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In re GuideOne Mutual Insurance Co.

Court of Appeals of Texas, Tenth District

May 3, 2017

IN RE GUIDEONE MUTUAL INSURANCE COMPANY

         Original Proceeding

          Before Chief Justice Gray, Justice Davis, and Justice Scoggins

          MEMORANDUM OPINION

          TOM GRAY Chief Justice

         GuideOne Mutual Insurance Company brings this petition for writ of mandamus to compel the trial court to vacate its order denying GuideOne's Motion to Compel Appraisal and to direct the trial court to order the appraisal to proceed under the procedure authorized by contract. Because the trial court abused its discretion in denying the motion to compel, GuideOne's petition for writ of mandamus is conditionally granted.

         Background

         This proceeding arises from a dispute between an insurance company, GuideOne, and its insured, D.S. Patel d/b/a Western Motel, regarding payment for claimed property damage to the motel from a storm. GuideOne made two payments to Patel for the damages, but Patel contends the payments are inadequate. After Patel filed suit against GuideOne and mediation was unsuccessful, GuideOne invoked its right to appraisal pursuant to the insurance contract. GuideOne filed a motion to compel appraisal after Patel refused to voluntarily proceed with the appraisal process. After a hearing, the trial court denied the motion to compel appraisal.

         Appraisal Clause

         In its sole issue, GuideOne argues the trial court abused its discretion by failing to enforce a contractual appraisal clause in the parties' insurance contract. Appraisal clauses, commonly found in homeowners, automobile, and property policies in Texas, provide a means to resolve disputes about the amount of loss for a covered claim. In re Universal Underwriters of Tex. Ins. Co., 345 S.W.3d 404, 406-07 (Tex. 2011); State Farm Lloyds v. Johnson, 290 S.W.3d 886, 888 (Tex. 2009). These clauses are generally enforceable, absent illegality or waiver. In re Universal Underwriters, 345 S.W.3d at 407.

         Trial courts have no discretion to ignore a valid appraisal clause. State Farm Lloyds v. Johnson, 290 S.W.3d 886, 888 (Tex. 2009). A trial court abuses its discretion in failing to enforce a valid appraisal clause and such abuse of discretion cannot be remedied by appeal. See In re Universal Underwriters of Tex. Ins. Co., 345 S.W.3d 404, 412 (Tex. 2011); In re Allstate Cnty. Mut. Ins. Co., 85 S.W.3d 193, 195-96 (Tex. 2002).

         Patel did not argue at the trial court, nor does he argue here, that the appraisal clause is illegal. Instead, Patel argued that GuideOne waived the ability to assert the use of the clause. GuideOne's argument before us is two-fold: first, GuideOne contends it did not waive the appraisal clause by delaying the invocation of it; and second, GuideOne argues it could not waive the appraisal clause because the insurance contract included a "non-waiver clause." Because it is dispositive of this case, we review GuideOne's second argument first.

         Non-Waiver Clause

         The insurance contract between the parties contains the following non-waiver clause:

         12. Waiver or Change of Provisions.

This policy contains all of the agreements between you and us concerning the insurance afforded. The first Named Insured shown in the Declarations is authorized to make changes in ...

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