Debbie Beaty and Jonathan Hayes v. Homeowners of America MGA, Inc. and Homeowners of America in Surance Company

Opinion issued August 26, 2025

In The

Court of Appeals
For The

First District of Texas
————————————
NO. 01-23-00844-CV
———————————
DEBBIE BEATY AND JONATHAN HAYES, Appellants
V.
HOMEOWNERS OF AMERICA INSURANCE COMPANY, Appellee

On Appeal from the 61st District Court
Harris County, Texas
Trial Court Case No. 2022-30047

MEMORANDUM OPINION

Debbie Beaty and Jonathan Hayes filed a claim under their homeowner’s

insurance policy with Homeowners of America Insurance Co. after a windstorm

damaged their home in April 2020. Insurer paid Beaty and Hayes to repair the roof

damage, but Beaty and Hayes claimed that their entire roof needed to be replaced at
a much higher cost. After Insurer hired a forensic engineer who determined that the

roof damage was caused by improper installation or lack of maintenance, Insurer

denied further coverage under the policy for roof damages. The parties eventually

participated in appraisal, but the appraisal award did not contain any additional

amount for roof damage repairs beyond what Insurer had already paid.

Beaty and Hayes sued Insurer for breach of contract, breach of the duty of

good faith and fair dealing, and violations of Texas Insurance Code Chapters 541

and 542.1 The live petition also asserted that the appraisal award was unenforceable.

Insurer moved for no-evidence and traditional summary judgment on all claims. The

trial court granted the motion and signed a take-nothing summary judgment.

In two issues on appeal, Beaty and Hayes contend that the trial court erred by

granting summary judgment on their contractual and extra-contractual claims. First,

they argue that Insurer did not meet its burden to establish that no fact issue existed

concerning whether the appraisal award is enforceable, which we construe as

addressing the breach of contract cause of action. Second, they argue that if the

appraisal award is enforceable, Insurer did not establish that its partial payment of

the award barred their extra-contractual claims. We affirm.

1
Although Beaty and Hayes named only Insurer as a defendant, their notice of appeal
included both Insurer and Homeowners of America MGA, Inc. as a second
defendant in the style of the case. This second entity was not named as a party, and
it was not mentioned in either the motion for summary judgment or the final
judgment. This entity is therefore not a party to this appeal.
2
Background

Insurer issued Beaty and Hayes a homeowners insurance policy covering their

home in Spring from December 2019 to December 2020. The policy insured the

dwelling for $750,000 with a $7,500 deductible. The policy “insure[d] against all

risks of physical loss to the property . . . unless the loss is excluded” in the

Exclusions section of the policy. That section excluded numerous losses from

coverage, including defective workmanship, inadequate maintenance, wear and tear,

and loss occurring prior to the inception of the policy. The parties agree that damage

caused by wind or tornado was covered under the policy.

As part of its underwriting process, Insurer obtained an underwriting report

concerning the condition of Beaty and Hayes’ roof from a third-party company on

January 13, 2020. The report indicated that there were “No Issues Observed” with

the clay tile roof at that time.

A. The Insurance Claim

In early May 2020, Beaty and Hayes filed a claim for damage to their roof

from wind or a tornado on April 29, 2020. An adjuster hired by Insurer inspected the

claimed damage on May 6 and sent a loss report to Insurer on May 15. The report

concluded that “[r]oofing tiles were damaged from [a] recent tornado in the area,”

and a window was damaged from high winds. The report estimated the roof repairs

at $11,475 and the window repair at about $70. The estimate for roof repairs was

3
based on an estimate provided by Beaty and Hayes that would reuse 75 percent of

the roof tiles. On May 14, 2020, Insurer paid Beaty and Hayes $4,045.19,

representing the estimated repairs less the deductible.

On June 4, Beaty notified Insurer that she had additional damage to her roof

and newly discovered damage to her swimming pool heater and controller, tiles, and

slide. Insurer sent a second adjuster to inspect the claimed damage on June 23, and

this adjuster submitted a second loss report on July 2. The second report stated that

Beaty and Hayes had provided a second contractor’s estimate to replace the entire

roof, but the adjuster disagreed that the whole roof needed to be replaced. The

adjuster stood on the first adjuster’s estimate plus a nominal amount to place a tarp

on the roof. The second loss report estimated these roof repairs at $11,681.32. Insurer

paid Beaty and Hayes $4,738.38 on July 6. Most of this payment was for non-roof-

related repairs, but it did include the additional amount to place the tarp on the roof.

