No. 14-15-00922-CV 

In the Court of Appeals 

For the Fourteenth Judicial District of Texas 

Houston, Texas 

IN RE: AMERICAN RISK INSURANCE COMPANY, INC. 

Original Proceeding from Cause No. 14-DCV-213947 

In the 268th District Court of Fort Bend County, Texas 

Honorable Brady G. Elliot, Presiding Judge 

RESPONSE TO PETITION FOR WRIT OF MANDAMUS

HAWASH MEADE GASTON 

NEESE & CICACK LLP 

Jeremy Gaston 

Bar No. 24012685 

2118 Smith Street 

Houston, Texas 77010 

713.658.9001 

713.658-9011 (Fax) 

Counsel for Real Party in Interest 

Hussam Barazi 

ACCEPTED

14-15-00922-CV

FOURTEENTH COURT OF APPEALS

HOUSTON, TEXAS

11/12/2015 11:16:53 PM

CHRISTOPHER PRINE

CLERK

 FILED IN 14th COURT OF APPEALS HOUSTON, TEXAS 11/12/2015 11:16:53 PM CHRISTOPHER A. PRINE Clerk
i 

IDENTITY OF PARTIES AND COUNSEL

Real party in interest Hussam Barazi certifies that the following is a complete 

list of the counsel and parties to the judgment from which this mandamus is taken: 

Relator/Defendant: 

American Risk Insurance Company (“ARIC”) 

Counsel for Relator/Defendant: 

Spence E. Dunn 

State Bar No. 00797848 

4669 Southwest Freeway, Suite 700 

Houston, Texas 77027 

Telephone: 713-559-0705 

Facsimile: 713-481-8768 

sdunn@americanriskins.com 

Kevin F. Risley 

State Bar No. 16941200 

Andrew L. Johnson 

State Bar No. 24060025 

George Arnold 

State Bar No. 00783559 

Thompson, Coe, Cousins & Irons, LLP 

One Riverway, Suite 1400 

Houston, Texas 77056 

Telephone: 713-403-8210 

Facsimile: 713-403-8299 

 garnold@thompsoncoe.com 

 krisley@thompsonecoe.com 

ajohnson@thompsoncoe.com 

Real Party in Interest/Plaintiff: 

Hussam Barazi 

Counsel for Real Party in Interest/Plaintiff: 

BRASHER LAW FIRM, PLLC 

Clint Brasher 
ii 

clint@brasherattorney.com 

State Bar. No. 24009915 

Joe Muckleroy 

joe@brasherattorney.com 

State Bar No. 24065801 

P.O. Box 2237 

Beaumont, Texas 77704 

(409) 832-3737 

(409) 832-3838 (facsimile) 

HAWASH MEADE GASTON NEESE & CICACK LLP 

Jeremy Gaston 

jgaston@hmgnc.com 

State Bar No. 24012685 

2118 Smith Street 

Houston, TX 77002 

(713) 658-9001 

(713) 658-9011 (facsimile) 

 
iii 

TABLE OF CONTENTS

IDENTITY OF PARTIES AND COUNSEL .......................................................................... i

TABLE OF CONTENTS ................................................................................................ iii

INDEX OF AUTHORITIES ............................................................................................. iv

STATEMENT ON ORAL ARGUMENT ............................................................................ vi

INTRODUCTION & ISSUE PRESENTED ........................................................................... 1

STATEMENT OF FACTS ................................................................................................. 2

SUMMARY OF ARGUMENT ........................................................................................... 4

STANDARD OF REVIEW ................................................................................................ 4

ARGUMENT ................................................................................................................. 5

I. ARI cannot invoke appraisal because it wholly denied coverage. .................... 5

II. Appraisal is inapplicable because the amount of loss is not disputed. .............. 7

III. ARI waived its right to appraisal by its unreasonable delay. ............................ 9

IV. ARI’s prior breach of contract excuses Barazi from appraisal. ...................... 13

V. ARI’s nonwaiver argument should be rejected for several reasons. ............... 15

CERTIFICATE OF COMPLIANCE .................................................................................. 19

CERTIFICATE OF SERVICE .......................................................................................... 20

 
iv 

INDEX OF AUTHORITIES

Cases 

Boone v. Safeco Ins. Co., 

Civ.A.H-09-1613, 2010 WL 2303311 (S.D. Tex. June 7, 2010) ........................... 9 

