In a case that demarcates the boundary between Rule 91a (dismissal for failure to state a claim) and Rule 166a (summary judgment), the Houston [1st] Court of Appeals has reversed a trial court dismissing a contractor’s breach of contract and extracontractual claims against an insurer.
Holloman Holdings Corp. v. Starr Indemnity & Liability Co. (No. 01-24-00704-CV; April 28, 2026) arose from an insurance claim dispute. A construction company bought occurrence-based builder’s risk policies from the insurer for 2018, 2019, and 2020. In December 2019, the contractor was notified that a jobsite in West Virginia was flooded with rainfall, causing slope failures. The contractor performed repairs, which were complete in May 2021, and gave written notice of loss to the insurer in October 2021. Starr’s adjuster conducted an 18-month investigation, costing $356,000. As a result, the insurer offered to pay $3 million in full settlement of the entire claim. The contractor rejected the claim, and the insurer made no payment. The contractor sued the insurer for breach of contract and extracontractual claims. The insurer filed a Rule 91a motion to dismiss, which the trial court granted. The contractor appealed.
In an opinion by Justice Johnson, the court of appeals reversed and remanded. The insurer argued that the contractor’s claims had no basis in law because the contractor failed to give the insurer prompt notice of loss, impeding the insurer’s ability to adjust the claim. Observing that courts may not consider evidence in a Rule 91a proceeding beyond the allegations in the claimant’s pleadings and any proper Rule 59 exhibits made part thereof, the court disregarded the insurer’s position that excerpts from the policies and letters attached to its answer and incorporated into its Rule 91a motion established its defense. Instead, the court looked to the allegations in the contractor’s petition, which stated the relevant dates of loss, repairs, and notice but did not establish as a matter of law that the insurer was prejudiced by the delay.
The insurer argued that the contractor’s allegations proved that “multiple rainstorms over the course of several years” caused the insurer a loss of access to “critical evidence,” the absence of which prejudiced the investigation. The contractor further alleged that the insurer appointed an adjuster, who conducted an 18-month investigation at substantial cost. That investigation concluded in a $3 million settlement offer based on an estimation of the number of workdays lost because of rain multiplied by an average daily value for the lost workdays. The court was thus at a loss to understand in what way the insurer’s investigation may have been prejudiced, though it expressed no opinion as to whether the insurer might raise a fact issue later. As the court noted, “that is an issue for Rule 166a, not 91a.”
