Villareal v. Company

Filing 11

OPINION AND ORDER re 8 MOTION to Abate, 10 MOTION to Compel Appraisal. (Appraisal due by 9/27/2021. Status Report due by 1/18/2022, Status Conference set for 1/24/2022 at 09:00 AM before Judge Micaela Alvarez), Deadlines terminated. (Signed by Judge Micaela Alvarez) Parties notified.(JenniferNogueira, 7)

Case 7:21-cv-00145 Document 11 Filed on 09/07/21 in TXSD Page 1 of 7
United States District Court
Southern District of Texas

ENTERED
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
MCALLEN DIVISION
Guadalupe Villareal,
Plaintiff,
VS.
United Property and Casualty Insurance
Company,

September 07, 2021
Nathan Ochsner, Clerk

§
§
§
§
§
CIVIL ACTION NO. 7:21-cv-00145
§
§
§
§

Defendant.
OPINION AND ORDER
The Court now considers Defendant’s motion to abate,1 Plaintiff’s response to Defendant’s
motion to abate,2 and Defendant’s motion to compel.3 Plaintiff has not filed a response to the
motion to compel and the time for doing so has passed, rendering Defendant’s motion unopposed
by operation of this Court’s Local Rule. 4 The motions are now ripe for consideration. After
considering the motions, record, and relevant authorities, the Court GRANTS Defendant’s motion
to compel5 and Defendant’s motion to abate.6
I. BACKGROUND AND PROCEDURAL HISTORY
This is an insurance case.7 In his original petition, Plaintiff Guadalupe Villarreal alleges
that on or about July 25, 2020, his home sustained wind and hail damage during a storm in the
City of McAllen.8 Plaintiff alleges that he reported the claim to Defendant.9 Plaintiff further alleges
1

Dkt. No. 8.
Dkt. No. 9.
3 Dkt. No. 10.
4 LR7.4 (“Failure to respond to a motion will be taken as a representation of no opposition .”).
5 Dkt. No. 10.
6 Dkt. No. 8.
7 Dkt. No. 1.
8 Dkt. No. 2-1
9 Dkt. No. 2-1.
2

1/7

Case 7:21-cv-00145 Document 11 Filed on 09/07/21 in TXSD Page 2 of 7

Defendant sent an independent adjuster to inspect Plaintiff’s home. 10 After inspecting the dwelling,
Defendant alleges that it sent a disposition letter to Plaintiff stating it allowed $471.11 in
damages.11 On December 11, 2020, Plaintiff sent Defendant a Demand Letter and included an
estimate which totaled $50,751.81.12 On February 12, 2021, Plaintiff filed suit in the 332nd District
Court of Hidalgo County, Texas.13 Plaintiff seeks monetary relief for contractual and extracontractual causes of action arising out of a claim for home damage. 14 Subsequently, on April 14,
2021, Defendant filed a notice of removal to this Court based on diversity jurisdiction.15 The Court
then issued a scheduling order for this case on May 12, 2021, setting the deadline for discovery on
February 1, 2021.16
On June 23, 2021, Defendant made a written demand for appraisal pursuant to the terms of the
Homeowner’s Insurance Policy (“the Policy”) issued to Plaintiff.17 Plaintiff’s deadline to respond
to the appraisal demand was 20 days after issuance, on Tuesday, July 13, 2021.18 Defendant alleges
Plaintiff did not respond to Defendant’s appraisal demand. 19 The Policy contains an appraisal
provision that allows either party to the contract to invoke the appraisal process in the event there
is disagreement in terms of the “amount of loss.”20 The provision states, “[i]f you and we fail to
agree on the amount of loss, either may demand an appraisal of the loss. 21 In this event, each party
will choose a competent and impartial appraiser within 20 days after receiving a written request

10

Id.
Dkt.
12 Dkt.
13 Id.
14 Dkt.
15 Id.
16 Dkt.
17 Dkt.
18 Dkt.
19 Dkt.
20 Dkt.
21 Id.
11

2/7

No. 10.
No. 2.
No. 1.
No. 7.
No. 10-1.
No. 10-3.
No. 10.
No. 10-2.

