The Insured Bears The Burden to Prove Loss Due to Peril Insured Against

Lack of Evidence Supports Motion for Summary Judgment in Favor of Insurer

Barry Zalma

Jan 08, 2025

Transcript

To Prove a Claim for Hailstorm Damage Admissible Evidence of Covered Loss is Needed from Insured

Kimberly and Michael Cutchall sued their homeowner’s insurance provider, Chubb Lloyd’s Insurance Company of Texas. Chubb disputed that there was water damage caused by a storm and claims that it already issued payment to the Cutchalls for all of the covered losses.

In Kimberly Cutchall and Michael Cutchall v. Chubb Lloyd’s Insurance Company Of Texas, Civil Action No. 23-3745, United States District Court, S.D. Texas, (December 31, 2024) the USDC ruled on the insurer’s Motion for Summary Judgment.

BACKGROUND

The Insurance Claim

Kimberly and Michael Cutchall were insured by Chubb providing coverage for certain type of damages to their home. The policy insured against “risks of physical loss to the property,” subject to several exceptions.

In September 2021, the Cutchalls submitted an insurance claim to Chubb for water damage to their house. Chubb retained Nelson Forensics, LLC to inspect the Cutchalls’ house. The report from Nelson Forensics concluded that the moisture in the house was due to deterioration or deficiencies in the way the house was built, not storm damage.

Nelson Forensics prepared a supplemental. The report stated that the roof damage was “unrelated to wind or hail from any storm event.”

Chubb sent a letter to the Cutchalls explaining the results of its investigation, including that the damage to the Cutchalls’ house was “a result of several different causes of loss including a hail event prior to 2020, roof distress unrelated to wind or hail, as built defects, changes in temperatures between the interior and the attic space, prior plumbing leaks, and localized movement.” Chubb issued a $27,385.81 payment to the Cutchalls for covered damages. The Cutchalls never cashed the check.

THE LITIGATION

The Cutchalls sued Chubb for breach of contract and bad faith and designated Mr. Halliday and independent adjuster, Brandon Allen, as an expert. Chubb retained a meteorologist, David Finfrock, to assess whether a hailstorm could have damaged the Cutchalls’ home on August 16, 2021, as Mr. Allen contended. After analyzing the data relied upon by Mr. Allen, along with multiple other sources of weather data, Mr. Finfrock concluded that “there is no evidence of hail at [the Cutchalls’ address] ¶ 16 August 2021.”

Chubb filed a motion for summary judgment on all of the Cutchalls’ claims.

THE SUMMARY JUDGMENT MOTION

Chubb filed its motion for summary judgment nearly a year after removing the case and the Cutchalls had not requested any depositions.

The Breach of Contract Claim

The Cutchalls’ breach of contract claim failed for two reasons: first, the Cutchalls have failed to point to evidence raising a dispute about whether their claim was covered; and second, the Cutchalls have failed to distinguish between covered and uncovered damages.

Failure to Identify Covered Loss

Under Texas law, the insured bears the burden of establishing that its claim is covered by the policy. Unconfirmed rumors of loss are insufficient to satisfy that burden.

Two of Chubb’s experts established that there were no hail or wind storms at the Cutchalls’ address during the policy period that could have caused the damage they claimed to their house.

No reasonable juror could believe the Cutchalls’ lack of evidence over Chubb’s. Because no genuine dispute existed over whether a covered loss occurred during the policy period, summary judgment on the Cutchalls’ breach of contract claim was granted.

The Extra-Contractual Claims

An insurer breaches its duty of good faith and fair dealing by denying a claim when the insurer’s liability has become reasonably clear. Chubb investigated the Cutchalls’ claim and concluded that the covered losses, minus the deductible, amounted to $27,385.81. Chubb issued a payment in that amount. The Cutchalls never cashed the check. The Cutchalls have failed to raise a genuine dispute of material fact as to whether they suffered additional losses covered by the policy.

All of the Cutchalls’ claims are dismissed with prejudice.

ZALMA OPINION

It is axiomatic that not every damage to a dwelling is covered under a homeowners policy. Chubb’s experts established some damage but not the excessive damage claimed by the Cutchalls. Chubb’s motion for summary judgment contained convincing evidence that there was no covered loss causing damage to the Cutchalls home and there was insufficient, if any, evidence provided by the Cutchalls establishing a covered law. It is insufficient to prove a loss to rely on two adjusters whose lack of expertise and conclusions based on inadequate evidence, is insufficient.