Recently, in EDM Office Services, Inc. v. Hartford Lloyds Insurance Company, 2011 WL 2619069, a federal District Court judge in the Southern District of Texas, Judge Lee Rosenthal, granted Hartford’s motion to compel appraisal in an Ike insurance case.  This suit sought contractual and bad faith damages arising out of alleged nonpayment of an insurance claim for damages supposedly caused to Plaintiff’s business by Hurricane Ike.  The suit is being prosecuted by the Mostyn firm.  After an unsuccessful mediation, Hartford invoked the appraisal provision in the insurance policy.  Plaintiff argued Hartford could not demand appraisal because it failed to comply with the “Claims Handling” provisions of the policy and provisions of the Texas Insurance Code, which Plaintiff asserted were conditions precedent to appraisal.  Disagreeing, the Court noted that compliance with such provisions were not conditions precedent to appraisal.  In addition, Plaintiff argued Hartford’s delay in paying the clam waived appraisal because such delay prejudiced Plaintiff.  Again, the Court disagreed noting Plaintiff was not prejudiced by any such delay.  As such, the Court granted Hartford’s motion to compel appraisal.  The Court further determined that the portion of the case involving coverage issues should continue forward pending appraisal, while it stayed the portion of the case involving all damage valuations.

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