Circuit Court of Etowah County,

Alabama, asserting three causes of action: breach of contract (Count I), bad faith

(Count II), and fictitious parties (Count III). (Doc. 1-1).2 State Farm timely

removed the action, invoking this court’s diversity jurisdiction under 28 U.S.C. §

1332. (Doc. 1). Presently pending is State Farm’s motion for summary judgment,

which is fully briefed and ripe for adjudication. (Doc. 17; see Docs. 18, 23, 24).

For the reasons stated below, State Farm’s motion for summary judgment will be

granted.

1 The parties have unanimously consented to magistrate judge jurisdiction pursuant to 28 U.S.C.

§ 636(c). (Doc. 9).

2 Citations to the record refer to the document and page numbers assigned by the court’s

CM/ECF electronic document system and appear in the following format: (Doc. __ at __).

I. Standard of Review

Under Rule 56 of the Federal Rules of Civil Procedure, summary judgment

is proper “if the pleadings, depositions, answers to interrogatories, and admissions

on file, together with the affidavits, if any, show that there is no genuine issue as to

any material fact and that the moving party is entitled to judgment as a matter of

law.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The party asking for

summary judgment always bears the initial responsibility of informing the court of

the basis for its motion and identifying those portions of the pleadings or filings

which it believes demonstrate the absence of a genuine issue of material fact. Id. at

323. Once the moving party has met its burden, the non-moving party must go

beyond the pleadings and by his own affidavits, or by the depositions, answers to

interrogatories, and admissions on file, designate specific facts showing there is a

genuine issue for trial. See id. at 324.

The substantive law identifies which facts are material and which are

irrelevant. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Only

disputes over facts that might affect the outcome of the case will preclude

summary judgment. Id. All reasonable doubts about the facts and all justifiable

inferences are resolved in favor of the non-movant. See Fitzpatrick v. City of

Atlanta, 2 F.3d 1112, 1115 (11th Cir. 1993). A dispute is genuine “if the evidence

is such that a reasonable jury could return a verdict for the nonmoving party.”

Anderson, 477 U.S. at 248. If the evidence is merely colorable, or is not

significantly probative, summary judgment may be granted. See id. at 249.

Where, as here, a federal district court has diversity jurisdiction over state

law claims, the court must apply the substantive law of the forum state. See

McMahan v. Toto, 256 F.3d 1120, 1132 (11th Cir. 2001) (citing Erie R. Co. v.

Tompkins, 304 U.S. 64, 78 (1938)). Consequently, substantive Alabama law

applies to the Mishras’ claims. However, the procedural aspects of the case,

including those that relate to whether evidence is legally sufficient to submit an

issue to a jury, are a question of federal law. Harrell v. Wal-Mart Stores E., LP,

724 F. Supp. 3d 1250 (N.D. Ala. 2024).

II. Undisputed Material Facts

Since 2006, State Farm has insured the Mishras’ residence at 145 River

Brow Drive, Gadsden, AL 35901 (the “Property”) under a homeowners’ policy of

insurance, Policy No. 01-GU-3019-8 (the “Policy”).3 (Doc. 17-1 at 5, 8; Doc. 17-

3 Pursuant to the Court’s Civil Administrative Procedures Manual for CM/ECF, a party’s address

should be redacted so that only the city and state are identified, unless otherwise ordered by the

court. Here, however, the Mishras disclosed their address in their initial complaint (Doc. 1-1),

and their address appears throughout the docket, including in State Farm’s brief in support of its

motion for summary judgment (Doc. 18 at 4), the Mishras’ response brief (Doc. 23 at 4), and

exhibits in opposition to State Farm’s motion for summary judgment (Doc. 23-2 at 3). Federal

Rule of Civil Procedure 5.2(h) provides that “a person waives the protection of Rule 5.2(a)

[which governs redactions of social security numbers, birthdays, minors, and financial account

numbers] as to the person's own information by filing it without redaction and not under seal.”

The court finds the waiver principle applies equally to the requirements of the Civil

Administrative Procedures Manual. Further, the property address is an essential component of

2). The Policy specifically provides coverage, in pertinent part, for the following

losses:

SECTION I – ADDITIONAL COVERAGES

***

11. Collapse. We will pay for accidental direct physical loss to

covered property involving the abrupt, entire collapse of a building

structure or any part of a building structure.

