The United States Court of Appeals for the Fifth Circuit's recent opinion in Majestic Oil, Inc. v. Certain Underwriters at Lloyd's, London Subscribing to Policy Number W1B527170201, No. 21-20542 (5th Cir. Mar. 17, 2023), offers important guidance for practitioners in insurance coverage cases faced with offering new or supplemental expert opinions after the expert report deadline. Moreover, the opinion provides insight into how a recent articulation of Texas' concurrent causation doctrine could affect insurance cases where the cause of damage is at issue.
The question underpinning Majestic Oil was whether Hurricane Harvey or an earlier January 2017 storm damaged Majestic Oil's roof such that it started to leak. Majestic Oil's first-party property insurance policy issued by Lloyd's covered damage caused by "[r]ain or wind driven rain which enters the insured building or structure through an opening created by the force of a [n]amed [s]torm," but according to the Firth Circuit, the policy did not cover "pre-existing damage, ongoing damage, or wear and tear." Majestic Oil, slip op. at 1-2 (alteration in original). After Hurricane Harvey―a named storm―Majestic Oil's roof began leaking, but the parties disputed whether the damage to the building predated the storm. Id. at 2-3. A Lloyd's claims adjuster and a structural engineering expert hired by Lloyd's determined that the damage predated Hurricane Harvey, and Lloyd's denied the claim. Id. Meanwhile, Majestic Oil hired its own expert, who authored a report. Id. at 3. The report stated that while the earlier January 2017 storm could not "be ruled out as initially contributing to the roof vulnerability," it was "more likely than not that" Hurricane...
