Miller v. Allstate Texas Lloyd's et al

Filing 26

ORDER STRIKING 22 MOTION to Compel Appraisal, Abate Litigation and Extend Deadlines, GRANTING 20 MOTION to Compel Appraisal, DENYING AS MOOT 19 MOTION Compel Inspection Subject to Appraisal Demand. This cause of action is STAYED and a dministratively (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
HOUSTON DIVISION
MICHAEL MILLER,
Plaintiff,
v.
ALLSTATE TEXAS LLOYD’S, et al.,
Defendants.

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CIVIL ACTION H-17-1684

ORDER
Pending before the court is defendant Allstate Texas Lloyd’s (“Allstate”) motion to compel
appraisal and abate proceedings and motion to compel inspection.1 Dkts. 19, 20. Having considered
the motions, response, reply, and applicable law, the court is of the opinion that the motion to compel
appraisal should be GRANTED and the motion to compel inspection should be DENIED AS
MOOT.
I. BACKGROUND
This case arises from damage to plaintiff Michael Miller’s property during a storm in April
2016. Dkt. 1-2 at 3. Miller and Allstate disagree about the amount of loss to the property. Id. at
4–5. According to Allstate, “the covered loss fell below the deductible.” Dkt. 20 at 2. Miller argues

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Allstate filed its motion to compel appraisal and abate proceedings on March 16, 2018. Dkt.
20. Then, Allstate filed a substantially similar motion to compel appraisal and abate litigation on
April 3, 2018. Dkt. 22. That same day, Allstate also filed its reply to the original motion to compel
appraisal (Dkt. 20). Dkt. 23. The court finds no substantive difference between Allstate’s first and
second motion. And because the court grants the first motion, the second is rendered moot. Further,
the second motion is not accompanied by a proposed order, which violates this court’s procedures.
See Judge Miller’s Procedures ¶ 6(A)(3). Accordingly, the court STRIKES Allstate’s second motion
to compel appraisal (Dkt. 22).

that the property suffered $23,446.51 in damages. Dkt. 1-2 at 5. The insurance policy addresses
these types of disputes and provides:
If you and we fail to agree on the actual cash value, amount of loss[,] or the cost
of repair, either can make a written demand for appraisal. Each will then select
a competent, independent appraiser and notify the other of the appraiser’s identity
within 20 days of receipt of the written demand. The two appraisers will choose
an umpire. If they cannot agree upon an umpire within 15 days, you or we may
request that the choice be made by a judge of a district court of a judicial district
where the loss occurred. The two appraisers will then set the amount of loss,
stating separately the actual cash value and loss to each item.
If the appraisers fail to agree, they will submit their difference to the umpire. An
itemized decision agreed to by any two of these three and filed with us will set
the amount of the loss. Such award shall be binding on you and us.
Each party will pay its own appraiser and bear the other expenses of the appraisal
and umpire equally.
Dkt. 20-1 at 31–32.
On March 8, 2018, Allstate made a written demand for appraisal. Dkt. 20-2. Miller did not
comply with the appraisal requirements in the policy. Accordingly, Allstate first filed a motion to
compel inspection of the property. Dkt. 19. Then, Allstate filed a motion to compel appraisal and
abate the case.2 Dkt. 20. Miller 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

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Allstate acknowledges that the motion to compel inspection “would be rendered moot if the
appraisal motion is granted.” Dkt. 20 at 5. Thus, the court will consider the motion to compel
appraisal first.
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of the loss. Dkt. 20-1 at 31–32. 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, Miller argues that the court should not compel appraisal and abate the case
because: (1) he has the right to prove other elements of his claims regardless of the appraisal; and
(2) he would be prejudiced by requiring appraisal at this time.3 Dkt. 21.
Miller argues that he has the right to conduct discovery in order to prove his other contract
claims and extra-contractual claims. Dkt. 21 at 3. The court agrees that all of Miller’s claims will
not necessarily be resolved through the appraisal process. But appraisal is likely to narrow, if not
resolve, Miller’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, Miller 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 3 (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,
the case should be abated if the court compels appraisal.
Miller, in making a waiver argument, also asserts that he will be prejudiced by appraisal
because Allstate waited so long to invoke the appraisal clause. Dkt. 21 at 4. “Waiver requires intent,
either the ‘intentional relinquishment of a known right or intentional conduct inconsistent with

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While not explicitly worded as such, Miller essentially makes an argument that Allstate
waived its right to appraisal by waiting too long to invoke the right. Dkt. 21 at 4–5.
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claiming that right.’” In re Gen. Elec. Capital Corp., 203 S.W.3d 314, 316 (Tex. 2006) (quoting Sun
Expl. & Prod. Co. v. Benton, 728 S.W.2d 35, 37 (Tex. 1987)). “Waiver is an affirmative defense;
the burden to show waiver is on the party challenging the right to appraisal.” James, 2011 WL
4067880, at *1. “In order to establish waiver . . . a party must show that an impasse was reached,
and that any failure to demand appraisal within a reasonable time prejudiced the opposing party.”
Universal Underwriters, 345 S.W.3d at 412.
Miller fails to meet his burden for two reasons. First, a demand for appraisal must be made
within a reasonable time from impasse, not just mere disagreement. Id. at 409, 412. An impasse is
reached when there is “a mutual understanding that neither [party] will negotiate further.” Id. at 410.
Miller argues that “[t]he impasse occurred prior to Plaintiff filing suits when Defendants determined
that Plaintiff’s home sustained minimal storm damage.” Dkt. 21 at 2. The court disagrees. Texas
courts have rejected the notion that impasse occurs at “the first sign of disagreement.” Universal
Underwriters, 345 S.W.3d at 409. Thus, Miller fails to show when the parties reached an impasse
or that an unreasonable amount of time has passed since that time.
Second, “mere delay is not enough to find waiver; a party must show that it has been
prejudiced.” Id. at 411. As the Supreme Court of Texas noted:
it is difficult to see how prejudice could ever be shown when the policy, like the
one here, gives both sides the same opportunity to demand appraisal. If a party
senses that impasse has been reached, it can avoid prejudice by demanding an
appraisal itself. This could short-circuit potential litigation and should be
pursued before resorting to the courts.
Id. at 412 (emphasis added). Miller had the opportunity to demand appraisal, did not, and now
claims he is prejudiced because Allstate exercised its rights. Miller argues, without any evidentiary
support, that he has incurred significant litigation expense and that expense will be for nothing if the

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court compels appraisal. Dkt. 21 at 5. Miller’s unsupported assertions are insufficient for him to
meet his burden. 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. Allstate’s motion to compel
inspection (Dkt. 19) is DENIED AS MOOT. The court STRIKES Allstate’s second-filed motion
to compel appraisal (Dkt. 22) as set forth in this order. Pursuant to the terms of the policy, Miller
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 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. If the case is reinstated, the parties may then seek an extension on the deadlines
set forth in the court’s current scheduling order.
Signed at Houston, Texas on June 20, 2018.

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Gray H. Miller
United States District Judge

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