Hooker v. United Prop. & Cas. Ins. Co.
| Decision Date | 08 September 2020 |
| Docket Number | CIVIL ACTION NO. 2:18-CV-424 |
| Parties | CLAUDE HOOKER, Plaintiff, v. UNITED PROPERTY & CASUALTY INSURANCE COMPANY, Defendant. |
| Court | U.S. District Court — Southern District of Texas |
Plaintiff Claude Hooker sues United Property & Casualty Insurance Company (UPC) for windstorm insurance policy benefits for Hurricane Harvey damage to his home. He asserts claims for breach of contract, violation of the prompt pay act, and bad faith insurance practices. D.E. 1-1. Before the Court is UPC's motion for summary judgment, claiming that UPC has already paid for all damage within the policy's coverage. UPC seeks to defeat the breach of contract claim, which then causes the remaining claims to fail.1 D.E. 33. Hooker has responded, UPC has replied, and Hooker filed a sur-reply. D.E. 44, 46, 52. For the reasons set out below, the motion (D.E. 33) is DENIED.
Also before the Court is Hooker's "Motion for Partial Summary Judgment on Certain Affirmative Defenses" (D.E. 34). Hooker seeks to eliminate UPC's defenses related to covered losses, conditions precedent, third-party causation, and failure to mitigate damages. UPC responded and Hooker replied. D.E. 43, 47. For the reasons set out below, the motion (D.E. 34) is GRANTED IN PART and DENIED IN PART.
UPC seeks summary judgment dismissing Hooker's breach of contract claim. However, UPC did not timely produce a true and correct, complete copy of Hooker's insurance policy (the 08/14 form) in the ordinary course of discovery. And the policy form attached to its motion is a revised form (09/16) that does not apply to Hooker's coverage. D.E. 33-1. Hooker objected to any summary judgment based on the incorrect form. D.E. 44, p. 2. Thereafter, UPC filed the correct policy form with its reply. D.E. 46-2, pp. 18-38.
Ordinarily, the Court does not consider new evidence filed with a summary judgment reply. However, that new evidence may be considered if the Court extended to the non-movant an opportunity to address it. Vais Arms, Inc. v. Vais, 383 F.3d 287, 292 (5th Cir. 2004). The Court has done so by permitting Hooker to file his sur-reply. Because Hooker has not identified a material difference in the policy language as it applies to the issues and arguments first placed before the Court in the motion,2 the Court proceeds to adjudicate the motion on the merits using only the language of the 08/14 policy form, disregarding the 09/16 form.
UPC's motion is based on the concurrent cause doctrine. See generally, Wallis v. United Servs. Auto. Ass'n, 2 S.W.3d 300, 302-03 (Tex. App.—San Antonio 1999, pet. denied) (citing Travelers Indem. Co. v. McKillip, 469 S.W.2d 160, 162 (Tex. 1971)).
The doctrine of concurrent causes limits an insured's recovery to the amount of damage caused solely by the covered peril. Because an insured can recover only for covered events, the burden of segregating the damage attributable solely to the covered event is a coverage issue for which the insured carries the burden of proof.
Wallis, 2 S.W.3d at 303 (emphasis added); see also, Seahawk Liquidating Tr. v. Certain Underwriters at Lloyds London, 810 F.3d 986, 990, 995 & n.14 (5th Cir. 2016).3
According to UPC and its expert, Hooker's claim for structural damage to his home involves damage caused by ordinary wear and tear or construction defects. It argues that, because such damage is not covered under the policy, Hooker is not entitled to a jury trial unless—consistent with the concurrent cause doctrine—he submits evidence allocating the damage between the covered and uncovered causes.
While denying that there were any wear and tear issues or construction defects involved in the property damage suffered, Hooker first complains that UPC has not demonstrated that those causes are excluded from the policy's coverage. UPC responded that Hooker just does not understand how insurance policies work. D.E. 43, p. 12. While UPC failed to articulate the insurance principles behind its argument, those principles are important to understanding how the concurrent cause doctrine applies here.
