                                   In The
                              Court of Appeals
                     Seventh District of Texas at Amarillo

                                   No. 07-16-00304-CV


                         CHRISTOPHER HALL, APPELLANT

                                           V.

        GERMANIA FARM MUTUAL INSURANCE ASSOCIATION, APPELLEE

                           On Appeal from the 181st District Court
                                   Potter County, Texas
               Trial Court No. 102599-B, Honorable John B. Board, Presiding

                                   October 13, 2017

                            MEMORANDUM OPINION
                  Before QUINN, C.J., and CAMPBELL and PIRTLE, JJ.

      This appeal involves property insurance, damage to the insured’s property, the

insurer’s attempt to adjust the claim, a dispute regarding the quantum of loss derived by

the adjuster, a lawsuit filed by the insured against the insurer, an appraisal clause, the

invocation of the appraisal clause by the insurer once suit was filed, an eventual

appraisal, the purported tender of the appraised loss by the insurer, the doctrine of

estoppel, and the question of whether any extra-contractual claims of the insured

survived tender of the appraised amount.
      The dispute comes to us in the setting of a final summary judgment. The insurer,

Germania Farm Mutual Insurance Association, filed a traditional motion for such relief.

It believed that payment of the appraised loss erected an insurmountable obstacle to

the insured’s recovery on not only his breach of contract claims but also his extra-

contractual statutory and common law tort claims. The trial court agreed and granted

the motion.   The insured, Christopher Hall, appealed and contended through three

issues that granting the motion was error.

      One may wonder if the factual circumstances before us comport with those

contemplated by our Texas Supreme Court in recognizing the legitimacy of insurers’

decisions to include appraisal clauses in their policies. Though agreeing to purchase an

insurance policy containing one may have been an “‘injudicious’” decision, according to

our Supreme Court, the high court nevertheless deemed them enforceable. State Farm

Lloyds v. Johnson, 290 S.W.3d 886, 888 (Tex. 2009), quoting Scottish Union & Nat’l

Ins. Co. v. Clancy, 71 Tex. 5, 8 S.W. 630 (Tex. 1888). Apparently, they were to serve

the purpose of avoiding the expense of litigation.        See id. at 894 (stating that

“[a]ppraisals require no attorneys, no lawsuits, no pleadings, no subpoenas, and no

hearings. It would be a rare case in which appraisal could not be completed with less

time and expense than it would take to file motions contesting it.”). And, to achieve that

end, completing the appraisal process was “intended to take place before suit [was]

filed” and be a “condition precedent to suit.” Id. Despite the existence of an appraisal

clause in the policy at bar, no one invoked its terms before suit. Instead, more than two

years from the time of loss and one year from the date of suit lapsed before Germania

moved the trial court to compel appraisal.



                                             2
      Counsel for Hall asserted, at oral argument, that insureds have little incentive to

seek appraisal under the policy due to the costs inherent in the process and its

tendency to reduce their recovery. It was also suggested that delaying appraisal and

ultimate payment of the loss is economically beneficial to the insurance company.

Given the multiple years of delay, the attorney’s fees, and other litigation costs

undoubtedly incurred by both litigants atop the appraisal costs, it is doubtful that either

will reap more monetary benefit than anyone would have if appraisal were invoked soon

after the dispute arose in 2013.             Humming “I need money, that’s what I want,”1

sometimes results in “you can’t always get what you want but if you try sometimes you

might . . . get what you need,”2 or deserve. We reverse.

      Standard of Review

      Being that it filed a traditional motion for summary judgment, Germania had the

burden to prove the absence of any genuine issue of material fact and its entitlement to

judgment as a matter of law.          First United Pentecostal Church of Beaumont v. Parker,

514 S.W.3d 214, 220 (Tex. 2017); Mad-Mag Dev., L.L.C. v. Cargle, No. 07-16-00132-

CV, 2017 Tex. App. LEXIS 5891, at *1 (Tex. App.—Amarillo June 26, 2017, no pet.)

