Opinion
CIVIL ACTION NO. 3:00-CV-0689-P
January 15, 2002
MEMORANDUM OPINION AND ORDER
Now before the Court are the following:
1. Defendant Travelers' Motion for Summary Judgment, with supporting brief and appendix, filed December 5, 2000;
2. Plaintiff's Response to Defendant Travelers' Motion for Summary Judgment, with supporting brief and appendix, filed January 12, 2001;
3. Defendant Travelers' Reply to Plaintiff's Response to Motion for Summary Judgment, filed January 29, 2001;
4. Plaintiff's Supplemental Memorandum to its Response to Defendant Traveler's Motion for Summary Judgment, filed March 2, 2001;
5. Plaintiffs' Evidentiary Addendum to its Supplemental Memorandum to its Response to Defendant Traveler's Motion for Summary Judgment, filed March 30, 2001;
6. Defendant Travelers' Supplemental Reply to Plaintiffs' Evidentiary Addendum to its Supplemental Memorandum to its Response to Defendant Travelers' Motion for Summary Judgment, filed April 13, 2001;
7. Defendant Travelers' Supplemental and/or Second Motion for Summary Judgment, with supporting brief, filed September 24, 2001;
8. Plaintiffs' Response to Defendant Travelers' Second Motion for Summary Judgment, with supporting brief and appendix, filed October 15, 2001;
9. Plaintiffs' Supplemental Response to Defendant Travelers' Second Motion for Summary Judgment, with supplemental brief and supplemental appendix, filed November 14, 2001;
10. Defendant Travelers' Brief in Reply to Plaintiffs Response and Supplemental Response to Defendant Travelers' Second Motion for Summary Judgment, with supplemental appendix, filed November 26, 2001;
11. Royal's Motion for Summary Judgment Against All Plaintiffs, with brief in support and appendix, filed October 30, 2001;
12. Royal's First Supplement to its Motion for Summary Judgment Against All Plaintiffs, filed November 2, 2001;
13. Royal's Corrected Brief in Support of its Motion for Summary Judgment Against All Plaintiffs, with corrected appendix, filed November 9, 2001;
14. Plaintiffs' Response to Defendant Royal's Motion for Summary Judgment, with supporting brief, filed November 26, 2001;
15. Royal's Reply to Plaintiffs' Response to Royal's Motion for Summary Judgment Against All Plaintiffs, filed December 6, 2001;
16. Plaintiffs' Motion for Leave to File Supplemental Arguments and Evidence, with supporting brief, filed December 13, 2001;
17. Royal's Opposition Response to Plaintiffs' Motion for Leave to File Supplemental Arguments and Evidence, with appendix, filed December 21, 2001; and
18. Plaintiffs' Reply to Defendant Royal' supposition Response to Plaintiffs' Motion for Leave to File Supplemental Arguments and Evidence, filed January 3, 2002.
By Order dated March 8, 2001, the Court granted Plaintiff Day Commercial Management, Inc.'s Motion for Leave to File Second Amended Complaint, in order to include Crossroads Greenville Property, Ltd. as an additional plaintiff in this case.
By Order dated November 9, 2001, Royal Insurance Company of America was granted leave by the Court to file its Corrected Summary Judgment Brief and Corrected Summary Judgment Appendix in order to correct page numbering in its previously filed Summary Judgment Appendix (and the corresponding references in their Brief), as well as to add Supplemental Appendix Exhibit 15.
After a thorough review of the summary judgment evidence, the pleadings, the parties' briefs, and the applicable law, for the reasons set forth below, the Court is of the opinion that Defendant Travelers' Motion for Summary Judgment and Defendant Royal's Motion for Summary Judgment should be GRANTED in PART and DENIED in PART. The Court The Court further ORDERS that Plaintiff's Motion for Leave to File Supplemental Arguments and Evidence should be DENIED as MOOT.
