Evidence Required to Prove Breach of Contract

APPRAISAL AWARD SETS AMOUNT OF DAMAGES RECOVERED FROM INSURER
Post 5180

It's a Waste of Time to Sue Your Insurer if You Don't Have Evidence

In Debbie Beaty and Jonathan Hayes v. Homeowners Of America Insurance Company, No. 01-23-00844-CV, Court of Appeals of Texas, First District (August 26, 2025) 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. The insurer paid for some repairs but denied further coverage, leading Beaty and Hayes to sue for breach of contract and other claims.

FACTUAL BACKGROUND
Insurance Claim:

Beaty and Hayes filed a claim for roof damage caused by a windstorm in April 2020.

Appraisal Award:

An appraisal award was issued, valuing the total loss at $30,681.81, with $15,508.35 attributed to roof-related repairs. The insurer paid the appraisal award less the deductible and prior payments.

Breach of Contract:

The insurer conclusively negated the breach element, and Beaty and Hayes did not produce evidence raising a genuine issue of material fact.

Extra-Contractual Claims:

Beaty and Hayes did not raise a fact issue on whether they were entitled to additional benefits under the policy.

Summary Judgment:

The trial court granted summary judgment in favor of the insurer, concluding that the insurer did not breach the policy and that Beaty and Hayes were not entitled to additional benefits.

The Lawsuit

Beaty and Hayes filed suit against Insurer in May 2022.  They 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 Insurer moved for summary judgment. The trial court signed a final judgment granting Insurer's summary judgment motion and ordering that Beaty and Hayes take nothing on their claims.

LAW GOVERNING APPRAISAL AWARDS

An appraisal provides an extra-judicial remedy for disagreements about the amount of loss. From a policy point of view, appraisal clauses allow the insured and insurer to resolve disputes about damages with greater efficiency by eliminating the cost and delay of traditional litigation.

Courts will indulge every reasonable presumption to sustain an appraisal award. To avoid enforcement of an appraisal award, a party must establish one of three grounds for setting aside the award:

the award was made without authority;
it was made as a result of fraud, accident, or mistake; or
it did not comply with the requirements of the 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.

BREACH OF CONTRACT

The essential elements of a breach of contract claim are:

the existence of a valid contract between the plaintiff and the defendant;
the plaintiff's performance or tendered performance;
the defendant's breach of the contract; and
the plaintiff's damages as a result of the breach.

The Court of Appeals concluded that Insurer conclusively negated at least one essential element of Beaty and Hayes' breach of contract claim, namely the breach element.

Extra-Contractual Claims

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. Beaty and Hayes did not produce a scintilla of evidence that the policy provided them a right to additional benefits.

The trial court did not err by granting summary judgment.

ZALMA OPINION

People who present insurance claims seem to think that an insurer will do no investigation and simply pay them whatever they ask. Beaty and Hayes believed that and when they didn't get what they wanted, even after an appraisal panel set the amount of loss and the insurer paid the award, they wanted more and sued only to have the Court of Appeals conclude that they failed to even produce a scintilla of evidence that they were entitled to more.

(c) 2025 Barry Zalma & ClaimSchool, Inc.

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