The court granted the insurer’s motion for partial summary judgment because the insured failed to present evidence that the insurer failed to conduct a reasonable investigation. PSY Burger, LLC v. State Farm General Insurance Company, 2026 U.S. Dist. LEXIS 66991(C.D. Cal. March 20, 2026).

The insured’s commercial property suffered heavy damage from tropical storm Hilary. State Farm denied coverage to repair the damage. The insured sued State Farm alleging breach of contract and bad faith due to an inadequate investigation. Apparently, the insured did not retain an expert to opine on claims handling.

The court found, after making every reasonable inference in the insured’s favor, that no reasonable jury could find that State Farm’s investigation was inadequate. It was undisputed that State Farm inspected the property itself and retained two external companies to act as expert inspectors. The two experts physically examined the damage and reported their determinations as to whether it was covered under the policy. No reasonable jury could find that this did not constitute an adequate investigation.

The first expert reported no evidence of wind damage or a storm-created opening on the flat roof. The second expert, refuting specific findings by an inspector retained by the insured, reported, “we conclude that the damage to the vertical roofing along the parapet is most likely due to improper original installation and occurred prior to [the tropical storm].” Therefore, no reasonable jury could find that State Farm was unreasonable to deny the insured’s claim in light of these reports. The insureed could not bring a bad faith claim against State Farm as a matter of law.

Surprisingly, the court determined it was inappropriate at this stage to rule as a matter of law on the punitive damages claim.