BACKGROUND
This case arises from an insurance dispute over property damage to the Crossroads Mall in Greenville, Texas, allegedly resulting from one or more hail storms occurring during coverage periods under insurance policies purchased from the Defendants. The Crossroads Mall was initially purchased by Crossroads Greenville Property Ltd. (hereinafter "Greenville Property") on November 2, 1995, and was thereafter managed by Day Commercial Management, Inc. (hereinafter "Day Commercial"). See PL's Br. Resp. Def. Travelers' Mot. Summ. J. at 1. Prior to this purchase, Coastal Bank, the lender involved, conducted and prepared a complete inspection and structural report of the insured premises. See Id. Amongst its findings, the report noted several construction related deficiencies and/or items warranting immediate repair, including the property's roof systems, which it found "was nearing the end of its useful life and may need replacement in the near future." See App. PL's Resp. Def. Travelers' Mot Summ. J., Exh. 2. However, regardless of these observations, Plaintiffs claim that no mention was ever made in the report as to any hail damage to the roof, and Coastal Bank did not issue a mandate for such repairs prior to the purchase. See Pls' Br. Resp. Def. Royal's Mot. Summ. J. at 2.
Prepared on August 2, 1995, the AECC Property Review Summary report for the Crossroads Mall characterized the need for repair on the structure's roof systems as "Major," stating more specifically that:
"The majority of the roof systems are of original construction and are nearing the end of their useful lives. The roof system for the Bud's Retail Store is in better condition and we were informed major roof repairs were performed and an aluminized reflective coating was added in 1994. We were informed several roof leaks have been experienced over the past years. This was partially alleviated by the roof repairs performed for the Bud's Retail Store. Maintenance personnel directed us to a few areas where current roof leaks are evidence and immediate repairs will be required. We observed some felt blisters, deterioration of flashing, and deterioration of sealant. We recommend, as an immediate measure, current roof leaks be applied. Sealants should be applied at parapet roof caps, HVAC roof curbs, skylight systems, and perimeter flashing. We recommend the above repairs be performed as needed in order for the roof systems to reach their intended useful lives. We have included complete replacement of roof systems within our `Replacement Reserve Table' later in this report. . . . Estimated Cost: $48,000."See App. Pl's Resp. Def. Travelers' Mot. Summ. J., Exh. 2.
On October 31, 1995, an insurance policy in the name of "Crossroads Greenville Corp. Ltd. % Day Commercial Mgmt," was purchased from Travelers Lloyds Insurance Company (hereinafter "Travelers") to cover said premises. See App. Def. Travelers' Mot. Summ. J., Exh. 1 at 3-4 (Declarations Pages). The Texas Businessowners Policy issued by Travelers was in effect for a period of one year, until October 31, 1996, and was thereafter extended from December 31, 1996 until its effective cancellation on April 15, 1997. See Id.; see also Def. Travelers' Supp./Second Mot Summ. J. at 3 (hereinafter "Def. Travelers' Sec. Mot.). Under this policy, the "Named Insurer" was entitled to recover for "direct physical loss of or damage to Covered Property at the premises described in the Declarations, caused by or resulting from a Covered Cause of Loss." App. Def. Travelers' Mot. Summ. J., Exh. 2 at 36. A "Covered Cause of Loss" was defined in the policy as risks of direct physical loss unless otherwise excluded. See Id. at 37. Among the relevant exclusions, the Travelers' policy stated that "[Travelers] will not pay for loss or damage caused by or resulting from . . . (1) Wear and tear; or (2) Rust, corrosion, fungus, decay, deterioration, hidden or latent defect or any quality in [the] property that causes it to damage or destroy itself." See Id. at 43.
Additionally, the Traveler's Policy required that in the event of loss or damage "[the insured] must see to it that . . . prompt notice [is given] of the facts relating to the claim." See App. Def. Travelers' Mot. Summ. J., Exh. 2 at 45. Further, the policy stated, "no one may bring a legal action against [Travelers] under this Coverage form unless . . . (1) there has been full compliance with all the terms of this insurance, and (2) the action is brought within 2 years and 1 day next after the date on which the direct physical loss or damage occurred." See Id. at 49.