***

b. The collapse must be directly and immediately caused by one

or more of the following:

(1) perils described in SECTION I – LOSSES

INSURED, COVERAGE B, PERSONAL

PROPERTY. These perils apply to building structures

covered under Coverage A or Coverage B for loss

insured by this Additional Coverage;

***

(5) use of defective material or methods in the

construction (includes remodeling or renovation) of the

building structure, if the collapse occurs during the

course of the construction of the building structure.

***

SECTION I – LOSSES INSURED

COVERAGE B – PERSONAL PROPERTY

We will pay for accidental direct physical loss to the property

described in Coverage B caused by the following perils, unless the

the litigation. Accordingly, the court finds it unnecessary to redact the property address at this

late stage of the proceedings.

loss is excluded or limited in SECTION I – LOSSES NOT

INSURED or otherwise excluded or limited in this policy. . . .

***

2. Windstorm or hail. . . .

(Doc. 17-2 at 13, 15, 17). The Policy specifically excludes the following losses:

SECTION I – LOSSES NOT INSURED

* * *

1. We will not pay for any loss to the property described in Coverage

A that consists of, or is directly and immediately caused by, one or

more of the perils listed in items a. through m. below, regardless of

whether the loss occurs abruptly or gradually, involves isolated or

widespread damage, arises from natural or external forces, or occurs

as the result of any combination of these:

a. collapse, except as specifically provided in SECTION I—

ADDITIONAL COVERAGES, Collapse;

* * *

c. Freezing, thawing, pressure, or weight of water, ice, snow or

sleet, whether driven by wind or not, to:

* * *

(2) an awning, fence, pavement, patio, foundation

(including slabs, basement walls, crawl space

walls, and footings), retaining wall, bulkhead, pier,

wharf, or dock;

* * *

3. We will not pay for, under any part of this policy, any loss

consisting of one or more of the items below.

* * *

b. defect, weakness, inadequacy, fault, or unsoundness in:

(1) planning, zoning, development,

surveying, or siting;

(2) design, specifications, workmanship,

repair, construction, renovation, remodeling,

grading, or compaction;

(3) materials used in repair, construction,

renovation, remodeling, grading, or

compaction, or

(4) maintenance;

of any property (including land, structures, or

improvements of any kind) whether on or off the

residence premises;

* * *

However, we will pay for any resulting loss from items

3.a, 3.b, and 3.c unless the resulting loss is itself a Loss

Not Insured as described in this Section.

(Doc. 17-2 at 19–23).

During the night of January 3, 2023, a storm occurred in Gadsden, Alabama.

(Doc. 17-1 at 9). The following morning, Pranav walked outside and saw the

Property’s retaining wall, driveway, and fence had collapsed. (Id. at 7-8). He also

saw that large trees had fallen next to the retaining wall. (Id. at 9-10). Pranav

reported the loss to State Farm, and within two days, State Farm sent a claims

specialist to inspect the Property. (Id. at 10).

State Farm then hired Joshua Brackett, a licensed forensic engineer with

Donan Engineering, to independently investigate the cause of the collapse. (Doc.

17-1 at 11; Doc. 17-5 at 5, 8). Brackett routinely investigates the causes of

structure collapses and failures. (Id. at 5). On January 12, 2023, Brackett visited

the Property for two hours to inspect the damage. (Id. at 10). Brackett also spoke

with Pranav about the weather conditions prior to the collapse. (Id. at 14-15).

Pranav told Brackett that storms had produced heavy rain before the wall failed,

but Pranav did not mention anything about wind. (Id. at 15). Brackett did not ask

Pranav about wind because Brackett saw no collateral indicators of wind damage,

such as twigs or branches in the driveway or yard; however, he does not know

whether Pranav had cleaned up the Property beyond having sandbags and tarps

placed. (Id.). Brackett also observed a tree that had fallen underneath the failed part

of the retaining wall. (Id.).

Brackett would eventually issue three separate reports over the course of this

dispute. The first report (“Brackett’s First Report”), dated January 24, 2023,

concluded that the retaining wall (and subsequently, the driveway) collapsed

because of “a lack of adequate drainage and a lack of lateral reinforcement

perpendicular to the retaining wall.” (Doc. 17-4 at 22). After investigating the

claim and receiving Brackett’s First Report, State Farm denied the claim on

January 26, 2023. (Doc. 17-6). State Farm concluded the loss was not covered

under the Policy because the retaining wall collapsed due to hydrostatic pressure

and/or a defect in its design and reinforcement, causes that were excluded from

coverage by the terms of the Policy. (Id.).

