Fifth Circuit Seeks Guidance From The Texas Supreme Court On When The Concurrent Cause Doctrine Applies

• Published date: 14 October 2021
• Subject Matter: Insurance, Litigation, Mediation & Arbitration, Insurance Laws and Products, Trials & Appeals & Compensation
• Law Firm: Butler Weihmuller Katz Craig LLP
• Author: Mr K. Clark Schirle and Mary Bishara

Hail damage is so typical in Texas that Chapter 542A of the Texas Insurance Code is known as the "Hail Bill."

Texas follows the concurrent cause doctrine. As the Texas Supreme Court held in Lyons v. Millers Casualty Insurance Co. of Texas, 866 S.W.2d 597, 601 (Tex. 1993), when a loss is caused by both covered and non-covered perils, the insured must present "some evidence" affording the jury a reasonable basis on which to allocate the damage. The insured has the burden of segregating the damage attributable solely to the covered event. In cases involving hail damage, if there was hail damage that occurred during the policy period, as well as hail damage that pre-existed the inception of the policy; if the insured fails to present sufficient evidence on which to allocate the damages, the insured will be granted summary judgment. See, e.g., Certain Underwriters at Lloyd's of London v. Lowen Valley View, LLC, LLC, 892 F.3d 167 (5th Cir. 2018) (affirming summary judgment for an insurance company where there was evidence that several hail storms struck in the vicinity of the insured hotel several years prior to the inception of the policy).

On August 26, 2021, the United States Court of Appeals for the Fifth Circuit asked for guidance on the concurrent cause doctrine, certifying questions to the Supreme Court of Texas. Frymire Home Services, Inc v. Ohio Security Insurance Company, No. 21-10012, 2021 WL 3783150 (5th Cir. Aug. 26, 2021).

The case involves a 45-year-old roof, in an old commercial building in Dallas, that the insured claimed was damaged by hail during the insurer's policy period. The insured produced some evidence suggesting the roof damage was solely caused by the hailstorm. The policy, however, excluded coverage for cosmetic damage, as well as wear and tear. The insurance company determined that the damage was caused by wear and tear. The District Court granted summary judgment in favor of the insurance company, and the insured appealed.

The Fifth Circuit articulated that the central issue was whether the insured provided enough evidence for a reasonable jury to conclude that the hailstorm during the policy period provided covered losses. Resolving that issue required...