During the effective coverage period of the Travelers' policy, from October 1995 until April 1997 (save for the two month renewal period above noted), Plaintiffs allege several hail storms affected the Greenville, Texas area-including a severe hail storm in May of 1996. See PI.'s Br. Resp. Def. Travelers' Mot. Summ. J. at 2 ( citing Hill Aff., App. PL's Resp. Def. Travelers' Mot. Summ. J., Exh. 5). According to Ms. Jeannie Hill, property manager of the Crossroads Mall, the hail storm of May 1996 caused severe damage to her car, which was parked approximately one-half mile from the mall, requiring a total of $6,000 in repairs. See Hill Aff. supra. However, she also noted that there was nothing at the mall following this storm which, at the time, indicated that significant damage had occurred to the mall's roof since no immediate leaks were found. See Id. Nevertheless, a property loss notice was filed with Travelers on May 13, 1996, claiming among other things, storm and roof damage, as well as water in the mall's stores. See App. Pls.' Resp. Def. Travelers' Sec. Mot., Exh. 4-C. Plaintiffs assert, however, that Travelers later denied this claim. See Pls.' Resp. Def. Travelers' Sec. Mot. at 2-3.
Plaintiffs, relying on information provided by the Southern Regional Climate Center, the Fort Worth Star-Telegram, and the Greenville Herald Banner, assert also there were several other hail storms which occurred in the Greenville, Texas area during the relevant Travelers' insurance policy period, including a severe storm on April 20, 1996 and two more in May of 1996 (one being the storm described by Ms. Hill infra). See Pls.' Br. Resp. Def. Travelers Sec. Mot. at 2; see also App. Pls.' Resp. Def. Travelers Sec. Mot., Exh. 4-G, 5 and 6.
Subsequently, the Crossroads Mall was insured under a policy purchased from Royal Insurance Company of America (hereinafter "Royal"), which was effective from April 12, 1997 through October 12, 1999. See Royal's Mot. Summ. J. at 1-2. Under this policy, Royal promised to "cover [Plaintiffs] interest in and will pay for direct physical loss of or damage to all real and business personal property" related to the mall. See Royal's Corrected Br. Supp. Mot. Summ. J., Exh. 1 at 7 (Common Policy Declarations at 4). In addition, the policy covered loss or damage commencing during the period in the Declaration, and excluded from coverage:
(a) Wear and tear;
(b) Rust, corrosion, fungus, decay, deterioration, hidden or latent defect, or any quality in the property that causes it to damage or destroy itself;
. . .
(i) Faulty, inadequate or defective
(1) Planning, zoning, development, surveying, siting;
(2) Design, specifications, workmanship, repair, construction, renovation, remodeling, grading, compaction;
(3) Materials used in repair, construction, renovation, or remodeling; or
(4) Maintenance
of part or all of any property on or off insured premises.See Id., Exh. 1 at 28, 19-20.
Thereafter, on or about June 6, 1997, another hail storm hit the insured premises. See Pl's Second Am. Compl. at 2-3. Plaintiffs assert that this storm also caused severe damage to the property since, immediately after the storm, the roof had numerous leaks that did not exist the day prior to this storm. See Pls.' Br. Resp. Def. Royal's Mot. Summ. J. at 3; see also App. Pls.' Resp. Def. Travelers' Sec. Mot., Exh. 1 (McClure Dep. at 27). Thereafter, Day Commercial submitted a property claim to Royal for the hail damage to the mall's roof following this June 1997 storm.
Royal, however, denied the claim after its investigation on February 9, 1998 concluded that the damage to the insured premises was the result of damage which had previously occurred during the Travelers' policy period. See PL's Br. Resp. Def. Travelers' Mot. Summ. J. at 2. More specifically, Royal's report, which was prepared by Pat Brady, Senior Consultant for Unified Building Sciences, Inc., concluded that:
"Based on our observation and activities, it is clear that small hail impacted the Crossroads Mall roof system on or about June 6, 1997. The size of this hail is clearly not sufficient to cause physical damage to the gravel coated and aluminum paint coating built-up roof systems that we observed. Further this small hail, measuring 1/4" to 9/16" in diameter, occurred within a twelve month time period from our inspection on February 9, 1998.
Hail impacts and fractures measuring up to 1 1/4" have fractured the aluminum roof coating at a point in time exceeding twelve months from our inspection and prior to 1997, according to two car dealerships who provided information to us since this hail would have unquestionably damaged cars on their lots."See App. PL's Resp. Def. Travelers' Mot. Summ. J., Exh. 3 (hereinafter "Brady Report).
