Hail Claims – What Caused The Damage

Hail damage claims are a frequent source of litigation.  The insured says the damage occurred in the last storm.  The insurance company says the damage is wear and tear or occurred in another storm under a different insurance policy.

The argument about when and how the hail damage occurred generally deals with the legal question known as “concurrent causation.”  This is discussed in a 2022, opinion from the Western District of Texas, Austin Division.  The opinion is styled, Marina Club Condominium Association vs. Philadelphia Indemnity Insurance Company.

This is a summary judgment opinion.  Plaintiff has sued for breach of contract and for insurance code violations.  The Court ruled in favor of Defendant on the insurance code violations but denied the summary judgement for the breach of contract claim.

The policy at issue excludes coverage for wear and tear, decay, deterioration, and other similar causes of harm.

Experts for the insurer claimed the damage to the roof was the result of wear and tear and possibly an earlier storm.  Experts for Plaintiff said the damage is due to the most recent storm.

In a claim for breach of an insurance contract, Texas law requires the insured to prove: (1) the existence of a valid contract; (2) performance or tendered performance by the plaintiff; (3) breach of the contract by the defendant; and (4) damages sustained by the plaintiff as a result of the breach.

Under the concurrent causation doctrine, when covered and non-covered perils combine to create a loss, the insured is entitled to recover that portion of the damage caused solely by the covered peril.  Failure to segregate covered and non-covered perils is fatal to recovery.  An
insured may carry its burden by putting forth evidence demonstrating that the loss came solely from a covered cause or by putting forth evidence by which a jury may reasonably segregate covered and non-covered losses.

Here, Marina Club does not necessarily dispute Philadelphia’s evidence that the condos’ roofs were between thirteen and seventeen years old at the time of the May 17, 2017 storm, and that the roofs were not in same condition as when they were first installed.  Instead, Marina Club’s
position is that, at the time of the storm, the roofs were in good working order and fully functional and did not need to be replaced prior to the May 11, 2017 storm.  Additionally, Marina Club argues that, because the roofs’ tiles were
later in their service life, they were more susceptible to damage when they were struck by hail on that date.  Given this, Marina Club appears to argue that the loss that is the subject of the insurance claim in this case was caused solely (100%) by the hail produced during the May 11, 2017 storm.

Whether the concurrent cause doctrine applies in cases like has troubled district courts and the Fifth Circuit.

Here, the same issues that troubled these courts are before this Court.  Recognizing that the concurrent causation doctrine’s questions certified to the Fifth Circuit remain unanswered, the Fifth Circuit’s most recent opinion on the issue found that the concurrent causation doctrine does not bar recovery where the same evidence supporting an insured’s argument that a storm caused some damage also supports its argument that the storm caused all the damage.

Here, Marina Club has presented evidence by Brandon Allen, a licensed insurance adjustor and Marina Club’s testifying expert, that the May 11, 2017 storm caused the damage to Marina Club’s property for which it submitted a claim, and that 100% of the repair estimate in his report was caused by the hail damage on that date and not by any non-covered peril.  Given this evidence, as the Fifth Circuit found in Advanced Indicator, a jury could reasonably find that all of Marina Club’s loss comes from a covered cause, and therefore the concurrent cause doctrine does not bar recovery.  Philadelphia of course disputes this evidence, presenting its own evidence that the roof had significant wear and tear, and that any hail damage was caused by a 2005 storm and not the May 11, 2017 storm.  However, because Marina Club has presented evidence which creates a factual dispute regarding whether the May 11, 2017 storm caused 100% of the damage, the Court will deny summary judgment to Philadelphia on Marina Club’s breach of contract claim.

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