you said was ruined by the hurricane and they said well the floor here was ruined by the hurricane and that you failed to put a tarp over the roof and consequently  was actually are within its purview of determining the colors of the coverage from the coverage to answers that you're out in the first place the relief that is sought is not that the court determines what was mitigated what was not the relief that  aside for the very reason that mitigation was considered and the evidence put on that mitigation was considered that it with respect to one on medication is a very tricky term one of it comes to these appraisal reports to mean  fifty six is on par garcia saying these questions i have regarding largely the extent of damage to the property as a result of versus lack of mitigation there's also e mailed in from the appraiser o'leary in this case who represent the policyholder which is page eight fifty nine is my counterpart speaking of the hartford in appraiser is making a full court press to leave out significant amount of water damages not because it was in suing damage from the hurricane but because the insurer failed to mitigate his damages properly so the evidence as to carpet vs dry wall vs tile that's not in the record before the court what is in the record before the court is the water damage to the interior that's the extent that it was mitigated versus not that's not clear to me the argument the appraisers and the umpire was considering w plaintiffs negligently in this case failed to take reasonable steps to mitigate the damages after the loss of the problem with that is that the award does not indicate what they considered the with that but the issue with that your honor is that under the authority given by this court in t m in state farm versus johnson the court determines that a reasonable degree of causal germination is relevant inter meeting preexisting condition versus things caused by the store in the example of state farm versus johnson if you have hail damage to roofs are not talking about remodeling the kitchen or leaky faucets that's not the case here because somebody gave finding determines the negligence of a party after the loss the mitigation instruction given by this court and by the other thirty in texas says that in order to support a finding a failure to mitigate or neglect under the policy there must be several findings one of which is liability under the claim the second of which is negligence on the part of the policy holder nowhere  this contract does the appraisal clause allow the umpire in the appraiser to make a determination as to the liability for the claim which is required for mitigation for a minute there to get finding nor does it give the me the authority to determine the negligence of the policyholder which particular items with respect to mitigation or just generally asking questions that could be considered mitigation questions what we know your honor is that they sat down and discussed with the property manager what steps were taken after the storm to mitigate no we don't know and there's no record evidence as to specifics things that were asked i mean just pose a hypothetical to you they might have asked the property manager was the roof already leaking right they might have your honor yes i might have asked the in a similar type of damage that was some definitely not caused by either mitigation or the hurricane that is possibly me that would be part of a prudent investigation it's possible you're on it but the reason that we think that this case is different is because number one there's no evidence that that was the questions it was asked number two in order to support a fine to get neglect which is what these appraisals were considering preexisting condition doesn't factor in the language in the policy that says what neglect is under the policy its record but the policy is kind covered the insurable loss and if you're if your roof was the swiss cheese full of holes already the insurable loss would be smaller than if it were a new roof right that's correct and where the appraiser to have determine the wear and tear that would be exactly what that is going to say if the price of what a determined that it was not the storm that caused this roof that was the age it didn't work worn torn condition of the roof then that would be one thing and that is what state farm versus johnson sort of addresses that determination but that is not what happened here you don't know i mean you can't prove to us that that is what happened here in new have the burden to the yes your honor we do the evidence showing that they consider failure to mitigate comes from the umpire's own words and the ruling given by the  this case where she said specifically in her denial of the motion to set aside the appraisal the trial court held that appraisal panel actually in their authority when they determine whether damage was caused by a covered event or was a result of non coverage pre condition like wear and tear which is on point with them and on point with johnson then she deviates from that authority when she says as a second clause in that sentence or in this case neglect under the terms of the policy neglect of the terms of the policy requires the policyholder to do something covered based upon their determination that the plaintiff failure to mitigate in the middle of the umpire in the appraiser did not say what specifically it was they failed to mitigate all we know in the trial court believed and applied the reasoning behind that they did fail to mitigate something the report to try to get her to be more specific the opportunity was not given because the motion to set aside the appraisal or was not set for a hearing it was just ruled upon in the jurisdiction i mean it's not atypical for these appraisal words to be very isn't that part of her general statement of principles no you're out of the quote that i gave was in her very last paragraph on the very final page on her conclusions it is where she says that in the point where we believe that she deviated from johnson and deviated from t is that she equated neglect on the policy to a preexisting condition which it is not and the authority does not support that libor don't support that determination it can be determined as to who is actually liable for this claim the appraiser to raise a list one thing you determines the amount of the last year they didn't even do that because they on their own accord reduced because of a affirmative defense under the policy and so in this case yes your honor but as we're asking for because in this case the determination of negligence goes against the precedence of johnson because it goes against the precedence of t m him because the language in johnson's requires to be an honest assessment of what the losses in this case that was never done but of course if you if it were set aside i mean fifty four thousand they were offering you zero the praises offered you seventy eight thousand proximately and you're seeking a whole bunch of extra damage f that right or not yes your honor there was a claim being made for business interruption and the issue with that is whether or not the investigation requirement of the policy puts the emphasis on the policy holder to present or the insurance company to investigate as to what the requirements