                                                                                       ACCEPTED
                                                                                  03-14-00533-CV
                                                                                         3865258
                                                                        THIRD COURT OF APPEALS
                                                                                   AUSTIN, TEXAS
                                                                             1/22/2015 3:02:40 PM
                                                                                JEFFREY D. KYLE
                                                                                           CLERK
                      CASE NO. 03-14-00533-CV

                IN THE THIRD COURT OF APPEALS                     FILED IN
                         AUSTIN, TEXAS                     3rd COURT OF APPEALS
                                                               AUSTIN, TEXAS
                                                           1/22/2015 3:02:40 PM
                                                             JEFFREY D. KYLE
                    ROSA ENA CANTU, Appellant                      Clerk


                                    V.

           SOUTHERN INSURANCE COMPANY, Appellee


            On appeal from the 335th Judicial District Court of
                         Bastrop County, Texas
                   Trial Court Cause Number 29,079


                        APPELLEE’S BRIEF
__________________________________________________________________

                                         Catherine L. Hanna
                                         State Bar No. 08918280
                                         Email: channa@hannaplaut.com
                                         Eric S. Peabody
                                         State Bar No. 00789539
                                         Email: epeabody@hannaplaut.com
                                         Laura D. Tubbs
                                         State Bar No. 24052792
                                         Email: ltubbs@hannaplaut.com
                                         HANNA & PLAUT, L.L.P.
                                         211 E. Seventh Street, Suite 600
                                         Austin, Texas 78701
                                         Telephone: (512) 472-7700
                                         Facsimile: (512) 472-0205
                                         Counsel for Appellee


                       Oral Argument Requested
                                     TABLE OF CONTENTS

TABLE OF CONTENTS .......................................................................................... ii

TABLE OF AUTHORITIES ................................................................................... iv

STATEMENT OF THE CASE..................................................................................1

STATEMENT REGARDING ORAL ARGUMENT ...............................................2

ISSUES PRESENTED...............................................................................................2

            After Cantu sued Southern following the 2011 Bastrop wildfires
            for allegedly inadequate payment on her claim, the court ordered
            the parties to appraisal. Despite participating in the appraisal
            process, Cantu was dissatisfied with the award and nonsuited after
            Southern paid the award and moved for summary judgment. In
            Southern’s subsequent declaratory action, Cantu challenged the
            appraisal award based on the original court’s replacement of the
            first appraisal umpire.

            1.      Cantu did not seek appellate review of the original trial
                    court’s replacement of the appraisal umpire and cannot
                    collaterally attack that court’s orders in a court of concurrent
                    jurisdiction.

            2.      The appraisal award signed by the umpire and Southern’s
                    appraiser was valid, binding, and in substantial compliance
                    with the policy.

            3.      Cantu did not assert any extra-contractual claims regarding
                    Southern’s pre- or post-appraisal conduct and is not entitled
                    to an advisory opinion on the effect of the appraisal award on
                    hypothetical claims that are now barred.

STATEMENT OF FACTS ........................................................................................3

SUMMARY OF THE ARGUMENT ........................................................................6



                                                       ii
ARGUMENT AND AUTHORITIES ........................................................................6

             A.      Cantu cannot collaterally attack a different trial court’s
                     appraisal orders in this suit.......................................................................... 6

             B.      The appraisal award was valid and binding. ........................................... 9

             C.      Cantu cannot complain about the effect of the trial court’s
                     declarations on extra-contractual causes of action she did not
                     assert. .............................................................................................................. 11

CONCLUSION AND PRAYER .............................................................................12

CERTIFICATE OF SERVICE ................................................................................14

CERTIFICATE OF COMPLIANCE .......................................................................15

APPENDIX ..............................................................................................................16




                                                                  iii
                                   TABLE OF AUTHORITIES
Cases                                                                                                     Page
Barnes v. Western Alliance Ins. Co.,
 844 S.W.2d 264 (Tex. App.–Fort Worth 1992, writ dism'd by agr.) ...................11

Blum’s Furniture Co., Inc. v. Certain Underwriters at Lloyds London,
  459 Fed. Appx. 366 (5th Cir. 2012) ......................................................................12

Franco v. Slavonic Mut. Fire Ins. Ass’n,
  154 S.W.3d 777 (Tex. App.–Houston [14th Dist] 2004, no pet.) .........................11

Harris County Appraisal Dist. v. Bradford Realty, Ltd.,
 919 S.W.2d 131 (Tex. App.–Houston [14th Dist.] 1994, no writ) ..........................9

In re Barrentine,
  2013 WL 6466574 (Tex. App.–Austin Nov. 27, 2013, orig. proceeding) .............8

Michels v. Safeco Ins. Co.,
 544 Fed. Appx. 535 (5th Cir. 2013) ......................................................................10

Providence Lloyds Ins. Co. v. Crystal City Independent Sch. Dist.,
  877 S.W.2d 872 (Tex. App.–San Antonio 1994, no writ)....................................10

Richardson v. Allstate Texas Lloyds,
2007 WL 1990387 (Tex. App.–Dallas July 11, 2007, no pet.) ....................... 10, 11

Safeco Lloyds Ins. Co. v. Barrentine,
  2014 WL 7399307 (Tex. App.– Dallas Dec. 17, 2014, n.p.h.) ..............................7

TMM Investments, Ltd. v. Ohio Cas. Ins. Co.,
 730 F.3d 466 (5th Cir. 2013) .................................................................................10

Wells v. American States Preferred Ins. Co.,
 919 S.W.2d 679 (Tex. App.–Dallas 1996, writ denied) .........................................9

Wentworth v. Medellin,
 529 S.W.2d 125 (Tex. Civ. App.–San Antonio 1975, no writ) ..............................9



                                                       iv
Statutes
TEX. INS. CODE § 541.061 .........................................................................................5

TEX. INS. CODE § 542.060..........................................................................................5


Rules
TEX. R. APP. P. 38.2 ...................................................................................................1




                                                           v
To the Honorable Court of Appeals:

          Appellee Southern Insurance Company submits this brief in response to the

brief of Appellant Rosa Ena Cantu1 pursuant to Rule 38.2 of the Texas Rules of

Appellate Procedure. Southern agrees with Cantu’s list of parties and counsel, but

presents its own statement of the case, statement of the issues presented, and

statement of facts.

                                      Statement of the Case

          The lawsuit giving rise to this appeal involves Cantu’s claims under her

Southern homeowners’ insurance policy for damage resulting from the 2011

Bastrop County wildfires.2 Cantu filed suit in Bastrop district court,3 and the court

ordered the parties to appraisal. After paying the appraisal award, Southern moved

for summary judgment.4 Cantu nonsuited this Original Bastrop Suit.5 Southern

filed the declaratory action underlying this appeal, Cause Number 29,079, in the

335th Judicial District Court of Bastrop County (“Bastrop Dec Action”), the

Honorable Reva Towslee Corbett, presiding, to determine its contractual and




1
 Cantu’s first name is identified in the record as both “Rose” and “Rosa.” Southern uses “Rosa”
as directed in the Court’s letter of August 27, 2014.
2
    R. 5-7. The record for this appeal consists solely of an original clerk’s record [R.].
3
 Cause No. 28,370; Rose Ena Cantu v. Southern Insurance Co., et al., in the 21st Judicial
District Court, Bastrop County, Texas (“Original Bastrop Suit”); R. 255-64.
4
    R. 275-87.
5
    R. 288.

Appellee’s Brief                                                                             Page 1
statutory duties in light of its payment of the appraisal award.6 On July 23, 2014,

Judge Corbett granted Southern’s motion for summary judgment, declaring that:

(1) the award signed by Southern’s appraiser and the umpire was valid and

binding; (2) Southern’s payment of the appraisal award fulfilled Southern’s duties

under Cantu’s insurance policy; and (3) Southern’s liability was not reasonably

clear until the appraisal award was issued.7 Cantu filed her notice of appeal on

August 22, 2014.8

                        Statement Regarding Oral Argument

         Although Southern believes that oral argument is unnecessary to resolve the

issues in this appeal, Southern reserves its right to appear.

                                    Issues Presented


         After Cantu sued Southern following the 2011 Bastrop wildfires for
         allegedly inadequate payment on her claim, the court ordered the
         parties to appraisal. Despite participating in the appraisal process,
         Cantu was dissatisfied with the award and nonsuited after Southern
         paid the award and moved for summary judgment. In Southern’s
         subsequent declaratory action, Cantu challenged the appraisal award
         based on the original court’s replacement of the first appraisal umpire.

         1. Cantu did not seek appellate review of the original trial court’s
            replacement of the appraisal umpire and cannot collaterally attack
            that court’s orders in a court of concurrent jurisdiction.



6
    R. 6-10.
7
    R. 532-33.
8
    R. 534-35.

Appellee’s Brief                                                                    Page 2
            2. The appraisal award signed by the umpire and Southern’s appraiser
               was valid, binding, and in substantial compliance with the policy.

            3. Cantu did not assert any extra-contractual claims regarding
               Southern’s pre- or post-appraisal conduct and is not entitled to an
               advisory opinion on the effect of the appraisal award on
               hypothetical claims that are now barred.

                                     Statement of Facts

            Cantu owns a property in Paige, Texas, which Southern insured for the

period August 14, 2011 to August 14, 2012.9 Cantu reported her fire claim on or

about September 4, 2011.10           Southern hired an independent adjuster, Steven

Dollery, to inspect the loss and issued payment to Cantu for damage to the

contents, dwelling, and other structures.11

            Cantu was dissatisfied with Southern’s adjustment of her claim and hired

counsel and a public adjuster, Stephen Hadhazi.12 Southern contacted Dollery and

instructed him to attempt to reach an agreement with Hadhazi on the amount of

loss.13 Dollery and Hadhazi briefly discussed the differences in their estimates by

telephone, but Hadhazi failed to reply to Dollery’s further communications.14




9
    R. 7.
10
     R. 158-59.
11
     Id.
12
     R. 159, 201-22.
13
     R. 159.
14
     R. 159, 223.

Appellee’s Brief                                                                     Page 3
         Cantu filed the Original Bastrop Suit in January 2012, and Southern

answered, reserving its right to invoke appraisal.15 In September 2012, the 21st

District Court ordered the parties to appraisal and appointed Claude Ducloux as

umpire.16         On January 16, 2013, the court, after learning of inappropriate

communications between Cantu’s counsel and the umpire, dismissed Ducloux and

appointed the Hon. Don Wittig as umpire.17 Cantu continued to participate in the

appraisal and did not ask the 21st District Court to reconsider its appointment of

Judge Wittig or seek mandamus review of this order. In April 2013, Judge Wittig

and Southern’s appraiser signed an appraisal award.18 After Cantu’s counsel failed

to respond to multiple requests for drafting instructions, Southern tendered a check

for the full replacement cost value of the appraisal award less the deductible and

prior payments.19

         Following its payment of the appraisal award, Southern filed a motion for

summary judgment, arguing that the payment of the award satisfied Southern’s

obligations under the policy and negated the only bases for Cantu’s extra-

contractual causes of action.20       Shortly before her response was due, Cantu


15
     R. 255-68.
16
     R. 459.
17
     R. 273.
18
     R. 227.
19
     R. 228-36.
20
     R. 275-87.

Appellee’s Brief                                                             Page 4
nonsuited the Original Bastrop Suit.21 Cantu did not cash the award check because

she disputed the validity and binding effect of the appraisal award.22

          Two days after Cantu’s nonsuit, Southern filed the Bastrop Dec Action,

requesting that the Court declare that:

        (1) The appraisal award signed by Southern’s appraiser and the umpire
            is valid and binding on the parties with regard to the amount of
            Cantu’s loss;

        (2) Southern’s payment of the appraisal award fulfills its obligations
            under the insurance policy with regard to Cantu’s claim; and

        (3) Southern’s liability to pay Cantu’s claim was not reasonably clear
            until the appraisal award was issued and Southern’s payment was
            therefore prompt for purposes of Texas Insurance Code sections
            541.061 and 542.060 and tie-in provisions of the DTPA.23

After Southern filed the Bastrop Dec Action, Cantu filed suit in Dallas County,

alleging the same claims and causes of action she had raised in the Original

Bastrop Suit and disputing the validity of the appraisal award.24 The Dallas court

abated Cantu’s suit against Southern in favor of the Bastrop court’s dominant

jurisdiction over the parties and subject matter.25 Despite the dominant jurisdiction

of the Bastrop court, Cantu did not assert any counterclaims in the Bastrop Dec



21
     R. 288.
22
     R. 295.
23
     R. 6-10.
24
     R. 290-315.
25
     R. 316-17.

Appellee’s Brief                                                                 Page 5
Action.26 The Bastrop court rendered summary judgment in favor of Southern, and

this appeal ensued.27

                             Summary of the Argument

         Appraisal awards are presumptively valid and binding. Cantu did not plead

or adduce evidence of any basis to set aside the appraisal award. She could not

collaterally attack in this suit the former trial court’s decision to appoint a new

umpire after the appraisal was complete and she had nonsuited her claims.

Because Southern promptly paid the appraisal award in full, the trial court

correctly ruled that Southern satisfied its contractual and statutory obligations with

respect to her loss. Cantu is not entitled to an advisory opinion on the effect of an

appraisal award on causes of action she never raised.

                              Argument and Authorities

A.       Cantu cannot collaterally attack a different trial court’s appraisal
         orders in this suit.

         Cantu’s primary argument is that the court in which she originally filed suit

– the Bastrop 21st District Court – had no authority to replace an appraisal umpire

after finding Cantu’s counsel had inappropriate communications with that

umpire.28 In this case, Cantu complains that the 335th District Court should have


26
     R. 17-22.
27
     R. 532-33.
28
  Cantu’s assertion that she was denied “due process” in the appointment of a new umpire is
groundless. See Appt. Br. at 13. Judge Campbell appointed Judge Wittig as the replacement

Appellee’s Brief                                                                    Page 6
invalidated the appraisal award based on the 21 st District Court’s alleged lack of

jurisdiction to replace the umpire. A district court does not have the authority to

review or invalidate the orders of a court of concurrent jurisdiction.

           The Dallas Court of Appeals recently rejected the same argument by Cantu’s

counsel.29 In Barrentine, the 423rd District Court of Bastrop County disqualified

umpire Ducloux for the same inappropriate contact by plaintiff’s counsel and

appointed Judge Wittig as a replacement.30               The homeowners in Barrentine

nonsuited, refiled in Dallas County, and sought a temporary injunction to prevent

the appraisal ordered by the Bastrop court from proceeding.31                 On appeal, the

Dallas Court of Appeals dissolved the temporary injunction, holding that the

injunction ignored and unwound the orders of the Bastrop court, which “‘allow[ed]

the Barrentines to collaterally attack those orders in a court of concurrent

jurisdiction.’”32 The Barrentines also sought a writ of mandamus in this Court,



umpire at a hearing on Southern’s motion to compel completion of the appraisal process, which
counsel for Cantu attended. A copy of the trial court’s order setting the hearing in which Judge
Campbell removed umpire Ducloux and appointed umpire Wittig is attached at Appendix A.
Contrary to Cantu’s assertion, the record in Cause No. 28,370 shows that Judge Campbell
explicitly removed umpire Ducloux when he appointed Judge Wittig as umpire and then set the
appraisal deadlines. See Order of January 28, 2013, attached at Appendix B. Southern agrees
with Cantu that the Court should take judicial notice of these and other documents from Cause
No. 28,370. See Appt. Br. at 14.
29
  Safeco Lloyds Ins. Co. v. Barrentine, No. 05-13-01011-CV, 2014 WL 7399307 (Tex. App.–
Dallas Dec. 17, 2014, n.p.h.).
30
     Id. at *1; R. 493-500.
31
     Barrentine, 2014 WL 7399307 at *1.
32
     Id.

Appellee’s Brief                                                                         Page 7
arguing that the Bastrop trial court abused its discretion by appointing Judge Wittig

as replacement umpire. This Court summarily denied the petition and the

Barrentines’ motion for rehearing.33

         After Judge Campbell replaced the umpire in the Original Bastrop Suit,

Cantu did not ask for reconsideration of this decision or file a petition for writ of

mandamus.34 Instead, Cantu participated in the appraisal process and nonsuited

when she was dissatisfied with the appraisal award. She then asked the trial court

in this case to rule on its sister court’s authority to replace the umpire. Judge

Corbett had neither the obligation nor the authority to sit in appellate review of

Judge Campbell’s appraisal orders.35

         Even if the 335th District Court could have reviewed the 21st District Court’s

order to replace the umpire, the 335th District Court did not err in confirming

validity of the appraisal. Nothing in the insurance policy or Texas law limited the

21st District Court’s authority to appoint, remove, or replace the appraisal umpire.

Although appraisal is intended to take place before suit is filed, Cantu filed suit in

the 21st District Court, which gave the court jurisdiction over all matters

appurtenant to that suit, including the appraisal. Cantu has cited no authority

33
 See R. 501-31; In re Barrentine, No. 03-13-00752-CV, 2013 WL 6466574 (Tex. App.–Austin
Nov. 27, 2013, orig. proceeding).
34
     See Docket Sheet for Cause No. 28,370, attached hereto as Appendix C.
35
   Because Cantu is actually attacking the actions of the 21st District Court in replacing the
umpire, she confuses the suit on appeal. See Appt. Br. at 14 (“Entry of the order appointing a
second Umpire was reversible error and an abuse of discretion by the District Court.”).

Appellee’s Brief                                                                       Page 8
limiting that jurisdiction or discretion, and this Court already rejected the same

argument by Cantu’s counsel when it denied the petition for writ of mandamus in

Barrentine.

B.        The appraisal award was valid and binding.

          Cantu further argues that appraisal award was not in compliance with the

policy because it was not “itemized.”36             An appraisal award is binding and

enforceable if it is in “substantial compliance” with the policy.37 “Substantial

compliance” means fulfillment of the essential requirements of a contract or a

statute.38      The Southern policy does not require a particular form for the appraisal

award; appraisers and umpires use different templates for their awards. The award

in this case itemizes the amount of loss for all coverages provided under the

policy.39 The award is in writing and includes the actual cash value, depreciation,

and replacement cost of the damage to Cantu’s property caused by the fires. The




36
     Appt. Br. at 14-16.
37
   See Wells v. American States Preferred Ins. Co., 919 S.W.2d 679, 683 (Tex. App.–Dallas
1996, writ denied) (“Texas courts recognize three situations in which an appraisal award may be
disregarded: (1) when the award was made without authority; (2) when the award was the result
of fraud, accident, or mistake; or (3) when the award was not made in substantial compliance
with the terms of the contract.”). As discussed supra, Cantu’s argument that umpire Wittig was
without authority to act is really an attack on Judge Campbell’s authority to appoint him. Cantu
does not argue that the award was the result of fraud, accident, or mistake.
38
  Wentworth v. Medellin, 529 S.W.2d 125, 128 (Tex. Civ. App.–San Antonio 1975, no writ); see
also Harris County Appraisal Dist. v. Bradford Realty, Ltd., 919 S.W.2d 131, 135 (Tex. App.–
Houston [14th Dist.] 1994, no writ).
39
     R. 227.

Appellee’s Brief                                                                         Page 9
award was signed by Southern’s appraiser and the duly-appointed umpire, Judge

Wittig.40

           Cantu’s counsel has raised and had the same arguments rejected in another

Bastrop wildfire case.41 In response to the carrier’s motion for summary judgment

in Michels, plaintiffs argued that the form of the award was not in substantial

compliance with the policy because it was not itemized and provided only the

replacement cost and actual cash value of the loss.42 The district court disagreed

and denied the Michelses’ motion to set aside the award.43 The appellate court

affirmed, holding that the lump sum award substantially complied with the policy’s

requirements.44

           Cantu’s reliance on Richardson v. Allstate Texas Lloyds,45 is misplaced. In

Richardson, the court held that the entire appraisal process was not in substantial

compliance with the policy because: (1) the appraisers did not prepare an itemized

list of damages; (2) the appraisers did not meet to discuss their estimates; (3) the

appraisers did not submit to the umpire the items upon which they did not agree;

40
     Id.
41
     See Michels v. Safeco Ins. Co., 544 Fed. Appx. 535 (5th Cir. 2013).
42
     Id. at 542.
43
     Id. at 537.
44
   Id. at 542; see also TMM Investments, Ltd. v. Ohio Cas. Ins. Co., 730 F.3d 466, 472 (5th Cir.
2013) (“minor mistakes that do not taint the entire award should not frustrate the parties’ intent
to be bound by the appraisal provision of their contract”); Providence Lloyds Ins. Co. v. Crystal
City Independent Sch. Dist., 877 S.W.2d 872, 875-78 (Tex. App.–San Antonio 1994, no writ).
45
     No. 05-06-00100-CV, 2007 WL 1990387 (Tex. App.–Dallas July 11, 2007, no pet.).

Appellee’s Brief                                                                         Page 10
(4) the umpire did not discuss the award with both appraisers before it was entered;

and (5) the award was a lump-sum amount written next to the phrase “to be

determined by hygienist.”46 The lack of an itemized decision was just one part of

the wholly flawed process that was not in substantial compliance with the policy. 47

          Appraisal awards “are binding and enforceable, and every reasonable

presumption will be indulged to sustain an appraisal award.”48 Because every

reasonable presumption is indulged in favor of the award, the burden of proof is on

the party seeking to avoid the award.49 Cantu did not request clarification of the

award and did not adduce any evidence that the appraisal process or award in this

case was not in substantial compliance with the policy.

C.        Cantu cannot complain about the effect of the trial court’s declarations
          on extra-contractual causes of action she did not assert.

          Cantu’s final argument is that the trial court erred in holding that Southern’s

payment of the appraisal award foreclosed her bad-faith claims.50 This misstates

the trial court’s judgment. The trial court declared that Southern’s liability under

the policy was not reasonably clear until the appraisal award was issued and that

Southern’s timely payment of the award therefore satisfied the prompt-payment
46
     Id. at *2-3.
47
     See id. at *4.
48
  Franco v. Slavonic Mut. Fire Ins. Ass’n, 154 S.W.3d 777, 786 (Tex. App.–Houston [14th Dist]
2004, no pet.).
49
  Id. (citing Barnes v. Western Alliance Ins. Co., 844 S.W.2d 264, 267 (Tex. App.–Fort Worth
1992, writ dism'd by agr.)).
50
     Appt. Br. at 16-19.

Appellee’s Brief                                                                     Page 11
requirements of the Texas Insurance Code and tie-in provisions of the DTPA –

established holdings under Texas law.51 The court did not opine on Southern’s

“pre-appraisal conduct” or alleged “extreme acts” in processing Cantu’s claims

because Cantu did not assert any counterclaims for this extra-contractual liability.

Cantu did not assert any counterclaims at all. Her pleadings consisted solely of an

answer with affirmative defenses to the validity of the appraisal award, a plea to

the jurisdiction, and a motion to transfer venue to Dallas based on convenience.52

Even if Cantu had bad-faith claims that were not extinguished by Southern’s

payment of the appraisal award, she did not raise them, providing no impediment

to the trial court’s final summary judgment and preserving nothing for this Court to

review. Cantu is not entitled to an advisory opinion on the effect of an appraisal

award on theoretical bad-faith claims.

                                Conclusion and Prayer

         Rather than challenge the appraisal process and award in the Original

Bastrop Suit through proper appellate channels, Cantu abandoned her claims and

sought a different district court to review the first court’s appraisal orders. The

trial court properly rejected this collateral attack. Cantu also failed to assert the




51
  R. 532; see Blum’s Furniture Co., Inc. v. Certain Underwriters at Lloyds London, 459 Fed.
Appx. 366, 367 (5th Cir. 2012) (collecting and discussing cases).
52
     R. 17-22.

Appellee’s Brief                                                                   Page 12
extra-contractual claims she contends are affected by the trial court’s declarations,

which leaves nothing for this Court to review.

       WHEREFORE, PREMISES CONSIDERED, Appellee Southern Insurance

Company respectfully requests that the Court affirm the trial court’s judgment and

grant Appellee such other relief to which it may be justly entitled.

                                       Respectfully submitted,

                                       HANNA & PLAUT, L.L.P.
                                       211 E. Seventh Street, Suite 600
                                       Austin, Texas 78701
                                       Telephone: (512) 472-7700
                                       Facsimile: (512) 472-0205

                                       By: /s/ Eric S. Peabody
                                              Catherine L. Hanna
                                              State Bar No. 08918280
                                              Email: channa@hannaplaut.com
                                              Eric S. Peabody
                                              State Bar No. 00789539
                                              Email: epeabody@hannaplaut.com
                                              Laura D. Tubbs
                                              State Bar No. 24052792
                                              Email: ltubbs@hannaplaut.com

                                       ATTORNEYS FOR APPELLEE
                                       SOUTHERN INSURANCE COMPANY




Appellee’s Brief                                                             Page 13
                          CERTIFICATE OF SERVICE

      I hereby certify that a true and correct copy of the foregoing Appellant’s
Brief has been forwarded by e-service and/or facsimile on the 22nd day of January,
2015 to:

Via Facsimile: (713) 583-8989
Email: rraytex@aol.com
Robert E. Ray
1177 West Loop South, Suite 1180
Houston, Texas 77027

Via Facsimile: (713) 467-8883
Email: houstonlaw2@aol.com
Robert L. Collins
M. Chad Gerke
Audrey E. Guthrie
P.O. Box 7726
Houston, Texas 77270-7726

Via Facsimile: (713) 467-8883
Email: lewis@texlaw.info
Christopher D. Lewis
1721 West T.C. Jester Blvd.
Houston, Texas 77008

Attorneys for Appellant



                                            /s/ Eric S. Peabody
                                            Eric S. Peabody




Appellee’s Brief                                                           Page 14
                     CERTIFICATE OF COMPLIANCE

      I certify that this document was produced on a computer using Microsoft
Word 2010 and contains 3,757 words, as determined by the computer software’s
word-count function, excluding the sections of the document listed in Texas Rule
of Appellate Procedure 9.4(i)(1).

/s/ Eric S. Peabody
Eric S. Peabody
Catherine L. Hanna
Laura D. Tubbs
Attorneys for Appellee Southern Insurance Company

Dated: January 22, 2015




Appellee’s Brief                                                         Page 15
                                  APPENDIX

Tab A         Cause No. 28,370: Order setting hearing on Motion to Compel
              Completion of Appraisal

Tab B         Cause No. 28,370: Order Granting Motion to Compel Completion of
              Appraisal

Tab C         Cause No. 28,370: Docket Sheet




Appellee’s Brief                                                      Page 16
Tab A
  Dec. 13. 2012         8:31AM                                                                    No. 2167       P.   1/3




                                      211` and 335th JUDICIAL DISTRICT COtrRTS
                                       BASTROP, BURLESON, LEE AND WASHINGTON COUNTIES

TERRY FLENNIKEN, JUDGE                                  DEBORAH SHIROCKY                  REVAL. TOWSLEE connErr, JUDGE
21' Judicial District Court                                Court Coordinator                         3354' Judicial District Court
100 East Main Street, Suite 305                             804 Pecan Street                       100 W. Buck Street, Suitt 307
Brenhern, Texas 77833                                    Bastrop, Texas 78602                             Caldwell, Texas 77836
(979) 277-6200                                           phew, (512) 581.4037                                     (979) 567-2335
                                                          Fax (512) 5814038
                                                E-mail deborah.shirocky©co.bastronticms                      CAROLER MURRAY
JAN LYNN
Of ficial Reporter                                                                                              Official Reporter
(979) 542-2947                                                                                                   (512) 581-4236




                                     NOTICE OF HEARING

               DATE:              December 11, 2012

               TO:                Mr. Robert L. Collins, Attorney at Law, 713-467-8883
                                  Mr. Daniel Kistler, Attorney at Law, 866-352-5124
                                  Mr. Eric S. Peabody, Attorney at Law, 512-472-0205
                                  Ms. Laura D. Tubbs, Attorney at Law, 512-472-0205
                                  Ms. Sarah Loucks, District Clerk, Hand Delivered

               FROM:              Deborah Shirocky, Civil Court Coordinator

               RE:                Cause No. 28,370; ROSE ENA CANTU vs. SOUTHERN
                                  XNSURANCE COMPANY and STEVE A. DOLLERY; In
                                  the 21st Judicial District Court of Bastrop County, Texas

               Greetings:

               PLEAE BE ADVISED that the court received the Plaintiff's Motion for
               Continuance of the Oral Hearing that was set on the docket for December
               12, 2012. The court GRANTED that Motion and an Order is attached.

               The court has rescheduled the above entitled and numbered case for
               Wednesday, January 16, 2013 at 9:00 a,m. At that time the court will
               address Southern Insurance Company's Motion To Compel Plaintiff To
               Complete Appraisal and To Continue Trial Setting.
                                                                          FILED8%5°AM
                                                                          DATE 12-3- 1 2.
                                                                                                       Sarah Loucks
                                                                                                 Oistiot Merk, Bastrop County
Dec. 13. 2012   8:31AM                                                  No. 2167   P. 2/3




       Page 2
       December 11, 2012
       Cause No. 28,370



       This hearing will take place on the First Floor of the Bastrop County
       Courthouse Annex, located at 804 Pecan in Bastrop, Texas. Please call the
       Court Coordinator, Deborah Shirocky, the day before this scheduled
       hearing to confirm the location!

       The Honorable Carson Campbell will be the new judge presiding over the
       entitled case. Please notify the court by phone and in writing at the above
       referenced numbers if this case reaches a settlement prior to the setting so
       that other matters may be scheduled.

       Should you have any questions regarding the rescheduling of this hearing,
       please do not hesitate to contact this office at the above referenced number.




       Respectfully,
               onAL
       Deborah Shirocky
       Civil Court Coordinator
     Dec. 13. 2012            8 31AM                                                                            No. 2167       P. 3/3
To    lodosgai   a of   7                               .T.i1 0/M0i= 3:47..44 P.M =-W-r-                    I Etela455q DTA PrOrn:   nob." rt Colt! no




                                                         CAUSE NO. 2S,370

                  ROSE ENA CANTU                                                   IN THE DISTRICT COURT OF
                       Faintiff,

                  VS.                                                              218T JUDICIAL DISTRICT

                  SOUTHERN INSURANCE
                  COMPANY and STEVE A.
                  DOLLERY
                      Defendants.                                       BASTROP COUNTY, TEXAS


                              ORDER GRANTING MOTION FOR CONTINUANCE OF ORAL IEEARING

                            On this day the Court considered the Motion for Continuance of Oral Hearing requesting

                  a continuance of the December 12, 2012oial hearing. After reviewing the Motion for

                  Continuance of Oral Hearing, the Court finds and concludes that the Motion should be

                  GRANTED.

                            IT IS THEREFORE ORDERED that this matter be reset, for hearing on the

                  day of                                , 2013 at         *   0 0 lar,?"‘

                            SIGNED this id            day of                                      , 2012.




                                                                                           PILE
                                                                                           occrF. -.L.at,f1E(
                                                                                             .     : .

                                                           tleCt
                                                       6eaq
Tab B
01/28/2013 15:56 9792776235                                 LYNN MITCHELL                               PAGE 02/02
    Jan, 23. 2013 3:10PM         Hanna & Haut, 1., F.                                    No, 989/   P. 3




                                                CAUSE NO. 28,370

            ROSE ENA CANTU                                        IN THE DISTRICT COURT
                 Plaintiff,
            vs
                                                                  BASTROP, TEXAS
            SOUTHERN INSURANCE COIVCPANY §
            And STEVE A DOLLERY
            PARKER CLAIMS SERVICE                                 21ST JUDICIAL DISTRICT

             ORDER GRANTING MOTION TO CCOMPEL COMPLETION OF APPRAISAL

                   CAME ON FOR CONSIDMATION the Motion to Compel. Completion of the Appraisal

            in, the above-referenced action, The Court, having considered the motion, the Plaintiff's

            response, and arguments of counsel, removed the previously appointed umpire, Mr, Claude

            Nam, and appointed lien, ton Wittig as umpire of the appraisal on January 1.6, 2013

                   IT IS ORDERED that the following deadlines will govern the appraisal:

            Jamlary 28, 2013        Appraisers shall confer regarding their estimates

            January 29, 2013        Appraisers shall submit their differences to the umpire

            February 8, 2013        Appraisal panel shall inspect the residence

            February' 15, 2013     Appraisal panel shall meet to dimass estimates and award

            February 22,2011       Appraisal shall be completed


                   SIGNED this, 2S%of              J    P•bk r      013.
                                                                                                           or
01/28/2013 15:56           9792776235                               LYNN MITCHELL                                       PAGE 01/02




                                        21' and 335th JUDICIAL DISTRICT COURTS
                                        BASTROP, BURLESON, ACE, AND WASHINGTON COUNTIES

      CARSON CAMPBELL, JUDGE                                                            REVA L. TOWSLEE CORBETT, JUIY
      21" Judicial District Court                          LYNN MITCHELL                           335th Judicial Diatriet Co , rt
      100 East Main Street, Suite 305                      Court Coordinator                      100 W. Buck Street, Suite 4.1
      Brenham, Texas 77833                            100 E. Main Street, Suite 305                     Caldwell, Texas 771.15
      (979) 277-6200                                     Brenham, Texas 77833                                    (979) 567.2,13
                                                        (979) 277.6200, cxi, 156
      JAN LYNN                                              (979) 2776235 fax                                  HOLLY SOIL V,
      Official Reporter                             itma i l. ImitchollZwnwnty,com                              Official Repor I ;Tr
      (979);542-2947


                                                     FACSIMI


      DATE:               January 28, 2013

      TO:                 Eric Peabody, Attorney at Law                           FAX #: (512) 472-0205
                          Robert Collins, Attorney at Law                                (713) 467-8883
                          Daniel Kistler, Attorney at Law                                (866) 352-5124

      FROM:               Lynn Mitchell

      RE:                 No. 28,370; Rose ,Ella Cantu v. Southern Insurance Company, et al.;
                          In the 21' Judicial District Court at Law of Bastrop County, Texas

      PAGES:              2

      MESSAGE:

      Attached, please find the Order Granting Motion to Compel Completion of Appraisal on the abov
      referenced case signed by Judge Campbell today.




      cc:       Ms. Deborah Shirocky,
                Court Coordinator
Tab C
1/20/2015                                                   co.bastrop.tx.us:8080/CaseDetail.aspx?CaselD=526080

  Ski• to Main Content Lo•out M Account Search Menu New Civil Search Refine Search Back                                        Location : All Courts Help

                                                                REGISTER OF ACTIONS
                                                                    CASE No. 28,370


 ROSE ENA CANTU vs.SOUTHERN INSURANCE COMPANY and STEVE §                                                  Case Type: Contract - Other
 A. DOLLERY                                                                                                Date Filed: 01/11/2012
                                                                                                             Location: 21st District Court




                                                                       PARTY INFORMATION


                                                                                                                            Attorneys
 Defendant DOLLERY, STEVE A.