(mem. op.).       In deciding if it carried that burden, we accept as true all evidence

favorable to the nonmovant (i.e., Hall) and indulge in every reasonable inference and

resolve all doubts regarding the evidence in the nonmovant’s favor. Cantey Hanger,

L.L.P. v. Byrd, 467 S.W.3d 477, 481 (Tex. 2015); Mad-Mag Dev., L.L.C. v. Cargle, 2017

Tex. App. LEXIS 5891, at *1.             Authority also prevents us from affirming summary




      1
          Due nod to the hit factory of Mr. Gordy’s Motown.
      2
          Due nod to Misters Jagger and Richards.

                                                    3
judgment on grounds unmentioned in the written motion. State Farm Lloyds v. Page,

315 S.W.3d 525, 532 (Tex. 2010).

       Summary Judgment

       The underlying dispute arose from a storm that struck the area in May of 2013. It

resulted in damage to Hall’s home and other property insured by Germania. A claim

was made, and an adjuster was assigned to assess the loss. He ultimately valued the

net claim to be approximately $13,000. In June of 2013, Germania tendered Hall two

checks totaling $9,700.       The sum was derived after making adjustments for the

deductible and depreciation.        Hall found the amount unacceptable, after which

Germania issued Hall another check for about $1,200 in October of 2013.             Hall

remained unsatisfied.

       Hall engaged his own adjuster to estimate the loss. That person conducted his

inspection in May of 2014 and valued the loss at about $76,600. Whether this was

disclosed to Germania is unclear. What is certain, though, is that Hall sued Germania

by the end of May 2014. The causes of action alleged were 1) breached contract, 2)

violation of the Texas Prompt Pay Act, 3) violation of chapter 541 of the Texas

Insurance Code, and 4) violation of the Texas Deceptive Trade Practices Act.

       Germania answered the suit in June of 2014. But not until October of 2014 did

the insurer move to compel an appraisal under the insurance contract. It made the

demand after accusing Hall of neglecting his own obligation to complete the process

before filing suit, even though either party had the right to require it.

       An appraisal ensued. It was finalized on February 12, 2016, when the second of

the two appraisers signed it. Together, they valued the loss at $31,497, plus change.



                                               4
Given that decision, Germania issued a check for $18,566.32 payable to Hall. The

check was dated February 20, 2016, and apparently sent to the insurer’s attorney. The

latter then drafted a letter dated February 25, 2016, to counsel for Hall, which letter

purported to enclose the check. In writing the letter, counsel for Germania mentioned a

joint motion to dismiss Hall’s suit and conditioned the negotiation of the check upon Hall

agreeing to dismiss the suit. That is, he told opposing counsel that: “[t]he check is to be

held in trust and not distributed until dismissal documents have been signed and

forwarded to our office.” Needless to say, Hall did not agree to that condition.3

        Germania subsequently filed the summary judgment underlying this appeal. It

contended therein that:

        [a]s Germania invoked the appraisal provision of his Homeowners’ Policy and as
        Germania has complied with the policy terms by paying the award, Plaintiff is
        now estopped from maintaining a breach of contract claim as a matter of law.
        Additionally, Plaintiff has no extra-contractual claims because he has suffered no
        independent injury that would otherwise entitle him to damages and because
        Germania properly handled and timely investigated his claim. Thus, summary
        judgment is warranted and appropriate as to all of Plaintiff’s causes of action.

The trial court granted the motion thereby denying Hall any recovery. Hall appealed.

        Issue One – Estoppel Defense

        Hall initially contends that the trial court erred in granting summary judgment

because Germania failed to establish, as a matter of law, essential elements of its

estoppel defense as a matter of law. The elements were “acceptance [and] timeliness

of the payment.” We sustain the issue in part.