Beaty and Hayes disagreed that these two payments sufficiently compensated

them for covered property damage. So Insurer hired a forensic engineer on July 8,

2020, to inspect the property and determine whether any claimed damage was caused

by high wind. The engineer inspected the property on September 18, 2020.

On September 25, the engineer sent a structural damage report to Insurer. The

report stated that Beaty had expressed her main concerns as damage to the roof, attic,

and pool, but she also mentioned that water had entered a bathroom wall. The

4
engineer reported various observations about his inspection, including that the roof

had “no fasteners and no mortar on hips, ridges or valleys, notably at areas of

displaced tiles.” The report included weather data showing that the maximum

sustained wind speed in Harris County in April and May 2020 was 23 miles per hour

with a maximum gust of 35.3 miles per hour. The report concluded that the roof

damage was “due to a lack of fastening or adherence and not due to wind.”2

On September 29, 2020, Insurer sent Beaty and Hayes a letter denying further

coverage related to the April 2020 windstorm. The letter quoted three provisions of

the policy excluding coverage for various causes of damage, including wear and tear,

deterioration, defective workmanship, and inadequate maintenance of the property.

B. The Appraisal Award

In March 2021, Beaty invoked the appraisal clause in the policy. The clause

provided that if the parties “fail to agree on the amount of loss, either may demand

an appraisal of the loss.” Once appraisal is invoked, each party chooses a qualified

appraiser to “set the amount of loss, stating the actual cash value and loss to each

item.” If the appraisers disagree on the amount of loss, they choose an umpire to

resolve the disagreements. An appraisal agreed to by any two panel members “will

set the amount of loss” and “shall be binding” on the parties. However, the appraisers

and umpire “are not authorized to determine coverage, exclusions, conditions,

2
The report reached similar conclusions about Beaty’s remaining areas of concern.
5
forfeiture provisions, conditions precedent, or any other contractual issues that may

exist between [the parties], and the appraisal decision is not binding on these issues.”

The record contains few details about the appraisal process in this case. But

Insurer’s appraiser and the umpire signed an appraisal award in September 2022.

The award “appraised the value of all losses presented” at an actual cash value of

$30,681.81, noting the “award is made subject to all the terms, conditions and

exclusions of the [insurance] policy.” Of this amount, the roof portion totaled

$15,508.35. The roof appraisal was based on the two adjusters’ previous estimates

plus about $700 for sheathing in the attic.

On September 13, Insurer sent Beaty and Hayes a final payment for $8,374.31.

An attached letter explained that this payment was for the appraisal award less the

deductible, prior payments, and part of the award for bathroom and pool equipment

damage that was not covered under the policy. But the payment included the

additional attic repairs included in the appraisal award, and thus Insurer paid all the

appraisal award for roof repairs. Insurer’s three payments to Beaty and Hayes totaled

$17,157.88.

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C. The Lawsuit

Beaty and Hayes filed suit against Insurer in May 2022.3 Their live petition

asked the trial court to vacate the appraisal award on the grounds that it was made

pursuant to Insurer’s fraudulent conduct, it was the product of a gross mistake, and

it exceeded the appraisal panel’s scope of authority under the policy. The petition

asserted eleven causes of action for breach of contract, breach of the duty of good

faith and fair dealing, and violations of Insurance Code Chapters 541 and 542. See

TEX. INS. CODE §§ 541.060(a)(1)–(3), (4)(A), (7), 542.055, 542.056, 542.058. For

all these claims, Beaty and Hayes sought damages for benefits they were allegedly

entitled to under the policy.

Insurer moved for no-evidence and traditional summary judgment. Insurer

asserted that Beaty and Hayes had no evidence to establish the breach and damages

elements of their breach of contract claim “as to all portions of the appraisal award

that [Insurer] has paid.” On traditional grounds, Insurer argued that it was entitled to

judgment as a matter of law because all the losses claimed by Beaty and Hayes were

excluded from coverage under the policy. Finally, Insurer argued that Beaty and

Hayes could not establish a right to additional benefits under the policy beyond that

3
The lawsuit was filed several months before the appraisal award issued. Appraisal
was a condition precedent to filing suit under the policy, so the trial court abated the
proceeding pending completion of the appraisal process. Beaty and Hayes filed their
live petition after the appraisal award issued and the case was reinstated.
7
which Insurer had already paid, and therefore Insurer was entitled to summary

judgment on the extra-contractual claims.