During the insurance investigation, Pranav hired Scott Skipper with Skipper

Engineering to place sandbags and tarps around the collapsed retaining wall and

driveway. (Doc. 17-3 at 9). Skipper, who obtained his Bachelor of Science in civil

engineering in 1986 from the University of Alabama, is a registered engineer and

land surveyor. (Doc. 16-6 at 8). He is a civil engineer, not a structural engineer,

and generally deals with storm drainage, sanitary sewers, potable water, road

building, and general site improvement (such as grading plans). (Id.). By contrast,

structural engineers deal with details and structures surrounding concrete and steel

structures. (Id.).

Skipper visited the Property within a few days of the loss. (Id.). The purpose

of this visit was to determine how to repair the home rather than to give an opinion

as to what caused the collapse. (Id. at 11). On February 3, 2023, Skipper wrote a

letter to Pranav offering theories as to the retaining wall’s collapse. (Doc. 17-7).

Skipper agreed there was inadequate drainage behind the retaining wall and the

wall was structurally unsound; however, he disagreed with Brackett’s conclusion

that “groundwater was the mechanism that triggered the collapse of the wall.” (Id.).

Skipper noted that in the 17 years since the retaining wall was constructed, there

had been many large rainfall events which did not cause the wall to collapse. (Id.).

He suggested, as a “plausible theory,” that the roots from trees at the toe of the

wall might have been moved by wind in such force as to trigger the wall’s

collapse. (Id.). Skipper further thought that Brackett could not “say that

groundwater was unquestionably the cause of the failure.” (Id.). Skipper ultimately

concluded there could have been numerous factors that triggered the collapse and

he doubted anyone could identify a single cause. (Id.).

Although Pranav testified he believed the storm caused the Property damage,

he admitted he was not an engineer and could not provide specific details about the

cause of the damage. (Doc. 17-1 at 8). Pranav stated he would rely on Skipper’s

opinion regarding the cause of the damage. (Id. at 17). Mamta similarly testified

that she did not know what caused the damage. (Doc. 17-3 at 8-9).

On June 2, 2023, Brackett responded to the theories set forth in Skipper’s

February 3, 2023 letter. (Doc. 17-4 at 31-35). Brackett noted that Skipper agreed

the drainage behind the wall was inadequate and the wall was structurally unsound.

(Id. at 32). He also rejected Skipper’s theory regarding wind as a contributing

factor to the wall’s collapse. Brackett observed that the closest National Weather

Service (“NWS”) recording station was located at the Gadsden Municipal Airport,

approximately 5 miles west of the Property. (Id. at 33). The NWS records for the

Gadsden Airport on January 3, 2023, reflected the maximum wind speed as 22

miles per hour and the maximum wind gusts at 29 miles per hour. (Id.).

Accordingly, Brackett reported:

Based on the weather data, the winds on January 3, 2023, can be

described as up to a strong breeze with large branches in continuous

motion. It is not until around 55 mph that small trees may be blown

over and uprooted.

Mr. Skipper does not provide any evidence that a wind event occurred

on the property or that wind affected the wall. His statement that wind

could be the cause is speculative and not based on evidence.

(Id.). Based on the maximum wind speeds recorded and the corresponding affect

on trees, Brackett declined to change his original conclusion that a lack of adequate

drainage and lateral reinforcement caused the retaining wall to collapse. (Id.).

After State Farm ultimately retained Brackett as an expert witness in this

action, Brackett issued his third report on August 19, 2024. (Doc. 17-4 at 8-15). He

restated the positions of his first two reports and, more specifically, stated the

retaining wall was “progressively deteriorating due to cyclical increases in

hydrostatic pressure during periods of heavy rainfall from inadequate drainage and

inadequate lateral reinforcement.” (Id.). At his deposition, Brackett explained that

the wall was “progressively deteriorating” as demonstrated by several dark stained

cracks with rounded edges in the retaining wall which indicated the cracks were

“not due to recent failure.” (Doc. 17-5 at 12-13).

