In Re Allstate County Mutual Insurance Co.
85 S.W.3d 193
Tex.
2002
Check Treatment

*1 Company, Mid- Insurance Mutual renders the exclusion by Dallas Fire Company, Mid- Century Insurance We warned injury surplusage. intended Company Tex Century duty Insurance And our against this Cowan.47 Casualty Insurance as, Progressive provisions, effect to all contract give County Mutual Progressive Company, meaningless.48 render none Progressive Company, Insurance as narrow- Finally, to read “occurrence” Company, Insurance Northwestern suggests Fire obviates ly as Dallas Insurance Progressive Preferred many exclusions need for other standard Progressive Company, Southeastern in- For policies. CGL often contained Progressive Company, and Insurance construction, stance, under Dallas Fire’s Company, Rela Specialty Insurance cov- for exclusions there would be no need tors. battery or sexual miscon- ering assault and No. 00-1301. claims would claims. For these duct Dallas “occurrences” under constitute Texas. Court of Supreme interpretation. Fire’s narrow Nov.

Argued Ill Aug. Decided peti- respect King, Jankowiak’s With Consequent- an “occurrence.” alleges defend

ly, Dallas Fire has the appeals’ the court of

King. We reverse King requests only remand

judgment. claims for

to the trial court to consider fees, the trial court

attorneys’ something granted that it Dal- given

did not consider motion. summary judgment

las Fire’s

Thus, the case to that court for we remand proceedings

further consistent with

opinion.

In re COUNTY MUTUAL ALLSTATE COMPANY, In- Allstate

INSURANCE

demnity Company, Insurance Allstate Property

Company, and Ca- Allstate Company,

sualty Allstate Insurance Lloyd’s, Insurance Farmers

Texas County

Exchange, Texas Farmers Am., Ins. Co. 48. Balandran S.W.2d at 828. 47. 945 Safeco (Tex.1998). *2 mont, Rogers, Thomas T. Jackson & Walk- Jordan, er, Murphy, Bell & Sean Daniel Austin, Brown, Reagan Fulbright M. & Giesber, Jaworski, Rachel Edward B. Sue Adams, Jaworski, LLP, Fulbright & Hous- ton, Germer, Lawrence L. Germer & Gertz, Beaumont, for Relators. Green, E. Toups, Hart Mitchell A. Wel- Terrell, Beaumont, H. Toups ler Green & Houston, Godfrey, Godfrey, Lee Susman Respondent. for opinion Justice ENOCH delivered the Court, in which Chief Justice PHILLIPS, HECHT, Justice Justice OWEN, and Justice O’NEILL Justice joined. JEFFERSON The trial court this case determined appraisal provision personal that an in a policy promulgated automobile insurance Department the Texas of Insurance is arbitrate, such, and as agreement it is agreement is unenforceable because Thus, the trial court against public policy. But refused to enforce the clause. provision appraisal, concerns an not arbi- tration, and is not unenforceable for gave. reason the court Because trial court abused its discretion and rela- appeal, tors have no the writ of manda- conditionally grant we mus. stolen, car was

