Segregating Losses On Insurance Claim

Saginaw insurance lawyers need to know about this insurance case. The case is a 1999, San Antonio Court of Appeals case styled, Wallis v. United Services Automobile Association. Here is the relevant information.
In the spring of 1993, the Wallises noticed evidence of foundation damage in their home. Suspecting such damage was caused by a plumbing leak, the Wallises filed a claim under their homeowner’s policy. Through its investigation, USAA determined that the foundation damage was caused by a combination of several excluded perils under the Wallises’ policy, including settlement, poor surface drainage, the topography of the lot, and surrounding vegetation. Plumbing leaks, which are covered perils, were also detected; however, based on soil testing and continued earth settlement following repair of the Wallises’ plumbing system, USAA concluded that the leaks were negligible and had not caused or contributed to the complained-of damage. USAA believed improper compaction of the fill dirt upon which the Wallises’ foundation rests was the primary source of the problem. Elevation tests indicated that the Wallises’ home, which was built upon a sloping lot, had settled as much as fifteen inches on the low end of the hill where soil was placed to create a plane for the foundation. In short, USAA’s investigation revealed that the Wallises’ home was sliding down the lot. Experts for the Wallises did not refute USAA’s evidence regarding the excluded perils. They did, however, challenge the conclusion drawn regarding the effect of the plumbing leaks, and claimed instead that the leaks could not be excluded as a contributing cause of the damage.
At trial, the jury was asked to determine whether “earthquake, landslide, or earth movement,” perils excluded under exclusion k of the policy, caused the Wallises’ damage. The jury was also charged under question two of the charge with determining whether “accidental discharge, leakage, or overflow of water from within a plumbing system” contributed to the Wallises’ damage. The jury answered both questions affirmatively and, under question three, found that thirty-five percent of the Wallises’ damage was caused by plumbing leaks.
Both parties moved for judgment. In its motion for judgment notwithstanding the verdict, USAA asserted its entitlement to judgment on the following grounds: (1) damage caused by earthquake, landslide, or earth movement is an excluded peril under exclusion k of the policy, for which there is no exception; (2) damage to the dwelling caused by plumbing leaks is an excluded peril under exclusion h of the policy; and (3) even if damage caused by a plumbing leak is covered, the Wallises failed to produce any evidence to demonstrate what portion of the loss was caused solely by the plumbing leak.
Texas recognizes the doctrine of concurrent causes. This doctrine provides that when, as in the instant case, covered and non-covered perils combine to create a loss, the insured is entitled to recover only that portion of the damage caused solely by the covered peril. To this end, the insured must present some evidence upon which the jury can allocate the damage attributable to the covered peril.
As noted earlier, in its motion for judgment notwithstanding the verdict, USAA lodged a legal sufficiency challenge to the jury’s finding that plumbing leaks, a covered peril, caused thirty-five percent of the Wallises’ damage. Viewing the evidence in the light most favorable to the jury’s finding, considering only the evidence and inferences which support it and rejecting the evidence and inferences to the contrary, this court agreed with USAA that there is no evidence to support the challenged finding. The record contains evidence from which the jury could conclude that plumbing leaks had contributed to the Wallises’ loss. Indeed, three engineers so testified. The testimony varied, but the jury heard that the plumbing leaks did contribute to the damage, or that the plumbing leaks could have contributed to the damage, or that the plumbing leaks could not be excluded as a contributing factor to the damage. From this testimony, the jury could believe that plumbing leaks caused part of the complained-of damage. However, the engineers could not indicate the extent to which this peril damaged the Wallises’ home. This is fatal to their claim. Although a plaintiff is not required to establish the amount of his damages with mathematical precision, there must be some reasonable basis upon which the jury’s finding rests. Here, there is neither mathematical precision, nor a basis from which the jury could reasonably infer that thirty-five percent of the Wallises’ damage was caused by the plumbing leaks. The jury heard no testimony regarding how much of the Wallises’ damage was caused by the plumbing leaks. It learned only that plumbing leaks were found. Because there is no evidence upon which the jury could determine that thirty-five percent of the damage was caused by plumbing leaks, the trial court properly granted a take-nothing judgment in favor of USAA.