are in the issue is the policy in this case requires notice of physical loss or physical damage to the property does not require notice to be given on every potential coverage under the sun that's not what the policy states the policy states that he to notify quire months are the notice of actual physical damage which was given the error in that case was that the in this situation is that the insurance company failed to investigate the full extent of the loss which is their duty under the policy not the policy holders the authority in this case that is determined for example the metro case the metro hospitality case that was a scenario where the chillers and the ac units malfunctioned and so the claim was filed and then later but did the that she has questions about the damages caused by i curse this failure to mitigate in the declaration of the policyholders appraiser louis o'leary saying that they are discussing the failure to mitigate versus damages caused by the storms and finally the declarant by mary for he the property manager who was questioned for forty five minutes soley about not soley about but in large part about what steps he took to mitigate the damages after the loss that is the evidence upon which we presented to the court which she accepted when she ruled that the appraiser was not the appraisal was not default because they factored in the collector the policyholder the fact that he was again i sort of go back to this again the fact that he was questioned about this  prove much about whether they actually factored appraisal into the into the award does it mean you don't know was it was he asked well how much of that grouping occurred after the storm or how much do you think it exacerbated how much do you think it cost extra after because of what occurred after the storm you know you are we did other you know and have and no affidavit by him about the questioning  was exposed to or whatever there is an affidavit as to the question he was exposed to but not the specific questions he was asked his affidavit states generally that i was asked about what steps we took to repair the property after the loss but there is no affidavit saying specific questions that he scope of what the appraiser supposed to be considered and i understand that but if you comes into a room that it looks like it's completely redone and looks like it suffered no loss you ask what did this look like at the time of the store the the issue is that when appraisers come in and in your situation say what it looked like before the storm that is within their authority to do so but in asking what have you done after the storm that does not affect the amount of loss that they have suffered that's a question as to the liability for those damages  and the second is the summary judgment ruling and that's an important point because subsequent to the time of our briefing i went back and looked at what the court is supposed to do in terms of review of those two decisions and i find the michaels court the fifth circuit in two thousand and thirteen addressed the motion to set aside an appraisal award on an abuse of discretion standard and i should lose a point in my brief for not having that side of there but i think that you look first in this instance at the first decision which is to deny the most to set aside the appraisal and then you look at the summary judgment motion with the appraisal decision already made and texas law of course favors appraisal and every presumption is w favor of the appraisal award and the opponents of course cite the wells case for a proposition that this presumption in favor of appraisals has to yield to the degree its application conflict with the presumptions required to be made in favor of the non mov the summary judgment case and wells was a summary judgment case where the appraisal award was considered as as part and parcel of that summary judgment matter that's not the situation we have here so we don't have to restrict the presumption in favor of appraisal in this case no one asked for testimony or even an interview with any of the appraisal panel so there's none of that evidence here and in fact that's really the lic law is that there's no evidence here at all that when you look at the award that award is actually colored by consideration of mitigation issues in fact in this case there's plenty of evidence prior to the time that the uprising was taking place that there are other causes that were going on at these two buildings you have three reports from regions mccoury and williams and you have a report from hague engineering which identified preexisting conditions other causes and minimal hurricane damage and so those are all things that could inform the umpires award in this case that post simply act like that didn't happen or it's not available here and in fact when we talk about this cause ation question i think the courts are pretty much gotten to the point where they recognize that certain elements of causation are always going to  when you're talking about other causes this particular case has photographic evidence has investigation work done within four or five months of the storm and then it's not until the two year anniversary of the storm that the lawsuit is proper and it's right after that that we invoke the appraisal provision hard for does and you have a clear picture of what the properties were like before and after the record here the pictures are not in the record just the just the eight hundred pounds and on the other hand you have brecht in fact the appraiser for hard for argued that there was no damage caused by the hurricane and the war comes out in between those numbers it happens to be a lot closer to the lower number than it actually are there are two buildings that have an eight hundred thousand dollar business loss someone are building loss on one and about one hundred thousand or so on the other and then there's the separate question of the business income and there are two business income claims because there are two appellants was covered under the problem it is covered under the policy and the first time that the appellant's raise the issue of a business income claim is on behalf of the tare real estate at the time of the mediation back in october that's when that starts that's when hard for filed a motion to motion for summary judgment tars interest in the insurance proceeds so that was held in abatement in abeyance until after all the appraisal one forward and all that kind of thing but that was the first argument the second business income claim is united neurologist business income claim they say that they suffered about a ten day break in service following the storm and they asserted that claim for the first time in and expert report which was submitted in march of two thousand and thirteen two thousand and eleven i'm sorry two thousand and eleven and is just in there with no supporting evidence during the appraisal process some documents were produced by the appellants through their appraiser neurology and on top of all that the united neurology never pled in the pleadings of business income claimed they have general allegations of all the damages available to us but they never mention business income at any point in time and so the trial court in this case made really two determinations the first