Canadian Helicopters, Ltd. v. Wittig,

876 S.W.2d 304 (Tex. 1994) (orig. proceeding) .................................................... 4 

Cleaver v. Cleaver, 

140 S.W.3d 771, 774 (Tex. App.—Tyler 2004, no pet.) ..................................... 17 

Downer v. Aquamarine Operators, Inc., 

701 S.W.2d 238 (Tex. 1985) .................................................................................. 4 

Hooks v. Fourth Court of Appeals,

808 S.W.2d 56 (Tex. 1991) (orig. proceeding) ..................................................... 4 

In re Acadia Ins. Co., 

279 S.W.3d 777 (Tex. App.—Amarillo 2007, no pet. h.) 

(orig. proceeding) ....................................................................................... 5, 9, 16 

In re Allstate, 

85 S.W.3d 193 (Tex. 2002) (orig. proceeding) ..................................................... 6 

In re Bank of Am., N.A., 

01-02-00867-CV, 2003 WL 22310800 (Tex. App.—Houston [1st Dist.] Oct. 9, 

2003, no pet.) (orig. proceeding) .......................................................................... 16 

In re GuideOne Nat’l Ins. Co., 

No. 07-15-00281-CV, 2015 WL 5766496 (Tex. App. Sept. 29, 2015, no pet. h.) 

(orig. proceeding) ................................................................................................... 6 

In re Guideone Nat’l Ins. Co., 

No. 05-15-00981-CV, 2015 WL 5050233 (Tex. App.—Dallas Aug. 27, 2015, 

no. pet. h.) (orig. proceeding) ...............................................................................16 

In re Pub. Serv. Mut. Ins. Co., 

No. 03-13-00003-CV, 2013 WL 692441 (Tex. App.—Austin Feb. 21, 2013, 

mandamus denied) (orig. proceeding) .................................................................... 6 

In re Security Nat. Ins. Co., 

14-10-00009-CV, 2010 WL 1609247 (Tex. App.—Houston [14th Dist.] 2010, 

no pet.) (orig. proceeding) ............................................................................... 7, 16 
v 

In re Texas Windstorm Ins. Ass’n, 

No. 14-13-00632-CV, 2013 WL 4806996 (Tex. App.—Houston [14th Dist.] 

Sept. 10, 2013, no pet.) (orig. proceeding) ............................................................ 6 

In re Universal Underwriters of Texas Ins. Co., 

345 S.W.3d 404 (Tex. 2011) (orig. proceeding) .................................... 5, 6, 9, 10 

Mustang Pipeline Co. v. Driver Pipeline Co.,

134 S.W.3d 195 (Tex. 2004) .......................................................................... 14-15 

Perry Homes v. Cull, 

258 S.W.3d 580 (Tex. 2008) ......................................................................... 10, 11 

Sanchez v. Prop. and Cas. Ins. Co. of Hartford, 

Civ. A. H-09-1736, 2010 WL 413687 (S.D. Tex. Jan. 27, 2010) ......................... 9 

Southland Lloyds Ins. Co. v. Cantu, 

399 S.W.3d 558 (Tex. App.—San Antonio 2011, pet. denied) ............................ 9 

State Farm Lloyds v. Johnson, 

290 S.W.3d 886 (Tex. 2009) .......................................................................... 6, 12 

Straus v. Kirby Court Corp., 

909 S.W.2d 105 (Tex. App.—Houston [14th Dist.] 1995, writ denied) .............. 16 

Walker v. Packer, 

827 S.W.2d 833 (Tex. 1992) (orig. proceeding) .................................................... 4 

Rules 

TEX. R. APP. P. 9.4 ................................................................................................... 19 

 

 
vi 

STATEMENT ON ORAL ARGUMENT

 Real party in interest Hussam Barazi does not believe oral argument would 

significantly aid the Court’s decisional process because the facts and legal arguments 

are adequately presented by the parties’ briefs and record. 
1 

INTRODUCTION & ISSUE PRESENTED

In 2012, the roof of Barazi’s home suffered $17,805.63 in hail damage. His 

insurer, American Risk Insurance Co. (“ARI”), wholly denied coverage, claiming 

no hail had hit the home. ARI and Barazi then litigated the matter for eighteen 

months. During litigation, ARI ultimately admitted that hail had, in fact, hit Barazi’s 

home. On the eve of trial, however, ARI sought to invoke the insurance policy’s 

appraisal provision, which provides a mechanism for determining the amount of a 

loss when that amount is disputed. But here, although ARI disputed coverage, it did 

not dispute the amount of loss. In addition, ARI had waited two and a half years 

after denying coverage to invoke appraisal. 

At issue is whether the trial court committed a clear abuse of discretion or 

legal error in denying ARI’s request for appraisal. 