Plaintiff Terri Shields’s Lu- plaintiffs Washington’s Renita and involved cilia Hernandez’s vehicles were All- companies, accidents. Their insurance state, Farmers, Progressive, respec- that the vehicles were tively, determined Information engaged total losses and CCC Services, Inc., the values of to determine that the allege the totaled cars. Plaintiffs companies directed CCC to insurance Johnson, Close, for the fraudulently generate L. Leanne Hol- low values Howard vehicles, Horton, Tucker, intentionally un- Beau- totaled that CCC Orgain, lis Bell & to the binding vehicles, appraisers that the in- two their dervalued vehicle’s value. plain- offered companies thereby surance than full values their tiffs less suit, filed the insurance After plaintiffs ac- and Hernandez Washington vehicles. plea and then filed companies answered offers. companies’ the insurance cepted invoke and motion to abatement *3 motion, yet any compen- has received trial court denied praisal. Shields The when finding appraisal provision, policy. sation under her agreement, as an arbitration considered that the insurance plaintiffs allege The un- The was unenforceable. defendants misrepresented coverage their companies from relief successfully sought mandamus that actual cash value by representing They petitioned then appeals. the court of when in paid policies, would be under the this Court for relief. companies’ and the insurance fact CCC’s inaccurate, unreliable, conduct resulted II valuations, payment of less and biased trial conclusion The court’s than full value. Under the theo- arbitration appraisal was an provision systematically ry, companies the insurance was error. agreement and unenforceable vehicles, knowing undervalue that because distinguished apprais between This Court costly appraisal process of the insureds a hundred al and clauses over arbitration unlikely challenge the valuations. National years are In Scottish Union & ago. they Clancy, v. we concluded allegations, pleaded Based on these Insurance Co. concealment, that while arbitration determines fraud and fraudulent Texas rights parties, apprais liabilities of the Trade Act and Deceptive Practices Texas have the merely parties al “binds violations, Insurance Code breach of the extent or of the determined amount loss dealing, faith good of and fair 1 way.” apprais a We particular held contract, and civil conspiracy. Texas courts al clauses are enforceable.2 policies The insurance contain recognize have this distinct continued clause, may be appraisal an which invoked ion,3 as has the United States Court by party, determining either vehicle’s Fifth Circuit.4 And Texas Appeals for the if the value insurer and insured dis- clauses appraisal courts have enforced agree. party Each hires its own apprais- since that decision.5 appraisers agree er. If the two cannot III value, they select an additional an umpire, judge or a district

praiser by clear failure “[A] correctly appoint appraisers apply one if the cannot court to or the law analyze will sub- will an abuse of discretion” umpire. signed by on an A decision constitute agree Peters, 5.See, 5, 630, (1888). 386 e.g., Falls 8 Glens Ins. Co. 1. 71 Tex. 529, (Tex.1965); Vanguard Under- id. at 631-32. 2. See Smith, 448, 451 writers Ins. Co. 1999, Terra (Tex.App.-Amarillo pet.); In re no Fraiman, See, e.g., Ins. Co. v. Standard Fire Co., 741, (Tex.App.- Nova Ins. 343, (Tex.Civ.App.-Houston Fire, pet.); no Standard Texarkana writ); Huntington Corp. [14th Dist.] 345; Lloyd’s, 898 see also S.W.2d at Constr. Hartford v. Inwood F.2d at 1063. n.r.e.). (Tex.Civ.App.-Dallas writ ref'd Teachworth, Lloyd’s Ins. Co. Hartford (5th Cir.1990). F.2d ject to correction writ of mandamus that the failure to order the will when the relator adequate remedy has no severely compromise vitiate or the defen- by appeal.6 holdWe that the trial court dants’ defenses to those claims.9 by determining abused its discretion IV appraisal plaintiffs’ poli-

cies was an parties arbitration clause and unen- The in this case contracted for mandamus, issuing forceable. But before appraisal they disagreed about the we must damaged property’s determine whether relator value. Texas courts appellate remedy. distinguished between arbitration years. for over a hundred And situation, analogous In an we have held they have enforced provisions discovery that denial of “going to the *4 over that same length of time. Under heart of a party’s may case render the law, Texas the court’s conclusion that appellate remedy inadequate.”7 As to the the appraisal clause was one for arbitra- plaintiffs’ claim, breach of contract the tion and unenforceable was an error of parties agreed have the contracts’ law, constituting abuse of discretion. praisal by clause to the method which to That abuse of discretion denies the devel- determine whether a breach has occurred. opment proof going of to the heart of a is, if That the determines that party’s case and cannot be remedied the vehicle’s full value is what the insur- appeal. Accordingly, conditionally we offered, ance company there would be no grant mandamus relief. breach of contract. min- Accordingly, at a imum, denying will vitiate While the trial court’s of denial ability defendants’ to defend the error, the motion to invoke appraisal was breach of contract claim. the ap- Because grant the failure to the motion to abate is praisals go to the heart of the plaintiffs’ subject event, any not to mandamus.10 In claim, breach of contract we need not de- proceedings need not be abated while cide here significance of the appraisals appraisal goes forward. While the to each of the remaining claims. trial court deny discretion to appraisal, the court have does some discre Packer, Walker this Court reaf- timing appraisal.11 as to the of the principle firmed the that “an appeal will trust that the trial comply We court will not an adequate remedy be where the with opinion; only this the writ will issue party’s ability present a viable claim or it fails to do so. at trial severely defense is vitiated or com- promised by discovery the trial court’s er- BAKER dissenting Justice filed a 8 A ror.” refusal to enforce the appraisal opinion, in which Justice HANKINSON process prevent here will the defendants joined. obtaining independent from valuations could counter at least the Justice RODRIGUEZ did not of breach contract claim. We conclude in the participate decision. Packer, (Tex.

