NO. 07-07 -021 1-CV IN THE CO UR T OF APPEA LS FO R THE S EVEN TH D ISTRI CT O F TEXAS

AT AM AR ILLO PAN EL A JU LY9, 2007

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___ IN RE ACADIA INSURANCE COMPANY

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______ Before CAMPBE LL a nd HANCOCK an d PIRT LE, JJ. OPIN ION Rel ator , Ac adi a Ins urance Compan y ( Acad ia) , pet it ion s t his C our t t o g ra nt a w ri t of ma nda mu s directing the Hono rable Ruben Rey es, presiding judge of the 72 Distri ct Court

nd of Lubboc k C ounty , t o ent er an o rd er

to 1) g ra nt A cadi a’s moti on to i nv oke apprais al, 2) grantAcadia ’s plea in ab at e m ent , and 3) v acat e it’s order on rea l party in interest ’s, Bemov e, LL C (B emov e) , moti on to co mpel depos it ion and to precl ude app ra is al. W e deny the reli ef req uest ed. Back g ro und Acad ia prov ide d proper ty i nsurance to Bemov e under a pol icy w it h an inc epti on dat e of Apri l 1, 20 05. Bemov e al leg es it suff ered hai l damag e to the roofs of two s tr uct ures c o ve re d b y t h e p o li c y o n M a y3 1 , 2 0 0 5

. Ac c o rd in gl y, o n S e p t e m b e r 1 2 , 2 0 0 5 , Be m o ve f iled a claim w ith Acad ia. In a lette r da ted De cem ber 28, 2 005 , Acad ia den ied Be mo v e’sT EX . B US . & C O MM . C OD E A NN . Chap t. 17 (Vernon Supp . 200 6). 1 2 cl aim sta ti ng thatthe hai l damag e pre- dated the i ncept ion date of the p oli cy . Bemov e fil ed suit on August 26 , 200 6 alleging breach of contract , breach of

duty of g ood faith a nd fair deal ing and DTPA v iol ati ons. On Apr il 4, 2007, Bemov e filed a moti on to compel 1 depos it ion s a nd precl ude app ra is al. On Apr il 6, 20 07, A cadi a fil ed a moti on to i nv oke the apprais al cl ause of the i nsurance pol icy and a pl ea i n abat ement. The tr ial co urt hea rd the oppos ing moti ons re g ardin g the appraisa l o n A p ri l 13, 2 007. The tr ial co urt den ied Acad ia’ s motion s and granted the reli ef req uest ed by Bemov e. It is from t hese ru li ng s t hat A c a d i a b r i n g s t h i s p e t i t i o n fo r m a n d a mu s re l i e f. Standa rd of Rev iew M a n d a mu s w i l l i s s u e on l y to co r re c ta c l e a r

ab u s e o f d i s c re t i o n o r

t h e v i o l a t i o n o f a dut yimp os ed b y

l aw w he n th ere i s n o ot he r a de q ua te rem ed y

a t l aw . W al k er

v . Pa c k er , 827 S. W .2d 8 33, 8 39 (Tex

. 1992, or ig . proceed ing ). Thi s i s a n extremely heavy burden on re la to r. Can a d ia n He lic o p te rs, Lt d . v. W it ti g, 8 7 6 S. W .2 d 30 4 , 3 0 5 (T e x. 19 9 4 , o rig. proceed ing ). To es tabl is h an abuse of dis creti on, t he c omplai nin g par ty mustdemons trate that the tr ial courtacted unrea sonab ly , arbi trar il y , or w it hout reference to g uid ing r ule s a nd p ri n ciples. See Dow ner v . Aquam arine Operato rs, Inc., 701 S.W .2d 238 , 241 -42 (T e x. 1985)

. An app ell ate c our t may not re sol v e factual di sput e s in a n or ig ina l mandamus proceed ing