 
2 

STATEMENT OF FACTS

 On February 4, 2013, real party in interest Hassam Barazi reported a hail 

claim to his insurance company, relator American Risk Insurance Company 

(“ARI”). Supplemental Record (“Supp. R.”) Tab 3 at 423. ARI initially accepted 

coverage but said “no payment will be issued because the Actual Cash Value of 

repairs is below your deductible.” R. Tab 1D at 117. 

 Barazi hired Don Foreman to inspect the property and prepare a damage 

report. R. Tab 1E; id. at 136. Foreman found substantial hail damage to the roof. 

Id. Foreman concluded that the hail damage totaled $17,805.63. Id. After receiving 

this estimate, ARI’s adjuster conducted a re-inspection with Foreman. R. Tab 1F. 

On May 10, 2013, ARI ordered a weather report (Supp. R. Tab 3 at 424) requesting 

information as to whether any hail one inch or larger had hit the home during the 

policy period. Supp. R. Tab 3 at 454. After the re-inspection and after receiving a 

hail report from Weather Guidance, ARI wholly denied any coverage for Barazi’s 

claim. Meanwhile, ARI’s adjuster did not write an estimate of damage, stating “We 

have not prepared an estimate at this time. Should your [insurance] company elect 

to provide coverage and replace the roof, please advise and we will submit estimate.” 

R. Tab 1F at 138. 

 In particular, on May 13, 2013, ARI sent Barazi a letter denying coverage 

and claiming that no hail events hit Barazi’s property since the inception of his 

policy: 
3 

“The investigation into the facts and circumstances of your 

claim has been completed and a final coverage decision 

has been reached. . . The fact that there were no hail 

events from the inception of your policy to the date you 

reported the damage reveals that the damage to your roof 

occurred outside the period of effectiveness of your 

policy with American Risk Insurance. Because the 

damages to your property occurred outside the window of 

effectiveness of this policy, we are unable to satisfy a 

claim...Before reaching this decision, we conducted a 

thorough investigation and considered all information you 

provided.” 

R. Tab 1H at 168 (emphasis added). 

 Yet ARI ultimately admitted that hail which was one inch or larger had hit 

Barazi’s property during the policy period. See Supp. R. Tab 3 at 464. By itself, 

this showed that ARI’s denial letter (claiming “no hail events”) was false. 

Now, two and a half years after ARI’s original denial of coverage and after

determining that its basis for denying coverage was wrong, ARI wants an appraisal. 

ARI’s request was on the eve of trial, as the pretrial conference in this matter was 

set for tomorrow (November 13, 2015), with trial to start the next week. 

ARI’s request for appraisal was also disingenuous because, as explained 

below, the amount of damage here is not disputed. In addition, ARI’s request for 

contractual appraisal was improper because ARI had wholly denied coverage and 

because ARI had unreasonably delayed seeking appraisal. For these and other 

reasons discussed below, the district court did not commit any clear abuse of 

discretion or legal error in denying ARI’s request. 
4 

SUMMARY OF ARGUMENT

 Because ARI wholly denied coverage for Barazi’s loss, ARI cannot invoke 

appraisal under the parties’ insurance contract. Appraisal also is inapplicable 

because the parties do not dispute the amount of Barazi’s loss. 

Separately, ARI waived any right to invoke appraisal by its unreasonable 

delay of over two and a half years in seeking appraisal, which prejudiced Barazi by, 

among other things, forcing him to litigate a disputed coverage claim for more than 

eighteen months. In addition, ARI’s material breach of the insurance policy 

(denying coverage on a basis that ARI ultimately admitted to be invalid) also 

precludes ARI from invoking appraisal. 

ARI argues that it can’t be deemed to have waived appraisal because its policy 

has a “non-waiver” provision, but ARI did not present that argument below, and it 

has also been recently rejected on the merits by another court of appeals. 

STANDARD OF REVIEW

Mandamus is appropriate only to correct a clear abuse of discretion or legal 

violation when there is no other adequate remedy at law. See Walker v. Packer, 827 

S.W.2d 833, 839 (Tex. 1992) (orig. proceeding). This is a heavy burden. See

Canadian Helicopters, Ltd. v. Wittig, 876 S.W.2d 304, 305 (Tex. 1994, orig. 

proceeding). To establish an abuse of discretion, the complaining party must 

demonstrate that the trial court acted unreasonably, arbitrarily, or without reference 

to guiding rules and principles. See Downer v. Aquamarine Operators, Inc., 701 

S.W.2d 238, 241-42 (Tex. 1985). An appellate court may not resolve factual 
5 

disputes in an original mandamus proceeding. See Hooks v. Fourth Court of Appeals,

808 S.W.2d 56, 60 (Tex. 1991) (orig. proceeding). 

ARGUMENT

I. ARI cannot invoke appraisal because it wholly denied coverage. 

 ARI lost its right to invoke appraisal when it wholly denied Barazi’s claim. 

