Case: 21-10462 Document: 00516326397 Page: 1 Date Filed: 05/19/2022
United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
Fifth Circuit
FILED
May 19, 2022
No. 21-10462
Lyle W. Cayce
Clerk
Harold Franklin Overstreet,
Plaintiff—Appellant,
versus
Allstate Vehicle and Property Insurance Company,
Defendant—Appellee.
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
combination of covered and uncovered causes, the insured must prove how
much of the damage is solely attributable to the covered cause. But courts
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have sent mixed signals about when the concurrent causation doctrine
applies, and what the doctrine requires when it does.
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
1
Frymire Home Servs., Inc. v. Ohio Sec. Ins. Co., 12 F.4th 467, 471 (5th Cir. 2021),
certified question accepted (Sept. 10, 2021), certified question dismissed (Dec. 3, 2021).
2
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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
§ 541.060(a)(2)(A) (the “prompt payment claim”). The district court
granted Allstate’s motion in part, only leaving in place Overstreet’s claim
under § 541.060(a)(7) of the Insurance Code (which alleged that Allstate
failed to conduct a reasonable investigation).2 The district court also sua
sponte dismissed Overstreet’s prompt payment claim.3
Allstate later moved for summary judgment on Overstreet’s
remaining claims for breach of contract and failure to conduct a reasonable
investigation. The district court granted Allstate’s motion because it found
that Overstreet’s losses involved concurrent causes and Overstreet had not
carried his burden of proving how much damage came from the June 6, 2018
2
Overstreet v. Allstate Vehicle & Prop. Ins. Co., No. 4:20-CV-242-A, 2020 WL
6132229, at *1–4 (N.D. Tex. Aug. 25, 2020) (“Overstreet I”).
3
Id. at *4.
3
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storm alone.4 The district court entered final judgment, and Overstreet
appealed.
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.
4
Overstreet v. Allstate Vehicle & Prop. Ins. Co., No. 4:20-CV-242-A, 2021 WL
1238299, at *1–4 (N.D. Tex. Apr. 2, 2021) (“Overstreet II”).
5
Lyons v. Millers Cas. Ins. Co. of Texas, 866 S.W.2d 597, 601 (Tex. 1993).
6
Fiess v. State Farm Lloyds, 392 F.3d 802, 807 (5th Cir. 2004), certified question
accepted (Jan. 21, 2005), certified question answered,
202 S.W.3d 744 (Tex. 2006).
7
Frymire, 12 F.4th at 471.
8
Id.
9
Id.
10
See id.
4
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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 have suggested that
if the plaintiff agrees there was any uncovered damage—even just minor wear
and tear that did not impair the insured roof’s function—the plaintiff must
apportion damages.15
11
Lyons, 866 S.W.2d at 601.
12
Frymire, 12 F.4th at 471.
13
One “sideshow” in the parties’ contest is Allstate’s argument that the district
court held Earle’s declaration was a “sham.” But the district court did no such thing. It
explicitly declined to rule on Allstate’s evidentiary motions. See Overstreet II, 2021 WL
1238299, at *2 n.6.
14
See, e.g., Southland Lloyds Ins. Co. v. Cantu, 399 S.W.3d 558, 575–76 (Tex. App.—
San Antonio 2011, pet. denied); State Farm Fire & Cas. Co. v. Rodriguez,
88 S.W.3d 313,
320–21 (Tex. App.—San Antonio 2002, pet. denied), abrogated on other grounds by Don’s
Bldg. Supply, Inc. v. OneBeacon Ins. Co.,
267 S.W.3d 20 (Tex. 2008); see also Utica Nat. Ins.
Co. of Tex. v. Am. Indem. Co.,
141 S.W.3d 198, 204 (Tex. 2004) (noting that “without a
finding” by the “finder of fact,” “we cannot determine whether this case involves
concurrent causes”).
15
See Wallis v. United Servs. Auto. Ass’n, 2 S.W.3d 300, 304 (Tex. App.—San
Antonio 1999, pet. denied) (affirming a trial court’s decision overturning a jury’s verdict
where the jury had determined that 35 percent of the damage resulted from a covered cause
5
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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
but because the plaintiff’s expert had contended that 100% of the damage was caused by
covered events and did not apportion damages).
16
Compare Presswood, 2017 WL 7051074, at *4, and Cantu, 399 S.W.3d at 575–76,
and Rodriguez, 88 S.W.3d at 320–21, with Wallis,
2 S.W.3d at 304.
17
Frymire, 12 F.4th at 471.
18
Id. at 472.
19
Degan v. Bd. of Trs. of Dall. Police & Fire Pension Sys., 766 F. App’x 16, 19–20 (5th
Cir. 2019) (per curiam), certified questions answered,
594 S.W.3d 309 (Tex. 2020).
20
Overstreet also argues that the district court erred in dismissing his bad faith and
prompt payment claims. The district court held that these claims were derivative of
Overstreet’s breach of contract claim. We withhold judgment on this issue while we wait
for the Supreme Court of Texas’s opinion.
6
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III
We respectfully request that the Supreme Court of Texas answer
these three questions:
1. 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;
2. 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
3. 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
We disclaim any intention or desire that the Court confine its reply to
the precise form or scope of the questions certified.
QUESTIONS CERTIFIED.
21
Frymire, 12 F.4th at 472.
7
