CERTAIN UNDERWRITERS AT LLOYD'S OF LONDON, Syndicate Nos. 2003, 1414, 0510, 4472, 1183, 1200, and 4444, Subscribing to Policy Number NJL440003612, Plaintiff - Appellee
LOWEN VALLEY VIEW, L.L.C.; PANADE II, LIMITED, doing business as Hilton Garden Inn, Defendants - Appellants
from the United States District Court for the Northern
District of Texas
CLEMENT, HIGGINSON, and HO, Circuit Judges.
STEPHEN A. HIGGINSON, Circuit Judge:
insurance underwriter brought this suit seeking a declaratory
judgment that it owed no coverage under a commercial property
insurance policy. The insured counterclaimed for declaratory
judgment, breach of the insurance contract, and violations of
the Texas Insurance Code. The district court granted summary
judgment in favor of the insurer on all claims, and we
Lowen Valley View, LLC and Panade II Limited (collectively,
Lowen Valley) own and operate a Hilton Garden Inn in Irving,
Texas. Plaintiff Certain Underwriters at Lloyd's of
London, Syndicate Nos. 2003, 1414, 0510, 4472, 1183, 1200,
and 4444, Subscribing to Policy Number NJL440003612
(Lloyd's) issued Lowen Valley a commercial property
insurance policy for the period from June 2, 2012 to June 2,
2013. In November 2014, a Lowen Valley employee "noticed
that the shingles on the top of the hotel looked bad"
and called a roofing contractor to investigate. The
contractor found evidence of significant hail damage.
December 29, 2014, Lowen Valley notified the company's
insurance agent that the hotel roof had suffered hail damage.
The agent filed a "Property Loss Notice" with
Lloyd's the same day. The notice listed Lowen
Valley's "Date of Loss" as June 13, 2012. The
agent apparently based the June 2012 date of loss on a
weather history report obtained by Lowen Valley's roofing
contractor. The report listed nine hail events of varying
severity occurring "[a]t location" between January
2006 and December 2014.
receiving the claim, Lloyd's sent an adjuster, Derek
Phipps, to inspect the property. Phipps concluded that the
roof would need to be replaced, and estimated a total repair
cost of $429, 225.41. On March 2, 2015, Lloyd's, through
another adjuster, sent Lowen Valley a "reservation of
rights" letter, which stated that "potential
coverage issues may exist."
sending the reservation of rights letter, Lloyd's
commissioned Haag Engineering to prepare a report-what would
become the first of three- analyzing Lowen Valley's
claim. In this first report, Haag confirmed that the hotel
had suffered hail damage and concluded that "the
most recent hailstorm with hailstones large enough
to cause the damage [Haag] observed was on June 13,
2012." (emphasis added). At Lloyd's request, Haag
also completed a second report. This time, Haag stated that
its previous report had "concluded that the observed
damage most likely occurred on June 13, 2012."
February 18, 2016, Lloyd's denied Lowen Valley's
claim. The same day, Lloyd's filed this suit seeking a
declaratory judgment that it owed no coverage for Lowen
Valley's hail damage claim. Lowen Valley counterclaimed
for declaratory judgment, breach of the insurance contract,
and violations of the Texas Insurance Code.
prepared two more documents after Lloyd's sued.
Haag's third report "conclude[d] that it is unlikely
that hail only fell at this location one time." The
report identified four dates for which both National Weather
Service hail reports and third-party radar data suggested
that hail greater than one inch in diameter fell in the
vicinity of the hotel. Finally Haag produced a "letter
to clarify statements made in [its] past reports regarding
dates of hailfall and potential damage." The letter
explained that "a single sentence in the June report
inadvertently referred to June 13, 2012, as the 'most
likely' date that damage occurred instead of the
'most recent.'" Haag averred that it never
intended "to suggest that June 13, 2012, was the known
date or the only date that dents/damage occurred at this
property, " and, to the contrary, "[m]eteorological
study . . . identifies additional dates in which conditions
were conducive to hail at the site prior to June 2012."
moved for summary judgment on all claims before the district
court. The court granted Lloyd's motion in full, and this
district court granted summary judgment on Lloyd's
declaratory judgment claim for two, independent reasons: (1)
Lowen Valley failed to meet its burden to offer evidence that
would allow a trier of fact to segregate covered losses from
non-covered losses, and (2) Lowen Valley failed to provide
prompt notice of its loss, and this delay ...