United States District Court, W.D. Texas, Austin Division
GUIDEONE SPECIALTY MUTUAL INSURANCE COMPANY, GUIDEONE LLOYDS INSURANCE COMPANY, Plaintiff,
FELLOWSHIP AT FOREST CREEK, Defendant.
SPARKS UNITED STATES DISTRICT JUDGE
REMEMBERED on this day the Court reviewed the file in the
above-styled cause, and specifically, Defendant Fellowship at
Forest Creek (FFC)'s Motion for Summary Judgment [#27],
Plaintiffs GuideOne Specialty Mutual Insurance Company and
GuideOne Lloyds Insurance Company (collectively,
GuideOne)'s Response [#31] in opposition, FFC's Reply
[#34] in support, and GuideOne's Surreply [#35] in
opposition, as well as GuideOne's Motion for Summary
Judgment [#28], FFC's Response [#30] in opposition,
GuideOne's Reply [#33] in support, and FFC's Surreply
[#37] in opposition. Having reviewed the documents, the
arguments of counsel, the relevant law, and the case file as
a whole, the Court now enters the following opinion and
an insurance coverage dispute between FFC and GuideOne. The
property at issue in this dispute (the Property) is owned by
FFC and located in Round Rock, Texas. FFC Mot. Summ. J. [#27]
at 2. The Property consists of three buildings: the Worship
Center, the Children's Building, and the Student Center.
insurance dispute centers on hail and wind damage which
occurred to the Property sometime between 2007 and 2012.
GuideOne Mot. Summ. J. [#28] at 5-7.As explained below, the
parties dispute when the hail damage to the Property
occurred: FFC's expert estimates the damage should be
traced to a May 2012 hail storm, while GuideOne's expert
suggests at least some of the wind and hail damage occurred
in 2007 and 2009. See FFC Mot. Summ. J. [#27-3]
Exhibit C (Kettle Affidavit); GuideOne Mot. Summ. J. [#28-1]
Exhibit A (Hoover Declaration) at 4. The date on which the
damage occurred is relevant for two reasons.
the date on which the damage occurred is relevant in
determining which insurance policy covers FFC's claim.
Between 1999 and 2017, the Property has been insured under
three different insurance policies. GuideOne Lloyds insured
the Property from 1999 to 2009 (the Lloyds Policy), while
GuideOne Mutual insured the property from 2009 to 2013 (the
Mutual Policy). FFC Mot. Summ. J. [#27] at 2. Around 2014,
FFC switched insurance carriers, and as a result, the
Property is now insured under a different carrier's
policy. See FFC Mot. Summ. J. [#27-4] Exhibit D at
25-28. Thus, over the last ten years, the Property has been
covered at various times by three different insurance
policies, only two of which were issued by a GuideOne entity.
The parties do not dispute the hail damage occurred while one
of the two GuideOne policies was in effect.
the date on which the damage occurred is relevant in
determining whether FFC fulfilled its contractual obligation
to report its claim in a timely fashion. In general, both the
Mutual Policy and the Lloyds Policy appear to contain
substantively similar provisions, and in particular, the
parties have identified two provisions which appear in both
policies and which are central to the parties' coverage
dispute. The first relevant provision is a "Common
Policy Condition" which applies to all parts of the
policy and states,
"It is understood and agreed that knowledge of an
occurrence by your agent, or any servant or employee of
yours, shall not in itself constitute knowledge by you,
unless an executive officer of your corporation shall have
received such notice from its agent, servant or
Mot. Summ. J. [#27-2] Exhibit B (Mutual Policy) at 7-8
(Common Policy Condition H). The second relevant provision is
a "Loss Condition" which applies "in addition
to the "Common Policy Conditions" and which states
in relevant part that, in the event of loss or damage to the
insured property, FFC must give "prompt notice of the
loss or damage." Mutual Policy at 57-58.
Discovery and Investigation of the Damage
2014 or 2015, the hail damage to the Property began to
manifest itself in the form of increasingly severe leaking
within the Worship Center whenever it rained. The parties
dispute when FFC first discovered this leaking, but it
appears the first person to take note of the problem was
FFC's sole maintenance employee, Jim Whitehead. Whitehead
testified in his deposition that the Worship Center had
experienced minor leaking on five or six occasions since the
Worship Center was built in 2003, but began to experience
significant leaking in either 2014 or 2015. GuideOne Mot.
Summ. J. [#28-5] Exhibit B (Whitehead Deposition) at 26-27.
At first, the leaking from the roof would merely puddle on
the floor of the unoccupied second story of the Worship
Center. Id. at 26. However, as the
leaking got worse, Whitehead began to notice water seeping
through the ceiling and pooling on the first floor of the
Worship Center. Id.
did not inform the leadership that the Worship Center roof
was leaking until August or September 2015. GuideOne Mot.
Summ. J. [#28-6] Exhibit C (Kettle Deposition) at 6-7. Brent
Kettle, the Vice-Chair of the Board of Elders for FFC,
testified FFC leadership was unaware the Worship Center roof
was leaking prior to this time. Kettle Deposition at
Kettle and Smith also testified they were unaware of any hail
storms occurring at the Property. See, e.g., Smith
Deposition at 6; Kettle Deposition at 13-14.
attempt to diagnose the problem, FFC recruited a parishioner
who worked in roofing to inspect the Worship Center roof and
determine the cause of the leaking. It was at this point that
FFC's leadership claims to have first learned of the hail
damage to the Property's roofs. On September 15, 2015,
FFC hired a public adjuster, Logan Rodgers, to assist in
making an insurance claim. GuideOne Mot. Summ. J. [#28-9]
Exhibit 15. In turn, Rodgers hired Matt Phelps, an
engineer, to inspect the property and help determine the date
on which the storm damage occurred. Kettle Affidavit. Rodgers
and Phelps eventually informed FFC the storm damage had
occurred on May 7, 2012, and May 11, 2012, while the property
was covered by the Mutual Policy. Id. With this
information in hand, Rodgers reported the claim to GuideOne
on January 27, 2016. Hoover Declaration. In total, it took
roughly five months for FFC to investigate and form a
judgment as to when the damage occurred.
receiving notification of FFC's claim on January 27,
2016, GuideOne retained Scott Morrison, an engineer, and Dan
Turpin, a construction and cost-estimation expert, to conduct
an investigation into FFC's claim. Hoover Decl. at 3-4.
GuideOne's investigation took between three and four
months. Id. Following its investigation, GuideOne
determined the storm occurred in May 2009, rather than May
2012 as determined by FFC's expert. Id. Based on
this determination of likely date of the storm, GuideOne
denied FFC's claim on May 16, 2016. Id.
19, 2016-three days after denying FFC's claim- GuideOne
filed this lawsuit seeking a declaratory judgment that
FFC's claim is not covered by either of the two GuideOne
policies. Compl. [#1] at 10. FFC subsequently counterclaimed,
alleging breach of contract and violations of the Texas
Insurance Code. Answer & Counterclaims [#6] at 7. Both
parties have now filed motions for summary ...