Texas Courts Continue to Address Appraisal Procedures

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The importance of the Texas Supreme Court's opinion, In re Universal Underwriters of Texas Insurance Company, 345 S.W.3d 404 (Tex. 2011), continues to grow as Texas courts face an onslaught of appraisal cases. In re Universal Underwriters involved a petition for writ of mandamus brought by an insurance carrier contending that a trial court had abused its discretion in denying its motion to compel an appraisal and abate a pending lawsuit. The Texas Supreme Court issued an opinion directing the trial court to order appraisal. However, the court found that the trial court's failure to grant the motion to abate the case during appraisal was not subject to mandamus and that the proceedings need not be abated while the appraisal goes forward.

In the subsequent case of In re Certain Underwriters at Lloyds, No. 10-11-00263-CV, 2011 WL 4837869 (Tex. App.—Waco Oct. 12, 2011), the Waco Court of Appeals considered a trial court's repeated denial, on the basis of waiver, of the insurance carrier's motion to compel appraisal. In analyzing the appraisal issue, the Court of Appeals initially noted that "[w]hile trial courts have some discretion as to the timing of an appraisal, they have no discretion to ignore a valid appraisal clause entirely." Id. at *10 (citing State Farm Lloyds v. Johnson, 290 S.W.3d 886, 888 (Tex. 2009)). It further noted that "[i]n order to establish waiver...a party must show that an impasse was reached, and that any failure to demand appraisal within a reasonable time [of the impasse] prejudiced the opposing party."

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