TOBY SHREVE AND SHERRI SHREVE Plaintiff-Appellants Cross-Appellees
STATE FARM FIRE AND CASUALTY COMPANY, ET AL. Defendant-Appellee Cross-Appellant
Appealed from the Fourth Judicial District Court for the
Parish of Ouachita, Louisiana Trial Court No. 13-0237
Honorable Daniel Joseph Ellender, Judge
ANTHONY J. BRUSCATO JOHN F. BRUSCATO Counsel for Appellant
Cross-Appellee Toby Shreve and Sherri Shreve.
DAVENPORT, FILES & KELLY By: Martin Shane Craighead
Counsel for Appellee Cross-Appellant State Farm Fire and
WILLIAM HENRY HALLACK, JR. DENNIS WOODFORD HALLACK Counsel
for Appellee Smith Builders, LLC
STONE, STEPHENS, and McCALLUM, JJ.
lawsuit results from a significant crack located in the
foundation of a house in Downsville, Louisiana, owned by Toby
and Sherri Shreve ("Shreves"). A jury found the
crack was caused by a tree falling on the house, which was
covered by their homeowner's insurance policy with State
Farm. The jury also found that State Farm, which had denied
the Shreves' claim on the basis that the crack was caused
by differential settlement, had been unreasonable, arbitrary,
and capricious in handling the claim. State Farm filed a
motion for a JNOV on the issue of State Farm's bad faith,
and the trial court granted the motion. The Shreves have
appealed the granting of the JNOV. We affirm.
Shreve has lived in the house since 1994, and Toby Shreve
began living there after their marriage in 2000. On October
9, 2009, a large oak tree fell across the right front of the
house causing extensive damages. At the time, State Farm
insured the Shreves' home.
Shreves selected Smith Builders, a contractor in State
Farm's Premier Service Program, to repair the damage.
While the house was being repaired, the Shreves lived in a
motel and then in a house they rented before returning to
their own house in January of 2010. In February of 2010, one
of Smith's workers came to the house to repair kitchen
cabinets which had pulled away from the wall.
December of 2011, the Shreves heard what they described as a
loud "gunshot" sound in the house. They were unable
to determine the origin of the sound. In April of 2012, the
heel of Sherri's shoe went through the linoleum floor in
the master bathroom. A large crack running the entire width
of the rear of the house was eventually discovered. The
Shreves did not see the crack when the flooring in the entire
house was replaced in 2000, or when the flooring in the
hallway, dining room, and kitchen was replaced after the tree
fell on the house.
August 10, 2012, Sherri notified her State Farm agent of the
claim regarding the crack. Later that month, State Farm wrote
to the Shreves that there was a question as to whether State
Farm was obligated under the policy for the crack, and that
the cause of the crack was being investigated. The policy
excluded coverage for losses caused by "settling,
cracking, shrinking, bulging, or expansion of pavements,
patios, foundation, walls, floors, roofs or ceilings[.]"
Farm contacted Donan Engineering to evaluate the cause of the
crack in the slab and to provide an indication of the scope
of the repair job. Timothy Hassenboehler, a forensic engineer
for Donan, visited the house on August 22, 2012. The Shreves
were present during his visit and pointed out areas of
concern. Sherri recalled that by that time the crack had
grown, the floor had become uneven and doors would not shut.
prepared a report on August 27, 2012. Hassenboehler noted in
his report that the crack in the bathroom was one inch wide
and three inches deep, without any reinforcing steel in it.
The crack, which spanned the entire width of the south-facing
house, was one to two feet from the north wall of the house.
The crack could be felt under the flooring in the kitchen,
master bedroom, and adjacent bedroom.
also noted in his report that drywall at numerous locations
in the house was cracked or delaminated, many closet and
cabinet doors were out of plumb, there was a large hump in
the living room floor, the hallway floor was not level, and
soft spots could be felt under the floor in the living room
observed a large diagonal crack in the brick veneer on the
west side of the house, with the crack widening as it went
up. There were numerous additional cracks on this wall.