Insurer’s motion attached numerous exhibits, including the insurance policy,

the underwriting report, the adjusters’ loss reports, the appraisal award, Insurer’s

letters to Beaty and Hayes with payments shortly after receiving each loss report and

the appraisal award, discovery responses and deposition testimony of Beaty and

Hayes, and an affidavit from a claims manager detailing the claim process in this

case. As to roof damages, the motion also attached the engineer’s report, in which

the engineer concluded that the roof damage was caused by lack of adequate

fasteners rather than by wind. Insurer further relied on a declaration from its

appraiser, who stated that the roof damage was not caused by wind; rather, the

damage was “due to lack of fasteners,” improper sealing, and improper maintenance.

The appraiser stated that he included roof damage in the appraisal award only

because Insurer had already paid Beaty and Hayes to repair the damage.

Beaty and Hayes filed a response primarily disputing that Insurer had met its

burden to show the roof portion of the appraisal award was enforceable as a matter

of law. They relied on the appraiser’s declaration to assert that the appraisal award

limited the roof loss only to loss that was covered under the policy. In their view, the

appraiser’s declaration raised a fact issue about whether the appraisers exceeded the

scope of their authority under the policy by making coverage decisions in setting the

8
amount of roof loss. This was Beaty and Hayes’ sole argument concerning their

breach of contract action. They further argued that even if the appraisal award was

enforceable, their extra-contractual claims were not barred and would not result in

double recovery.

Beaty and Hayes’ response mostly relied on Insurer’s summary judgment

evidence. However, they also attached Beaty’s letter invoking appraisal and

attachments to this letter, including a roofing contractor’s estimate to replace the

entire roof for nearly $175,000. Their evidence also included a separate contractor’s

letter stating that “several areas of the roof [were] damaged by wind, storms,

tornados, and extreme weather conditions.” Insurer filed a reply that objected to this

evidence on several grounds, including that it constituted inadmissible hearsay from

undesignated experts. Beaty and Hayes did not respond to the evidentiary objection.

The trial court held a short hearing on Insurer’s motion. The parties

summarized their respective positions in the summary judgment briefing, but neither

party mentioned the evidentiary objection. The trial court took the motion under

advisement.

The trial court signed a final judgment granting Insurer’s summary judgment

motion and ordering that Beaty and Hayes take nothing on their claims. The trial

court also signed an order sustaining the evidentiary objection and striking Beaty’s

letter, the estimated cost to replace the whole roof, and the letter stating that several

9
areas of the roof were damaged by wind and extreme weather conditions. This appeal

followed.

Summary Judgment

In two issues on appeal, Beaty and Hayes contend that the trial court erred by

granting summary judgment on their contractual and extra-contractual claims.

A. Standard of Review

Appellate courts review summary judgment rulings de novo. Wal-Mart

Stores, Inc. v. Xerox State & Loc. Sols., Inc., 663 S.W.3d 569, 576 (Tex. 2023). The

standard of review is well-settled. See, e.g., id.; Ford Motor Co. v. Ridgway, 135

S.W.3d 598, 600 (Tex. 2004); King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 750–

51 (Tex. 2003); see also TEX. R. CIV. P. 166a(c), (i).

B. Law Governing Appraisal Awards

Appraisal clauses are commonly included in Texas insurance policies and

“provide a means to resolve disputes about the amount of loss for a covered claim.”

In re Universal Underwriters of Tex. Ins. Co., 345 S.W.3d 404, 406–07 (Tex. 2011)

(orig. proceeding). An appraisal provides an extra-judicial remedy for disagreements

about the amount of loss. Tex. Windstorm Ins. Ass’n v. Dickinson Ind. Sch. Dist.,

561 S.W.3d 263, 275 (Tex. App.—Houston [14th Dist.] 2018, pet. denied)

(quotation omitted); see Zhu v. First Cmty. Ins. Co., 543 S.W.3d 428, 433 (Tex.

App.—Houston [14th Dist.] 2018, pet. dism’d) (“From a policy point of view,

10
appraisal clauses allow the insured and insurer to resolve disputes about damages

with greater efficiency by eliminating the cost and delay of traditional litigation.”).

But appraisers are “not to construe the policy or decide whether the insurer

should pay.” State Farm Lloyds v. Johnson, 290 S.W.3d 886, 890 (Tex. 2009). Such

questions of liability—as opposed to damages—are for the courts. Id. at 889–90

(quoting Scottish Union & Nat’l Ins. Co. v. Clancy, 8 S.W. 630, 631 (Tex. 1888)).

Although the “line between liability and damage questions may not always be

clear,” “the scope of appraisal is damages, not liability.” Id. at 890.