Afterwards, on April 2, 1998, pursuant to Royal's recommendation, Day Commercial notified Travelers of the above findings and submitted a claim under the Travelers' policy for its asserted losses at the insured premises. See Def. Travelers Sec. Mot. at 5. By letter dated July 17, 1998, Travelers advised Day Commercial that its claim was not considered timely. See Id. Additionally, in a subsequent letter dated August 3, 1998, Travelers also informed Day Commercial that coverage for the property was not afforded under the policy because the loss did not occur during the applicable policy period. See Id. Thereafter, Day Commercial filed its suit against both Defendants, and was later joined by Greenville Property as Plaintiff upon the filing of Plaintiffs Second Amended Complaint on March 8, 2001. See Footnote 1 supra.
DISCUSSION
I. The Parties ClaimsIn this action Plaintiffs Day Commercial and Greenville Property assert a right of recovery against Defendant Royal for hail damage to the Crossroads Mall occurring on or about June 6, 1997. See Pls.' Second Am. Compl. at 3. Alternatively, if the hail damage is found to have occurred prior to this date, Plaintiffs assert a right to recovery against Defendant Travelers, as such hail damage would have presumably occurred during the Travelers' policy period, making either one or both of the Defendants liable. See Id. 3-4. In addition, Plaintiffs assert that Defendants have made various misrepresentations, either explicitly or implicitly, regarding the Plaintiffs' coverage, unjustifiably denying liability under these policies, and thereby compelling Plaintiffs to institute this litigation. See Id. at 4.
Plaintiffs' alternatively argue that the alleged loss occurred on March 25, 1998, since this was the date on which they learned from their expert that the damage to the mall's roof occurred during the Travelers' policy period. See Pls.' Br. Resp. Def. Travelers' Sec. Mot. at 7.
On the other hand, Defendant Travelers moves this Court for relief claiming that summary judgment is proper because (1) there is no competent evidence to demonstrate that the property damage in question occurred during the Travelers' policy period; (2) it is not liable to Plaintiff Day Commercial because it is not an insured under the Travelers' policy and lacks standing to bring this suit; (3) Plaintiffs failed to promptly notify Travelers of the claim, a condition precedent to recovery under the policy; (4) the damage did not result from a "Covered Cause of Loss"; and finally (5) even assuming arguendo that there is a fact question as to whether any hail damage occurred during Travelers' policy period, Plaintiffs cannot establish to what extent, if any, the damage for which recovery is sought can be attributed to a "Covered Cause of Loss," and thus Plaintiffs cannot meet their burden under the doctrine of concurrent causes. See Def. Travelers' Sec. Mot. at 2-3.
Additionally, Defendant Royal also moves the Court for relief claiming that summary judgment is proper because (1) it is not liable for the alleged misrepresentation claims brought by Plaintiffs because none were made; (2) the alleged property damage cannot be shown to have occurred during Royal's policy period; (3) there is no evidence of a "Covered Cause of Loss"; and (4) Plaintiffs cannot meet their burden under the doctrine of concurrent causation. See Royal's Corrected Br. Supp. Mot. Summ. J. at 6-10 (hereinafter "Royal's Corr. Br."). Each of these arguments will be considered in turn.
II. Summary Judgment Standard
Summary Judgment shall be rendered when the pleadings, depositions, answers to interrogatories and admissions on file, together with affidavits, if any, show that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). All evidence and the reasonable inferences to be drawn therefrom must be viewed in the light most favorable to the party opposing the motion. United States v. Diebold, Inc., 369 U.S. 654, 655 (1962). The moving party bears the burden of informing the district court of the basis for its belief that there is an absence of a genuine issue for trial, and of identifying those portions of the record that demonstrate such an absence. Celotex, 477 U.S. at 323.
