1 In The 

### Court of Appeals Ninth District of Texas at Beaumont

_________________ NO. 09
- 18
- 00024
- CV



### _________________

IN RE ALLSTATE VEHICLE AND PROPERTY INSURANCE COMPANY

________________________________________________________________________ Original Proceeding County Court at Law No. 2 of Montgomery County, Texas

Trial Cause No. 17
- 08
- 10039
- CV

________________________________________________________________________ OPINION Allstate Vehicle and Property Insurance Company (Allstate) seeks mandamus
relief from the trial court’s decision denying its motion to compel an appraisal pursuant to the appraisal clause in Pamela Bailey ’s homeowners policy. We conditionally grant Allstate’s petition , and direct the trial court to vacate it s order denying Allstate’s motion and enforce the appraisal clause in Bailey’s policy

. Background Shortly after Bailey insured her home for property damages with Allstate i n April 2015, Bailey’s home was damaged in a storm. Although Allstate was given an2

estimate showing that the home needed $13,77 6 1 in repairs, Allstate determined that the home suffered only $2 , 766 in damages. After applying Bailey’s deductible,
Allstate advised Bailey that it would pay her $766 for the “storm related damages identified by Allstate in connection with the reported loss [

. ] ” In July 2017, Bailey’s attorney wrote Allstate a demand letter

. B ased on an
estimate included with the letter , 2 Baile y’s attorney demanded that Allstate pay Bailey $11,7 76 , an amount Bailey’s attorney b ased upon an estimate that
accompan ied his demand letter , less Allstate’s prior payment and Bailey’s deductible. Bailey’s attorney also demanded that Allstate pay penalties in the amount of $3,40 5 on Bailey’s claim together with attorney’s fees and expenses associated with his work on Bailey’s case of $3,53 3

. With re spect to appraisal , the demand
letter states: If you wish to appraise this loss under the policy’s appraisal condition, pl ease notify us of the identity o f your app raiser within twenty (20) days o f your receipt of this letter. Otherwise we intend to move forward, in reliance on your decision, with [litig ation ] as outlined below. Approximately forty days later, Allsta t e responded to the letter , advising Bailey’s attorney that it was “not in agreement on the amount of loss claimed by

1 For convenience, the dollar amounts referenced in the opinion have been rounded to the nearest dollar.

2 The estimate the attorney relied on is not included in the record in this proceeding.3

your client as set out in your letter, and respectfully declines to pay your [ $18,713 ] demand.” Allstate also pointed out that Bailey’s policy included a no action clause
and that the clause did not allow Bailey to file suit unless Bailey had fully

“ [complied] with all policy terms [

. ] ” Allstate’s letter was silent regarding whether it intended to invoke its right to an appraisal regarding Bailey’s property damage
claim. In August 2017, Bailey sued Allstate, alleging claims based on theories of breach of contract, misrepresent ation, failing to pay Bailey’s claim promptly, and
bad faith. Allstate answer ed Bailey’s suit in September 2017. In November 2017, Allstate invoked the appraisal clause and notified Bailey’s attorney of the name of
the individual that it had chosen as its appraiser. When Bailey did not respond to Allstate’s demand for an appraisal , Allstate filed a motion asking that the trial court compel an appraisal

. The appraisal provision in Bailey ’s homeowners policy provides: Appraisal
If you and we fail to agree on the amount of loss, either party may make written demand for an appraisal. Upon such demand, each party must select a competent and impartial appraiser and notify the other of the appraiser ’ s identity within 20 days after the demand is re ceived. The appraisers will select a competent and impartial umpire. I f the appraisers are unable to agree upon an umpire within 15 days, you or we can ask a judge of a court of record in the state where the residence premises is located to select an umpire.4

Bailey filed a written response to Allstate’s motion to compel in December
2017. In her response, Bailey argued that by waiting until after she filed suit to
invok e its right to appraisal , Allstate had waived its appraisal right s . Additionally, Bailey argued that Allstate’s request for appraisal was “an impermissible request to compel specific performance under the policy.” In late December 2017, the trial court signed an order denying Allstate’s motion to compel. The Parties’ Arguments In its petition for mandamus relief, Allstate argues t he trial court abused its
discretion by denying its motion to require that Bailey go through the appraisal
process
. Allstate further claims that Bailey was not prejudiced by any of its delays
because sh e could have avoided any alleged prejudice by demand ing an appraisal
before filing suit

. Because the trial court denied Allstate ’s m otion to compel , Allstate
also claims the trial court interfered with its right to defen d against Bailey’s allegation that it breach ed the obligations it owed Bailey under her insurance policy.
F inally , Allstate argues that by allowing a trial to occur before requiring Bailey’s property damage claim to go through the appraisal process , it has n o adequate remedy by appeal

. In response to Allstate’s petition, Bailey argues that proceeding to mediation
and trial in the event mediation is unsuccessful is a more efficient and cost

- effective
alternative t han appraisal

. She notes the case is on the docket for trial in February5

2018. Second, Bailey argues the trial court might have denied Allstate’s motion
based on her argument that she had incurred attorney’s fees and expenses after filing
suit