An appraisal award made pursuant to a provision of an insurance contract is

binding and enforceable, and courts will indulge every reasonable presumption to

sustain an appraisal award. Zhu, 543 S.W.3d at 433. Appraisal clauses estop a party

from disputing damages in a lawsuit based on an insurance contract. Id. To avoid

enforcement of an appraisal award, a party must establish one of three grounds for

setting aside the award: (1) the award was made without authority; (2) it was made

as a result of fraud, accident, or mistake; or (3) it did not comply with the

requirements of the policy. Id.; Wells v. Am. States Preferred Ins. Co., 919 S.W.2d

679, 683 (Tex. App.—Dallas 1996, writ denied).

We construe an insurance policy “using ordinary rules of contract

interpretation.” StarNet Ins. Co. v. RiceTec, Inc., 586 S.W.3d 434, 444 (Tex. App.—

Houston [1st Dist.] 2019, pet. denied) (quoting Nassar v. Liberty Mut. Fire Ins. Co.,

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508 S.W.3d 254, 257 (Tex. 2017) (per curiam)). In doing so, we must determine the

parties’ intent “as reflected in the terms of the policy itself.” Id. (quoting Nassar,

508 S.W.3d at 257–58). We do not consider any phrase, sentence, or section in

isolation from other contractual provisions; rather, we must “examine the entire

agreement and seek to harmonize and give effect to all provisions so that none will

be meaningless.” Id. (quoting Nassar, 508 S.W.3d at 258). Unless the policy

provides otherwise, courts “give words and phrases their ordinary and generally

accepted meaning, reading them in context and in light of the rules of grammar and

common usage.” Id. at 444–45 (quoting Nassar, 508 S.W.3d at 258).

C. Contractual Claims

In their first issue, Beaty and Hayes contend that summary judgment was

improper on their breach of contract claim solely because the roof-loss portion of

the appraisal award is unenforceable.4 They assert that a declaration from Insurer’s

appraiser shows that the appraisal award excluded costs to make repairs that the

4
Beaty and Hayes’ live petition alleged that Insurer breached the insurance policy by
refusing coverage for claimed damages to their roof, pool, pool equipment, and
bathroom. Insurer moved for summary judgment on these claims. In their summary
judgment response—as on appeal—Beaty and Hayes challenge the appraisal award
only as to their alleged roof damage. Accordingly, the trial court did not err by
granting summary judgment on the contractual claims concerning damage to any
other part of the house. See Plotkin v. Joekel, 304 S.W.3d 455, 467 (Tex. App.—
Houston [1st Dist.] 2009, pet. denied) (affirming summary judgment on claims
challenged in motion but to which nonmovant did not respond). Neither party
addresses whether an appraisal award can be partially unenforceable as Beaty and
Hayes’ argument suggests, and resolution of this sub-issue is not necessary to
disposition of the appeal. See TEX. R. APP. P. 47.1.
12
appraisal panel concluded were not covered under the policy instead of appraising

the cost to repair all claimed roof damage as required by the policy. Because the

appraisal provision in the policy prohibited the appraisers from determining

coverage or other contractual issues, Beaty and Hayes argue that the appraisal panel

exceeded the scope of its authority under the policy, thus rendering the appraisal

award unenforceable. They do not otherwise address their breach of contract claim.

The policy’s appraisal provision required the appraisers to “set the amount of

loss” without determining coverage, exclusions, or “any other contractual issues that

may exist between” the parties. The provision stated that if the appraisers determine

such issues, “the appraisal decision is not binding on these issues.”

The appraisal award itself stated that it “appraised the value of all losses

presented . . . subject to all the terms, conditions and exclusions of the [insurance]

policy.” The award set the actual cash value of the loss at $30,681.81. Of this

amount, an attached estimate attributed $15,508.35 to roof-related repairs. The

estimate stated that the roof appraisal was based on the roofing company’s estimate

provided by Beaty and Hayes. Thus, the face of the appraisal award and the attached

estimate does not reflect that the appraisers considered only damage that was

covered under the policy rather than all claimed damage.