        As previously mentioned, appraisal clauses found in insurance contracts have

been deemed enforceable for quite some time. Furthermore, compliance with such


        3
         The evidence of record fails to reveal the status of the check. Whether it eventually was cashed
is unknown.

                                                   5
clauses affords the parties to the agreement opportunity to raise estoppel as a means of

settling debate regarding damages recoverable in a suit for breached contract. That is,

the “effect of an appraisal award is to estop one party . . . from contesting the issue of

damages, in a suit on the insurance contract, leaving only the question of liability.”

Hennessey v. Vanguard Ins. Co., 895 S.W.2d 794, 797-98 (Tex. App.—Amarillo 1995,

writ denied); accord Nat’l Sec. Fire & Cas. Co. v. Hurst, __S.W.3d__, __, 2017 Tex.

App. LEXIS 4664, at *6-7 (Tex. App.—Houston [14th Dist.] May 23, 2017, no pet.)

(stating the same); Garcia v. State Farm Lloyds, 514 S.W.3d 257, 264-65 (Tex. App—

San Antonio 2016, pet. denied) (stating the same).       Yet, estoppel is an affirmative

defense, and the onus normally falls upon the defendant to assert it. Hennessey v.

Vanguard Ins. Co., 895 S.W.2d at 797-98.

       That the defense was asserted by Germania through its motion for summary

judgment imposed upon the insurer one other burden; it had to prove its entitlement to

the defense as a matter of law. Johnson & Johnson Med., Inc. v. Sanchez, 924 S.W.2d

925, 927 (Tex. 1996) (stating that “[w]hen a party moves for summary judgment based

upon an affirmative defense, the movant must establish each element of its defense as

a matter of law”); Bruno Indep. Living Aids v. Yzaguirre, No. 13-15-00408-CV, 2016

Tex. App. LEXIS 3253, at *5-6 (Tex. App.—Corpus Christi Mar. 31, 2016, no pet.)

(mem. op.) (stating the same). And, again, under the standard of review, we view the

evidence touching upon the defense in a manner most favorable to the nonmovant

(Hall) and resolve against the movant any doubt as to the existence of a genuine issue

of material fact on the estoppel defense. Garcia v. State Farm Lloyds, 514 S.W.3d at

265.



                                            6
       Estoppel tends to be an amoebic defense available in different settings. It is

amoebic in a sense because its elements may change depending on the setting. Here,

the defense arises from contract, as opposed to the common law.            By including a

provision in the insurance contract relating to appraisal, the parties have effectively

adopted a procedure for calculating loss and cannot disregard it. Scottish Union & Nat’l

Ins. Co. v. Clancy, 8 S.W. at 631-32. So, where the value of the loss is in dispute and

the contract provides for the manner of calculating that loss, calculating it in accordance

with the contract terms generally prevents the parties from asserting the loss to have

some other value.     In other words, they agreed to be bound to the results of the

appraisal and, consequently, are estopped from seeking damages based upon some

other calculation.

       Thus, the terms of the appraisal clause and other relevant contractual provisions

would logically affect the elements of the ensuing estoppel claim. This is most likely

why others have said that “[b]ecause courts seek to implement the intention of the

parties as expressed in the language of a contract, it has long been the rule in

Texas that an appraisal award made pursuant to the provisions of an insurance

contract is binding and enforceable,” Floyd Circle Partners, LLC v. Republic Lloyds,

No. 05-16-00244-CV, 2017 Tex. App. LEXIS 6906, at *18 (Tex. App.—Dallas July 24,

2017, no pet.) (mem. op.) (emphasis added), and “tender of the full amount owed

pursuant to the conditions of an appraisal clause is all that is required to estop the

insured from raising a breach of contract claim.” Nat’l Security Fire & Cas. Co. v. Hurst,

2017 Tex. App. LEXIS 4664, at *8 (emphasis added).




                                            7
        Given the aforementioned quotes from Nat’l Security and Floyd Circle, it is clear

that payment of the loss (or at least tender of payment) as calculated via the appraisal

clause is elemental to the applicability of estoppel. Indeed, failing to at least tender the

appraised value hardly denotes compliance with the intent of the parties as expressed

in their insurance agreement.            Here, though, the pivotal question is not so much

payment but rather when it was to occur. Hall suggests that Germania had a five-day

window based on the contract while Germania argues that it need have only been

timely. We resolve the controversy by turning to the policy and general jurisprudence

applicable to contracts.