 Defendant SOUTHERN INSURANCE COMPANY                                                                                       ERIC S PEABODY
                                                                                                                             Retained
                                                                                                                            512-472-7700(W)


                                                                                                                            LAURA D TUBBS
                                                                                                                             Retained
                                                                                                                            512-472-7700(W)


 Plaintiff       CANTU, ROSE ENA                                                                                            ROBERT L. COLLINS
                                                                                                                             Retained
                                                                                                                            713-467-8884(W)


                                                                                                                            DANIEL KISTLER
                                                                                                                             Retained
                                                                                                                            713-855-0827(W)

                                                                  EVENTS & ORDERS OF THE COURT

            DISPOSITIONS
 07/08/2013 Non Suit (Judicial Officer: Flenniken, Terry)


              0 IDER EVENTS AND HEARINGS
 01/11/2012   Original Petition (OCA)
 01/11/2012   Case Information Sheet
 01/11/2012   COVER LETTER
 01/18/2012   Citation by Certified Mail
 01/18/2012   Citation
                 DOLLERY, STEVE A.                                      Returned Unserved 01/24/2012
                                                                        Returned               01/24/2012
 01/18/2012 Citation by Certified Mail
 01/18/2012 Citation
               SOUTHERN INSURANCE COMPANY                         Served                         01/25/2012
 01/25/2012 Green Card Received
 02/10/2012 Answer
 02/10/2012 COVER LETTER
 04/09/2012 Notice
 04/09/2012 Notice
 04/19/2012 COVER LETTER
 04/19/2012 Motion
 05/07/2012 COVER LETTER
 05/07/2012 Motion
 05/09/2012 Notice
 05/30/2012 Motion
 06/05/2012 Notice of Hearing
 06/05/2012 COVER LETTER
 06/07/2012 COVER LETTER
 06/07/2012 Motion
 06/07/2012 Notice
 06/13/2012 Hearing (9:00 AM) (Judicial Officer Flenniken, Terry)
 06/18/2012 Order of Mediation
 08/02/2012 Order
 08/06/2012 Report of Mediation (ACTIVE)
 08/07/2012 Notice of Hearing
 08/07/2012 Notice of Hearing
 09/04/2012 COVER LETTER
 09/04/2012 Response
 09/05/2012 STATUS HEARING (9:00 AM) (Judicial Officer Flenniken, Terry)
 09/05/2012 Order

http://co.bastrop.bus:8080/CaseDetall.aspx?CaselD=526080                                                                                                1/2
1/20/2015                                              co.bastrop.1x.us:8080/CaseDetail.aspx?CaselD=526080
 09/06/2012   Notice of Hearing
 11/30/2012   Motion
 11/30/2012   COVER LETTER
 12/05/2012   COVER LETTER
 12/05/2012   Notice of Hearing
 12/11/2012   COVER LETTER
 12/11/2012   Motion
 12/11/2012   Other/Misc
 12/11/2012   Order
 12/11/2012   Notice of Hearing
 12/12/2012   CANCELED Hearing (9:00 AM) (Judicial Officer Flenniken, Terry)
                Other
 12/13/2012   COVER LETTER
 12/13/2012   Motion
 01/15/2013   COVER LETTER
 01/15/2013   Response
 01/16/2013   Hearing (9:00 AM) (Judicial Officer Campbell, Carson)
 01/16/2013   Order
 01/23/2013   COVER LETTER
 01/23/2013   Notice
 01/29/2013   Order
 01/30/2013   COVER LETTER
 02/25/2013   Report
 02/25/2013   COVER LETTER
 02/26/2013   COVER LETTER
 02/27/2013   Pre-Trial Hearing (9:00 AM) (Judicial Officer Campbell, Carson)
 02/27/2013   Agreed Order
 03/07/2013   Notice
 03/18/2013   CANCELED Jury Trial (9:00 AM) (Judicial Officer Campbell, Carson)
                Per Judge
 04/10/2013   STATUS HEARING (9:00 AM) (Judicial Officer Campbell, Carson)
 05/01/2013   Hearing (9:00 AM) (Judicial Officer Campbell, Carson)
 06/10/2013   COVER LETTER
 06/10/2013   Motion
 06/18/2013   Notice of Hearing
 06/18/2013   COVER LETTER
 07/08/2013   Notice of Nonsuit
 07/17/2013   CANCELED Summary Judgment Hearing (9:00 AM) (Judicial Officer Campbell, Carson)
                Case Disposed
 09/18/2013   CANCELED Pre-Trial Hearing (9:00 AM) (Judicial Officer Campbell, Carson)
                Case Disposed
 09/23/2013   CANCELED Jury Trial (9:00 AM) (Judicial Officer Campbell, Carson)
                Case Disposed
 10/31/2013   Motion
 11/12/2013   COVER LETTER
 11/12/2013   Response
 11/12/2013   Notice of Hearing
 12/04/2013   Motions Hearing (9:00 AM) (Judicial Officer Campbell, Carson)

                                                                 FINANCIAL INFORMATION




              Plaintiff CANTU, ROSE ENA
              Total Financial Assessment                                                                        418.00
              Total Payments and Credits                                                                        418.00
              Balance Due as of 01/20/2015                                                                        0.00

 01/17/2012 Transaction Assessment                                                                               252.00
 01/18/2012 Transaction Assessment                                                                               166.00
 01/18/2012 Payment                     Receipt # 2012-07272                              COLLINS, ROBERT L.   (418.00)




http://co.bastrop.bus:8080/CaseDetail.aspx7CaselD=526080                                                             2./2
Barnes v. Western Alliance Ins. Co., 844 S.W.2d 264 (1992)




                  844 S.W.2d 264
              Court of Appeals of Texas,                                              OPINION
                     Fort Worth.
                                                              DAY, Justice.
 W. Ray BARNES, Barnes Maintenance Co., Inc.,
    W.R.B. Properties, and Softline Services,                 W. Ray Barnes, Barnes Maintenance Company, and
            Intervenor, Appellants,                           W.R.B. Properties (Barnes) brought this action against
                       v.                                     Western Alliance Insurance Company (Western) to
 WESTERN ALLIANCE INSURANCE COMPANY,                          enforce an insurance appraisal award. Softline Services
                   Appellee.                                  (Softline) intervened in the suit, asserting its right to 20%
                                                              of the gross damages Barnes recovered from Western,
  No. 2–92–034–CV. | Dec. 16, 1992. | Rehearing               pursuant to a contract between Barnes and Softline that
             Denied Jan. 26, 1993.                            antedated this proceeding. Barnes claimed that the roofs
                                                              of two of his buildings were hail-damaged on March 1,
Insured brought action against insurer to enforce appraisal   1988. Barnes filed a claim for this alleged loss with
award and entity, which had contracted with insured to
                                                              Western. Barnes and Western could not agree on the
investigate and document insured’s claims and to receive
                                                              amount of the loss, so Barnes, through Softline, 1
20% of gross damages recovered from insurer,
                                                              demanded that an appraisal be made and an award given
intervened. The 89th District Court, Wichita County,
                                                              based on that appraisal, pursuant to *267 a provision in
Temple Driver, J., set aside appraisal award, rendered        the insurance contract between Barnes and Western. The
judgment for insured for actual and treble damages,
                                                              insurance contract provided as follows:
attorney fees, and prejudgment and postjudgment interest,
and awarded entity 20% of insured’s actual damages and
prejudgment interest. Insured and entity appealed. The          Appraisal. In case the insured and this Company shall
Court of Appeals, Day, J., held that: (1) evidence was          fail to agree as to the actual cash value or the amount of
sufficient to support finding that appraisal award was          loss, then, on the written demand of either, each shall
result of fraud, accident, or mistake; (2) jury question        select a competent and disinterested appraiser and
asking whether appraisal award should be set aside              notify the other of the appraiser selected within twenty
because of fraud, accident, or mistake was not                  days of such demand. The appraisers shall first select a
impermissibly multifarious; and (3) entity was entitled to      competent and disinterested umpire; and failing for
20% of overall, total amount insured was awarded in             fifteen days to agree upon such umpire, then, on
action.                                                         request of the insured or this Company, such umpire
                                                                shall be selected by a judge of a district court of a
Affirmed in part and reversed and rendered in part.             judicial district where the loss occurred. The appraisers
                                                                shall then appraise the loss, stating separately actual
                                                                cash value and loss to each item; and, failing to agree,
Attorneys and Law Firms                                         shall submit their differences only to the umpire. An
*266 Schell, Nicholas, Thompson, Beene & Vaughan,               award in writing, so itemized, of any two when filed
L.L.P., and Russell W. Schell, Gregory Alan Scott,              with this Company, shall determine the amount of
                                                                actual cash value and loss. Each appraiser shall be paid
Baltasar D. Cruz, Dallas, for appellants.
                                                                by the party selecting him and the expenses of appraisal
Pohl, Bennett & Mathews, and Michael A. Pohl, Daniel            and umpire shall be paid by the parties equally.
L. Ellwood, James A. Dunn, Houston, for appellant
Softline Services.                                                 When Loss Payable. The amount of loss for which
                                                                   this Company may be liable shall be payable sixty
Oldham & Barnard, and Charles M. Barnard, Charles W.               days after proof of loss, as herein provided, is
Oldham, Wichita Falls, for appellee.                               received by this Company and ascertainment of the
                                                                   loss is made either by agreement between the insured
Before MEYERS, DAY and CLYDE R. ASHWORTH                           and this Company expressed in writing or by the
(Retired, Sitting by Assignment), JJ.                              filing with this Company of an [appraisal] award as
                                                                   herein provided.


WestEawNext © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                      1
Barnes v. Western Alliance Ins. Co., 844 S.W.2d 264 (1992)



Barnes appointed Gene E. Thayer, Sr. (Thayer) as his             *268 Do you find from a preponderance of the
appraiser, and Western selected Dennis Olsovsky                  evidence that the [appraisal] award should be set aside
(Olsovsky). Thayer and Olsovsky were unable to agree on          because of fraud, accident, or mistake?
an umpire, so Judge Brotherton, of the 30th District Court
of Wichita County, appointed Joseph E. Ashmore, Jr.              Answer “Yes” or “No.”
(Ashmore) as umpire. Thayer and Olsovsky submitted
their differences as to the actual cash value of the loss in     ANSWER: Yes
writing to Ashmore. Ashmore and Thayer signed an
appraisal award for $402,978.08 on June 6, 1990.                 Jury Instruction No. 14–A:
Olsovsky did not sign the award. Western failed to
                                                                 You are instructed that “fraud” means:
challenge or pay the award sixty days after it was
rendered, whereupon Barnes instituted this suit. Softline        (1) that a material representation was made; (2) that it
intervened in the suit on July 29, 1991.                         was false; (3) that when the speaker made it, he knew it
                                                                 was false or made it recklessly without any knowledge
Following a trial on the merits, the jury found that Barnes      of its truth and as a positive assertion; (4) that he made
had suffered hail damage in the amount of $67,834.89 and         it with the intention that it should be acted upon by the
that the appraisal award should be set aside because of          party; (5) that the party acted in reliance upon it; and
fraud, accident, or mistake. The jury also found that            (6) that he thereby suffered injury.
Western had knowingly violated the Texas Insurance
Code and the Deceptive Trade Practices–Consumer                  Jury Instruction No. 14–B:
Protection Act.
                                                                 You are instructed that “accident” means an
The trial court denied Barnes’ and Softline’s motions for        unexpected, unforseen [sic] or undesigned happening
judgment non obstante veredicto to disregard the jury’s          or consequence from either a known or unknown cause.
finding on the damages issue and rendered judgment for
Barnes for actual and treble damages, attorneys’ fees, and       Jury Instruction No. 14–C:
pre- and postjudgment interest. The judgment also
provided for Softline to recover 20% of Barnes’ actual           You are hereby instructed that “mistake” means a
damages and prejudgment interest.                                situation where the appraisers and umpire were
                                                                 laboring under a mistake of fact by which their
We affirm in part and reverse and render in part.                appraisal award was made to operate in a way they did
                                                                 not intend, such that the award does not speak the
[1] [2] [3]                                                      intention of the appraisers and umpire, or where the
        Texas courts have long held that appraisal awards
made pursuant to the provisions of an insurance contract         error resulting in the award is so great as to be
are binding and enforceable. Standard Fire Ins. Co. v.           indicative of gross partiality, undue influence, or
Fraiman, 514 S.W.2d 343, 344–45 (Tex.Civ.App.—                   corruption.
Houston [14th Dist.] 1974, no writ). Every reasonable
presumption will be indulged to sustain an appraisal             Jury Question No. 10 asked:
award, and the burden of proof lies on the party seeking to
avoid the award. Continental Ins. Co. v. Guerson, 93             [F]rom a preponderance of the evidence[, w]hat sum of
S.W.2d 591, 594 (Tex.Civ.App.—San Antonio 1936, writ             money, if paid now in cash, would fairly and
dism’d). An award entered by appraisers and an umpire            reasonably compensate W. Ray Barnes for his
can be disregarded in only two instances: (1) if the award       damages, if any, for the storm, hail, and resulting
                                                                 damage to the insured buildings from the occurrence in
was made without authority; or (2) if the award was made
                                                                 question?
as the result of fraud, accident, or mistake. See Fisch v.
Transcontinental Ins. Co., 356 S.W.2d 186, 190
                                                                 ....
(Tex.Civ.App.—Houston 1962, writ ref’d n.r.e.);
Guerson, 93 S.W.2d at 594.                                       Answer in dollars and cents for damages, if any.
Western contended at trial that the appraisal award was          ANSWER: $67,834.89
the result of fraud, accident, or mistake. The trial court
allowed Western to submit that issue to the jury in the        Because the jury answered Question 14 in the affirmative,
form of Jury Question 14.                                      the trial court based Barnes’ damages on the jury’s
                                                               answer to Question 10 rather than on the appraisal award.
   Jury Question No. 14 asked:
WestEawNext © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                      2
Barnes v. Western Alliance Ins. Co., 844 S.W.2d 264 (1992)



                                                                          ....
[4] [5] [6] [7]
             In their first two points of error, Barnes and
Softline each complain that the jury’s affirmative finding             Q: And you know that you ordered a new roof on the
in response to Question 14 was supported by no evidence                Winn’s portion before the hail?
or insufficient evidence.2 In point of error three, Barnes
contends that he was entitled to specific performance of               A: Yes, sir.
the appraisal award as a matter of law, and Softline
asserts that the trial court should have based damages on              Q: And although you told us in your prior testimony
the appraisal award as a matter of law, rather than on the             that the entire roof was fine before the hail, you now
jury’s answer to Question 10.                                          know that it was so bad that one section of it you had
                                                                       completely ordered a re-roofing job?
[8] [9]
      In determining a “no evidence” point, we are to
                                                                       A: Yes, sir.
consider only the evidence and inferences that tend to
support the finding of the jury and disregard all evidence                ....
and inferences to the contrary. See Sherman v. First Nat’l
Bank, 760 S.W.2d 240, 242 (Tex.1988) (per curiam);                     Q: So whatever work you were having done, not
Larson v. Cook Consultants, Inc., 690 S.W.2d 567, 568                  only to that roof but to the inside of the Winn’s
(Tex.1985) (per curiam); In re King’s Estate, 150 Tex.                 building, obviously was not work caused by that
662, 244 S.W.2d 660, 661–62 (1951) (per curiam). If                    particular hail?
there is any evidence of probative force to support the
finding of the jury, the point must be overruled and the               A: That’s true.
finding upheld. In re King’s Estate, 244 S.W.2d at 661–
62.                                                                       ....

The record reveals numerous instances in which Barnes                  Q: Back in October of 1990. And you told the court
admitted in open court that he had previously lied about               reporter that at that time you believe[d] the Winn’s
the hail damage *269 to the roof and about the repair                  roof damage was from the hail, and that’s a lie?
costs. Barnes testified at trial as follows:
                                                                       A: That’s right.
   Q: Now, in your deposition you told us that the work
   that was done on Winn’s3 was done after the hail and                   ....
   because of the hail and you had to get that roof because
   of the hail; didn’t you?                                            Q: And before the deposition she had you raise your
                                                                       right hand and swear that everything you stated
                                                                       before her was true and correct?
   A: Yes, sir, I did.
                                                                       A: That’s true.
          Q: That’s not true; is it?
                                                                       Q: Do you have anything in writing that you can
          A: That is not true.                                         show this jury that from March 1, 1988 up to
                                                                       December 28th, 1990 that you ever told the
            ....                                                       insurance company that you were not claiming
                                                                       damage to the Winn’s portion of the roof?
          Q: Have you ever at any point prior to the last five
          minutes ever told the defendants in this case ... that       A: No, sir.
          you were no longer claiming that that was part of the    Judge Ashmore, the umpire, testified as follows:
          hail damage?
                                                                     Q: ... If this roof [over Winn’s] was under repair at the
          A: No, sir, I have not done that.                          time of the hail, that repair was finished after the hail
                                                                     without any additional charges other than what was
            ....                                                     already going to be charged, and it was a permanent
                                                                     roof, and they gave a roofing guarantee, then you
          Q: ... You never told the umpire or Thayer that that       wouldn’t expect there to be any award if you had
          new roof was not from the hail?                            known those facts, for that section of the roof that that
                                                                     roofer had done the work on?
          A: No, sir.
WestEawNext © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                         3
Barnes v. Western Alliance Ins. Co., 844 S.W.2d 264 (1992)



       ....                                                      guaranteed its work and that Barnes had never asked
                                                                 Armored to make good on its guarantee.
   A: If I had had that information, I would have factored
   it in. Unfortunately, I didn’t have that information.         (3) Ashmore testified that he was shocked by
                                                                 Olsovsky’s letter sent after the award was made
This testimony is some evidence from which the jury              because of the difference between Ashmore’s and
could reasonably have concluded, based on the definition         Olsovsky’s findings and because Olsovsky was so
given in Jury Instruction 14–A, that Barnes had                  upset about the award. Ashmore asked Judge
committed fraud, thus causing the appraisal award to be          Brotherton what he should do about the situation.
based on fraud. This testimony also provides some                Ashmore testified that Olsovsky’s letter did not contain
evidence from which the jury could have concluded that           anything that would have made a difference in the
the appraisal award was the result of accident or mistake,       award, but he also admitted that he got his figures
as those terms were defined in Jury Instructions 14–B and        solely from Thayer.
14–C.
                                                                 (4) Ashmore testified that he could not tell which part
Because we find some evidence that supports the jury’s           of the Thaten property roof was over Winn’s store and
affirmative finding to Question 14, we overrule Barnes’          that he did not know whether the roof he had inspected
and Softline’s first points of error.                            was permanent or temporary or whether his appraisal
                                                                 figures were for the whole roof, including the part that
[10]
     We will now consider Barnes’ and Softline’s                 was roofed after the hail by Armored.
challenge to the factual sufficiency of the evidence.
                                                                 (5) Ashmore admitted that he had received two
*270 [11] [12] [13] [14] An assertion that the evidence is       different letters from Armored that predated the
“insufficient” to support a finding of fact can mean that        appraisal award, showing that Armored had performed
the evidence supporting the finding is so weak or the            two repair jobs on Winn’s store: one in process before
evidence to the contrary is so overwhelming that the             and completed after the hail and one several months
finding should be set aside and a new trial ordered. Garza       later. Ashmore further testified that he knew this
v. Alviar, 395 S.W.2d 821, 823 (Tex.1965). We are                information when he made his appraisal award.
required to consider all of the evidence in the case in
making this determination. See id. Findings of fact are the      (6) Ashmore testified that Olsovsky complained of the
exclusive province of the jury and/or the trial court.           Winn’s roof being repaired before the appraisers and
Bellefonte Underwriters Ins. Co. v. Brown, 704 S.W.2d            umpire could inspect it so that it was difficult to tell
742, 744–45 (Tex.1986). A court of appeals cannot make           whether there had been hail damage to the roof in 1988.
findings of fact; it can only “unfind” facts. Id.
                                                                 (7) Olsovsky’s estimate for roof repairs was $135.00
                                                                 per square. Olsovsky provided Ashmore this
Based on our review of the entire record on this issue, we
                                                                 information, substantiated by estimates from Lydick
find that there is sufficient evidence to support the jury’s
                                                                 Roofing and Weatherford Roofing, at $142.00 per
affirmative answer to Question 14. In addition to Barnes’
                                                                 square and $135.00 per square, respectively. Thayer’s
admissions that he had lied about the March 1988 hail
                                                                 per-square estimate was $325.00, and Ashmore could
damage and correspondent repair costs, evidence was
                                                                 provide no information from Thayer that backed this
presented of the following:
                                                                 estimate. Ashmore testified that he had access to this
   (1) When questioned about whether Winn’s store                information and considered it in making his award, but
   needed considerable work before the hail (inside and          that he could not tell if it was for the same type of roof
   out) and whether the price changed after the hail,            as the roof for which he made the award. Ashmore
   Barnes would not give a direct answer but could               relied on Thayer’s figures when making the award
   produce no evidence that his roofing contractor,              because he thought they were correct.
   Armored Roofing (Armored), changed its contract
   price after the hail.                                       Barnes’ testimony shows that he did not tell the truth
                                                               about the 1988 hail damage to the Thaten property.
   (2) Armored completed its roofing job a few days after      Barnes’ and Ashmore’s testimony reveals that there was a
   the March 1988 hailstorm, and Barnes knew of no             great deal of confusion about which part of the roof on the
   damage to the roof after that time. Barnes refused to       Thaten property was actually damaged during the 1988
   assume that any leakage damage to the Winn’s store          hailstorm, so *271 much so that the appraisers and umpire
   was not from the hail but admitted that Armored had

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Barnes v. Western Alliance Ins. Co., 844 S.W.2d 264 (1992)



could not tell which part needed to be replaced because of    finding and as such would be improper.” Id., 596 S.W.2d
the storm.                                                    at 290.
                                                              [16]
This evidence is sufficient for the jury to have reasonably       Both of these cases were decided before the 1988
concluded that the appraisal award was based on fraud.        amendment to TEX.R.CIV.P. 277. Rule 277 provides, in
The jury could have found that: (1) Barnes made a             pertinent part:
material representation as to which part of the roof was
actually damaged by the March 1988 hailstorm; (2) this                     In all jury cases the court shall,
representation was false; (3) Barnes knew it was false                     whenever feasible, submit the cause
when he made it; (4) Barnes intended that Western,                         upon broad-form questions. The
Thayer, Olsovsky, and Ashmore should act upon it; (5)                      court shall submit such instructions
Ashmore4 did act in reliance upon it pursuant to the                       and definitions as shall be proper to
insurance contract between Western and Barnes; and (6)                     enable the jury to render a verdict.
Western thereby suffered injury. Additionally, the
evidence of Barnes’ dishonesty and the resultant              Id. (emphasis supplied). In Texas Dep’t of Human
confusion as to which portion of the roof actually required   Resources v. E.B., 802 S.W.2d 647, 649 (Tex.1990), the
replacing was sufficient for the jury to have reasonably      supreme court stated that “whenever feasible” means “in
concluded that the appraisal award was the result of          any or every instance in which it is capable of being
accident or mistake, based on Jury Instructions 14–B and      accomplished.”       Thus,       unless     “extraordinary
14–C.                                                         circumstances” exist, a trial court must submit broad-form
                                                              questions. Id.
Because we find sufficient evidence from which the jury
could have concluded that the appraisal award was the         The “controlling question” in E.B. was whether the
result of fraud, accident, or mistake, we overrule Barnes’    parent-child relationship between the mother and her
and Softline’s second points of error. In view of our         children should be terminated, and not what specific
finding with respect to Barnes’ and Softline’s first and      ground or grounds the jury relied on to affirmatively
second points of error, we deem it unnecessary to address     answer the question posed. Id. The E.B. court also
their third points of error.                                  rejected arguments that the jury was required to agree on
                                                              the specific grounds for termination. Rather, it was
[15]
    By his fourth point of error, Barnes complains that       enough that the jurors agreed that the mother had
Jury Question No. 14 was impermissibly multifarious           endangered her children by doing one or more of the
because fraud, accident, and mistake are distinct             things listed in the jury instruction. Id.
affirmative defenses that should have been submitted
separately to the jury. Barnes contends that the question     *272 In the case before us, the controlling question was
was improper because there is no way of knowing which         whether the appraisal award was the result of fraud,
of these defenses the jury intended from its affirmative      accident, or mistake and not which of these specific
finding.                                                      grounds the jury relied upon to answer Question 14.
                                                              Under E.B., the jury was not required to agree on the
We have found that evidence sufficient to prove each of       specific ground that resulted in the improper appraisal
these theories was presented to the jury at trial.            award. See also TEX.R.CIV.P. 277 (court may submit a
Nonetheless, we must consider whether it is necessary         question disjunctively when it is apparent from the
that we be able to determine which of the defenses the        evidence that one or the other of the conditions or facts
jury intended from its affirmative finding.                   inquired about necessarily exists). Moreover, the trial
                                                              judge complied with Rule 277 by submitting the
Barnes primarily relies on European Import Co. v. Lone        instructions necessary to enable the jury to render a
Star Co., 596 S.W.2d 287, 290 (Tex.Civ.App.—Houston           verdict on the appraisal award issue.
[1st Dist.] 1980, writ ref’d n.r.e.) and Parker v. Keyser,
540 S.W.2d 827, 830–31 (Tex.Civ.App.—Corpus Christi           Because we find that Jury Question 14 was proper in light
1976, no writ). The European court ruled that a special       of the current version of Rule 277 and the supreme court’s
issue inquiring whether the execution of a guaranty           interpretation of that rule, we overrule Barnes’ fourth
agreement was obtained by fraud or duress was                 point of error.
“multifarious and would cause the court to speculate
                                                              [17]
concerning what the jury intended from an affirmative            In its fourth point of error, Softline complains the trial
                                                              court improperly limited Softline’s recovery to 20% of
                                                              Barnes’ actual damages and prejudgment interest because
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Barnes v. Western Alliance Ins. Co., 844 S.W.2d 264 (1992)



the contract between Softline and Barnes and the jury’s         Barnes does not assert that Softline was engaged in the
answer to Question 13 entitled Softline to 20% of Barnes’       unauthorized practice of law. He does not dispute the
gross recovery from Western.                                    existence of the contract with Softline or any of its terms,
                                                                nor does he contend that the contract was unconscionable
Jury Question No. 13 asked:                                     or the result of unequal bargaining power. Based on the
                                                                evidence presented at trial, the jury concluded that
  Do you find from a preponderance of the evidence that         Softline was entitled to recover 20% of the gross amount
  Softline Services and Plaintiffs agreed that Softline was     Barnes recovered from Western, pursuant to that contract.
  to be paid by the Plaintiffs an amount equal to 20% of        Aside from his mistaken reliance upon Jansen, Barnes has
  the gross amount recovered prior to any alterations           presented no evidence or authority on appeal, and we are
  and/or depreciation with no limitations or restrictions       aware of none, why he should not be required to abide by
  on the method of recovery, or for time and expenses,          the terms of his contract with *273 Softline. Thus,
  whichever is greater, and directed all interested parties     Barnes’ argument must fail.
  to honor Softline Services’ interest and lien in the
  agreement? [Emphasis supplied.]                               [18]
                                                                    Words used in a contract are to be given their plain,
                                                                ordinary, and generally accepted meanings unless the
  Answer “Yes” or “No.”                                         instrument itself shows them to have been used in a
                                                                technical or different sense. Western Reserve Life Ins. Co.
  ANSWER: Yes                                                   v. Meadows, 152 Tex. 559, 261 S.W.2d 554, 557 (1953),
                                                                cert. denied, 347 U.S. 928, 74 S.Ct. 531, 98 L.Ed. 1081
Similarly, the contract between Barnes and Softline
                                                                (1954). The term “gross” means “an overall total
provided that Barnes was to pay Softline “an amount
                                                                exclusive of deductions.” WEBSTER’S THIRD NEW
equal to 20% of the gross amount recovered prior to any
                                                                INTERNATIONAL DICTIONARY 1002 (1981). Thus,
deductions for deductibles and/or depreciation with no
                                                                the “gross amount” is the overall, total amount Barnes
limitations or restrictions on the method of recovery” for
                                                                was awarded. That amount includes: (1) actual damages
Softline’s services in collecting insurance proceeds for the
                                                                of $67,834.89, trebled to $203,504.67, (2) attorneys’ fees
hail-damaged roof from Western.
                                                                of $13,500.00, (3) prejudgment interest of $16,325.99,
                                                                and (4) postjudgment interest at 10% per annum from and
Relying on Unauthorized Practice of Law Committee v.
                                                                after the date of the judgment until fully paid.
Jansen, 816 S.W.2d 813, 814 (Tex.App.—Houston [14th
                                                                Accordingly, Softline is entitled to 20% of each of these
Dist.] 1991, writ denied), Barnes asserts that Softline is
                                                                amounts.
precluded from any recovery. In the judgment that formed
the basis of the Jansen appeal, the trial court permanently
                                                                We sustain Softline’s fourth point of error.
enjoined a public insurance adjusting firm (Jansen) from
asserting a contingent fee claim against a client who has       [19]
                                                                    In two cross-points Western complains that the trial
contracted with an attorney on a contingent fee basis in
                                                                court erred in awarding Barnes treble damages and
the same matter. Id. at 814. The trial court’s ruling on that
                                                                attorneys’ fees. Western directs us to TEX.BUS. &
issue was undisputed on appeal. Id. Without the benefit of
                                                                COM.CODE ANN. § 17.50(b) (Vernon Supp.1993),
knowledge of the facts in that case, we cannot determine
                                                                which provides that only consumers who prevail in a trial
whether Jansen was in the practice of contracting with his
                                                                on the merits are entitled to recover treble damages.
clients on a contingency fee basis before or after those
                                                                Western contends that Barnes did not prevail at trial
clients entered into contingency fee contracts with
                                                                because of the jury’s affirmative finding in response to
attorneys on the same matters.
                                                                Question 14. This argument is without merit.
In the case before us, however, Barnes contracted with
                                                                In his original petition Barnes sought to recover damages
Softline on February 8, 1989, over a year-and-a-half
                                                                from Western for breach of contract, insurance code
before Barnes filed suit against Western. We find it
                                                                violations, breach of duty of good faith and fair dealing,
inconceivable that the Jansen trial court intended to
                                                                DTPA violations, and negligence and gross negligence.
enable insureds to avoid contingency fee contracts already
                                                                The jury found that Western breached its duty of good
in existence with insurance adjustors by subsequently
                                                                faith, engaged in unfair or deceptive practices, in violation
contracting on a contingency fee basis with an attorney
                                                                of the Texas Insurance Code and the Texas Deceptive
about the same matter. Moreover, we are not bound by the
                                                                Trade Practices–Consumer Protection Act, and was
decisions of our sister appellate courts, much less those of
                                                                grossly negligent in its handling of Barnes’ claim. Thus,
the trial courts.


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Barnes v. Western Alliance Ins. Co., 844 S.W.2d 264 (1992)



Barnes prevailed on all of his causes of action. Moreover,                827   (Tex.App.—Austin              1990,      writ      denied);
Western does not dispute any of these findings.                           TEX.R.APP.P. 74(f).

The jury also found that Barnes had suffered damages in                   We overrule both of Western’s cross-points.
the amount of $67,834.89 as a result of the March 1988
hailstorm and that he was entitled to attorneys’ fees in the              We affirm the trial court’s judgment, except as it relates
amount of $13,566.98. Barnes did not recover the amount                   to Softline’s fourth point of error. With respect to that
of damages requested in his petition, but many litigants do               point, we reverse the trial court’s judgment and render
not recover the entire amount they seek at trial.                         judgment for Softline of 20% of Barnes’ gross damages
                                                                          recovered, including actual and trebled damages, pre- and
Western’s complaint that the trial court improperly                       postjudgment interest, and attorneys’ fees.
awarded Barnes attorneys’ fees is without support in the
record or the case law. Accordingly, this point is waived                 The parties shall share equally the costs of this appeal.
on appeal. Lakeway Land Co. v. Kizer, 796 S.W.2d 820,


Footnotes
1      On February 8, 1989, Barnes and Softline entered into an agreement under which Softline agreed to investigate and document
       Barnes’ claims for presentation to Western. A Softline representative initiated the appraisal process provided for in the
       insurance contract between Barnes and Western.
2      Barnes contends that the jury’s factual finding was against the great weight and preponderance of the evidence. When a party
       without the burden of proof on a special issue complains of the jury’s adverse fact finding, that party should phrase his point of
       error as “insufficient evidence” to support the jury’s findings. Croucher v. Croucher, 660 S.W.2d 55, 58 (Tex.1983). Since
       fraud, accident, and mistake are affirmative defenses, Western, and not Barnes, had the burden of proof on Jury Question 14.
          The supreme court has adopted a liberal rule of reference to the construction of points of error contained in appellate briefs,
          however, (see Pool v. Ford Motor Co., 715 S.W.2d 629, 630 (Tex.1986) (opinion on reh’g), O’Neil v. Mack Trucks, Inc., 542
          S.W.2d 112, 114 (Tex.1976), and TEX.R.APP.P. 74(p)), and so we will construe an inappropriately phrased point of error as
          raising a challenge to the factual sufficiency of the evidence. See Muhlbauer v. Muhlbauer, 686 S.W.2d 366, 368
          (Tex.App.—Fort Worth 1985, no writ).
3      Barnes claimed that the March 1988 hailstorm damaged two of his properties: the Lamar property, where Barnes maintained
       offices, and the Thaten property, which was a strip shopping center. Winn’s Variety Stores was one of two tenants located at the
       Thaten property.
4      We cannot determine the basis of Thayer’s and Olsovsky’s award because their testimony is not before us.




