Unreported / Non-Citable
Background
Underwood Financial owns and manages two commercial buildings in Richardson, Texas, insured by AMCO Insurance Company under successive policies covering direct physical loss unless excluded or limited. After an April 2021 hailstorm, Underwood claimed damage to rooftop HVAC units. AMCO’s investigator found hail damage to those units, and AMCO paid the agreed amount less the deductible. Underwood later expanded that claim to allege that the same storm also damaged the roofs.
Underwood separately reported a June 2022 claim after a tenant reported a roof leak and flooding following a storm with high winds and rain. AMCO ultimately denied the reopened claim, relying on inspections attributing the water intrusion to deterioration, sealant defects, inadequate drainage, or other noncovered conditions rather than wind-created openings. Underwood’s roofing consultant, Scott Jetton, instead opined that physical evidence was consistent with covered hail and wind damage during the policy periods and that the roofs required replacement.
Underwood sued for breach of contract, violations of Chapter 541 of the Texas Insurance Code and the Texas Deceptive Trade Practices Act, and breach of the common-law duty of good faith and fair dealing. AMCO moved to strike Jetton’s opinions and testimony under Federal Rules of Civil Procedure 26 and Evidence 702 and moved for summary judgment. Underwood moved to exclude anticipated trial testimony from two defense experts.
The Court’s Holding
The court denied AMCO’s motion to strike Jetton’s opinions and testimony. It found Jetton’s report substantially satisfied Rule 26 and held that any omission of weather reports or a related spreadsheet was harmless. It also concluded that Underwood had shown by a preponderance of the evidence that Jetton’s causation opinions were relevant and sufficiently reliable under Rule 702. Jetton’s inspections, roof samples, laboratory analysis, historical imagery, weather information, photographs, and experience supplied an adequate methodology, while AMCO’s criticisms could be explored through cross-examination.
The court also denied AMCO’s motion for summary judgment. Underwood presented evidence from which a reasonable jury could find that the April 2021 hailstorm and June 2022 wind-and-rain storm solely caused the claimed damage requiring roof replacement. That evidence included Jetton’s opinions, repair history, and AMCO’s pre-loss assessments of the buildings. AMCO’s contrary evidence— including reports attributing the conditions to older hail, clogged drains, deterioration, and sealant defects—created factual disputes for a jury rather than establishing a concurrent-causation defense as a matter of law.
Underwood’s extracontractual claims and request for attorney’s fees also survived. The court found evidence permitting more than a mere bona fide coverage dispute, including evidence concerning unreported indications of hail damage, the scope of AMCO’s inspections, and an adjuster’s alleged statements before any roof inspection. Finally, the court denied Underwood’s motion to exclude the defense experts without prejudice because it concerned anticipated trial testimony and was unnecessary to decide summary judgment. All claims remain for trial unless resolved.
Key Takeaways
- An insured can defeat summary judgment under Texas’s concurrent-causation doctrine by producing evidence from which a jury could find that covered events solely caused the claimed loss.
- An expert’s inability to eliminate every alternative storm or cause may affect credibility and weight without necessarily making the opinion irrelevant or unreliable.
- Competing expert accounts of whether roof damage resulted from covered storms, older hail, deterioration, drainage problems, or sealant defects presented fact and credibility questions for the jury.
- Evidence concerning the insurer’s investigation and preinspection communications allowed the statutory and common-law extracontractual claims to proceed.
Why It Matters
The decision illustrates that preexisting wear or evidence of other possible causes does not automatically defeat a Texas property claim at summary judgment. When competent evidence would allow jurors to attribute the entire claimed loss to covered events, the dispute may proceed even if the insurer presents substantial contrary causation evidence.
It also applies the amended Rule 702 framework without treating reliability as a demand for certainty. The proponent must establish admissibility by a preponderance of the evidence, but disputes over competing factual premises and adequately supported conclusions may remain for cross-examination and trial.