To raise a fact issue, Beaty and Hayes rely on a declaration from Insurer’s

appraiser, which states in relevant part:

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• He “prepared an estimate of the amount of the loss to the Property from
the storm,” which was attached to the appraisal award.
• He “did not observe any wind damage to the roof of the Property as a result
of the storm at issue.”
• Instead, he saw “slipping roof tiles due to lack of fasteners at the hips and
ridges of the roof,” and “many of the roof tiles had been sealed into place
at the laps with caulk at the hips and ridges, but had not been maintained
over time.”
• He “only included an allowance for roof repairs in [his] estimate because
[Insurer] had already paid Ms. Beaty and Mr. Hayes for those repairs.”
• “The award accurately reflects the cost to make the repairs included in the
award, irrespective of the cause of the loss reflected by those repairs or
whether the repairs were covered under the insurance policy.”

Beaty and Hayes persuasively argue that these statements in the declaration raise a

fact issue concerning whether the appraisal panel exceeded the scope of its authority

under the policy by appraising only loss that the panel determined was covered under

the policy. See Tippett v. Safeco Ins. Co. of Ind., No. 02-19-00152-CV, 2020 WL

827143, at *10 (Tex. App.—Fort Worth Feb. 20, 2020, no pet.) (mem. op.) (“Rather,

when determining ‘the amount of the loss,’ appraisers may both appraise losses that

Safeco agrees are covered and losses that Tippett claims are covered (but that Safeco

claims are excluded) when the parties value such losses differently.”). But even

assuming that the appraiser’s declaration was sufficient to raise a fact issue on the

enforceability of the appraisal award and thus to defeat no-evidence summary

judgment, Beaty and Hayes have not addressed the traditional grounds raised in the

motion. See Ford Motor, 135 S.W.3d at 600 (stating that when party moves for

14
summary judgment on both no-evidence and traditional grounds, appellate court first

reviews trial court’s ruling under no-evidence standard).

On traditional grounds, Insurer argued that the scope of appraisal is damages,

not liability. Insurer relied on the engineer’s report and the appraiser’s declaration

to argue that the roof damage was caused by improper installation and defective

workmanship, and thus none of the roof damage was covered under the policy.

Insurer maintains this argument on appeal, asserting that Beaty and Hayes set forth

no argument for “why they are entitled to coverage for the loss to the roof, and

particularly, why they are entitled to a roof replacement.”

The essential elements of a breach of contract claim are: (1) the existence of

a valid contract between the plaintiff and the defendant; (2) the plaintiff’s

performance or tendered performance; (3) the defendant’s breach of the contract;

and (4) the plaintiff’s damages as a result of the breach. Prime Prods., Inc. v. S.S.I.

Plastics, Inc., 97 S.W.3d 631, 636 (Tex. App.—Houston [1st Dist.] 2002, pet.

denied); see also Am. Nat’l Ins. Co. v. Arce, 672 S.W.3d 347, 353 (Tex. 2023)

(“Insurance policies are construed as contracts and enforced as contracts.”). An

appraisal award fits within the fourth element, and an enforceable appraisal award

estops the parties from disputing the amount of damages—but not causation or

liability—at trial. See Zhu, 543 S.W.3d at 433 (stating that appraisal clause estops

party from disputing damages in lawsuit based on insurance policy); see also

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Johnson, 290 S.W.3d at 890 (stating that “the scope of appraisal is damages, not

liability”). If the appraisal award is unenforceable, then estoppel does not apply, and

a party may contest damages at trial. See Zhu, 543 S.W.3d at 433. Thus, we agree

with Insurer that the appraisal award concerns only the damages element of a breach

of contract claim.

“A breach of contract occurs when a party fails to perform an act that it has

expressly or impliedly promised to perform.” Tabe v. Tex. Inpatient Consultants,

LLLP, 555 S.W.3d 382, 385 (Tex. App.—Houston [1st Dist.] 2018, pet. denied)

(quoting Case Corp. v. Hi-Class Bus. Sys. of Am., Inc., 184 S.W.3d 760, 769–70

(Tex. App.—Dallas 2005, pet. denied)). “It should go without saying that a breach

[of contract] is determined by comparing the terms of a contract with the actions of

the alleged breaching party.” Enron Oil & Gas Co. v. Joffrion, 116 S.W.3d 215, 221

(Tex. App.—Tyler 2003, no pet.).

When parties dispute an insurer’s liability under a policy, the parties share

shifting burdens. See Gilbert Tex. Constr., L.P. v. Underwriters at Lloyd’s London,

327 S.W.3d 118, 124 (Tex. 2010). The insured has the initial burden to establish

coverage under the terms of the policy. Id. If the insured establishes coverage, then

the insurer must show that the loss falls within an exclusion. Id. If the insurer does

so, the insured must establish that an exception to the exclusion brings the claim

back within coverage under the policy. Id.