Once the moving party has made an initial showing, the party opposing the motion must come forward with competent summary judgment evidence of the existence of a genuine fact issue. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). The party defending against the motion for summary judgment cannot defeat the motion unless he provides specific facts that show the case presents a genuine issue of material fact, such that a reasonable jury might return a verdict in his favor. Anderson v. Liberty Lobby, Inc., 477U.S. 242, 248 (1986). Mere assertions of a factual dispute unsupported by probative evidence will not prevent summary judgment. Id. at 248-50; Abbot v. Equity Group, Inc., 2 F.3d 613, 619 (5th Cir. 1993). In other words, conclusory statements, speculation and unsubstantiated assertions will not suffice to defeat a motion for summary judgment. Douglass v. United Servs. Auto. Ass'n, 79 F.3d 1415, 1429 (5th Cir. 1996) (en banc). If the nonmoving party fails to make a showing sufficient to establish the existence of an element essential to is case, and on which he bears the burden of proof at trial, summary judgment must be granted. Celotex, 477 U.S. at 322-23.
Finally, the Court has no duty to search the record for triable issues. Guarino v. Brookfield Township Trustees, 980 F.2d 399, 403 (6th Cir. 1992). The Court need only rely on the portions of submitted documents to which the nonmoving party directs. Id.
III. Standing to Bring Suit
Defendant Travelers moves this Court for relief claiming that Plaintiff Day Commercial lacks standing to bring this suit since it was not an insured under the Travelers' policy. See Def. Travelers' Mot. Summ. J. at 7. The Defendant bases this argument on the fact that, under the policy, only the "named insured" is entitled to recover for the "direct physical loss of or damage to Covered Property at the premises described in the Declarations caused by or resulting from a Covered Cause of Loss." App. Def. Travelers' Mot. Summ. J., Exh. 2 at 36.
As it is well established under Texas law, one who is not a party, an insured, or a beneficiary under an insurance policy, cannot sue to enforce the policy. See Paramount Ins. Co. v. Aetna Cas. Sur. Co., 353 S.W.2d 841, 844-845 (Tex. 1962); see also Allstate Ins. Co. v. Watson, 876 S.W.2d 145, (Tex. 1994). In this case, the Travelers' policy which was purchased for the Crossroads Mall on October 31, 1995, indicates that the named insured on the policy was to be "Crossroads Greenville Corp. Ltd. % Day Commercial Mgmt." App. Def. Travelers' Mot. Summ. J., Exh. 2 Exh. 1 at 3-4. Relying on the testimony of Joann Concannan, a Texas-licensed insurance adjuster employed by the Defendant, Travelers asserts that this "%" symbol in the policy represents the fact that Plaintiff Day Commercial is simply an entity "in care of Greenville Property. See Id., Exh. 4 (Concannan Aff. at 1-2). As such, Travelers' position is that, because of this "in care of qualification, Day Commercial cannot be considered a named insured under the policy, even though its name appears listed within the description. See Def. Travelers' Br. Sec. Mot. at 9. The Court, however, finds no authorities to support Defendant's position as to the meaning of this "%" symbol in the contract, and further finds that the language of the contract as a whole indicates that the parties intended to encompass Day Commercial as an insured under the Travelers' policy. See Def. Travelers' Mot. Summ. J., Exh. 2. Therefore, Defendant Travelers shall be denied summary judgment as to this claim.
The Court notes that, in the "Commercial General Liability Coverage Form" section of the Travelers' insurance policy, the subsection II entitled "WHO IS AN INSURED," includes as a designated insured under the "any person (other than your employee), or any organization while acting as your real estate manager." See App. Def. Travelers' Mot. Summ. J., Exh. 2 at 29-30. It is undisputed in this case that Day Commercial acted as real estate manager for Greenville Property for all relevant periods in this case.
IV. Prompt Notice
Defendant Travelers also moves the Court for relief in claiming that Plaintiffs' waived any right of recovery against it due to their failure to promptly notify Travelers of their claims, as required by the notification provision in the policy. See Def. Travelers Br. Sec. Mot. at 8. Under Texas law, a provision in an insurance policy requiring that notice of the claim be given to the insurer as soon as practicable is generally considered a condition precedent to liability. See Dairyland Cty. Mut. Ins. Co. v. Roman, 498 S.W.2d 154, 157 (Tex. 1973). Thus, in the absence of waiver or other special circumstances, failure to perform the condition constitutes an absolute defense to liability on the policy. Id.