End of Document                                                          © 2015 Thomson Reuters. No claim to original U.S. Government Works.




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Blum’s Furniture Co., Inc. v. Certain Underwriters at Lloyds..., 459 Fed.Appx. 366...




                                                                 Thomas Clark Wright, Wright & Close, L.L.P., Frank
                  459 Fed.Appx. 366
                                                                 Anthony Piccolo, I, Esq., Preis & Roy, A.P.L.C., Henry
   This case was not selected for publication in the
                                                                 Sim Platts, Jr., Esq., Wright & Close, L.L.P., Houston,
                   Federal Reporter.
                                                                 TX, for Defendant–Appellee.
 Not for Publication in West’s Federal Reporter See
   Fed. Rule of Appellate Procedure 32.1 generally               Appeal from the United States District Court for the
 governing citation of judicial decisions issued on or           Southern District of Texas, 4:09–CV–3479.
 after Jan. 1, 2007. See also Fifth Circuit Rules 28.7,
 47.5.3, 47.5.4. (Find CTA5 Rule 28 and Find CTA5                Before KING, JOLLY, and GRAVES, Circuit Judges.
                       Rule 47)
            United States Court of Appeals,
                     Fifth Circuit.                              *367 PER CURIAM:*
         BLUM’S FURNITURE COMPANY, INC.,
                 Plaintiff–Appellant,
                           v.
         CERTAIN UNDERWRITERS AT LLOYDS                             FACTS AND PROCEDURAL BACKGROUND
            LONDON, Defendant–Appellee.
                                                                 Certain Underwriters at Lloyds London (“Lloyds”) issued
 No. 11–20221 | Summary Calendar. | Jan. 24, 2012.               to Blum’s Furniture Company (“Blum’s”) an insurance
                                                                 policy, number PUC 102524 (“policy”), covering its
                                                                 business property. During Hurricane Ike in 2008, the
Synopsis                                                         insured’s building and contents (collectively “the
Background: Insured company brought Texas state-court            property”) sustained extensive damage. On September 17,
action against insurer, alleging breach of contract, fraud,      2008, Blum’s submitted its claim under the policy to
conspiracy, and common-law and statutory bad faith               Lloyds.
claims in relation to insurance claim, under business
property policy, stemming from hurricane damage.                 On September 26, 2008, T.M. Mayfield & Company, an
Insurer removed action and asserted defense of estoppel          independent insurance claims adjuster hired by Lloyds,
based on ongoing appraisal procedure provided for by             inspected the property. After conducting its inspection,
policy. The United States District Court for the Southern        T.M. Mayfield & Co. forwarded to Lloyds a detailed
District of Texas, Nancy F. Atlas, J., 2011 WL 819491,           report containing an estimate for payment of Blum’s
granted insurer’s summary judgment motion. Company               claim. On October 28, 2008, Lloyds requested a proof of
appealed.                                                        loss in exchange for payment of $50,000.00. Less than a
                                                                 year after Hurricane Ike, Lloyds obtained a second
                                                                 estimate from Belfor USA. Upon receiving Belfor USA’s
                                                                 report, Lloyds adjusted the claim and paid Plaintiff
Holdings: The Court of Appeals held that:
                                                                 approximately $300,000.00. Plaintiff accepted this
[1]                                                              payment, but invoked the appraisal provision under the
      insurer did not breach its contract with company, and
                                                                 policy on August 10, 2009.
[2]
   insurer did not act in bad faith in processing company’s
                                                                 According to the appraisal provision, if the parties to the
claim.
                                                                 policy disagreed on the value of the property loss, either
                                                                 party may make written demand for an appraisal of the
Affirmed.                                                        loss. In the event that a party demands appraisal, each
                                                                 party will select its own impartial appraiser. If the
                                                                 selected appraisers cannot agree on the value of the loss,
Attorneys and Law Firms                                          the two appraisers will select an umpire to whom the
                                                                 differences will be submitted. Once an umpire has been
*366 Peter M. Kelly, Attorney, Law Office of Peter M.            selected, an agreement on the amount of loss by the
Kelly, P.C., Robert Chamless Lane, Middagh & Lane,               umpire and either appraiser will be binding. However,
P.L.L.C., Houston, TX, for Plaintiff–Appellant.                  Lloyds still retained its right to deny the claim.


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Blum’s Furniture Co., Inc. v. Certain Underwriters at Lloyds..., 459 Fed.Appx. 366...



Less than one month later, Blum’s filed this lawsuit in          Fed.R.Civ.P. 56(c). The moving party bears the burden of
Texas state court asserting causes of action for breach of       identifying an absence of evidence to support the
contract, fraud, conspiracy, and common law and                  nonmoving party’s case. Celotex Corp. v. Catrett, 477
statutory bad faith claims. Lloyds then removed the              U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). In
lawsuit to federal court and asserted the defense of             determining whether summary judgment is appropriate,
estoppel based on the appraisal procedure.                       the evidence and factual inferences drawn therefrom are
                                                                 to be viewed in a light most favorable to the non-movant,
Meanwhile, the appraisal process continued. Each party           and all reasonable doubts about the facts should be
selected an appraiser who inspected the property and             resolved in favor of the non-movant. Boston Old Colony
issued estimates of damage. When the appraisers could            Ins. v. Tiner Associates Inc., 288 F.3d 222, 227 (5th
not agree on the proper value of the damage, they selected       Cir.2002).
an umpire as required under the policy. After more than
one year spent in the appraisal process, the umpire              Where, as here, jurisdiction is based upon diversity, this
ultimately issued an award for damage to the property            court applies the law of the forum state. Holt v. State
exceeding $1,000,000.                                            Farm Fire & Cas. Co., 627 F.3d 188, 191 (5th Cir.2010).
                                                                 Accordingly, Texas substantive law controls. In the
Thereafter, Lloyds issued two checks to Blum’s for the           absence of a final decision by the Texas Supreme Court
appraisal amount, less amounts already paid and other            addressing the issue at hand, this court must determine, in
deductions provided for by the policy. Blum’s accepted           its best judgment, how the state’s highest court would
Lloyds’s payment of the appraisal amount, but continued          resolve the issue if presented with it. Id. Because the
to pursue the breach of contract and extra-contractual           Texas Supreme Court has not addressed the issue at hand,
claims.                                                          we must make an “Erie guess.” Id. at 191–192.

Following the close of discovery, Lloyds filed its motion
for summary judgment. The district court granted Lloyds’
motion for summary judgment, finding that “when an
insurer makes timely payment of a binding and                                           DISCUSSION
enforceable appraisal award, and the insured accepts that
payment, the insured is ‘estopped by the appraisal award         In this case, Blum’s raises two issues challenging the
from pursuing a breach of contract claim the insure[r]           district court’s grant of summary judgment in favor of
[sic].’ ” Blum’s Furniture Co. v. Certain Underwriters at        Lloyds. These issues, however, hinge upon the same
Lloyds *368 London, 2011 WL 819491, *1, *3                       argument—that Lloyds breached its duty of good faith
(S.D.Tex.2011) (citing Franco v. Slavonic Mut. Fire Ins.         and fair dealings with Blum’s by failing to promptly pay
Ass’n., 154 S.W.3d 777, 787 (Tex.App.2004)). Based on            the full policy claim.
this holding, the district court found that an insured
cannot maintain a common law and/or statutory bad faith          In Liberty Nat’l Fire Ins. Co. v. Akin, the Texas Supreme
claim where the breach of contract claim fails, unless the       Court recognized that “in most circumstances, an insured
insurer’s actions fall within one of the recognized              may not prevail on a bad faith claim without first showing
exceptions, to which Blum’s has failed to present any            that the insurer breached the contract.” 927 S.W.2d 627,
evidence. Id. at *3–*5.                                          629 (Tex.1996). The only recognized exceptions to this
                                                                 rule are if the insurer “commit[s] some act, so extreme,
Aggrieved by the district court’s grant of summary               that would cause injury independent of the policy claim,”
judgment, Blum’s appealed.                                       or fails “to timely investigate the insured’s claim.”
                                                                 Republic Ins. Co. v. Stoker, 903 S.W.2d 338, 341
                                                                 (Tex.1995).

                                                                 Under Texas law, when an insurer makes timely payment
              STANDARD OF REVIEW                                 of a binding and enforceable appraisal award, and the
                                                                 insured accepts the payment, the insured is “estopped by
This court reviews a district court’s grant or denial of         the appraisal award from maintaining a breach of contract
summary judgment de novo. Dunn–McCampbell Royalty                claim against [the insurer].” Franco v. Slavonic Mut. Fire
Interest, Inc. v. Nat’l Park Serv., 630 F.3d 431, 435 (5th       Ins. Ass’n, 154 S.W.3d 777, 787 (Tex.App.2004).
Cir.2011). Summary judgment may be granted if there is
no genuine issue as to any material fact and the moving          According to Blum’s, because the appraisal award was
party is entitled to judgment as a matter of law. See            greater than the initial payment made by Lloyds

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Blum’s Furniture Co., Inc. v. Certain Underwriters at Lloyds..., 459 Fed.Appx. 366...



(approximately $300,000), Lloyds’ final payment of the                 based on the general rule, Blum’s cannot maintain an
claim was untimely and constituted a breach of contract.               action for bad faith where the breach of contract claim
Lloyds argues that Blum’s cannot use the difference in the             fails, Akin, 927 S.W.2d at 629, and neither exception
appraisal award and initial payment as evidence of a                   applies. Stoker, 903 S.W.2d at 341.
breach of contract. See *369 Breshears v. State Farm
Lloyds, 155 S.W.3d 340, 343 (Tex.App.2004) (“The                       Blum’s, however, would have this court believe that it
Breshears may not use the fact that the appraisal award                suffered additional damages because Lloyds initially paid
was different than the amount originally paid as evidence              only a portion of the entire claim thereby forcing Blum’s
of breach of contract, especially when the contract they               to invoke the appraisal process. To the contrary, Lloyds
claim is being breached provides for resolution of                     began investigating Blum’s claim nine days after Blum’s
disputes through appraisal.”).                                         submitted its claim. Lloyds inspected the property damage
                                                                       and obtained estimates from two adjusters. Based on these
[1]
   Here, it seems clear that Lloyds did not breach its                 estimates, Lloyds adjusted the claim and paid Blum’s
contract with Blum’s. Blum’s made a claim, Lloyds                      approximately $300,000.00. Because Blum’s disagreed
inspected the property, obtained estimates on the amount               with the amount of payment, it invoked the appraisal
of damage, and made an initial payment to Blum’s. When                 provision.
Blum’s disputed the amount paid, it invoked the appraisal
process to have independent appraisers determine the                   It is undisputed that the appraisal process can only
amount of covered loss. Upon the conclusion of the                     determine the value of damages, while liability is left for
appraisal process, Lloyds paid the difference between the              the courts to decide. See, e.g., In re Universal
appraisal award and the initial payment. Furthermore, the              Underwriters of Tex. Ins. Co., 345 S.W.3d 404, 407 (Tex.
district court found that “it is undisputed that Lloyds paid           May 6, 2011). However, at no time during the claims
the appraisal amount in a timely manner after the award                process did Lloyds dispute the issue of coverage. Once
was issued,” and that “Blum’s accepted that payment.”                  the appraisal process concluded with an award to Blum’s,
Blum’s Furniture Co., 2011 WL 819491, at *3. Therefore,                Lloyds made payment of that amount and Blum’s
we find that Blum’s has failed to present any evidence                 accepted. Based on the evidence presented, Blum’s has
which would establish a genuine issue of material fact                 failed to establish a genuine issue of material fact
regarding its breach of contract claim against Lloyds.                 regarding its bad faith claims against Lloyds.

As stated above, “in most circumstances, an insured may
not prevail on a bad faith claim without first showing that
the insurer breached the contract.” Akin, 927 S.W.2d at
629. The only recognized exceptions to this rule are if the                                   CONCLUSION
insurer “commit[s] some act, so extreme, that would
cause injury independent of the policy claim,” or fails “to            Based on the foregoing analysis, the judgment of the
timely investigate the insured’s claim.” Republic Ins. Co.             district court is AFFIRMED.
v. Stoker, 903 S.W.2d 338, 341 (Tex.1995).
[2]
   Here, Blum’s argues that because the initial payment                Parallel Citations
made by Lloyds was less than the appraisal award,
Lloyds’ failure to pay the full amount of the claim                    2012 WL 181413 (C.A.5 (Tex.))
constituted an act, so extreme, that caused injury
independent of the policy claim. Lloyds contends that,

Footnotes
*      Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not be published and is not precedent except
       under the limited circumstances set forth in 5TH CIR. R. 47.5.4.




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Blum’s Furniture Co., Inc. v. Certain Underwriters at Lloyds..., 459 Fed.Appx. 366...




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Franco v. Slavonic Mut. Fire Ins. Ass’n, 154 S.W.3d 777 (2004)




                                                                 H. Dwayne Newton, Houston, Jeffrey Lee Hoffman,
                   154 S.W.3d 777
                                                                 Richmond, for appellees.
              Court of Appeals of Texas,
                Houston (14th Dist.).                            Panel consists of Justices ANDERSON, HUDSON, and
                                                                 FROST.
  Patsy FRANCO, Individually and as Next Friend of
  Jesse Ryan Villanueva, Alyssa Villanueva, Victoria
    Villanueva, and Pete Villanueva, Minors, and
             Jesse Villanueva, Appellants,
                           v.
      SLAVONIC MUTUAL FIRE INSURANCE                                                    OPINION
   ASSOCIATION, Jed Walzel, Southland Services,
     Inc., Carl King, and Ernie Afflitto, Appellees.             JOHN S. ANDERSON, Justice.

       No. 14–03–01433–CV. | Dec. 16, 2004.                      Appellants, Patsy Franco, individually and as next friend
                                                                 of her four children Jesse Ryan, Alyssa, Victoria, and Pete
                                                                 Villanueva, and Jesse Villanueva, her husband, appeal
Synopsis                                                         summary judgments granted *780 in favor of appellees.
Background:      Insureds    brought     action against          This suit arises from a claim filed by Patsy Franco, the
homeowners’ insurer, its employee, and adjusters to              insured, with her insurer seeking coverage under a fire
recover for breach of contract and based on extra-               and extended coverage insurance policy for damage
contractual causes of action stemming from alleged               caused by a plumbing leak in her home. Appellants, Patsy
misrepresentations concerning the policy and the handling        Franco and her family, filed suit against appellees, the
of the claim for damage from plumbing leak. The 149th            insurer, adjuster, and individuals who handled the
District Court, Brazoria County, Robert E. May, J.,              insurance claim, alleging breach of contract and extra-
entered summary judgments in favor of defendants.                contractual causes of action stemming from alleged
Insureds appealed.                                               misrepresentations made concerning the policy and the
                                                                 handling of the claim. We affirm.

Holdings: The Court of Appeals, John S. Anderson, J.,
held that:
[1]                                                               FACTUAL AND PROCEDURAL BACKGROUND
   insurer’s appraiser was not shown to be biased against
insureds;                                                        On June 18, 2000, Patsy Franco noticed water on her
[2]
                                                                 porch. It was discovered that the water was the result of a
    insureds failed to present evidence creating factual         plumbing leak in her home. She notified her insurer,
issue precluding summary judgment on extra-contractual           Slavonic Mutual Fire Insurance Association, of the
claims; and                                                      plumbing leak and sought coverage for the cost of
[3]
                                                                 repairing the damage caused by the plumbing leak under a
   statutes of limitations applicable to extra-contractual       fire and extended coverage insurance policy issued by
claims began to run at time of insurer’s alleged                 Slavonic insuring her home from certain losses.1
misrepresentations in connection with sale of policy more
than five years before suit was commenced.                       Jed Walzel, secretary of Slavonic, acknowledged Franco’s
                                                                 claim and hired Southland Services, Inc. to inspect the
                                                                 premises at Franco’s residence and adjust the claim.
Affirmed.                                                        Southland assigned the claim to individual adjustors Ernie
                                                                 Afflitto and Carl King. King contacted Franco about her
                                                                 claim and instructed her to contact a plumber. The section
Attorneys and Law Firms                                          of the pipe that was leaking was located within the wall
*779 John Steven Mostyn, Eric Vincent Blanchard,                 cavity, and King authorized the kitchen wall to be opened
Houston, for appellants.                                         for plumbing repairs. It was discovered that the leak was
                                                                 caused by a hole in a drain pipe connected to the kitchen

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Franco v. Slavonic Mut. Fire Ins. Ass’n, 154 S.W.3d 777 (2004)



sink that leaked only when the sink was used. Franco did         Garibay agreed on the appointment of Lynn Taylor as the
not know how long the pipe had been leaking.                     umpire, and the appraisal process moved forward.

After the plumbing repairs were made, King returned to           Franco and Kubala claimed mold in Franco’s home was
Franco’s home, inspected the damage, and prepared an             caused by water from the plumbing leak and needed to be
estimate of the repairs. On July 7, 2000, King sent his          tested. Kubala estimated the cost of repair as $12,397.72.
estimate of the cash value of the repairs to Slavonic. King      Garibay disagreed with Kubala’s estimate and, instead,
estimated the amount of the actual cash value of the             agreed with an estimate prepared by Southland estimating
repairs as $3,930.55, less a $250 deductible, for a total        the cost of repair as $4,002.2
cash value of $3,680.55. On July 18, 2000, Slavonic
tendered a check in that amount to Franco. Slavonic also         On December 28, 2000, Taylor sent a proposed appraisal
paid an invoice in the amount of $285 for emergency              award to Kubala and Garibay proposing $8,273.53 as the
services at the Franco residence related to the plumbing         cost of repair and $6,863.03 as the amount of the loss
leak. Franco did not cash the check for $3,680.55.               with depreciation deducted. Taylor’s proposed award
                                                                 included an allowance for “mold treatment” but not for
On July 21, 2000, Southland was notified by John Kubala,         any special remediation effort because Taylor had “not
Franco’s designated appraiser, that Franco was invoking          been presented with any information that the mold
the appraisal provision of the Slavonic policy. On July 31,      condition that presently exists is one that warrants special
Walzel received a fax from Southland transmitting                environmental remediation.”
Franco’s demand for appraisal. The appraisal provision in
the policy provides the following:                               On January 13, 2001, Taylor submitted a revised,
                                                                 proposed award to Kubala and Garibay. Taylor and
  Appraisal. In case the insured and this Company shall          Kubala both agreed to the revised proposed award of
  fail to agree as to the actual cash value or the amount of     $8,350.51 for the cost of repair and $6,902.03 for the
  loss, then, on the written demand of either, each shall        actual amount of loss, and Slavonic paid Franco
  select a competent and disinterested appraiser and             $6,652.03 on January 22, which represented the actual
  notify the other of the appraiser selected within twenty       value of the loss as determined by the revised, proposed
  days of such demand. The appraisers shall first select a       award agreed to by Kubala and Taylor, less the $250
  competent and disinterested umpire; and failing for            deductible specified in the policy. Franco accepted
  fifteen days to agree upon such umpire, then, on               payment and deposited the check.
  request of the insured or this Company, such umpire
  shall be selected by a judge of a district court of a          In June 2001, appellants filed suit against Slavonic,
  judicial district where the loss occurred. The appraisers      Walzel, Southland, Afflitto, and King, alleging violations
  shall then appraise the loss, stating separately actual        of Texas Insurance Code articles 21.21 and 21.55 and the
  cash value and loss to each item; and, failing to agree,       Texas Deceptive Trade Practices Act (“DTPA”) and
  shall submit their differences only to the umpire. An          claims of negligent misrepresentation, fraud, breach of
  award in writing, so itemized, *781 of any two when            contract, breach of the duty of good faith and fair dealing,
  filed with this Company, shall determine the amount of         breaches of warranty, unconscionable conduct, gross
  actual cash value and loss. Each appraiser shall be paid       negligence, and malice. All of appellants’ claims stem
  by the party selecting him and the expenses of appraisal       from alleged misrepresentations made by appellees
  and umpire shall be paid by the parties equally.               concerning the policy and its coverage and the appellees’
                                                                 alleged mishandling of Franco’s claim.3 Appellants sought
On August 14, 2000, Afflitto notified Kubala that                economic and mental anguish damages, treble damages
Slavonic designated Sergio Garibay as its appointed              under the DTPA, exemplary damages, and attorney’s fees.
appraiser.
                                                                 In April 2003, Slavonic and Walzel filed a joint motion
In mid-July 2000, prior to Garibay’s appointment as              for summary judgment (“Slavonic’s motion”) asserting
Slavonic’s appraiser, Southland had contacted Garibay to         traditional and no-evidence grounds as follows:
examine the premises of the Franco home and determine
the cause of the damage, and Garibay issued a report                  1. The Plaintiffs submitted their contractual claim to
regarding his examination of the Franco residence and his             binding appraisal under the policy [and the appraisal
findings. Franco protested Garibay’s appointment as                   award] was paid by Defendant Slavonic;
Slavonic’s appraiser because of his previous investigation
of the leak. However, on October 4, 2000, Kubala and                  *782 2. The Plaintiffs are estopped to claim
                                                                      additional damages under the policy of insurance
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Franco v. Slavonic Mut. Fire Ins. Ass’n, 154 S.W.3d 777 (2004)



     since they have retained the benefit of the appraisal       and (4) appellants have no evidence to support certain
     award paid by Slavonic;                                     elements of their article 21.21, DTPA, and
     3. The Plaintiffs’ contractual claims are not covered       negligence/gross negligence claims. In August 2003, the
     under the policy because the plumbing leak was not          trial court signed a “Final Judgment of Dismissal”
     sudden but was a repeated leak over at least a period       granting Southland’s summary judgment motion.
     of weeks;4


     4. The summary judgment evidence establishes that
     no misrepresentation/fraud took place, the claims are                             DISCUSSION
     barred by the applicable statute of limitations, or, in
     the alternative there is no evidence to support             Appellants challenge the summary judgments rendered in
     Plaintiffs’ misrepresentation/fraud claims;                 favor of appellees Slavonic, *783 Walzel, Southland,
                                                                 King, and Afflitto in five issues, arguing: (1) the trial
          5. The summary judgment evidence establishes           court abused its discretion in overruling their special
          compliance with the provisions of Art. 21.55 of        exception to Slavonic’s motion; (2) Slavonic’s payment
          the Texas Insurance Code as a matter of law;           of the appraisal award does not dispose of appellants’
                                                                 breach of contract claim; (3) Slavonic’s motion fails to
          6. There is no evidence to support Plaintiffs’         show there are no fact issues as to any elements of
          claims of violations of Art. 21.21 of the Texas        appellants’ extra-contractual causes of action; (4)
          Insurance Code or the Texas DTPA or that               Southland’s motion does not establish that there are no
          Plaintiffs were damaged thereby;                       fact issues as to any elements of appellants’ extra-
                                                                 contractual causes of action; and (5) fact issues preclude
          7. There is no evidence to support Plaintiffs’         no-evidence summary judgment in favor of Southland,
          Art. 21.21, DTPA and misrepresentation/fraud           Afflitto, and King.
          claims against Jed Walzel; and

          8. There is no evidence that Slavonic or Walzel
          prevented Plaintiffs from remediating their
          premises or intentionally, knowingly, recklessly                      STANDARD OF REVIEW
          or negligently caused the minor Plaintiffs any
          bodily injury.                                         The movant for summary judgment has the burden to
                                                                 show that there is no genuine issue of material fact and
      Appellants filed a response and specially excepted to      that it is entitled to judgment as a matter of law. TEX.R.
      Slavonic’s motion, contending it is unclear what type      CIV. P. 166a(c); Nixon v. Mr. Prop. Mgmt. Co., 690
      of summary judgment motion, traditional or no-             S.W.2d 546, 548 (Tex.1985). We review the summary
      evidence, Slavonic filed. The trial court specifically     judgment evidence using familiar standards of review. See
      denied Slavonic’s motion for summary judgment              Dolcefino v. Randolph, 19 S.W.3d 906, 916–17
      with respect to the lack of coverage ground, but           (Tex.App.-Houston [14th Dist.] 2000, pet. denied).
      granted the motion in all other respects, ordering that
      appellants take nothing as to Slavonic and Walzel.         A defendant moving for traditional summary judgment
In June 2003, Southland, Afflitto, and King jointly moved        assumes the burden of showing as a matter of law the
for summary judgment (“Southland’s motion”) on both              plaintiff has no cause of action against him. Levesque v.
traditional and no-evidence grounds. Southland’s motion          Wilkens, 57 S.W.3d 499, 503 (Tex.App.-Houston [14th
alleged summary judgment was proper based on the                 Dist.] 2001, no pet.). Traditional summary judgment for a
following: (1) because appellants’ claims against Slavonic       defendant is proper only when the defendant negates at
failed, their claims against Slavonic’s agents, Southland,       least one element of each of the plaintiff’s theories of
King, and Afflitto, also must fail; (2) appellants’              recovery, or pleads and conclusively establishes each
acceptance of the appraisal award waives appellants’             element of an affirmative defense. Science Spectrum, Inc.
claim for insurance benefits; (3) the summary judgment           v. Martinez, 941 S.W.2d 910, 911 (Tex.1997). A
evidence shows Slavonic paid Franco’s plumbing-leak              defendant may file a “no evidence” motion for summary
claim in its entirety as determined by appraisal, thus           judgment, after sufficient time for discovery has passed, if
Southland, King, and Afflitto are entitled to summary            there is no evidence of one or more essential elements of
judgment on appellants’ DTPA and insurance code claims           a claim or defense on which an adverse party would have
premised upon the contention that the claim was denied;          the burden of proof at trial. See TEX.R. CIV. P. 166a(i).

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Franco v. Slavonic Mut. Fire Ins. Ass’n, 154 S.W.3d 777 (2004)



As with the traditional summary judgment, in reviewing a         858 S.W.2d 337, 343 n. 7; Dolcefino, 19 S.W.3d at 925–
“no evidence” summary judgment, we review the                    26; see also Rosas v. Hatz, 147 S.W.3d 560, 562
evidence in the light most favorable to the non-movant           (Tex.App.-Waco, 2004, no pet. h.) (refusing to infer a
and disregard all evidence and inferences to the contrary.       ruling on a special exception based only upon the trial
Coastal Conduit & Ditching, Inc. v. Noram Energy Corp.,          court’s disposition of the summary judgment motion
29 S.W.3d 282, 284 (Tex.App.-Houston [14th Dist.]                standing alone); Well Solutions, Inc., v. Stafford, 32
2000, no pet.).                                                  S.W.3d 313, 316–17 (Tex.App.-San Antonio 2000, no
                                                                 pet.) (holding “a trial court’s ruling on an objection to
[1] [2] [3]
         Because the propriety of summary judgment is a          summary judgment evidence is not implicit in its ruling
question of law, we review the trial court’s decision de         on the motion for summary judgment; a ruling on the
novo. See Provident Life & Accident Ins. Co. v. Knott,           objection is simply not ‘capable of being understood’
128 S.W.3d 211, 215 (Tex.2003). In an appeal from a              from the ruling on the motion for summary judgment”).
summary judgment, issues an appellate court may review           As a general rule, a complaint is preserved for appellate
are those the movant actually presented to the trial court.      review only if the record establishes the complaint was
Travis v. City of Mesquite, 830 S.W.2d 94, 100                   made known to the trial court in a timely manner, and the
(Tex.1992). When the trial court grants summary                  trial court ruled on the complaint. See TEX.R.APP. P.
judgment specifically on fewer than all grounds asserted,        33.1(a).
Rule 166a does not prevent an appellate court from
affirming the judgment on other grounds the parties              Appellants concede that the trial court did not explicitly
properly raised before the trial court. Cincinnati Life Ins.     rule on their special exception. Instead, appellants
Co. v. Cates, 927 S.W.2d 623, 625 (Tex.1996). If the trial       contend that the trial court implicitly overruled their
court grants a motion for summary judgment without               special exception pursuant to Rule 33.1 by (1) granting
stating the grounds on which it relied, we must affirm the       Slavonic’s motion and not requiring Slavonic to replead
summary judgment if any ground argued in the motion              its summary judgment grounds, and (2) refusing to sign
was sufficient. Star–Telegram, Inc. v. Doe, 915 S.W.2d           an order setting forth its denial of the special exception or
471, 473 (Tex.1995); Blan v. Ali, 7 S.W.3d 741, 747–48           the bases for granting Slavonic’s motion for summary
(Tex.App.-Houston [14th Dist.] 1999, no pet.).                   judgment when appellants reurged the special exception
                                                                 in their motion for reconsideration. See TEX.R.APP. P.
                                                                 33.1(a)(2)(A). Slavonic and Walzel contend that
                                                                 appellants have waived appellate review of this issue by
I. Slavonic’s Motion for Summary Judgment                        not obtaining a ruling on their special exception in the
                                                                 court below.
A. The Special Exception to Slavonic’s Motion for
Summary Judgment                                                 [7]
                                                                     We examine the record to determine whether or not
In issue one, appellants challenge the trial court’s denial      appellants obtained a ruling on the special exception.
of their special exception to Slavonic’s motion. In their        First, with regard to appellants’ arguments pertaining to
response to Slavonic’s motion, appellants *784                   their motion for reconsideration, despite their assertions to
complained by special exception that Slavonic’s motion           the contrary, nowhere in the motion for reconsideration
was vague and unclear in that they were unable to tell           do appellants request the trial court to reconsider or rule
whether the motion was a traditional, no-evidence, or a          on the special exception. Thus, the trial court’s denial of
hybrid motion for summary judgment.5 Appellants                  the motion for reconsideration is not an implicit ruling on
requested that Slavonic be required to replead the motion        their special exception. See Alejandro v. Bell, 84 S.W.3d
for summary judgment with more specificity “so as to             383, 388 (Tex.App.Corpus Christi 2002, no pet.) (holding
identify what type of motion it is and clearly distinguish       trial court implicitly ruled on objections to summary
between traditional grounds and any no-evidence grounds          judgment evidence where the appellant complained in his
asserted.”                                                       motion for new trial of the trial court’s refusal to rule on
[4]   [5]   [6]
                                                                 his objections).
           When a summary judgment is attacked on
specificity grounds, a special exception is required.            [8]
                                                                    Second, we address appellants’ contention that the trial
McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d             court’s order granting summary judgment in favor of
337, 342 (Tex.1993) (“An exception is required should a          Slavonic constitutes an implicit denial of appellants’
non-movant wish to complain on appeal that the grounds           special exception. Appellants contend a denial is implied
relied on by the movant were unclear or ambiguous.”).            because the trial court did *785 not order Slavonic to
The excepting party must obtain a ruling on the special          replead its motion for summary judgment. Slavonic and
exception to preserve the issue for appeal. McConnell,
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Franco v. Slavonic Mut. Fire Ins. Ass’n, 154 S.W.3d 777 (2004)



Walzel counter that the entry of summary judgment could          contract are binding and enforceable, and every
just as easily evidence an abandonment of the issue in the       reasonable presumption will be indulged to sustain an
trial court by appellants and, in addition, holding the entry    appraisal award. Providence Lloyds Ins. Co. v. Crystal
of a summary judgment constitutes an implicit denial of a        City Indep. Sch. Dist., 877 S.W.2d 872, 875 (Tex.App.-
special exception would render the refusal to rule               San Antonio 1994, no writ). The effect of an appraisal
provision of Rule 33.1(a) meaningless.                           provision is to estop one party from contesting the issue
                                                                 of damages in a suit on the insurance contract, leaving
In light of the relevant rules and caselaw, we simply are        only the question of liability for the court. Wells v.
unable to infer from the record in this case that the trial      American States Preferred Ins. Co., 919 S.W.2d 679,
court implicitly overruled or implicitly made any ruling         683–85 (Tex.App.-Dallas 1996, writ denied) (analyzing
regarding appellants’ special exception. See Dolcefino, 19       similar appraisal provision and concluding authority of
S.W.3d at 926–27. The summary judgment order does not            appraisal panel limited to determining only the amount of
mention the special exception, and a ruling on the special       loss). Because every reasonable presumption will be
exception cannot be inferred based solely upon the               indulged to sustain an appraisal award, the burden of
disposition of Slavonic’s summary judgment motion.               proof is on the party seeking to avoid the award. Barnes v.
Appellants were required to obtain a ruling, and they            Western Alliance Ins. Co., 844 S.W.2d 264, 267
failed to do so.6 Having failed to preserve the issue for        (Tex.App.-Fort Worth 1992, writ dism’d by agr.). Texas
review, we overrule appellants’ first issue.                     courts recognize three situations in which the results of an
                                                                 otherwise binding appraisal may be disregarded: (1) when
                                                                 the award was made without authority; (2) when the
                                                                 award was made as a result of fraud, accident, or mistake;
B. The Appraisal Award                                           or (3) when the award was not in compliance with the
[9]
    In issue two, appellants assert (1) the appraisal award      requirements of the policy. Wells, 919 S.W.2d at 683;
should be set aside because the appraisal was not                Providence Lloyds Ins. Co., 877 S.W.2d at 875.
conducted in substantial compliance with the insurance
policy, and (2) even if the appraisal award is valid,            [15]
                                                                       Appellants argue that exception (1) applies;
Slavonic’s payment of the appraisal award is not                 specifically, that “Garibay had a predetermined opinion as
dispositive of the breach of contract action alleged against     to what the scope of his appraisal would be and was,
Slavonic and Walzel.7                                            therefore, bias[ed] against the Franco family.” We are
                                                                 required to view the summary judgment proof in the light
[10]
    Appellants contend the appraisal award should be set         most favorable to appellants and to resolve against
aside because Garibay was an interested, prejudiced, and         Slavonic any doubt as to the existence of a genuine issue
biased appraiser, due to his status as an investigating          of material fact. The evidence relied upon by appellants to
engineer for Southland and the fact that he already had          support their claim of bias consists of (1) Franco’s
issued a report containing his opinions regarding the            statement in a deposition excerpt that Garibay was an
scope of appellants’ damages and coverage prior to his           engineer hired by Southland to inspect their home and
appointment as appraiser. Additionally, for the first time       that he was appointed as an appraiser, and (2) Garibay’s
on appeal, appellants contend that the award should be set       affidavit in which he acknowledges being hired by
aside because Garibay did not follow the procedure for           Southland in mid-July 2002 to conduct an examination of
the appraisal process because he did not submit an               appellants’ house in order to determine the cause of the
appraisal for consideration by Kubala or Taylor in               damage from a plumbing leak and discusses his
accordance with the appraisal provision of the policy.           observations and conclusions concerning the leak.