. Bailey claims that requiring her to incur expenses for both an appraisal and trial

w ill “cut[] into Bailey’s bottom line and significantly hinder[] her ability to pay for the repairs to the property that need to be made.” Third, Bailey c laims that Allstate
waived it s right to appraisal because it did not invoke its right to an appraisal b efore engaging in the litigation process for approximately two months after she filed suit

. Finally, Bailey argues that Allstate waived its right to appraisal because Allstate failed to allege in either an answer, a counterclaim, or a motion for summary ju dgment that Bailey had not submit ted he r property damages claim t o the appraisal
process. Analysis
The Right to Appraisal First, we note that we have jurisdiction to consider Allstate’s petition for
mandamus , as the petition challenges a ruling f rom a statutory county court. Tex. Gov’t Code Ann. § 22.221(b)(1) (West Supp. 2017). Second, we note that t he law
in Texas is settled concerning the judicial enforcement of appraisal clause s that are
contained within insurance polic ies

. An appraisal clause in a policy “binds the parties to have the extent or amount of the loss determined in a particular way[.]” Scottish Union & Nat’l Ins. Co. v. Clancy , 8 S.W. 630, 631 ( Tex. 1888). The purpose6

of an appraisal clause is to “ provide a means to resolve disputes about the amount of
loss for a covered claim.” In re Universal Underwriters of Tex

. Ins. Co. , 345 S.W.3d 404, 407 (Tex. 2011). Such provisions are “ generally enforceable, absent illegality
or waiver .” Id. Bailey did not argue the appraisal clause in her p olicy i s illegal , but she did claim that Allstate waived its right to require her to submit her property damage claim to the appraisal process. Under Texas law, “‘[w]aiver requires intent, either the intentional relinquishment of a known right or intentional conduct inconsistent with claiming that right.’” Id . (quoting In re Gen. Elec. Capital Corp. , 203 S.W.3d 314, 316 (Tex. 2006) ) . Additionally, a party relying on a claim of waiver cannot rely on delay alone, but must also establish prejudice. Id . at 411. Given the language in the demand letter from Bailey’s attorney , Bailey argues
the trial court could have found that , by waiting until November 2017 to seek an appraisal , Allstate unreasonably delayed its decision to invok e the appraisal process. However, Bailey’s policy place s no time limit on the parties regarding when the appraisal clause must be invoked

. Moreover, both the insured and the insurer have the right to invoke appraisal

. Thus, although Bailey could have invoke d the appraisal
clause even before she elected to file suit , she did not

. Allstate’s decision to invoke the appraisal process after Baile y filed suit is not conduct inconsistent with its claim that it was entitled to rely on the terms that are in the policy that it issued to Bailey.7

T he language in Bailey’s policy is also relevant to our determination that Bailey ’s attorney could not unil aterally change Allstate’s rights to an appraisal through a letter informing Allstate that Bailey intended to file suit

. The construction of an unambiguous contract is a question of law

— it is not a fact issue. Tex

. Farm
Bureau Mut. Ins. Co. v. Sturrock , 146 S.W.3d 123, 126 (Tex. 2004). Bailey’s policy provides that it “can be changed only by endorsement. ” 3 The record before the trial
court include s no evidence showing that Allstate issued an endorsement that changed
any rights the parties had under the policy to invoke the appraisal clause

. Moreover , “[c]our t s cannot make new contracts between the parties, but must enforce the
contracts as written. Where the terms of an insurance policy are plain, definite and unambiguous, the courts cannot vary these te rms.” Royal Indem. Co. v. Marshall , 388 S.W.2d 176, 181 (Tex. 1965). We conclude that the trial court did not have the
discretion to re
- write the policy in a way that require d Allstate to invoke its right to appraisal before Bailey filed suit

. We further conclude that the record does not support finding s that Allstate
unreasonabl y delayed seek ing appraisal or that Bailey was prejudiced by Allstate’s alleged delays . While delay can be a factor in finding waiver, “reasonableness must be measured from the point of impasse” after considering the circumstances and the

3 The policy does allow Allstate to unilaterally change the policy’s terms if the change broadens the coverage without charge.8

parties’ conduct. Universal , 345 S.W.3d a t 408. The Texas Supreme Court has explained: An impasse is not the same as a d isagreement about the amount of loss. Ongoing negotiations, even when the parties d isagree, do not trigger a party’ s obligation to demand appraisal. Nor does an insurer’ s offer of money to cover damages necessarily indicate a refusal to negotiate further, or to recognize additional damages upon reinspection

. Id. Impasse occurs when the parties reach “ a mutual understanding that neither will negotiate further [

. ] ” Id . at 410.
The record before us in this case shows that after Allstate invoked the appraisal process, Bailey filed a “Motion to Compel Mediation In Lieu Of Appraisal. ” Nothing in the record shows that Allstate was unwilling to negotiate further or reconsider its position rejecting Bailey’s settlement offer upon conducting another inspection of Bailey’s home