Case 7:21-cv-00145 Document 11 Filed on 09/07/21 in TXSD Page 3 of 7

from the other.”22 Prior to the end of the twenty days, on June 29, 2021, Defendant filed its motion
to abate, and Plaintiff filed his response on July 12, 2021.23 After the twenty day deadline,
Defendant filed the motion to compel on July 21, 2021.24 Therein, Defendant requests the Court
to compel participation from Plaintiff in the appraisal process. 25 The Court now turns to its
analysis.
II. D ISCUSSION
A. Jurisdiction
Under 28 U.S.C. §1332, " the matter in controversy must exceed the sum or value of
$75,000," and the parties are "citizens of different states." 26
Here, Plaintiff, Guadalupe Villareal, is domiciled in Hidalgo County, Texas, and was
domiciled there at the time this action commenced. 27 Defendant, United Property and Casualty
Insurance Company, is a corporation incorporated under the laws of the State of Florida, having
its principal place of business in St. Petersburg, Pinellas County, Florida.28 Furthermore, Plaintiff
seeks damages of over $200,000. Accordingly, because Plaintiff and Defendant are diverse in
citizenship and the amount in controversy exceeds $75.000.00, the Court has subject matter
jurisdiction.

22

Dkt. No. 10-2.
Dkt. No. 8 & 9.
24 Dkt. No. 10.
25 Id.
26 28 U.S.C. §1332.
27 Dkt. No. 1.
28 Id.
23

3/7

Case 7:21-cv-00145 Document 11 Filed on 09/07/21 in TXSD Page 4 of 7

B. Legal Standard
I.

Motion to Compel

In Defendant’s motion, Defendant requests that the Court order Plaintiff to participate in
the appraisal process pursuant to the Policy issued to Plaintiff. 29 In support, Defendant argues that
Plaintiff did not respond to Defendant’s appraisal demand within the allotted 20 days. 30
Appraisal clauses in Texas insurance policies have long provided a mechanism to resolve
disputes between policy holders and insurers about the amount of loss for a covered claim. 31
Because federal jurisdiction in this case is invoked on the basis of diversity of citizenship, 32 this
Court, Erie-bound, applies the substantive law of the state of Texas.33 Absent a decision by Texas’s
highest tribunal, the decisions by Texas courts of appeals control “unless [the Court] is convinced
by other persuasive data that the highest court of the state would decide otherwise.”34 The Texas
Supreme Court has held that appraisal clauses in insurance contracts are enforceable, and that a
trial court abuses its discretion if it fails to enforce an appraisal provision.35 While courts have
some discretion as to the timing of the appraisal, they have no discretion to ignore a valid appraisal
clause entirely.36 Furthermore, an appraisal clause “binds the parties to have the extent or amount

29

Dkt. No. 10.
Id.
31 In re Universal Underwriters of Texas Ins. Co., 345 S.W.3d 404, 406-07 (Tex. 2011).
32 Dkt. No. 1.
33 See Homoki v. Conversion Servs., Inc., 717 F.3d 388, 396 (5th Cir. 2013); Exxon Co. U.S.A, Div. of Exxon Corp. v.
Banque De Paris Et Des Pays-Bas, 889 F.2d 674, 675 (5th Cir. 1989); Erie R.R. Co. v. Tompkins, 304 U.S. 64
(1938).
34 Exxon Co. U.S.A, Div. of Exxon Corp., 889 F.2d at 675 (quoting West v. AT&T, 311 U.S. 223, 237 (1940)).
35 In re Allstate County Mutual Insurance Company, 85 S.W.3d 193, 195 (Tex. 2002).
36 Id.
30

