FIFTH CIRCUIT UPHOLDS LOWER COURT DECISION DISMISSING HURRICANE HARVEY CLAIM

The Fifth Circuit Court of Appeals (the “Fifth Circuit”) recently affirmed a trial court’s judgment dismissing a lawsuit filed by insureds after a dispute with their insurer, American Bankers Insurance Company of Florida (“American”), over a claim for insurance coverage following Hurricane Harvey. Shaw v. American Bankers Ins. Co. of Fl., No. 21-20455, 2022 WL 621694 (5th Cir. March 3, 2022). The insureds filed a claim with American after allegedly sustaining flood damage to their home from Hurricane Harvey. An adjuster with American inspected the insureds’ home and reported no visible signs of covered flood damage, so American denied the claim. The insureds then filed suit against American for breach of contract.

American filed a motion for summary judgment, arguing that the insureds did not provide evidence of a “flood” as defined by the policy, or that the damage sustained to their property resulted from a “flood” and not from another event not covered by the policy. The insureds did not respond to the motion, and the trial court granted it. Subsequently, the insureds filed a motion for relief from judgment to add new evidence to the record, including responses to American’s interrogatories, the notice of deposition for one of the insureds, an affidavit of their attorney, an affidavit of their attorney’s legal assistant, and a water damage assessment report from one of its experts, and argued that such evidence supported a denial of American’s motion for summary judgment. After the trial court denied the insureds’ motion and declined to consider the newly presented evidence, the insureds’ appealed.

The Fifth Circuit reviewed the new evidence but did not find it persuasive and concluded that the trial court properly denied the insureds’ motion for relief from judgment. Pointing to the language of the policy that specifically defined “flood,” the Fifth Circuit held that the evidence failed to create a genuine fact issue regarding whether there was a “flood,” as defined by the policy, and whether a “flood” caused the damage to the insureds’ home. Thus, the Fifth Circuit affirmed the trial court’s ruling, and the case was dismissed.