See In re Acadia Ins. Co., 279 S.W.3d 777, 780 (Tex. App.—Amarillo 2007, no pet. 

h.) (orig. proceeding). In that case, the policyholder claimed hail damage to his 

property. Id. at 778. Acadia denied the claim for the same reason ARI denied 

coverage here: that the hail damage allegedly pre-dated the inception date of the 

policy. Id. at 778-79. The policyholder filed a lawsuit, and the insurer subsequently 

sought appraisal, which the trial court denied. Id. The appellate court denied 

mandamus relief because Acadia’s decision to deny coverage waived its right to 

appraisal. Id. at 780; see also In re Universal Underwriters of Texas Ins. Co., 345 

S.W.3d 404, 407 (Tex. 2011) (orig. proceeding) (stating that waiver can also be 

shown by an insurer’s “denial of liability” or “refusal to pay the loss”). Here, ARI 

denied liability for Barazi’s claim and refused to pay the loss when it denied 

coverage in its May 13, 2013 letter. 

 ARI tries to avoid this result by relying on cases where the insurer estimated 

that the insured’s damages were below a deductible.1

 But those cases are not 

 

1 See In re Pub. Serv. Mut. Ins. Co., No. 03-13-00003-CV, 2013 WL 692441, at *6 (Tex. 

App.—Austin Feb. 21, 2013, mandamus denied) (orig. proceeding) (“PSMIC stated that it 
6 

applicable to situations where coverage was wholly denied, as here. To be sure, ARI 

originally stated that Barazi’s damages were below his deductible, but ARI changed 

its position, wholly denied coverage, and stated that a “final coverage decision has 

been reached.” R. Tab 1H at 168 

 ARI cites other cases for the proposition that denying appraisal is an abuse of 

discretion when an insurance policy includes an appraisal clause. But none of those 

cases addressed situations like the present where coverage is wholly denied. In one 

case, the issue was whether appraisal was unenforceable as a form of arbitration, see

In re Allstate, 85 S.W.3d 193 (Tex. 2002) (orig. proceeding); in another, the issue 

was the scope of appraisal where coverage had not been completely denied, see State 

Farm Lloyds v. Johnson, 290 S.W.3d 886, 891 (Tex. 2009) (orig. proceeding), and 

in the others, the insurer also did not deny liability/coverage. See In re Univ. 

Underwriters, 345 S.W.3d at 410 (Tex. 2011) (orig. proceeding) (“Universal never 

denied liability for the loss.”); In re Security Nat. Ins. Co., 14-10-00009-CV, 2010 

WL 1609247, *6 (Tex. App.—Houston [14th Dist.] 2010, no pet.) (orig. proceeding) 

 

was unable to issue payment because the cost to repair the roof damage was less than Shree 

Deep’s $5,000 deductible.”); In re Texas Windstorm Ins. Ass’n, No. 14-13-00632-CV, 

2013 WL 4806996, at *2 (Tex. App.—Houston [14th Dist.] Sept. 10, 2013, no pet.) (orig. 

proceeding) (“[T]he record shows that TWIA also disputed the amount of loss, which it 

Fdetermined did not exceed the deductible.”); In re GuideOne Nat’l Ins. Co., No. 07-15-

00281-CV, 2015 WL 5766496, at *1 (Tex. App. Sept. 29, 2015, no pet. h.) (orig. 

proceeding) (“GuideOne advised that the adjusted loss was below the deductible and so 

notified TopDog.”). 
7 

(not designated for publication) (insured “has not identified or specified any portion 

of coverage [the insurer] has denied”). Indeed, it is ironic that ARI cites In re 

Security National Insurance, as that case recognizes the very principle that Barazi 

relies upon here: “Denying coverage under an insurance policy waives the right of 

the insurer to request appraisal . . . .” 2010 WL 1609247 at *6.

2

II. Appraisal is inapplicable because the amount of loss is not disputed. 

 Under the parties’ policy, appraisal may be invoked by either party “If you 

and we fail to agree on the actual cash value, amount of loss, or cost of repair or 

replacement.” R. Tab 1A at 25-26. The purpose of appraisal is to “set the amount of 

loss” if the parties disagree. Id. ARI argues that the parties disagree on the amount 

of loss, but ARI has admitted that there is no such disagreement. 

