Last Wednesday, the Corpus Christi Court of Appeals determined that a trial court’s appointment of an attorney to serve as umpire in a property damage dispute, was improper, not in compliance with Policy terms and thus, conditionally granted the insurer’s petition for writ of mandamus. In In re State Farm Lloyds, 2023 WL 2029148 (Tex.App. – Corpus Christi, February 15, 2023), the insured and State Farm were unable to reach an agreement over the amount of damage to the insured residence caused by a July 25, 2020, hurricane. The insured invoked appraisal under the Policy, but the two appraisers were unable to agree on the amount of loss or on an umpire. So, the insured petitioned the trial court to appoint an umpire. State Farm responded to the request arguing that it was “procedurally improper” and that the umpires recommended by the insured lacked the training and experience required by the Policy. Following a hearing, the trial court appointed Derek Salinas, an attorney to serve as umpire and then rejected State Farm’s motion to reconsider. State Farm then filed a petition for writ of mandamus with the Corpus Christi Court of Appeals.

The Court of Appeals carefully analyzed Texas case law on policy appraisals and the policy language at issue in this case which required in part that to qualify as an umpire, they must be either an engineer, architect, an adjuster or public adjuster, or a contractor “with experience and training in the construction, repair, and estimating of the type of property damage in dispute.”  And the court found no evidence in the record that Salinas, an attorney, meets the qualifications required by the Policy. State Farm also argued that because a request to appoint an umpire is not a lawsuit and the order is not a final judgment subject to appeal, State Farm lacks a remedy by appeal. After considering the favored status of appraisal and the implications of proceeding with appraisal under these circumstances, the court found that State Farm lacked an adequate remedy by appeal to address the error. Accordingly, the Corpus Christi Court of Appeals conditionally granted the petition for writ of mandamus and directed the trial court to vacate its order appointing Salinas and, to appoint a new umpire in compliance with the Policy terms.

Editor’s Note: This decision emphasizes the need to closely monitor and promptly address issues and concerns which arise during the appraisal process to help keep the process on track. MDJW coverage lawyers are well versed in these issues available to assist as needed.

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