State Farm moved for summary judgment in December 2024. (Docs. 17-18).

At the same time, State Farm moved to strike the testimony of two of the Mishras’

experts: Eddie Perman and Skipper. (Docs. 15, 16). On September 25, 2025, the

court granted State Farm’s motion to strike Skipper’s testimony because it was not

sufficiently reliable as required by Daubert v. Merrell Dow Pharmaceuticals, Inc.,

509 U.S. 579 (1993). (Doc. 27).

III. Analysis

In support of its motion for summary judgment, State Farm first contends the

Mishras cannot prove the Policy covers their loss and the Policy clearly excludes

the loss from coverage. Second, it argues the Mishras cannot show they are entitled

to emotional distress damages. Finally, State Farm asserts the Mishras cannot

prove the elements of their bad faith claim.

A. Count I – Breach of Contract

To succeed on their breach of contract claim, the Mishras must demonstrate

(1) the existence of a valid contract binding them and State Farm; (2) their own

performance under the contract; (3) State Farm’s nonperformance; and (4)

damages. See S. Med. Health Sys., Inc. v. Vaughn, 669 So. 2d 98, 99 (Ala. 1995)

(citations omitted). Courts generally employ a three-step inquiry to determine

whether a claim is covered by an insurance policy. See USF Ins. Co. v. Metcalf

Realty Co., No. 2:12-CV-02529-AKK, 2013 WL 4679833, at *5 (N.D. Ala. Aug.

30, 2013) (citations omitted). First, the party seeking coverage under the policy

bears the burden of establishing the claim is covered by the policy’s initial grant of

coverage. Jordan v. Nat’l Acc. Ins. Underwriters Inc., 922 F.2d 732, 735 (11th Cir.

1991) (“Under Alabama law the general rule is that the insured bears the burden of

proving coverage.”) (citation omitted); USF Ins. Co., 2013 WL 4679833 at *5.

Next, the insurer has the burden of establishing an exclusion in the policy

precludes coverage for the claim. Id.; Jordan, 922 F.2d at 735. Then, if a policy

exclusion potentially precludes coverage for a claim, the burden shifts back to the

party seeking coverage to establish an exception to the exclusion applies. USF Ins.

Co., 2013 WL 4679833 at *5.

In determining whether coverage exists, insurance policies should be

construed “to give effect to the intention of the parties.” Twin City Fire Ins. Co. v.

Alfa Mut. Ins. Co., 817 So. 2d 687, 691 (Ala. 2001) (quoting Att’ys Ins. Mut. of

Alabama, Inc. v. Smith, Blocker & Lowther, P.C., 703 So. 2d 866, 870 (Ala.

1996)). Additionally, “it is well established ‘that when doubt exists as to whether

coverage is provided under an insurance policy, the language used by the insurer

must be construed for the benefit of the insured.’” St. Paul Fire & Marine Ins. Co.

v. ERA Oxford Realty Co. Greystone, LLC, 572 F.3d 893, 898 (11th Cir. 2009)

(quoting St. Paul Mercury Ins. Co. v. Chilton-Shelby Mental Health Ctr., 595 So.

2d 1375, 1377 (Ala. 1992)). “It is equally well settled, however, that insurers have

the right to limit their liability by writing policies with narrow coverage.” Id.

(citing Johnson v. Allstate Ins. Co., 505 So. 2d 362, 365 (Ala. 1987)). Accordingly,

if there is no ambiguity in the terms of an insurance policy, a court must enforce

the policy “as written and cannot defeat express provisions in a policy by making a

new contract for the parties.” St. Paul Fire and Marine Ins. Co., 572 F.3d at 898

(citing Johnson, 505 So. 2d at 365).

“While ambiguities or uncertainties in an insurance policy should be

resolved against the insurer, ambiguities are not to be inserted by strained or

twisted reasoning.” Twin City Fire Ins. Co., 817 So. 2d at 692 (citation omitted).

Moreover, just because a term is undefined in the policy does not mean the policy

is ambiguous; rather, “the court should simply give the undefined word or phrase

the same meaning that a person of ordinary intelligence would give it.” Id. (citation

omitted). Finally, in analyzing the terms of an insurance policy, “a court must

examine more than the isolated sentence or term; it must read each phrase in the

context of all other provisions.” Id. at 691 (citation omitted).

