in Re: Guideone National Insurance Company
05-15-00981-CV
| Tex. App. | Aug 27, 2015Background
- GuideOne insured Sherman Hospitality under policies covering fire and wind/hail damage; GuideOne paid $260,549.29 for a fire loss but denied coverage for wind/hail in July 2014.
- Sherman Hospitality sued in September 2014. The trial court ordered mediation, which failed; GuideOne did not request appraisal until April 2015 (one week after mediation).
- GuideOne moved to compel appraisal and to abate the case; the trial court denied the motion.
- GuideOne sought mandamus relief from the court of appeals, arguing the insurer’s policy allowed it to demand appraisal and that the trial court abused its discretion by denying the motion.
- The court analyzed when the right to demand appraisal accrues, the doctrine of waiver by delay after an impasse, and the effect of policy anti-waiver language.
Issues
| Issue | GuideOne's Argument | Sherman Hospitality's Argument | Held |
|---|---|---|---|
| Whether GuideOne waived the right to appraisal by delaying its demand until months after denying the wind/hail claim and after suit was filed | GuideOne contended it retained the contractual option to invoke appraisal and had not waived it | Sherman argued GuideOne reached an impasse by denying the claim and then waited unreasonably long to invoke appraisal, so it waived the right | Court held GuideOne waived appraisal by unreasonably delaying after impasse; mandamus denied |
| When the right to demand appraisal accrues (impasse timing) | GuideOne implied appraisal could be sought later even during litigation | Sherman argued the right accrues at impasse (when further negotiation is futile), which here occurred when GuideOne denied the claim and suit followed | Court reiterated that the right accrues at impasse and must be invoked within a reasonable time after impasse |
| Whether policy anti-waiver/endorsement language prevents waiver of appraisal by delay | GuideOne relied on policy language requiring endorsements to amend or waive policy terms, arguing appraisal cannot be waived absent endorsement | Sherman argued that the clause does not make appraisal a condition precedent to suit and does not prevent a finding that the insurer elected not to exercise the option | Court treated the anti-waiver language as inapplicable to prevent waiver here because appraisal was an optional remedy, not a condition precedent to suit |
Key Cases Cited
- In re Universal Underwriters of Texas Ins. Co., 345 S.W.3d 404 (Tex. 2011) (appraisal right accrues at impasse and must be invoked within a reasonable time)
- State Farm Lloyds v. Johnson, 290 S.W.3d 886 (Tex. 2009) (appraisal clause binds parties to a particular method for determining amount of loss; appraisal favored and typically precedes suit)
- In re Prudential Ins. Co., 148 S.W.3d 124 (Tex. 2004) (mandamus relief requires showing trial court clearly abused its discretion and lack of adequate appellate remedy)