16
Here, the policy “insure[d] against all risks of physical loss to the

property . . . unless the loss is excluded in Section I Exclusions.” The “all risks”

language meets Beaty and Hayes’ initial burden to establish that the policy covered

their claimed roof damage. See id.

Insurer relies on the engineer’s report and the appraiser’s declaration to

establish that the claimed roof loss was caused by installation defects excluded from

coverage under the policy. Specifically, Insurer relies on the following exclusion

provision:

m. We do not cover loss consisting of, caused by, contributed to or
aggravated by, or resulting from inadequate or
defective . . . design, specifications, workmanship,
construction, . . . maintenance, repairs, or materials whether used
in construction, remodeling, maintenance or repair of part or all
of any property (including land, structure or any improvements)
whether on or off the insured location. However, any loss that
ensues that is not otherwise excluded is covered.

After Beaty and Hayes filed the insurance claim, Insurer sent two adjusters to

inspect the claimed damage. The first adjuster’s loss report stated that some roofing

tiles sustained tornado damage, and it estimated the cost to repair the roof at $11,475.

This estimate was based on a roofing company’s estimate to repair the roof provided

by Beaty and Hayes. The second adjuster’s loss report mentioned that Beaty and

Hayes had provided an estimate to replace the entire roof, but the adjuster disagreed

that full replacement was necessary. Instead, the second report included an

17
additional estimate for placement of a tarp on the roof. Insurer paid Beaty and Hayes

the amount of the roof estimates in both reports less the deductible.

Beaty and Hayes disagreed with the two adjusters’ estimates to repair the roof,

so Insurer hired a forensic engineer to determine the cause of the claimed property

damage. In a structural damage report, the engineer concluded that the roof damage

was “due to a lack of fastening or adherence and not due to wind.” The report stated,

“There were no fasteners and no mortar on hips, ridges or valleys, notably at areas

of displaced tiles.” The engineer also discovered many nail holes in the roof tiles.

Trees surrounding the house were upright without broken branches, fences were

upright and not missing pickets, and a satellite dish was upright. The report also

contained weather data which contradicted Beaty and Hayes’ assertion that a tornado

had damaged their home.

Beaty then invoked appraisal. The appraisal award included an estimate for

roof damage. Most of this estimate was based on the adjusters’ loss reports, which

in turn were based on the roofing company’s estimate provided by Beaty and Hayes.

The appraisal award also found additional roof-related damage in the attic. Insurer

paid Beaty and Hayes for the additional amount of roof loss contained in the

appraisal award. In a declaration, Insurer’s appraiser stated that he did not observe

any wind damage to the roof, and any roof damage was “due to lack of fasteners,”

improper sealing, and improper maintenance. The appraiser only included roof loss

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in the appraisal award because Insurer had already paid Beaty and Hayes to repair

this damage.

The parties dispute whether the roof damage was caused by a windstorm

(which is covered) or by defective workmanship or improper installation (which is

not covered). Although the loss reports conflict with the engineer’s report and the

appraiser’s declaration concerning the cause of the roof damage, Insurer

nevertheless paid the estimated amounts to repair the roof contained in both loss

reports and the appraisal award. Evidence that Insurer paid for these repairs does not

raise a fact issue on whether Insurer breached the insurance policy. See USAA Tex.

Lloyds Co. v. Menchaca, 545 S.W.3d 479, 494 (Tex. 2018) (“If the policy does not

cover the insured’s loss, the insurer does not breach the policy by failing to pay

benefits for that loss because the insured is not entitled to those benefits. Conversely,

if the policy does cover the loss, the insurer necessarily breaches the policy if it fails

to pay benefits for the loss because the insured is entitled to those benefits.”); Tabe,

555 S.W.3d at 385.

Beaty and Hayes argue that these roof repairs were insufficient because their

entire roof needed to be replaced at a much greater cost. But they do not point to any

evidence supporting this argument.5 Instead, as discussed above, they rely solely on

5
We note that in their summary judgment response, Beaty and Hayes attached a
nearly $175,000 estimate to replace their entire tile roof and a letter stating that
“several areas of the roof [were] damaged by wind, storms, tornados, and extreme
19
the appraiser’s declaration to assert that the appraisal award was unenforceable. The

declaration, however, stated that the appraiser “did not observe any wind damage to

the roof of the Property as a result of the storm at issue,” but he instead observed

“slipping roof tiles due to lack of fasteners at the hips and ridges of the roof,” and

“many of the roof tiles had been sealed into place at the laps with caulk at the hips

and ridges, but had not been maintained over time.”