1. The Policy excludes the Mishras’ loss.

State Farm argues that based on the undisputed evidence, it did not breach

its contract with the Mishras because the Policy language—specifically, the

provisions excluding coverage for both hydrostatic pressure and “defect, weakness,

inadequacy, fault or unsoundness” in design or construction—excludes the

Mishras’ loss. It further asserts the Mishras have no knowledge or opinion as to

what caused the retaining wall to collapse,4 and they have offered no admissible

evidence that another cause triggered the collapse.

In Nix v. State Farm Fire & Casualty Co., the insureds made a claim under

their policy following the collapse of a retaining wall which resulted in basement

flooding. 444 F. App’x 388 (11th Cir. 2001). State Farm denied their claim

because the policy excluded coverage for collapses caused by construction defects

and damage caused by groundwater. Id. at 389. The Nixes filed suit for breach of

contract and bad faith. Id. State Farm’s expert engineer, Voll, testified that the

retaining wall failed because it was not properly built and thus collapsed because

of hydrostatic pressure. Id. at 390. Voll also testified that (1) the retaining wall

lacked reinforcing steel (required by a local building code) and could not withstand

the pressure created by groundwater that accumulated during a heavy rainfall and

(2) a french drain, which had been covered with clay soil instead of gravel, did not

disperse the groundwater. Id. Based on the opinion of Terry Nix and a contractor

who made temporary repairs to the wall, the Nixes argued the main line water pipe

burst and caused the collapse. However, neither opinion was admissible as lay

testimony given neither individual witnessed the wall collapse or had personal

4 State Farm also contends that even if the Mishras had an opinion regarding the cause of the

collapse, that opinion would be insufficient because, as lay witnesses, they cannot offer

testimony about the cause of damage; rather, the Mishras must provide expert testimony

regarding causation. (Doc. 18 at 15-16).

knowledge regarding the construction of the home. Id. The district court granted

summary judgment in favor of State Farm because the Nixes did not contradict

State Farm’s expert testimony that the damage was caused by construction defects;

the Eleventh Circuit affirmed. Id. at 389-90.

The Mishras object to State Farm’s reliance on Nix on the basis Skipper’s

testimony sufficiently calls into question the cause of the retaining wall’s collapse.

As noted above, however, the court has concluded Skipper’s testimony is due to be

excluded given the Mishras have not established his opinions are sufficiently

reliable as testable, peer-reviewed, or generally accepted. (Doc. 27). Because

Skipper cannot testify as an expert, his testimony is inadmissible unless it involves

his actual observation of the collapse. See Fed. R. Evid. 701; Nix, 444 F. App’x at

390. But Skipper did not witness the collapse, and there is no suggestion he was

personally involved with the original construction of the retaining wall.5 Therefore,

even if the Mishras sought to introduce Skipper’s opinion as lay testimony, which

they do not, it would be inadmissible under Rule 701.

Consequently, Nix is directly on point. Here, the Policy excludes from

coverage (1) any loss caused by pressure or weight of water to a retaining wall and

(2) any loss consisting of a defect, inadequacy, or unsoundness in the design,

5 Notably, when asked whether he recalled there being wind, Skipper testified, “I do not. I didn’t

even realize that we had had rain that night.” (Doc. 16-6 at 19).

specifications, workmanship, or construction. (Doc. 17-2 at 19-23). As in Nix,

State Farm has presented expert testimony that the retaining wall collapsed because

of hydrostatic pressure caused by inadequate drainage of the groundwater under

the retaining wall. Also like Nix, the Mishras have not presented any admissible

evidence that contradicts State Farm’s expert testimony.6 Therefore, they cannot

prove the retaining wall collapsed because wind caused movement in the tree roots.

Without evidence as to the cause of the retaining wall’s collapse, the Mishras

cannot establish their loss is covered by the Policy or an exception to an exclusion,

and State Farm is entitled to summary judgment on the Mishras’ breach of contract

claim.

2. The Policy is not ambiguous.

In response to State Farm’s motion, the Mishras contend the Policy language

is ambiguous. Under Alabama law, the question of whether a contract is

ambiguous is a question of law to be decided by the court. Federated Mut. Ins. Co.

v. Abston Petroleum, Inc., 967 So. 2d 705, 709 (Ala. 2007). Where the contract

terms are plain and unambiguous, construing the legal effect of the contract is also

a question of law to be decided by the court. Id.

