An insurer did not breach its policy with the owner of a Texas convenience store by denying coverage for roof damage after a vehicle crashed into the store, the Fifth Circuit affirmed. The court concluded that the owner failed to establish a genuine dispute regarding whether any roof damage was attributable to the crash.

5th Circuit General Star Win Affirmation: Summary Judgment Affirmed

In an unpublished opinion Friday, a three-judge panel upheld a Texas federal court's summary judgment in favor of General Star Indemnity Co. in a coverage lawsuit brought by Smiley Team II Inc. The panel agreed with the lower court that Smiley’s evidence was insufficient to challenge the insurer’s decision.

Insufficient Evidence from Smiley's Expert

The affidavit of Smiley's expert, adjuster Richard Gadrow, "makes conclusory statements and naked assertions that the roof damage was caused by the vehicle collision," the panel said. "He provides no supporting factual evidence or methodology for how he arrived at the conclusion that the roof damage was caused by the vehicle collision. Such a self-serving affidavit is not sufficient to defeat summary judgment," the panel added.

5th Circuit General Star Win Affirmation: Incident Background

According to court filings, Smiley's convenience store in Hitchcock, Texas, sustained damage when a vehicle crashed into the building in September 2017, one month after Hurricane Harvey hit the area. Smiley's adjuster estimated damages at about $129,000, including over $37,000 for roof repairs.

However, an adjuster for General Star, which insured the store under a commercial property policy, found these estimates "totally off base." An engineer hired by the insurer determined that the roof damage was unrelated to the collision.

Policy Limitations and Legal Dispute

General Star subsequently tendered over $33,000 for damage caused by the crash. The property policy did not cover pre-existing wear and tear or damage caused by windstorms or hail, court documents stated.

Due to an ongoing dispute over the damage costs, Smiley filed suit against the insurer in Texas state court in March 2021. The complaint, which was later removed to federal court, included claims for breach of contract, bad faith, violations of the Texas Deceptive Trade Practices Act and Texas Insurance Code, fraud, and conspiracy to commit illegal acts.

5th Circuit General Star Win Affirmation: Court's Decision

U.S. District Judge Jeffrey V. Brown had previously dismissed Smiley's fraud and DPTA claims and granted summary judgment to General Star on the store's remaining claims in October 2022. Judge Brown ruled that Gadrow's affidavit and report were insufficient to establish a genuine dispute of material fact regarding whether the vehicle collision caused the roof damage.

"The large compendium of photos taken by Gadrow of the property are not evidence that the collision, rather than Hurricane Harvey or some pre-existing cause or general wear and tear, caused [damage] to the roof," the judge said. The affidavit and report also did not contain any facts that would allow a jury to segregate damages, Judge Brown added.

Conclusion

U.S. Circuit Judges Rhesa H. Barksdale, Leslie H. Southwick, and James E. Graves Jr. sat on the appeals panel. Representatives of the parties did not immediately respond to requests for comment Monday.

Smiley is represented by Eric B. Dick and Joe Synoradzki of Dick Law Firm PLLC and Alexander B. Wathen of Wathen & Associates. General Star is represented by Lindsey P. Bruning of Zelle LLP.