12 F.4th 467
5th Cir.2021Background
- Plaintiffs Frymire Home Services, Inc. and Whitfield Capital, LLC insured a Dallas commercial office building under a policy covering "windstorm or hail" but excluding "cosmetic" damage and general "wear and tear."
- A June 2018 hailstorm allegedly caused severe roof damage; Plaintiffs submitted a claim that OSIC denied, attributing the loss to wear and tear.
- Plaintiffs’ adjuster, Brady Sandlin, declared that despite possible preexisting damage, the June 2018 hailstorm alone caused the damage requiring roof replacement.
- Plaintiffs sued in state court (breach of contract and related claims); OSIC removed to federal court and moved for summary judgment.
- The district court granted summary judgment for OSIC, reasoning the loss involved concurrent causes and that Plaintiffs bore an attribution burden they failed to meet.
- The Fifth Circuit, unsure how Texas law treats preexisting wear-and-tear in concurrent-cause analysis and whether Plaintiffs’ evidence suffices, certified three questions to the Texas Supreme Court instead of resolving the merits.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the concurrent-cause doctrine applies whenever any non-covered damage (e.g., wear and tear) exists even if that preexisting damage did not contribute to the specific loss | Hail was the sole cause; mere preexisting wear-and-tear that did not produce the loss should not trigger concurrent-cause treatment | Any non-covered preexisting damage invokes concurrent-cause analysis, shifting allocation burdens | Certified to the Texas Supreme Court; Fifth Circuit did not decide on the merits |
| If concurrent cause applies, whether plaintiffs who assert a single covered-cause theory must allocate loss between covered and non-covered perils | No allocation required; Plaintiffs can prevail by showing the covered peril alone caused the loss | Plaintiffs must allocate between covered and excluded causes once concurrent-cause doctrine applies | Certified to the Texas Supreme Court; Fifth Circuit did not decide on the merits |
| If an allocation burden exists, whether plaintiffs may satisfy it by presenting evidence that the covered peril caused 100% of the loss (i.e., implicit full attribution) | Sandlin’s declaration that hail caused the entire loss suffices to attribute 100% to the covered peril | Such evidence is insufficient without affirmative, specific attribution or apportionment methodology | Certified to the Texas Supreme Court; Fifth Circuit did not decide on the merits |
Key Cases Cited
- Lyons v. Millers Casualty Ins. Co. of Texas, 866 S.W.2d 597 (Tex. 1993) (when a loss is caused by both covered and non-covered perils, insured must present some evidence attributing damage to covered peril)
- Certain Underwriters at Lloyd’s of London v. Lowen Valley View, L.L.C., 892 F.3d 167 (5th Cir. 2018) (applied attribution rule where insured produced no evidence that covered peril solely caused loss)
- Evanston Ins. Co. v. Legacy of Life, Inc., 645 F.3d 739 (5th Cir. 2011) (examples of federal appellate certification to Texas Supreme Court on insurance-law questions)
- Burrell v. Prudential Ins. Co. of Am., 820 F.3d 132 (5th Cir. 2016) (summary judgment standard reviewed de novo)
- Swindol v. Aurora Flight Scis. Corp., 805 F.3d 516 (5th Cir. 2015) (factors for certifying state-law questions to state supreme court)
- Wallis v. United Servs. Auto Ass’n, 2 S.W.3d 300 (Tex. App.—San Antonio 1999) (state-court application of Lyons)
- Southland Lloyds Ins. Co. v. Cantu, 399 S.W.3d 558 (Tex. App.—San Antonio 2011) (another state-court application illustrating doctrinal variation)