Insurance Claims – Proving Damages

Lake Worth insurance lawyers need to know this case. It is a 1971 opinion issued by the Texas Supreme Court. It’s style is, Travelers Indemnity Co. v. McKillip. Here is the relevant information.
Troy L. McKillip and wife brought this action against the Travelers Indemnity Co. to recover for damages to their poultry house under the terms of a policy of insurance issued by that Company. After a trial to a jury, respondents were awarded a recovery for $7,450.
The insureds were the owners of a turkey farm in Eastland County, which included two sheet metal buildings and a wooden building used as conditioning houses for breeder turkeys. The one damaged building was of steel truss type construction, 408 feet long by 40 feet wide. The other two buildings, located some distance from the damaged building, were undamaged. The second building was essentially of the same construction as the damaged building and was some fifty feet shorter. The third building was of wooden construction.
There was testimony of ‘a tremendous wind’ on the McKillip farm on November 2, 1968. According to the insured’s testimony the wind took an ‘obvious path’ across his property and struck the turkey barn alleged to have suffered the damage. There is no contention the wind struck or damaged the other two turkey barns located on the same property. Following this windstorm no inspection was made of the building involved here, and by the insured’s own testimony no apparent damage was detected. It is undisputed the wind twisted the insured’s television antenna fixed to his home, disrupted the telephone service, broke large tree limbs and bent some steel posts around their yard enclosure. The wind also broke a large electric wire connecting two of these buildings . On November 8, 1968, six days later, a four or five inch snow fell on the McKillip farm and the one building collapsed.
The jury found (1) the turkey barn was damaged by a windstorm on November 2, 1968, (2) that such windstorm was the dominant efficient cause of the collapse of the building, although, other causes may have contributed thereto, (3) the fair market value of the building immediately prior to the windstorm was $11,400, (4) the fair market value of the building immediately after the windstorm was $2,000, (5) the fair market value of the building immediately after it collapsed on November 8, 1968, was $2,000, (6) the reasonable and necessary cost to repair or replace the building after the windstorm was $7,500, (7) that the reasonable and necessary cost to repair or replace the building after its collapse November 8, 1968, was $7,500, (8) that the damage was directly caused by windstorm, (9) the damage was not caused solely by weight of the snow. Judgment was rendered on the verdict for the respondents in the amount of $7,450.
The policy purchased by Mr. and Mrs. McKillip from Travelers insured them against ‘direct loss resulting from any of the perils * * * E.–Extended Coverage * * * Windstorm, Hurricane, Hail, Explosion, Riot, Civil Commotion, Smoke, Aircraft and Land Vehicles.’ Under ‘Specific Coverage Condition,’ appears the following exclusionary clause: ‘conditions applicable only to Windstorm, Hurricane, and Hail: Unless specifically named hereon this company shall not be liable for loss to metal smokestacks * * * nor (b) by snowstorm. * * *’
The insurance company pleaded the specific exclusion of loss by snowstorm set out in the policy. This pleaded exclusion thus raised the issue of coverage. The insureds had the burden to prove that their loss was not attributable to the pleaded excluded hazard.
Travelers having plead the exclusion under the policy of loss by snowstorm, the insureds were obligated to introduce evidence to prove and secure jury findings that the damage was caused solely by the windstorm, an insured peril; or segregating the damage caused by the insured peril from that caused by the snowstorm, an excluded peril. This construction of the exclusionary clause is well settled in Texas.
The case was submitted to the jury and judgment rendered in the trial court upon the theory that if the windstorm was the dominant efficient cause of the building’s collapse, although other causes may have contributed to the loss, the insurer was liable.
The court quoted with approval the following rule of law announced in Texas law:
* * * the rule in Texas is to the effect that where a loss occurs under a standard fire, windstorm and extended coverage policy within the coverage of the policy, and such loss is contributed to by an excluded risk of the policy, the plaintiff may, nevertheless, recover if plaintiff proves that the dominant efficient cause of the loss is the covered risk.
The general theory of segregating the damages caused by the wind and excluded peril was set forth in the submission of the damage issues. The jury was asked to determine the market value of the building immediately prior to and after the windstorm; and its value after the building collapsed on November 8; and the cost of repairs or replacement of the building immediately after the windstorm, and the same inquiry immediately after its collapse six days later. The jury found the reduced market value was the same after the windstorm and the snowstorm; and the cost of repair or replacement after both occurrences was the same.
The evidence is undisputed that a windstorm took an ‘obvious path’ across the insured’s property and struck the turkey barn on November 2, 1968. The structure remained standing after the wind, and sustained no apparent damage. No inspection was made of the barn until it collapsed six days later following the snowstorm. It is the position of the insured that the legal effect of these findings is that the damages were wholly attributable to the windstorm. Assuming this to be a correct contention, the question then is whether the evidence, viewed most favorably in support of the verdict, will support the jury findings that the damage to the insured’s barn was caused solely by the insured peril of windstorm, and that none of it was caused by the snow.
There was no evidence relating to the direct effect of the wind on the damaged building, nor did anyone attempt to estimate the damage caused by wind action independent of all other causes. There is a complete absence of evidence concerning the fair market value of the building immediately after the windstorm; or of the cost to repair or replace it immediately after the windstorm. Evidence of costs of repairs was related solely to the building’s condition after the snowstorm and collapse. It is essential that the insured produce evidence which will afford a reasonable basis for estimating the amount of damage or the proportionate part of damage caused by a risk covered by the insurance policy. The insured has failed to do so.