Johnson v. Allstate Vehicle and Property Insurance Company, et al

Filing 26

ORDER GRANTING 20 MOTION to abate and Compel Appraisal. This cause of action is STAYED and administratively (statistically) closed. The parties may move to reinstate the case on the court's active docket at such time in the future as deemed appropriate. Case terminated on 6/20/2018.(Signed by Judge Gray H Miller) Parties notified.(rkonieczny, 4)

United States District Court
Southern District of Texas

ENTERED
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
HOWARD JOHNSON II,
Plaintiff,
v.
ALLSTATE VEHICLE AND PROPERTY
INSURANCE COMPANY, et al.,
Defendants.

§
§
§
§
§
§
§
§
§
§

June 20, 2018
David J. Bradley, Clerk

CIVIL ACTION H-17-1206

ORDER
Pending before the court is defendant Allstate Vehicle and Property Insurance Company’s
(“Allstate”) motion to compel appraisal and abate proceedings. Dkt. 20. Having considered the
motion, response, reply, and applicable law, the court is of the opinion that the motion should be
GRANTED.
I. BACKGROUND
This case arises from damage to plaintiff Howard Johnson II’s property during a storm in
April 2016. Dkt. 1-1 at 9. Johnson and Allstate disagree about the amount of loss and cost of repairs
to the property. Id. at 10–11. According to Allstate, “the amount of damages caused by a covered
peril fell below [Johnson’s] deductible.” Dkt. 20 at 2. Johnson argues that the property suffered
$32,551.73 in damages. Dkt. 21 at 2. The insurance policy addresses these types of disputes and
provides:
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 received. The appraisers will select a competent and
impartial umpire. If 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.

The appraisers shall then determine the amount of loss, stating separately the
actual cash value and the amount of loss to each item. If the appraisers submit
a written report of an agreement to you and to us, the amount agreed upon shall
be the amount of loss. If they cannot agree, they will submit their differences to
the umpire. A written award agreed upon by any two will determine the amount
of loss.
Each party will pay the appraiser it chooses, and equally bear expenses for the
umpire and all other appraisal expenses.
Dkt. 20-1 at 33 (emphasis in orginal).
On February 1, 2018, Allstate made a written demand for appraisal. Dkt. 20-2. Johnson did
not respond to that demand. Accordingly, Allstate filed the instant motion, asking the court to
compel appraisal and abate the case. Dkt. 20. Johnson opposes appraisal and abatement. Dkt. 21.
II. LAW AND ANALYSIS
“The [c]ourt must apply the terms of the insurance contract as it is written.” James v. Prop.
and Cas. Ins. Co. of Hartford, No. H–10–1998, 2011 WL 4067880, at *1 (S.D. Tex. Sept. 12, 2011)
(citing RSR Corp. v. Int’l Ins. Co., 612 F.3d 851, 858 (5th Cir. 2010)). Here, the appraisal clause
clearly and unambiguously grants both the insured and the insurer the right to demand an appraisal
of the loss. Dkt. 20-1 at 33. Under Texas law, appraisal clauses are generally enforceable and have
been upheld as a means for determining loss. In re Universal Underwriters of Tex. Ins. Co., 345
S.W.3d 404, 407 (Tex. 2011); State Farm Lloyds v. Johnson, 290 S.W.3d 886, 889–89 (Tex. 2009).
However, Johnson argues that the court should not compel appraisal and abate the case because: (1)
the appraisal language prejudices his litigation rights; and (2) he has the right to prove other elements
of his claims regardless of the appraisal. Dkt. 21.
Johnson argues that the appraisal language prejudices him because the appraisal clause is not
binding and “allows Allstate to reject any part of the award based on its reservation that no binding
2

policy issues are determined during the appraisal process.” Id. at 3. Johnson is incorrect. The policy
states that if the appraisers agree on the amount of loss, “the amount agreed upon shall be the amount
of loss.” Dkt. 20-1 at 33 (emphasis added). If the appraisers do not agree, they must submit their
differences to an umpire, and “[a] written award agreed upon by any two will determine the amount
of loss.” Id. (emphasis added). Johnson points to no policy provision, and the court is unaware of
one, that allows Allstate to reject the appraisal amount if it disagrees with it.
Johnson also argues that he has the right to conduct discovery in order to prove his other
contract claims and extra-contractual claims. Dkt. 21 at 4. The court agrees that all of Johnson’s
claims will not necessarily be resolved through the appraisal process. But appraisal is likely to
narrow, if not resolve, Johnson’s breach of contract and extra-contractual claims. See Cavazos v.
State Farm Lloyds, No. 7:14–CV–395, slip op. at 2 (S.D. Tex. Mar. 3, 2015). Notably, Johnson
relies on a different order in Cavazos to support the assertion that the case should not be abated even
if the motion to compel appraisal is granted. Dkt. 21 at 4 (citing Cavazos, 2015 WL 8074063, at *4).
But in Cavazos, the court granted a motion to abate proceedings pending appraisal. Cavazos, slip
op. at 2–3 (S.D. Tex. Mar. 3, 2015). According to the court, “[i]f the parties and the Court continue
to proceed on this case, it could ultimately result in wasted time, money, and energy if the appraisal
process resolves the case or significantly narrows the issues.” Id. at 2. The same holds true in the
instant case. Thus, Allstate’s motion to compel appraisal and abate the case is GRANTED.
III. CONCLUSION
Allstate’s motion to compel appraisal (Dkt. 20) is GRANTED. Pursuant to the terms of the
policy, Johnson shall provide Allstate with the name and address of his chosen appraiser within
twenty (20) days from the date of this order. The two appraisers shall agree upon an umpire within

3

fifteen (15) days thereafter. If they cannot agree, the parties may request the court to designate an
umpire.
Further, Allstate’s request to abate the proceedings (Dkt. 20) pending the appraisal is
GRANTED. It is therefore ORDERED that this cause of action is STAYED and administratively
(statistically) closed. The parties may move to reinstate the case on the court's active docket at such
time in the future as deemed appropriate. A copy of this order shall be attached as an exhibit to any
motion to reinstate.
Signed at Houston, Texas on June 20, 2018.

___________________________________
Gray H. Miller
United States District Judge

4