Testimony of Insurance Coverage Expert Witness found to be connected to existing data only by her ipse dixit

Testimony of Insurance Coverage Expert Witness found to be connected to existing data only by her ipse dixit

The case involved a dispute over insurance coverage concerning damages resulting from a roof leak in a residential property. Great Lakes Insurance SE, the Defendant, denied the Plaintiff’s claim, contending that the leak stemmed from rot, wear and tear, and an accumulation of pine needles—causes not covered under the policy. The crux of the matter for the Defendant’s motion for summary judgment was whether the Plaintiff could demonstrate that the leak arose from a storm, a covered cause of loss. The Court ruled in favor of summary judgment, determining that the Plaintiff failed to present sufficient evidence to establish that the loss fell within the policy coverage, thereby supporting the Defendant’s decision to deny the claim.

Apex REI Series, LLC, managed by Rahim Meghani, owned and leased a residential property in Humble, Texas. Great Lakes Insurance SE provided insurance coverage for the property from January 1, 2020, to January 1, 2021, safeguarding against “direct physical loss” unless specifically excluded or limited in the policy.

The insurance policy contained exclusions barring coverage for damages caused, directly or indirectly, by “surface water,” “fungus,” wet or dry rot, and bacteria. Additionally, the policy imposed limitations, specifying that damage to the interior of any building or structure, or personal property within, resulting from rain, snow, sleet, ice, sand, or dust—whether wind-driven or not—was not covered unless the building or structure initially sustained damage to its roof or walls due to a Covered Cause of Loss. In essence, coverage for interior damage resulting from rain, snow, or similar elements required prior damage to the roof or walls caused by a covered incident, through which the rain, snow, sleet, ice sand or dust entered. Put simply, the insurance policy didn’t provide coverage for damage caused by water entering the property through the roof, unless the leak itself resulted from a “Covered Cause of Loss,” specifically a direct physical loss like a windstorm or hailstorm.

In April 2020, tenants informed Meghani about water seeping into the home through the roof, leading to interior damage. Meghani promptly filed a claim with Great Lakes, citing April 6, 2020, as the date of loss. Great Lakes appointed an adjuster who assessed the property without inspecting the roof directly. Upon the adjuster’s findings attributing the interior damage to surface water in the backyard and mold growth—both excluded causes under the policy—Great Lakes rejected the claim.

Around June or July 2020, Meghani requested a second inspection of the property. Interestingly, without a direct request from Meghani, Great Lakes initiated a new claim, dating it June 30, 2020. They then appointed a second adjuster to conduct a reinspection of the property. This subsequent assessment by the adjuster determined that the roof leak hadn’t been a result of a storm and that neither wind nor hail had caused damage to the roof.

In October 2020, Great Lakes appointed a third adjuster to examine the property. This adjuster’s report highlighted findings of “rotted fascia” and “heavy rot on the roof decking.” Additionally, observations noted “heavy granule loss and reduced pliability of the shingles.” The adjuster also remarked that the roof vents seemed to be part of the original construction of the home.

In December 2020, Great Lakes denied the June 30, 2020, claim, explaining that the leak had been caused by rot, wear and tear, and lack of maintenance—all excluded causes of loss under the policy.

Following the denial, Meghani engaged OnPoint Claim Recovery to assess the property damage. OnPoint conducted an inspection and tasked adjuster Ana Nguyen with preparing a loss estimate and report. Nguyen’s assessment attributed the primary cause of the property damage to an “intense wind and hailstorm.”

However, in July 2021, Great Lakes enlisted an engineer to inspect the property. The engineer’s findings diverged, asserting that the roof leak hadn’t stemmed from a windstorm or hailstorm but rather from “pine needles that had accumulated within the roof valley.”

Plaintiff, Apex REI Series, LLC asserted claims for breach of contract, violations of the Texas Insurance Code, § 542.051 et seq., and breach of the duty of good faith and fair dealing against the Defendant, Great Lakes Insurance SE, seeking damages for “the loss of the benefits that should have been paid pursuant to the Policy.”

Great Lakes has moved for summary judgment, and to exclude Ana Nguyen’s expert testimony, report, and estimate.

Insurance Coverage Expert Witness

Ana Nguyen is the Founder and CEO of OnPoint Claim Recovery Services. She is  a Licensed Professional Public Adjuster, among other roles, with over 20 years of administrative and managerial experience in the insurance and healthcare sectors. Ana Nguyen has helped victims of flood damage, roof damage and other home damages recovery claims.

Discussion by the Court

According to Texas law, the insured is responsible for demonstrating that a loss falls within the coverage specified in an insurance policy. Once the insurer demonstrates that an exclusion is applicable, the insured must then prove the application of an exception to that exclusion. This was established in the case Fiess v. State Farm Lloyds, 392 F.3d 802, 807 (5th Cir. 2004).

Great Lakes contends that Apex failed to provide evidence that the property sustained damage due to a covered loss within the policy period. They highlighted Meghani’s deposition testimony, noting his lack of recollection regarding specific weather events in April and June 2020, along with Apex’s failure to determine the precise cause of the leak. Great Lakes argued that Meghani’s testimony about a roof leak causing interior damage during the policy period lacked legal sufficiency.

In response, Apex asserted that pinpointing the exact date of loss wasn’t a requirement. They emphasized that every date associated with the claim for roof and property interior damage fell within the policy period. Apex relied on Meghani’s testimony, affirming the prompt filing of the claim following tenant reports and the absence of prior roof or water issues before April 2020. Additionally, they referenced the expert report, estimate, and affidavit from Nguyen to support their position.