6 The court notes the Mishras did not witness the collapse but instead discovered it the following

morning. (Doc. 17-1 at 7-8). Further, Pranav stated he would rely on Skipper’s opinion regarding

the cause of the collapse, and Mamta testified she did not know what caused the damage. (Id. at

17; Doc. 17-3 at 8-9). Skipper agreed the retaining wall was structurally unsound and had

inadequate drainage when he testified the retaining wall was “not sufficient per engineering

standards.” (Doc. 17-8 at 14).

The Mishras first claim the retaining wall falls within the definition of

“dwelling” because it is attached to the residence’s structure, and the Policy

provides coverage for the collapse of any building structure due to wind. (Doc. 23

at 22-23). Therefore, they argue, they reasonably expected the Policy would cover

their loss. As explained above, however, the Mishras have presented no admissible

evidence the retaining wall collapsed due to wind. Skipper’s testimony is not

admissible as either expert or lay testimony, and the Mishras offer no other

evidence that wind caused the retaining wall to collapse. Even if the retaining wall

comes within the definition of “dwelling”—a question the court does not answer—

the analysis would not change.

The Mishras next argue the exclusions are ambiguous because of the

following ensuing loss provision: “‘However, we will pay for any resulting loss

from [the exclusions listed above] unless the resulting loss is itself a Loss Not

Insured as described in this Section.’” (Doc. 23 at 24 (quoting Doc. 17-2 at 21)).

Because the Policy does not define “resulting loss,” they assert the Policy is

ambiguous and this court should interpret the exclusions as narrowly as possible to

provide maximum coverage for them. They further state, “Applying such an

interpretation likely provides coverage for the Mishras since the collapse of the

retaining wall due to a windstorm (a covered loss) was, in turn, a ‘resulting loss’

from the relevant exclusions. Put simply, the ensuing loss provisions, when

interpreted in context of the entire Policy, render the exclusions sufficiently

ambiguous to find coverage for the loss.” (Doc. 23 at 25).

As with their argument regarding whether the retaining wall is considered a

“dwelling,” this argument depends on their theory that wind caused the loss.

However, as explained at length above, the Mishras have offered no admissible

evidence that wind was the cause of the loss.

Further, as State Farm contends, the Alabama Court of Civil Appeals has

determined that a substantially similar resulting loss provision was unambiguous.

See Phillips v. Nat’l Sec. Fire & Cas. Co., 59 So. 3d 711, 716 (Ala. Civ. App.

2010).7 There, the damage to the house was caused by faulty workmanship to the

roof—a cause that was specifically excluded from coverage under the relevant

policy. Id. at 712-13. Nevertheless, the plaintiff argued the ensuing loss provision

7 The policy language in Phillips stated:

13. Errors, Omissions, and Defects—We do not pay for loss which results from

one or more of the following:

a. an act, error, or omission (negligent or not) relating to:

....

2) the design, specification, construction, workmanship, installation of

property;

....

b. a defect, a weakness, the inadequacy, a fault, or unsoundness in material used

in construction or repair whether on or off the insured premises.

We do pay for an ensuing loss unless the ensuing loss itself is excluded.

59 So. 3d at 712-713. Phillips does not state whether the relevant policy defined “ensuing

loss.”

entitled him to coverage because that provision “render[ed] ambiguous the specific

coverage granted in the policy.” Id. at 713. The court disagreed, finding “the

ensuing-loss provision in the exclusions section of the policy cannot reasonably be

interpreted to create coverage beyond the perils initially insured against, and the

coverage allowed under the ensuing-loss provision is not ambiguous as applied” to

the facts of Phillips. Id. at 716.

Here, as in Phillips, the Mishras’ argument regarding the ensuing-loss

provision requires the court to interpret the Policy to create coverage where it

specifically excludes coverage. Read in the context of the entire policy, the court

cannot interpret the ensuing-loss provision to create coverage where it was plainly

not contemplated at the time the parties entered into their contractual relationship.