Here, the Travelers' policy, in relevant part, provided that in the event of loss or damage "[the insured] must see to it that . . . prompt notice [is given] of the facts relating to the claim." See App. Def. Travelers' Mot. Summ. J., Exh. 2 at 45. Further, the policy stated that "no one may bring a legal action against [Travelers] under this Coverage form unless (1) there has been full compliance with all the terms of this insurance, and (2) the action is brought within 2 years and 1 day next after the date on which the direct physical loss or damage occurred." See Id. at 49. While interpreting Texas law, the Fifth Circuit has found that phrases in insurance policies such "promptly give notice," which are similar to the phrases "as soon as practicable" or "immediately," require only that notice be given within a reasonable time in light of the circumstances involved. See Continental Sav. Ass'n v. U.S. Fidelity and Guar. Co., 762 F.2d 1239, 1243 (5th Cir. 1985).
In this case, Travelers asserts that it was first notified of Plaintiffs' claims on April 2, 1998, following Royal's denial of the Plaintiffs' claim, approximately one year after the cancellation date of the policy, and two years after the last date of reported hail activity within its policy period for which Plaintiffs' have attempted to put forth evidence in this case (i.e., May of 1996). See Def. Travelers' Sec. Mot. at 9. Plaintiffs, meanwhile, assert that timely notice was in fact given to Travelers on May 13, 1996, shortly after the first of the alleged severe storms occurred at the mall in 1996. See Pls.' Br. Resp. Def. Travelers' Sec. Mot. at 4. Moreover, Plaintiffs' further assert that timely notice was given to Travelers almost immediately after learning from Royal, following their denial of their claim, that the damage on the roof was old damage. See Id. at 4-5. Therefore, Plaintiffs assert that notice was given to Travelers of its claims no more than 23 or 8 days, respectively, from the time the they became aware that their claims accrued. See Pls. `s Br. Resp. Def. Travelers' Sec. Mot. at 4-5
Based on the summary judgment evidence, the Court finds that, at a minimum, a question of fact exists as to whether or not Travelers did in fact receive timely notices of the Plaintiffs claims, as required under their policy. See Continental Sav. Ass'n, 762 F.2d at 1243 (holding that reasonableness of "claim notice" is a question of fact unless facts are undisputed); see also Broussard v. Lumbermens Mut. Cas. Co., 582 S.W.2d 261, 262 (Tex.Civ.App.-Beaumont 1979, no writ) (same). As such, summary judgment shall be denied to Defendant Travelers as to this claim.
V. Covered Cause of Loss
Under Texas law, for an insurance company to be held liable for breach of its duty to satisfy a claim presented to it by its insured, the insured must first prove that the claim itself falls within the insuring agreement of the policy. Data Specialties, Inc. v. Transcontinental Ins. Co. 125 F.3d 909, 911 (5th Cir. 1997) ( citing Employers Casualty Co. v. Block, 744 S.W.2d 940, 944 (Tex. 1988), overruled on other grounds by State Farm Fire and Casualty v. Gandy, 925 S.W.2d 696 (Tex. 1996)). That is, proof that the claimed losses occurred during the policy period is an essential element of a plaintiff's coverage claim, on which he alone bears the burden of proof. New Hampshire Ins. Co. v. Martech USA., Inc., 993 F.2d 1195, 1200 (5th Cir. 1993).
In this case, both Defendants assert that the roof damage which occurred at the Crossroads Mall was not caused by hail but was due to pre-existing damage, "wear and tear," and/or other deterioration on the property, and which were not covered causes under either Travelers' or Royal's policies. See Def. Travelers' Sec. Mot. at 11-12; see also Royal's Corr. Br. at 8-9. Further, in the event that any such covered damages occurred, they necessarily occurred outside of each their respective policy periods. See Id. Plaintiffs, meanwhile, maintain in their suit that the damage complained of occurred during the relevant policy periods of either one or both Defendants, and hail, the alleged cause of these damages, was not an excluded cause of loss under their policies. See Pls.' Br. Resp. Def. Travelers' Sec. Mot. at 7-9; see also Pls.' Br. Resp. Def. Royal's Mot. Summ. J. at 5.
