United States District Court, S.D. Texas, Houston Division
H. Miller United States District Judge
before the court is defendant Allstate Vehicle and Property
Insurance Company's (“Allstate”) motion to
compel appraisal and abate proceedings. Dkt. 20. Having
considered the motion, response, reply, and applicable law,
the court is of the opinion that the motion should be
case arises from damage to plaintiff Howard Johnson II's
property during a storm in April 2016. Dkt. 1-1 at 9. Johnson
and Allstate disagree about the amount of loss and cost of
repairs to the property. Id. at 10-11. According to
Allstate, “the amount of damages caused by a covered
peril fell below [Johnson's] deductible.” Dkt. 20
at 2. Johnson argues that the property suffered $32, 551.73
in damages. Dkt. 21 at 2. The insurance policy addresses
these types of disputes and provides:
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.
The appraisers shall then determine the amount of loss,
stating separately the actual cash value and the amount of
loss to each item. If the appraisers submit a written report
of an agreement to you and to
us, the amount agreed upon shall be the
amount of loss. If they cannot agree, they will submit their
differences to the umpire. A written award agreed upon by any
two will determine the amount of loss.
Each party will pay the appraiser it chooses, and equally
bear expenses for the umpire and all other appraisal
Dkt. 20-1 at 33 (emphasis in original).
February 1, 2018, Allstate made a written demand for
appraisal. Dkt. 20-2. Johnson did not respond to that demand.
Accordingly, Allstate filed the instant motion, asking the
court to compel appraisal and abate the case. Dkt. 20.
Johnson opposes appraisal and abatement. Dkt. 21.
Law and Analysis
[c]ourt must apply the terms of the insurance contract as it
is written.” James v. Prop. and Cas. Ins. Co. of
Hartford, No. H-10-1998, 2011 WL 4067880, at *1 (S.D.
Tex. Sept. 12, 2011) (citing RSR Corp. v. Int'l Ins.
Co., 612 F.3d 851, 858 (5th Cir. 2010)). Here, the
appraisal clause clearly and unambiguously grants both the
insured and the insurer the right to demand an appraisal of
the loss. Dkt. 20-1 at 33. Under Texas law, appraisal clauses
are generally enforceable and have been upheld as a means for
determining loss. In re Universal Underwriters of Tex.
Ins. Co., 345 S.W.3d 404, 407 (Tex. 2011); State
Farm Lloyds v. Johnson, 290 S.W.3d 886, 889-89 (Tex.
2009). However, Johnson argues that the court should not
compel appraisal and abate the case because: (1) the
appraisal language prejudices his litigation rights; and (2)
he has the right to prove other elements of his claims
regardless of the appraisal. Dkt. 21.
argues that the appraisal language prejudices him because the
appraisal clause is not binding and “allows Allstate to
reject any part of the award based on its reservation that no
binding policy issues are determined during the appraisal
process.” Id. at 3. Johnson is incorrect. The
policy states that if the appraisers agree on the amount of
loss, “the amount agreed upon shall be the
amount of loss.” Dkt. 20-1 at 33 (emphasis added). If
the appraisers do not agree, they must submit their
differences to an umpire, and “[a] written award agreed
upon by any two will determine the amount of
loss.” Id. (emphasis added). Johnson points to
no policy provision, and the court is unaware of one, that
allows Allstate to reject the appraisal amount if it
disagrees with it.
also argues that he has the right to conduct discovery in
order to prove his other contract claims and
extra-contractual claims. Dkt. 21 at 4. The court agrees that
all of Johnson's claims will not necessarily be resolved
through the appraisal process. But appraisal is likely to
narrow, if not resolve, Johnson's breach of contract and
extra-contractual claims. See Cavazos v. State Farm
Lloyds, No. 7:14-CV-395, slip op. at 2 (S.D. Tex. Mar.
3, 2015). Notably, Johnson relies on a different order in
Cavazos to support the assertion that the case
should not be abated even if the motion to compel appraisal
is granted. Dkt. 21 at 4 (citing Cavazos, 2015 WL
8074063, at *4). But in Cavazos, the court granted a
motion to abate proceedings pending appraisal.
Cavazos, slip op. at 2-3 (S.D. Tex. Mar. 3, 2015).
According to the court, “[i]f the parties and the Court
continue to proceed on this case, it could ultimately result
in wasted time, money, and energy if the appraisal process
resolves the case or significantly narrows the issues.”
Id. at 2. The same holds true in the instant case.
Thus, Allstate's motion to compel appraisal and abate the
case is GRANTED.