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In re Allstate Vehicle and Property Insurance Co.

Court of Appeals of Texas, Ninth District, Beaumont

February 22, 2018

IN RE ALLSTATE VEHICLE AND PROPERTY INSURANCE COMPANY

          Submitted on January 26, 2018

         Original Proceeding County Court at Law No. 2 of Montgomery County, Texas Trial Cause No. 17-08-10039-CV

          Before McKeithen, C.J., Kreger and Horton, JJ.

          OPINION

          PER CURIAM.

         Allstate Vehicle and Property Insurance Company (Allstate) seeks mandamus relief from the trial court's decision denying its motion to compel an appraisal pursuant to the appraisal clause in Pamela Bailey's homeowners policy. We conditionally grant Allstate's petition, and direct the trial court to vacate its order denying Allstate's motion and enforce the appraisal clause in Bailey's policy.

         Background

         Shortly after Bailey insured her home for property damages with Allstate in April 2015, Bailey's home was damaged in a storm. Although Allstate was given an estimate showing that the home needed $13, 776[1] in repairs, Allstate determined that the home suffered only $2, 766 in damages. After applying Bailey's deductible, Allstate advised Bailey that it would pay her $766 for the "storm related damages identified by Allstate in connection with the reported loss[.]"

         In July 2017, Bailey's attorney wrote Allstate a demand letter. Based on an estimate included with the letter, [2] Bailey's attorney demanded that Allstate pay Bailey $11, 776, an amount Bailey's attorney based upon an estimate that accompanied his demand letter, less Allstate's prior payment and Bailey's deductible. Bailey's attorney also demanded that Allstate pay penalties in the amount of $3, 405 on Bailey's claim together with attorney's fees and expenses associated with his work on Bailey's case of $3, 533. With respect to appraisal, the demand letter states:

If you wish to appraise this loss under the policy's appraisal condition, please notify us of the identity of your appraiser within twenty (20) days of your receipt of this letter. Otherwise we intend to move forward, in reliance on your decision, with [litigation] as outlined below.

         Approximately forty days later, Allstate responded to the letter, advising Bailey's attorney that it was "not in agreement on the amount of loss claimed by your client as set out in your letter, and respectfully declines to pay your [$18, 713] demand." Allstate also pointed out that Bailey's policy included a no action clause and that the clause did not allow Bailey to file suit unless Bailey had fully "[complied] with all policy terms[.]" Allstate's letter was silent regarding whether it intended to invoke its right to an appraisal regarding Bailey's property damage claim.

         In August 2017, Bailey sued Allstate, alleging claims based on theories of breach of contract, misrepresentation, failing to pay Bailey's claim promptly, and bad faith. Allstate answered Bailey's suit in September 2017. In November 2017, Allstate invoked the appraisal clause and notified Bailey's attorney of the name of the individual that it had chosen as its appraiser. When Bailey did not respond to Allstate's demand for an appraisal, Allstate filed a motion asking that the trial court compel an appraisal. The appraisal provision in Bailey's homeowners policy provides:

Appraisal
If you and we fail to agree on the amount of loss, either party may make written demand for an appraisal. Upon such demand, each party must select a competent and impartial appraiser and notify the other of the appraiser's identity within 20 days after the demand is received. The appraisers will select a competent and impartial umpire. If the appraisers are unable to agree upon an umpire within 15 days, you or we can ask a judge of a court of record in the state where the residence premises is located to select an umpire.

         Bailey filed a written response to Allstate's motion to compel in December 2017. In her response, Bailey argued that by waiting until after she filed suit to invoke its right to appraisal, Allstate had waived its appraisal rights. Additionally, Bailey argued that Allstate's request for appraisal was "an impermissible request to compel specific performance under the policy." ...


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