Reported / Citable
Background
Trinity Fellowship Church of Pampa sought coverage from Church Mutual after a June 2023 storm allegedly caused hail, wind, and water damage to its Pampa, Texas property. Church Mutual’s initial adjuster estimated repairs at $9,085.39, below the church’s $168,660 deductible. After the church submitted a contractor estimate exceeding $1.3 million, the insurer obtained an engineering review and a new repair estimate of $98,683.01 for the main property, still below the deductible, while paying $11,323.85 for covered damage to other structures.
The church later sued for breach of contract, Texas Insurance Code violations, DTPA violations, and breach of the duty of good faith and fair dealing. It relied on damage estimates from Monty Stone and contractor Chase Brewer. Church Mutual moved to exclude those opinions and sought partial summary judgment on the extra-contractual claims and to cap damages at Brewer’s earlier $1,339,163.97 estimate.
The Court’s Holding
Judge Kacsmaryk excluded Stone’s and Brewer’s expert damage-estimate opinions because they made numerous unexplained alterations to Xactimate inputs and methodology, rendering their opinions unreliable under Rule 702. The court denied the church’s motion to exclude Church Mutual’s experts, Matthew Cowen and Troy White. Cowen adequately supported his opinion that the interior moisture intrusion reflected deteriorated sealant, prior repairs, weathering, or moisture-mitigation deficiencies—not storm-created roof breaches; White’s opinions were not needlessly cumulative.
The court granted summary judgment for Church Mutual on the church’s bad-faith claim, all asserted Chapter 541 claims, and the DTPA claim. The evidence did not permit a finding that the insurer lacked a reasonable basis for its claims position or acted with the requisite bad faith. The alleged misrepresentations largely concerned the cause, extent, and cost of damage rather than policy terms or benefits, and Church Mutual’s estimates and communications adequately explained its below-deductible determination. The court denied summary judgment on a damages cap, leaving the amount of storm damage for the jury.
Key Takeaways
- Unexplained deviations from Xactimate defaults can make a damages expert’s methodology inadmissible.
- An insurer’s incorrect valuation or incomplete investigation does not alone establish Texas bad faith.
- Texas Insurance Code misrepresentation claims require statements about policy terms or benefits, not merely disputes over damage facts.
Why It Matters
The ruling narrows the case to the church’s breach-of-contract claim and its Texas prompt-payment claim. Although the church lost its expert estimates and extra-contractual theories, the court held that damages remain a factual issue and declined to impose the insurer’s requested ceiling based on the contractor’s initial estimate.