. See H ooks v . Four th Cou rtof Appeal s, 808 S. W .2d 5 6, 60 ( Tex . 199 1) ( ci ti ng Brady v. Fourteent h Cour

t of Appeals , 795 S.W .2d 7 12, 7 14 ( Tex .1990) ); In re Jo nes, 978 S.W .2d 6 48, 652 (Tex .App. –Amar il lo 1998, or ig

. proceed ing ). W hen the is sues before t he3

trial court require a fa ctua l dete rmina tion, an app ellate co urt abu ses its discretion w hen it re sol v es those i ss ues in an or ig ina l mandamus proceed ing

. H ooks , 808 S.W .2d a t 60. Nei ther may w e s ubst it ute o ur

j udg ment abo ut d isputed factual i ss ues for th at of the tr ial cour t unl ess the re lat or

ca n establ is h that the tri al cour t c oul d hav e reason abl y onl y reache d one dec is ion and that the tr ial co urt’ s d eci si on i s a rb it ra ry and unreason abl e. W alk er , 827 S.W .2d at 839 -40. But , a trial court has no discretion i n det ermin ing w hatthe law is or i n appl y ing the law

to the fact s. Id. at 840. Fail ure to eit her co rrect ly anal yz e or

appl y the law w il l cons ti tute an abus e of di sc re ti on. Id. Ana ly sis The record of the hear ing on the compet ing moti ons prov ide s t he bas is to deter mine w het her or notthe trial court abu sed its d iscretion. Acad ia cont end s t hatt he issue before the t ri al cour

t w as si mply

a matter of l aw , w hereas, Bemov e c ontends thatthe tr ial co urt w as re q uired to make a factual dete rmi nati on and then a l eg al conc lus ion bas ed upon the factual findi ng . Both par

ti es cont end the is sue of w aiv er of t he ri g ht of apprais al is the cont ro ll ing is sue in the cas e . W e n o te that w aiv er i s a n aff ir mati v e defense that can be as ser ted ag ain st a par

ty w ho i ntent ion all y

reli nq uis hes a k now n r ig ht or eng ag es in int enti onal condu ct inc onsi ste nt w it h c lai ming that ri g ht. Tenneco , I nc. v . En ter pr is e Prods. C o., 925 S.W .2d 6 40, 6 43 ( Tex . 199 6)

. A w aiv abl e r ig ht mayspri ng from t he l aw or from a cont ra ct. Id. The q uest ion of int ent t o w aiv e the r ig ht i s t he k ey in qui ry. Rod ri g uezv . C las si cal Cus tom H omes, Inc ., 176 S. W .3d 9 28, 9 32 ( Tex .App. –Da ll as 2005, n o p e t. ). W hether w aiv er has oc cur re d i s a q uest ion of fact for the t ri er of fact. Id.4

Al l matters w ere s ubmitted t o the t ria l co u rta t the hear ing on A pr il 13, 2007. The re cord of thathear ing rev eal s that Bemov e w as cl ear ly arg uin g that Acadi a had w aiv ed i ts ri g ht t o demand an apprais al. I n s uppor t of this arg ument, Bemov e submitted a number of ex hib it s. Ex hib it4, a l etter from Ac adi a’s off ic e adj ust er to Bemov e, conc lud es by st ati ng that Acad ia’ s in sp e ct io n rev eal ed “ no appa re nt da mag e to the b uil din g [‘ s] tw o roofs from w ind /hai l w it hin the pol icy p e rio d o f this pol icy . . . .” Ex hib it5, a l etter to Bemov e from Acad ia’s coun sel, dat ed August 17, 2 005 , discussing the a ppra isal se ction o f the insu rance policy in question , is q uite clea r that Aca dia do es no t t h in kthe claim in q uest ion w as a cov ered ev ent a nd, fur ther more, i ndi cat es that Acad ia canno t be re q uired to su bmitthe claim for an ap praisal if there is n o cov erage. Finally , coun sel une quiv ocally state s, in Ex hib it5, thatAc adi a i s not w il li ng to w aiv e its cov erag e i ss ue. Dur ing the arg ument of the compet ing moti ons on Apr il 13, 2005, the t ri al cour t di sc uss ed th e i ss ue of w aiv er at len g th w it h bot h counsel and iti s c lea r from thos e di sc uss ion s t hat t he tr ial co urt w as attempt ing to mak e a fact ual dete rmi nati on abou t w hether Acad ia had w aiv ed it s ri g ht to demand an apprais al by it s Aug ust 17, 2005 letter

