Fifth Circuit Guidance For Newly-Offered Expert Opinions And The Concurrent Causation Doctrine In Insurance Coverage Cases

• Published date: 28 April 2023
• Subject Matter: Insurance, Energy and Natural Resources, Oil, Gas & Electricity, Insurance Laws and Products
• Law Firm: Jenner & Block
• Author: Brian S. Scarbrough and Cianan M. Lesley

The United States Court of Appeals for the Fifth Circuit's recent opinion in Majestic Oil, Inc. v. Certain Underwriters at Lloyd's, London Subscribing to Policy Number W1B527170201, No. 21-20542 (5th Cir. Mar. 17, 2023), offers important guidance for practitioners in insurance coverage cases faced with offering new or supplemental expert opinions after the expert report deadline. Moreover, the opinion provides insight into how a recent articulation of Texas' concurrent causation doctrine could affect insurance cases where the cause of damage is at issue.

The question underpinning Majestic Oil was whether Hurricane Harvey or an earlier January 2017 storm damaged Majestic Oil's roof such that it started to leak. Majestic Oil's first-party property insurance policy issued by Lloyd's covered damage caused by "[r]ain or wind driven rain which enters the insured building or structure through an opening created by the force of a [n]amed [s]torm," but according to the Firth Circuit, the policy did not cover "pre-existing damage, ongoing damage, or wear and tear." Majestic Oil, slip op. at 1-2 (alteration in original). After Hurricane Harvey―a named storm―Majestic Oil's roof began leaking, but the parties disputed whether the damage to the building predated the storm. Id. at 2-3. A Lloyd's claims adjuster and a structural engineering expert hired by Lloyd's determined that the damage predated Hurricane Harvey, and Lloyd's denied the claim. Id. Meanwhile, Majestic Oil hired its own expert, who authored a report. Id. at 3. The report stated that while the earlier January 2017 storm could not "be ruled out as initially contributing to the roof vulnerability," it was "more likely than not that" Hurricane Harvey caused the damage. Id.

At his deposition, Majestic Oil's expert "refined his theory" and ruled out the January 2017 storm as the cause of the damage. Id. In other words, at his deposition, the expert concluded that only Hurricane Harvey caused the damage to Majestic Oil's property. Id. In doing so, the expert referenced a previously unconsidered weather report that he discovered while researching an unrelated case. Id.

Shortly after the deposition, Majestic Oil's expert authored a second expert report that reiterated his conclusion that Hurricane Harvey―not the January 2017 storm―caused the damage to Majestic Oil's property. Id. at 4. However, the second report was offered six months after the deadline for expert reports, and Lloyd's moved to strike the second...