Last week, the United States District Court for the Eastern District of Texas granted an insured’s motion to compel appraisal, which was first invoked ten months after suit was filed and three days after the insurer sought summary judgment. In Hamorsky v. Allstate Vehicle and Property Ins. Co., No. 4:19-CV-00084, 2020 WL 1929420 (E.D. Texas, April 21, 2020, mem. op.), Jennifer Hamorsky’s home sustained wind and hail damage.  Hamorsky presented a claim under her homeowners’ insurance policy with Allstate Vehicle and Property Insurance Company (“Allstate”). Allstate investigated the claim and paid Hamorsky $31,614.47 for the loss.  However, Hamorsky, relying on an independent contractor, believed she was entitled to $51,043.27.

In January 2019, Hamorsky filed suit against Allstate.  In June 2019, the court referred the case to mediation and entered an amended scheduling order, with trial to occur in March 2020. In September 2019, the parties notified the court that mediation resulted in an impasse.  In October 2019, Allstate filed a motion for summary judgment. Three days later, and ten months after suit was filed, Hamorsky invoked appraisal pursuant to the policy. Allstate opposed appraisal and, consequently, Hamorsky filed a motion to compel appraisal.

Under Texas law, since the policy did not include a time frame in which Hamorsky must request an appraisal, she needed to make the request for an appraisal within a reasonable time from the moment of impasse. “An impasse is reached when it becomes apparent to both sides that they disagree as to the damages and any further attempts to negotiate a settlement is futile. A court is not to measure the point of impasse by considering the first sign of disagreement between the parties because both parties must be aware that future negotiations would be futile. An impasse can exist despite the fact that the parties are engaged in continuing efforts to resolve their dispute, including mediation.” 

Allstate argued that the point of impasse occurred on January 8, 2019—the date the lawsuit was filed—and that Hamorsky waived her right to appraisal by “waiting until the end of litigation and the eve of trial to invoke appraisal.”

The United States District Court for the Eastern District of Texas disagreed, concluding that the parties reached an impasse on September 10, 2019—the date that mediation failed—and that Hamorsky’s approximate one-month delay in invoking appraisal after impasse was not unreasonable, and no waiver was committed. To that end, the U.S. District Court relied on cases concluding five-month and six-month delays from the point of impasse were not per se unreasonable. Further, the court reasoned the there was nothing in the record to evidence that Allstate believed that the parties were at an impasse prior to mediation or that Hamorsky acted in a manner that would constitute waiver prior to mediation. Further, “any argument that Allstate believed that the parties were at an impasse as early as January 8, 2019 was belied by the fact that the parties entered mediation following the filing of [the] suit.” Lastly, “the filing of a lawsuit does not necessarily signify an impasse because the filing of a suit merely demonstrates that one party, the plaintiff, has unilaterally concluded that the parties were at an impasse.” 

In sum, although “appraisal is intended to take place before suit is filed” and “many of the benefits of appraisal are lost if a party is allowed to delay invoking the appraisal”, the U.S. District Court granted Hamorsky’s motion to compel appraisal, first invoked ten months into the lawsuit, because an impasse had not been reached until that time. 

Jump to Page

Necessary Cookies

Necessary cookies enable core functionality such as security, network management, and accessibility. You may disable these by changing your browser settings, but this may affect how the website functions.

Analytical Cookies

Analytical cookies help us improve our website by collecting and reporting information on its usage. We access and process information from these cookies at an aggregate level.