HAROLD FRANKLIN OVERSTREET, Plaintiff-Appellant, versus ALLSTATE VEHICLE AND PROPERTY INSURANCE COMPANY, Defendant-Appellee.
No. 21-10462
United States Court of Appeals for the Fifth Circuit
May 19, 2022
Appeal from the United States District Court for the Northern District of Texas, USDC No. 4:20-CV-242-A
Before HIGGINSON, WILLETT, and HO, Circuit Judges. Don R. Willett, Circuit Judge:
Hail damage, and thus hail-damage litigation, is ubiquitous in Texas, home to some of the nation‘s most extreme weather. And severe weather events often pose complicated issues of causation when multiple perils, some covered and some uncovered, combine to damage property. Under Texas‘s “concurrent causation doctrine,” when insured property is damaged by a
This case is about a leaky roof. Harold Franklin Overstreet says the leak was caused by a strong hailstorm that hit his neighborhood shortly after he purchased the policy. Allstate argues that almost all the roof damage was due to uncovered causes, namely a combination of wear and tear and earlier hailstorms that hit the roof before Overstreet purchased the policy. The district court granted summary judgment to Allstate because Overstreet did not prove what damages were solely attributable to the covered storm.
There are substantial gaps in the concurrent causation doctrine, and this case poses significant consequences for the Texas insurance market. Therefore, we CERTIFY three questions to the Supreme Court of Texas—the same verbatim questions a different panel of this court certified in a similar case less than a year ago, a case that settled soon after certification.1
I
Harold Franklin Overstreet bought a home insurance policy from Allstate that covered damage from wind and hail. Overstreet‘s roof was about three years old when he purchased the policy. On June 6, 2018 a wind and hail storm hit the area where he lived, allegedly damaging his roof. Overstreet reported a loss to Allstate, whose adjuster estimated the value of the loss at only $1,263.23. Because this amount was less than the deductible, Allstate paid Overstreet nothing.
Overstreet disagreed with Allstate‘s valuation. He said that his roof never leaked before 2018 but started leaking right after the June 6, 2018 storm. He also relied on the testimony of his expert Mark Earle, who testified that he inspected the roof and saw evidence of hail damage. Earle relied on meteorological data which showed that hailstorms hit the property both before and after the insurance policy became effective. That data showed that storms accompanied by 0.75” hail hit before Overstreet purchased the policy. The June 6 storm was more violent, accompanied by 1.25” hail. While Earle testified that 0.75” hail can damage a roof, he says the damage he found was more consistent with the 1.25” hail that fell on June 6.
Overstreet filed suit in state court. Allstate removed the case to federal court. After some motions practice not relevant to this appeal, Overstreet filed a Second Amended Complaint which claimed breach of contract and various violations of the Texas Insurance Code. Allstate moved for judgment on the pleadings on most of Overstreet‘s Insurance Code claims—but not his breach of contract claim or his claim under Insurance Code
II
Texas‘s concurrent causation doctrine instructs that “[w]hen covered and excluded perils combine to cause an injury, the insured must present some evidence affording the jury a reasonable basis on which to allocate the damage.”5 That is, the insured must “segregate covered losses from non-covered losses.”6 But questions remain about when the doctrine applies, and what plaintiffs must prove when it does. First, does “any preexisting damage to [a] roof” trigger the concurrent causation doctrine?7 Second, must plaintiffs allocate their losses even if they “provide[] evidence suggesting that the covered hailstorm is the sole reason the roof must be repaired or replaced“?8 Third, assuming the answer to the second question is “yes,” can plaintiffs “satisfy any such attribution obligation by implicitly attributing all of their losses to the hailstorm“?9 Last year a panel of our court considered a similar case and concluded that Texas law does not resolve any of these issues.10 We agree.
The primary authority on concurrent causes is Lyons v. Millers Casualty Insurance Co. of Texas, but that case left several important questions unresolved. The first of these is whether the presence of any preexisting damage triggers the concurrent causation doctrine. In Lyons the concurrent causes—a covered storm and uncovered structural problems—were both substantial.11 But in Frymire, the only prior damage was ordinary wear and tear.12 This case falls somewhere between the two. Overstreet‘s roof had ordinary wear and tear and had also been hit with hail before the policy began (though the parties hotly contest whether that hail damaged the roof or caused the roof to fail).13
Faced with similar factual disputes, some courts have said that concurrent causation is a question for the jury.14 Others
We are also unsure whether the doctrine applies if, examining the record in the light most favorable to the plaintiff, the covered peril caused the entire loss. Similarly, we are unsure whether, even assuming a plaintiff must attribute losses in this situation, attributing 100% of the damage to a covered peril satisfies an insured‘s burden.16 As we noted in Frymire, “an ugly roof can function until it is hit by a hailstorm. Would the hail damage that rendered it nonfunctional be covered in full?”17 Existing precedents do not yield a clear answer.
In sum, we agree with Frymire that determinative questions about the concurrent causation doctrine remain unresolved.18 Federal-state comity interests also support certification, as this case involves a significant issue of state insurance law. Practical considerations likewise favor certification, as the Texas Supreme Court is rightly hailed for its “speedy, organized docket.”19 We will therefore certify the same questions certified in Frymire.20
III
We respectfully request that the Supreme Court of Texas answer these three questions:
- Whether the concurrent cause doctrine applies where there is any non-covered damage, including “wear and tear” to an insured property, but such damage does not directly cause the particular loss eventually experienced by plaintiffs;
- If so, whether plaintiffs alleging that their loss was entirely caused by a single, covered peril bear the burden of attributing losses between that peril and other, non-covered or excluded perils that plaintiffs contend did not cause the particular loss; and
- If so, whether plaintiffs can meet that burden with evidence indicating that the covered peril caused the entirety of the loss (that is, by implicitly attributing one hundred percent of the loss to that peril).21
QUESTIONS CERTIFIED.