According to the policy, "[UPC] cover[s] direct physical loss to the covered property caused by windstorm or hail unless the loss is excluded in the Exclusions." D.E. 46-2, p. 25. UPC's windstorm and hail policy is thus a named-perils policy. See generally, Tex. Windstorm Ins. Ass'n v. Dickinson Indep. Sch. Dist., 561 S.W.3d 263, 273 (Tex. App.—Houston [14th Dist.] 2018, pet. denied). This is to be distinguished from an all-risks policy.4 "Under such a named-perils policy, 'all perils not specifically included in the policy are excluded from coverage.'" Id. (quoting de Laurentis v. United Servs. Auto. Ass'n, 162 S.W.3d 714, 722 (Tex. App.—Houston [14th Dist.] 2005, pet. denied)).
D.E. 46-3, p. 7. This is not policy language and UPC has not indicated how it collected this list of uncovered causes.5 However, what is important to the pending motions is that each represents a causal agent for property damage that is not a windstorm or hail. Therefore, wear and tear and construction defects are not covered perils. Under this named-perils policy, the fact that wear and tear and construction defects are not expressly listed in the policy exclusions is irrelevant.6
Hooker can take no comfort in the proposition that Hurricane Harvey was a dominant, proximate, contributing, or "but for" cause of all of the damage. Under the concurrent cause doctrine, he can recover only for that part of the damage "solely" caused by windstorm. Wallis, 2 S.W.3d at 303. Because UPC has invoked the uncovered perils of wear and tear and construction defects, it is Hooker's burden under the concurrent cause doctrine to provide evidence regarding how the damages should be allocated. He is only entitled to recover damages "solely" caused by the windstorm.
Hooker has testified, supported by his expert, that the structural beams were intact andproperly joined before the hurricane and that splitting of the wood, broken straps, and joints-out-of-placement appeared only after the hurricane. His testimony was based on his personal observations as a daily occupant of the home. D.E. 44-6, p. 4. Engineer Stuart Lynn declared that, at the time of his inspection soon after the storm, it was clear that the damage to the wood was new, as it was not weathered as one would expect with ordinary aging and wear and tear. He stated that he did not observe any construction defects. And he further asserted that the damage was consistent with the wind forces of Hurricane Harvey and the surrounding property damage. He considered whether there were other weather events during the life of the house that predated the hurricane and might have caused the damage and found none. D.E. 44-1.
While UPC has complained that this evidence is conclusory, the Court has reviewed the deposition testimony and expert declaration and finds that the evidence provides sufficient basis for the representations to qualify as admissible summary judgment evidence. See Fed. R. Evid. 702, 703; Generation Trade, Inc. v. Ohio Sec. Ins. Co., 3:18-CV-0434-K, 2019 WL 3716427, at *1 (N.D. Tex. Aug. 6, 2019) (). Any complaints go to the weight, not the admissibility, of the opinions. State Farm Fire & Cas. Co. v. Rodriguez, 88 S.W.3d 313, 320 (Tex. App.—San Antonio 2002, pet. denied) (addressing expert testimony), abrogated on other grounds by Don's Bldg. Supply, Inc. v. OneBeacon Ins. Co., 267 S.W.3d 20 (Tex. 2008) ().
It is Hooker's burden to show that his claim results from a covered peril. He has done that. But UPC has provided competent summary judgment evidence to support its claim that thedamages were caused by non-covered perils. In such a scenario of competing causes, Hooker bears the burden to support his claim with evidence that allocates damages arising from his covered claim from any damages that arise from a non-covered cause. Wallis, 2 S.W.3d at 303.
"Under Texas law, allocation is an issue of fact, unless the insured fails to present any evidence regarding allocation." Companion Prop. & Cas. Ins. Co. v. Opheim, 92 F. Supp. 3d 539, 548 (N.D. Tex. 2015). Whether Hooker has satisfied his allocation burden depends on whether he is entitled to "allocate" zero percent of the damages to the non-covered causes and 100% to Hurricane Harvey. He can.
The percentage spectrum includes taking the position, based on admissible evidence, that the covered peril caused 100% of the loss claimed. See generally, Southland Lloyds Ins. Co. v. Cantu, 399 S.W.3d 558, 576 (Tex. App.—San Antonio 2011, pet. denied); Certain Underwriters at Lloyd's of London v. Lowen Valley View, LLC, 3:16-CV-0465-B, 2017 WL 3115142, at *9, 11 (N.D. Tex. July 21, 2017) (), aff'd, 892 F.3d 167 (5th Cir. 2018).
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