Because appellants did not raise the second asserted basis       [16]
                                                                      Upon reviewing the record before us, we find
for setting aside the *786 appraisal award in their              appellants have not presented summary judgment proof of
response to Slavonic’s motion in the trial court, we may         Garibay’s bias against the Franco family, thus no fact
only examine whether the summary judgment evidence               issue was presented. The showing of a pre-existing
raised a fact issue as to whether Garibay was biased and,        relationship, without more, does not support a finding of
if so, whether evidence of such bias raises a fact issue as      bias. See *787 Allison v. Fire Ins. Exchange, 98 S.W.3d
to the appraisal award’s validity.8 See TEX.R.APP. P.            227, 255 (Tex.App.-Austin 2002, pet. granted, judgm’t
33.1(a); City of Houston v. Clear Creek Basin Auth., 589         vacated w.r.m.); Gardner v. State Farm Lloyds, 76
S.W.2d 671, 678 (Tex.1979).                                      S.W.3d 140, 143–44 (Tex.App.-Houston [1st Dist.] 2002,
                                                                 no pet.). Here, the summary judgment evidence shows
[11] [12] [13] [14]
            Texas courts have long held that appraisal           that Garibay was hired by Southland “to examine the
awards made pursuant to the provisions of an insurance
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Franco v. Slavonic Mut. Fire Ins. Ass’n, 154 S.W.3d 777 (2004)



premises” and “determine the cause of the damage,                was no false advertisement or misleading or false
possibly from a reported sink drain line leak.” Garibay          statement or representation made to Franco in the sale of
was not an employee of Slavonic, and Garibay’s report            the insurance policy; (3) any misrepresentations or fraud
and conclusions regarding the cause of the plumbing leak         regarding the policy’s coverage when it was purchased
were his own. There is no evidence suggesting that               would have occurred, if at all, in February 1996 and are
Slavonic influenced or exercised control over Garibay,           barred by limitations; (4) any misrepresentations made
that Garibay had a financial interest in Franco’s claim, or      concerning the policy or appellants’ claim were not the
that Garibay’s previous inspection of the premises               producing cause of any damages to appellants because
somehow factored into his damages valuation. Moreover,           Slavonic paid the amount of the loss as determined by the
the final appraisal award was entered into by Kubala,            appraisal; (5) even if Slavonic denied appellants’ claim,
Franco’s appraiser, and the umpire. Viewing the evidence         the damage resulting from the plumbing leak was not a
in the light most favorable to appellants, the evidence          covered loss or was specifically excluded from coverage
does not raise a fact issue as to Garibay being biased           by the policy; (6) there is no evidence Slavonic failed to
against appellants.                                              meet the time deadlines imposed by article 21.55, or,
                                                                 alternatively, the summary judgment evidence
[17]
    Appellants further allege that “payment of an appraisal      conclusively established Slavonic met the time deadlines
award is not dispositive of the Franco Family’s entire           of article 21.55; and (7) there is no evidence that
breach of contract cause of action against Slavonic              appellants sustained bodily *788 injury or that Slavonic or
Mutual.” Slavonic counters that the appraisal award is           Walzel acted criminally, negligently, recklessly,
binding and enforceable. The summary judgment record             intentionally, or knowingly to cause any bodily injury.
reveals that Slavonic did not deny Franco’s claim. Rather,
Slavonic paid the full amount of the appraisal award to          In response, appellants cite to the following evidence as
Franco, and Franco accepted payment of the award. The            raising a fact issue with regard to Slavonic’s alleged
award is binding and enforceable. Under these                    violations of article 21.21 of the Texas Insurance Code
circumstances, appellants are estopped by the appraisal          and the DTPA in the sale of the policy: (1) Villanueva’s
award from maintaining a breach of contract claim against        deposition testimony that he was told the policy “was a
Slavonic. See Gardner, 76 S.W.3d at 143–44 (affirming            standard policy that homeowners have” and that he was
summary judgment where there was no evidence raising a           led to believe that they “had the max[imum]” coverage;
fact issue about whether the insurer’s appraiser lacked          and (2) Franco’s deposition testimony that she thought the
independence). We hold summary judgment was proper               Slavonic policy was the same as any other insurance
in favor of Slavonic on appellants’ breach of contract           policy, and that this evidences an omission of fact
claim.                                                           regarding the policy by Slavonic’s representative.
                                                                 Appellants further contend the following evidence shows
We overrule appellants’ second issue.                            Slavonic and Walzel violated the Insurance Code and the
                                                                 DTPA during the claim-handling process: (1) Franco’s
                                                                 deposition testimony that King told her that the policy
                                                                 covers damage from plumbing leaks so long as the
C. Appellants’ Extra–Contractual Claims Against                  plumbing leak is above the foundation slab; and (2)
Slavonic and Walzel                                              Villanueva’s testimony, in response to being asked what
In issue three, appellants contend Slavonic’s motion for         was the first conversation he recalled having with Walzel,
summary judgment did not conclusively establish that             that “I don’t recall the first one. I know a conversation
there are no genuine issues of material fact as to any           was related to the—where we weren’t happy about what
element of appellants’ extra-contractual causes of action.       was going to be done to the house and we had—God, I
Specifically, appellants argue that Franco and                   can’t recall, but I know his response was, ‘Well, you hired
Villanueva’s lack of knowledge regarding the breaches            an appraiser. He needs to represent ya’ll now.’ ”
and/or violations is not dispositive of the merits of their      Additionally, appellants cite the following evidence as
extra-contractual causes of action.                              proof showing they were met with resistance and delay:
                                                                 (1) Franco’s testimony that Slavonic “took forever” to
With regard to appellants’ extra-contractual claims,             name their appraiser, and that when she disputed Garibay
Slavonic and Walzel moved for summary judgment based             as the appraiser, that it took another 20 to 30 days,
on the following grounds: (1) there is no evidence that          “somewhere around there,” to rename Garibay; and (2)
Slavonic or Walzel misrepresented the terms of the policy        Villanueva’s testimony that he felt “nothing was getting
or made any false representations, statements, or                resolved.” Finally, appellants cite to Walzel’s deposition
advertisements concerning coverage afforded by the               testimony in which he states that he does not know the
policy; (2) the summary judgment evidence shows there
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Franco v. Slavonic Mut. Fire Ins. Ass’n, 154 S.W.3d 777 (2004)



provisions of article 21.21 “off the top of [his] head” as       pleaded or otherwise raised, by proving as a matter of law
evidence that Walzel “has a complete lack of                     that there is no genuine issue of material fact about when
understanding with regard to the provisions and                  the plaintiff discovered, or in the exercise of reasonable
requirements of [the] Texas Insurance Code.”                     diligence should have discovered, the nature of its injury.
                                                                 If the movant establishes that the statute of limitations
                                                                 bars the action, the nonmovant must then adduce
                                                                 summary judgment proof raising a fact issue in avoidance
1. Walzel’s No–Evidence Motion for Summary                       of the statute of limitations. Id.
Judgment
[18]                                                             [22] [23]
     The only evidence appellants cite in support of their                 Generally, a cause of action accrues when a
extra-contractual claims asserted against Walzel are (1)         wrongful act causes an injury, regardless of when the
Walzel’s statement that he did not know the specific             plaintiff learns of the injury. Moreno v. Sterling Drug,
provisions of article 21.21 of the Texas Insurance Code          Inc., 787 S.W.2d 348, 351 (Tex.1990). We note that
off the top of his head, and (2) Villanueva’s statement that     appellants did not respond to Slavonic’s statute of
Walzel told them to contact their appraiser during the           limitations summary judgment ground in the trial court or
appraisal process. Appellants do not explain how these           on appeal. Because appellants did not raise the discovery
statements raise a fact issue on their article 21.21, DTPA,      rule, Slavonic is not required to negate the applicability of
and negligence claims alleged against Walzel. We                 the discovery rule by proving as a matter of law that there
conclude the two cited statements do not raise a fact issue      is no genuine issue of fact concerning the date when the
on appellants’ extra-contractual claims alleged against          Franco’s discovered or should have discovered the injury.
Walzel. Additionally, the record shows appellants did not        Here, the summary judgment evidence shows that
present any evidence of bodily injury or any evidence that       Slavonic sold Franco the policy in February 1996, and
Walzel acted criminally, negligently, intentionally, or          that this suit was filed June 14, 2001, over five years later.
knowingly to cause any bodily injury. Accordingly, we
overrule appellants’ issue three as to Walzel.                   We conclude Slavonic proved as a matter of law that the
                                                                 statutes of limitations bar appellants’ fraud, negligent
                                                                 misrepresentation, DTPA, and article 21.21 claims
                                                                 stemming from alleged misrepresentations Slavonic made
2. Article 21.55 Violations                                      when the policy was purchased in 1996. See TEX. BUS.
We next address appellants’ article 21.55 claims against         & COM.CODE ANN. § 17.565 (Vernon 2002) (providing
Slavonic. Appellants do not complain on appeal of the            two-year statute of limitations for claims filed under the
summary judgment in favor of Slavonic on their article           DTPA); TEX. CIV. PRAC. & REM.CODE ANN. §§
21.55 claims. Furthermore, viewing the evidence in the           16.003, 16.004 (Vernon 2002) (providing two and four-
light most favorable to appellants, there is no evidence         year statute of limitations, respectively, applicable to
raising a fact issue about Slavonic’s compliance with the        causes of action for negligent misrepresentation and
time deadlines imposed by article 21.55. Accordingly,            fraud); TEX. INS.CODE ANN. art. 21.21, § 16(d)
summary judgment in favor of Slavonic was proper on              (Vernon Supp.2004) (providing two-year statute of
appellants’ article 21.55 claims.                                limitations applicable to actions brought under article
                                                                 21.21). We affirm the summary judgment in favor of
                                                                 Slavonic on appellants’ extra-contractual claims
                                                                 stemming from the sale of the policy.
3. Statutes of Limitations
Slavonic asserted in its motion for summary judgment
that appellants’ misrepresentation, *789 fraud, DTPA,
and article 21.21 claims stemming from alleged                   4. Article 21.21 and DTPA Violations
misrepresentations made by Slavonic in the sale of the           Slavonic moved for summary judgment on the ground
policy are barred by statutes of limitations.                    that there is no evidence that appellants suffered any
[19] [20] [21]
                                                                 damages from the alleged violations of article 21.21 and
          A defendant moving for summary judgment on             the DTPA. Appellants did not produce any summary
the affirmative defense of limitations has the burden to         judgment evidence of damages in their response.
conclusively establish that defense and must conclusively        Accordingly, we conclude that summary judgment in
prove when the cause of action accrued. KPMG Peat                favor of Slavonic on these claims was proper.
Marwick v. Harrison County Housing Finance Corp., 988
S.W.2d 746, 748 (Tex.1999). Additionally, a defendant
must negate the discovery rule, if it applies and has been

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Franco v. Slavonic Mut. Fire Ins. Ass’n, 154 S.W.3d 777 (2004)



5. Other Claims                                                  no evidence Southland committed a felony under Texas
Slavonic also moved for summary judgment on the                  Penal Code section 22.04 in the work on Franco’s home.
ground that there is no evidence that it prevented Franco
                                                                 [24]
from remediating the damage to her home or caused the                Appellants, as the non-movants, had the burden to
minor appellants any injury. Appellants did not introduce        raise a genuine issue of material fact as to the elements
any evidence in response to these grounds, nor do                challenged in Southland’s motion. See TEX.R. CIV. P.
appellants contest these grounds on appeal. Accordingly,         166a(i). In their response to Southland’s motion,
we affirm the summary judgment on these grounds.                 appellants only addressed the no-evidence grounds
                                                                 pertaining to their alleged article 21.21 violations.
We overrule appellants’ third issue.                             Because appellants did not present any evidence in
                                                                 response to Southland’s no-evidence grounds pertaining
                                                                 to appellants’ DTPA, negligence, and gross negligence
                                                                 claims, we affirm the summary judgment in favor of
II. Southland’s Motion for Summary Judgment                      Southland, King, and Afflitto on these claims. See
In issues four and five, appellants argue summary                Dolcefino, 19 S.W.3d 906, 917.
judgment was improper for *790 Southland9 because (1)
Southland did not conclusively disprove appellants’              We are left to examine whether summary judgment was
“extra-contractual” causes of action; (2) Southlands’ no-        proper on appellants’ article 21.21 claims. The evidence
evidence motion was legally insufficient; and (3) fact           appellants cite in support of their claims under article
issues precluded no-evidence summary judgment in favor           21.21 consists of the following: (1) Franco’s deposition
of Southland. We first address appellants’ complaints            testimony that King told her the policy covers damage
regarding Southland’s no-evidence motion.                        from plumbing leaks so long as the plumbing leak is
                                                                 above the foundation slab; (2) Franco’s testimony that she
Appellants argue that the no-evidence motion is legally          took out a loan with her attorney and hired a company to
insufficient because it does not identify the elements that      come out and prepare a scope of remediation with regard
are being challenged. However, contrary to appellants’           to mold in her home; (3) a letter dated October 26, 2000,
assertions, Southland’s no-evidence motion adequately            from Afflitto to Kubala discussing the relevant policy
sets forth the elements as to which there is no evidence,        provisions and notifying appellants that Slavonic’s offer
and we overrule this subissue.                                   of $4,002.42 would be left on the table for an additional
                                                                 thirty days; and (4) a fax cover sheet dated October 24,
In fact, Southland’s no-evidence summary judgment                2000, from Afflitto to Walzel, concerning records from
motion specifically alleges that there is no evidence of         Garibay.
damages with regard to appellants’ claims that Southland
violated article 21.21 by: wrongfully denying Franco’s           *791 [25] One of the grounds in Southland’s motion is that
claim; falsely stating the policy does not cover the claim;      there is no evidence of damages caused by the alleged
not attempting in good faith to effectuate a prompt, fair,       article 21.21 violations. Section 16(a) of article 21.21
and equitable settlement of the claim; not promptly              provides:
providing Franco a reasonable explanation of the basis for
denial of the claim; not affirming or denying coverage or                    Any person who has sustained
submitting a reservation of rights; refusing to pay the                      actual damages caused by another’s
claim; and making untrue statements of material fact                         engaging in an act or practice
concerning the policy’s coverage. Southland’s motion                         declared in Section 4 of this Article
further alleges that there is no evidence of a knowing                       to be ... unfair or deceptive acts or
violation of article 21.21.                                                  practices in the business of
                                                                             insurance ... may maintain an
With regard to appellants’ DTPA claims, Southland’s                          action against the person or persons
motion alleges there is no evidence of damages or of                         engaging in such acts or practices.
unconscionable conduct. As pertaining to appellants’
negligence and gross negligence claims, Southland’s              TEX. INS.CODE ANN. art. 21.21, § 16(a) (Vernon
motion argues there is no evidence of bodily injury, no          Supp.2004). Here, appellants offer Franco’s statement
evidence of the breach of any legal duty, no evidence that       that she obtained a loan from her attorney for scope of
Southland’s conduct was the proximate cause of bodily            remediation work conducted at her home as evidence of
injury to appellants, no evidence that Southland refused to      damages. However, this evidence is not connected to the
allow appellants to repair their home, and no evidence of        article 21.21 claims (or any other claim for that matter)
exemplary damages. The motion further asserts there is           and, therefore, does not raise a fact issue as to whether
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Franco v. Slavonic Mut. Fire Ins. Ass’n, 154 S.W.3d 777 (2004)



appellants sustained damages attributable to their alleged                  address the remaining summary judgment grounds.
article 21.21 claims. Because appellants did not present                    Accordingly, we overrule appellants’ fourth and fifth
evidence raising a genuine issue of material fact as to                     issues and affirm the summary judgment in favor of
damages, we conclude summary judgment in favor of                           Southland, King, and Afflitto.
Southland, King, and Afflitto was proper on appellants’
article 21.21 claims.                                                       We affirm the judgment of the trial court.

Because we conclude that no-evidence summary
judgment was proper in favor Southland, King, and
Afflitto on all of appellants’ causes of action, we do not

Footnotes
1      In 1996, Franco purchased a fire and extended coverage insurance policy from Slavonic to insure her home, and this same
       policy had been renewed each year and was in effect in June 2000.
2      During the appraisal process, Slavonic offered Franco $4,002.52 to compromise the claim, but this offer was not accepted.

3      Appellants did not seek in their petition to set aside the appraisal award.

4      Slavonic asserted the plumbing leak claim was not covered by the policy because of a specific provision in the policy governing
       coverage for accidental water damage:
           ACCIDENTAL WATER DAMAGE—Water damage is limited to a loss of a sudden nature or circumstance....
           Water damage covers loss above foundation from accidental discharge, leakage, or overflow of water or steam from within
           a plumbing, heating or air-conditioning system or domestic appliance....
           This Association shall not be liable for loss caused directly or indirectly by ... (4) by continuous or repeated seepage or
           leakage over a period of weeks, months, years[.]
5      Slavonic’s motion raises both traditional and no-evidence grounds, and appellants concede the rules do not prohibit a hybrid
       summary judgment motion such as Slavonic’s.
6      Appellants did not identify in their special exception (or on appeal) the particular grounds in Slavonic’s motion that lack
       specificity. We recognize that Slavonic’s motion is not a model of clarity—the motion does not set forth the applicable
       standards of review under Rule 166a(c) and (i) and does not segregate the traditional from the no-evidence grounds; however,
       the motion does comply with Rule 166a in stating the grounds and sufficiently puts appellants on notice of the claims and
       causes of action being challenged by appellees. The better practice is to file two separate motions or to file one document
       containing both motions but with the arguments and authorities for each clearly delineated and separated from one another. For
       example, Southland’s motion also was a hybrid, but it clearly segregated the traditional from the no-evidence grounds.
7      Notably, appellants do not allege a cause of action to set aside the appraisal award in their petition. The claims and facts alleged
       in appellants’ live petition focus on alleged misrepresentations made by appellees concerning the policy and the alleged
       mishandling of Franco’s claim. However, despite not having alleged a cause of action to set aside the award, appellants are not
       barred from raising the issue of the appraisal award’s validity for the first time in their summary judgment response, and this
       issue was properly before the trial court and is subject to review by this court. See Womack v. Allstate Ins. Co., 156 Tex. 467,
       473, 296 S.W.2d 233, 237 (1956) (holding when summary judgment proof discloses facts rendering summary judgment
       untenable for the moving party, summary judgment should be denied regardless of defects in the pleading of the non-movant);
       Patterson v. First Nat. Bank of Lake Jackson, 921 S.W.2d 240, 244 (Tex.App.-Houston [14th Dist.] 1996, no writ) (holding
       same).
8      In the last section of their summary judgment response entitled, “Jed Walzel’s deposition reveals a total lack of adherence to the
       Insurance Code,” appellants allege that Slavonic allowed Garibay “to avoid actually participating in the process and to
       completely neglect even submitting an appraisal for either Plaintiffs’ appraiser’s consideration or the umpire’s consideration”
       and that this “reveals a total lack of adherence to the Insurance Code, as well as a lack of adherence to the insurance contract at
       issue.” Appellants do not allege anywhere in their response to Slavonic’s motion that the appraisal award should be set aside
       because Garibay allegedly did not substantially comply with the procedure for the appraisal process.
9      References in this section to “Southland” also include King and Afflitto.


WestEawNext © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                                         9
Franco v. Slavonic Mut. Fire Ins. Ass’n, 154 S.W.3d 777 (2004)




End of Document                                                  © 2015 Thomson Reuters. No claim to original U.S. Government Works.




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Harris County Appraisal Dist. v. Bradford Realty, Ltd., 919 S.W.2d 131 (1994)




                                                               contending the property was incorrectly appraised for
                                                               1988 and 1989. We reverse and remand.
                     919 S.W.2d 131
                Court of Appeals of Texas,
                  Houston (14th Dist.).                        On December 31, 1986, Bradford purchased an industrial
                                                               facility for $2.2 million. The appraisal district valued the
   HARRIS COUNTY APPRAISAL DISTRICT and                        property for tax year 1987 at approximately $7.2 million.
     Harris County Appraisal Review Board,                     Bradford protested the appraisal to the review board,
                  Appellants,                                  which reduced the appraisal to approximately $4.5
                      v.                                       million. Bradford timely filed notice of appeal with the
      BRADFORD REALTY, LTD., Appellee.                         review board and filed suit in district court. While the
                                                               1987 suit was pending, appellants appraised the property
        No. 14–93–01152–CV. | Dec. 15, 1994.                   for tax years 1988 and 1989. For 1988, the property was
                                                               again appraised at approximately $4.5 million. For 1989,
Taxpayer challenged real property tax appraisals for three     the appraisal was reduced to approximately $3.5 million.
years. The 165th District Court, Harris County, Elizabeth      Bradford amended its lawsuit to include the 1988 and
Ray, J., entered judgment for taxpayer. Taxing authorities     1989 valuations to its appeal. Prior to trial, the parties
appealed. The Court of Appeals, Lee, J., held that: (1)        agreed to a $2.5 million appraisal for the 1987 tax year.
having exhausted administrative remedies for first year,
taxpayer was not required to exhaust administrative            Appellants filed a plea to the jurisdiction contending that
remedies for succeeding years before amending petition         Bradford had not exhausted its administrative remedies
to add them to case; (2) reduction of appraisal as to one      for tax years *133 1988 and 1989. Appellants also filed a
taxing authority but not as to two others was                  motion to dismiss, contending Bradford had forfeited its
unconstitutional; (3) taxpayer forfeited its right to appeal   right to appeal because it had not paid the undisputed
as to one tax year by its complete failure to pay              portion of its 1988 and 1989 taxes to the three affected
undisputed tax; and (4) taxpayer’s timely payment to one       taxing units: Spring Independent School District (Spring
taxing authority but not to two others for another tax year    ISD), Harris County Municipal Utility District # 36
would not bar its appeal if it is was in substantial           (MUD # 36) and Harris County. See TEX. TAX CODE
compliance with statutory payment requirements.                ANN. § 42.08 (Vernon 1992). After a trial to the court on
                                                               stipulated facts, the court overruled appellants’ plea to the
Reversed and remanded.                                         jurisdiction and partially granted the motion to dismiss.
                                                               The court dismissed the 1989 appeal because Bradford
                                                               had not substantially complied with § 42.08. The court
Attorneys and Law Firms                                        also precipitously dismissed Spring ISD and MUD # 36
                                                               from the 1988 appeal and reduced the Harris County 1988
*132 Robert P. McConnell, Houston, for appellants.             appraised value to $2.4 million.
Irving C. Stern and Randall P. Crump, Houston, for             [1]
                                                                  In their first point of error, appellants contend that
appellees.
                                                               Bradford failed to exhaust its administrative remedies for
Before ROBERTSON, CANNON and LEE, JJ.                          tax years 1988 and 1989. Bradford counters that
                                                               amending its preexisting suit gave appellants sufficient
                                                               notice of its intent to protest the 1988 and 1989
                                                               valuations. The parties stipulated Bradford had complied
                                                               with the administrative prerequisites for tax year 1987.

                        OPINION                                Property is generally appraised for tax purposes by the
                                                               appraisal district as of January 1. TEX. TAX CODE
LEE, Justice.                                                  ANN. § 23.01 (Vernon 1992); Beck & Masten Pontiac–
                                                               GMC v. Harris County Appraisal Dist., 830 S.W.2d 291,
This is a property tax case. Appellants, Harris County         292 (Tex.App.—Houston [14th Dist.] 1992, writ denied).
Appraisal District and Harris County Appraisal Review          Once the appraisal is complete, the appraisal district
Board, appeal a judgment in favor of Bradford Realty,          delivers to the taxpayer notice of the property’s appraised
Ltd. (Bradford). Appellants bring two points of error          value. A taxpayer must file a notice of protest of the
asserting Bradford’s 1988 property appraisal was               appraisal with the appraisal review board within thirty
improperly reduced. Bradford brings five cross points
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Harris County Appraisal Dist. v. Bradford Realty, Ltd., 919 S.W.2d 131 (1994)



(30) days after receiving the appraisal district’s notice.       same value as the 1984 appraisal. He simply amended his
TEX. TAX CODE ANN. § 41.44(a) (Vernon 1992). If a                1984 suit to include the 1985 appraisal. The court of
notice of protest is timely filed, the appraisal review board    appeals held that the suit challenging the initial appraisal
must schedule a hearing on the protest. The property             put the appraisal board and appraisal district on notice
owner is entitled to an opportunity to appear and offer          that Miller also disputed the application of that appraisal
evidence or the property owner may offer evidence by             to subsequent years.
affidavit. TEX. TAX CODE ANN. § 41.45 (Vernon
1992). A property owner may appeal the appraisal review          The facts in the instant case are nearly identical to the
board’s determination by filing a petition for review with       facts in Estepp. Bradford’s suit was pending when the
a district court within forty-five (45) days of receiving        1988 and 1989 appraisals were issued. Appellants
notice that a final order has been entered. TEX. TAX             appraised the property for 1988 at the same value as 1987.
CODE ANN. § 42.21 (Vernon 1992). A notice of protest             For 1989, appellants reduced the appraisal by
is sufficient if it identifies the property, identifies the      approximately $1 million. Appellants were clearly aware
property owner who is protesting, and indicates that the         that Bradford was dissatisfied with the appraisals.
property owner is dissatisfied with the appraisal district’s     Because the amended petition sufficiently identifies the
determination. TEX. TAX CODE ANN. § 41.44(d)                     property, the property owner, and the owner’s
(Vernon 1992); Estepp v. Miller, 731 S.W.2d 677, 680             dissatisfaction, we, like the Austin Court of Appeals in
(Tex.App.—Austin 1987, writ ref’d n.r.e.).                       Estepp, hold that appellants had the required notice of
                                                                 Bradford’s protest. TEX. TAX CODE ANN. § 41.44
Appellants cite Atascosa County Appraisal District v.            (Vernon 1992). The supreme court was dealing with a
Tymrak, 858 S.W.2d 335 (Tex.1993), as authority that             different question in Tymrak. Appellants’ reliance on that
Bradford was required to complete these administrative           case is misplaced, and their first point of error is
procedures for tax years 1988 and 1989. In Tymrak, the           overruled.
taxpayer appealed the appraisal review board’s property
                                                                 [2]
valuation for four tax years. Before trial, the parties             In their second point of error, appellants argue that the
settled on a valuation of the property, but they did not         1988 appraised value was incorrectly reduced as to Harris
settle the amount of attorney’s fees the taxpayer was            County. The trial court found that the 1988 undisputed
entitled to recover under § 42.29 of the Tax Code. When          taxes were timely paid to Harris County while Spring ISD
the case went to trial, § 42.291 authorized the trial court to   and MUD # 36 were not timely paid. The trial court also
award a prevailing taxpayer up to $5,000 in attorney’s           determined the 1988 appraised value as to only Harris
fees per “appeal.” The trial court determined that each tax      County would be $2.4 million. Appellants contend that
year constituted a separate “appeal” and awarded the             the trial court’s determination violates the Texas
taxpayer $20,000 in attorney’s fees. On appeal, the only         constitution because the property is appraised with two
question before the supreme court was whether “appeal”           different values.
limited the taxpayer’s recovery to $5,000 for all the tax
years. The supreme court reviewed the various steps              The constitution requires the legislature to provide for a
required to bring an appeal to the district court and held       single tax appraisal of property. TEX. CONST. Art. VIII,
that an “appeal,” for purposes of § 42.29 of the Tax Code,       § 18(b). By enacting the Property Tax Code,3 the
concerns only one tax year. Thus, the supreme court              legislature has fulfilled this constitutional mandate.
affirmed the district court’s holding that the taxpayer          Wilson v. Galveston County Cent. Appraisal Dist., 713
should be allowed to recover $20,000. Atascosa County            S.W.2d 98, 101 (Tex.1986). The Property Tax Code
Appraisal District v. Tymrak, 858 S.W.2d 335, 337                established appraisal districts in each county and charged
(Tex.1993); see also TEX. TAX CODE ANN. § 42.29                  these districts with the responsibility for appraising
(Vernon 1992).                                                   property within the district. The purpose of each district is
                                                                 to place a single value on each piece of taxed property
*134 Appellants, in the instant case, argue that the steps       located within the district. See TEX. TAX CODE ANN.
reviewed by the court in Tymrak were required to be              § 6.01 (Vernon 1992). It is this appraisal that may be
followed before Bradford could bring its appeal. 2 To the        appealed by the property owner to the district court. TEX.
contrary, Bradford cites Estepp v. Miller, 731 S.W.2d 677        TAX CODE ANN. § 42.01 (Vernon 1992). The taxing
(Tex.App.—Austin 1987, writ ref’d n.r.e.), in which the          units are bound by the appraisal determined at the
taxpayer, Miller, completed all the administrative               conclusion of the appellate process. TEX. TAX CODE
procedures and filed suit in district court for the 1984         ANN. §§ 42.25, 42.26 (Vernon 1992). In the instant case,
appraisal of his property. In 1985, while his appeal was         the trial court’s judgment resulted in an appraisal for the
pending, Miller received his tax bill which reflected the        1988 tax year of approximately $4.5 million being used

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Harris County Appraisal Dist. v. Bradford Realty, Ltd., 919 S.W.2d 131 (1994)



by Spring ISD and MUD # 36 while an appraisal of $2.5                                2. to assure that the activities of the local
million was used by Harris County. The trial court                                   governments which relied on ad valorem taxes
erroneously assessed the property with two different                                 would not be unduly impeded by granting the
appraisals. Appellants first contention in their second                              property owner the right of judicial review.
point of error is sustained.
                                                                               Krupp, 787 S.W.2d at 515 (quoting Missouri Pac. R.R. v.
           [3]                                                                 Dallas County Appraisal Dist., 732 S.W.2d 717, 721
*135       Appellants further contend that Bradford has
forfeited its right to appeal because it did not comply with                   (Tex.App.—Dallas 1987, no writ)). Each case is to be
Tax Code § 42.08. Section 42.08 requires a property                            determined on a case by case basis. Whether the taxpayer
owner who appeals an appraisal to pay the greater of the                       substantially complied will depend on various factors
undisputed tax amount or the tax imposed in the                                such the amount paid timely, the amount left unpaid by
preceding year. TEX. TAX CODE ANN. § 42.08(b)                                  the delinquency date, and the promptness of the late
(Vernon 1992). Bradford admits that it paid all 1989 taxes                     payment. Dipaola, 841 S.W.2d at 490.
after their due dates. A complete failure to timely pay any
tax unit as is required under Tax Code § 42.08 results in                      By timely paying Harris County, Bradford at least
forfeiture of the right to appeal. Because Bradford did not                    partially complied. Other courts of appeals have held that
comply with § 42.08, it is bound by the appraisal district                     an appealing taxpayer substantially complied even though
and appraisal review board’s 1989 valuation of the                             the taxpayer paid some of the affected taxing units after
property. Harris County Appraisal Dist. v. Dipaola Realty                      the undisputed taxes became delinquent. See Harris
Assoc., 841 S.W.2d 487, 490 (Tex.App.—Houston [1st                             County Appraisal Dist. v. Krupp Realty Ltd. Partnership,
Dist.] 1992, writ denied). See also TEX. TAX CODE                              787 S.W.2d 513, 515 (Tex.App.—Houston [1st Dist.]
ANN. § 42.08(b) (Vernon 1992).                                                 1990, no writ); Missouri Pac. R.R. v. Dallas County
                                                                               Appraisal Dist., 732 S.W.2d 717, 721 (Tex.App.—Dallas
[4] [5]
      The trial court found that Harris County was timely                      1987, no writ). In order for “substantial compliance” to
paid for the 1988 tax year while Spring ISD and MUD #                          have any meaning, we must reject appellants’ contention
36 were not. Taxpayers must “substantially comply” with                        that Bradford has forfeited its right to appeal because it
the requirement to pay undisputed taxes or forfeit their                       did not timely pay Spring ISD and MUD # 36. See
right to appeal. TEX. TAX CODE ANN. § 42.08(d)                                 Dipaola, 841 S.W.2d at 490. Appellants’ second
(Vernon 1992); Lawler v. Tarrant Appraisal Dist., 855                          contention in their second point of error is overruled.
S.W.2d 269, 271 (Tex.App.—Fort Worth 1993, no writ).
“Substantial compliance” has been defined to mean                              Whether Bradford substantially complied with the Tax
performance of the essential requirements of a statute. A                      Code requirement or forfeited its right to appeal because
deviation from the requirements of the statute which does                      it was delinquent in paying the undisputed taxes is a
not seriously hinder the legislature’s purpose in imposing                     factual matter to be determined by the court. TEX. TAX
the requirement is “substantial compliance.” Harris                            CODE ANN. § 42.08(d) (Vernon 1992). The district court
County Appraisal Dist. v. Krupp Realty Ltd. Partnership,                       below did not determine whether Bradford substantially
787 S.W.2d 513, 515 (Tex.App.—Houston [1st Dist.]                              complied with the requirements of § 42.08 for the 1988
1990, no writ). In Krupp, the court indicated there were                       tax year. Therefore, we must reverse for that express
two purposes behind § 42.08:                                                   purpose. We do not need to address Bradford’s five cross
                                                                               points.
          1. to insure that taxpayers would not use the right of
          judicial review as a subterfuge for delaying or                      The judgment of the trial court is reversed and remanded
          avoiding the payment of at least some tax, and                       for further proceedings consistent with this opinion.



