Hail Claims – Cosmetic Damage

Hamilton insurance lawyers need to read this opinion from the Western District, Waco Division, Federal Courts.  It is styled, Stephen Hahn v. United Fire and Casualty Company.

Hahn filed this lawsuit against United Fire after United Fire refused to pay a hail damage claim submitted to them by Hahn.  United Fire refused based on their assertion that the damage is cosmetic only and does not jeopardize the integrity of the roof and is an exclusion not covered under the policy.  United Fire filed a motion for summary judgment in an effort to get the case resolved in their favor.

United Fire’s exclusion says:

We will not pay for loss or damage caused by the peril of hail that alters the physical appearance of any part of any roof covering made of metal but does not result in damage that allows the penetration of water through the roof covering or does not result in failure of the roof covering to perform its intended function to keep out elements over an extended period of time.  This exclusion applies to roof coverings including the roofing material exposed to weather, its underlayments applied for moisture protection and all flashings required in application of the roof covering.

Hail damage to roof coverings that results in damage that will allow the penetration of water through the roof covering or that results in the failure of the roof covering to perform its intended function to keep out elements over an extended period of time is not subject to this exclusion.

United Fire hired two experts who essentially said that hail caused dents on the roof “did not damage the roof coating” nor did they “reduce the watertight integrity of the roof panels.”  Also, after testing on a section of the roof panel the experts concluded that “no loss of integrity, functionality or corrosion resistance was found in either of the two largest hail dents.

Hahn submitted circumstantial evidence suggesting that the damage caused by the hail storm was not merely cosmetic.  The property manager explained that prior to the storm at issue, the property “had perimeter leaks,” but that after the hailstorm, he “observed interior leaks” for the first time.  He further explains that he “had pretty much addressed almost everything on the perimeter of these buildings that would have had to do with flashing.” before the storm, and drew a diagram at his deposition of places where he observed new leaks following the storm.  He also notes that he had a close relationship with the tenants at the property, so he learned about leaks soon after they occurred, suggesting that he would know when they first occurred.

The Judge in this case, denied the motion for summary judgment and stated “the evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor.”  “Credibility determinations, the weighing of evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge, whether he is ruling on a motion for summary judgment or for a directed verdict.