United States Court of Appeals for the Fifth Circuit ____________ United States Court of Appeals Fifth Circuit No. 22-10662 ____________ FILED April 2, 2024 Carl Schnell; Mary Ellen Schnell, Lyle W. Cayce Clerk Plaintiffs—Appellants,

versus State Farm Lloyds,

Defendant—Appellee. ______________________________

Appeal from the United States District Court for the Northern District of Texas USDC No. 4:21-CV-558 ______________________________ Before Dennis, Engelhardt, and Oldham, Circuit Judges. James L. Dennis, Circuit Judge: After a hailstorm damaged their home’s tiled roof, Plaintiff- Appellants Carl and Mary Ellen Schnell filed insurance claims with their home insurer Defendant-Appellee State Farm Lloyds (“State Farm”). While State Farm accepted coverage for certain claims, it denied coverage for others, including the claim that the City of Fort Worth required the Schnells to replace their whole roof, rather than just the damaged tiles. The Schnells sued, and the district court granted summary judgment to State Farm. We VACATE in part, AFFIRM in part, and REMAND. Case: 22-10662 Document: 60-1 Page: 2 Date Filed: 04/02/2024

No. 22-10662

I. The Schnells owned a home in Fort Worth, Texas, which had a roof covered in concrete tiles manufactured by Monier Lifetile. On April 11, 2017, a wind and hailstorm damaged the Schnells’ roof. At the time of the storm, the Schnells had a homeowner’s insurance policy with State Farm. The Schnells’ insurance policy covered the typical “accidental direct physical loss” to their home. However, the Schnells’ policy also covered increased repair costs due to building code enforcement under the policy’s Building Ordinance or Law provision, known as “Option OL.” Option OL stated in relevant part: 2. Damaged Portions of Dwelling. When the dwelling covered under COVERAGE A – DWELLING is damaged by a Loss Insured we will pay for the increased cost to repair or rebuild the physically damaged portion of the dwelling caused by the enforcement of a building, zoning or land use ordinance or law if the enforcement is directly caused by the same Loss Insured and the requirement is in effect at the time the Loss Insured occurs. 3. Undamaged Portions of Damaged Dwelling. When the dwelling covered under COVERAGE A – DWELLING is damaged by a Loss Insured we will also pay for: a. the cost to demolish and clear the site of the undamaged portions of the dwelling caused by the enforcement of a building, zoning or land use ordinance or law if the enforcement is directly caused by the same Loss Insured and the requirement is in effect at the time the Loss Insured occurs; and b. loss to the undamaged portion of the dwelling caused by enforcement of any ordinance or law if:

2 Case: 22-10662 Document: 60-1 Page: 3 Date Filed: 04/02/2024

No. 22-10662

(1) the enforcement is directly caused by the same Loss Insured; (2) the enforcement requires the demolition of portions of the same