Accordingly, State Farm is entitled to summary judgment on the Mishras’ claim

for breach of contract.8

B. Count II – Bad Faith

Under Alabama law, a plaintiff can recover for an insurer’s bad faith refusal

to pay a claim under two theories: a “normal” bad-faith claim and an “abnormal”

bad-faith claim. White v. State Farm Fire & Cas. Co., 953 So. 2d 340, 347–48

(Ala. 2006). A normal bad faith claim is one where the insurer refused to pay, and

8 Because State Farm is entitled to summary judgment on the breach of contract claim, the court

does not reach its argument regarding the Mishras’ entitlement to damages for emotional

distress.

an abnormal bad faith claim is one where the insurer failed to investigate. “These

are not two torts but a single tort with different options for proof.” Coleman v.

Unum Grp. Corp., 207 F. Supp. 3d 1281, 1284 (S.D. Ala. 2016); see also State

Farm Fire & Cas. Co. v. Brechbill, 144 So. 3d 248, 256–58 (Ala. 2013). Abnormal

bad-faith claims

have been limited to those instances in which the plaintiff produced

substantial evidence showing that the insurer (1) intentionally or

recklessly failed to investigate the plaintiff’s claim; (2) intentionally

or recklessly failed to properly subject the plaintiff’s claim to a

cognitive evaluation or review; (3) created its own debatable reason

for denying the plaintiff’s claim; or (4) relied on an ambiguous

portion of the policy as a lawful basis to deny the plaintiff’s claim.

State Farm Fire & Cas. Co. v. Slade, 747 So. 2d 293, 306–07 (Ala. 1999)

To prove State Farm’s bad faith refusal to pay, the Mishras must show by

substantial evidence:9 (1) the breach of an insurance contract between the parties;

(2) State Farm’s intentional refusal to pay their claim; (3) the absence of any

reasonably legitimate or arguable reason for that refusal; and (4) State Farm’s

actual knowledge of the absence of any legitimate or arguable reason. See

Lunsford, 621 So. 2d at 978. To prove State Farm failed to investigate, the Mishras

must prove an additional element: State Farm intentionally failed to determine

9 Substantial evidence is “‘evidence of such weight and quality that fair-minded persons in the

exercise of impartial judgment can reasonably infer the existence of the fact sought to be

proved.’” See Indep. Fire Ins. Co. v. Lunsford, 621 So. 2d 977, 978 (Ala. 1993) (quoting West v.

Founders Life Assur. Co. of Fla., 547 So. 2d 870, 871 (Ala. 1989)).

whether there was a legitimate or arguable reason to refuse to pay the claim. See

Walker v. Life Ins. Co. of N. Am., 59 F.4th 1176, 1187 (11th Cir. 2023).

The Mishras “bear[] a heavy burden” on their bad faith claim—they must

show the “underlying contract claim [is] so strong that [they] would be entitled to a

preverdict judgment as a matter of law.” See Acceptance Ins. Co. v. Brown, 832

So. 2d 1, 16 (Ala. 2001); Jones v. Alfa Mut. Ins. Co., 1 So. 3d 23, 32 (Ala. 2008).

This is true for both normal and abnormal bad faith claims. See Walker, 59 F.4th at

1187 (citing White, 953 So. 2d at 348 (normal bad faith), and Brechbill, 144 So. 3d

at 258 (abnormal bad faith)). Further, “all bad-faith claims fail on summary

judgment ‘where the trial court . . . expressly [finds] as a matter of law that the

insurer had a reasonably legitimate or arguable reason for refusing to pay the claim

at the time the claim was denied.’” Id. (quoting Brechbill, 144 So. 3d at 260). Put

another way, to defeat the Mishras’ bad faith claim, State Farm “does not have to

show that its reason for denial was correct, only that it was arguable.” See Liberty

Nat. Life Ins. Co. v. Allen, 699 So. 2d 138, 143 (Ala. 1997).

As established above, the Mishras cannot show, as a matter of law, State

Farm breached the terms of the Policy. State Farm is therefore entitled to summary

judgment on the Mishras’ bad faith claim. Even if the Mishras could establish a

question of fact regarding the cause of the wall’s collapse, State Farm would still

be entitled to summary judgment on the claim for bad faith.

The Mishras assert State Farm “relied upon an ambiguous portion of the

[P]olicy as a lawful basis to deny [their] claim and/or failed to conduct a proper

investigation into the possibility that wind caused the loss.” (Doc. 23 at 17). First,

the Mishras’ argument regarding ambiguity is focused not on the exclusions on

which State Farm relied or the investigation it conducted but the ensuing-loss

provision. As explained above, however, the ensuing loss provision is not

ambiguous and cannot be interpreted to create coverage where it does not exist.

