Ron Pounds v. Liberty Lloyd of Texas Insurance Company
528 S.W.3d 222
| Tex. App. | 2017Background
- Pounds owned a home insured by Liberty Lloyds; the policy covered wind/hail and set a $9,620 deductible for those perils and required appraisal if parties disagreed on amount of loss.
- Pounds filed a claim for storm damage on August 8, 2014; an adjuster inspected and Liberty Lloyds denied the claim on August 16, 2014, stating “no storm related damages were found.”
- Pounds sued for breach of contract and statutory/extra-contractual violations; Liberty Lloyds answered reserving its right to demand appraisal and later invoked the policy appraisal clause after mediation failed.
- Pounds refused to participate; the trial court compelled appraisal. The appraisers found Replacement Cost Value $15,161.73, depreciation $5,642.73, and Actual Cash Value (ACV) $9,519.00 — which is below the policy deductible.
- Liberty Lloyds moved for traditional summary judgment based on the appraisal award being below the deductible; the trial court granted summary judgment and entered final judgment for Liberty Lloyds.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Liberty Lloyds waived appraisal by denying the claim | Pounds: denial alone amounted to waiver of appraisal | Liberty Lloyds: denial did not waive appraisal; reserved rights in pleadings and correspondence | Court: No waiver; denial alone insufficient and Pounds failed to show prejudice |
| Whether Liberty Lloyds breached the insurance contract | Pounds: summary judgment premature because future repairs could exceed deductible and trigger payment | Liberty Lloyds: appraisal fixed ACV below deductible, so no present contractual obligation | Court: No breach; appraisal award binding and ACV < deductible, so no present payment owed |
| Whether Pounds can recover extra-contractual/statutory damages | Pounds: insurer’s investigation/denial violated statutes and DTPA; entitles him to damages | Liberty Lloyds: no right to benefits under policy so statutory/extra-contractual claims fail absent independent injury | Court: Extra-contractual claims fail because Pounds had no right to benefits and showed no independent injury |
| Whether prejudice must be shown to prove waiver of appraisal | Pounds: waiver by denial should not require prejudice showing | Liberty Lloyds: prejudice must be shown for implied waiver | Court: Prejudice is required; Pounds did not show prejudice |
Key Cases Cited
- In re Universal Underwriters of Tex. Ins. Co., 345 S.W.3d 404 (Tex. 2011) (appraisal clauses generally enforceable; waiver requires showing and prejudice may be relevant)
- State Farm Lloyds v. Johnson, 290 S.W.3d 886 (Tex. 2009) (appraisers can determine amount of loss even when insurer denies coverage)
- G.T. Leach Builders, Inc. v. Sapphire V.P., LP, 458 S.W.3d 502 (Tex. 2015) (waiver requires intentional relinquishment of known right)
- In re State Farm Lloyds, 514 S.W.3d 789 (Tex. App.—Houston [14th Dist.] 2017) (analysis that denial does not automatically waive appraisal; consider policy and circumstances)
- In re Slavonic Mut. Fire Ins. Ass’n, 308 S.W.3d 556 (Tex. App.—Houston [14th Dist.] 2010) (standard for reviewing motion to compel appraisal)
- Franco v. Slavonic Mut. Fire Ins. Ass’n, 154 S.W.3d 777 (Tex. App.—Houston [14th Dist.] 2004) (appraisal awards are binding and entitled to every reasonable presumption)
- Trelltex, Inc. v. Intecx, L.L.C., 494 S.W.3d 781 (Tex. App.—Houston [14th Dist.] 2016) (waiver is largely a matter of intent; implied waiver must be clearly demonstrated)