Footnotes
1           Amended by Acts 1991, 72nd Leg., ch. 836, § 4.1 (effective September 1, 1991). Section 42.29 now allows the trial court to
            award in reasonable attorney’s fees the greater of $15,000 or 20 percent of the total amount by which the property owner’s tax
            liability is reduced. The award of attorney’s fees may not exceed the total amount that the taxpayer tax liability is reduced. TEX.
            TAX CODE ANN. § 42.29 (Vernon 1992).
2           In their brief, appellants quote Tymrak at length. The following most clearly supports their contention that Bradford did not
            exhaust its administrative remedies:

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Harris County Appraisal Dist. v. Bradford Realty, Ltd., 919 S.W.2d 131 (1994)



           The taxpayer must complete these steps for each year that it desires to challenge the valuation because the completion of
           all the administrative requirements, the filing of a timely petition in the trial court, and the prosecution of the lawsuit to its
           final disposition affects only the appraised value of the property for that one tax year. Unless a property owner repeats this
           almost yearlong administrative process and files another petition in a separate lawsuit or files an amended petition in a
           pending lawsuit filed appealing from an appraisal review board order issued in a previous year, the taxpayer loses its right
           to litigate the appraised value for the subsequent year.
         Tymrak, 858 S.W.2d at 337 (emphasis added).
3      The Property Tax Code is chapters 1 through 43 of the Texas Tax Code. See TEX. TAX CODE ANN. § 1.01 (Vernon 1992).




End of Document                                                            © 2015 Thomson Reuters. No claim to original U.S. Government Works.




WestEawNext © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                                           4
In re Barrentine, Not Reported in S.W.3d (2013)




                                                        Robert L. Collins, Robert E. Ray, Houston, TX, for
                                                        relator.
                2013 WL 6466574
  Only the Westlaw citation is currently available.
                                                        Catherine L. Hanna, Laura D. Tubbs, Hanna & Plaut,
  SEE TX R RAP RULE 47.2 FOR DESIGNATION                L.L.P., Austin, TX, for real party in interest.
         AND SIGNING OF OPINIONS.
                                                        Before Justices PURYEAR, ROSE and GOODWIN.
           MEMORANDUM OPINION
            Court of Appeals of Texas,
                     Austin.

      In re James BARRENTINE and Patricia                               MEMORANDUM OPINION
                   Barrentine.
                                                        MELISSA GOODWIN, Justice.
      No. 03–13–00752–CV. | Nov. 27, 2013.
                                                        *1 The petition for writ of mandamus is denied. See
Original Proceeding from Bastrop County.                Tex.R.App. P. 52.8(a).
Attorneys and Law Firms

End of Document                                        © 2015 Thomson Reuters. No claim to original U.S. Government Works.




WestEawNext © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                     1
Michels v. Safeco Ins. Co. of Indiana, 544 Fed.Appx. 535 (2013)




                                                                  Attorneys and Law Firms
                  544 Fed.Appx. 535
   This case was not selected for publication in the              *536 Robert Edwin Ray, Robert L. Collins Houston, TX,
                   Federal Reporter.                              for Plaintiffs–Appellants.
Not for Publication in West’s Federal Reporter.
See Fed. Rule of Appellate Procedure 32.1 generally               Catherine L. Hanna, Esq., Eric Scott Peabody, Hanna &
 governing citation of judicial decisions issued on or            Plaut, L.L.P., Austin, TX, David A. Ward, Jr., The Ward
 after Jan. 1, 2007. See also Fifth Circuit Rules 28.7,           Law Firm, Woodlands, TX, for Defendants–Appellants.
 47.5.3, 47.5.4. (Find CTA5 Rule 28 and Find CTA5
                       Rule 47)                                   Appeals from the United States District Court for the
            United States Court of Appeals,                       Western District of Texas, USDC No. 1:12–CV–511.
                     Fifth Circuit.
                                                                  Before REAVLEY, JONES, and PRADO, Circuit Judges.
        Wayne MICHELS; Marie Michels, Plaintiffs–
                        Appellants,                               Opinion
                            v.
      SAFECO INSURANCE COMPANY OF INDIANA;                        PER CURIAM:*
         Jason Christopher Womack, Defendants–
                        Appellees.
      Safeco Insurance Company Of Indiana, Plaintiff–             This case arises out of an insurance coverage dispute
                         Appellee,                                relating to smoke damage to the plaintiffs’ home. The
                            v.                                    plaintiffs appeal the district court’s dismissal of a
        Wayne Michels; Marie Michels, Defendants–                 nondiverse defendant as being improperly joined, the
                        Appellants.                               grant of the remaining defendant’s motion to compel
                                                                  appraisal, the denial of their motion to vacate the
 No. 13–50321 | Summary Calendar. | Nov. 6, 2013.                 appraisal award, and the grant of summary judgment in
                                                                  favor of defendants. We AFFIRM.
Synopsis
Background: Insureds brought action against insurer its
investigator relating to smoke damage to their home. The
United States District Court for the Western District of          I. FACTUAL AND PROCEDURAL BACKGROUND
Texas dismissed investigator, a nondiverse defendant, as
being improperly joined, granted insurer’s motion to              The home of Plaintiffs–Appellants Wayne and Marie
compel appraisal, denied insureds’ motion to vacate the           Michels (collectively “the Michelses”) was damaged by
appraisal award, and granted summary judgment in favor            smoke from the September 2011 Bastrop, Texas wildfires.
of insurer. Insureds appealed.                                    The Michelses filed a claim with their homeowner’s
                                                                  insurance carrier, Safeco Insurance Company of Indiana
                                                                  (“Safeco”). Safeco assigned an adjuster, Daniel Etzel, to
                                                                  investigate the damage to the house and report his
Holdings: The Court of Appeals held that:                         findings back to Safeco. After Etzel’s inspection found no
[1]
                                                                  visible damage, Safeco hired ServPro to clean the
  insureds did not have a “reasonable basis of recovery”          Michelses’ home. In total, before suit or appraisal, Safeco
against investigator;                                             paid $12,005.19 to the Michelses for general cleaning and
[2]
                                                                  attic insulation replacement.
   District Court did not abuse its discretion by granting
insurer’s motion to compel appraisal; and                         Safeco adjuster Kevin Glassel was assigned to coordinate
[3]
                                                                  the continuing investigation and adjustment of the
   District Court did not abuse its discretion in denying         Michelses’ claim. Glassel notified the Michelses via *537
insureds’ motion to vacate umpire’s appraisal award.              mail that Safeco was having a man named Jason Womack
                                                                  come to their home to complete an inspection. After
                                                                  receiving Womack’s report, Safeco informed the
Affirmed.                                                         Michelses that no additional payments would be made.

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Michels v. Safeco Ins. Co. of Indiana, 544 Fed.Appx. 535 (2013)



The Michelses sought an appraisal, and the two appraisers                     III. STANDARDS OF REVIEW
selected an umpire, as outlined by the policy. Later, the
Michelses rescinded their appraisal demand, and Safeco            This Court reviews de novo a district court’s denial of a
then made its own demand for appraisal. When the                  motion to remand. Guillory v. PPG Indus., Inc., 434 F.3d
parties’ designated appraisers were unable to agree on an         303, 308 (5th Cir.2005). The party seeking to remove
umpire, Safeco filed suit in the district court, asking the       bears the burden of showing that federal jurisdiction
court to appoint an umpire in accordance with the policy.         exists and that removal was proper. Manguno v.
Shortly after Safeco filed its federal suit, the Michelses        Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 723 (5th
filed suit in state court against Safeco and Womack for           Cir.2002). A trial court’s decision to “pierce the
damages exceeding $72,700. Safeco and Womack                      pleadings” to determine whether a plaintiff has a
removed the Michelses’ state court suit to the federal            reasonable basis of recovery against a particular
district court, which consolidated the two suits after            nondiverse defendant under state law is reviewed for an
dismissing Womack and denying the Michelses’ motion               abuse of discretion. Smallwood v. Ill. Cent. R.R. Co., 385
to remand. The Michelses and Jason Womack are citizens            F.3d 568, 573 (5th Cir.2004) (en banc). The district
of Texas. Safeco is a citizen of Indiana.                         court’s dismissal is subject to de novo review. Causey v.
                                                                  Sewell Cadillac–Chevrolet, Inc. 394 F.3d 285, 288 (5th
The district court appointed an umpire, who issued an             Cir.2004).
award that was agreed to by Safeco’s appraiser. The
award set the replacement cost value of the loss at               The district court’s grant of a motion for summary
$17,600, the recoverable depreciation at $100, and the            judgment and denial of a motion to set aside or vacate an
actual cash value of the loss at $17,500. Safeco issued           appraisal award as a defense to the motion for summary
payment to the Michelses in the amount of $3,928.41—              *538 judgment are subject to de novo review. See
the difference between the replacement cost value and             Federated Mut. Ins. Co. v. Grapevine Excavation, Inc.,
Safeco’s prior payments and the policy deductible.                197 F.3d 720, 723 (5th Cir.2000).

After paying the appraisal award, Safeco filed a motion
for summary judgment as to all the Michelses’ remaining
claims. The Michelses filed a response and a motion to set
aside the award. The district court denied the Michelses’                            IV. DISCUSSION
motion to set aside the appraisal award, granted Safeco’s
                                                                  The Michelses contend the district court made four errors.
motion for summary judgment, and signed a final, take-
                                                                  We address each in turn, affirming the district court on
nothing judgment in favor of Safeco.
                                                                  each one.
On appeal, the Michels raise four points of error.
Specifically, they argue the district court erred in: (1)
finding that Womack was improperly joined and in                  1) Improper Joinder and Dismissal of Womack
dismissing him; (2) granting Safeco’s Motion to Compel            As discussed above, the district court dismissed Womack
Appraisal; (3) denying the Michelses’ Motion to Set               as having been improperly joined.1 The district court
Aside or Vacate Umpire Award; and (4) granting                    found that there was no reasonable basis of recovery
summary judgment in favor of Safeco. We address each              against Womack because he was not a “person” engaged
in turn.                                                          in the business of insurance as defined by the Texas
                                                                  Insurance Code. “Because all the claims the Michels
                                                                  bring against Womack are predicated on their belief he
                                                                  was (1) somehow acting within the auspices of the
                  II. JURISDICTION                                Insurance Code, or (2) in privity with them, when, in fact,
                                                                  he was neither, there is no possibility they could recover
The Michelses seek review of a final judgment of the              from him under their Original Petition.” Thus, the district
district court. Accordingly, this Court has jurisdiction          court found that Womack was improperly joined and that
pursuant to 28 U.S.C. § 1291. The district court’s                therefore his citizenship status would be disregarded for
jurisdiction under 28 U.S.C. § 1332 is discussed below.           jurisdiction purposes. Once Womack was dismissed from
                                                                  the action, complete diversity existed between the parties.

                                                                  As the Michelses concede, the district court correctly
                                                                  stated that it first had to examine whether the Michelses

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Michels v. Safeco Ins. Co. of Indiana, 544 Fed.Appx. 535 (2013)



sufficiently pleaded a cause of action under the Texas fair        joinder was improper, the district court acted within its
notice pleading standard. See Smallwood, 385 F.3d at 573.          discretion to “pierce the pleadings” and conduct a brief
Then, the district court erred, the Michelses contend, by          inquiry. The district entered its order that Womack was
viewing and considering evidence beyond the Michelses’             improperly joined only thirty-two days after the
state court pre-removal pleading. The Michelses submit             Michelses moved to remand. No depositions were taken,
that a motion to remand is analyzed with reference to only         and Womack did not propound any new discovery.
the complaint. According to the Michelses, the district
court erred by looking beyond the pleadings to determine           After conducting its summary inquiry, the district court
whether Womack met the definition of a “person”                    correctly determined that the Michelses has no
engaged in the business of insurance as defined by the             “reasonable basis of recovery against” Womack. See
Texas Insurance Code.                                              Guillory, 434 F.3d at 311. Because, as the district court
                                                                   correctly noted, the claims the Michelses brought against
A district court’s improper joinder decision is subject to         Womack were based on the idea that he was acting under
de novo review. McDonal v. Abbott Labs., 408 F.3d 177,             the Insurance Code or in privity with them, it was critical
182 (5th Cir.2005) (citing Great Plains Trust Co. v.               to determine whether Womack was a “person” under the
Morgan Stanley Dean Witter & Co., 313 F.3d 305, 311                Insurance Code such that he could be held liable.
(5th Cir.2002)). “[Improper] joinder can be established in         According to the Code, “ ‘Person’ means an individual,
two ways: (1) actual fraud in the pleading of jurisdictional       corporation, association, partnership, reciprocal or
facts, or (2) inability of the plaintiff to establish a cause of   interinsurance exchange, Lloyd’s plan, fraternal benefit
action against the non-diverse party in state court.”              society, or other legal entity engaged in the business of
McKee v. Kan. City S. Ry. Co., 358 F.3d 329, 333 (5th              insurance.” Tex. Ins.Code Ann. § 541.002(2).
Cir.2004) (quoting Travis v. Irby, 326 F.3d 644, 647 (5th
Cir.2003)). This Court has stated that the second way of           The Michelses seem to concede that Womack’s role as an
establishing improper joinder “stated differently means            appraiser after they made their appraisal demand does not
that there is no reasonable basis for the district court to        subject Womack to any liability. Rather, the Michelses
predict that the plaintiff might be able to recover against        argue that the district court failed to acknowledge their
an in-state defendant.” Smallwood, 385 F.3d at 573.                argument that Womack was an adjuster before he was an
                                                                   appraiser, and that his role as an adjuster gives the
This Court’s en banc opinion in Smallwood sets out a               Michelses a “reasonable basis of recovery” against him.
procedure for determining whether a nondiverse
                                                                   [1]
defendant was improperly joined. First, the court should               The summary inquiry confirms that Womack was
focus on the complaint: “Ordinarily, if a plaintiff can            improperly joined. Womack’s undisputed affidavit
survive a Rule 12(b)(6) challenge, there is no improper            testimony was that he (1) was hired only to determine the
joinder.” Id. at 573. However, where a complaint states a          cause and extent of damages to the Michelses’ home; (2)
claim that satisfies 12(b)(6), but *539 has “misstated or          was a registered professional engineer in Texas at all
omitted discrete facts that would determine the propriety          times during the Michels assignment; (3) did not know
of joinder ... the district court may, in its discretion, pierce   what coverage the policy provided and never spoke to the
the pleadings and conduct a summary inquiry.” Id. (citing          Michelses about policy coverage; and (4) made no
Badon v. RJR Nabisco, Inc., 224 F.3d 382, 389 n. 10 (5th           decisions with respect to insurance coverage and at all
Cir.2000)). If a district court pierces the pleadings, and         times was acting pursuant to a contract for professional
the defendant has produced evidence supporting improper            services with Safeco. The district court also knew that
joinder, the plaintiff must produce at least some                  Womack was employed by Rimkus Consulting, not
controverting evidence. Badon, 224 F.3d at 393 (“We                Safeco, and that a Safeco adjuster, Gressel, *540 handled
agree with the district court that, considering defendants’        the adjustment of the Michelses’ loss. Moreover, the
affidavits ‘in light of the plaintiffs’ lack of evidence,’         Safeco insurance policy specifies that the results of the
there is no reasonable basis for predicting that plaintiffs        appraisal process are not an adjustment. The Michelses
might establish liability in their conspiracy claim against        did not object to Womack’s affidavit or submit
the in-state defendants.”). There must be a “reasonable            controverting evidence. The Michelses relied exclusively
possibility of recovery” against the nondiverse defendant,         on the allegations within their petition.
“not merely a theoretical one.” Ross v. Citifinancial, Inc.,
344 F.3d 458, 462 (5th Cir.2003).                                  On appeal, the Michelses state that Womack provided an
                                                                   adjustment of their claim. However, the document they
The district court did not abuse its discretion in looking         cite from the record is not an adjustment. Instead, it is a
beyond the Michelses’ pleadings.2 In assessing whether             letter from Safeco’s adjuster, Kevin Glassel, stating that

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Michels v. Safeco Ins. Co. of Indiana, 544 Fed.Appx. 535 (2013)



based on Womack’s report from his inspection of the               district court did not order the appraisal until after it had
house, Safeco had determined that no additional payments          denied the Michelses’ motion to remand and dismissed
would be made. Beyond the Michelses’ assertion that               Womack. Every Texas court to consider the “anticipatory
Womack was an adjuster or de facto adjuster, there is no          breach” argument the Michelses raise has rejected it as
evidence that he was, and substantial evidence that was           being incompatible with the mandatory contractual
not. Womack is an engineer employed by a third-party              remedy and the strong public policy favoring appraisal
company to inspect damaged properties. He is not a                clauses. See, e.g., In re State Farm Lloyds, Inc., 170
licensed adjuster and does not provide insurance or               S.W.3d 629, 634–35 (Tex.App.–El Paso 2005, no pet.);
adjusting services. In sum, Womack was not an adjuster.           see also Johnson, 290 S.W.3d at 894 (holding that
                                                                  appraisals should go forward as a preliminary matter *541
Although adjusters can be liable under Texas law, Texas           because “[a]llowing litigation about the scope of appraisal
courts have held that engineers who investigate and               before the appraisal takes place would mark a dramatic
consult with insurance companies in the adjustment of a           change in Texas insurance practice, and surely encourage
claim are not “persons” engaged in the business of                much more of the same”). Thus, the district court did not
insurance. An independent engineering firm hired by an            abuse its discretion by denying the Michelses’ request to
insurer to investigate a claim is not “engaged in the             delay the appraisal.
business of insurance” under the Insurance Code. Dagley
v. Haag Eng’g Co., 18 S.W.3d 787, 793 (Tex App.–Hous.
[14th Dist.] 2000, no pet.); Medistar Twelve Oaks
Partners, Ltd. v. Am. Econ. Ins. Co., 2010 WL 1996596,            3) District Court Denied Michelses’ Motion to Set Aside
at *3, *4 (S.D.Tex. May 17, 2010); see also Castillo v.           or Vacate Umpire Award
Prof’l Serv. Indus. Inc., 1999 WL 155833, at *1–2                 The umpire issued what he called an “Umpire Appraisal
(Tex.App.–San Antonio March 24, 1999, no pet.). In fact,          Award” of the total lump sum of $17,500.3 The district
the Insurance Code explicitly exempts engineers from              court, finding that the award substantially complied with
getting licensed as adjusters, despite the technical              the terms of the policy, held that there was no basis for
assistance they provide to adjusters. See Tex. Ins.Code §         vacating or setting aside the umpire’s appraisal award,
4101.002(3)(B).                                                   and thus denied the Michelses’ motion to vacate the
                                                                  award.
Because the district court correctly dismissed Womack as
improperly joined, complete diversity existed between the         The Michelses argue that the process by which the
proper parties—the Michelses and Safeco.                          Umpire Appraisal Award was reached was flawed, and
                                                                  that the appraisal award does not comply with the
                                                                  requirements of the insurance policy.4 As such, the
                                                                  Michelses assert that the district court should have
2) District Court Granted Safeco’s Motion to Compel               vacated the appraisal award. The “Appraisal” section of
Appraisal                                                         the insurance policy reads, in full:
The district court denied the Michelses’ opposition to the
Motion to Compel Appraisal. The Michelses argue on
appeal that the district court abused its discretion by             8. Appraisal. If you and we do not agree on the amount
ordering the parties to appraisal. Specifically, the                of the loss, including the amount of actual cash value
Michelses contend that because Safeco breached its                  or replacement cost, then, on the written demand of
contract with the Michelses with respect to adjusting the           either, each shall select a competent and disinterested
property damage claim, Safeco should not have been                  appraiser and notify the other of the appraiser selected
permitted to invoke the benefits of the contract. The               within 20 days of such demand. The appraisers shall
Michelses insist that they were not seeking an order                first select a competent and disinterested umpire; and
denying the appraisal process, but instead a remedy that            failing for 15 days to agree upon such umpire, then, on
would “prevent[ ] Safeco from essentially picking and               request of you or the company, such umpire shall be
choosing which provisions of the contract it would                  selected by a judge of a court of record in the state in
honor.”                                                             which the property covered is located. The appraisers
                                                                    shall then resolve the issues surrounding the loss,
[2]                                                                 appraise the loss, stating separately the actual cash
    Under Texas law, appraisal is an enforceable,
contractually agreed upon method of determining the                 value or replacement cost of each item, and, failing to
amount of loss. In re Universal Underwriters of Tex. Ins.           agree, shall submit their differences, only, to the
Co., 345 S.W.3d 404, 407 (Tex.2011); State Farm Lloyds              umpire. An award in writing, so itemized, of any two of
v. Johnson, 290 S.W.3d 886, 888–89 (Tex.2009). The
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Michels v. Safeco Ins. Co. of Indiana, 544 Fed.Appx. 535 (2013)



  these three, when filed with the company shall                  complied with the procedures outlined by the insurance
  determine the amount of loss.                                   policy, the district court is entitled to uphold that award,
Each party will:                                                  notwithstanding the non-itemized award form.

      a. pay its own appraiser; and

      b. bear the other expenses of the appraisal and umpire      4) District Court Granted Safeco’s Motion for Summary
      equally.                                                    Judgment
                                                                  After Safeco tendered the appraisal award amount to the
As both the Michelses and Safeco point out, in Texas,             Michelses, the trial court granted summary judgment in
appraisal awards “are binding and enforceable, and every          favor of Safeco and entered a take nothing judgment
reasonable presumption will be indulged to sustain an             based on Safeco’s tender of the appraisal award amount to
appraisal award.” Franco v. Slavonic Mut. Fire Ins. Ass’n,        the Michelses. The Michelses contend that Safeco was not
154 S.W.3d 777, 786 (Tex.App.–Hous. [14th Dist.] 2004,            entitled to summary judgment as a matter of law. The
no pet.). “Because every reasonable presumption is                Michelses’ claim that summary judgment was not
indulged in favor of the award, the burden of proof is on         appropriate hangs, for the most part, on their earlier
the party seeking to avoid the award.” Id. (citing Barnes         arguments, namely that the district lacked jurisdiction
v. W. Alliance Ins. Co., 844 S.W.2d 264, 267 (Tex.App.–           because the parties were not diverse, that the appraisal
Fort Worth, 1992, writ dism’d by agr.)). An award made            process should have been stayed pending resolution of
in substantial compliance with the policy is presumptively        other contract issues, and that the appraisal award did not
valid; minor discrepancies in the appraisal process or            comply with the insurance policy. We have affirmed,
award do not invalidate the award. See *542 Providence            above, the district court’s disposition of those issues.
Lloyds Ins. Co. v. Crystal City Indep. Sch. Dist., 877
S.W.2d 872, 875 (Tex.App.–San Antonio 1994, no writ).             On appeal, a district court’s grant or denial of summary
The results of an otherwise binding appraisal may be              judgment is reviewed de novo. Dunn–McCampbell
disregarded when the appraisal award is not in                    Royalty Interest, Inc. v. Nat’l Park Serv., 630 F.3d 431,
compliance with the requirements of the policy. Franco,           435 (5th Cir.2011). Summary judgment shall be rendered
154 S.W.3d at 786.                                                when the pleadings, the discovery and disclosure
                                                                  materials on file, and any affidavits show that there is no
[3]
   The Michelses mainly complain that the appraisal               genuine dispute as to any material fact and that the
award was not in compliance because the umpire’s award            moving party is entitled to judgment as a matter of law.
was not fully itemized, as the insurance policy required.         Fed R. Civ. P. 56(a); Celotex Corp. v. Catrett, 477 U.S.
This argument is estopped, as the district court pointed          317, 323–25, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). A
out, because the appraiser the Michelses appointed                dispute regarding a material fact is “genuine” if the
requested that the umpire use a non-itemized, lump sum            evidence is such that a reasonable jury could return a
form.                                                             verdict in favor of the nonmoving party. *543 Anderson v.
                                                                  Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505,
Even assuming that the Michelses’ contention about the            91 L.Ed.2d 202, (1986). When ruling on a motion for
non-compliance of the appraisal award could be brought,           summary judgment, the court is required to view all
the Michelses offer no citation in support of their position      inferences drawn from the factual record in the light most
that even small variances from the appraisal process as           favorable to the nonmoving party. Matsushita Elec. Indus.
outlined by the insurance policy require setting aside the        Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct.
appraisal award.                                                  1348, 89 L.Ed.2d 538 (1986).

The appraisal award substantially complied with the               The district court did not err in granting Safeco summary
policy. It identified the Actual Cash Value and                   judgment. The Michelses’ argument on the issue of
Replacement Cost Value of the loss, as the policy                 summary judgment is that “once the district court erred in
required. The appraisers prepared itemized estimates, met         finding improper joinder and overruled the Michels’
to discuss them, and then submitted the disputes to the           motion to remand, all subsequent rulings, including the
umpire. Further, the record before the district court             summary judgment, were tainted by the initial error.” The
demonstrates that the umpire performed his own                    Michelses insist that, assuming arguendo that the case
inspection of the property in addition to considering the         was not remanded and that the breach of contract claims
evidence and arguments of the appraisers.5 Because the            were negated once Safeco paid the Michelses the balance
award indicates the umpire considered the evidence from           on the appraisal award, they should nonetheless have been
both sides to arrive at an award and substantially                entitled to continue their state court claims. Despite this
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Michels v. Safeco Ins. Co. of Indiana, 544 Fed.Appx. 535 (2013)



assertion, the Michelses’ brief goes on to only restate their                                  V. CONCLUSION
concern about the joinder and remand issue tainting the
rest of the court’s determination. Above, we affirmed the                 For the foregoing reasons, we AFFIRM the district court.
district court’s resolution of those issues.



Footnotes
*      Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not be published and is not precedent except
       under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
1      The Fifth Circuit adopted the terminology “improper joinder,” Smallwood, 385 F.3d at 571 n. 1, instead of the terminology
       “fraudulent joinder,” which is “a term of art” used in other circuits to describe the doctrine that ignores a lack of complete
       diversity where the plaintiff joins a nondiverse defendant to avoid federal jurisdiction. E.g., Morris v. Princess Cruises, Inc.,
       236 F.3d 1061, 1067 (9th Cir.2001).
2      The Michelses’ brief does not address the district court’s actions as “piercing the pleadings.” But because the district court, in
       conducting a summary inquiry, looked at evidence beyond the pleadings, we consider the court to have pierced the pleadings.
       The Michelses did not reply to Safeco’s briefed argument that the district court’s consideration of evidence beyond the
       pleadings was permitted because of the allowance for “piercing the pleadings.”
3      The Michelses state “the umpire issued what he called a ‘Final Ruling’ on [sic] in the total lump sum of $17,500.00 (R. 592).”
       However, page 592 of the record is titled “Umpire Appraisal Award.” A search of the record does not reveal a “Final Ruling”
       from the umpire.
4      Specifically, the Michelses contend that the umpire failed to consider all available information, to require the appraisers to
       submit their “differences only” as required by the policy, and to assess actual costs related to the claims.
5      The Umpire asserted the following in his signed award: “I have held a total 6 hours of hearings on October 12, 2012, and
       November 19, 2012, read numerous exhibits and reports, and inspected the property on November 2, 2012. I have twice allowed
       each side to supplement the record based on my questions and requests for further information.”




End of Document                                                          © 2015 Thomson Reuters. No claim to original U.S. Government Works.




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Providence Lloyds Ins. Co. v. Crystal City Independent..., 877 S.W.2d 872 (1994)
92 Ed. Law Rep. 719



                                                               The essential facts surrounding this controversy are
                                                               undisputed. Following a February 9, 1992 fire at the
                   877 S.W.2d 872
               Court of Appeals of Texas,                      Benito Juarez Elementary School, Providence and the
                     San Antonio.                              District disagreed as to cash values of the loss. The
                                                               District filed a lawsuit in March 1992, alleging both (1)
 PROVIDENCE LLOYDS INSURANCE COMPANY                           bad faith by Providence regarding handling of the claim
                   v.                                          and (2) breach of the insurance contract and the resulting
   CRYSTAL CITY INDEPENDENT SCHOOL                             claim for damages. The trial court severed the bad faith
               DISTRICT.                                       cause of action. This appeal is from the judgment on the
                                                               breach of contract cause of action.
       No. 04–93–00483–CV. | June 8, 1994.
                                                               By agreement of the parties, the trial court abated the suit
Insured sued insurer for breach of contract. The 293rd         for the parties to participate in the insurance policy
District Court, Zavala County, Rey Perez, J., entered          appraisal process. Providence and the District had failed
judgment on jury verdict for insured. Insurer appealed.        to agree on the cash values of the loss. After abatement,
The Court of Appeals, Butts, J., held that appraisal award     they engaged in the required appraisal *874 process with
precluded recovery on breach of contract claim.                an umpire pursuant to the following insurance policy
                                                               clause:
Reversed and rendered.
                                                                           Appraisal. In case the Insured and
                                                                           this Company shall fail to agree as
Attorneys and Law Firms                                                    to the actual cash value of the
                                                                           amount of loss, then, on the written
*873 Patricia Montgomery, Austin, Julie Kraatz, Law                        demand of either, each shall select
Office of Louis J. Sandbote, Dallas, for appellant.                        a competent and disinterested
                                                                           appraiser and notify the other of the
Jesse M. Gamez, Sherry A. Muller, Law Offices of Jesse
                                                                           appraiser selected within twenty
Gamez, Inc., Preston H. Dial, Jr., San Antonio, for
                                                                           days of such demand. The
appellee.
                                                                           appraisers shall first select a
Before BUTTS, PEEPLES and GARCIA, JJ.1
                                                                           competent       and       disinterested
Opinion                                                                    umpire; and failing for fifteen days
                                                                           to agree upon such umpire, then, on
BUTTS, Justice.                                                            request of the Insured or this
                                                                           Company, such umpire shall be
                                                                           selected by a judge of a district
Providence Lloyds Insurance Company (Providence),                          court of a judicial district where the
insurer, appeals a judgment granted in favor of Crystal                    loss occurred. The appraisers shall
City Independent School District (the District), insured,                  then appraise the loss, stating
following a jury trial regarding the disputed cash values                  separately actual cash value and
and loss after a fire. The trial court awarded the District                loss to each item; and, failing to
$222,199 which is the difference between the $1,237,000                    agree, shall submit their differences
jury verdict and a $1,014,801 sum previously paid by                       only to the umpire. An award in
Providence.                                                                writing, so itemized, of any two
                                                                           when filed with this Company shall
In eight points of error, Providence argues that (1) the                   determine the amount of actual
trial court erred by not enforcing the appraisal process and               cash value and loss. Each appraiser
by permitting this case to be tried, and (2) various errors                shall be paid by the party selecting
occurred during the trial regarding pleading and evidence,                 him and the expenses of appraisal
as well as the jury charge. By cross point, the District                   and umpire shall be paid by the
argues that it is entitled to attorney fees. We reverse and                parties.
render.
                                                               (emphasis added).


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Providence Lloyds Ins. Co. v. Crystal City Independent..., 877 S.W.2d 872 (1994)
92 Ed. Law Rep. 719

The District selected Joe Lopez as its appraiser;              of the forty-eight items in dispute, Harvey and Lopez then
Providence selected Preston Harvey. The trial court            resolved their differences and agreed on the following
appointed George Ozuna as the umpire, after the parties        twenty-six items:
disagreed about the umpire choice.