Hassenboehler also observed that the concrete slab had many
cracks, with the west side having the most amount of
cracking. It was obvious that repairs involving application
of a sealant had been attempted in the horizontal cracks on
the west side of the house, while numerous vertical cracks on
that side showed no signs of repair. Hassenboehler, who saw a
void that was one inch deep under the grade beam on the north
side of the house, also found the subsurface soils at this
wall to be moist.
attached to his report a statewide drought monitor map of
Louisiana from the USDA dated August 21, 2012. This map
showed Ouachita Parish as being under a severe drought.
Hassenboehler found that the slab had been significantly
damaged throughout the house, with damage to the interior
portion of the slab as well as to the exterior grade beam. He
concluded that: (1) North Louisiana had been undergoing a
severe to extreme drought; (2) the drought caused
differential settlement; (3) long-term differential
settlement had dislodged the plumbing under the house; (4)
the influx of additional water from leaking plumbing caused
erosion of the soils under the slab; (5) the erosion caused
the exterior grade beams of the slab to settle; (6) the
settlement caused the concrete slab to crack; and (7) the
erosion will continue and the crack will grow larger until
the plumbing is repaired. He further concluded that the
cracked concrete was not a result of damage from the fallen
September 4, 2012, Brian Griffin, a State Farm associate,
wrote to the Shreves that State Farm had determined that the
damage to their house's concrete slab was caused by
ground movement and, therefore, not covered by their policy.
Shreves filed suit against State Farm, Smith Builders, and
Sonnier & Fisher Public Adjusters, LLC, on January 24,
2013. State Farm answered and, by amended answer filed on
January 22, 2014, urged the affirmative defense that the suit
was untimely under a provision of the insurance contract
which required any suit against State Farm to be filed within
one year from the date of loss or damage. The policy further
provided that to conform with state law, when a policy
provision was in conflict with the applicable law of the
state in which the policy was issued, the law of the state
2, 2014, State Farm filed a motion for summary judgment in
which it argued, in part, that there was no genuine issue of
material fact that the Shreves failed to comply with the
policy provision requiring when suit was to be filed. In
their opposition, the Shreves argued in part that the suit
was not untimely because of prescription or the terms of the
insurance contract: La. R.S. 22:868(C) prohibited policy
provisions that purported to reduce an insured's time to
file suit under a policy to a period of less than two years.
At the hearing on the motion for summary judgment, State
Farm's attorney argued that nonetheless the claim was not
brought within 24 months. On October 23, 2014, the trial
court denied the motion for summary judgment.
2014, the Shreves hired Foy Gadberry, a Ouachita Parish civil
engineer who performs code inspections for several parishes,
to evaluate their claim. He first visited their house in June
or July of 2014. Gadberry believed that the crack in the
foundation was caused by the tree falling on the house. His
theory was that when the tree fell, its weight lowered the
front of the slab and pushed the rear of the slab up.
deposition of Hassenboehler was taken on January 15, 2015. On
March 30, 2015, the Shreves filed a second supplemental and
amended petition, asserting that Hassenboehler's report
was insufficient to conclude that the tree did not cause the
cracks. They asserted that the denial of coverage was without
just cause, and they were entitled to damages, penalties and
attorney fees for State Farm's breach of its duties of
good faith and fair dealing as well as its affirmative duty
to adjust their claims.
1, 2015, the court granted the Shreves' motion to dismiss
their claims against the defendants associated with Sonnier
State Farm learned that Gadberry had an opinion contrary to
Hassenboehler, it retained Dr. Jerry Householder, a
consulting engineer and retired engineering professor from
and Dr. Householder visited the house on March 13, 2015.
Householder and Gadberry each took a soil sample from a depth
of 18 inches at the same location. Gadberry took an
additional soil sample from another location.
