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Pounds v. Liberty Lloyds of Texas Insurance Co.

Court of Appeals of Texas, Fourteenth District

August 1, 2017

RON POUNDS, Appellant
v.
LIBERTY LLOYDS OF TEXAS INSURANCE COMPANY, Appellee

         On Appeal from the 215th District Court Harris County, Texas Trial Court Cause No. 2014-53921

          Panel consists of Justices Boyce, Busby, and Wise.

          OPINION

          J. Brett Busby Justice

         This case concerns whether an insurer waived appraisal of a homeowner's insurance claim by denying it and, if not, whether an appraisal award supported summary judgment against the owner's contractual and extra-contractual claims. Appellant Ron Pounds purchased a home insurance policy from appellee Liberty Lloyds of Texas Insurance Company. Pounds submitted a claim for storm damage, which Liberty Lloyds denied on the ground that "no storm related damages were found." Pounds then sued Liberty Lloyds. When the parties were unable to resolve their dispute at mediation, Liberty Lloyds invoked its right to an appraisal under the policy. Pounds resisted appraisal, and the trial court granted Liberty Lloyds's motion to compel. The appraisers eventually agreed that Pounds's home had experienced covered damage as a result of the storm and agreed on the amount of the loss. Liberty Lloyds moved for summary judgment on Pounds's claims, which the trial court granted.

         Pounds raises three issues on appeal. In his first issue, he argues that the trial court erred in compelling appraisal because Liberty Lloyds waived its right to appraisal by initially denying his claim. We overrule this issue because (a) Pounds failed to establish that Liberty Lloyds's denial, standing alone, was a knowing waiver of the right to an appraisal; and (b) Pounds failed to establish that he was prejudiced as a result of Liberty Lloyds' initial denial of his claim.

         Pounds argues in his second and third issues that the trial court erred in granting Liberty Lloyds's motion for summary judgment on his breach-of-contract claim and extra-contractual claims. We overrule both issues because Liberty Lloyds established as a matter of law that it did not breach the insurance contract, which, under the facts of this case, also defeats Pounds's extra-contractual claims. We therefore affirm the trial court's final judgment.

         Background

         The facts in this case are undisputed. Pounds purchased a home insurance policy from Liberty Lloyds. The policy covered damage to property caused by wind and/or hail. The policy provided that Liberty Lloyds would "pay no more than the actual cash value of the damage until actual repair or replacement is complete." The policy also set the deductible for damage caused by wind or hail at $9, 620.00.

          The policy included an appraisal provision:

E. Appraisal
If you and we fail to agree on the amount of loss, either may demand an appraisal of the loss. In this event, each party will choose a competent and impartial appraiser within 20 days after receiving a written request from the other. The two appraisers will choose an umpire. If they cannot agree upon an umpire within 15 days, you or we may request that the choice be made by a judge of a court of record in the state where the "residence premises" is located. The appraisers will separately set the amount of loss. If the appraisers submit a written report of an agreement to us, the amount agreed upon will be 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 set the amount of loss. . . .

         The policy did not set a time limit for invoking appraisal. The policy also provided that "a waiver or change of a provision of this policy must be in writing by [Liberty Lloyds] to be valid."

         On August 8, 2014, Pounds made a claim under the policy, alleging that a wind and hail storm had caused damage to his property. An adjuster inspected the property on August 14, 2014, and determined that there was no storm-related damage. Liberty Lloyds sent a letter to Pounds two days later denying the claim because "no storm related damages were found." The letter concluded by informing Pounds that if he had any questions or concerns about his claim, he could contact Liberty Lloyds's claims representative by phone or email.

         Pounds responded to the denial letter by suing Liberty Lloyds. Pounds asserted claims for breach of contract and violations of the Prompt Payment of Claims statute, the Texas Insurance Code, and the Deceptive Trade Practices Act. Liberty Lloyds answered, stating (among other things) that it did not waive, and expressly reserved, its right under the policy to demand an appraisal to determine the actual cash value of Pounds's property damage claims. In a November 17, 2014 letter, Liberty Lloyds informed Pounds that "nothing herein should be ...


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