        To be sure, expressly specifying in the policy a time for performance of the

particular obligation (i.e., payment after appraisal) would render that period controlling.

If no period was specified, all is not lost. Under that circumstance, we would revert to

the tenets of the common law relating to agreements. One such tenant provides that

“where no time of performance is stated in a contract, the law will imply a reasonable

time.” Moore v. Dilworth, 142 Tex. 538, 179 S.W.2d 940, 942 (Tex. 1944); Batjet, Inc. v.

Jackson, 161 S.W.3d 242, 246-47 (Tex. App.—Texarkana 2005, no pet.).4

        Like estoppel, the idea of a “reasonable time” is also a bit amoebic, or “relative,”

as noted by sister courts. Vlasak v. Taxco, Inc., No. 01-16-00191-CV, 2017 Tex. App.

LEXIS 6337, at *19 (Tex. App.—Houston [1st Dist.] July 11, 2017, no pet.), quoting,

        4
         The court in Moore also said that as a “general rule . . . a contract to pay money, which does not
specify a date of payment, is enforceable as soon as the contract is made.” Moore v. Dilworth, 179
S.W.2d at 942. The latter passage from Moore seems particularly interesting. No other Texas opinion
could be found reiterating the proposition after Moore, and the only authority cited by the Supreme Court
to support it was the initial version of the legal encyclopedia American Jurisprudence. While that version
of the encyclopedia was unavailable, a later one was not. In volume 17 of American Jurisprudence 2d,
under § 337 of the topic “Contracts,” the writer explained that when the contract fails to specify the date
of payment, the law deems the amount due and payable when the party fully performs his obligation
under the contract and nothing remains to be done except paying the amount due. 17 Am. Jur 2d
Contracts § 337, citing McCandlish v. Estate of Timberlake, 497 S.W.2d 191, 195-96 (Mo. Ct. App. 1973).

                                                    8
Chen v. Parkwood Creek Owner’s Ass’n, Inc., No. 05-10-01511-CV, 2012 Tex. App.

LEXIS 7347 (Tex. App.—Dallas Aug. 30, 2012, no pet.).           For instance, it excludes

unnecessary delay and “‘denotes such promptitude as the circumstances will allow for

the action called for by the contract.’” Id. So too is it affected by or dependent upon the

facts and circumstances of the particular case. Allegiance Hillview, L.P. v. Range Tex.

Prod., LLC, 347 S.W.3d 855, 869-70 (Tex. App.—Fort Worth 2011, no pet.). This most

likely is why it normally encompasses a question of fact to be decided by the fact-finder

based upon the circumstances peculiar to the dispute and contract. Id. (stating that the

question is one of fact). Yet, that rule is subject to change as well when the underlying

facts are undisputed. In that scenario, whether one performed within a “reasonable

time” becomes a question of law. Id.

       With the foregoing being said, we turn to the record at bar. The appraisal clause

found in Section 10, paragraph 10 of the Germania insurance policy stated:

       Appraisal: If you and we fail to agree on the amount of loss, either can
       make a written demand for appraisal. Each will then select an independent
       appraiser, and notify the other of the appraiser’s identity within 20 days of
       receipt of the written demand. The two appraisers will choose an umpire.
       If they cannot agree upon an umpire within 15 days, you or we may
       request that the choice be made by a judge or a district court of a judicial
       district where the loss occurred. The two appraisers will then set the
       amount of loss, stating separately the loss to each item.

       If the appraisers fail to agree they will submit their differences to the
       umpire. An itemized decision agreed to by any two of these three and
       filed with us will set the amount of the loss. Such award shall be binding
       on you and us.