The declaration is not clear whether the appraiser determined that additional

roof damage existed—whether covered or not—beyond that which Insurer had

already paid Beaty and Hayes to repair. But this omission is immaterial because the

appraiser stated that none of the damage was caused by wind. The declaration does

not raise a fact issue concerning whether Insurer failed to perform an act that it was

required to perform under the policy. See Tabe, 555 S.W.3d at 385. Insurer therefore

met its burden to avoid liability by showing that any additional roof loss claimed by

Beaty and Hayes is excluded from coverage because it was caused by inadequate or

weather conditions.” Insurer objected to this evidence on several grounds, including
that it constituted inadmissible hearsay from undesignated experts. The trial court
sustained Insurer’s objection to this evidence and signed an order striking it from
the record. On appeal, Beaty and Hayes neither acknowledge nor challenge this
evidentiary ruling. And although they mention this stricken evidence in the
statement of facts section of their brief, they do not rely on this evidence to argue
that a fact issue exists on their breach of contract claim. Nor do they respond to
Insurer’s argument that they waived any challenge to the evidentiary ruling by
failing to raise it on appeal. Thus, we may not consider this evidence in reviewing
the trial court’s summary judgment ruling. See John C. Flood of DC, Inc. v.
SuperMedia, L.L.C., 408 S.W.3d 645, 656 (Tex. App.—Dallas 2013, pet. denied)
(“We may not consider stricken evidence when reviewing a summary judgment.”).
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defective design, workmanship, or construction of the roof. See Gilbert Tex. Constr.,

327 S.W.3d at 124. Beaty and Hayes have not established that an exception to this

exclusion applies to bring the claim back within coverage. See id.

We conclude that Insurer conclusively negated at least one essential element

of Beaty and Hayes’ breach of contract claim, namely the breach element, and Beaty

and Hayes did not produce evidence raising a genuine issue of material fact on this

element. See Oxy USA WTP LP v. Bringas, 702 S.W.3d 647, 654 (Tex. App.—

Houston [1st Dist.] 2024, pet. denied) (stating that defendant is entitled to traditional

summary judgment if defendant conclusively negates at least one essential element

of plaintiff’s cause of action); Tabe, 555 S.W.3d at 385. We therefore hold that the

trial court did not err by granting summary judgment on the contractual claims.

We overrule Beaty and Hayes’ first issue.

D. Extra-Contractual Claims

In their second issue, Beaty and Hayes assert that even if the appraisal award

is enforceable, the trial court erred by granting summary judgment on the extra-

contractual claims for breach of the duty of good faith and fair dealing and violations

of Insurance Code Chapter 541, specifically Insurer’s alleged failure to conduct a

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reasonable investigation, to settle the claim in good faith when its liability was

reasonably clear, and to provide a reasonable explanation for denying coverage.6

An insured cannot recover for an insurer’s violation of its common-law and

statutory duties unless the insured establishes either that she has a right to benefits

under the policy or that the insurer committed an act so extreme as to cause injury

independent of a right to benefits. Ortiz v. State Farm Lloyds, 589 S.W.3d 127, 133–

34 (Tex. 2019); see also Menchaca, 545 S.W.3d at 488, 500–01. Beaty and Hayes

expressly argue that their extra-contractual claims are based on their entitlement to

benefits under the policy rather than on an independent injury. Under the entitled-

to-benefits rule, “an insured cannot recover policy benefits as damages for an

insurer’s extra-contractual violation if the policy does not provide the insured a right

to those benefits.” Menchaca, 545 S.W.3d at 495–97.

Here, Beaty and Hayes solely ground their extra-contractual claims on their

alleged entitlement to receive benefits under the policy. We already determined

above that Beaty and Hayes did not raise a fact issue on the breach element of their

breach of contract claim. This conclusion was based on the lack of evidence showing

that Beaty and Hayes’ roof sustained any damage beyond that for which Insurer had

6
Beaty and Hayes’ live petition also alleged causes of action under Insurance Code
Chapter 542. Insurer moved for summary judgment on these claims, but Beaty and
Hayes did not respond to that part of the motion. See Plotkin, 304 S.W.3d at 467.
Nor do they address these claims on appeal. See TEX. R. APP. P. 38.1(i). Thus, the
trial court did not err by granting summary judgment on these claims.
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accepted coverage and paid Beaty and Hayes. Beaty and Hayes thus did not raise a

fact issue on whether they were entitled to additional coverage under the policy for

their roof loss. This conclusion means that Beaty and Hayes have not shown they

are entitled to additional benefits under the policy because Insurer has covered all

the roof damage present in the record.