6. Walker v. Black, 10. See Abor 1992). (Tex. 1985). 7. Id. at 843. See, Nova, 11. 992 S.W.2d at e.g., In re Terra 742. Id. See, id.; e.g., Supply Moye, Able Co. v. (Tex. 1995). remedy, extraordinary is an BAKER damus dissenting Justice filed may super- issue mandamus opinion, in which Justice HANKINSON Court a trial court’s incidental joined. vise or correct remedy when there is an rulings again, ignores Once estab Court law, appeal. such as a normal See precedent lished mandamus back rolls Helicopters, Wittig, Ltd. Canadian the clock to a time our before decision (Tex.1994); Walker, 827 (Tex. Packer, Walker v. 827 S.W.2d 838 839-40. 1992). Here, agree I with the when it court abused its discretion II. ANALYSIS that the is an determined Missing opinion is an from Court’s arbitration agreement. unenforceable description accurate of But, agree that an again, once cannot plaintiffs claims this case. The appeal inadequate fraud, fraudulent conceal- sued Allstate for relief is warranted. Because the Court ment, of Texas Deceptive violations express requirement that ignores Walker’s Act Texas Trade Practices and the Insur- (“Allstate”) companies the insurance estab Code, good faith ance inadequate lish an appellate *5 civil dealing, conspiracy, and fair relief, I obtain mandamus dissent. plaintiffs’ allega- contract. The all claims—includ- underlying tions these ADEQUATE REMEDY I. the the breach of contract claim that ing AT LAW—APPEAL n solely upon granting man- relies for “only A to writ of mandamus will issue damus—relate to how Allstate the correct a clear or the abuse of discretion it praisal company employs, CCC Informa- by imposed violation of a law when Services, tion value cars before Allstate by adequate remedy there no other is initially a cash settlement a cov- offers Ap law.” Johnson Fourth Court of plaintiffs’ pleadings ered loss. The con- (Tex.1985). peals, 700 S.W.2d Allstate, with CCC tend concert long recognized This Court has that we Services, un- systematically Information may relief not issue mandamus when stage at the initial valuation dervalues cars provides plain, adequate, law another knowing low and offers this amount complete remedy. Iley Hughes, See inaccurate, unre- the initial valuations “are (Tex.1958). Tex. 311 S.W.2d liable, valua- generating and biased toward person seeking The a requirement cash reports well below the actual tion an mandamus relief establish lack of anticipat- or cost” and replacement value adequate appellate remedy is a “funda will ing disputing that claimants not bother mental tenet” of mandamus practice. plaintiffs argue that All- the offer. The Walker, at As the Court 840. is and consti- state’s conduct fraudulent stated, in repeatedly mandamus is agreement pay its cash tutes a breach of extraordinary remedy, tended to be losses at the initial valua- value for covered only in limited available circumstances. stage. Walker, appellate S.W.2d at 840. An the nature of Refusing acknowledge inadequate merely is not because claims, remarkably terse may delay more or than expense it involve discussion, that Allstate Ltd. the Court holds obtaining mandamus relief. See CSR (Tex.1996); reme- Link, appellate does have Walker, deci- man- from trial court’s erroneous dy at Because appraisal