Harvey (for Providence) initially determined the school
could be restored for $851,149.98; Lopez (for the District)
estimated repairs at $1,747,640.00. The record shows that
1.           supervision                                                                                  $24,000.00


2.           project manager & travel                                                                       20,000.00


3.           portable commode                                                                                  600.00


4.           office trailer                                                                                  2,000.00


5.           dumpster rental & debris removal                                                               10,000.00


6.           crane rental                                                                                    2,000.00


7.           clean & seal for smoke odor                                                                    21,202.04


8.           clean & treat concrete slab for odor                                                            1,500.00


9.           glass, windows & doors                                                                          4,500.00


10.          suspended ceiling with insulation                                                              35,250.00


11.          laminated cabinets                                                                             23,397.75


12.          remove & replace bath accessories & toilet partitions                                          20,247.01


13.          chalk & tack boards                                                                             9,100.00


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Providence Lloyds Ins. Co. v. Crystal City Independent..., 877 S.W.2d 872 (1994)
92 Ed. Law Rep. 719

14.         structural steel                                                         37,175.00


15.         clock system                                                              2,995.00


16.         a/c heat energy control (Honeywell)                                       2,990.00


17.         remove & replace wall a/c & heating unit in Room 17                        966.00


18.         general cleaning during and after construction                            6,133.00


19.         remove & replace wood window frames                                           0.00


20.         plywood walls                                                             1,191.80


21.         marlyte wall in bath                                                       268.00


22.         repair concrete columns                                                    150.00


23.         remove & reset metal stairway and gate and burglar bars                   1,540.00


24.         remove & replace molding and trim                                         4,493.50


25.         6″ construction fence and gate                                            2,475.00


26.         permits                                                                   2,500.00


                                                                                   __________


                                                                                   $236,674.10



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Providence Lloyds Ins. Co. v. Crystal City Independent..., 877 S.W.2d 872 (1994)
92 Ed. Law Rep. 719




—————

Ozuna then reviewed the twenty-two2 remaining items,           *875
those upon which the appraisers were unable to agree, and
assigned values to them, as follows:
1.          builders risk                                                              $ 0.00


2.          power & telephone                                                            0.00


3.          project secretary                                                            0.00


4.          demolition of acoustic tile, ceiling, metal grid, insulation, walls,    47,500.00
            roof and carpet


5.          masonry                                                                 28,000.00


6.          metal stud walls, sheetrock, wall insulation, int. & ext. gyp board     39,901.00


7.          doors & frames                                                          16,620.00


8.          hardware                                                                 5,965.41


9.          plaster exterior                                                        16,950.00


10.         carpet, vinyl & base                                                    60,000.00


11.         painting & vinyl walls                                                  41,783.00


12.         remove & replace 4–ply built-up roof, roof insulation & sheetmetal     111,000.00


13.         lockers                                                                      0.00

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Providence Lloyds Ins. Co. v. Crystal City Independent..., 877 S.W.2d 872 (1994)
92 Ed. Law Rep. 719



14.         plumbing                                                                                       40,000.00


15.         fire alarm system                                                                              14,405.00


16.         intercom                                                                                        7,560.00


17.         electric with switch gear and light fixtures                                                   93,380.00


18.         HVAC                                                                                         100,164.00


19.         clean metal ducts                                                                                     0.00


20.         performance bond                                                                               21,278.75


21.         labor                                                                                                 0.00


22.         labor (subs)                                                                                          0.00


                                                                                                        $644,507.16




                                                               the cash value amounts, on the attached “Certificate of
Ozuna then added $132,365.38 as one lump sum which
                                                               Concurrence.” Providence immediately paid the District
included overhead, insurance and profit, previously
                                                               $1,014,801.30, and the District accepted payment and
separated items. Additionally, Ozuna awarded $1,254.72
                                                               deposited the check.4
for “remove & replace wood window frames,” one item
upon which Harvey and Lopez had previously agreed
(item 19, $0.00).3 Thus, Ozuna awarded $778,127.26 for         We note that the District did not amend its original
                                                               petition with pleadings to set aside the award. The
the disputed items as follows:
                                                               District’s own appraiser, together with Providence’s
                                                               appraiser, concurred in the final amount as submitted by
Ozuna added his value for the disputed items
                                                               the umpire, thereby signifying their approval of the cost
($778,127.26) to the total sum upon which the appraisers
previously    agreed     ($236,674.10),     resulting in       values of the items. The District amended its petition,
$1,014,801.36 as the total appraisal sum pursuant to the       alleging that Providence had made a “partial payment”
                                                               ($1,014,801.30) for the loss, but that the District was
appraisal clause. It is significant that both Harvey and
                                                               entitled to recover an additional sum, $735,198.70, for
Lopez signed the umpire’s determination, concurring with
                                                               repairs or replacement.
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Providence Lloyds Ins. Co. v. Crystal City Independent..., 877 S.W.2d 872 (1994)
92 Ed. Law Rep. 719

                                                                question of law. Reilly v. Rangers Management, Inc., 727
Subsequently, after a hearing, the trial court permitted the    S.W.2d 527, 529 (Tex.1987); Coker v. Coker, 650 S.W.2d
District to proceed with this lawsuit despite the appraisal     391, 394 (Tex.1983). We ascertain the subject appraisal
process. In so doing, the court ruled, as a matter of law,      clause is unambiguous, and neither party claims
that the umpire’s final sum, which included the agreed          otherwise. Pursuant to the appraisal clause, Harvey and
amounts of the two appraisers and the umpire’s own cost         Lopez were charged to agree on all possible items, and
values, was not in substantial compliance with the              then submit both disputed estimates to Ozuna. Ozuna, in
contractual appraisal mandates. The court based this on         turn, as the independent umpire, was to be the “tie-
the final appraisal document which denominated the              breaker.”
twenty-six items agreed to by both parties’ appraisers as
“court award” rather than “agreed award.” Other than            Finally, we agree with the Fisch court which quoted a
calling the appraisers’ agreed cost values “court award”,       statement from 6 APPLEMAN ON INSURANCE LAW
the umpire set out the accurate agreed amounts. At trial        & PRACTICE, p. 368 (now § 3933, pp. 586–87):
the court excluded the evidence of the appraisal and the
testimony of the umpire.                                                   Where the policy provided that the
                                                                           appraisers should submit their
In its first point of error, Providence argues that the trial              differences to an umpire, it was
court erred by not enforcing its appraisal award and, thus,                held that the signature of the
by permitting this breach of contract case to be tried. We                 umpire was without validity unless
agree.                                                                     and until the two appraisers failed
                                                                           to agree. * * * An umpire may act
[1] [2] [3]
         In deciding Providence’s point of error, we are                   to settle differences between
guided by several well-settled principles. Appraisal                       appraisers respecting the amount of
awards made pursuant to the provisions of an insurance                     a loss, when such differences
contract are binding and enforceable. Scottish Union and                   become known to him. But an
Nat’l Ins. Co. v. Clancy, 8 S.W. 630, 71 Tex. 5 (1888);                    umpire, appointed to decide on
Barnes v. Western Alliance Ins. Co., 844 S.W.2d 264, 267                   matters of difference only, has no
(Tex.App.—Fort Worth 1992, writ dism’d by agr.). Every                     authority to pass on matters
reasonable presumption will be indulged to sustain an                      concerning which there was no
appraisal award. Continental Ins. Co. v. Guerson, 93                       difference between the appraisers.
S.W.2d 591, 594 (Tex.Civ.App.—San Antonio 1936, writ                       The function of an umpire who is
dism’d). An award entered by appraisers and an umpire                      to act in matters of difference only
can be disregarded if: (1) the award was made without                      is not to coincide with one or the
authority; (2) the award was made as a result of fraud,                    other of the appraisers, but he is to
accident or mistake; or (3) the award was not made                         make his award independently of
substantially *876 in compliance with the requirements of                  such estimates.
the policy. Scottish Union, 8 S.W. at 631; Barnes, 844
S.W.2d at 267. See also Fisch v. Transcontinental Ins.          Fisch, 356 S.W.2d at 190.
Co., 356 S.W.2d 186, 190 (Tex.Civ.App.—Houston 1962,
writ ref’d n.r.e.).                                             [6]
                                                                    Applying these principles here, we must decide
[4]                                                             whether there was substantial compliance with the
   In addition, well-settled contract principles apply. We
seek to implement the intention of the parties as expressed     appraisal mandates. See Fisch, 356 S.W.2d at 190; see
in the language of the contract. Sun Oil Co. v. Madeley,        also Barnes, 844 S.W.2d at 267. The District does not
626 S.W.2d 726, 727–28 (Tex.1981); R & P Enter. v.              allege lack of authority or fraud, mistake or accident
LaGuarta, Gavrel & Kirk, Inc., 596 S.W.2d 517, 518              regarding the appraisal award. Id.5
(Tex.1980). The parties usually intend for each clause to
have meaning and effect. Ogden v. Dickinson State Bank,         The District complains of two “flaws” in the umpire
662 S.W.2d 330, 332 (Tex.1983); City of Pinehurst v.            award and argues that they demonstrate the appraisal
Spooner Addition Water Co., 432 S.W.2d 515, 518                 award was not made in substantial compliance with the
(Tex.1968).                                                     appraisal provisions: (1) Ozuna exercised independent
                                                                judgment with five items, instead of agreeing with one
[5]                                                             appraiser or the other; and (2) the *877 agreed awards
  Further, whether a disputed provision is unambiguous
or whether it can have more than one meaning is a               were included in Ozuna’s award summary and were
                                                                labeled “court award.”
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Providence Lloyds Ins. Co. v. Crystal City Independent..., 877 S.W.2d 872 (1994)
92 Ed. Law Rep. 719

                                                                     unprejudiced and disinterested within the meaning of
Regarding the five items which Ozuna, the umpire,                    the contract of insurance.
calculated without agreeing with either appraiser, the
record reveals that the District failed to object to the cost      ******
value appraisal on that ground or specify that particular
basis for the trial court’s ruling that Ozuna failed to              The question still is, Was the umpire guilty of
substantially comply with the insurance policy terms. In             misconduct in appraising the loss on the 17 items at
line with the District’s argument of non-compliance, the             figures beyond the limits fixed by the appraisers and in
trial court did state its specific basis for its ruling: “[T]hat     discarding the estimates of the appraisers as to the
this Court ordered certain awards, was used as his                   sound value of one of the articles? ... Where an umpire
foundation and he built on that foundation. And it must              ... exceeds his authority, the effect of his act is the same
fail, it must fall. This Court never awarded any amount ...          whether it was done consciously or by mistake, as in
[E]ven if the language [“court” instead of “agreed”] were            either case his award was void....
to be taken out ... still, it is not in substantial compliance
even with the appraisal clause provisions as mandated by           The position taken by the complainants is, and they
law. Motion to strike is granted.”                                 contend, that, as the umpire was to act “in matters of
                                                                   difference only,” his function was to coincide with one or
The record contains no mention of the five items not               the other of the appraisers or to somehow warp his
being correctly determined, which the District now                 judgment between the high and low figures that marked
maintains demonstrates failure to substantially comply             their differences. The position is not sound.
with the terms of the appraisal clause. The matter was
raised for the first time on appeal. Since the District did        ******
not submit to the court that same objection to the
appraisal award it now raises on appeal, the trial court did                    [I]f the three are of one mind, or if
not rule upon it. We will address this argument, however,                       any two of them are in accord as to
for the purpose of clarification.                                               sound value and loss, the award is a
                                                                                finality. Manifestly, it would have
In all but the following five items, Ozuna agreed with                          been an abuse of authority had the
either Harvey’s or Lopez’s estimate: (1) builders risk, (2)                     umpire arbitrarily confined himself
doors & frames, (3) plumbing, (4) fire alarm system, and                        within the limits of the appraisers’
(5) HVAC.                                                                       estimates.

The duty of the umpire under the terms of the insurance            Dennis, 107 A. at 162–63. Accord Atlas Constr. Co. v.
policy was to ascertain and determine, in the exercise of          Indiana Ins. Co., 160 Ind.App. 33, 309 N.E.2d 810
his own best judgment, the cash value of the items of              (1974).
property about which the appraisers had disagreed,
independent of the findings of the appraisers, or either of        Concerning the same contention made in the present case
them. This is what the umpire did, according to the                by the District, we find that in acting independently as to
record, and both appraisers agreed with his findings and           the disputed values, the umpire did not exceed the
signed the award, which included their agreed findings.            authority *878 conferred upon him. On the contrary, it
See Orient Ins. Co. v. Harmon, 177 S.W. 192                        was the duty of the umpire under the terms of the contract
(Tex.Civ.App.—Dallas 1915, writ ref’d).                            of insurance to ascertain and determine, in the exercise of
                                                                   his own judgment and as the result of his own
[7]                                                                investigation, the cost values of the disputed items,
   The umpire is required to act with the appraisers in
matters of difference. He is a third appraiser. If the three       independent of the findings of the appraisers, or either of
are of one mind, or if any two of them are in accord as to         them.
value and loss, the appraisal award is a finality. See
Dennis v. Standard Fire Ins. Co., 90 N.J.Eq. 419, 107 A.           Finally, regarding this contention, the parties concurred in
161 (1919). In expounding on the duties of an umpire               the result. Not one, but both the appraisers agreed with the
acting pursuant to a similar contractual provision, the            final appraisal award, making it a binding one. Following
court wrote:                                                       this, the District accepted the payment of the award. As
                                                                   noted previously, the District did not file suit to set aside
      It was hardly to be expected that the appraisers would       the award.
      agree in all matters. They were partisans, within
      bounds, but were nevertheless unbiased and
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Providence Lloyds Ins. Co. v. Crystal City Independent..., 877 S.W.2d 872 (1994)
92 Ed. Law Rep. 719

[8]
   Regarding the District’s complaint about the column                         Providence filed its motion to enforce the appraisal award
labeling on Ozuna’s report, the record shows that Ozuna                        after trial began. It stressed that the parties entered into
labeled the column listing these twenty-six sums, upon                         the appraisal process, a condition precedent to recovery
which the appraisers had agreed, as “court award.” The                         under the terms of the policy. The District participated,
record supports the argument that this list should have                        accepted the appraisal award, and received the proceeds.
been appropriately titled “agreed award.” However,                             Providence cited the “loss payable clause” of the policy
though arguably confusing, this labeling does not render                       which required the insurer to pay the appraisal award
the appraisal award not in substantial compliance.6 Here                       within 60 days after it was filed, and it complied. It
the record is clear that Harvey and Lopez agreed on these                      asserted the District failed to timely contest the appraisal
twenty-six items and that Ozuna examined only the                              award by a suit to set aside and had waived that right. In
disputed twenty-two items. We hold the appraisal award                         its motion for judgment n.o.v., Providence again argued
was the intended result.                                                       that the appraisal award should have been enforced by the
                                                                               court. Also it argued that there was no evidence of breach
[9] [10]
       The District argues that we cannot respond to point                     of contract. Our previous discussions and rulings
of error one without Ozuna’s entire deposition, which the                      demonstrate that we agree with the first argument.
trial court considered at the pre-trial hearing at which it                    Therefore point of error one is sustained. We have no
excluded from evidence the appraisal award. We disagree.                       need to address the remaining points of error.
Providence brought forth relevant portions of Ozuna’s
deposition with its bill of exception at trial when it argued                  *879 By cross point the District argues that it was entitled
that the appraisal award should be enforced. The record is                     to $123,700 in attorney fees, despite the jury’s “0.00”
clear that Harvey and Lopez agreed on twenty-six items                         answer as to a reasonable fee for necessary service by the
and that Ozuna was authorized to and did examine only                          District’s attorneys. Because of our disposition of the first
the disputed twenty-two items. Also, we need not go                            point of error, we need not address this point.
behind Ozuna’s award and analyze his mental processes.
See Continental, 93 S.W.2d at 594.                                             The judgment is reversed and judgment is rendered that
                                                                               the appraisal award made pursuant to the provisions of the
[11]
    We believe the entire record before us demonstrates                        insurance contract is binding on the District and that the
the appraisal was conducted in a fair and proper manner,                       District take nothing in this suit.
and the award was determined, after full investigation by
both appraisers and the umpire. There was no partiality or
collusion shown; the appraisers and umpire acted in an
honest and conscientious manner. Under these                                   Parallel Citations
circumstances the trial court was not warranted, in effect,
in setting aside the appraisal award.                                          92 Ed. Law Rep. 719


Footnotes
1          Justice Orlando Garcia not participating.

2          We note that appellant states in its brief that eighteen items were disputed. However, the record reflects the twenty-two listed
           items.
3          The District does not complain of this $1,254.72 sum in their favor. Neither party having complained, we need not address it.

           twenty-two itemized items                                                                                             $644,507.16

           overhead, insurance and profit                                                                                         132,365.38

           window frames                                                                                                            1,254.72

                                                                                                                                 $778,127.26
4          As previously noted, the trial court deducted this sum from the jury verdict, in its judgment.



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Providence Lloyds Ins. Co. v. Crystal City Independent..., 877 S.W.2d 872 (1994)
92 Ed. Law Rep. 719

5      In Barnes, which was a suit by the insured to enforce an insurance appraisal award after the insurance company refused to pay
       the appraisal award, definitions of fraud, accident and mistake were submitted to the jury. The jury was asked whether it found
       from a preponderance of the evidence that the [appraisal] award should be set aside because of fraud, accident or mistake. The
       jury answered that it should be set aside. Another question asked the jury:
             [F]rom a preponderance of the evidence, [w]hat sum of money, if paid now in cash, would fairly and reasonably
             compensate [the insured] for his damages, if any, for the storm, hail, and resulting damage to the insured from the
             occurrence in question?
          844 S.W.2d at 268.
          The jury awarded a much lesser amount than the original appraisal award.
          In the present case the jury answered three questions. The first question asked:
             Did [Providence] fail to fairly and reasonably compensate [the District] for the cost to repair or replace the [school] and
             thereby fail to comply with the insurance contract?
             ANSWER: Yes
          Conditioned upon an affirmative response to number one, the second question was:
             What sum of money, if any, if paid now in cash, would fairly and reasonably compensate [the District] for the cost to repair
             or replace [the school]?
             “Cost to repair or replace” is the amount to repair or replace [the school] with material of like kind or quality, without
             deduction for depreciation and intended for the same occupancy and use.
             ANSWER: 1,237,000
          The third question regarding the amount of attorney fees to award the District’s attorneys was answered –––0.00–––.
6      Nor do we believe that the mere column labeling gives rise to a “mistake.” This is illustrated by prior case law. See Providence
       Wash. Ins. Co. v. Farmers Elevator Co., 141 S.W.2d 1024, 1026–27 (Tex.Civ.App.—Amarillo 1940, no writ) (trial court
       judgment setting aside an award by two appraisers and an umpire reversed and rendered in part because there was no mistake—
       award was intended result); Continental, 93 S.W.2d at 594 (court cannot concern itself where the award embodies the appraisers
       real judgment); Camden Fire Ins. Ass’n v. McCain, 85 S.W.2d 270, 271 (Tex.Civ.App.—San Antonio 1935, writ dism’d)
       (award not set aside where no evidence of interest, bias or prejudice); Gulf Ins. Co. of Dallas v. Pappas, 73 S.W.2d 145, 146–47
       (Tex.Civ.App.—San Antonio 1934, writ ref’d) (court will not substitute its own award for that of the appraisers unless the
       mistake is one by which the award fails to operate in a way the appraisers intended); Home Ins. Co. v. Walter, 230 S.W. 723,
       724 (Tex.Civ.App.—Dallas 1921, no writ) (an award which is the result of fraud, mistake or accident means one which was
       made by appraisers who were incompetent, interested or partial).




End of Document                                                          © 2015 Thomson Reuters. No claim to original U.S. Government Works.




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Richardson v. Allstate Texas Lloyd’s, Not Reported in S.W.3d (2007)




                2007 WL 1990387
  Only the Westlaw citation is currently available.
                                                                FACTUAL AND PROCEDURAL BACKGROUND
  SEE TX R RAP RULE 47.2 FOR DESIGNATION
         AND SIGNING OF OPINIONS.                              In December 2001, “a catastrophic pressurized infusion of
                                                               raw sewage spewed through every plumbing opening” in
            MEMORANDUM OPINION
                                                               Richardson’s home in Lancaster, Texas. Richardson’s
             Court of Appeals of Texas,
                                                               home was insured by Allstate. Immediately after her
                       Dallas.
                                                               home was flooded with sewage, Richardson contacted
         Linda RICHARDSON, Appellant                           Allstate to make a claim under her insurance policy.
                     v.                                        Shortly thereafter, a dispute arose between Richardson
       ALLSTATE TEXAS LLOYD’S, Appellee.                       and Allstate concerning the amount of Richardson’s
                                                               insured loss. Accordingly, Allstate sent Richardson a
 No. 05-06-00100-CV. | July 11, 2007. | Rehearing              written notice informing her that Allstate was invoking
            Overruled Sept. 26, 2007.                          the appraisal provision of her insurance policy. The terms
                                                               of that provision read, in pertinent part, as follows:
On Appeal from the 160th Judicial District Court, Dallas
County, Texas, Trial Court Cause No. 02-01779-H, Joe             Appraisal. If you and we fail to agree on the actual
Cox, J.                                                          cash value, amount of loss, or cost of repair or
                                                                 replacement, either can make a written demand for
Attorneys and Law Firms                                          appraisal. Each will then select a competent,
                                                                 independent appraiser and notify the other of the
Charles Raymond Nichols, Chet Dingler, John H. Carney,           appraiser’s identity within 20 days of receipt of the
John H. Carney & Associates, Dallas, for Appellant.              written demand. The two appraisers will choose an
                                                                 umpire. If they cannot agree upon an umpire within 15
Roger D. Higgins, Jacquelyn Chandler, Thompson, Coe,             days, you or we may request that the choice be made by
Cousins & Irons, L.L.P., Dallas, for Appellee.                   a judge of a district court of a judicial district where the
                                                                 loss occurred. The two appraisers will than [sic] set the
Before Justices MOSELEY, O’NEILL, and LAGARDE.                   amount of loss, stating separately the actual cash value
                                                                 and loss to each item.



             MEMORANDUM OPINION
                                                                                            ...
                                1
Opinion by Justice LAGARDE.
                                                                  If the appraisers fail to agree, they will submit their
*1 Appellant Linda Richardson sued Allstate Texas                 differences to the umpire. An itemized decision agreed
Lloyd’s (Allstate), seeking to overturn an appraisal award        to by any two of these three and filed with us will set
entered on her insurance claim for sewer damage to her            the amount of such loss. Such award shall be binding
home. After originally denying Allstate’s successive              on you and us.
motions for summary judgment, upon reconsideration, the        Allstate selected Jim Greenhaw as its independent
trial court granted Allstate’s second motion and dismissed     appraiser. Richardson selected C.R. Johnson as her
Richardson’s claims with prejudice.                            independent appraiser. The parties then agreed to use
                                                               Sally Montgomery as the umpire, and she was appointed
Richardson appeals the summary judgment order and the          by the trial court in March 2002. On March 25, 2002,
trial court’s denial of her motion to designate experts. For   Johnson and Greenhaw signed their names on a blank
reasons that follow, we conclude the summary judgment          form “Appraisal Award.” The top of that one-page form
was improperly granted and we remand this case to the          contains general information about the claim, including
trial court for further proceedings. Because all dispositive   the names of the parties, the appraisers, and the umpire.
issues are settled in law, we issue this memorandum            The appraiser’s signatures are in the middle of the page
opinion. TEX.R.APP. P. 47.2(a), 47.4.                          beneath that general information. Directly underneath the

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Richardson v. Allstate Texas Lloyd’s, Not Reported in S.W.3d (2007)



appraisers’ signatures on the form award is a chart with       granted Allstate’s second motion           and   dismissed
three columns. The first column is titled “ITEM,” and the      Richardson’s claims with prejudice.
phrase “to be determined by hygienist” is hand-written
beneath that title on the first numbered line. The next two    In this appeal, Richardson asserts five main points of
columns, titled “LOSS REPLACEMENT COST” and                    error, each with multiple subpoints. In her first point,
“LOSS ACTUAL CASH VALUE,” are blank.                           Richardson argues the summary judgment order is
                                                               improper because the appraisal award is “void as a matter
*2 According to the record, after they signed the blank        of law,” based, inter alia, on her contention that the
form, Greenhaw and Johnson each conferred separately           appraisal procedure was not followed. In her second
with the umpire during the next few months. It appears,        point, Richardson argues she is entitled to summary
however, that neither appraiser prepared an itemized list      judgment on Allstate’s affirmative defense of accord and
of the cash value and loss to each item in Richardson’s        satisfaction. In her third issue, Richardson argues she is
house. According to Richardson, sometime prior to June         not estopped to assert her breach of contract claim. In her
21, 2002, Johnson sent Montgomery a written estimate           fourth issue, Richardson argues genuine issues of material
totaling approximately $141,000. The written estimate          fact preclude summary judgment dismissing her extra-
itself is not in the record. On June 21, 2002, Montgomery      contractual claims. Finally, in her fifth point, Richardson
met with Greenhaw at Greenhaw’s office. During that            argues the trial erred in denying her motion to designate
meeting, Montgomery or Greenhaw wrote “$39,650.75”             experts.
on the form appraisal award under the column “LOSS
REPLACEMENT COST,” next to the phrase “to be
determined by hygienist” previously written on the form
award. Montgomery and Greenhaw then dated the award
June 21, 2002 and both signed it. There is no evidence in                 THE APPRAISAL PROCEDURE
the record that Montgomery or Greenhaw discussed this
award with Johnson either before or after it was entered.
                                                                                  A. Applicable Law
On July 16, 2002, Allstate sent Richardson a check for         *3 Because courts “seek to implement the intention of the
$27,813.95, the net amount of the award after deducting        parties as expressed in the language of a contract,” it has
the amounts already paid to Richardson and half of the         long been the rule in Texas that “[a]ppraisal awards made
umpire’s fee. The next day, Johnson and Richardson             pursuant to the provisions of an insurance contract are
wrote to the trial court complaining about the impropriety     binding and enforceable.” Providence Lloyds Ins. Co. v.
of the appraisal award and requested a meeting with the        Crystal City Ind. Sch. Dist., 877 S.W.2d 872, 875
trial judge. There is no evidence in the record about          (Tex.App.-San Antonio 1994, no writ) (citing Scottish
whether such meeting occurred. On October 2, 2002,             Union and Nat’l Ins. Co. v. Clancy, 71 Tex. 5, 8 S.W. 630
Richardson cashed Allstate’s check.                            (Tex.1888)). “Although every reasonable presumption
                                                               will typically be made in favor of an appraisal award,
Thereafter, Richardson filed a petition seeking to set aside   when reviewing a summary judgment proceeding, that
the appraisal award. In her suit against Allstate,             rule must yield to the degree its application conflicts with
Richardson asserted claims against Allstate for breach of      the presumptions required to be made in favor of the
contract, breach of the duty of good faith and fair dealing,   nonmovant.” Wells v. Am. States Preferred Ins. Co., 919
negligence, negligence per se, and violation of articles       S.W.2d 679, 683 (Tex.App.-Dallas 1996, writ denied)
21.21 and 21.55 of the Texas Insurance Code.                   (citing Hennessey v. Vanguard Ins. Co., 895 S.W.2d 794,
                                                               797-98 (Tex.App.-Amarillo 1995, writ denied)). There are
Allstate moved for summary judgment twice. In its              three circumstances in which an appraisal award may be
second motion for summary judgment, Allstate asserted it       set aside on appeal: (1) the award was made without
was entitled to summary judgment because (i) Richardson        authority, (2) the award was made as a result of fraud or
could not establish any grounds for setting aside the          accident, or (3) the award was not make in substantial
appraisal award, (ii) Richardson’s claims were barred by       compliance with the terms of the insurance policy.
the affirmative defense of accord and satisfaction, (iii)      Crystal City, 877 S.W.2d at 875-76.
Richardson was estopped to assert a breach-of-contract
claim, and (iv) Richardson’s extra-contractual claims
were “unsupportable, as a matter of law.” The trial court
denied Allstate’s first and second motions; but upon
Allstate’s one-page motion to reconsider, the trial court                             B. Analysis

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Richardson v. Allstate Texas Lloyd’s, Not Reported in S.W.3d (2007)



In her first issue, Richardson argues the award in this case             before any award was issued. Allstate also argues the
should be set aside because it was not made in substantial               award is proper because “nothing in the policy requires
compliance with the policy. We agree. The policy                         that the two individuals agreeing on the award delineate
expressly requires that the appraisers each make an                      every item to be replaced.” We agree that in a situation
itemized list, “stating separately the actual cash value and             like this, in which raw sewage may have contaminated the
loss to each item.” It also requires the appraisers to submit            entire contents of a home, it would not be necessary to list
to the umpire only the items on which the two appraisers                 and separately appraise, for example, every item of
fail to agree. The policy then requires at least two of these            clothing and kitchen utensil in the home. Nevertheless, we
individuals must agree on the final appraisal award, and                 reject Allstate’s contention that the appraisers were
the final award must be “itemized.”                                      entirely relieved of their obligation to make an itemized
                                                                         list that at least categorized the contents of the home in a
The record in this case does not reflect substantial                     manner customary in the insurance industry.
compliance with this required procedure. There is no
evidence in the record the appraisers made the requisite                 *4 Under these facts, we conclude the appraisal award
itemized lists or that they submitted only disputed items to             should be set aside because the award was not made in
the umpire for a decision. Instead, the record contains                  substantial compliance with the terms of the insurance
testimony that, prior to Montgomery and Greenhaw                         policy. E.g., Fisch v. Transcon. Ins. Co., 356 S.W.2d 186,
signing the award, Johnson never saw any written                         189-90 (Tex.Civ.App.-Houston 1962, writ ref’d n.r.e.)
estimate from Greenhaw and did not meet with Greenhaw                    (setting aside appraisal award because record contained
or Montgomery to discuss the appraisers’ disputed items.                 no evidence appraisers failed to agree and only submitted
The record contains no itemized list prepared by either                  disagreements to umpire, as required by policy).
appraiser. There is testimony in the record that Johnson
prepared a written estimate and forwarded it to the
umpire, but that estimate is not in the record. There is no
evidence that Johnson ever met with Greenhaw to discuss
their itemized estimates so the appraisers could determine                                       CONCLUSION
their differences. Moreover, the appraisal award signed by
Montgomery and Greenhaw is not an “itemized decision”                    We reverse the trial court’s summary judgment and
as required by the terms of the insurance policy. Instead,               remand this case for further proceedings consistent with
it merely reflects a lump-sum award written next to the                  this opinion. TEX.R.APP. P. 43.2(d). The ultimate
phrase “to be determined by hygienist.”                                  disposition of this case, including Richardson’s extra-
                                                                         contractual claims and Allstate’s affirmative defenses,
Allstate argues that a document prepared by Greenhaw                     will depend on the facts developed and decisions made
several days after Greenhaw and Montgomery signed the                    during the further proceedings in the trial court.
award “comprises the itemized decision upon which the                    Accordingly, we need not address Richardson’s
appraisal award was based.” We reject this argument. A                   remaining issues at this time. TEX.R.APP. P. 47.1.
document prepared after the appraisal award was issued
cannot, as a matter of common sense and law, constitute
the itemized list Greenhaw was supposed to prepare

Footnotes
1      The Honorable Sue Lagarde, Justice, Court of Appeals, Fifth District of Texas at Dallas, Retired, sitting by assignment.




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Safeco Lloyds Insurance Company v. Barrentine, Not Reported in S.W.3d (2014)




                                                               Texas. In September 2011, wildfires damaged the
                                                               Barrentines’ home, and they filed a claim under the
                2014 WL 7399307
  Only the Westlaw citation is currently available.            insurance policy. In May 2012, pursuant to the provisions
                                                               of the policy, Safeco demanded an appraisal of the
  SEE TX R RAP RULE 47.2 FOR DESIGNATION                       amount of loss suffered by the Barrentines and designated
         AND SIGNING OF OPINIONS.                              its appraiser. The policy provided the Barrentines were
                                                               entitled to appoint their own appraiser, and the two
              MEMORANDUM OPINION                               appraisers would agree on an umpire. If the appraisers
               Court of Appeals of Texas,                      were unable to agree on an umpire, the policy permitted
                         Dallas.                               either party to request that the choice of an umpire be
                                                               made by a judge of a district court of a judicial district
    Safeco Lloyds Insurance Company, Appellant                 where the loss occurred.
                         v.
       James & Patricia Barrentine, Appellees                  In August 2012, Safeco filed a motion in Bastrop County
                                                               district court seeking the appointment of an umpire
No. 05–13–01011–CV | Opinion Filed December 17,                because the parties’ appointed appraisers were unable to
                    2014                                       agree on an umpire. In September 2012, the Bastrop
                                                               County court appointed an umpire. On January 25, 2013,
On Appeal from the 193rd Judicial District Court, Dallas       the umpire issued a proposed appraisal award, allegedly
County, Texas, Trial Court Cause No. DC–13–04453.              without considering the estimate or opinions of Safeco’s
Carl Ginsberg, Judge.                                          appraiser. On January 31, following a hearing, the
                                                               Bastrop County court appointed a different umpire. On
Attorneys and Law Firms
                                                               April 13, the Barrentines nonsuited the suit in Bastrop
Catherine L. Hanna, Laura Tubbs, Eric S. Peabody,              County and re-filed suit in Dallas County district court.
Austin, TX, for Appellant.                                     Among other things, the Barrentines sought a temporary
                                                               restraining order barring the Bastrop County court from
Robert L. Collins, Robert Edwin Ray, Houston, TX,              conducting a re-appraisal of the Barrentines’ property in
Kathleen Kearney, Michael Nathaniel Barbera, Paul              Bastrop. On July 3, 2013, the Dallas County district court
Wesley Black, Dallas, TX, for Appellees.                       entered an order temporarily enjoining the re-appraisal of
Before Justices Bridges, Lang, and Evans                       the Bastrop property, and this interlocutory appeal
                                                               followed.

