BEAUMONT – A Texas appellate court recently wiped a $9.6 million judgment stemming from a Hurricane Ike lawsuit brought by the Dickinson Independent School District.
In 2012, DISD, through Houston attorney Tony Buzbee, sued the Texas Windstorm Insurance Association, alleging fraud, breach of contract and insurance code violations.
In response, TWIA invoked the insurance policy’s appraisal provisions, which resulted in an award totaling $10.8 million in damages, court records show.
DISD then amended its petition, abandoning all claims except breach of contract, and, based on the appraisal award, filed traditional motions for partial summary judgment on the elements of causation and damages.
TWIA opposed the motions, arguing DISD had not conclusively proven that the alleged damages reflected in the appraisal award were caused by covered perils, court records show.
Nonetheless, the trial court granted both motions in DISD’s favor and the case proceeded to trial.
The jury determined TWIA breached the policy by failing to pay the appraisal award and the trial court then signed a final judgment against TWIA for $9,602,542.82, court records show.
The final judgment ordered that DISD recover $8,193,168.85 for the appraisal award less prior payments, deductibles, and sales tax; $159,373.97 in interest on the award; and $1,250,000 in attorney’s fees.
On May 31, the 14th Court of Appeals found that the trial court erred in granting DISD’s motions for partial summary judgment on causation and damages, reversing the judgment and remanding the case for further proceedings.
Justices held the district’s evidence, including the appraisal award, did not conclusively prove whether and how much alleged loss was caused by a covered peril and otherwise subject to coverage under the policy terms and conditions.
Hurricane Ike ravaged the Texas coast on Sept. 13, 2008. Three days after the storm made landfall, DISD notified TWIA of windstorm damage to several of the district’s buildings.
In December 2009, TWIA paid DISD $220,232.85 for damages. Two years later, in September 2011, DISD contacted TWIA concerning a roof on one of DISD’s buildings.
DISD had replaced the roof and sought reimbursement of $1,550,645.75 as additional damages caused by Ike. TWIA paid $999,577.19 for the supplemental claim in October 2011.
In September 2012, four years after the storm made landfall, DISD filed suit against TWIA.
Prior to filing suit, DISD did not notify TWIA of any additional losses it contended were covered under the policy, court records show.
A dissenting opinion was issued by Chief Justice Kem Thompson Frost, who opined that because TWIA failed to brief any argument as to how the trial court erred, it waived its ability to obtain a reversal.
TWIA is represented in part by James Old Jr., a Beaumont attorney with Hicks Thomas, and Andrew McKinney IV of Litchfield Cavo, a Houston law firm.
Appeals case No. 14-16-00474-CV.
The suit was filed in Galveston County District Court, case No. 12-CV-2012.