sion that the an unen- allegations of contract turn on whether provision. plain- forceable arbitration Allstate did in fact undervalue the The Court tiffs’ at initial stage. concludes that cars valuation court’s order is Court, According to the “if the analogous to an denying discovery order “ ” determines that the vehicle’s full value is ‘going to the heart party’s of a case.’ company [initially] what the insurance of- Walker, (quoting fered, there would be no 843). breach of con- explains S.W.2d at The Court tract.” 85 S.W.3d at 196. But the Court’s this is “the parties agreed because analysis entirely ignores that plaintiffs the contracts’ clause to meth- simply do not seek to recover the value for od which to determine whether a losses, particular their all that which is breach has occurred.” 85 S.W.3d at 196. Rather, appraisal process produce. will Court, According to the the trial court’s plaintiffs damages arising seek from refusal to appraisal provision enforce the fraud, alleged statutory Allstate’s viola- defenses, will vitiate Allstate’s because it tions, And, and breach of contract. prevents “obtaining Allstate from the inde- above, discussed all these claims relate to pendent valuations that could counter at damages how Allstate values car losses or least breach of contract at the stage. initial valuation and offer In claim.” 85 S.W.3d at 196. words, plaintiffs other challenge the In determining that the trial court’s or is, process initial valuation All- how —that denying der would vitiate or stage state values cars at that and whether defenses, severely compromise Allstate’s obligation pay Allstate breaches its cash the Court relies on Walker. 85 stage. value at that Walker, that, we held in the dis Moreover, the Court’s unfounded belief context, covery “an appeal will not be an *6 appraisal finally the valuations will adequate remedy ability where the party’s resolve whether Allstate breached its con present to a viable claim or defense at trial obligation tractual to cash pay value for severely compromised by is vitiated or the damage losses or at the initial valuation Walker, trial court’s discovery error.” stage demonstrates a fundamental misun Thus, S.W.2d at 843. whether the exclud derstanding only about our case law discovery ed goes par to the heart of the involving appraisal pro insurance contract ty’s case appellate so that relief is inade visions, but about when the also Court has Walker, quate pertinent. is See First, authority to issue mandamus relief. 843; Jampole Touchy, S.W.2d at 673 long ago, rejected position the (Tex.1984). But, still, the an appraisal’s outcome establishes lia relator must “establish the effective denial that, bility when we held unlike arbitra opportunity develop of a reasonable to the provision “only provision, appraisal case, merits of his or her that the trial so the to have the extent or parties binds judicial would be a waste of resources.” particu amount of the loss determined in a Walker, Otherwise, at way, leaving question liability lar the of the relator has not shown that determined, such if necessary, loss to be court’s error vitiated a viable claim or by the courts.” Scottish Union & Nat’l adequate appellate defense so that no rem Clancy, Ins. Co. v. 71 Tex. 8 Walker, edy exists. 827 S.W.2d at 843. (Tex.1888); Hennessey see also Here, position the is that no Vanguard Court’s Ins. denied). exists,

adequate appellate remedy writ (Tex.App.-Amarillo because Thus, writing impermissibly to the plaintiffs’ Allstate’s defenses the breach Court’s for covered losses pay actual value incorrectly Allstate about how ment to advises systematically acted successfully the or Allstate may against it defend whether fraudulently during the initial valuation of contract claim. breach process. Second, cursory conclusion the Court’s Furthermore, re- granting disposi- appraisal

that the valuations are valuations will appraisal lief the the breach of contract because plaintiffs’ tive of plaintiffs’ at least one of the disregards claim that Allstate can other- counter claims, parses breach of plaintiffs’ to the Court develop wise defenses from the other contract The Court contract claim allegations. breach of so, assumes, recognizes analysis expla- doing or the Court simply without claims. nation, compro- does not refusing that the erroneous order court’s order to the fraud-based appraisal to vitiates mise Allstate’s defenses provision enforce the However, assuming the severely compromises ability or Allstate’s claims. even authority grant mandamus against to itself Court has to defend However, purported effect claim. other relief based on an order’s contract claims, underlying wholly advisory writing, on one of the several than Court’s so is absolutely that the decision to do here based there is no indication Court’s process’ only faulty assumption that the breach of appraisal outcome is its develop can its claim necessitates the means which Allstate contract Instead, process. plaintiffs’ pleadings contractual defenses. has not Allstate the plaintiffs’ demonstrated that it lacks other reason- demonstrate that breach of opportunities develop able to evidence contract claim is Allstate breached its plain- agreement value for covered pay about cars’ values to counter cash allegations stage; the initial during tiffs’ about Allstate’s breach of losses valuation obligation its the breach of pay allegations underlying cash value Walker, duty un- process. initial valuation See .contract claim refer to Allstate’s Indeed, appraisal provision. The Court even der the provide plain- authority would none that evidence to refute cites no find —and tiffs’ claim that Allstate breached its that the obli- exists—for its conclusion gation entirely or pay replacement process’ dispositive cash value outcome *7 cost, asserts, Fur- as Court whol- the breach of contract claim here. Court ly ther, authority can for the ignores that Allstate obtain informa- there is no Court’s initial that Allstate cannot defend it- process assumption about the valuation and against cars’ values other self the breach of contract claim through means. Allstate through other means. Because expert example, For Allstate can obtain trial court’s not established testimony process about the valuation order vitiates its defenses so the actual about losses counter resources, judicial a would be waste Thus, the trial plaintiffs’ allegations. adequate appellate exists. See nothing court’s order is more than inci- Therefore, Walker, at 843. S.W.2d ruling deny dental that does not Allstate a must relief. deny Court mandamus its de- opportunity develop reasonable Ultimately, the trial court’s order refus- against fenses claims. is, Moreover, provisions ing can to enforce the because the cars’ values be means, against in claims through ap- light of the established other Allstate, ruling. an incidental As the praisal process certainly dispositive is acknowledges, is well settled agree- Allstate its it whether breached Texas that Therefore, insurance contract appraisal mus.” purpose the Court’s real provisions are typically enforceable. Clan- making parties go is to avoid through 1888, cy, 8 631. Since expense when we time and of a trial on its Clancy, decided appeals our courts of merits and then appeal the trial court’s Walker, consistently correctly In applied Texas decision. we expressly held law on appraisal ordinary longer clauses on that this is no ap- valid reason for peal.1 Consequently, concluding appellate well-established Tex- relief is inadequate. Walker, authority demonstrates that 827 S.W.2d at 842 (disapproving Cleveland, court’s refusal Jampole, enforce the any other author- corrected, readily ity can be they implied neces- to the extent that a reme- sary, on appeal. dy by appeal inadequate is merely because

