A legal dispute over home insurance coverage in Travis County has been sent back to court after a state appeals court ruled that an insurance company must provide evidence about what caused a major backyard landslide before refusing to pay a claim under its standard policy exclusions.
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what → send → exclusions
According to legal documents published by Justia Law, the Texas Third Court of Appeal in Austin overturned a trial court's summary judgment in _Privilege Underwriters Reciprocal Exchange v. Michael MacDougall and William Heyer_.
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Court → accord → MacDougall
The appeals court issued its ruling on 30 October.
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court → issue → October
The decision sends insurer PURE back to court to determine whether human activity helped cause two residential backyards to collapse down an 80-foot slope.
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backyards → send → slope
The dispute began when the rear sections of neighbouring properties owned by Michael MacDougall and the estate of the late George S. Heyer Jr. suddenly collapsed.
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sections → begin → Jr.
Large sections of land broke away and slid down a steep slope towards a local creek.
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sections → break → creek
The damage left both homes unsafe, with the buildings sitting dangerously close to the edge of the cliff.
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buildings → leave → cliff
Insurer denied claims under standard earth movement exclusion
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Insurer → deny → exclusion
After the slope collapsed, MacDougall and the Heyer estate filed insurance claims under their high-end homeowners policies with Privilege Underwriters Reciprocal Exchange (PURE).
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MacDougall → collapse → Exchange
They asked the insurer to cover structural repairs, work to stabilise the land and other related losses.
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They → ask → land
PURE rejected the claims, pointing to the policy's standard exclusion for earth movement and landslides.
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PURE → reject → movement
The insurer argued that natural movement of the land and damage to the slope caused the collapse.
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movement → argue → collapse
It said the policy clearly excluded this type of damage, even if other factors had also played a role.
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factors → say → role
The homeowners then sued PURE for breach of contract and for failing to pay their claims on time under the Texas Insurance Code.
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homeowners → sue → Code
The Travis County 250th District Court granted summary judgment in favour of the homeowners on the question of liability, making the insurer responsible for the loss.
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insurer → grant → loss
PURE later challenged that decision in the appeals court.
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PURE → challenge → court
Appellate court defines scope of landslide exclusions
In its decision, the Third Court of Appeal considered whether the policy's landslide exclusion also applies when human activity or man-made conditions help cause land to move.
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land → define → Appeal
The appeals court explained that, under established rules for interpreting insurance contracts, exclusion clauses must be read strictly against the insurance company.
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clauses → explain → company
The judges found that PURE's policy did not specifically exclude landslides caused by a combination of natural and human-related events.
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policy → find → events
Therefore, the exclusion only applies when natural events alone cause the landslide.
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events → apply → landslide
The judges also pointed out that some other standard insurance policies clearly exclude earth movement caused by any combination of natural and man-made forces.
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policies → point → forces
However, PURE's policy did not contain such wide-ranging wording.
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policy → contain → wording
Fact issues remain over human causation and site conditions
The appeals court reviewed expert statements submitted during the earlier court proceedings.
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court → remain → proceedings
These included reports from geotechnical engineers Terrance Zich and Andrew Davidoff.
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These → include → engineers
PURE argued that their reports showed that natural environmental conditions were the main cause of the slope collapse.
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conditions → argue → collapse
However, the three-judge panel found that the different expert opinions raised an important question that still needed to be answered.
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that → find → question
There was not enough agreement to determine whether the collapse was caused only by natural erosion or whether human activities also played a part.
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activities → be → part
Possible human causes included construction work, changes to drainage systems and land management activities.
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causes → include → systems
Because the exact cause of the land movement remains disputed, the appeals court ruled that neither side was entitled to summary judgment on liability as a matter of law.
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side → dispute → law
Lower court judgment reversed for trial proceedings
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judgment → reverse → proceedings
The Third Court of Appeal overturned the district court's summary judgment ruling that had held PURE responsible for the loss.
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PURE → overturn → loss
It also reversed a related award of statutory interest under the Texas Prompt Payment of Claims Act.
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It → reverse → Act
The appeals court sent the case back to the 250th District Court of Travis County for further hearings and the presentation of more evidence.
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court → send → evidence
The lower court will now examine the facts to establish the exact cause of the landslide.
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court → examine → landslide
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