United States Court of Appeals
                                                                             Fifth Circuit
                                                                          F I L E D
               IN THE UNITED STATES COURT OF APPEALS                     November 3, 2006

                           FOR THE FIFTH CIRCUIT                      Charles R. Fulbruge III
                                                                              Clerk
                            _____________________

                                 No. 06-40442
                               Summary Calendar
                            _____________________


      RODRIGO MARTINEZ, SR; DORA MARTINEZ,

                                                          Plaintiffs-Appellants,

                                       versus

      STATE FARM LLOYDS; STATE FARM LLOYDS, INC.,

                                                          Defendants-Appellees.

          __________________________________________________

                 Appeal from the United States District Court
                      for the Southern District of Texas
                           USDC No. 7:05-CV-271
          __________________________________________________

Before REAVLEY, GARZA, and BENAVIDES, Circuit Judges.

PER CURIAM:*

      Appellants Rodrigo and Dora Martinez filed suit in state court against their



      *
         Pursuant to 5TH CIR. R. 47.5, the Court has determined that this opinion
should not be published and is not precedent except under the limited circumstances
set forth in 5TH CIR. R. 47.5.4.
insurer, State Farm Lloyd’s (“State Farm”), and its attorney-in-fact, State Farm

Lloyd’s, Inc. (“Lloyds, Inc.”) alleging breach of contract, violations of the Texas

Insurance Code, and a breach of the duty of good faith and fair dealing, all arising

out of State Farm’s actions on Appellants’ insurance claims. State Farm removed

the case to federal court, where the district court dismissed Lloyd’s, Inc., and

granted summary judgment to State Farm. We review both holdings de novo, and

affirm.

      First, Appellants argue that the district court should not have dismissed

Lloyd’s, Inc. from the suit, because Lloyd’s, Inc., in a services agreement with State

Farm Fire & Casualty1, reserved the power to make final decisions concerning

claims adjustment and thus could be held liable for that entity’s actions.

      State Farm sells insurance under a so-called “Lloyd’s plan,” which consists of

a group of underwriters who combine to issue insurance through an attorney in

fact—in this case, Lloyd’s, Inc. See TEX. INS. CODE ANN. § 941.001 (Vernon Supp.

2006). “The attorney in fact is ‘in effect the chief executive and managing agent of

the enterprise. . . .’” Royal Ins. Co. of America v. Quinn-L Capital Corp., 

, 882 (5th Cir. 1993) (quoting Grace v. Rahlfs, 

, 161 (Tex. Civ.

      1
         Pursuant to the services agreement, State Farm Fire & Casualty handles,
investigates, and pays or denies insurance claims made on State Farm policies. R.
124.
                                           2
App.—El Paso 1974, writ ref’d n.r.e.)). The attorney-in-fact does not bear risks,

and has no contractual relationship with the insured, but acts as an agent for the

Lloyd’s group. See 

law, agents are generally not liable for contracts entered into on

behalf of a principal, or for any actions that are within the scope of their authority.

French v. State Farm Ins. Co, 

, 162 (S.D. Tex 1994).

Consequently, unless Lloyd’s, Inc. was acting outside of the scope of its authority

with respect to Appellants’ claims, Lloyd’s Inc. is not individually liable. See

Arzehgar v. Dixon, 

, 94–95 (S.D. Tex. 1993). Appellants have

included no claims of specific wrongdoing on the part of Lloyd’s Inc., nor any

claims that might suggest it acted outside of the scope of its authority. Any actions

that Lloyd's Inc. took were on behalf of the principal, State Farm. Therefore, the

district court properly dismissed Lloyd’s, Inc.

      Second, Appellants argue that because State Farm discussed the possibility of

mediating the claims, the statute of limitations did not begin to run until January

2005. However, State Farm had communicated a final determination on all the

Martinezes’ claims by February 8, 2002, when State Farm sent the last of a series of

letters to Appellants describing its decisions. There is no evidence that State Farm

was attempting to string the insureds along “without denying or paying a claim...”

                                            3
Murray v. San Jacinto Agency, Inc., 

, 828 n.2 (Tex. 1990). Thus,

the Martinezes' cause of action began to accrue, at the latest, upon the issuance of

the February 8, 2002 letter. See Mangine v. State Farm Lloyds, 

,

470–71 (Tex. App.—Dallas 2002, pet. denied) (holding issuance of "building

estimate" constituted a denial of claim and triggered the running of the limitations

period).

      In order to bring suit under Texas law, a plaintiff must both file an action and

serve defendants with process. Boyattia v. Hinojosa, 

, 733 (Tex.

App.—Dallas 2000, pet. denied). Appellants filed their claim within the statute of

limitations, in 2003, but failed to demonstrate due diligence in serving process. The

two-year statute of limitations had run by the time that Appellants finally managed

to serve State Farm on August 1, 2005. Therefore, the district court was correct to

grant summary judgment to State Farm.

AFFIRMED.




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