Insured cannot lay down its burden and survive summary judgment.

July 23rd, 2018 By Sheila Tan

In Certain Underwriters at Lloyd’s of London v. Lowen Valley View, LLC, 892 F.3d 167 (5th Cir. June 6, 2018), the Fifth Circuit affirmed that in addition to establishing that the insured property sustained hail damage within a policy period, the policyholder must also provide some evidence of how much of the hail damage was attributable to the hail event within the policy period, and the failure to do so should lead to summary judgment against the policyholder.

Insurance underwriter Lloyds filed a declaratory judgment against policyholders Lowen Valley View and Panade II Limited (collectively “Lowen Valley”), seeking a finding that it owed no coverage under a commercial property insurance policy. Lowen Valley owned and operated a Hilton Garden Inn, which had allegedly suffered hail damage. Lowen Valley made a claim with Lloyds, citing a date of loss of June 13, 2012.  Lloyds’ investigation however, revealed that there had been multiple hail events in the area that could have damaged the roof. The 2012 event was  the only one within the pertinent  policy period. Lloyds moved for summary judgment and the trial court granted it, finding among other things, that Lowen Valley failed to meet its burden to offer evidence that would allow a jury to determine which of the storms – alone or in combination – damaged the hotel. The Fifth Circuit agreed and affirmed, an encouraging sign of the effectiveness of summary judgment motions to attack claims in which no reliable evidence is presented that the damage was the result of a covered peril.