The summary judgment record before the Court provides ample evidence to suggest that a significant amount of deterioration may have already been present on the roof of the Crossroads Mall at the time of its purchase by Greenville Property in November 1995. See Footnote 3 supra. In fact, the Property Review Summary report prepared prior the purchase unequivocally stated that the mall's roofing systems needed immediate repairs since "it was nearing the end of its useful life and may need replacement in the near future." See App. PI.'s Resp. Def. Travelers' Mot. Summ. J., Exh. 2. Nonetheless, taking into consideration the testimony of Ms. Hill in this case, as well as other supporting materials provided by the Plaintiffs, the Court finds that a genuine dispute exists regarding the extent of the damage, if any, that may have been inflicted to the Plaintiffs' insured premises as a result of the several severe hail storms affecting the Greenville, Texas area during the months of April and May of 1996. See Footnote 3 supra; see also Hill Aff, App. PL's Resp. Def. Travelers Mot. Summ. J., Exh. 5. In addition, the expert report prepared by Mr. Brady, at the request of Defendant Royal, stated that in addition to finding some hail damage impacting the mall's roof system as a result of the June 6, 1997 storm, further evidence was believed to have been found of hail damage that may have occurred within the 12-month period preceding the roof's inspection on February 9, 1998. See Brady Report supra. Moreover, as Ms. Hill has also testified, following the hail storm of June 1997, there were substantial leaks and other damage to the roof of the mall that did not exist prior to this event. See Hill Aff. at 2. Thus, based on this evidence, the Court finds that issues of fact exist regarding when the complained of damage occurred to the roof of the Crossroads Mall relative to both the Defendants' relevant policy periods, and whether this damage may be have been attributable to hail, a non-excluded covered cause of loss under both of Defendants' policies. This dispute, therefore, prevents summary judgment from being granted by the Court on these claims.
VI. Concurrent Causation
Because both Travelers and Royal have plead the specific policy exclusions of "(1) Wear and tear, and (2) Rust, corrosion, fungus, decay, deterioration, hidden or latent defect or any quality in [the] property that causes it to damage or destroy itself," see App. Def. Travelers' Mot. Summ. J., Exh. 2 at 43, see also Royal's Corrected Br. Supp. Mot. Summ. J., Exh. 1 at 19-20, an issue of causation has been raised. See Travelers Indem. Co. v. McKillip, 469 S.W.2d 160, 162 (Tex. 1971).
Defendant Royal has additionally plead the specific exclusion of "(3) Faulty, inadequate and/or defective design, specifications, workmanship, repair, construction, renovation, remodeling, grading, compaction of part or all [of the] insured premises," appearing in its policy. See Royal's Corrected Br. Supp. Mot. Summ. J., Exh. 1 at 19-20.
Under the doctrine of concurrent causation, where covered and non-covered causes of action combine to create a loss, an insured is entitled to recover for only that portion of the damage caused solely by the covered perils. See McKillip, 469 S.W.3d at 162.; Wallis v. United Serv. Auto. Assoc., 2 S.W.3d 300, 302-303 (Tex.Civ.App. — San Antonio 1999, writ denied). And since it is not viewed as an affirmative defense or an avoidance issue, the burden of segregating the damages attributable solely to a covered event constitutes an issue of coverage, for which the ultimately the insured carries the burden of proof, and thus article 21.58(b) of the Texas Insurance Code is inapplicable. See Wallis, 2S.W.3d at 303.
Texas Insurance Code art. 2158(b) provides that "in any suit to recover under a contract of insurance, the insurer has the burden of proof as to any avoidance or affirmative defense that must be affirmatively pleaded under the Texas Rules of Civil Procedure. Any language of exclusion in the policy and any exception to covered claimed by the insurer constitutes an avoidance or an affirmative defense." See Tex. Ins. Code. Ann. art. 21.58(b) (Vernon Supp. 2002).
To this end, in order to survive summary judgment, Plaintiffs need only present " some evidence upon which [a] jury can allocate the damage attributable to the covered peril." See Wallis, 2 S.W.3d at 303 (emphasis added). That is, Plaintiffs are not required to establish the amount of their damages with mathematical precision, or provide an expert allocation of damages between covered and excluded risks, so long as there is some circumstantial evidence upon which a jury's findings may rest. See Id.; see also Lyons v. Millers Cas. Ins. Co. of Texas, 866 S.W.2d 597, 601 (Tex. 1993) ( citing United States Fidelity and Guar. Co. v. Morgan, 399 S.W.2d 537, 540 (Tex. 1966)).