 In particular, after ARI told Barazi that his loss did not meet his deductible, 

Barazi hired Don Forman, an independent roofing expert,3

 to estimate his hail 

damage. R. Tab 1E. Then, during the litigation of this matter, Larry Simmons 

testified on April 29, 2015 as ARI’s corporate representative. Through Simmons’ 

testimony, ARI admitted that (a) ARI had Foreman’s estimate before ARI’s May 13, 

2013 denial letter (R. Tab 6 at 233-242, pp. 105:11-16; 106:10-107:7); and (b) ARI 

 

2

 ARI argues that appraisal is warranted because the parties reached an “impasse” in 

negotiating the value of a claim. But whether the parties reached any impasse is irrelevant 

once ARI lost its right to invoke appraisal. 

3

 Relator mistakenly refers to Foreman as a “public adjuster.” Foreman is an independent 

roofing contractor and provided his service to Barazi for $647.00. R. Tab 1E at 136. 
8 

did not disagree with Foreman’s estimate (R. Tab 6 at 233-242, pp.114:21-23; 117:7-

16). Indeed, ARI specifically denied that it had any dispute with Foreman’s 

$17,805.63 estimate and rejected any suggestion that his prices were excessive or 

that his estimate was overbroad. R. Tab 6 at 233-242, pp.114:21-23; 117:7-16. ARI 

stated that the issue was coverage, not scope or price. Id. Because the issue was not 

the amount of loss, appraisal is simply inapplicable. 

 ARI argues that there is no evidence in the mandamus record proving that ARI 

agrees with Foreman’s estimate. But as cited above, there is such evidence in the 

record. What ARI really means is that Simmons’ deposition (cited above) was not 

yet on file with the trial court before the court denied ARI’s request for appraisal. 

That is true, but the substance of Simmons’ deposition testimony (i.e., Simmons’ 

admission that ARI did not dispute the amount of damages) was on file with the trial 

court in the form of correspondence from Barazi’s counsel to ARI’s counsel, which 

ARI attached to its very own motion to compel appraisal, and that correspondence 

stated that: 

I [trial counsel for Barazi] am in receipt of your [counsel 

for ARI’s] correspondence dated October 7, 2015 

requesting appraisal. Not only is the request not timely and 

made after expiration of the demand, it is made late in 

respect to when ARI was aware of the dispute for the 

amount of loss. In addition, Mr. Simmons testified that he 

received and was aware of Mr. Foreman’s estimate prior 

to the time that ARI denied the claim. (Simmons 

deposition, page 106:19 through 107:23). Mr. Simmons 

was asked in his deposition if he disagreed with the scope 

or price of Mr. Foreman’s estimate. He admitted he did 
9 

not. (Simmons deposition, page 114, line 21-23, page 117, 

lines 7-16). Therefore, there is no dispute as to the 

amount of loss. The only remaining dispute is regarding 

the coverage position ARI made in respect to the claim. 

Since there is no dispute as to the amount of loss, it is not 

appropriate to seek appraisal of this matter. 

R. Tab 1J at 170 (emphasis added). Notably, ARI made no attempt to rebut the 

substance of this correspondence in ARI’s motion to compel appraisal. See R. Tab 

1 at 1-7. 

III. ARI waived its right to appraisal by its unreasonable delay. 

 An insurer must demand appraisal within a reasonable time after any 

negotiation impasse is reached; otherwise, the right is waived. See Boone v. Safeco 

Ins. Co., Civ.A.H-09-1613, 2010 WL 2303311, at *11-12 (S.D. Tex. June 7, 2010); 

In re Universal Underwriters of Texas Ins. Co., 345 S.W.3d 404, 408 (Tex. 2011) 

(orig. proceeding); Southland Lloyds Ins. Co. v. Cantu, 399 S.W.3d 558 at 578 (Tex. 

App.—San Antonio 2011, pet denied); In re Acadia Ins. Co., 279 S.W.3d 777,780 

(Tex. App.—Amarillo, pet. denied, no pet. h.) (orig. proceeding). 

An impasse is reached when the insurer becomes aware that its insured 

disagrees with the damages found by the insurer and further negotiations would be 

futile. In re Universal Underwriters, 345 S.W.3d at 408-12. Impasse is also reached 

when an insurer denies or otherwise refuses to pay a claim. Sanchez v. Prop. and 

Cas. Ins. Co. of Hartford, CIV. A. H-09-1736, 2010 WL 413687, at *5 (S.D. Tex. 

