549 S.W.3d 881
Tex. App.2018Background
- Jackson (insured) sued Allstate under an expedited Rule 169 action for roof and interior damage after Allstate denied substantive payments for two claims.
- Allstate conducted at least six inspections, removed and was remanded from federal court, deposed Jackson, engaged in discovery, and obtained a trial setting before compelling a seventh inspection and designating a new expert for trial preparation.
- After the seventh inspection, Allstate offered $24,000 to settle the entire case; Jackson rejected the offer; the next day Allstate demanded appraisal under the policy; Jackson refused to participate.
- Allstate moved to compel appraisal and to abate; the trial court found Allstate had waived its appraisal right by conduct inconsistent with invoking appraisal and by unreasonable delay from the point of impasse, and denied the motion.
- Allstate sought mandamus relief; the appellate court denied mandamus, holding the trial court did not abuse discretion, and that the cited policy endorsement was not a nonwaiver clause.
Issues
| Issue | Plaintiff's Argument (Jackson) | Defendant's Argument (Allstate) | Held |
|---|---|---|---|
| Whether insurer waived appraisal by conduct | Allstate’s repeated inspections, trial preparation, expert-designation delay, and delay after point of impasse show conduct inconsistent with appraisal and caused prejudice | Allstate argued no waiver because it demanded appraisal promptly after a new settlement rejection (August 17) and the endorsement prevents waiver findings | Court held Allstate waived appraisal by conduct and delay from point of impasse (no abuse of discretion) |
| When was the "point of impasse" concerning amount of loss? | May 9, 2017—Jackson’s third demand for $19,350.42 after rejecting Allstate’s $4,000 offer | Allstate contended impasse was August 16, 2017—after Jackson rejected the $24,000 settlement offer | Court held point of impasse occurred no later than May 9, 2017; Allstate’s later demand was untimely |
| Whether Jackson suffered prejudice from invoking appraisal late | Appraisal would cause delay, additional expense, loss of use of her chosen expert, difficulty finding unbiased appraisers, and disruption of agreed trial setting | Allstate argued Jackson did not show required prejudice | Court held Jackson demonstrated prejudice (delay, expense, tactical unfairness) |
| Whether policy endorsement constituted a contractual nonwaiver clause | Jackson: endorsement does not limit waiver or require writing; thus does not bar finding waiver | Allstate: endorsement ("Coverage Changes") operates as nonwaiver preventing waiver findings | Court held endorsement is not a nonwaiver clause and does not preclude finding waiver |
Key Cases Cited
- State Farm Lloyds v. Johnson, 290 S.W.3d 886 (Tex. 2009) (appraisal is a condition precedent to suit)
- Sun Exploration & Production Co. v. Benton, 728 S.W.2d 35 (Tex. 1987) (conditions precedent may be waived by conduct)
- G.T. Leach Builders, LLC v. Sapphire V.P., LP, 458 S.W.3d 502 (Tex. 2015) (waiver defined as intentional relinquishment of a known right)
- Jernigan v. Langley, 111 S.W.3d 153 (Tex. 2003) (implied waiver by conduct requires clear demonstration of intent)
- In re Universal Underwriters of Texas Ins. Co., 345 S.W.3d 404 (Tex. 2011) (acts constituting waiver must be inconsistent with the claimed right; unreasonable delay is a factor)
- In re Allstate County Mut. Ins., 85 S.W.3d 193 (Tex. 2002) (no adequate appellate remedy for erroneous denial of appraisal enforcement)
- Perry Homes v. Cull, 258 S.W.3d 580 (Tex. 2008) (prejudice may arise from delay, expense, or damage to legal position when finding waiver)
- Walker v. Packer, 827 S.W.2d 833 (Tex. 1992) (mandamus standard: clear abuse of discretion)
- In re Prudential Ins. Co., 148 S.W.3d 124 (Tex. 2004) (mandamus requires showing no adequate appellate remedy)