Homeowners Claims And Estoppel

The Amarillo Court of Appeals issued an opinion on October 13, 2017, that is a must read for insurance lawyers who handle homeowner claims.  It is styled, Christopher Hall v. Germania Farm Mutual Insurance Company.

This case involves a homeowners policy and damage to Hall’s insured property and Germania’s attempt to adjust the claim.  A lawsuit was filed over the amount of the loss sustained by Hall and eventually Germania invoked the appraisal clause in the insurance contract.  An appraisal was eventually performed and Germania tendered to Hall the appraised amount.  In the lawsuit, Germania invoked the doctrine of estoppel.

A motion for summary judgment was filed by Germania and granted in their favor.

The facts of the case are that a storm did damage to Hall’s home in May 2013.  A claim was made and an adjuster was assigned to assess the loss.  The adjuster evaluated the claim to be approximately $13,000.  In June of 2013, Germania tendered Hall two checks totaling $9,700.  This amount was derived after making adjustments for the deductible and depreciation.  Hall found the amount unacceptable and Germania issued Hall another check for about $1,200 in October 2013.

Hall hired his own adjuster who valued the loss at about $76,600.  Hall then sued Germania by the end of May 2014.  The lawsuit was for breach of contract, violation of the Texas Prompt Pay Act, violation of chapter 541 of the Texas Insurance Code, and violation of the Texas Deceptive Trade Practices Act.

Germania responded to the lawsuit in June of 2014.  Germania did not invoke appraisal until October of 2014.  Germania made this demand for appraisal after accusing Hall of neglecting his own obligation to complete the process before filing suit, even though either party had the right to require it.

The appraisal was finalized on February 12, 2016, when the second of the two appraisers signed it.  Together, they valued the loss at $31,497.  Given that decision, Germania issued a check for $18,566.32 payable to Hall.  The check is dated February 20, 2016, and apparently sent to Germania’s lawyer.  Germania’s lawyer then drafted a letter dated February 25, 2016, to Hall’s lawyer, which purported to enclose the check.  In writing the letter, counsel for Germania brought up a joint motion to dismiss Hall’s lawsuit and conditioned negotiation of the check upon Hall agreeing to dismiss the suit.  Hall did not agree to this condition.

So, there are the underlying facts.  In discussing this case the Court spent time discussing the defense of estoppel that was asserted by Germania.  Ultimately, the Court reversed the summary judgment ruling.  The case is well worth reading for situations where appraisal is demanded by the insurance company.

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