The Fords rejected this supplemental payment, too, causing United to invoke the appraisal provision of its policy on January 18, 2018.

Two months later, the Fords sent United pre-suit notice under the Deceptive Trade Practices Act (“DTPA”) and the Texas Insurance Code.

In response, United invoked its appraisal right again on May 3, 2018.

On May 22, 2018, the Fords filed claims against United for breach of contract, violations of the Texas Insurance Code, and violations of the DTPA.

United asked the district court for permission to file a motion to compel appraisal on December 7, 2018. The district court granted United the right to file a motion to compel appraisal on January 3, 2019.

United subsequently asked the district court to compel appraisal and to abate the proceedings pending completion of the appraisal.

In response, the Fords contended that United had waived its right to demand appraisal under their policy because United had filed its motion to compel “232 days” after they had filed their lawsuit and, by that time, litigation was “well under way.”

The United Policy

The United policy provided:

If 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. 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 court of record in the state where the “residence premises” is located. The appraisers will separately set the amount of loss. If the appraisers submit a written report of an agreement to us, the amount agreed upon will be the amount of loss. If they fail to agree, they will submit their differences to the umpire. A decision agreed to by any two will set the amount of loss.

The District Court's Decision

The district court granted United's motion.

In its decision, the district court explained that United had “consistently invoked its right to appraisal” since the parties reached an impasse in their claim negotiations on December 5, 2017. According to the district court, the fact that United had not actually filed its motion to compel until 232 days after the Fords filed their lawsuit was “irrelevant.”

The district court reasoned that determining whether a party had waived its right to appraisal required “an examination of the circumstances and the parties' conduct, not merely a measure of the amount of time involved in seeking appraisal.”

The district court found that United had “consistently asserted its appraisal right over the life of this dispute,” asserting its appraisal right once it became clear that the Fords were not willing to accept the supplemental payment; invoking appraisal after it received the pre-suit notice; and filing a letter with the district court after the Fords filed their lawsuit asking for permission to file a motion to compel appraisal.

In the district court's opinion, United could “not reasonably be characterized as having acted in a way that induced the Fords to believe that compliance with the terms and requirements of the appraisal clause was not desired.”

Moreover, the district court continued, even if it were true that United had waited too long to formally file a motion to compel appraisal, the Fords had to show that they had been prejudiced. The district court found no prejudice in this case, given that the policy gave “both sides the same opportunity to demand appraisal.”

The district court concluded that the Fords would not be prejudiced by being compelled to participate in appraisal and, therefore, United's appraisal right had not been waived.

The case is Ford v. United Property & Casualty Ins. Co., No. 3:18-CV-00182 (S.D. Tex. March 18, 2019). Attorneys involved include: For Benjamin Ford, Jill Ford, Plaintiffs: Andres Alejandro Arguello, LEAD ATTORNEY, Arguello Law Firm, Houston, TX. For United Property & Casualty Insurance Company, Defendant: Rhonda J Thompson, LEAD ATTORNEY, David Thomas Khirallah, Thompson Coe et al, Dallas, TX; Drew Austin Jones, Thompson, Coe, Cousins & Irons, LLP, Dallas, TX.