. By the g ra nti ng of Bemov e’s moti ons and t he deni al of Acadi a’s moti on, i t is cl ear thatthe tr ial co urt resol v ed th is factual di sput e ag ain st Acad ia. Accordin gly , w e are no t f ree to su bstitu te ou r ju dgme nt for thatof the trial court. W alker, 827 S. W .2d a t 839 -4 0. Acad ia posi ts that the t ri al cour t’ s d eci si on to refuse to order an a ppr a isal i s a n appl ic ati on of the law

to the fact s a nd, t herefore, the t ri al cour t’ s r uli n g w as an abus e of discretion base d up on the cases cited by Acad ia. How ever, Acadia ha s not pro v ided this cour t w it h any

anal y si s o f how , und er

the re cord, w e c oul d hav e reache d only one deci si on,5

tha t Acad ia had not kno w ingly w aived its r ight to require an app raisal. Id. Rathe r, Acadia ’s enti re arg ument i s t hat the del ay in re q uest ing the apprais al w as not s o l ong as to amount to a w aiv er

and that the c our

ts in the S tate of Tex as hav e ro uti nel y g ra nted mandamus ev en w hen t he req uestw as made after su ithad been fil ed. B o th of the se posi ti ons maybe correct, ho w ever, neithe r position answ ers the w aiver allegation asserte d by Bem ove. It is cl ear thatdeny ing co v erag e under an i nsurance pol icy

does , i n fact, w aiv e the r ig ht of the ins urer t o r e que st an a pprais al. Amer ic an C ent. Ins . C o. v . Ter ry , 26 S.W .2d 1 62, 1 66 (Te x .Com m. App . 193 0, ho lding approved). Th at th is p rincipal w as und erstoo d by Acad ia is ev ide nced in the record b y A cadi a’s co unsel adv is ing Bemov e tha t Ac adi a c oul d not ag re e to an apprais al becau se itdi d notw ant t o w aiv e i ts cov erag e i ss ue. The ex hib it s referred to abov e cl ear ly demonst ra te that Acad ia w as aw are of its r ig ht to req uire an apprais al. The t ri al cour t had before itev ide nce that Acad ia int enti onal ly and uneq uiv ocal ly

reli nq uis hed t he r ig ht s o that it coul d chal len g e cov erag e and, thus , w aiv ed that ri g ht. Tenneco , I nc. , 925 S.W .2d a t 643

. Therefore, A cadi a has fail ed to es tabl is h i ts rig ht to man dam us relief beca use it ha s failed to show tha t the trial court could reason ably hav e reache d onl y

one deci si on. W alk er , 827 S.W .2d a t 839 -4 0. A cc ordin g ly , t he tr ial cour t’ s a cti on w as not a cl ear abus e of di sc re ti on. As sta ted a bov e, A cadi a pos it s t hat t he acti on of the tr ial cour t w as a c lea r abuse of dis creti on becaus e the tri al cour t misapp li ed the law

to the fact s. Ac cordin g ly , Ac adi a has ci ted u s t o a n umber

of Tex as cas es w hic h, on their face, all seem to hold that the d eni al of a request for an appraisal w hen the insu rance contractinclude s an ap praisal clause is an a buse of

discretion. See In re Allstat e Coun ty Mut. Ins. Co., 85 S.W .3d 193 (Tex. 2002 );6