Second, as the Mishras acknowledge in their brief, “[f]rom the date of the

loss to the date [the Mishras] filed their Complaint, multiple correspondences were

sent back and forth, each referencing competing or differing findings from subject

experts. Both Parties contest and dispute the others’ statement and position

regarding the cause of the loss.” (Doc. 23 at 9). Here, there is no question State

Farm investigated the Mishras claims. State Farm sent an inspector to the Property

within two days of Pranav reporting the loss. State Farm then hired Brackett to

further investigate the cause of the damage. The undisputed facts establish Brackett

reviewed and responded to Skipper’s letter regarding alternate theories about the

cause of the wall’s collapse.10 Further, the Mishras do not argue Brackett was not

qualified to conduct this investigation. Cf. Slade, 747 So. 2d 293, 316 (holding the

10 The Mishras do not cite any case law requiring State Farm to investigate potential alternative

theories concerning the cause of the damage after the claim was denied.

plaintiffs could prove bad faith where they claimed lightning caused their loss but

the insurer never sent an investigator qualified to conduct a lightning investigation

or interviewed witnesses present).

In Slade, the Alabama Supreme Court stated that an insurer has a

responsibility to marshal all facts necessary to determine whether coverage exists

before its refusal to pay and “[t]his duty must include a duty to investigate a

covered event that an insured claims has caused his loss.” 747 So. 2d at 316. Here,

Brackett issued his First Report on January 24, 2023, and State Farm denied the

claim on January 26, 2023, before Skipper wrote his February 3, 2023 letter to

Pranav suggesting other factors might have caused the retaining wall to collapse.11

Further, the Mishras both testified they did not know what caused the retaining

wall to collapse. This sequence of events is significant, and the facts here

distinguish it from Slade, in which the plaintiffs reported their retaining wall

collapsed due to a lightning strike, an event specifically covered by the insurance

policy at issue. 747 So. 2d at 297. Accordingly, State Farm is entitled to summary

judgment on the Mishras’ claim for bad faith.

C. Count III – Fictitious Parties

11 In their briefing, the Mishras do not cite any evidence demonstrating when Skipper’s February

2023 letter to Pranav was provided to State Farm.

The Mishras’ complaint states a count for “fictitious defendants” in which

they demand judgment separately and severally against fictitious parties. (Doc. 1-1

at 13). Neither party addresses this count. The court has located no Alabama

authority permitting a specific cause of action for fictitious parties. Instead,

Alabama Rule of Civil Procedure 9(h) permits a plaintiff to designate a fictitious

opposing party if the plaintiff is ignorant of the name of the opposing party. There

is no such corresponding federal rule. See Fed. R. Civ. P. 9; see also Richardson v.

Johnson, 598 F.3d 734, 738 (11th Cir. 2010) (explaining that fictitious party

pleading is not generally allowed in federal court unless the description of the

defendant is so specific that service could be made on the individual).

The Mishras do not describe the three fictitious parties with enough

particularly to serve those individuals or corporate entities. (See Doc. 1-1 at 4-5).

Further, they have not sought to substitute any specific party for the fictitious

parties. Accordingly, Count III is due to be dismissed.

The Mishras may object to the court’s conclusion regarding fictitious parties

within 14 days of the date of this Memorandum Opinion. See Fed. R. Civ. P. 56(f)

(a court may enter judgment on grounds not raised by a party after giving notice

and a reasonable time to respond). If they do not file a timely objection citing

Alabama authority recognizing an independent cause of action for fictitious parties,

the court will dismiss Count III.

IV. Conclusion

For the foregoing reasons, State Farm’s motion for summary judgment is

GRANTED regarding Counts I and II. (Doc. 17). The court has determined Count

III is to due to be dismissed. To the extent the Mishras can provide the court with

authority to the contrary, they must do so within 14 days of the date of this order.

If they do not do so or if they notify the court they do not object to the dismissal of

Count III, the court will dismiss this claim.

DONE this 30th day of September, 2025.

Lau 4. Crenibios

STACI G. CORNELIUS

U.S. MAGISTRATE JUDGE

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