Janurary Newsletter

Happy January from our Austin office! 2025 is off and running, and I am already looking forward to warmer weather. We actually had a bit of “snow” here in Austin recently. I think we got a massive fall of .0001 inches. The city completely shut down and schools were cancelled. My kids loved it. Temperatures are climbing a bit now. Spring will be here before we know it because time seems to be flying by, and I mean flying. So much so that I was recently surprised when I realized I had hit a career milestone – twenty-five years since I got my law license. This has been rather difficult for me to process. It just does not seem like that long ago. The best part, though, is realizing how many great relationships I have been able to be a part of over the years with clients and other attorneys. I look forward to continuing and growing these relationships in the future and making new ones. From the firm, stay safe and have a great 2025!  

Joke of the month: What does a lawyer order to drink? (see answer at the bottom of the newsletter)

Under Texas law, the insured bears the burden of establishing that its claim is covered by their insurance policy and, when a covered cause of loss and an excluded peril combine to cause a particular loss, to segregate the uncovered from the covered damages. On December 31, 2024, in Cutchall v. Chubb Lloyd’s Insurance Company of Texas, the Honorable Judge Lee Rosenthal reaffirmed that very concept, stating that the insured always has the burden to identify covered damages that occurred between the policy period and the burden to segregate its alleged damages between covered and non-covered damages. Not doing so is fatal to an insured’s claim. Cutchall v. Chubb Lloyd’s Ins. Co., 2024 WL 5264707 (December 31, 2024).

In this case, the Cutchalls filed a homeowners claim with their insurance provider, Chubb Lloyd’s Insurance Company of Texas, for damage caused to their home by alleged hailstorms. Id at 1. During the ensuing six months, various inspections and reports of the Cutchalls home took place. Chubb’s inspections and expert reports ultimately concluded that the roof damage was unrelated to wind or hail from any storm event and that the limited roof tile distress was due to as-built conditions, deferred maintenance, thermal and moisture variations in the roofing, improper shipping and handling, and/or mechanical impact/loading. However, they also concluded that there were indications of hail damage on the gutters and air conditioning unit caused by hail impact occurring prior to 2020. Id. The Cutchalls’ experts produced a report attributing the water damage observed on the home to wind and hail damage. Id at 2.

Chubb issued a payment to the Cutchalls for covered damages and the Cutchalls sued Chubb for breach of contract, violations of the Texas Insurance Code, breach of the duty of good faith and fair dealing, and violations of the Texas Deceptive Trade Practices Act. However, during the litigation, the Cutchalls failed to raise evidence to support their claims, instead choosing to focus their arguments on how many adjusters Chubb had assigned to the claim and other trivial topics.

In litigation, the Cutchalls asserted that a hailstorm damaged their house on a specific date, but they could not identify a covered loss, as the evidence presented by their experts did not raise a genuine dispute about whether a storm capable of causing the alleged damage affected their neighborhood on that date or at another time during the policy period. Id at 7. In fact, their evidence was contradictory as to whether the alleged storm even took place. Additionally, their expert qualified his opinion by saying a meteorologist would be more trustworthy on the topic.

So, Chubb retained a meteorologist, who explained not only how the Cutchalls’ experts misinterpreted the data, but also analyzed data from three other sources that contradicted the Cutchalls’ conclusions. Id at 7. The evidence presented by Chubb’s experts was definitive: there were no hail or windstorms at the Cutchalls address during the policy period that could have caused the damage they claimed to their house. Id at 6.

Judge Rosenthal ruled that “no reasonable juror could believe the Cutchalls’ evidence – or, really, lack thereof – over Chubb’s. Because no genuine dispute exists over whether a covered loss occurred during the policy period, summary judgment on the Cutchalls’ breach of contract claim is required.” Id at 7. Judge Rosenthal also ruled that the Cutchalls failure to segregate their alleged damages between covered and non-covered claims defeated their action: “The Cutchalls’ breach of contract claim fails for another reason: their own evidence identifies uncovered water damage in the Cutchalls’ house, but the Cutchalls have not provided any means for segregating the uncovered from the covered damage.” Id at 7. When 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.

The Texas Law Update is coming to Dallas, TX on April 11th! This annual continuing education seminar is perfect for insurance claims professionals, risk managers and in-house counsel.

This month we celebrated our January birthdays with some delicious breakfast tacos! Here’s to a month full of happy birthdays and great memories! 

This month, we celebrate the legacy of Martin Luther King Jr. and his incredible contributions to the Civil Rights movement. His work reminds us that each of us has the power to inspire positive change, both within ourselves and in the world around us.  

Joke of the month: Just-ice!