                                                               In its first issue, Safeco argues the Dallas County district
                                                               court erred in entering a temporary injunction.
                                                               Specifically, Safeco argues the temporary injunction
             MEMORANDUM OPINION                                impermissibly disrupted the status quo of the underlying
                                                               case by ignoring and unwinding the orders of the Bastrop
Opinion by Justice Bridges                                     County court, “allowing the Barrentines to collaterally
                                                               attack those orders in a court of concurrent jurisdiction.”
*1 Safeco Lloyds Insurance Company appeals the trial           We agree.
court’s order temporarily enjoining a re-appraisal of the
Barrentines’ residence in Bastrop, Texas. In three issues,     The purpose of a temporary injunction is to preserve the
Safeco argues the trial court’s injunction was an improper     status quo of the subject matter of a suit pending a trial on
collateral attack on the orders and jurisdiction of the        the merits. Butnaru v. Ford Motor Co., 84 S.W.3d 198,
Bastrop court, the trial court abused its discretion by        204 (Tex.2002); El Tacaso, Inc. v. Jireh Star, Inc., 356
finding the Barrentines had a probable right to recovery       S.W.3d 740, 743 (Tex.App.–Dallas 2011, no pet.). A
under the invalidated appraisal, and the trial court erred     party asking for a temporary injunction seeks
by refusing to dissolve the injunction. We reverse the trial   extraordinary equitable relief. El Tacaso, 356 S.W.3d at
court’s order granting temporary injunctive relief,            743; Wilson N. Jones Mem’l Hosp. v. Huff, 188 S.W.3d
dissolve the temporary injunction, and remand for further      215, 218 (Tex.App.–Dallas 2003, pet. denied). The
proceedings.                                                   extraordinary equitable remedy of an injunction must be
                                                               carefully regulated and confined to proper cases. El
In March 2011, the Barrentines purchased a homeowner’s         Tacaso, 356 S.W.3d at 743. The decision to grant or deny
insurance policy from Safeco for their home in Bastrop,
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Safeco Lloyds Insurance Company v. Barrentine, Not Reported in S.W.3d (2014)



a temporary injunction lies in the sound discretion of the     Where two actions involving the same subject matter are
trial court, and the court’s grant or denial is subject to     brought in different courts having concurrent jurisdiction,
reversal only for a clear abuse of discretion. Butnaru, 84     the court which first acquires jurisdiction should retain
S.W.3d at 204.                                                 jurisdiction, undisturbed by the interference of another
                                                               court and dispose of the controversy. In re Sims, 88
*2 To be entitled to a temporary injunction, an applicant      S.W.3d at 303. It is not required that the exact issues and
must plead and prove three specific elements: (1) a cause      all the parties be included in the first action before the
of action against the defendant; (2) a probable right to the   second action is filed, provided that the claim in the first
relief sought; and (3) a probable, imminent, and               suit may be amended to bring in all necessary and proper
irreparable injury in the interim. Id. “Probable injury”       parties and issues. Id. The test is whether there is an
includes the elements of imminent harm, irreparable            inherent interrelation of the subject matter in the two
injury, and no adequate remedy at law. El Tacaso, 356          suits. Id. As long as the forum of the first action is proper,
S.W.3d at 743. For purposes of a temporary injunction, an      the plaintiff’s choice of forum must be respected, and a
injury is irreparable if the injured party cannot be           defendant is “simply not at liberty to decline to do battle
adequately compensated in damages or if the damages            in the forum chosen by the plaintiff.” Id. (quoting Wyatt,
cannot be measured by any certain pecuniary standard. Id.      760 S.W.2d at 248).
The general rule at equity is that before injunctive relief
can be obtained, it must appear that there does not exist an   Here, the record shows that the Dallas County district
adequate remedy at law. Butnaru, 84 S.W.3d at 210. An          court’s temporary injunction, rather than preserving the
adequate remedy at law is one that is as complete,             status quo of the underlying suit pending a trial on the
practical, and efficient to the prompt administration of       merits, usurped the role of the Bastrop County court as
justice as is equitable relief. El Tacaso, 356 S.W.3d at       the court granted authority to conduct an appraisal under
744.                                                           the terms of the parties’ contract. See Butnaru, 84 S.W.3d
                                                               at 204. The temporary injunction states the Dallas County
As a general rule, when cases involving the same subject       district court’s finding that “re-appraisal and its attendant
matter are brought in different courts, the court with the     delay poses a risk of irreparable harm to the Barrentines’
first-filed case has dominant jurisdiction and should          health and to their rights in their unique real property.” As
proceed, and the other case should be abated. Ashton           a result, the temporary injunction was granted “barring a
Grove, L.C. v. Jackson Walker L.L.P., 366 S.W.3d 790,          second or subsequent appraisal of the insured risk at issue
794 (Tex.App.–Dallas, 2012, no pet.); see In re Sims, 88       in the above-captioned litigation pending [the Dallas
S.W.3d 297, 302 (Tex.App.–San Antonio 2002, orig.              County district court’s] ruling on the summary judgment
proceeding) (citing Wyatt v. Shaw, 760 S.W.2d 245, 248         now pending in connection with the completed appraisal.”
(Tex.1988); Curtis v. Gibbs, 511 S.W.2d 263, 267               Thus, rather than preserving the status quo, the temporary
(Tex.1974)). In Curtis, the Texas Supreme Court stated:        injunction purportedly cut off the Bastrop County court
                                                               from taking further action to effectuate the appraisal the
            Any subsequent suit involving the                  contract between the parties mandated. See id. The
            same parties and the same                          Bastrop County court, as the court with dominant
            controversy must be dismissed if a                 jurisdiction, should have been left undisturbed to dispose
            party to that suit calls the second                of the underlying controversy. See In re Sims, 88 S.W.3d
            court’s attention to the pendency of               at 302–03. We conclude the trial court erred in entering
            the prior suit by a plea in                        its temporary injunction in this case. We sustain Safeco’s
            abatement. If the second court                     first issue. Because of our disposition of Safeco’s first
            refuses to sustain a proper plea in                issue, we need not address Safeco’s remaining issues.
            abatement or attempts to interfere
            with the prior action, this court has              *3 We reverse the trial court’s order granting temporary
            the power to act by mandamus or                    injunctive relief, dissolve the temporary injunction, and
            other appropriate writ to settle the               remand this case to the trial court for further proceedings.
            conflict of jurisdiction.

Curtis, 511 S.W.2d at 267.

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Safeco Lloyds Insurance Company v. Barrentine, Not Reported in S.W.3d (2014)




WestEawNext © 2015 Thomson Reuters. No claim to original U.S. Government Works.   3
TMM Investments, Ltd. v. Ohio Cas. Ins. Co., 730 F.3d 466 (2013)




                                                               Frank M. Mason, Longview, TX, for Plaintiff–Appellee–
                                                               Cross Appellant.
                    730 F.3d 466
            United States Court of Appeals,
                                                               Richard Brent Cooper, Esq., Diana L. Faust, Michelle
                     Fifth Circuit.
                                                               Elaine Robberson, Cooper & Scully, P.C., Dallas, TX, for
      TMM INVESTMENTS, LIMITED., Plaintiff–                    Defendant–Appellant–Cross Appellee.
             Appellee–Cross Appellant
                                                               Appeals from the United States District Court for the
                        v.
                                                               Eastern District of Texas.
      OHIO CASUALTY INSURANCE COMPANY,
        Defendant–Appellant–Cross Appellee.                    Before JOLLY, DAVIS, and PRADO, Circuit Judges.
            No. 12–40635. | Sept. 17, 2013.                    Opinion

                                                               EDWARD C. PRADO, Circuit Judge:
Synopsis
Background: Insured, the owner of a shopping center,
brought action in state court against insurer seeking to       This appeal arises out of an insurance dispute between
have an appraisal award regarding hailstorm damage             TMM Investments, Ltd. (“TMM”), which owned a
declared invalid. Following removal, the United States         shopping center, and Ohio Casualty Insurance Co.
District Court for the Eastern District of Texas entered       (“OCIC”), which insured the property. The property was
partial summary judgment for insured, set aside the            damaged in a hailstorm, but the parties disagreed about
appraisal award, found that insured was entitled to            the extent of the damage. An appraisal was conducted
damages and attorney fees, and denied insurer’s motion         according to the terms of the insurance contract, but
for new trial. Both parties appealed.                          TMM was not pleased with the appraisal award and sued
                                                               to have the award declared invalid. The district court set
                                                               aside the appraisal award and had the case proceed to trial
Holdings: The Court of Appeals, Prado, Circuit Judge,          for liability and coverage determinations. An advisory
held that:                                                     jury assessed a damage award, and after a bench trial on
                                                               the remaining issues, the district court delivered a number
[1]
  umpire lacked authority to exclude heating, ventilation,     of findings of fact and conclusions of law, including that
and air-conditioning (HVAC) damages estimate from              OCIC had breached the insurance contract and that TMM
appraisal award;                                               was entitled to damages, attorney’s fees, and prejudgment
                                                               interest. OCIC appeals the district court’s order setting
[2]
   umpire’s error in excluding HVAC damages estimate           aside the appraisal award and the district court’s findings
from appraisal award did not justify throwing out the          of fact and conclusions of law. TMM appeals the district
entire appraisal award;                                        court’s determination that TMM was entitled to only the
                                                               actual cash value of the damage, rather than the
[3]
   appraisal panel did not exceed its authority in             replacement cost, and the district court’s failure to award
considering causation; and                                     appellate attorney’s fees. Because we find that the
                                                               original appraisal award should not have been set aside,
[4]
  insurer fulfilled the terms of the insurance contract        we reverse.
when it tendered the amount articulated in the appraisal
award.


Reversed.                                                      I. FACTUAL AND PROCEDURAL BACKGROUND

                                                               TMM owns a shopping center (“Liberty Square”) in
                                                               Texarkana, Texas, which was insured by OCIC under a
Attorneys and Law Firms
                                                               policy that was *469 in force from June 1, 2005 to June 1,
*468 Andy Tindel, Andy Tindel, Attorney & Counselor at         2006. According to TMM, the roof of the Liberty Square
Law, P.C., Tyler, TX, Frank M. Mason, Law Office of            property was severely damaged when a hailstorm passed
                                                               through the area on or around June 6, 2005. TMM

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TMM Investments, Ltd. v. Ohio Cas. Ins. Co., 730 F.3d 466 (2013)



notified OCIC of the damage around March 30, 2007.                 infiltration is not covered under the policy. It is my
TMM conducted an assessment of the damage and                      understanding that the policy would only cover interior
estimated it to be between $654,796 and $955,910.                  damage if there was not a covere[d] peril related
OCIC’s engineers, on the other hand, estimated the                 opening(s) in the roof. I feel confident in my position
damage to be only around $17,949. OCIC made TMM a                  on this matter but ask my client for confirmation and
payment offer on the basis of that estimate. TMM filed a           advi[c]e. Once I have the confirmation I will issue an
sworn proof of loss for $679,725.68 on April 9, 2008.              estimate that cover[s] all item[s] I attribute to the storm
                                                                   and my recommended quantification of expense.
Because the disparity between the parties’ estimates was
so great, TMM refused the payment offer and invoked the        On July 15, citing concerns over the way the appraisal
Appraisal Property Loss Conditions section of the              was being conducted, Crites resigned.
insurance policy, which reads, in pertinent part:
                                                               On July 29, 2009, Boyd issued an appraisal award, which
            If we and you disagree on the                      Butler also signed, listing the “Replacement Cost” of the
            amount of loss, either may make                    damage to Liberty Square as $73,014.83, and the “Actual
            written demand for an appraisal of                 Cash Value” of the loss as $49,632.63. The award
            the loss. In this event, each party                contained line items for “Clean and coat modified
            will select a competent and                        [illegible] roof 188 sqs,” “Repair & coat EFIS,” and
            impartial appraiser and notify the                 “Replace and paint aluminum shingles,” but apparently
            other of the appraiser selected                    the final figure was not inclusive of any estimate for
            within 20 days of such demand.                     damage to the roof membrane or to the skylights. Boyd, in
            The two appraisers will select an                  drawing up the award, also chose to exclude damage to
            umpire. If they cannot agree within                Liberty Square’s heating, ventilation, and air-conditioning
            15 days upon such umpire, either                   (HVAC) system because he did not believe the damage
            may request that selection be made                 affected the unit’s operation, even though Crites and
            by a judge of a court having                       Butler had both stated in their own appraisal awards that
            jurisdiction. Each appraiser will                  the HVAC system had sustained $2,794.80 *470 worth of
            state separately the amount of loss.               damage. At some point, OCIC tendered payment for the
            If they fail to agree, they will                   “Actual Cash Value” listed in the award Boyd issued, less
            submit their differences to the                    the policy deductible. After TMM notified OCIC that the
            umpire. A decision agreed to by                    award had excluded the HVAC damage, OCIC sent TMM
            any two will be binding as to the                  a check for $51,427.43, the amount of the appraisal award
            amount of loss.                                    plus the agreed-upon $2,794.80 damage to the HVAC
                                                               system. Because it took issue with the appraisal process
                                                               and award, TMM refused the money.
The appraisal process initially encountered a number of
delays, but ultimately TMM and OCIC appointed Clifford
Crites and Mitchell Butler as their respective appraisers.     TMM then sued OCIC in state court on August 21, 2009,
Crites and Butler designated Gary Boyd to serve as             seeking a declaratory judgment pursuant to the Texas
                                                               Declaratory Judgments Act that the appraisal process was
umpire. In March 2009, Crites, Butler, and Boyd began
                                                               flawed and that the appraisal award should be set aside.
their appraisals. On April 13, Butler sent Boyd and Crites
                                                               TMM additionally alleged that OCIC had breached the
an e-mail that read:
                                                               terms of the insurance contract by failing “to pay any
  Gentlemen,                                                   claim loss in a timely manner when liability and loss had
                                                               become reasonably clear.”1 OCIC timely removed the
  While I appreciate and do not question the [ ]               case to federal court on diversity grounds.2 See 28 U.S.C.
  directions, warnings and procedures quoted below from        § 1332(a) (2013). The parties took discovery, and Boyd,
  the various expert agencies, the insurance issue remains     Butler, and Crites each gave sworn depositions. In his
  what was damage[d] by the storm/hail and what is the         deposition, Butler testified that he believed some of the
  reason the moisture levels are what they are. It is my       damage to Liberty Square’s skylights had been caused by
  position that from the roofing stand point the old           projectiles from inside the building such as bullets or
  aluminum coating was scuffed and displaced by the            rocks, rather than hail.
  storm. The membrane was not damaged. The water
  infiltration was not as a result of the storm and the        On January 31, 2011, OCIC moved for summary
  subsequent interior water damage resulting from that         judgment. TMM in turn filed a cross-motion for partial
                                                               summary judgment on February 1, 2011, arguing that the
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TMM Investments, Ltd. v. Ohio Cas. Ins. Co., 730 F.3d 466 (2013)



appraisal award should be set aside because the appraisers      Both parties have raised a number of issues on appeal,
had erred in a number of ways. First, TMM argued that           many of which are contingent on the outcome of the
Boyd, the umpire, had exceeded his authority when he            dispute over the validity of the appraisal award. We hold
improperly excluded damage to Liberty Square’s HVAC             that the appraisal award was incorrect in that it excluded
system. See Fisch v. Transcon. Ins. Co., 356 S.W.2d 186,        damage to the HVAC unit from the award, but that the
189 (Tex.Civ.App.—Houston 1962, writ ref’d n.r.e.)              rest of the award should remain unaffected by this
(“[T]he umpire’s power to act is conditioned upon a             determination. The appraisers did not exceed their
disagreement between the appraisers and the submission          authority when they considered causation issues, and
of their differences only to him....”). Second, TMM             therefore the appraisal award should not have been set
argued that Butler and Boyd, in considering whether it          aside. OCIC thus was only obligated to pay the amount
had been hail, or instead wind, improper installation, and      articulated in the award, plus the cost of repair for the
deterioration that had caused the damage to Liberty             HVAC system. OCIC therefore fulfilled the terms of the
Square’s roof, had “improperly considered causation and         insurance contract when it tendered the amount
coverage issues” in arriving at the appraisal award. 3 Third,   articulated in the award and the cost of the repair to the
TMM claimed that Boyd and Butler had ignored pertinent          HVAC system to TMM, and the district court erred when
evidence in arriving at their appraisal award.                  it determined OCIC had breached the insurance contract.
                                                                Accordingly, the district court’s award of attorney’s fees
On March 25, 2011, the district court granted partial           and prejudgment interest to TMM is also reversed.
summary judgment for TMM, finding that the appraisal            Because we hold that there was no breach of contract, the
award was invalid and should be set aside. The district         issues raised in TMM’s cross-appeal are moot.
court agreed with TMM that the appraisal panel had
exceeded the scope of its authority, first, because Boyd
was not authorized to exclude the HVAC damage from
the appraisal award, and second, because Butler and Boyd        A. Standard of Review and Applicable Law
improperly considered causation and coverage issues             “We review a grant of summary judgment de novo,
when evaluating the damage to certain parts of the              viewing all evidence in the light most favorable to the
property, namely the roof membrane and skylights, citing        nonmoving party and drawing all reasonable inferences in
Wells v. Am. States Preferred Ins. Co., 919 S.W.2d 679,         that party’s favor.” Pierce v. Dep’t of the U.S. Air Force,
685 (Tex.App.—Dallas 1996, writ denied). The court              512 F.3d 184, 186 (5th Cir.2007). “[S]ummary judgment
determined that “[t]he case [would] proceed to trial on         is proper if the pleadings, depositions, answers to
matters of causation, liability, and damages[,]” because        interrogatories, and admissions on file, together with the
“[i]t *471 would be inappropriate to remand this matter         affidavits, if any, show that there is no genuine issue as to
for a new appraisal determination.”                             any material fact and that the moving party is entitled to a
                                                                judgment as a matter of law.” Celotex Corp. v. Catrett,
The district court empaneled an advisory jury, which            477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265
eventually found that it would cost $654,795.84 “to repair      (1986) (internal quotation marks omitted).
and replace Liberty Square Shopping Center property
                                                                [1]
damaged by the hailstorms of June 6, 2005, November 27,             Because this case was removed to federal court on
2005, and/or May 16, 2006.” The district court then             diversity grounds, Texas substantive law applies. See Erie
conducted a bench trial, and issued its findings of fact and    R.R. Co. v. Tompkins, 304 U.S. 64, 78–80, 58 S.Ct. 817,
conclusions of law on November 15, 2011. The court              82 L.Ed. 1188 (1938). “To determine issues of state law,
concluded that OCIC had breached the terms of the               we look to final decisions of the state’s highest court, and
insurance policy and that TMM was entitled to “the actual       when there is no ruling by that court, then we have the
cash value of the damage: $445,261.17,” or sixty-eight          duty to determine as best we can what the state’s highest
percent of the replacement cost. The court also awarded         court would decide.” Westlake Petrochems., L.L.C. v.
TMM attorney’s fees, court costs, expert fees, and              United Polychem, Inc., 688 F.3d 232, 238 n. 5 (5th
prejudgment interest running from October 6, 2008.              Cir.2012) (citation omitted). “In making an [Erie ] guess
OCIC moved for a new trial, but the district court denied       in the absence of a ruling from the state’s highest court,
the motion. OCIC and TMM both timely appealed.                  this Court may look to the decisions of intermediate
                                                                appellate state courts for guidance.” Howe ex rel. Howe v.
                                                                Scottsdale Ins. Co., 204 F.3d 624, 627 (5th Cir.2000)
                                                                (citation omitted).

                    II. DISCUSSION

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TMM Investments, Ltd. v. Ohio Cas. Ins. Co., 730 F.3d 466 (2013)


                                                               [7]
B. Analysis                                                        However, Boyd’s error does not justify, on its own,
[2] [3] [4]   [5]
               “Because courts ‘seek to implement the          throwing out the entire appraisal award. The district court
intention of the parties as expressed *472 in the language     had no occasion to decide the issue of what should be
of a contract,’ it has long been the rule in Texas that        done in the event the HVAC damages omission
‘appraisal awards made pursuant to the provisions of an        constituted the only error on the part of the appraisal
insurance contract are binding and enforceable.’ ”             panel, because it also found that the appraisal panel’s
Richardson v. Allstate Tex. Lloyd’s, No. 05–06–00100–          consideration of causation rendered the appraisal invalid
CV, 2007 WL 1990387, at *3 (Tex.App.—Dallas July 11,           in its entirety. Because we find that the award is otherwise
2007, no pet.) (mem.op.) (alteration omitted) (quoting         unobjectionable, see infra Part II.B. 2., we must
Providence Lloyds Ins. Co. v. Crystal City Indep. Sch.         determine if, given Boyd’s error, the “valid” portion of
Dist., 877 S.W.2d 872, 875 (Tex.App.—San Antonio               the award should stand. While Texas courts have never
1994, no writ)); see also Lundstrom v. United Servs. Auto.     addressed the issue, the related case law suggests that
Ass’n, 192 S.W.3d 78, 87 (Tex.App.—Houston [14th               minor mistakes that do not taint the entire award should
Dist.] 2006, pet. denied). Every reasonable presumption        not frustrate the parties’ intent to be bound by the
will be indulged to sustain an appraisal award, and the        appraisal provision of their contract.
burden of proof lies on the party seeking to avoid the
award. Franco v. Slavonic Mut. Fire Ins. Ass’n, 154            In Crystal City, the trial court set aside an appraisal award
S.W.3d 777, 786 (Tex.App.—Houston [14th Dist.] 2004,           because a section in the award listing damages agreed
no pet.); Continental Ins. Co. v. Guerson, 93 S.W.2d 591,      upon by the appraisers had been mislabeled. 877 S.W.2d
594 (Tex.Civ.App.—San Antonio 1936, writ dism’d). An           at 876–77. The court of appeals, while acknowledging the
appraisal award will be upheld unless at least one of three    error, nonetheless reinstated the award and noted that “[i]f
circumstances exists: (1) the award was made without           the [umpire and the two other appraisers] *473 are of one
authority; (2) the award was the result of fraud, accident,    mind, or if any two of them are in accord as to value and
or mistake; or (3) the award was not made in substantial       loss, the appraisal award is a finality.” Id. at 877–78
compliance with the terms of the contract. Crystal City,       (citation omitted). A federal district court case
877 S.W.2d at 875–76. “The effect of an appraisal              interpreting Texas law also suggests that the acceptable
provision is to estop one party from contesting the issue      portions of the award should continue to bind the parties.
of damages in a suit on the insurance contract, leaving        In MLCSV10 v. Stateside Enterprises, Inc., the court
only the question of liability for the court.” Lundstrom,      explained, “To the extent the appraisal award implicitly
192 S.W.3d at 87.                                              determined that the ductwork damage was not covered ...,
                                                               the plaintiffs have provided a sufficient basis for setting
                                                               aside that part of the appraisal award. There is, however,
                                                               no basis for setting aside the entire award or any other
1. Exclusion of the HVAC system damages                        part of it.” 866 F.Supp.2d 691, 707–08 (S.D.Tex.2012).
[6]
    The district court was correct in determining that the     The court went on to say in a footnote, “[A] finding that
umpire had no authority to exclude the HVAC damages            appraisers were biased would require setting aside the
estimate from the appraisal award. Texas courts have           entire award. But as all parties admitted ..., there is no
clearly held that unless there is a discrepancy between the    precedent that compels setting aside an entire appraisal
findings of the two appraisers appointed by the parties,       award based on a finding that one part of the award was
there is no duty for the umpire to perform. See Fisch, 356     incomplete or implicitly determined a coverage issue.” Id.
S.W.2d at 189–90 (“Since the umpire’s power to act is          at 708 n. 6. Here, there is no contention that Boyd lacked
conditioned upon a disagreement between the appraisers         authority to speak on the numerous damage items that
and the submission of their differences only to him, we        Butler and Crites disagreed about. We do not believe the
are of the opinion that the award, which was signed by         omission of the HVAC damage from the award justifies
only one appraiser and the umpire who had no authority         ignoring the intent of the parties to have damages issues
to act, is invalid.”); Crystal City, 877 S.W.2d at 876         submitted to and decided by an appraisal panel. Cf. State
(“[A]n umpire, appointed to decide on matters of               Farm Lloyds v. Johnson, 290 S.W.3d 886, 895 (Tex.2009)
difference only, has no authority to pass on matters           (“Like any other contractual provision, appraisal clauses
concerning which there was no difference between the           should be enforced.”). We therefore uphold the remainder
appraisers.” (quoting Fisch, 356 S.W.2d at 190)). Here,        of the award.4
no party disputes that Butler and Crites agreed as to how
much damage the HVAC system sustained. Boyd was
thus without authority to strike it from the appraisal
award.                                                         2. Whether the appraisal panel exceeded its authority in
                                                               considering causation
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TMM Investments, Ltd. v. Ohio Cas. Ins. Co., 730 F.3d 466 (2013)


[8]
   The district court, in its order setting aside the appraisal   “[c]ausation relates to both liability and damages because
award, concluded that the appraisal panel had exceeded            it is the connection between them[,]” id. at 891–92.
its authority in “attribut[ing] the roof membrane damage
to improper installation and the skylight damage to rocks         The court discussed both Wells and Lundstrom v. United
thrown from below.” The district court relied primarily on        Services Automobile Ass’n, a case somewhat at odds with
a Texas Court of Appeals case, Wells v. American States           Wells, in which the appeals court upheld an appraisal
Preferred Insurance Co., 919 S.W.2d 679 (Tex.App.—                award that considered damages from an “initial wetting”
Dallas 1996, writ denied), in coming to that conclusion.          but not damages from mold. Id. at 892; see Lundstrom,
According to the district court, Wells “held that the             192 S.W.3d at 89 (“The cases cited in Wells stand for the
appraisal panel’s responsibility is simply to determine the       narrower proposition that appraisers exceed their
value of property damage and that ‘questions of what              authority when they engage in making the legal
caused or did not cause the loss are questions to be              determination of what is or is not a covered loss based on
decided by the court.’ ” (quoting Wells, 919 S.W.2d at            their determination of what caused the loss or a portion of
685). In Wells, the appraisal panel unanimously                   it.”). The Johnson court reconciled these cases as follows:
concluded that the claimant’s house had suffered damage
“due to foundation movement in the amount of                                  Appraisers can decide the cost of
$22,875.94[,]” but that the amount of damage attributable                     repairs in [the context of cases like
to a plumbing leak that had allegedly created the                             Wells ], but if they can also decide
foundation movement—which the policy would have                               causation there would be no
covered—was zero. 919 S.W.2d at 682. The trial court                          liability questions left for the
approved the appraisal award, but the appeals court                           courts. By contrast, when different
reversed, concluding that “the appraisal section of [the                      types of damage occur to different
policy] establishes an appraisal procedure to determine                       items of property, appraisers may
the dollar amount of the insured’s loss only, and that it                     have to decide the damage caused
does not authorize or empower the appraisal panel created                     by each before the courts can
thereunder to determine what caused or did not cause that                     decide liability.... In [the context of
loss.” Id. at 685. The appraisal award was therefore made                     cases like Lundstrom ], courts can
without authority, and the court remanded the case to the                     decide whether water or mold
trial court for a new trial. Id. at 686–87.                                   damage is covered, but if they can
                                                                              also decide the amount of damage
OCIC argues, however, that the district court did not take                    caused by each, there would be no
full account of a more recent Texas Supreme Court case                        damage questions left for the
that modifies the scheme established by Wells. That case,                     appraisers. The same is true when
State Farm Lloyds v. Johnson, does indeed provide the                         the causation question involves
controlling law on *474 the issue of the scope of the                         separating loss due to a covered
appraisal panel’s authority. 290 S.W.3d 886 (Tex.2009).                       event from a property’s pre-
In Johnson, the claimant alleged that her roof had been                       existing condition.... If State Farm
damaged in a hailstorm and filed a claim with her                             is correct that appraisers can never
insurance company. Id. at 887. When the insurance                             allocate damages between covered
company provided a much lower damage estimate than                            and excluded perils [such as wear
her claim requested, the claimant invoked the policy’s                        and tear], then appraisals can never
appraisal provision. Id. at 887–88. The insurance                             assess hail damage unless a roof is
company, however, argued that appraisal should not be                         brand new.
required because the panel would necessarily have to
decide issues of causation, not “amount of loss.” Id. at          Johnson, 290 S.W.3d at 892–93. The court concluded that
888. The claimant then filed suit seeking a declaratory           appraisal should be compelled, noting that “[a]ny
judgment compelling appraisal. Id.                                appraisal necessarily includes some causation element,
                                                                  because settling the ‘amount of loss’ requires appraisers
The Texas Supreme Court began by repeating the rule,              to decide between damages for which coverage is claimed
established in earlier case law, that “damage questions           from damages caused by everything else.” Id. at 893.
[are] for appraisers and liability questions [are] for the
                                                                  [9]
courts[.]” Id. at 889. It quickly acknowledged, though,              At the very least, Johnson arguably establishes that
that “[t]he line between liability and damage questions           appraisal panels are within their rights when they consider
may not always be clear [,]” id. at 890, and that                 whether damage was caused by a particular event or was
                                                                  instead the result of non-covered pre-existing perils like
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TMM Investments, Ltd. v. Ohio Cas. Ins. Co., 730 F.3d 466 (2013)



wear and tear. Indeed, this is the way many subsequent                  is a case of the second variety because damage is alleged
cases have interpreted Johnson’s guidance. See, e.g.,                   to have occurred to the roof membrane and the skylights.
MLCSV10, 866 F.Supp.2d at 705 (“Lochridge’s causation                   Additionally, the closeness of the facts in Johnson to
evaluation involved no more than ‘separating loss due to a              those at bar—both involved roofs damaged in part by
covered event from a property’s pre-existing condition.’ ”              hailstorms—militates in favor of arriving at a holding
(quoting Johnson, 290 S.W.3d at 892)); Essex Ins. Co. v.                similar to the one arrived at by the Johnson court.
Helton, 4:10–cv–2229, at *2 (S.D.Tex. Jan. 24, 2012)                    Coupled with the requirement that we indulge “every
(slip op.) (“However, where there are different types of                reasonable presumption to sustain an appraisal award,”
damage to different items of property, or *475 where the                Johnson appears to compel reversal of the district court’s
property is not new and has suffered wear and tear,                     order setting aside the award in this case.
appraisers may have to decide causation in order to decide
damages.”). To the extent the appraisers merely
distinguished damage caused by pre-existing conditions
from damage caused by the storm, they were acting                       3. Claims related to breach of contract
                                                                        [11]
within their authority.                                                      Because the appraisal award was not invalid, when
                                                                        OCIC tendered the amount articulated in the appraisal
The district court appears to have concluded that Johnson               award plus an amount for the damage to the HVAC
required setting aside the appraisal award because “TMM                 system, it fulfilled the terms of the insurance contract. See
contends the storm damaged the skylights, but [OCIC]                    Probus Props. v. Kirby, 200 S.W.3d 258, 262
contends rocks caused the damage.... TMM contends the                   (Tex.App.—Dallas 2006, pet. ref’d) (explaining that
storm damaged the roof membrane, but [OCIC] contends                    tendering a check “suspends the obligation until dishonor
the roof membrane was damaged due to improper                           of the check or until it is paid or certified ” (emphasis
installation. The parties have alleged different causes for             added) (internal quotation marks omitted)). Because
the same injuries.” There are two principal problems with               TMM thus did not bring a “valid claim” for breach of
this conclusion. First, it is not entirely clear from the               contract, it should not have been awarded attorney’s fees,
record what reasons Butler or Boyd had for excluding                    and we reverse the district court’s determination to that
certain items from the award. TMM itself acknowledges                   effect. See Tex. Civ. Prac. & Rem.Code Ann. § 38.001(8)
that multiple causes of damage, including wear and tear,                (2013). Similarly, because TMM was not a “prevailing
have been alleged. Its summary judgment motion stated,                  party” in its breach of contract claim, we reverse the
“Here, the moisture levels were allegedly caused by hail                district court’s award of costs to TMM. See Fed.R.Civ.P.
storm, wind storm and/or windstorm, improper                            54(d); Carter v. Gen. Motors Corp., 983 F.2d 40, 43 (5th
installation and deterioration.” If that is the case, Johnson           Cir.1993) (explaining that “federal procedural law
appears to foreclose setting aside the appraisal award—it               ordinarily governs the award of costs in diversity cases”).
was entirely appropriate for the appraisers to consider                 Because the claims in TMM’s cross-appeal are uniformly
whether damage was caused by these pre-existing                         related to the breach of contract found by the district
conditions.                                                             court, we dismiss these claims as moot.

[10]
    Second, it appears the district court misapplied the law
even if its statements about the reasons for Butler’s and
Boyd’s exclusions are accurate. Johnson stated, “[W]hen
different causes are alleged for a single injury to property,                             *476 III. CONCLUSION
causation is a liability question for the courts.... By
                                                                        For the foregoing reasons, we REVERSE the district
contrast, when different types of damage occur to
                                                                        court’s decision and REMAND the case so that the
different items of property, appraisers may have to decide
                                                                        district court may reinstate the appraisal award, including
the damage caused by each before the courts can decide
                                                                        the HVAC damage amount of $2794.80.
liability.” Johnson, 290 S.W.3d at 892. Putting aside the
question of why this distinction should matter, even
according to the facts as the district court found them, this

Footnotes
1      The complaint also contained claims for breach of fiduciary duty and violations of the Texas insurance code but TMM later
       agreed to reserve those issues for a separate trial, to be held once causation, damages, and coverage issues had been resolved.
2      The original complaint also included Boyd and Butler, who are Texas domiciliaries, as defendants, but TMM voluntarily

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TMM Investments, Ltd. v. Ohio Cas. Ins. Co., 730 F.3d 466 (2013)



       dismissed all claims against them pursuant to a settlement agreement, creating complete diversity between the parties.
3      As with similar insurance policies, TMM’s policy did not cover wear and tear.

4      The appraisal award amount and the HVAC damage amount were tendered to TMM, but it appears TMM never cashed the
       check. If this is the case, OCIC is obviously required to furnish that amount to TMM again.




End of Document                                                         © 2015 Thomson Reuters. No claim to original U.S. Government Works.




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Wells v. American States Preferred Ins. Co., 919 S.W.2d 679 (1996)




                                                               consequences of the appraisal made pursuant to that
                                                               insurance policy. The issues focus upon the question of
                   919 S.W.2d 679
               Court of Appeals of Texas,                      whether the appraisers are authorized and empowered to
                         Dallas.                               determine what caused or did not cause the loss claimed.
                                                               Here, the policy insured the dwelling against foundation
   Donald WELLS and Emma Wells, Appellants,                    and structural *681 damage due to foundation movement
                     v.                                        caused by leaks in the plumbing system. The Wellses
  AMERICAN STATES PREFERRED INSURANCE                          assert the dwelling suffered foundation and structural
            COMPANY, Appellee.                                 damage caused by a plumbing leak. The Wellses made a
                                                               claim on the policy. American States denied the claim,
       No. 05–95–00200–CV. | Jan. 29, 1996.                    demanded an appraisal, and then sued to require an
                                                               appraisal. The Wellses counterclaimed on the policy and
Insurer sought declaration that it had properly invoked        on other causes of action. The trial court abated the
appraisal provisions of homeowners’ policy, following          counterclaim until an appraisal was done. The two
insureds’ claim for loss from foundation movement              appraisers and an umpire determined that the resulting
allegedly caused by plumbing leak. After appraisers            damage to the dwelling due to foundation movement was
determined that insureds’ loss was not covered, the 199th      $22,875.94. However, one appraiser and the umpire also
Judicial District Court, Collin County, John R. Roach, J.,     determined that the plumbing leak caused no loss; i.e.,
granted summary judgment to insurer, and insureds              that the plumbing leak did not cause the damage. Based
appealed. The Court of Appeals, Whitham, Retired               on this latter determination, the trial court entered a take-
Justice, sitting by assignment, held that policy’s appraisal   nothing summary judgment against the Wellses. Because
clause authorized appraisers to determine amount of loss       we conclude that the appraisal section of the policy, as a
only, not what caused or did not cause loss.                   matter of law, did not authorize the appraiser and umpire
                                                               to determine that the plumbing leak did not cause the
Reversed and remanded.                                         damage and loss to the Wellses’ property, we conclude
                                                               that the trial court erred in entering a take-nothing
                                                               judgment against the Wellses. Accordingly, we reverse
*680 On Appeal from the 199th Judicial District Court          and remand.
Collin County; Trial Court Cause No. 199–1235–92.