Nguyen’s affidavit highlighted that, drawing upon expertise and experience as an adjuster, along with an assessment of Property photos and scope notes from an OnPoint Claim Recovery field adjuster, the evaluation led to a conclusion. Nguyen stated that, considering conversations with Meghani, who possessed knowledge of the Property’s condition before and after the storm, along with the claim’s history, the observed damage detailed in the estimate pointed to being a result of a wind and/or hail storm occurring within the policy period.

Nguyen’s report concluded that the “primary cause” of the property damage was an “intense wind and hailstorm.” This determination was based on findings from a weather report by HailTrace, indicating significant weather conditions with winds reaching 60 mph and hail up to 1.25 inches—conditions capable of causing substantial property damage at the time when the homeowner noticed the damage and leaks. Nguyen also observed that hailstones had created notable dents and punctures on the roof, causing several shingles to be dislodged and exposing the underlying wood. Additionally, there were golf ball-sized indentations on the soft metals, aligning with the reported hail impact.

Rule 702 “charges trial courts to act as ‘gate-keepers,’ making a ‘preliminary assessment of whether the reasoning or methodology underlying the testimony is scientifically valid and of whether that reasoning or methodology properly can be applied to the facts in issue.’”

Great Lakes submitted a motion to exclude Nguyen’s report, estimate, and affidavit based on Federal Rule of Civil Procedure 702. Their argument centered on the assertion that Nguyen’s opinion attributing the damage to a wind or hailstorm during the policy period was considered conclusory. They contended that Nguyen’s conclusion contradicted Meghani’s testimony, leading them to seek the exclusion of Nguyen’s findings and statements from consideration.

The Court determined that Nguyen’s causation opinion lacked specificity and was unduly conclusory. Nguyen’s assertion regarding the damage’s cause rested on her general “skills, knowledge, training, and experience,” without detailing specific observations supporting the conclusion of wind or hail as the cause. Despite referencing a weather report from HailTrace, Nguyen didn’t provide the report’s data or specific dates of relevant wind or hail events. The Court found that that Nguyen’s causation opinion was “connected to existing data only by [her] ipse dixit.”The Court deemed Nguyen’s causation opinions as unsupported and consequently, her report, estimate, and affidavit were excluded from the summary judgment record.

Without Nguyen’s causation opinion, Apex lacked substantial evidence to support its position on the cause of the damage. Meghani’s deposition testimony only indicated that the roof began leaking when reported by tenants in April 2020, falling short of establishing the damage resulted from a covered loss during the policy period. Under the policy, water damage from a roof leak is covered if caused by a “Covered Cause of Loss,” such as a wind or hailstorm. However, all evidence, excluding Nguyen’s inadmissible opinion, indicated that the cause wasn’t covered.

Great Lakes’ adjuster attributed the roof leak to “heavy rot” in the roof decking surrounding the HVAC Vent, also noting “wear and tear,” improper maintenance, and repairs as contributing factors. Furthermore, another adjuster from Great Lakes found no wind or hail damage to the roof. The engineer hired by Great Lakes similarly concluded that neither wind nor hail had caused roof damage, attributing the leak to pine needles accumulating within the roof valley. Apex did not contest that these identified causes were not covered losses under the policy terms. Therefore, considering the evidence, it supported the conclusion that the identified causes were not within the policy coverage.

The Court noted that Apex failed to raise a factual dispute material to determining whether the property was damaged by a covered loss during the policy period.

Great Lakes contends that Apex’s extra-contractual claims beyond breach of contract should be dismissed since Apex’s breach of contract claim itself lacks merit, and Apex hasn’t presented any distinct injury apart from the loss of policy benefits. Apex acknowledges its sole injury as the loss of policy benefits but argues that its extra-contractual claims persist based on the assertion that there’s sufficient evidence linking the damages to a storm within the policy period.

However, according to legal standards, an Insurance Plaintiff can pursue extra-contractual claims distinct from the breach of the insurance policy only if the alleged statutory violations led to an injury separate from the right to recover policy benefits. As clarified, Apex’s breach of contract claim doesn’t stand legally, and Apex hasn’t put forward any separate injury beyond the denial of policy benefits. Consequently, the Court deems summary judgment appropriate concerning Apex’s extra-contractual claims.


The Court granted Great Lakes’ motion for summary judgment as well as motion to exclude Ana Nguyen’s expert testimony, report, and estimate.

The Court has not arrived on an outcome for this case since the remaining issues involved in this case still await resolution.

Key Takeaways:

Expert testimony in insurance claims plays a critical role in establishing causation and substantiating claims within the policy coverage.

In this case, Nguyen’s expertise as an adjuster was essential in linking the property damage to a wind or hailstorm during the policy period. However, the Court excluded Nguyen’s opinions, finding them lacking in specificity and overly conclusory. Without Nguyen’s testimony, Apex struggled to provide substantial evidence supporting their claim of a covered loss.

The exclusion of Nguyen’s opinions left Apex reliant solely on Meghani’s deposition testimony, which fell short in establishing the damage as a covered loss within the policy period. While Apex contested the exclusion, arguing that pinpointing the exact date of loss wasn’t obligatory and emphasizing that reported dates fell within the policy period, this was insufficient without expert testimony to substantiate the claim.

The insurer, Great Lakes, reinforced their stance by presenting adjusters’ and an engineer’s assessments that attributed the roof leak to causes not covered under the policy. These findings, unchallenged by Apex, further undermined the assertion of a covered loss during the policy period.

Ultimately, the exclusion of crucial expert testimony weakened Apex’s position in demonstrating a covered loss, leading the court to rule in favor of Great Lakes on both the breach of contract and extra-contractual claims due to the absence of sufficient evidence and distinct injury beyond the denial of policy benefits.