In arguing that they raised a fact issue concerning their entitlement to policy

benefits, Beaty and Hayes rely on an underwriting report completed during the

underwriting process. The report was submitted to Insurer at the beginning of the

policy term about four months before the April 2020 windstorm. In a section for

“roof condition problems,” the report checked a box stating, “No Issues Observed.”

A separate box in this section for “Installation Problems” was not checked. Beaty

and Hayes argue that this report shows that there were no installation problems with

their roof four months before the windstorm. Yet Insurer did not provide this

underwriting report to the engineer during the claims process even though the report

is inconsistent with the engineer’s later conclusion that the roof damage was caused

by improper installation rather than wind. Beaty and Hayes thus contend that Insurer

unreasonably relied on the engineer’s report to deny coverage, and Insurer failed to

conduct a reasonable investigation and settle the claim when its liability was

reasonably clear. We disagree that this evidence raises a fact issue.

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First, the underwriting report states in the footer of each page that it “is made

from limited observation and interview.” As Insurer points out, however, the

engineer’s report shows that the engineer conducted a more comprehensive

investigation of the property. Whereas the underwriting report was based on “limited

observation” of the exterior of the property, the engineer inspected both the exterior

and the interior of the property, including the roof itself, the attic, an interior room,

and even surrounding trees and fences. The engineer’s report detailed various

observations from this inspection. For example, the engineer observed, “There were

no fasteners and no mortar on hips, ridges or valleys, notably at areas of displaced

tiles.” The engineer also observed many nail holes in the roof tiles. In the attic, the

engineer saw no staining on the roof framing, defects in the sheathing, or moisture

stains around the sheathing. The engineer also observed that trees surrounding the

house were upright without broken branches, fences were upright and not missing

pickets, and a satellite dish was still standing. The engineer also considered weather

data which contradicted Beaty and Hayes’ assertion that a tornado had damaged their

home. The engineer’s report concluded that the roof damage was “due to a lack of

fastening or adherence and not due to wind.” The face of the two reports indicates

that the conclusions in the engineer’s report were based on a review of more data

than were those in the underwriting report.

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Second, we have already discussed other evidence raising a fact issue on

whether the roof was damaged during the April 2020 windstorm, including the

adjusters’ loss reports, the appraisal award, and Insurer’s payments to Beaty and

Hayes for roof repairs which indicate Insurer’s implicit acceptance of policy

coverage for at least some roof damage. The underwriter’s report is consistent with

this evidence because it shows that there was no observable damage to the roof a

few months before the storm.

The engineer’s report contradicted this evidence by concluding that all the

claimed roof damage was caused by defective workmanship or improper installation

and thus not covered under the policy. But the engineer’s report does not discuss the

scope of the roof damage found by the engineer, whether the damage was covered

under the policy, or whether it was not covered. In other words, the report does not

state that the engineer found more roof damage than that discovered by the two

adjusters. Thus, while the engineer’s report conflicts with the underwriting report

and the loss reports submitted by the adjusters, it is not evidence that Beaty and

Hayes were entitled to additional policy benefits because it is not evidence of

additional roof damage beyond that which Insurer had already paid.

The effect of Insurer’s failure to provide the underwriting report to the

engineer is less than a scintilla of evidence showing that Beaty and Hayes were

entitled to additional benefits under the policy. See King Ranch, 118 S.W.3d at 751

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(stating that evidence is less than scintilla of evidence when it is “so weak as to do

no more than create a mere surmise or suspicion”). The summary judgment evidence

establishes that Insurer paid Beaty and Hayes to repair all the damage present on

their roof, even though the parties dispute the cause of this damage. Beaty and Hayes

did not produce a scintilla of evidence that the policy provided them a right to

additional benefits. See Menchaca, 545 S.W.3d at 495–97, 500.

We conclude that the summary judgment evidence does not raise a fact issue

on whether Beaty and Hayes were entitled to additional benefits under the policy,

and they do not assert that Insurer committed an act so extreme as to cause injury

independent of a right to benefits. See Ortiz, 589 S.W.3d at 133–34; Menchaca, 545

S.W.3d at 488, 500–01. Accordingly, we hold that the trial court did not err by

granting summary judgment on the extra-contractual causes of action.

We overrule Beaty and Hayes’ second issue.

Conclusion

We affirm the judgment of the trial court.

David Gunn
Justice

Panel consists of Justices Guerra, Gunn, and Dokupil.

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