Insurance Claims And Proving Repair Costs

It is one thing to sue your insurance company for doing you wrong.  It is another thing to prove the costs of what they should have done for you.  Here is a 2024 opinion from the Northern District of Texas, Dallas Division, that discusses this issue.  It is styled, Brian and Shannon Hart v. State Farm Lloyds.
The Harts suffered a loss to their home and their insurer is State Farm.  The Harts made a claim and a lengthy dispute arose between them and State Farm as to the costs of repairs.  A relevant fact in this case is that the repairs were not performed.  A lawsuit resulted.
After time for discovery had passed, State Farm filed a motion for summary judgment asserting the Harts were unable to prove their claim.
The Court ruled that State Farm is entitled to summary judgment on the Harts breach of contract claim because the Harts have not put forth evidence that State Farm underpaid them under their policy according to the limitations set by the Federal Rules of Evidence and Fifth Circuit case law.  To prevail on a claim for breach of an insurance policy, a plaintiff must either actually complete repairs or designate an expert witness to opine about the estimated cost of necessary repairs.  The Hart did neither.  Accordingly, the Harts cannot prove that State Farm has not adequately compensated them for the cost of repairs and therefore cannot prevail on their breach of contract claim.
Under Federal Rule of Civil Procedure 701(c), a lay witness may not testify regarding anything based on scientific, technical, or other specialized knowledge within the scope of Rule 702.  The Fifth Circuit has held that an estimate to repair property damage requires specialized knowledge of construction and repair work and therefore is based on specialized knowledge within the scope of Rule 702.  Accordingly, a lay witness cannot testify about repair costs.  A repair cost estimate requires at a minimum, a witness to forecast the amount, type, and costs of materials needed, as well as the amount of labor required to complete the long list of repairs.  These forecasts are not common knowledge.  A lay witness may testify regarding the cost of repairs that have actually been performed on a property.  But expert testimony is essential for proving the reasonable costs of reconstruction.
The Harts have provided no expert witnesses who can testify as to the estimated value of the repairs.  The Harts have not completed the repairs, and so cannot themselves testify as lay witnesses about the cost of those repairs.  Thus, the Harts have no evidence that the reasonable cost of repairs is greater than what State Farm paid them and therefore have no evidence that State Farm violated its obligations under their insurance policy.  Thus, State Farm is entitled to summary judgment on the Harts breach of contract claim.
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