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Click here for the full text of this decision FACTS:This suit involves a dispute over whether foundation damage to appellees C. Robert Mason and Deborah Mason’s house is covered under appellant Allstate Texas Lloyds’s homeowners insurance policy. The policy excludes coverage for loss caused by “settling, cracking, bulging, shrinkage, or expansion of foundations, walls, floors, ceilings.” Excepted from this exclusion is loss caused by “Accidental Discharge, Leakage or Overflow of Water or Steam from within a plumbing, heating or air conditioning system or household appliance.” At issue is whether foundation and other related damages to the Masons’ house were caused by a plumbing leak. Allstate denied coverage, and the Masons sued for breach of contract, the breach of the duty of good faith and fair dealing, unconscionable conduct, and unfair or deceptive acts or practices under the Texas Deceptive Trade Practices Act and the Texas Insurance Code. Following a jury trial, the trial court rendered judgment on the jury verdict, awarding the Masons $163,159.76 in actual damages, $88,561.97 in statutory damages, $74,600 in attorney’s fees, $49,216.02 costs in pre- and post-judgment interest and costs, and $3.5 million in exemplary damages. HOLDING:The court reverses the trial court’s award of exemplary damages and renders judgment that the Masons take nothing on their claims for breach of the duty of good faith and fair dealing, unconscionable conduct, and unfair or deceptive act or practice. The court affirms the trial court’s judgment of $163,159.76 for breach of contract, $88,561.97 for statutory damages under article 21.55 of the Texas Insurance Code, $74,600 for attorney’s fees, and $49,216.02 for pre- and post-judgment interest. Allstate’s argues the trial court erred in admitting into evidence Jim Linehan’s testimony. Linehan, the Masons’ engineering expert, opined that all the damages to the Masons’ house were the result of a plumbing leak under the west hall bathroom. Allstate contends that this expert testimony was unreliable because Linehan did not rule out other plausible causes of the damage to the house and exclude those causes with reasonable certainty. Specifically, Allstate focuses on Linehan’s failure to determine the cause of the plumbing leak under the house and to adequately address whether the house’s pre-existing foundation problems were the true cause of the damage. The court holds that the trial court did not abuse its discretion in denying Allstate’s motion to strike Linehan’s testimony. The court concludes that evidence supporting the finding that a plumbing leak caused the foundation damage is not so weak or the evidence to the contrary so overwhelming as to require that the jury’s verdict on the breach of contract claim be set aside. The court holds there was factually sufficient evidence for the jury to conclude that Allstate breached the insurance policy. Based on the evidence available to Allstate at the time it denied the Masons’ claim, the court holds that there is no evidence suggesting that Tolson’s investigation was unreliable and that Allstate acted unreasonably in its reliance on his investigation in denying the Masons’ claim. The court concludes that there is no evidence that Allstate acted in bad faith when it denied the Masons’ claim. Thus, there is no evidence to support the jury’s verdict that Allstate breached its duty of good faith and fair dealing. The court sustains Allstate’s legal sufficiency challenge to the jury’s finding of breach of the duty of good faith and fair dealing. OPINION:Day, J.

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