Householder and Gadberry had sieve tests run on the samples
to determine how much clay and silt was in the soil. Soil
analysis showed it was 17% sand and the remainder was a
combination of clay and silt. Clay soil is very susceptible
to shrinking and swelling because it is volatile regarding
moisture content. Gadberry also had an Atterberg limits test
performed to determine the plasticity index and liquid limits
of the soil. The test revealed that it was a fat clay with
Householder wrote to State Farm's counsel on May 31,
2015, regarding his conclusions. Dr. Householder had reviewed
the petitions, Hassenboehler's report, photos,
Hassenboehler's deposition, and Gadberry's affidavit
and deposition. He stated that it was his understanding that
Gadberry believed the tree falling on the house caused the
crack in the slab in December of 2010. He agreed that if the
front of the house was forced down, then the soil beneath the
slab could cause some indeterminate amount of flexural stress
in the slab.
Householder further noted that Gadberry opined that over
time, the tension gradually weakened the slab to the point
that it finally cracked at its weakest point. Dr. Householder
countered that there was no engineering principle to support
that theory. First, concrete does not weaken with age, but
actually strengthens with age. Second, concrete does not
weaken because it is under stress. Third, if the slab was
being forced upward into a bow, the soil beneath the slab
would have to be pushing up on the slab with a force greater
than it did before the tree fell. It is well settled that
clay soil such as at the site will consolidate under load.
The consolidation would relieve the force and flexure in the
Householder also noted that he had reviewed rainfall records
for Calhoun, Louisiana, from October 2009 through December
2010. These records showed rainfall of 42.22 inches, or a
23.45-inch deficit for that period. A deficit that great
would cause the water table to lower. Dr. Householder found
that the cracks in the brick masonry were consistent with
differential settlement, and that cracks in concrete slabs
often accompany differential movement. He acknowledged that
it can sound like a gunshot when concrete cracks.
Householder opined that any flexural stress in the slab due
to the tree pushing the front of the foundation into the
ground would have been greatest immediately after the impact
and that to the extent it might have existed, the flexural
stress decreased over time due to the consolidation of the
clay, assuming that the clay was under stress from the slab.
He concluded that there was no engineering or scientific
evidence that the crack in the slab was caused by or
influenced in any way by the tree falling on the front of the
house. He added that drought conditions can cause
differential settlement, and that differential settlement can
cause slab cracks.
Parish received 22 inches of rain in March of 2016. Gadberry
went to the house once a week for four weeks during that
month and took elevation readings of the slab to see if it
was moving up or down. He found no appreciable difference,
and he concluded that the soil was not highly volatile or
highly susceptible to shrinking or swelling.
matter proceeded to trial. A jury trial was conducted over a
week in February of 2017.
testified at trial as an expert in the field of civil
engineering. He believed that the "gunshot" heard
in December of 2011 was probably the sound of a rafter in the
attic breaking, although it would have been associated with
the slab breaking. He estimated that the foundation cracked
in November or December of 2011.
also testified that while concrete is strong in compression,
it is weak in tension, and the tree caused tension in the top
of the concrete. The lowering of the front of the slab caused
the middle to buckle, which then put pressure on the back of
the slab. The crack occurred when the foundation could no
longer take the tensile stress. He acknowledged that houses
typically have a thicker slab known as a grade beam along the
perimeter. The grade beam is normally 12 inches wide and
20-24 inches deep, while the rest of the slab is typically
only four inches thick. The concrete's compression
capacity is the same throughout a house slab, but the load
carrying capacity differs depending on the slab's
recognized that when the load capacity of a concrete
structure is exceeded to the point it fails, it usually fails
immediately. The tree caused an impact load, which meant it
caused a greater load than if it had been placed there. The
load was removed when the tree was removed. If an impact load
is applied with enough force to cause a failure, the higher
probability is that the failure will occur when the impact
did not think the soil had a high enough clay content to
shrink and swell to an extent that it would have caused the
crack. In his opinion, the soil samples were not taken from a
reliable depth because a core of 18 inches does not tell what
the soil is like for the next five to six feet. He also
maintained that the samples did not show what the soil was
actually like under the foundation.
rainfall data for Ouachita Parish from 1999 to 2012 that had
been compiled by the University of Louisiana-Monroe, Gadberry
determined that there had not been a drought from 2010 to
2012. The university is located about 18 miles from the
house. Gadberry believed that if the foundation was going to
crack from a ...