In this case, both Day Commercial and Greenville Property submit that the 1995 AECC report, prepared by Coastal Bank prior to the mall's purchase, was a complete and comprehensive inspection and structural report of the insured premises at the time. See Pls.' Br. Resp. Def. Travelers' Sec. Mot. at 1-2. And although it discussed various problems existing at the insured premises in August 1995, there was never any mention in the report of hail damage to the mall's roof. See Id. at 2. Thus, Plaintiffs urge, had hail damage existed, it would have surely been noted, and the bank would have mandated repairs, neither of which occurred. See Id. Adding to the this the confirmed presence of hail damage present on the mall's roof following the 1996 and 1997 storms, and indulging all inferences in favor of the Plaintiffs, as the Court must do at this summary judgment stage, the Court finds that Plaintiffs have presented some evidence upon which jury could allocate the damages attributable to the covered and uncovered perils. See Lyons, 866 S.W.2d at 601 (Texas Supreme Court finding testimony of the insured and her neighbors that there was no preexisting damage to the property constituted some evidence of the damages attributable solely to the covered perils following a windstorm).
Although Ms. Jeannie Hill, property manager for the mall testified that as early as 1995 that the property's roof was in constant need of repairs, evidenced by the normal leaks that would occur whenever it rained, see App. Royal's Corrected Br., Exh. 8 at 129 (Hill Dep. at 21), and Leroy McClure, the maintenance supervisor for the mall, corroborated the fact that the mall's roof had leaks even before the [May 6,] 1996 storm, see Id., Exh. 9 at 154, 150 (McClure Dep. at 50, 36), there is no evidence of hail damage present on the mall's roof prior to these storms.
In addition, Plaintiffs' corporate representative, Bob Yari, although conceding that it would be very difficult to allocate the asserted damages to the mall's roof among the 1996 and 1997 storms without some form of review by experts. See Id., Exh. 12 at 212-213 (Yari Dep. at 80-81), testified during his deposition that, "judging from the progressive increase in the number of leaks and condition of the roof after the `96 storm, going to the `97 storm, there [was] definitely a pattern that suggests both storms contributed to the damage." As such, Plaintiffs evidence, taken together with all reasonable inferences therefrom, creates sufficient circumstantial evidence upon which a reasonable jury could rely in making an apportionment of damages between covered and excluded risks during both of the Defendants' policy periods. Therefore, the Court shall deny grant summary judgment as to each of the Defendants on these claims.
VII. Misrepresentation Claims
Plaintiffs also allege in their Second Amended Complaint that, in addition or in the alternative, the Defendants made various misrepresentations, either explicitly or implicitly, regarding coverage under their respective policies. See Pls.' Second Am. Compl. at 4. More specifically, that the Defendants represented that hail damage would be covered under the policies, and as such, that Plaintiffs relied on those statements to their detriment and were compelled to engage the services of an attorney to prosecute and collect their claims. See Id.
When asked during discovery to more fully expand on these allegations, Plaintiff Day Commercial's answer stated that "Royal represented that coverage would be afforded in the event of hail damage to the property during the applicable policy period but has failed to adhere to this representation to the detriment of Plaintiff." See App. Royal's Corr. Br. at 238. However, finding that the Plaintiffs have not come forward with sufficient evidence to establish that either Travelers or Royal made any specific representations to the Plaintiffs, besides the language in their insurance contracts, the Court interprets these allegations as a breach of contract claim and grants Defendants summary judgment as to these misrepresentation claims. See Zipp Indus., Inc. v. Ranger Ins. Co., 39 S.W.3d 658, 667 (Tex.Civ.App.-Amarillo 2001, no writ) (summary judgment proper when record contains no evidence of a representation to Plaintiff outside draft on the letter of credit).
CONCLUSION
For the reasons stated above, the Court shall and hereby GRANTS Defendants Travelers' and Royal's Motion for Summary Judgment as the Plaintiffs misrepresentation claims, and DENIES Defendants Travelers' and Royal's Motion for Summary Judgment as to Plaintiffs breach of contract claims. Further, the Court DENIES as MOOT Plaintiff's Motion for Leave to File Supplemental Arguments and Evidence.
IT IS SO ORDERED.