       Each party will pay its own appraiser and bear the other expenses of the
       appraisal and umpire equally.

(Emphasis in original).   Under paragraph 12 of Section 10 of the same agreement

appears the following language:


                                            9
        Loss Payment. We will adjust all losses with you. We will pay you
        unless some other person named in the policy is legally entitled to receive
        payment.

        a. If we notify you that we will pay your claim, or part of your claim, we
        must make payment not later than the 5th business day after we notify
        you.

        b. If payment of your claim or part of your claim requires the performance
        of an act by you, we must make payment not later than the 5th business
        day after the date you perform the act.

(Emphasis in original). As can be seen, nothing in paragraph 10 specifies any particular

date by which the loss derived via the appraisal procedure must be paid. Rather, it

deals with the calculation (not payment) of the loss when the parties cannot agree on its

monetary value and its wording serves that purpose. On the other hand, payment of

loss is dealt with in paragraph 12. One reading that provision easily sees that it speaks

of 1) payment of the loss, 2) the time within which to pay the loss, and 3) when that time

period begins. The time to pay is within five business days, and when that period

begins to run is either the date 1) the insurer notifies the insured that some aspect of the

claim will be paid or 2) the insured performs all acts required of him. Missing from the

words of paragraph 12 though is language alluding to the appraisal under paragraph

10.5


        5
           That paragraph 10 and paragraph 12 were intended to cover distinct, as opposed to intertwined,
matters is further exemplified by two scenarios. For instance, the latter paragraph speaks of paying the
loss and the time within which to do that. Logically, before Germania could pay or represent that it would
pay the loss, the loss would have to be valued or calculated. For those who deal in rhetorical questions,
how could it agree to pay a particular monetary loss if it had yet to determine what that monetary loss
was? And, if the parties were unable to agree on the value, appraisal is the means for settling the
controversy. So, conceptually, the appraisal could possibly happen before the insurer represents that it
would pay any part of the claim or loss and thereby triggers the time within which to pay. On the other
hand, if the insurer had represented to pay at least part of the claim, like it did here, then it had five days
to do so. But what if the parties came to disagree about the amount of the loss it calculated and
incorporated into the ensuing check? In that situation, the insurer had the contractual right to demand an
appraisal under paragraph 10. Pursuing an appraisal with its attendant time delays related to each party
selecting appraisers, conducting dual appraisals, the appraisers selecting an umpire if the appraised
sums differed, a court selecting an umpire if the appraisers could not agree on one, and the umpire

                                                      10
         Nor do we find mention of when to pay after the appraisal in any other part of the

insurance contract. Ways for interjecting such terminology into the policy were offered

us. Yet, they involve rewriting parts of the agreement that, from their existing context

and words, fail to evince that those parts were ever intended to designate when

payment after appraisal was to be made.                 They would also obligate us to create

language explaining whether payment after appraisal meant such things as 1) payment

after each appraiser signed the final calculation, 2) payment after the final calculation

was sent by the appraisers to the insurer, or 3) payment after the insurer receives the

appraisal to which it agreed to be bound. None of those topics are covered in the

existing agreement.

         Simply put, we cannot “rewrite . . . the contract merely because . . . one [or both]

of the parties comes to dislike its provisions or thinks that something else is needed in

it.”    Cross Timbers Oil Co. v. Exxon Corp., 22 S.W.3d 24, 26-27 (Tex. App.—Amarillo

2000, no pet.). And, we make no effort to violate that prohibition here. The parties are

left to their agreement, and their agreement says nothing about when payment is to be

made after appraisal under paragraph 10. So, they are left to live with the common law

rule.     That means Germania had a reasonable time to pay once the appraisal was

completed.       Whether it complied with that edict depended on the facts and

circumstances of the case, excluding “unnecessary delay” while considering such

“promptitude as the circumstances will allow for the action called for by the contract.”




selecting the final appraisal amount hardly suggests that the procedure could be accomplished within five
days of the date Germania said it would pay part of the claim. So, the appraisal process would seem to
be a circumstance that extended or otherwise altered the time periods specified in paragraph 12. Yet,
both scenarios illustrate that paragraph10 does not dictate the time of payment (or even of appraisal) and
paragraph 12 with its time limits does not necessarily apply when a party demands an appraisal.