. Vi ewing the record as a whole, and given that Bailey’s demand for mediation indicates the parties were not at an impasse, we conclude that no reasonable construction of the record supports a finding of impas se before the date that Allstate invoked its contract right to an appraisal. “ L ike any other contractual provision, appraisal clauses should be enforced.” State Farm Lloyds v.
Johnson , 290 S.W.3d 886, 895 (Tex. 2009). We also reject Bailey’s argument that she established she was prejudice d by
any alleged delay s attributable to the timing surrounding Allstate ’s decision to invoke the appraisal clause

. For example, Bailey argues that she was prej udiced9

because she incur red expenses when she filed suit and expenses by participat ing in discovery

. However, th ese expense s were av oidable , as Bailey could have invok ed the appraisal clause before fil ing suit

. See In re Cypress Tex

. Lloyds , 419 S.W.3d 443, 445 (Tex. App.

— Beaumont A pr. 26, 2012, orig. proceeding [mand. denied]) ( “ When a party knows of its right to request an appraisal and does not make that request, it is difficult to attribute the costs incurred to the opponen t.” ). Finally, we reject Bailey ’s argument s that Allstate failed to file the proper pleadings needed to allow the trial court to resolve Allstate’s demand for appraisal. According to Bailey, a jury should resolve whether her failure to participate in the appraisal process constitutes either a mater ial breach of the policy or a condition she must satisfy before she can recover

. Based on this argument , she concludes that Allstate was required to present its demand for appraisal by filing a counterclaim followed by a motion for summary judgment. According to Bailey , Allstate’s motion to compel appraisal is analogous to the process involved in the enforc ement of an appraisal award. In support of the arguments, Bailey relies on Sec urity Nat ional
Ins urance Co mpany v. Waloon Inv estments , Inc. , 384 S.W .3d 901, 907

- 08 (Tex. App.

— Houston [14th Dist.] 2012, no pet.). However, Waloon is distinguishable from the facts that are presented here. In
Waloon , the Fourteenth Court of Appeals reasoned that t he trial court erred by rendering a judgment requiring the insurer to pay a loss that had been established10

through the appraisal process without first determining whether the insured could

recover against its insurer

. Id. at 905. Thus, the Fourteenth Court of Appeals ’ holding
in Waloon addresses a different stage of the process than the stage of the process at issue here , which in Bailey’s case concerns whether a trial court is required to order the parties to go through the appraisal process

. See i d . In Bailey’s case, there is no apprai sal award, and the ruling Allstate challenges does not concern enforc ing an award. Id. Bailey also argues that Allstate failed to plead that it had a right to appraisal in its answer, in a counterclaim, or in a motion for summary judgment. However , t he procedure to enforc e the right to appraisal is well

- established

. A party’s right to appraisal may be accomplished by the filing of motion to compel appraisal , which
is the procedure that Allstate followed here. See Universal , 345 S.W.3d at 412; In re
Al lstate Cty. Mut. Ins. Co. , 85 S.W.3d 193, 196 (Tex. 2002). Bailey fails to cite any cases holding that a party to a contract containing an appraisal clause must file a counterclaim for specific performance or motion for summary judgment before the
trial co urt is authorized to compel the parties to participate in the appraisal process

. In summary, Bailey’s insurance policy with Allstate places no time limit on the parties concerning when a party must demand an appraisal. While a dispute exists over the value of Bailey’s property damage claim, her decision to file suit does not establish that Allstate waived its right to appraisal. S ee In re GuideOne Mut. Ins.11

Co. , No. 09

- 12

- 00581

- CV, 2013 WL 257371, at *2 (Tex. App.

— Beaumont Ja n. 24, 2013, orig. proceeding [mand. denied] ) (mem. op.) (distinguishing appraisal as a means of determining amount of loss from arbitration as a choice of an alternate forum). We hold the trial court abused its discretion by denying Allstate’s motion.
Rem edy
We are required to determine whether Allstate has an adequate appellate remedy by balancing the benefits of mandamus review against its detriments. In re Team Rocket, L.P. , 256 S.W.3d 257, 262 (Tex. 2008). The Texas Supreme Court has
held t hat “ mandamus relief is appropriate to enforce an appraisal clause because denying the appr aisal would vitiate the insurer’ s right to defend its breach of contract
claim .” Universal , 345 S.W.3d at 412 ; see also Allstate , 85 S.W.3d at 196

. For th is

same reason, w e hold that Allstate has no adequate remedy by appeal. See id

. We conditionally grant Allstate’s petition for a writ of mandamus. We are
confident the trial court will vacate its order denying Allstate’s motion to compel and enforce the appraisal clause in Bailey’s policy . The writ of mandamus will issue only if the trial court fails to act in accordance with this opinion.
PETITION CONDITIONALLY GRANTED.
PER CURIAM
Submitted on January 26, 2018 Opinion Delivered February 22 , 2018 Before McKeith en, C.J., Kreger and Horton, JJ.