4/7

Case 7:21-cv-00145 Document 11 Filed on 09/07/21 in TXSD Page 5 of 7

of the loss determined in a particular way.”37 “Unless the ‘amount of loss' will never be
needed…appraisals should generally go forward without preemptive intervention by the courts.” 38
Here, the Policy issued to Plaintiff states that:
[I]f you and we fail to agree on the amount of loss, either may demand an appraisal
of the loss. In this event, each party will choose a competent and impartial appraiser
within 20 days after receiving a written request from the other. 39
Since both parties have continuously disagreed on the amount of loss incurred by the storm,
Defendant argues the appraisal process is needed.40 On June 23, 2021, Defendant sent Plaintiff a
letter invoking the appraisal process and requesting that Plaintiff establish an appraiser. 41 Plaintiff
failed to respond within the 20 days allotted by the appraisal provision in the Policy issued to
Plaintiff.42 On this basis, Defendant’s requests that Plaintiff be compelled to participate in the
appraisal process. Plaintiff has not responded to this motion, rendering it unopposed. 43 For the
foregoing reasons, the Court finds Defendant’s motion warranted.
Accordingly,

the Court GRANTS Defendant’s motion to compel44 appraisal and

ORDERS Plaintiff to choose a competent and impartial appraiser by Monday, September 27,
2021.

37

State Farm Lloyds v. Johnson, 290 S.W. 3d 886, 888-89 (quoting In re Allstate County Mut. Ins. Co., 85 S.W. 3d
193, 195 (Tex. 2002)); see also Lundstrum v. United Servs. Auto. Ass'n-CIC, 192 S.W.3d 78, 87 (Tex. App.—
Houston [14th Dist.] 2006, pet. denied) (“The effect of an appraisal provision is to estop one party from contesting
the issue of damages in a suit on the insurance contract, leaving only the question of liability for the court.”).
38 Id. at 895.
39 Id.
40 (An appraisal provision within an insurer’s contract is to be enforced when parties disagree to the amount of loss ).
41 Dkt. No. 10-1.
42 Dkt. No. 10.
43 LR7.4 (“Failure to respond to a motion will be taken as a representation of no opposition .”).
44 Dkt. No. 10.

5/7

Case 7:21-cv-00145 Document 11 Filed on 09/07/21 in TXSD Page 6 of 7

II.

Motion to Abate

Defendant also filed a motion to abate. 45 Therein, Defendant requests that the Court enter
an order abating discovery until further order of the Court pending completion of appraisal.46 In
support, Defendant argues that the appraisal process will establish the amount of loss and that the
completion of the appraisal process will likely resolve or at least narrow the breach of contract and
extra-contractual claim.47 In Plaintiff’s response, he requests that Defendant’s motion to abate be
denied.48 In support, Plaintiff argues that abatement would prevent Plaintiff from pursuing factual
support through discovery to prove his “unfair settlement practices” claims and that an appraisal
award does not, by itself, entitle insured or insurer to judgement in its favor. 49 However, abatement
will not prevent Plaintiff from pursuing discovery following the completion of the appraisal
process. Furthermore, “the power to stay proceedings is incidental to the power inherent in every
court to control the disposition of the causes on its docket with economy of time and effort for
itself, for counsel, and for litigants.”50 In light of the foregoing and the Court’s grant of the motion
to compel, the Court finds abatement warranted.
Accordingly, the Court GRANTS Defendant’s motion to abate51 and STAYS all discovery in
this case until completion of the appraisal process.

45

Dkt. No. 8.
Dkt. No. 8.
47 Id.
48 Dkt. No. 9.
49 Id.
50 Landis v. N. Am. Co., 299 U.S. 248, 254 (1936).
51 Dkt. No. 8.
46

6/7

Case 7:21-cv-00145 Document 11 Filed on 09/07/21 in TXSD Page 7 of 7

III. CONCLUSION AND HOLDING
For the foregoing reasons, the Court GRANTS Defendant’s unopposed motion to compel52
and ORDERS Plaintiff to choose a competent and impartial appraiser by Monday, September 27,
2021. Furthermore, the Court GRANTS Defendant’s motion to abate53 and STAYS all discovery
in this case until completion of the appraisal process. A status conference is set for Monday,
January 24, 2022 at 9 a.m. The parties shall file a status report by January 18, 2022.
IT IS SO ORDERED.
DONE at McAllen, Texas, this 7th day of September 2021.
___________________________________
Micaela Alvarez
United States District Judge

52
53

Dkt. No. 10.
Dkt. No. 8.

7/7