it might delay involve more or cost than mandamus). III. THE ROAD OF NO RETURN ... ONCE AGAIN Today, opinion the Court’s returns us to this disfavored doctrine and will cause ‘Yesterday ... in yesterday.” believe pellate courts to “embroil themselves un- Lennon/McCartney necessarily in incidental pre-trial rulings of The Court obviously yester- believes in Walker, the trial courts.” day, opinion because its revives a concept (quoting Braden v. Downey, 811 expressly we disapproved (Tex.1991)). Walker 922, Because the Packer. The clearly law establishes Court continues to lead us down this Road appraisal clauses are not analogous to un- Return, of No I dissent. Thus, provisions.

enforceable arbitration

this case involves a trial court’s erroneous

decision legal question about a settled

which an appeal readily available. here, Court, justify

order to skillfully so,

while avoiding saying revives

the more lenient mandamus standard first Ward,

articulated Cleveland v. 116 Tex.

1, (1926), 285 S.W.

remedy by appeal “equally must be conve-

nient, beneficial, and effective as manda- See, Peters, e.g., Glens Falls Ins. Co. Alliance Ins. (Tex. 1965); Export Ins. Co. (Tex.App.-Fort Worth writ dism’d Axe, (Tex. Com.App.1933, agr.); Terry, American Cent. Ins. Co. v. *8 holding approved); Pennsylvania Fire Ins. Co. 658, (Tex.Civ.App.-Texarkana S.W. 659-660 Estate, 593, Waggoner v. W.T. 39 S.W.2d 595 1927, writ); Kirby, no Boston Ins. Co. v. 281 (Tex.Com.App.1931); American Cent. Ins. Co. 275, writ); (Tex.Civ.App.1926, S.W. no 162, (Tex. Terry, Com.App. 26 S.W.2d Shacklett, 583, Aetna Ins. Co. v. 57 S.W. 1930, holding approved); In re Terra Nova writ); (Tex.Civ.App.1900, no American Fire Co., 741, (Tex.App.-Tex Ins. 992 S.W.2d Stuart, 395, (Tex.Civ. Ins. Co. v. 1999) (orig.proceeding); Hennessey arkana writ); App.1896, no Manchester Fire Ins. Co. 794, (Tex. Vanguard Ins. Simmons, 607, Tex.Civ.App. 35 S.W. denied); App.-Amarillo writ Providence (1896, ref'd); writ see also Hartford Lloyds Crystal City Indep. Ins. Co. v. Sch. Teachworth, Lloyd’s Ins. v.Co. 898 F.2d Dist., (Tex.App.-San (5th Cir.1990). writ); Antonio Barnes v. Western