Jan. 27, 2010) (impasse established by adjuster’s verbal declination to pay). 
10 

To show waiver by delay, Barazi must show the delay was unreasonable and 

prejudiced him. In re Universal Underwriters, 345 S.W.3d at 408-12. Here, the 

parties reached an impasse on May 13, 2013 when ARI denied coverage, stating “a 

final coverage decision has been reached.” R. Tab 1H. A year then passed without 

any negotiations or discussions on the claim. On April 14, 2014, Barazi filed suit 

against ARI. ARI answered and vigorously defended itself, standing behind its 

denial. Discovery is now complete. The case never was mediated. 

 In the trial court, ARI claimed an impasse was not reached until October 13, 

2015. R. Tab 1 at 4 ¶ 20. But throughout this litigation, ARI has maintained its 

denial of coverage. Indeed, ARI corporate representative Simmons testified that 

ARI’s denial of the claim was fair and reasonable. R. Tab 6 at 240-241. Having 

denied the claim over two and a half years ago and having maintained that denial 

throughout this litigation, ARI cannot claim the parties “just” reached an impasse 

last month. 

 In sum, ARI’s two-and-a-half year delay, coming after all discovery has been 

completed and the case is ready for trial, is an unreasonable delay. And there is no 

doubt that this delay prejudiced Barazi: 

 Prejudice to a party “may arise in any number of ways that demonstrate harm 

to a party’s legal rights or financial positions.” In re Universal Underwriters of Texas 

Ins. Co., 345 S.W.3d 404, 411 (Tex. 2011). In particular, litigation conduct and 
11 

participating in the litigation process is enough to establish prejudice for waiver. 

Perry Homes v. Cull, 258 S.W.3d 580, 597 (Tex. 2008). 

 Here, Barazi would be prejudiced if this matter were sent to appraisal at this 

late date. For one, over the course of the litigation, ARI has actively participated in 

the litigation process, including taking depositions, filing motions, and participating 

in discovery. See Perry Homes, 258 S.W. 3d at 595 (taking depositions, filing 

motions, and participating in discovery invokes the litigation process and is 

sufficient to show prejudice for waiver of right to invoke an alternative dispute 

resolution). 

 Hundreds of pages of documents have been exchanged, numerous motions 

filed, jury charges drafted, witnesses scheduled, experts retained, depositions taken, 

and trial scheduled to begin next week. ARI has substantially invoked the litigation 

process and taken advantage of the material made available to it before invoking 

appraisal. There is no question ARI has enjoyed the benefits of extensive discovery 

and only now wishes to invoke appraisal after discovery is concluded and on the 

eleventh hour. 

 Appraisal would also financially burden Barazi. See Perry Homes, 258 

S.W.3d at 597. Months after ARI made its final coverage decision, Barazi had to 

seek and hire legal counsel to prosecute his action against ARI. As a direct result of 

ARI’s coverage denial, Barazi faced legal fees, expert fees, professional fees, and 

associated costs with prosecuting this action. Any recovery Barazi obtains must be 
12 

used to pay attorneys, professionals, experts, and other litigation costs, a substantial 

portion of which have already been incurred. Had ARI invoked appraisal in a timely 

fashion, the majority of these expenses could have been avoided. Instead, financial 

prejudice to Barazi because of ARI’s delay is self-evident. 

 Appraisal would also prejudice Barazi’s legal position because an appraisal 

would not encompass his entire claim against ARI. Id. (prejudice shown by harm 

to party’s legal position). In accordance with the policy language as well as Texas 

jurisprudence, an appraisal only covers the amount of physical damage to a building 

caused by an event. See State Farm Lloyds v. Johnson, 290 S.W.3d 886, 888-89 

(Tex. 2009). Appraisal would not address ARI’s bad faith claims handling practices 

or the coverage questions that ARI has put in issue before the court to decide. ARI 

wishes to invoke appraisal knowing that an appraisal will not award certain damages 

caused by ARI’s delay, including the cost of preparing expert evaluations of those 

damages (as Barazi had to hire multiple experts to prepare his complete legal case 

against ARI, including an estimator to value damages, an expert with respect to 

ARI’s claims handling process, an attorney’s fee expert, and a meteorological 

service). 

 In sum, ARI waived any right to appraisal through its unreasonable two-anda-half year delay, including 18 months of substantially participating in the litigation 

process. 
13 

IV. ARI’s prior breach of contract excuses Barazi from appraisal. 

 On May 13, 2015, ARI denied coverage for this claim. ARI’s letter states the 

basis for the denial as follows: “We acquired a forensic meteorologist weather report 

for the period of effectiveness of your policy. The report revealed that there were 

no hail events at the location of your property from the inception of your policy to 

the date you reported the damage to your roof for consideration.” R. Tab 1H at 

168. 

