In Re Universal Underwriters of Texas Insurance Co.
345 S.W.3d 404
| Tex. | 2011Background
- Grubbs Infiniti (insured) suffered hail damage to buildings; Universal Underwriters paid initial claim $4,081.95.
- Universal sent an engineer to reinspect; issued a $3,000 supplemental payment for roof scuff marks.
- Grubbs received the inspection report and did not pursue further payment or inquiries for four months.
- Grubbs sued Universal for underpayment and related claims; Universal invoked the appraisal clause.
- Grubbs argued waiver due to eight-month delay before demanding appraisal; court analyzes waiver standards.
- Texas Supreme Court conditionally grants mandamus to compel appraisal, addressing waiver and prejudice requirements.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether insurer waived appraisal right by delay | Grubbs contends eight-month delay signals waiver. | Universal argues delay alone does not prove waiver without prejudice or impasse. | Delay must show impasse and prejudice; no waiver here. |
| What constitutes the point of impasse for appraisal | Grubbs asserts impasse existed when negotiations stalled after reinspection. | Universal contends impasse requires mutual futility of negotiations. | Impasse is the point negotiations become irretrievably unproductive; appeal to impasse as reference. |
| Role of prejudice in establishing waiver | Grubbs argues prejudice from delay is unnecessary to prove waiver. | Universal contends prejudice must be shown to waive appraisal. | Prejudice is required to establish waiver of appraisal right. |
| Whether waiver rule should apply to appraisal clauses as to coverage disputes | Grubbs claims Texas cases do not require prejudice for waiver of appraisal. | Waiver is equitable and may require prejudice, aligning with arbitration/notice precedents. | Prejudice requirement is adopted; waiver requires impasse plus prejudice. |
Key Cases Cited
- Scottish Union & Nat'l Ins. Co. v. Clancy, 8 S.W. 630 (Tex. 1888) (waiver requires intent or conduct inconsistent with claiming right)
- Del. Underwriters v. Brock, 211 S.W. 779 (Tex. 1919) (insurer cannot claim waiver for biased appraiser)
- Am. Cent. Ins. Co. v. Bass, 38 S.W. 1119 (Tex. 1897) (waiver depends on intent to relinquish right)
- In re Gen. Elec. Capital Corp., 203 S.W.3d 314 (Tex. 2006) (waiver requires intent and conduct inconsistent with asserting the right)
- In re ADM Investor Servs., 304 S.W.3d 371 (Tex. 2010) (waiver analysis in arbitration context)
- In re Allstate Cnty. Mut. Ins. Co., 85 S.W.3d 193 (Tex. 2002) (mandamus to enforce appraisal rights when necessary to defend breach)
- EZ Pawn Corp. v. Mancias, 934 S.W.2d 87 (Tex. 1996) (waiver of arbitration requires prejudice if delay)
- In re Slavonic Mut. Fire Ins. Ass'n, 308 S.W.3d 556 (Tex. App.—Houston [14th Dist.] 2010) (impasse and prejudice framework in waiver analysis)