determination she made was that the delay of more than two years in introducing the united are all g claim was that it was too long as a matter of law and that it was prejudicial to the to the insurance company and then she also ruled that there is no pleading to support the business income climb claim anyway so now at this late date that claim is bar five hundred thousand dollars or so and the united erotic claim being like fifty thousand dollars or so i don't think we have eight hundred business income i think that's just the second building somewhere how much in business income about five hundred thousand practice we also need to address the front page issue the parents have raised this issue that in spite of the fact that the appraisal ward was paid in a timely fashion that they should be entitled to prompt pay penalties under the texas insurance code they rely on a single case out of the northern district of texas that's the great work case and in that case the court denied summary judgment to state farm even though they paid the appraisal award in a timely manner and it's sort of twisted reasoning but the court there goes back to the bush years case to say that the shares didn't actually say that when you pay that appraisal award in a timely fashion you cannot have prompt  issue with respect to the original just one of the claim and so on the original just of the claim they say that all that was timely and then they say the fact that the appraisal award was issued much later is immaterial so they don't explicitly that that means you don't get a prompt pay award but they say it's immaterial in that court the school easy court southern district of texas out of macallan make that point explicit and that's where they say that relevant authority direct that an insurer commits no problem pay via lation when it's admits the delay inherent to the delay in here in the contractual appraisal process before paying all the covered damages determined by that process so that's the case we have here is th situation where there was a complaint about the original adjustment first made in the lawsuit filed two years after the storm appraisal was invoked in that same month and we praise a word finally comes out to all of the other cases russell versus scottsdale medicine are twelve oaks partners they all say that in that situation the insurer is not liable under the prompt pay statute the graber court also looks at the higginbotham case which is a fifth circuit case which first established the notion that there's no escaping the prop a claim if you under the prop eight damages if you underpay a claim and that's later been codified in the insurance code but we don't have a situation where we failed to properly pay the coin based on the information available and higginbotham the critical the crux of thinking bottom is a finding of liability we don't have a finding of liability here and we will never have a finding of liability because insurer and they are not a third party beneficiary i think the court addressed this pretty well but to qualify as a creditor beneficiary the maker of the contract that would be hartford and united neurology must have intended to confer a benefit on the third party and intended for the third party to have the right to enforce the contract that said in a material science case out of the houston first district two thousand and seven the contract has to either expressly name the third party or express that the third party has the right to enforce the obligation none of that's evident in this case the intention to confer benefits on the third party must be clear fully clearly and fully spelled out or enforcement by the third party must be denied c telecommunication mutations case and in that case the court even says that if the issue comes up in a summary judgment you still have a presumption against a third party beneficiary status because it's the other people who made the contract so and the case of the richmond capital partners case also say that point now atari it's clear on the record that atari contracted with united neurology to obtain insurance to try to bring up a d t p a claim and they rely on a case that says that you can acquire you can seek to acquire insurance through contracts with other with other parties or other types of goods or services  but in this instance atari is really only looking for insurance benefits not insurance coverage as i can tell and a fair cost case out of my pocket orleans kind just like i mean did it conclusion statement she does not mention the d t p claims but she addresses the fact that there's there's nothing in the record that puts a third party beneficiary status on running running a judge  client that's correct in fact the court wasn't sure at the end of the summary judgment proceeding whether all of the claims of all the parties had been addressed in the in the summ and so she asked the parties to file something if there's something left out of the way we filed and agreed notice that everything had been addressed in the summary judgment motion and she then issued a final judgment ok d said about closers no case it ever says appraisers can decide to the party but that evidence is in the form of the e mails where the umpire outlines the plan for their present and in that she says that look here is a consideration i damaged versus failure to mitigate the praiser who was appointed by the policyholder says to an email this is part of the record look we're not supposed to do that that's an infirmity of defense on the policy but if you're going to do that let's make sure that we make in the award we outlined that can make that determination and that it was a part so but the appraiser did not do that i as trial counsel for the insurance company wrote mr sadler and said look this is what they're trying to do why don't we agreed to have a joint letter to at least request that they outline those damages so after the fact we can tell and have those arguments with outlined the of our outline what her plan of action was it would be admissible under three zero three three because it's her state of mind and response however to the supposed to be unbiased you're not supposed to do anything to interfere with that process and you've got an appraiser should have x part of common x part of contact with them but not how do i have my idea i have boils down to they have several reports and as i recall the talk about you know the preexisting condition of the building and the hurricane really didn't touch this is right pretty widely so it's not implausible to me that maybe there was minimal damage from the hurricane as one of the reports said but my point is that if they if there's that evidence on one side that  have that and all you've got is this property manager saying he was talked to for forty five minutes you very heavy burden how do you overcome you know we do have more than that we have the e mail our to the appraiser saying this is what we're going to do here is my issue and her issue was i versus failure to mitigate there's no record before this court that the appraiser the umpire could have said oh yeah you're right we won't consider that after all but you get when you don't know that it's well they did not offer any contrary e mails or contrary evidence to the motion ok mr green i think we have you