                                                   11
        The undisputed facts and circumstances appearing of record included 1) loss

being initially appraised by an adjuster on behalf of Germania, 2) Hall deeming the

amount of the appraisal deficient, 3) the eventual appraisal of the loss under paragraph

10, 4) the appraisal being finalized by February 12, 2016, 5) Germania receiving the

appraisal on February 15, 2016, 6) Germania issuing a subsequent check to Hall ten

days later on February 24, 2016, and 7) counsel for Germania receiving the check and

drafting a letter dated February 25, 2016, mentioning the check and the terms of its

negotiation. Yet, we could not find evidence of the date on which the letter and check

were actually sent to Hall or his attorney.6 Nor did we find evidence of the check being

received by Hall or his attorney, the date of receipt, or the negotiation of the check by

Hall or his attorney. We further note that, though Germania agreed (in the contract) to

be bound by the appraisal award, tender of the check encompassing that award was

subject to conditions.       The effect of appending conditions to payment despite the

language in the contract could make one question whether Germania intended to delay

or actually delayed payment while the conditions it imposed were met.

        We mention one other potential circumstance and it relates to the time periods in

paragraph 12. While those periods do not specify when payment after appraisal was to

be made, they nevertheless evince a joint intent that payment should occur rather

quickly. Five days is not a lot of time. Furthermore, Germania previously had agreed

not only to pay the claim but also to be bound by the appraisal award. Whether the

eleven-day period between Germania receiving the appraisal award and sending the


        6
          Germania alleged in its motion for summary judgment that the check was mailed to Hall’s
attorney on the day the letter was written. Yet, the allegation was not accompanied with supporting
reference to any document or other evidence. Additionally, our own review of the record failed to uncover
such supporting evidence.

                                                   12
check to its attorney comports with the intent underlying paragraph 12 is reasonably

debatable.   Whether counsel’s effort to condition Hall’s ability to cash the check

comports with the intent underlying paragraph 12 is also reasonably debatable. The

latter seems especially true since Germania had agreed previously to pay the claim and

be bound by the appraisal award. This, of course, assumes counsel actually sent the

letter and check on February 25th.

       In short, the evidence of record coupled with the missing information created

material issues of fact. This prevented the trial court from determining as a matter of

law that Germania paid the appraisal award within a reasonable time. Or, at the very

least, pertinent facts missing from the record prevent us from holding that the trial court

correctly found, as a matter of law, that Germania paid the award within a reasonable

time after the appraisal. Being unable to so hold and because the defense of estoppel

was dependent upon proof of payment within a reasonable time, we must conclude that

Germania failed to establish, as a matter of law, the defense. Consequently, it did not

prove, as a matter of law, its entitlement to summary judgment on the claims of

breached contract. So, again, we sustain issue one.

       Issue Two – Extra-Contractual Claims

       Hall next argues that the trial court erred in granting summary judgment favorable

to Germania on his extra-contractual claims. We sustain the issue as well.

       Germania averred in its motion for summary judgment that without a breach of

contact claim, Hall had no extra-contractual causes of action sounding in common law

or statutory tort. That is, Germania alleged that the viability of Hall’s extra-contractual

claims was directly related to the viability of his claims for breached contract. Because



                                            13
it established that Hall was estopped from pursuing the contract claims, he could not

pursue the others, according to the insurer. However, it did not prove its entitlement to

summary judgment on the defense of estoppel and, therefore, the breach of contract

claims. Thus, the foundation underlying Germania’s argument for summary judgment

on those extra-contractual claims is non-existent.

      We reverse the summary judgment and remand the cause for further

proceedings.



                                                      Brian Quinn
                                                      Chief Justice




                                           14