Attorneys and Law Firms

Thomas M. Richards, Smith Merrifield & Richards,                                  Factual Background
L.L.P., Dallas, Dixon Jace Reynolds, Bush, Fulton,
Hurlbut & Morrison, P.C., Arlington, Gayle E. Oler,            Donald and Emma Wells own a home in Wylie, Texas.
Dallas, for Appellants.                                        American States insured the home under a Texas
                                                               Homeowner’s Policy. The policy contained the following
Wesley W. Chambers, Gollaher & Chambers, Dallas, for           provision for determining the amount of loss by appraisal
Appellee.                                                      at request of either party:
Before LAGARDE, BARBER and WHITHAM1, JJ.                         7. Appraisal. If you and we fail to agree on the actual
                                                                 cash value, amount of loss or the cost of repair or
                                                                 replacement, either can make a written demand for
                                                                 appraisal. Each will then select a competent,
                                                                 independent appraiser and notify the other of the
                                                                 appraiser’s identity within 20 days of receipt of the
                        OPINION
                                                                 written demand. The two appraisers will choose an
WHITHAM (Retired), Justice.                                      umpire. If they cannot agree upon an umpire within 15
                                                                 days, you or we may request that the choice be made by
Appellants, Donald Wells and wife, Emma Wells, appeal            a judge of a district court of a judicial district where the
from a summary judgment in favor of appellee, American           loss occurred. The two appraisers will then set the
States Preferred Insurance Company. The principal issues         amount of loss, stating separately the actual cash value
involve the appraisal provision of the Texas                     and loss to each item. If you or we request that they do
Homeowner’s Policy and the interpretation and                    so, the appraiser will also set:
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Wells v. American States Preferred Ins. Co., 919 S.W.2d 679 (1996)



     a. the full replacement cost of the dwelling.             $22,875.94. However, appraiser Lochridge and umpire
                                                               Butler determined that damage to the dwelling related to
     b. the full replacement cost of any other building        the plumbing leak was zero.
     upon which loss is claimed.
                                                               American States then filed its motion for summary
     c. the full cost of repair or replacement of loss to      judgment based on the appraisal determination that the
     such building, without deduction for depreciation.        plumbing leak did not cause the loss claimed. The
                                                               Wellses filed their own motion for partial summary
  If the appraisers fail to agree, they will submit their      judgment based on the unanimous determination of the
  difference to the umpire. An itemized decision agreed        appraisers and umpire that the amount of loss to the
  to by any two of these three and filed with us will set      dwelling resulting from foundation movement was
  the amount of the loss. Such award shall be binding on       $22,875.94. American States responded to the Wellses’
  you and us.                                                  motion, and the Wellses responded to American States’s
                                                               motion. The trial court granted American States’s motion,
  Each party will pay its own appraiser and bear the other
                                                               denied the Wellses’ motion, and rendered a take-nothing
  expenses of the appraisal and umpire equally.
                                                               summary judgment against the Wellses.
When their home sustained damage due to foundation
                                                               The trial court’s summary judgment contains this
movement, the Wellses investigated. They discovered a
                                                               language:
leak in the plumbing system underneath the foundation. A
structural engineer who examined the property reported
that the plumbing leak caused the foundation movement.                         The court further finds that
On April 20, 1992, the Wellses made a claim on the                             [American States] is entitled to a
policy. An adjuster from American States inspected the                         Declaratory Judgment maturing the
property and stated that the sewer-line leak did not cause                     appraisal award rendered herein,
the damage. The adjuster included that statement on a                          into a final judgment as requested
written non-waiver agreement dated May 7, 1992, which                          and prayed for in [American
Donald Wells signed only after noting on the writing his                       States’s] Summary Judgment and
disagreement with the statement. American States then                          thus, it is further ORDERED,
had its own engineer examine the property, who reported                        ADJUDGED and DECREED that
that the plumbing leak did not cause the foundation                            Declaratory Judgment be, and the
movement, conflicting with the report from the Wellses’                        same hereby is, rendered in favor
engineer as to causation of the loss.                                          of [American States] and against
                                                                               [the Wellses], that the appraisal
On July 20, 1992, American States again denied the                             award rendered on or about June
Wellses’ claim and at the same time demanded an                                24, 1994 is binding on and
appraisal under the “Appraisal” section quoted above,                          enforceable against [the Wellses],
designating John O. Lochridge, Jr. as its appraiser.                           that said appraisal award’s finding
American States then sued for a declaratory judgment that                      that the amount of loss is zero be
it had properly invoked the appraisal provisions of the                        matured into final judgment, and
policy. American States also asked for an order requiring                      judgment is hereby RENDERED
the Wellses to submit their claim to appraisal. The                            that [American States] is not liable
Wellses answered and filed a counterclaim on the policy                        to [the Wellses] on [the Wellses’]
and on other causes of *682 action. American States                            insurance claim made the basis of
responded with a first supplemental petition containing a                      this suit.
plea that the Wellses’ counterclaims be abated until they
participated in an appraisal and the appraisal was
completed. The trial court sustained the plea in abatement.
Thereafter, the Wellses designated Rob Brown as their
appraiser, and the two appraisers designated Mitchell L.                        Summary Judgment Principles
Butler as umpire.                                              [1] [2] [3] [4] [5]
                                                                               We begin by repeating well-known rules
                                                               governing the summary judgment practice. The function
Both appraisers and the umpire unanimously determined
                                                               of a summary judgment is not to deprive a litigant of his
that the Wellses’ home had resulting damage to the
                                                               right to a full hearing on the merits of any real issue of
dwelling due to foundation movement in the amount of
                                                               fact, but to eliminate patently unmeritorious claims and
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Wells v. American States Preferred Ins. Co., 919 S.W.2d 679 (1996)



untenable defenses. Gulbenkian v. Penn, 151 Tex. 412,            court erred in granting American States’s motion for
415–16, 252 S.W.2d 929, 931 (1952). The standards for            summary judgment.
reviewing a motion for summary judgment are well
established. As mandated by the Supreme Court of Texas,
they are as follows:

      1. The movant for summary judgment has the burden of                            The Appraisal Award
      showing that there is no genuine issue of material fact    [8]
      and that it is entitled to judgment as a matter of law.       In the present case, the Wellses insist that the appraisal
                                                                 section of the policy, as a matter of law, did not authorize
      2. In deciding whether there is a disputed material fact   the appraisers and umpire to determine that the plumbing
      issue precluding summary judgment, evidence                leak did not cause the loss to the Wellses’ property. Thus,
      favorable to the nonmovant will be taken as true.          we reach the question whether the appraisal section of the
                                                                 policy, invoked by American States, authorized and
      3. Every reasonable inference must be indulged in          empowered the appraisers to determine what caused or
      favor of the nonmovant and any doubts resolved in its      did not cause the loss claimed. It is obvious that two of
      favor.                                                     the three designated persons named to make the appraisal
                                                                 determined that the Wellses’ amount of loss also included
Nixon v. Mr. Property Management, 690 S.W.2d 546,                authority to determine that the loss was not caused by the
548–49 (Tex.1985). It is not the purpose of the summary          undisputed plumbing leak. We reach this conclusion
judgment rule to provide either a trial by deposition or a       because the “Appraisal Award” recites:
trial by affidavit, but rather to provide a method of
summarily terminating a case when it clearly appears that              Damage to dwelling related to plumbing leak.
only a question of law is involved and that there is no
genuine issue of fact. Gaines v. Hamman, 163 Tex. 618,                 Loss Replacement Cost –0–
626, 358 S.W.2d 557, 563 (1962).
                                                                       Loss Actual Cash Value –0–
[6]
   Moreover, when the counterclaim defendant is the
movant, as in the present case, we must be alert to              .....
additional rules controlling summary judgment practice.
The question on appeal, as well as in the trial court, is not          CLARIFICATIONS IF ANY: Resulting damage to
whether the summary judgment proof raises fact issues                  dwelling due to foundation movement $22,875.94
with reference to the essential elements of a counterclaim
plaintiff’s cause of action, but is whether the summary          We note the appraisal award’s language “Damage to
judgment proof establishes as a matter of law that there is      dwelling related to plumbing leak,” and followed by two
no genuine issue of fact as to one or more of the essential      loss figures of “0.” We interpret this language as a
elements of the counterclaim plaintiff’s cause of action.        determination that the “plumbing leak” was not the cause
Gibbs v. General Motors Corp., 450 S.W.2d 827, 828               of any damage, hence the two “Loss” findings of “–0–.”
(Tex.1970). Therefore, a counterclaim *683 defendant is          We reach the interpretation because the appraisal award
entitled to a summary judgment if he establishes, as a           proceeds to determine the cause of damage to the
matter of law, that at least one element of counterclaim         dwelling to be due to “foundation movement.” Taken in
plaintiff’s cause of action does not exist. See Rosas v.         the context of this litigation, we treat “Damage to
Buddies Food Store, 518 S.W.2d 534, 537 (Tex.1975).              dwelling” and “Loss” to be one and the same. Therefore,
                                                                 for the reasons that follow, we conclude that the appraisal
[7]
   Furthermore, summary judgment is not entitled to the          section of the policy invoked by American States does not
same deference given to a judgment following a trial on          authorize and empower the appraisers to determine what
the merits. Elam v. Yale Clinic, 783 S.W.2d 638, 641             caused or did not cause the loss claimed.
(Tex.App.—Houston [14th Dist.] 1989, no writ). Unlike
an appeal following a trial on the merits, when reviewing
a summary judgment, the appellate court does not view
the evidence in the light most favorable to the judgment                              Helpful Texas Cases
of the trial court. Elam, 783 S.W.2d at 641. With these
principles in mind, we turn to consider the Wellses’ first       [9] [10] [11] [12]
                                                                             In reaching this conclusion, we find language
point of error in which the Wellses contend that the trial       in certain Texas cases to be instructive. An appraisal
                                                                 award made pursuant to the provisions of an insurance
WestEawNext © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                         3
Wells v. American States Preferred Ins. Co., 919 S.W.2d 679 (1996)



contract is binding and enforceable. Barnes v. Western         been directed to estimate the value of the loss occasioned
Alliance Ins. Co., 844 S.W.2d 264, 267 (Tex.App.—Fort          by the walls being damaged.”); see also Jefferson Ins. Co.
Worth 1992, writ dism’d by agr.). Texas courts recognize       of N.Y. v. Superior Court, 3 Cal.3d 398, 90 Cal.Rptr. 608,
three situations in which an appraisal award may be            475 P.2d 880, 883 (1970) (the function of the appraisers is
disregarded: (1) when the award was made without               to determine the amount of damage resulting to various
authority; (2) when the award was the result of fraud,         items submitted for their consideration, and not to resolve
accident, or mistake; or (3) when the award was not made       questions of coverage and interpret provisions of the
in substantial compliance with the terms of the contract.      policy, which exceed the scope of their powers);
Providence Lloyds Ins. Co. v. Crystal City Indep. Sch.         Appalachian Ins. Co. v. Rivcom Corp., 130 Cal.App.3d
Dist., 877 S.W.2d 872, 875 (Tex.App.—San Antonio               818, 182 Cal.Rptr. 11, 16 (Ct.App. 2d Dist.1982) (the
1994, no writ). The effect of an appraisal award is to         appraisal clause provides the device to be utilized to
estop one party from contesting the issue of damages in a      determine the amount of loss if the parties cannot agree
suit on the insurance contract, leaving only the question of   on the amount; once the amount of the loss has been
liability for the court. Scottish Union & Nat’l Ins. Co. v.    fixed, whether by agreement between insurer and insured
Clancy, 71 Tex. 5, 8 S.W. 630, 631 (1888); Hennessey v.        or by appraisal procedure, if the insurer refuses to pay
Vanguard Ins. Co., 895 S.W.2d 794, 797–98 (Tex.App.—           such amount, the insured is not without jury trial rights);
Amarillo 1995, writ denied). Although every reasonable         Lewis Food Co. v. Fireman’s Fund Ins. Co., 207
presumption will typically be made in favor of an              Cal.App.2d 515, 24 Cal.Rptr. 557, 561 (Ct.App. 2d
appraisal award, when reviewing a summary judgment             Dist.1962) (the appraisers’ function under the policy is to
proceeding, that rule must yield to the degree its             determine the amount of damage resulting to various
application conflicts with the presumptions required to be     items submitted for their consideration; it is certainly not
made in favor of a nonmovant. Hennessey, 895 S.W.2d at         their function to resolve questions of coverage and
798.                                                           interpret provisions of the policy); Oakes v. Franklin Fire
                                                               Ins. Co., 122 Me. 361, 120 A. 53, 54 (1923) (the right of
The parties agree that no reported Texas case has decided      the insured to recover the loss is not submitted to the
the issue of whether the authority of appraisers under the     referees, only the amount of the damages); Wausau Ins.
appraisal *684 section of an insurance policy is limited to    Co. v. Herbert Halperin Dist. Corp., 664 F.Supp. 987,
determination of only the amount of loss as distinguished      989 (D.Md.1987) (where insurer does not factually
from determining cause of loss, and coverage and liability     dispute the consequences of the occurrence, but contests
for the loss. We conclude, however, that the weight of         the issue of legal “causation” on the basis that the policy
authority from other jurisdictions discussing the issue        exclusions apply so as to limit the scope of coverage, the
follows the rule that appraisers have no power or              issue is one of contract interpretation, and is within the
authority to determine questions of causation, coverage,       competence of the court, not an appraiser, to resolve);
or liability, which is consistent with the Texas courts’       Hogadone v. Grange Mut. Fire Ins. Co., 133 Mich. 339,
discussion of the effect of the appraisal award. See           94 N.W. 1045, 1047 (1903) (the policy provision relates
Scottish Union, 8 S.W. at 631; Hennessey, 895 S.W.2d at        only to cases of disagreement as to the amount of
798.                                                           valuation, in whole or in part, and not whether the claim
                                                               itself is valid); Denton v. Farmers’ Mut. Fire Ins. Co.,
                                                               120 Mich. 690, 79 N.W. 929, 930 (1899) (the sections of
                                                               the charter do not give board of auditors the power to pass
                                                               upon questions of liability, but contemplate a valid loss,
      Applicable Holdings of Other Jurisdictions               and confer upon the auditors only the power to fix the
                                                               amount); St. Paul Fire & Marine Ins. Co. v. Wright, 97
We have considered the holdings of other jurisdictions         Nev. 308, 629 P.2d 1202, 1203 (1981) (contrary to
interpreting appraisal provisions containing substantially     arbitration, where the arbitrator is frequently given broad
similar language to that contained in the policy at issue in   powers, appraisers generally have more limited powers;
this case in concluding that appraisers have no power to       an appraiser’s power generally does not encompass the
determine the cause of the damages. Their power is             disposition of the entire controversy between the parties,
limited to the function of determining the money value of      but extends merely to the resolution of the specific issues
the property damage. Munn v. National Fire Ins. Co. of         of actual cash value and the amount of loss); In re Delmar
Hartford, 237 Miss. 641, 115 So.2d 54, 55, 58 (1959)           Box Co., 309 N.Y. 60, 127 N.E.2d 808, 811 (1955)
(“The chancellor should have judicially determined what        (agreement for appraisal extends merely to the resolution
force caused the walls to lean and twist[;] [t]hat was not a   of specific losses of actual cash value and the amount of
question for the appraisers to decide. If that damage was      loss, with all other issues being reserved for determination
the result of the storm, then the appraisers should have

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Wells v. American States Preferred Ins. Co., 919 S.W.2d 679 (1996)



in a plenary action); United Boat Serv. Corp. v. Fulton        determine questions of what caused or did not cause the
Fire Ins. Co., 137 N.Y.S.2d 670, 671 (Sup.Ct.1955)             loss.
(where appraisers made a determination of a question of
                                                               [15]
liability, they exceeded the powers conferred *685 upon            In the present case, we conclude that the one appraiser
them, and summary judgment is improper); Kentner v.            and the umpire exceeded their authority when they
Gulf Ins. Co., 66 Or.App. 15, 673 P.2d 1354, 1356 (1983)       determined that the plumbing leak did not cause the
(statutory policy language establishes an appraisal            Wellses’ loss. It follows, and we so hold, that the trial
procedure to determine the amount of the insured’s loss;       court erred in finding that American States is entitled to a
the procedure does not apply to the determination of the       declaratory summary judgment maturing the appraisal
insurer’s responsibility).                                     award in the present case and entering a take-nothing
                                                               summary judgment against the Wellses based upon that
                                                               determination. Indeed, an appraiser’s acts in excess of the
                                                               authority conferred upon him by the appraisal agreement
                                                               are not binding on the parties. Fisch v. Transcontinental
                 Application of the Law                        Ins. Co., 356 S.W.2d 186, 190 (Tex.Civ.App.—Houston
                                                               1962, writ ref’d n.r.e.). Instead, the effect of an appraisal
With the above cases in mind, we look to the first             award is to estop one party, here the plaintiff, from
sentence of the appraisal clause at issue in the present       contesting the issue of damages in a suit on the insurance
case. We quote:                                                contract, leaving only the question of liability for the
                                                               court. Scottish Union, 8 S.W. at 631; Hennessey, 895
            If you and we fail to agree on the                 S.W.2d at 797–98.
            actual cash value, amount of loss,
            or the cost of repair or                           In the present case, we note that nowhere in the standard
            replacement, either can make a                     form for submission to appraisal is any power vested in or
            written demand for appraisal.                      conferred upon the appraisers to determine the cause of
                                                               the loss, the value of which they are to appraise. See
(Emphasis added.) Hence, we must conclude that the             Munn, 115 So.2d at 56. Therefore, we hold, as did the
appraisal clause at issue pertains to a dispute over the
                                                               Supreme Court of Mississippi, that the appraisers are not
amount of money involved in the controversy. Indeed, we
                                                               arbitrators. They have no power to arbitrate disputes
read the phrases “actual cash value,” “amount of loss,”        between the property owner and the insurance company,
and “cost of repair or replacement” as triggering the          other than to value the property damage. Munn, 115 So.2d
demand for appraisal. It cannot be doubted that these are
                                                               at 56. Indeed, the function of the appraisers is to
“dollar” controversies. Thus, nowhere do we read a
                                                               determine the amount of damage resulting to the property
“causation dispute” or a “liability dispute” as the means
                                                               submitted for their consideration. It is certainly not their
or manner by which the demand for appraisal can be
                                                               function to resolve questions of coverage and interpret
made operative.                                                provisions of the policy. St. Paul Fire & Marine Ins. Co.,
[13] [14]                                                      629 P.2d at 1203. Consequently, we conclude that the trial
        We conclude that the authority of the appraisal
                                                               court erred in granting American States’s motion for
panel in the present case was limited to determining only
                                                               summary judgment. We reach this conclusion because the
the amount of loss. Therefore, we conclude further that
                                                               appraisal section of the policy, as a matter of law, did not
the appraisal section of the policy, as a matter of law, did   authorize the appraisers and umpire to determine that the
not authorize and empower the appraisal panel to               plumbing leak did not *686 cause the loss to the Wellses’
determine that the plumbing leak did not cause the loss to     property. We sustain the Wellses’ first point of error.
the Wellses’ property. It follows, and we so hold, that the
appraisal section of the Texas Homeowner’s Policy
quoted above establishes an appraisal procedure to
determine the dollar amount of the insured’s loss only,
and that it does not authorize or empower the appraisal         The Wellses’ Partial Motion for Summary Judgment
panel created thereunder to determine what caused or did
not cause that loss. Indeed, we hold that, absent an           In their second point of error, the Wellses contend that the
agreement to the contrary, questions of what caused or did     trial court erred in overruling their partial motion for
not cause the loss are questions to be decided by the court.   summary judgment. The Wellses advance three principal
Moreover, we hold that participation by the insured in the     arguments. First, the Wellses argue that the appraisal
appraisal process does not constitute agreement by the         panel has no authority to determine the cause of the loss,
insured to authorize and empower the appraisal panel to        only the amount of the loss. We have held in disposition

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Wells v. American States Preferred Ins. Co., 919 S.W.2d 679 (1996)



of the Wellses’ first point of error that the appraisal panel   attorney’s fees incurred in this litigation, the amount
has no authority to determine the cause of the loss, only       thereof to be determined at trial. In light of our disposition
the amount of the loss. Thus, we agree with the Wellses’        of this appeal, all issues in dispute between the parties
first argument.                                                 will be before the trial court on remand for new trial.
                                                                Therefore, we conclude that we have no basis at this time
While we agree with the Wellses’ first principal                to determine that the Wellses recover their reasonable and
argument, we are unable to extend that agreement to the         necessary attorney’s fees incurred in this litigation.
thrust of the Wellses’ second principal argument. In that       Hence, we decline to decide at this time the liability of
second argument, the Wellses reason that the $22,875.94         American States for the Wellses’ reasonable and
damage figure stated in the appraisal award under the           necessary attorney’s fees, if any, incurred in this
language:                                                       litigation. For the reasons expressed above, we conclude
                                                                that the trial court did not err in overruling the Wellses’
             CLARIFICATIONS IF ANY:                             partial motion for summary judgment. We overrule the
             Resulting damage to dwelling due                   Wellses’ second point of error.
             to      foundation    movement
             $22,875.94

(Emphasis ours.) becomes the damage award for the
previously mentioned “plumbing leak,” instead of the                      Abatement and Trial On The Merits
figure “–0–” (zero). Hence, the Wellses argue that the          [16]
appraisal panel ascertained the amount of damages of                In their third point of error, the Wellses contend that
$22,875.94 as resulting from the plumbing leak. We              the trial court erred in abating the Wellses’ counterclaim
disagree. We note that the damage amount of $22,875.94          until the Wellses participated in the appraisal demanded
results from “foundation movement.”                             by American States, because the Wellses were not
                                                                obligated to comply with the appraisal provisions of the
“Foundation movement” appears to be excluded by the             policy as a condition precedent to filing their
policy:                                                         counterclaim against American States. We conclude that
                                                                we need not address this point of error. We reach this
                                                                conclusion because the issue is now moot. We hold that
             We do not cover loss under
                                                                the Wellses have now complied with any obligations
             Coverage A (Dwelling) caused by
             settling,   cracking,      bulging,                imposed by the appraisal provisions and that their
             shrinkage,   or    expansion      of               counterclaim is now properly before the court on remand.
                                                                Furthermore, the time has arrived to try this case on its
             foundation, walls, floors, ceilings,
                                                                merits in the trial court. The appraisal has been made. The
             roof structures, walks, drives,
                                                                fact that the resulting appraisal is defective is of no
             curbs, fences, retaining walls or
                                                                moment; the trial court is directed to try all issues in
             swimming pools.
                                                                dispute both as to liability and as to damages. The
(Emphasis ours). Consequently, we decline to read the           Wellses *687 are not required to again participate
appraisal award, as the Wellses would have us do, to say        involuntarily in yet another appraisal. The Wellses have
that a plumbing leak caused foundation damage to their          done all that was required of them as an asserted
dwelling in the amount of $22,875.94. We decline to do          condition precedent to filing their counterclaim. We
so because the appraisal panel, on the face of its award,       decline to penalize the Wellses by further delay when
separated the damage related to plumbing leak from              they have suffered a defective appraisal process through
damage due to foundation movement. For these reasons,           no fault of their own. We overrule for mootness the third
we disagree with the Wellses’ second principal argument         point of error.
under their second point of error.
                                                                We reverse the trial court’s judgment and remand the case
Lastly, we dispose of the Wellses’ third principal              to the trial court for trial on the merits.
argument under their second point of error. Here, the
Wellses insist that they are entitled to our determination
that they recover their reasonable and necessary

Footnotes



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Wells v. American States Preferred Ins. Co., 919 S.W.2d 679 (1996)


1      The Honorable Warren Whitham, Justice, Retired, Court of Appeals, Fifth District of Texas at Dallas, sitting by assignment.




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Wentworth v. Medellin, 529 S.W.2d 125 (1975)




                                                               provisions of Article 1301b, Tex.Rev.Civ.Stat.Ann.
                                                               (Supp.1975), in attempting to cancel said contract.
                    529 S.W.2d 125
            Court of Civil Appeals of Texas,
                                                               Defendant contends that the trial court erred in granting
                     San Antonio.
                                                               plaintiffs’ petition for declaratory judgment based on the
           Earl J. WENTWORTH, Appellant,                       applicability of Article 1301b, Supra, to the facts in this
                        v.                                     case.
          Albert MEDELLIN et ux., Appellees.
                                                               The applicable part of Article 1301b, Supra, provides:
               No. 15446. | Oct. 29, 1975.                     ‘Section 1. A forfeiture of the interest and the acceleration
                                                               of the indebtedness of a purchaser in default under an
Purchaser of land under executory contract sought              executory contract for conveyance of real property used
declaratory judgment that contract was in full force and       or to be used as the purchaser’s residence may be
effect and that vendor under such contract had to accept       enforced only after notice of seller’s intentions to enforce
offered payment. The 45th District Court, Bexar County,        the forfeiture and acceleration has been given to the
Robert R. Murray, J., granted petition for declaratory         purchaser and only after the expiration of the periods
judgment, and vendor appealed. The Court of Civil              provided below: . . .
Appeals, Klingeman, J., held that statute, which set forth
requirements for giving notice to purchaser in default         (b) When the purchaser has paid 10% But less than 20%
prior to the forfeiture of interest and acceleration of        Of the purchase price, 30 days from the date notice is
indebtedness under an executory contract for conveyance        given.
of land used or to be used as purchaser’s residence, did
not apply to situation in which vendor, under terms of         (d) Notice must be by mail or other writing. If by mail, it
executory contract for the sale of unimproved land,            must be registered or certified and shall be considered
elected to rescind such contract and take possession of        given at the time mailed to his residence or place of
land because of purchasers’ default, and that even if such     business, and notification by other writing shall be
statute were applicable, there was substantial compliance      considered given at the time delivered to the purchaser at
with terms of statute.                                         his residence or place of business.

Judgment reversed and rendered.                                (e) Such notice shall be conspicuously set out; shall be
                                                               printed in 10 point bold face type or upper case
Cadena, J., filed a concurring opinion.                        typewritten letter; and shall include the following:


Attorneys and Law Firms

*126 Jeffrey Wentworth, San Antonio, for appellant.                                     NOTICE

Marvin Miller, San Antonio, for appellees.                     YOU ARE LATE IN MARKING YOUR PAYMENT
                                                               UNDER THE CONTRACT TO BUY YOUR HOME.
Opinion                                                        UNLESS YOU MAKE THE PAYMENT BY (date) THE
                                                               SELLER HAS THE RIGHT TO TAKE POSSESSION
KLINGEMAN, Justice.                                            OF YOUR HOME AND TO KEEP ALL PAYMENTS
                                                               YOU HAVE MADE TO DATE.
                                                               Sec. 2. A purchaser in default under an executory contract
                                                               for the conveyance of real property used or to be used as
Defendant, Earl J. Wentworth, appeals from a declaratory       the purchaser’s residence, may at any time prior to
judgment that an executory contract of sale between            expiration of the period provided *127 for in Section 1,
plaintiff, Albert Medellin and wife, Rosie S. Medellin,        avoid the forfeiture of his interest and the acceleration of
dated November 5, 1971,1 is in full force and effect,          his indebtedness by complying with the terms of the
ordering defendant to accept all payments of principal and     contract up to the date of compliance notwithstanding any
interest due under said contract in accordance with its        agreement to the contrary.’
terms and provisions, and declaring that said contract is in
force and effect because defendant did not follow the

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Wentworth v. Medellin, 529 S.W.2d 125 (1975)


[1]
   The basic question before us is whether the trial court        of the entire statute, particularly the notice provision
erred in its application of Article 1301b, Supra, to the          therein,2 shows that it was the legislature’s intent to cover
contract in question. Defendant’s appeal is founded upon          only real estate on which there was a presently existing
three basic premises: (1) the property involved in the            residence or one in the process of construction; that the
executory contract is not the home of the buyer but is            legislature would not have used the word ‘home’ in the
unimproved real estate, and the statute is not applicable;        prescribed notice in the statute if it was their intention to
(2) the statute, by its terms, is restricted to cases involving   cover unimproved property; that a logical and proper
a forfeiture of interest and acceleration of indebtedness of      construction of the term ‘real estate used or to be used as
a purchaser in default, and this case does not involve a          a purchaser’s residence’ can only refer to real estate on
forfeiture and acceleration of the indebtedness, but rather       which there is a residence which the purchaser is either
a rescission of the contract; and (3) if the statute is           using or intends to use in the future as his residence.
applicable, there has been substantial compliance with the        Plaintiffs, on the other hand, argue that it covers any
terms and provisions of the statute.                              property which the purchaser has an intention *128 to use
                                                                  as a residence, present or future, irrespective of whether
                                                                  there is any residence on it or not.
The record discloses that, on November 5, 1971, plaintiffs
and defendant entered into an executory contract for the          This is not a case where the seller sought an acceleration
sale and purchase of certain unimproved real estate in            of indebtedness. The executory contract here involved
Bexar County with the agreed purchase price of $3,000.00          gave the seller two options after default: (a) to declare the
to be paid in monthly payments. Plaintiffs, at such time          entire purchase price due and payable, or (b) rescind the
and continuously thereafter, have lived in a residence in         contract and take possession of the property. Defendant
San Antonio, Texas, rented from plaintiffs’ parents.              here elected to rescind the contract and take possession of
According to the contract, if the monthly payments are            the property. In a recent case, Marshall v. Garcia, 514
more than 30 days delinquent, defendant has the option to         S.W.2d 513 (Tex.Civ.App.—Corpus Christi 1974, writ
accelerate payments and declare the entire purchase price         ref’d n.r.e.), the court said: ‘Article 1301b by its express
due, or to rescind the contract and take possession of the        terms limits its application to forfeiture and acceleration
property. Plaintiffs, on a number of occasions, have been         of indebtedness. The statute neither expressly nor by
in arrears in payment of monthly payments, and, on                implication purports to cover actions for cancellation and
several occasions, defendant has sent them notices of such        rescission of executory contracts for the sale of property.’
                                                                  [2] [3]
delinquency. On September 18, 1973, defendant mailed                      It is apparent that the trial court not only believed
plaintiffs a letter stating that they were several months         that Article 1301b, Supra, was applicable to the facts of
delinquent in their payments and notified them of his             this case, but that also there must be strict compliance
intention to cancel the contract if plaintiffs were not           with all the terms and provisions of such statute. It cannot
current in 30 days. This letter was neither registered or         be argued that there has been exact compliance with all its
certified but it is undisputed that plaintiffs received such      terms and provisions. The statute provides that all letters
letter. On October 29, 1973, more than 30 days after the          must be either registered or certified. It is undisputed that
letter above, defendant mailed a certified letter to              the defendant’s letter of September 18, 1973, was neither
plaintiffs, which was received by them, stating that, since       registered or certified, but it is also undisputed that such
the required delinquent payments had not been made, the           letter was received by plaintiffs. The statute provides that
contract was cancelled and revoked. At the time of such           all notices must be in a prescribed form, in certain
rescission, a little more than 10% But less than 20% Of           designated print, or typewritten case. The letters here
the purchase price had been paid by plaintiffs to                 involved were ordinary typewritten letters, but it is clear
defendant. On January 15, 1974, plaintiffs attempted to           from the record that plaintiffs were in no way misled by
pay $211.14 on the delinquent monthly payments, but               the letters and, in actuality, the record discloses that
defendant refused to accept such payment or any                   plaintiffs, after receipt of the September 18th letter, talked
payments thereafter. On February 14, 1974, defendant, by          with defendant about bringing the delinquent payments up
check, mailed to plaintiffs’ attorney, returned all               to date. The exact verbiage of the notice is not used in
payments made under such contract. Plaintiffs testified           defendant’s letter and nowhere in defendant’s letter is the
that they planned to build a home on the land when Mr.            term ‘home’ used. However, in our opinion, there has
Medellin retired. There is nothing in the record to show          been substantial compliance with the terms and provisions
when Mr. Medellin planned to retire. This suit was filed          of the statute. Plaintiffs were given 30 days notice, as
by plaintiffs on September 25, 1974.                              provided by the statute, to make up the delinquent
                                                                  payments; the letters involved were received by plaintiffs
In support of his contention that the statute does not apply      and the letter of notice of intention to cancel the contract
to unimproved property, defendant argues that a reading           contains all the provisions necessary to put plaintiffs on
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Wentworth v. Medellin, 529 S.W.2d 125 (1975)



notice that, if the delinquent payments were not made up                 involved. The judgment is reversed and judgment here
within 30 days, defendant would cancel the contract.                     rendered that plaintiffs take nothing by their suit.
‘Substantial compliance’ means compliance with the
essential requirements, whether of a contract or of a                    CADENA, Justice (concurring).
statute. See Jennings v. Willer, 32 S.W. 24
(Tex.Civ.App.1895), Motion for rehearing overruled, 32
S.W. 375 (Tex.Civ.App.—1895); Fitzgibbons v.                             I concur in the result solely on the ground that this case
Galveston Electric Company, 136 S.W. 1186                                does not involve an ‘acceleration,’ and that, therefore,
(Tex.Civ.App.1911, no writ).                                             Article 1301b, Tex.Rev.Civ.Stat.Ann. (Supp.1975), is
                                                                         inapplicable. I am unwilling to accept the conclusion that,
                                                                         assuming the statute to be applicable, defendant’s actions
In our opinion, the trial court improperly applied Article               constitute compliance, ‘substantial’ or otherwise, with the
1301b, Supra, to the facts of this case. The trial court                 statutory requirements.
erred in granting plaintiffs the declaratory judgment here

Footnotes
1      The contract here involved covers a lot in the Von Ormy Heights Subdivision in Bexar County, Texas, and provides for a
       purchase price of $3,000.00, payable by plaintiffs to defendant in deferred monthly payments. Such contract provides that, if the
       payments are not made when due or are more than 30 days delinquent, seller may, at his option, declare the entire purchase
       price due and payable, or may rescind such contract and take possession of the property and, in the event of a rescission, all
       payments made by the buyer shall be considered as rent for the property. It provides that, when the purchase price is fully paid,
       seller is to deliver a general warranty deed to the buyer.
2      ‘YOU ARE LATE IN MAKING YOUR PAYMENT UNDER THE CONTRACT TO BUY YOUR HOME. UNLESS YOU
       MAKE THE PAYMENT BY (date) THE SELLER HAS THE RIGHT TO TAKE POSSESSION OF YOUR HOME AND TO
       KEEP ALL PAYMENTS YOU HAVE MADE TO DATE.’ (emphasis ours)




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