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by Austin Taylor

In re SureChoice Underwriters Reciprocal Exch., involved a claim for hail and wind damage to the insured’s (“Glasper”) residence. 702 S.W.3d 876, 878 (Tex. App.—Houston [1st Dist.] 2024, no pet. h.) The carrier (“SureChoice”) investigated the loss but determined the damage from the storm fell below Glasper’s deductible. Id. Glasper subsequently retained her own adjuster who found significantly more damage from the storm which exceeded Glasper’s deductible. Id. After being advised of these findings, SureChoice retained an engineer to reinspect Glasper’s property. Id. The engineer affirmed SureChoice’s initial opinion, finding no additional storm-related damage. Id. SureChoice advised Glasper of the engineer’s findings and denied coverage for the additional claimed damages citing various policy exclusions. On October 24, 2023, Glasper issued a demand letter to SureChoice for the balance of her adjuster’s estimate. Id. On November 3, 2023, SureChoice rejected Glasper’s demand and invited Glasper to provide “information [that] has not been previously reviewed by the carrier for consideration.” Id. Glasper did not provide any additional documents, opting instead to file suit on February 26, 2024. Id. at 880.

After the initiation of litigation, SureChoice promptly invoked appraisal. The day after suit was filed—February 27, 2024— SureChoice sent a letter to Glasper invoking and demanding appraisal under the Policy and designating its appraiser. Id. Glasper responded by email on March 12, 2024, stating without explanation or elaboration, “[w]e do not agree with appraisal.” Id. SureChoice then filed an Answer and an Opposed Motion to Compel Appraisal and to Abate. Glasper filed a response arguing that because SureChoice had not invoked appraisal within the 60-day statutory notice period following her demand letter, SureChoice “effectively [had] waived its right to do so.” Id. Glasper also argued that because “the crux of the case” involves matters of causation, and “[a]ppraisal is useful to resolve a gap between coverage positions of the two parties,” an appraisal here “is simply not necessary” because “[it] does not resolve causation issues.” Glasper argued that because causation issues were implicated SureChoice could simply reject the appraisal award “result[ing] in a complete waste of time and money for the parties . . . .”

The trial court denied SureChoice’s Motion to Compel Appraisal. And SureChoice filed a Motion to Reconsider. Id. The trial court also denied the Motion to Reconsider, leading SureChoice to seek mandamus relief.

On review, the Houston First Court of Appeals concluded that mandamus relief was an appropriate remedy. First, the Court rejected Glasper’s argument that SureChoice waived its right to invoke when it denied Glasper’s claim. Id. at 883–885. The Court noted that the policy required any waiver to be in writing and SureChoice’s communications to Glasper had always reserved its rights under the policy. Id. at 882. Further, at least some damages at issue (those that fell below Glasper’s deductible) were covered under the policy. Accordingly, SureChoice denial was not based solely on a coverage issue and appraisal was appropriate. Id. at 882–883.

Next, the Court addressed Glasper’s argument that SureChoice waived its rights to invoke appraisal because it did so after Glasper filed suit. The Court again rejected Glasper’s argument. First, the Court noted that the Policy language allowed either party to invoke appraisal, “[t]hus, because the right of appraisal is mutual, Glasper’s decision to file suit did not compromise SureChoice’s contractual right to invoke its appraisal right.” Id. Further, the Court acknowledged that there is no authority in Texas that requires an appraisal to be invoked prior to suit being filed. Id. at 885. Finally, as Glasper did not argue she was be prejudiced in any way by SureChoice’s purported delay invoking appraisal till after suit was filed the record did not support a waiver by SureChoice of its appraisal rights. Id.

The Court of Appeal’s decision to grant mandamus relief to compel appraisal was correct and well-reasoned and accurately reflects the current state of Texas law on the issue. While mandamus is an extraordinary remedy only available in a limited set of circumstances, a court’s refusal to enforce an appraisal clause is such a circumstance. As the Texas Supreme Court has acknowledged the refusal to enforce an appraisal clause is an abuse of discretion that cannot be remedied by appeal. In re Universal Underwriters of Tex. Ins. Co. . 345 S.W.3d 404, 406–07 (Tex. 2011) (orig. proceeding).