The Texas Court of Appeals affirmed a trial court's judgment as modified against Lloyds for improperly denying a claim for damage caused by Hurricane Ike. Nat'l Lloyds Ins. Co. v. Lewis, 2015 Tex. App. LEXIS 1573 (Tex. Ct. App. Feb. 19, 2015).
Lewis sued Lloyds, alleging that, although her home and personal property were seriously damaged by Hurricane Ike, her claim was denied. At trial, Lloyds testified that the damage to Lewis' home had been previously caused by Hurricane Rita and Lloyds had already paid for repair of the roof. Nevertheless, Lewis had not used the payment for roof repairs. Lewis admitted that she used some of the payment after Hurricane Rita to purchase a generator and for evacuation expenses, but the majority of the payment was used for roof repairs.
Lewis' expert engineer testified that the damage to Lewis' home was caused by wind and water intrusion through a hole caused by a tree limb that fell during Hurricane Ike. The expert further opined that the cost to mitigate the damage to the home and bring it up to livable standard was $156,155. Further, the home was a constructive total loss.
A second expert for Lewis, a general contractor, testified that the actual cash value, without including upgrades to bring the house up to code, was $34,640.
The jury awarded Lewis $871,738 in damages for breach of contract, bad faith, mental anguish, and punitive damages.
Among the various issues it raised on appeal, Lloyds argued the evidence of causation was not legally sufficient. Lloyds argued three hurricanes damaged the property, but her policy only covered damage caused by Hurricane Ike. Lloyds contended that Lewis failed to show that the damages stemmed solely from Hurricane Ike. The Court of Appeal disagreed. The trial court properly allowed Lewis' experts to demonstrate causation from Hurricane Ike. Lewis also introduced legally sufficient evidence regarding mental anguish.
Further, the damages awarded for bad faith were upheld. The jury found that Lloyds made false representations relating the policy, misrepresented a material policy provision relating to coverage, failed to make a good faith attempt to settle the claim when Lloyds' liability had become reasonably clear, and failed to promptly provide a reasonable explanation of the basis for denying the claim.