 ARI’s denial letter claiming “no hail events” is false in two ways. First, ARIC 

concedes that there was at least one hail event at the property during the policy 

period. On September 28, 2015, ARI filed Defendant’s Motion for Leave to 

Designate Responsible Third Party seeking leave to designate Weather Guidance as 

a Responsible Third Party. Supp. R. Tab 1 at 272. Weather Guidance was the entity 

that prepared a hail report for ARIC on May 10, 2013. In ARI’s motion for leave, 

ARI states that “a careful examination of the weather report shows in the image for 

January 9, 2012, that the 1.0-1.5 inch diameter hail actually took place at the event 

location.” Supp. R. Tab 1 at 273. ARI thus knows that a hail event with 1.0-1.5 inch 

hail hit the property, yet it continues to maintain denial under the false premise of 

“no hail events.” 

In addition to the Weather Guidance report (which shows hail at the location 

during the policy period), ARI received other hail information from Barazi which 

depicted additional hail events. See Supp. R. Tab 2 at 383. Because ARI had this 
14 

information before it issued its denial letter, ARI should have known Barazi’s claim 

was valid even before ARI denied the claim. 

Second, ARI denied the claim on the basis that its Weather Guidance report 

reflected “no hail events.” But that report did not state that “no hail events” occurred. 

R. Tab 1G at 164. Rather, as explained in a sworn statement by Weather Guidance 

meteorologist Robert White, when ARI requested the hail report, ARI instructed 

White not to consider any hail events below one inch in diameter. Supp. R. Tab 3 

at 454. Accordingly, White’s report did not consider hail below one inch in size. 

Id. And from Barazi, ARI received information from a different weather service 

identifying several dates where hail 0.5-0.7 inches in size impacted the property. 

Supp. R. Tab 2 at 383. This data, combined with the fact that ARI knew White only 

considered one inch or larger hail, demonstrates the falsity of ARI’s statement of 

“no hail events.” 

“It is a fundamental principle of contract law that when one party to a contract 

commits a material breach of that contract, the other party is discharged or excused 

from further performance.” Mustang Pipeline Co. v. Driver Pipeline Co., 134 

S.W.3d 195, 196 (Tex.2004). Whether a party’s breach of contract is so material as 

to render the contract unenforceable is ordinarily a question of fact to be determined 

based on several factors, including: 

(a) the extent to which the injured party will be deprived 

of the benefit which he reasonably expected; (b) the extent 

to which the injured party can be adequately compensated 
15 

for the part of that benefit of which he will be deprived; 

(c) the extent to which the party failing to perform or to 

offer to perform will suffer forfeiture; (d) the likelihood 

that the party failing to perform or to offer to perform will 

cure his failure, taking account of the circumstances 

including any reasonable assurances; [and] (e) the extent 

to which the behavior of the party failing to perform or to 

offer to perform comports with standards of good faith and 

fair dealing. 

Id. at 199. 

Considering these factors, ARI’s denial of Barazi’s claim was a material 

breach. It deprived Barazi of the primary benefit of his homeowner’s insurance—

and has continued to do so for over two and a half years. Barazi was forced to hire 

counsel and initiate a lawsuit in order to seek recovery of a valid claim. And from 

May 13, 2013 until the present, ARI has maintained its denial of the claim even 

though they (1) had the Weather Guidance report before the denial and (2) admit 

that a “careful examination” of the report demonstrates a covered hail event at 

Barazi’s property. ARI’s ongoing denial of coverage is a breach of its duty of good 

faith and fair dealing and, at a minimum, constitutes a material breach of the 

insurance policy. Barazi thus is excused from further performance, including any 

duty to participate in an appraisal. 

V. ARI’s nonwaiver argument should be rejected for several reasons. 

 ARI argues that it cannot be held to have waived appraisal because of a 

nonwaiver provision in its insurance policy. As a threshold matter, this argument 

should be rejected because ARI did not make it below. See R. Tab 1 at 1-7; In re 
16 

Bank of Am., N.A., 01-02-00867-CV, 2003 WL 22310800, at *2 (Tex. App.—

Houston [1st Dist.] Oct. 9, 2003, no pet.) (orig. proceeding) (not designated for 

publication) (“Equity is generally not served by issuing an extraordinary writ against 

a trial court on a ground that was never presented to the court and that the court thus 

had no opportunity to address. Moreover, the standard of review on mandamus is 

whether the trial court clearly abused its discretion. It would be hard to conclude, 

without circumstances that were highly unusual or that made a trial court’s ruling 

void, that a trial court could abuse its discretion in making a ruling for a reason that 

was never presented to the court.”). 

