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Floyd Circle Partners, LLC v. Lloyds

Court of Appeals of Texas, Fifth District, Dallas

July 24, 2017


         On Appeal from the County Court at Law No. 5 Dallas County, Texas Trial Court Cause No. CC-16-00806-E

          Before Justices Bridges, Myers, and Stoddart



         In this case involving an appraisal award under an insurance policy, plaintiff Floyd Circle Partners, LLC (FCP) appeals a summary judgment in favor of defendant Republic Lloyds. In two issues, FCP contends the trial court (1) erred in granting summary judgment, and (2) abused its discretion in denying FCP a continuance to allow it to obtain discovery to respond to the Republic's amended summary judgment motion. We affirm the trial court's judgment.


         FCP owns four commercial buildings on Floyd Circle in Dallas. The property was insured under a policy issued by Republic effective from June 1, 2012 to June 1, 2013. In June 2012, FCP made a claim for damage to the properties caused by a storm.[1] In September 2012, Retha Welch, a claims representative for Republic, informed FCP in writing that Republic completed its investigation of the claim. Welch's letter stated that an adjustor inspected the property and prepared an estimate, and the letter specified the amount of the loss. The letter further informed FCP that no payment would be made because the amount of the loss was less than the deductible. In response, Stephen Brooks, a representative of FCP, sent Welch written demand for $362, 521.22 for hail damage to the properties. Brooks's letter stated that, in the event Republic did not make the payment within fourteen days, the letter was to be considered a formal demand to exercise the appraisal clause in the insurance contract. Brooks provided the name and contact information for FCP's chosen appraiser.

         The policy contained the following provision regarding appraisal:

If we and you disagree on the value of the property or the amount of loss, either may make written demand for an appraisal of the loss. In this event, each party will select a competent and impartial appraiser and notify the other of the appraiser selected within 20 days of such demand. The two appraisers will select an umpire. If they cannot agree within 15 days upon such umpire, either may request that selection be made by a judge of a court having jurisdiction. Each appraiser will state the amount of loss. If they fail to agree, they will submit their differences to the umpire. A decision agreed to by any two will be binding as to the amount of loss. Each party will:
a. Pay its chosen appraiser; and
b. Bear the other expenses of the appraisal and umpire equally.

         If there is an appraisal:

a. You will still retain your right to bring a legal action against us, subject to the provisions of the Legal Action Against Us Commercial Property Condition; and
b. We will still retain our right to deny the claim.

         The policy further provided that Republic would pay for covered loss or damage within five business days after an appraisal award was made.

         Republic did not meet FCP's demand for payment and selected its own appraiser. The two appraisers were unable to agree on an umpire, so in early June 2014, the judge of the 134th District Court appointed one at Republic's request.

         FCP filed this lawsuit three days after an umpire was appointed. In its live pleading, FCP brought claims against Republic for breach of contract, negligence, negligent misrepresentation, and violations of chapter 541 of the Texas Insurance Code. Republic answered with a general denial. It later filed a motion to compel appraisal and plea in abatement, asserting that the appraisal process was a condition precedent to filing suit. FCP opposed the motion to compel appraisal for various reasons.

         On September 10, 2014, the trial court granted Republic's motion to compel appraisal and abated the case for sixty days in order for the appraisal to be carried out. The order noted the parties agreed in open court to restart the appraisal process by appointing new appraisers and selecting an umpire.

         Republic appointed Justin Whedbee as its new appraiser, and FCP appointed Jim Koontz. On February 25, 2015, Whedbee and Koontz signed an appraisal award. Although the award names an umpire, Whedbee and Koontz agreed on the amount of loss, so the umpire was not needed and did not sign the award. The award references the addresses of the properties involved and a claim number. It states, "We, the appraisers in the above captioned matter having carefully reviewed all information, have determined the award for all measurement issues submitted in this matter pursuant to the terms and conditions of the Appraisal Protocol." It describes the award as "The Actual Cash Value of any such hail damage to the roof that resulted from the Hail Storm occurring during the period of coverage provided by the Policy. This is a roof repair of all damaged areas." A total of $73, 000 was awarded for two of the four properties: $30, 535.95 for 13438 Floyd Circle and $42, 464.05 for 13535 Floyd Circle. The award indicates the other two insured properties did not sustain damage.

         After Republic sent payment of the award to FCP, it filed a traditional motion for summary judgment. Republic asserted that it was entitled to judgment as a matter of law because its payment of the appraisal award precludes FCP's breach of contract claim. Republic also sought summary judgment on FCP's extra-contractual claims. Republic attached as summary judgment evidence various documents, including the insurance policy, the appraisal award, a letter from Chuck Street to FCP's attorney, and copies of two checks payable to FCP. In Street's letter, dated March 4, 2015, Street, Republic's senior claims representative, informed counsel that Republic was enclosing two checks totaling $59, 314.50 in payment of the appraisal award less the deductible for each location. Republic also relied on Street's affidavit, which included a statement that on March 24, 2015, he sent a letter to FCP's counsel enclosing full payment of the appraisal award.

         Thereafter, FCP served notice of its intention to depose Welch, Street, and "Person or Persons with REPUBLIC LLOYDS with the most knowledge of the claims made the basis of this suit" on April 21, 2015. Republic filed a "motion to quash depositions and motion for protective order." At the same time, FCP moved for continuance of Republic's motion for summary judgment until such time as FCP has an adequate time to conduct discovery.

         The record reflects that the trial court held a hearing on May 1, 2015, but we do not have a record of it. In letter to the court following the hearing, FCP argued Republic's summary judgment motion must be denied due to Street's statement in his affidavit that he paid the appraisal award on March 24, 2015, more than five days after the appraisal award. Republic responded with a letter informing the court that March 24, 2015, was a typographical error in the affidavit. The correct date was March 4, 2015, the date on the letter itself and on the checks tendered to FCP. The trial court notified the parties that the matters heard in the May 1 hearing remained under ...

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