Insurance – Texas law – ACV

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Where a complaint has been brought pursuant to Texas law by plaintiff homeowners alleging that the defendant insurance company breached their policy by depreciating labor costs from their actual cash value (ACV) payments, the defendant is entitled to summary judgment because the plaintiffs have not met their burden of establishing contractual damages to support their breach of contract claim.

“Plaintiffs Roy Stanley and Gail Stanley (collectively, ‘the Stanleys’ or ‘Plaintiffs’) filed this lawsuit individually and on behalf of others similarly situated against Defendant American Economy Insurance Company (‘AEIC’), alleging breach of contract (Count I) and seeking declaratory judgment and relief (Count II). …

“… On or around May 10, 2021, the Stanleys’ residence sustained damage for which the Stanleys timely submitted an insurance claim to AEIC on October 7, 2022. …

“… Of the amount depreciated from their ACV payments, AEIC depreciated $3,583.60 in ‘estimated future repair labor’ as determined by AEIC through Symbility®. … After receiving both ACV payments, the Stanleys made repairs and requested the replacement cost value (‘RCV’) of their claim. … On January 19, 2023, AEIC issued the Stanleys a RCV payment of $8,335.74. …

“In Count I, the Stanleys allege that AEIC breached its insurance policy by depreciating labor costs from their ACV payments. … The parties agree that Texas law governs the Stanleys’ claims. … But even if the parties did not consent to Texas law, the insurance policy at issue covered property located in Texas. … Texas, therefore, has the most significant relationship to the contract and Texas law applies. …

“… As there is no dispute that AEIC depreciated labor costs from the Stanleys’ ACV payments, … the Stanleys have established that AEIC breached its contractual duty to pay them the ACV of their claim as a matter of law.

“AEIC contends, however, that because the Stanleys subsequently recovered the RCV of their claim ‘in full,’ the Stanleys cannot establish breach. …

“… As explained below, AEIC’s RCV payment argument instead finds better footing in its challenge to the damage element of the Stanleys’ breach of contract claim. …

“… As the Stanleys do not allege any contractual damages aside from the depreciated labor costs which AEIC repaid at the RCV stage, … and prejudgment interest, which, as explained above, cannot satisfy the damages element of their claim, the Stanleys have not met their burden of establishing contractual damages to support their breach of contract claim. …

“Accordingly, as the Stanleys have failed to establish the damages element to their breach of contract claim, the Stanleys’ breach of contract claim fails as a matter of law.

“For the aforementioned reasons, AEIC is entitled to summary judgment on Count I, the breach of contract claim.”

Stanley, et al. v. American Economy Insurance Company (Lawyers Weekly No. 02-043-26) (17 pages) (Casper, C.J.) (Docket No. 24-cv-10622-DJC) (Jan. 26, 2026).

Click here to read the full text of the opinion.