Hail Damage Lawsuit And Abatement

The Northern District of Texas, Dallas Division issued an opinion dealing with hail damage and abatement of the case to compel appraisal.  This is becoming more and more common in hail damage claims.  The case is Nabors v. American Reliable Insurance Company, et al.

This claim arises out of water and hail damage to Nabors home.  The insurance company is American.  It is a declaratory judgment action regarding the scope of the policy’s coverage as well as damages for breach of contract and violations of the Texas Insurance Code against American.  American filed a motion to abate the proceeding and compel appraisal.

In this case, there was also a dispute over whether or not the adjuster assigned to the claim by American was properly joined as a defendant in this lawsuit or whether the joinder was merely an effort to defeat diversity jurisdiction in order to have the case remanded to State Court.  As in other cases in this blog, the examination by the Court was in favor of American.

As to the abatement and motion to compel appraisal, American contends that the lawsuit should be abated until the completion of appraisal because completing an appraisal is a condition precedent to Nabor’s lawsuit.  Under Texas law, an insured’s failure to comply with a condition precedent constitutes grounds for abating the suit.

Here, it is clear that a condition precedent to the instant lawsuit is completing an appraisal.  The policy states, “You can sue us … only if … You have complied with all the terms of the policy.”  The policy requires appraisal if Nabors and American cannot agree to the amount of loss, stating, “If you and we fail to agree on the amount of loss, either one can ask that the amount of loss be set by appraisal.”  The parties do not appear to dispute that the appraisal process was requested and has not been completed.  Therefore, because Nabors has not yet met a condition precedent prior to suing American, American’s motion to compel appraisal and abate proceedings is granted.