Global Warming is Real, Y’all

Just kidding.  Just kidding as in that’s not what we’re going to talk about today.  Global warming is real.  Whatever.  The point is, today I bring to you a cautionary tale out of Dickinson ISD, who went to the mattresses with their insurance company, Texas Windstorm Insurance Association (“TWIA”) over storm damage caused by Hurricane Ike.  No, you mean Hurricane Harvey [you’re probably thinking].  No, I mean Ike.  As in 2008 Ike.  Ten years ago Ike.

There are a couple of lessons here. The first of which is to carefully read a case before you represent to the entire Law Dawg readership that you are covering it tomorrow.  The second is that if, like Dickinson ISD, you decide to take on your insurance carrier on a coverage claim, you need to prepare yourself to fight tooth and nail for a very long time.

In this case, Texas Windstorm Insurance Association v. Dickinson Independent School District, the school district litigated a breach of contract claim against their carrier, TWIA, to the point of a five-day jury trial on the singular issue of whether TWIA breached the contract at the heart of the policy held by Dickinson ISD.  The jury concluded it did.  The trial court awarded $9.6 million dollars for the appraisal award, interest, and attorney’s fees, less prior payments, deductibles and sales tax.  TWIA immediately filed a motion to set aside this verdict and prevailed in part.  The issue was whether DISD adequately proved that the damage (roof) was caused by a “covered peril.”  This was a wind and hail policy, so “flood, surface water, waves, storm surge, tides, tidal water, tidal waves, tsunami, seiche [?], overflow of streams or other bodies of water, or spray from any of these, all whether driven by wind or not” were not covered.  Likewise, no rain damage was covered, unless caused by an opening itself caused by wind or hail.

Ultimately, the court concluded that DISD failed to conclusively establish that the direct physical losses to its covered property were caused by windstorm or hail.  For its part, DISD argued that the appraisal award determined the amount of its losses caused by the “covered peril” and that TWIA could not be permitted to dispute causation, rendering the appraisal process meaningless.  TWIA responded arguing that the appraisal process determines only damages (amounts) and not liability (causation).  Essentially the court sided with TWIA, holding that damages are properly determined by appraisers, that liability is properly determined by courts, and that DISD’s reliance on the appraisal was inadequate to establish liability.  The upshot?  More court proceedings.


Tomorrow: I Refuse to Commit to a Topic