United States District Court, S.D. Texas, Houston Division
H. Miller United States District Judge.
before the court is defendant Allstate Texas Lloyd's
(“Allstate”) motion to compel appraisal and abate
proceedings and motion to compel inspection. Dkts. 19, 20.
Having considered the motions, response, reply, and
applicable law, the court is of the opinion that the motion
to compel appraisal should be GRANTED and the motion to
compel inspection should be DENIED AS MOOT.
case arises from damage to plaintiff Michael Miller's
property during a storm in April 2016. Dkt. 1-2 at 3. Miller
and Allstate disagree about the amount of loss to the
property. Id. at 4-5. According to Allstate,
“the covered loss fell below the deductible.”
Dkt. 20 at 2. Miller argues that the property suffered $23,
446.51 in damages. Dkt. 1-2 at 5. The insurance policy
addresses these types of disputes and provides:
If you and we fail to agree on the actual cash value, amount
of loss[, ] or the cost of repair, either can make a written
demand for appraisal. Each will then select a competent,
independent appraiser and notify the other of the
appraiser's identity within 20 days of receipt of the
written demand. 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 district
court of a judicial district where the loss occurred. The two
appraisers will then set the amount of loss, stating
separately the actual cash value and loss to each item.
If the appraisers fail to agree, they will submit their
difference to the umpire. An itemized decision agreed to by
any two of these three and filed with us will set the amount
of the loss. Such award shall be binding on you and us.
Each party will pay its own appraiser and bear the other
expenses of the appraisal and umpire equally.
Dkt. 20-1 at 31-32.
March 8, 2018, Allstate made a written demand for appraisal.
Dkt. 20-2. Miller did not comply with the appraisal
requirements in the policy. Accordingly, Allstate first filed
a motion to compel inspection of the property. Dkt. 19. Then,
Allstate filed a motion to compel appraisal and abate the
case. Dkt. 20. Miller 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 31-32. 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, Miller argues that the court should not
compel appraisal and abate the case because: (1) he has the
right to prove other elements of his claims regardless of the
appraisal; and (2) he would be prejudiced by requiring
appraisal at this time. Dkt. 21.
argues that he has the right to conduct discovery in order to
prove his other contract claims and extra-contractual claims.
Dkt. 21 at 3. The court agrees that all of Miller's
claims will not necessarily be resolved through the appraisal
process. But appraisal is likely to narrow, if not resolve,
Miller'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, Miller
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 3 (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, the case
should be abated if the court compels appraisal.
in making a waiver argument, also asserts that he will be
prejudiced by appraisal because Allstate waited so long to
invoke the appraisal clause. Dkt. 21 at 4. “Waiver
requires intent, either the ‘intentional relinquishment
of a known right or intentional conduct inconsistent with
claiming that right.'” In re Gen. Elec. Capital
Corp., 203 S.W.3d 314, 316 (Tex. 2006) (quoting Sun
Expl. & Prod. Co. v. Benton, 728 S.W.2d 35, 37 (Tex.
1987)). “Waiver is an affirmative defense; the burden
to show waiver is on the party challenging the right to
appraisal.” James, 2011 WL 4067880, at *1.
“In order to establish waiver . . . a party must show
that an impasse was reached, and that any failure to demand
appraisal within a reasonable time prejudiced the opposing
party.” Universal Underwriters, 345 S.W.3d at
fails to meet his burden for two reasons. First, a demand for
appraisal must be made within a reasonable time from impasse,
not just mere disagreement. Id. at 409, 412. An
impasse is reached when there is “a mutual
understanding that neither [party] will negotiate
further.” Id. at 410. Miller argues that
“[t]he impasse occurred prior to Plaintiff filing suits
when Defendants determined that Plaintiff's home
sustained minimal storm damage.” Dkt. 21 at 2. The
court disagrees. Texas courts have rejected the notion that
impasse occurs at “the first sign of
disagreement.” Univer ...