Opinion ID: 2167431
Heading Depth: 2
Heading Rank: 2

Heading: Are causation disputes a question of liability or damages?

Text: Even if the parties' dispute involves causation, that does not prove whether it is a question of liability or damages. Causation relates to both liability and damages because it is the connection between them. For example, the Texas Pattern Jury Charges place causation in both the broad-form liability questions, [28] and in the broad-form damage questions that limit damages to those resulting from a particular occurrence, [29] and exclude damages due to other causes. [30] In the abstract, it is hard to say whether causation is more a question of liability or damages. But in actual cases, causation usually falls into one category or the other. Thus, when different causes are alleged for a single injury to property, causation is a liability question for the courts. For example, in Wells v. American States Preferred Insurance Co., appraisers assessed foundation damage due to plumbing leaks (a covered peril) as 0 but damage due to settling (an excluded peril) as $22,875.94. [31] The Dallas Court of Appeals set aside the appraisal, holding appraisers could decide the amount of damage but not what caused it. [32] Appraisers can decide the cost of repairs in this context, but if they can also decide causation there would be no liability questions left for the courts. By contrast, when different types of damage occur to different items of property, appraisers may have to decide the damage caused by each before the courts can decide liability. For example, in Lundstrom v. United Services Automobile Ass'n, the appraisers assessed $4,226.19 for damages due to water (a covered peril) but made no finding for damages due to mold (as to which coverage was disputed). [33] Rejecting the argument that appraisal is barred whenever causation factors into the award, the court of appeals affirmed the water damage award, and rendered mold damage moot by finding no coverage. [34] In this context, courts can decide whether water or mold damage is covered, but if they can also decide the amount of damage caused by each, there would be no damage questions left for the appraisers. The same is true when the causation question involves separating loss due to a covered event from a property's pre-existing condition. Wear and tear is excluded in most property policies (including this one) because it occurs in every case. If State Farm is correct that appraisers can never allocate damages between covered and excluded perils, then appraisals can never assess hail damage unless a roof is brand new. [35] That would render appraisal clauses largely inoperative, a construction we must avoid. [36] This was the conclusion we reached in Gulf Insurance Co. of Dallas v. Pappas , a case in which a fire worsened pre-existing sags in the floors and roof of a building. [37] The parties hotly disputed how much the floors sagged before the fire, and whether the building's interior should be repaired or completely replaced to restore it to its previous condition. [38] The court of appeals held these issues were for the appraisers rather than the jury, [39] and by refusing the writ we adopted that opinion. [40] If appraisers cannot take pre-existing wear and tear into consideration in valuing the amount of loss, then we should have reversed it instead. Indeed, appraisers must always consider causation, at least as an initial matter. An appraisal is for damages caused by a specific occurrence, not every repair a home might need. When asked to assess hail damage, appraisers look only at damage caused by hail; they do not consider leaky faucets or remodeling the kitchen. When asked to assess damage from a fender-bender, they include dents caused by the collision but not by something else. Any appraisal necessarily includes some causation element, because setting the amount of loss requires appraisers to decide between damages for which coverage is claimed from damages caused by everything else. This of course does not mean appraisers can rewrite the policy. No matter what the appraisers say, State Farm does not have to pay for repairs due to wear and tear or any other excluded peril because those perils are excluded. But whether the appraisers have gone beyond the damage questions entrusted to them will depend on the nature of the damage, the possible causes, the parties' dispute, and the structure of the appraisal award (as discussed more fully below). State Farm cannot avoid appraisal at this point merely because there might be a causation question that exceeds the scope of appraisal.