In Belotti v. State Farm Fire & Cas. Co., 2025 U.S. Dist. LEXIS 54471, the claim of State Farm insureds was dismissed amid allegations that it improperly used Xactimate software to estimate and undervalue the insured’s claim resulting from a fire loss. Specifically, the insureds argued that State Farm improperly employed Xactimate’s ‘new construction’ settings instead of its ‘repair/reconstruction’ settings, which wrongly lowered the repair estimate. The Court held that State Farm was not obligated to use a particular software or methodology to arrive at its estimate.
The Pennsylvania home of Becky and Jamey Belotti was damaged by fire on September 22, 2019. They held a homeowners insurance policy with State Farm. State Farm estimated repair costs using Xactimate software with a “new construction” labor efficiency setting. The parties disagreed on the amount of the loss. The insured filed a class action lawsuit against State Farm. State Farm and the Belottis later underwent an appraisal process. The final appraisal award exceeded State Farm’s initial estimate. State Farm agreed to pay the difference between its original estimate and the appraisal estimate. The plaintiffs continued with the class action, which was ultimately dismissed in summary judgment.
The insurance policy did not obligate State Farm to use a specific estimation method for calculating repair costs. The plain language of the policy did not mandate any particular estimation method, so there was no breach of contract. State Farm did not act in bad faith by initiating the appraisal process or handling the claim. State Farm promptly paid the initial estimate and the additional amount after appraisal, demonstrating no bad faith in claim handling. The appraisal process was valid according to the policy terms and does not indicate bad faith.
The court granted State Farm’s motion for summary judgment on all claims. The plaintiffs’ motion for class certification and State Farm’s motion to exclude expert testimony were denied as moot.
Jim Pattillo is a member of Christian Small, LLP’s Product Liability Practice Group. He is leading litigation counsel for insurance, product, and commercial clients and is based in the firm’s Birmingham, Alabama office. Mr. Pattillo represents numerous commercial and personal insurers in matters involving bad faith, extra-contractual exposure, coverage litigation, and a variety of declaratory judgment actions. He also works closely with large SIU investigations on fraud-related matters. Mr. Pattillo focuses exclusively on litigation and trial work. He has a twenty-year trial record in the courtroom that is extensive and successful, including numerous seven and eight-figure exposures with results routinely exceeding client expectations.
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