Second, as one appellate court recently held, a non-waiver clause does not 

prevent a finding that an insurer has foregone its right to appraisal where, as here, 

appraisal was merely a contractual option for the insurer (i.e., as opposed to a 

required condition) because foregoing a mere option does not actually constitute a 

change or waiver of any policy provision. See In re Guideone Nat’l Ins. Co., No. 

05-15-00981-CV, 2015 WL 5050233, at *1 (Tex. App.—Dallas Aug. 27, 2015, no. 

pet. h.) (orig. proceeding) (not designated for publication). 

 Third, as this Court has held, a contractual nonwaiver provision can, itself, be 

waived. See Straus v. Kirby Court Corp., 909 S.W.2d 105, 108 (Tex. App.—

Houston [14th Dist.] 1995, writ denied). As such, ARI is incorrect that such a 

provision necessarily precludes any finding of waiver. 
17 

Finally, although cases like In re Acadia Ins. Co. and In re Security National 

Insurance speak in terms of “waiver,” the same result can be reached without that 

term by noting that in cases where an insurer wholly denies coverage, the insurer is 

essentially taking the most extreme position that the parties’ contract simply does 

not apply to any aspect of the claimed loss. But an insurer can’t take the position 

that a contract absolutely doesn’t cover a given situation while simultaneously 

claiming it does cover some aspect of it. At a minimum, such inconsistent positions 

should be treated as an estoppel when invoked to the detriment of the insured, as 

here. See Cleaver v. Cleaver, 140 S.W.3d 771, 774 (Tex. App.—Tyler 2004, no 

pet.) (“Judicial estoppel is a common law principle that precludes a party from 

asserting a position in a legal proceeding inconsistent with a position taken by that 

party in the same or a prior litigation.”). 

CONCLUSION 

ARI’s desire for appraisal on the eve of trial was a delay tactic that should be 

rejected. ARI lost its right to invoke appraisal when it wholly denied coverage. ARI 

also lost its right after unreasonably delaying for more than two and half years. In 

addition, ARI cannot invoke appraisal after its representative confirmed there was 

no dispute as to the amount of loss. Finally, ARI cannot seek to enforce a contract 

provision after its own prior material breach. For these reasons, the Court should 

deny the petition. 

In the alternative, if the Court determines that the any evidence relevant to the 
18 

appraisal issue was not adequately before the trial court, the Court should remand 

for the trial court to consider such evidence before making any final ruling on 

relator’s petition. 

Respectfully submitted, 

HAWASH MEADE GASTON 

NEESE & CICACK LLP 

 /s/ Jeremy Gaston 

Jeremy Gaston 

Texas SBN 24012685 

jgaston@hmgllp.com 

2118 Smith Street 

Houston, Texas 77002 

(713) 658-9001 

(713) 658-9011 (Fax) 

Counsel for Real Party in Interest 

Hussam Barazi 

 
19 

CERTIFICATE OF COMPLIANCE

This brief complies with the length limitation of TEX. R. APP. P. 9.4(i)(2)(B) 

because this brief contains 4,364 words, including the Introduction text on page 1, 

but excluding those parts exempted by TEX. R. APP. P. 9.4(i)(1). 

 /s/ Jeremy Gaston 

Jeremy Gaston 

 
20 

CERTIFICATE OF SERVICE

I hereby certify that a true and correct copy of the foregoing brief was served 

by e-filing and e-service on November 12, 2015 to the following: 

Spence E. Dunn 

State Bar No. 00797848 

4669 Southwest Freeway, Suite 700 

Houston, Texas 77027 

Telephone: 713-559-0705 

Facsimile: 713-481-8768 

sdunn@americanriskins.com 

Kevin F. Risley 

State Bar No. 16941200 

Andrew L. Johnson 

State Bar No. 24060025 

George Arnold 

State Bar No. 00783559 

Thompson, Coe, Cousins & Irons, LLP 

One Riverway, Suite 1400 

Houston, Texas 77056 

Telephone: 713-403-8210 

Facsimile: 713-403-8299 

garnold@thompsoncoe.com 

krisley@thompsonecoe.com 

ajohnson@thompsoncoe.com 

 /s/ Jeremy Gaston 

Jeremy Gaston