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Abdalla v. Farmers Insurance Exchange

Court of Appeals of Texas, Seventh District, Amarillo

May 14, 2018

MAHMOUD ABDALLA, APPELLANT
v.
FARMERS INSURANCE EXCHANGE, APPELLEE

          On Appeal from the 153rd District Court Tarrant County, Texas Trial Court No. 153-269720-13, Honorable Susan H. McCoy, Presiding

          Before QUINN, C.J., and CAMPBELL and PARKER, JJ.

          MEMORANDUM OPINION

          PER CURIAM.

         Mahmoud Abdalla (Abdalla) appeals from a final summary judgment denying him recovery against Farmers Insurance Exchange. He sued Farmers alleging breach of contract and various extra-contractual claims. The dispute emanated from a loss covered under a policy Abdalla acquired from Farmers. The loss was attributable to water damage. The extent of the damage and insurance proceeds payable was ultimately submitted to appraisers in accordance with policy terms. An umpire appointed by the trial court eventually (1) found the appraisal developed by Farmers's appraiser (the Albright appraisal) to be the "more sound and well supported appraisal" and (2) designated the actual cash value of the loss at $345, 664.21. Farmers tendered the sum, less applicable deductions and prior payments, within seven days of the umpire's decision. Yet, Abdalla believed the umpire was wrong. This inspired him to move the trial court to both vacate the award and appoint a new umpire. The ground he cited to support those avenues of relief was "mistake"; that is, he asserted that the award was "clearly a product of mistake."

         Also pending at the time Abdalla filed his motion was that of Farmers seeking summary judgment. Upon considering each, the trial court denied Abdalla's requests and "affirmed" the umpire's award. And, while it also denied aspects of the motion filed by Farmers, it granted that portion attacking Abdalla's cause of action for breached contract. In other words, it declared that Farmers proved as a matter of law that it had not breached the insurance policy. That left the extra-contractual causes of action pending for disposition. In effort to defeat them, Farmers tendered a second motion for summary judgment containing both traditional and no-evidence aspects. That motion was granted, resulting in the execution of a final summary judgment denying Abdalla recovery on all of his claims. This appeal followed.

         Abdalla's two appellate issues attack the decisions to deny his motion to vacate the umpire's award and to grant summary judgment favoring the insurer. We affirm. [1]

         Motion to Vacate

         We first consider argument related to the motion to vacate the award. Abdalla contends that the trial court erred in denying his motion because the award was a product of mistake. We disagree.

         Mistake is one of the few grounds upon which an insurance appraisal award may be vacated. See Garcia v. State Farm Lloyds, 514 S.W.3d 257, 265 (Tex. App.-San Antonio 2016, pet. denied) (stating that Texas courts have recognized three grounds on which the results of an otherwise binding appraisal may be set aside and they are when the award fails to comply with the policy, was made without authority, or resulted from fraud, accident, or mistake); Barnes v. W. Alliance Ins. Co., 844 S.W.2d 264, 267 (Tex. App.-Fort Worth 1992, writ dism'd by agr.) (stating that an award entered by appraisers and an umpire can be disregarded only if it was made without authority or made as the result of fraud, accident, or mistake). Mistake applies when the award fails to speak what the appraisers intended. Garcia, 514 S.W.3d at 269 That is, it applies when the complainant establishes that the appraisers were operating under a mistake of fact which resulted in an unintended award. See Providence Wash. Ins. Co. v. Farmers Elevator Co., 141 S.W.2d 1024, 1026-27 (Tex. Civ. App.-Amarillo 1940, no writ); Gulf Ins. Co. v. Pappas, 73 S.W.2d 145, 146 (Tex. Civ. App.-San Antonio 1934, writ refd).

         Excluded from the scope of mistake, though, are those situations where one appraiser simply disagrees with an umpire's decision to adopt the estimates of the other appraiser. See MLCSV10 v. Stateside Enters., Inc., 866 F.Supp.2d 691, 702 (S.D. Tex. 2012) (wherein one appraiser objected to the umpire's adoption of the other appraiser's estimates because the latter allegedly failed to support his estimates). As said in Stateside, "[a]n umpire must often choose between two competing values." Id. Indeed, such would only seem logical, for there would seldom be a need for the intervention of a third party if the decision of the two appraisers was always unanimous. In view of this role played by the umpire, his decision to select between competing viewpoints or appraisals "does not mean that the appraisal resulted from accident or mistake." Id.

         The trial court in Stateside was not alone in opining that a mere difference of opinion failed to illustrate a mistake. We said as much in Providence Washington. There, reference was made to the difference between what a trial court would have awarded and what the appraiser awarded in effort to illustrate a mistake. We observed that such was simply a matter of opinion, not an instance of mistaken intention. Providence Wash. Ins. Co., 141 S.W.2d at 1026-27.

         Also worth mentioning, is the decision in Garcia. There, the insured contended that the appraisal award was the result of mistake because it omitted damages from a prior estimate and, therefore, failed to "'provide a correct appraisement of the full amount of loss.'" Garcia, 514 S.W.3d at 269. The reviewing court turned to Stateside for assistance in gauging the accuracy of Garcia's allegation. Upon doing so, it concluded that evidence of the mere omission of some aspect of damage from the appraisal was not sufficient to create an issue of fact regarding the presence of a mistake, as that term is contemplated within the realm of settling insurance disputes through the appraisal process. Id. at 270.

         The sum and substance of the mistake urged by Abdalla here likens to those in Stateside, Providence, and Garcia. It involved both a disagreement between appraisers about the extent of damage and the omission from the ultimate award of damages that Abdalla's appraiser thought should be included. Simply put, the appraisers disagreed on the extent of the loss suffered by Abdalla, and the umpire chose one appraisal over the other. Such evinced a split of opinions which the umpire was called upon to settle. So, in following the lead provided us in Stateside and Providence, we too conclude that a disagreement like that at bar falls short of illustrating the umpire operated under a mistake of fact resulting in an unintended award. That means, then, the trial court did not err in denying Abdalla's motion to vacate.

         Summary ...


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