Scotti sh Uni on & Nat ’l Ins . C o. v . C lan cey , 83 Tex . 113 , 18 S.W . 439 ( Tex . 189 2) ; J ohnso n v . Stat e Farm L loyds, 204 S. W .3d 897 (T ex.App. –Dallas 200 6, pet

. f iled); In re Sta te Farm Lloyds, Inc., 170 S.W .3d 629 (Tex.App .–E l Paso 20 05, orig . procee ding); Va n gua rd Unde rw riters Ins. Co. v . Sm ith, 99 9 S.W

. 2 d 448 (Tex.App .–A ma rill o 19 99, no pe t.). How ever, a close read ing of t he facts an d ho ldings of each of these cases reveals that e ach is ei ther factual ly or l eg all y di sti ng uis habl e from t he q uest ion before us. In t he c ase of In re Al ls tate Ins . C o., the i ss ue w as the t ri al cour t’ s l eg al deter minat ion that the a pprais al cl ause w as in fact an ar bit ra ti on c lau se and, therefore, not e nforce abl e. In re Allstate Ins. Co., 8 5 S.W .3d at 194 . Th e T exas Suprem e Court he ld tha t the t rial court faile d to anal yz e or

appl y the law co rrect ly

and, as su ch, abuse d it s dis creti on. Id. at 19 5. In t he Sc otti sh Uni on c ase, the Tex as Supreme C our t w as n o t d e a lin g w it h a mand amus is sue, rather

i t w as address ing a j ur y findi ng thatthe ins urance co m p a n y had w aiv ed i ts ri g ht t o demand compl ian ce w it h the apprais al secti on of the c ontract

. Scotti sh Uni on,18 S.W . at 44 0. Add itiona lly , the facts of thatcase clearly dem onst rate th at th e evidence did not s uppor

t a w aiv er of the r ig ht t o an apprais al by the ins urance company . Id. Jo hnson w as an appe al from the g ra nti ng of a s ummary judg ment in fav or

of Stat e F ar m. J ohnso n, 204 S.W .3d at 898-99

. Accordin gly , the stand ard of rev iew w as de nov

o and not an abu se of dis creti on s tandard. Id. F urther , t he i ss ue dec ide d by the cour t w as the appli cat ion of the a pprais al prov is ion w hen the content ion w as extent or amount of los s. Id. at 903. The issue of w aiver of

the ap praisal rig ht w as no t before the court. In In re State Farm Lloyds, the t ri al cour

t had deni ed a re q uestfor a n apprais al based upon the i nsured’ s a rg ument t hat the com pan y

had w aived its r ight to an ap praisal. How ever, the El Paso Court of Appe als7

found that the i nsure d h a d not offered any ev ide nce to s uppor

t her as ser ti on th at t he insuran ce com pan y

inten tiona lly

relinquishe d its right to seek an app raisal. I n re Stat e Farm Lloyds, 170 S.W .3d at 634 . Accordingly , the court con dition ally grante d Sta te Farm Lloyds’s peti ti on for w ri t of mandamus

. In t he Van g uard U nder w ri ters c ase, there w as no factua l dis p u te a b o ut w hether the ins urance company w aiv ed i ts ri g ht t o enforc e the apprais al provisi o n o f

t he p olicy , rathe r the on ly q uest ion be fore the court w as w het her Va nguard prese nte d an app el late reco rd suf f icient to supp ort its man dam us request. Va nguard Unde rw riters, 999 S

. W

. 2 d a t 450 . W e con clude thateach of these cases are dis ti ng uis habl e from t he presentca se and are notco ntroll ing on t he i ss ues present ed. C oncl usi on Base d up on th e record, w e can notsaythatthe trial court ab used its discretion in re fusing Ac adi a’s req uestfor a n apprais al. Ac cording ly , t he req uestfor mand amus reli ef is deni ed.

Mackey K. Hancock Justice