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Wells V.S. American States Preferred

 

919 S.W.2d 679
(Cite as: 919 S.W.2d 679)
Court of Appeals of Texas,
Dallas.
Donald WELLS and Emma Wells, Appellants,
v.
AMERICAN STATES PREFERRED
INSURANCE COMPANY, Appellee.
No.05-95-00200-CV.
Jan. 29, 1996.

Insurer sought declaration that it had properly
invoked appraisal provisions of homeowners'
policy, following insureds' claim for loss from
foundation movement allegedly caused by plumbiug
leak. After appraisers detemlined that insureds'
loss was not covered, the 199th Judicial District
Court, Collin Couuty, John R. Roach, J., granted
summary judgment to insurer, and insureds
appealed. The Court of Appeals, Whitham, Retired
Justice, sitting by assignment, held that policy's
appraisal clause authorized appraisers to determine
amount of loss only, not what caused or did not
cause loss.
Reversed and remanded.
West Headnotes
II} Judgment <8=178
228kl78 Most Cited Cases
Function of summary judgment is not to deprive
litigant of his right to full hearing on merits of any
real issue of fact, but to eliminate patently
unmeritorious claims and untenable defenses.
12} Judgment <8=185(2)
228k185(2) Most Cited Cases
Movant for summary judgment has burden of
showing that there is no genuine issue of material
fact and that it is entitled to judgment as matter of
law.
13} Judgment <8=185(2)
228k185(2) Most Cited Cases
In deciding whether there is disputed material fact
Page 2 of9
Page 1
issue precluding summary judgment, evidence
favorable to nonmovant will be taken as true.
14} Judgment <8=185(2)
228k185(2) Most Cited Cases
In resolving summary judgment motion, every
reasonable inference must be indulged in favor of
nonmovant and any doubts resolved in its favor.
15} Judgment <8=178
228kl78 Most Cited Cases
15} Judgment <8=181(2)
228kI81(2) Most Cited Cases
Purpose of summary judgment rule is not to provide
trial by deposition or trial by affidavit, but rather to
provide method of summarily tenninating case
when it clearly appears that only question of law is
involved and that there is no genuine issue of fact.
16} Judgment <8=181(2)
228k181(2) Most Cited Cases
Counterclaim defendant is entitled to summary
judgment if he establishes, as matter of law, that at
least one element of counterclaim plaintiffs cause
of action does not exist.
[7} Appeal and Error <8=934(1)
30k934(1) Most Cited Cases
On appeal, summary judgment is not entitled to
same deference given to judgment following trial on
merits; that is, appellate court does not view
evidence in light most favorable to judgment of trial
court.
18} Insurance <8=3251
217k3251 Most Cited Cases
(Fonnerly 217k569)
Appraisal clause of homeowners' insurance policy
that could be triggered by disagreements about
"actual cash value," "amount of loss," or "cost of
repair or replacement" authorized appraisers to
determine amount of loss only, not what caused or
did not cause loss.
19} Insurance <8=3262
217k3262 Most Cited Cases
(Fonnerly 217k574(5))
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919 S.W.2d 679
(Cite as: 919 S.W.2d 679)
Appraisal award made pursuant to insurance
contract is binding and enforceable.
[10) Insurance <£=3262
217k3262 Most Cited Cases
(Formerly 217k574(5»
Appraisal award made pursuant to insurance
contract may be disregarded in three situations: (1)
when award was made without authority; (2) when
award was result of fraud, accident, or mistake; or
(3) when award was not made in substantial
compliance with terms of contract.
[II) Insurance <£=3262
217k3262 Most Cited Cases
(Formerly 217k574(5»
Effect of appraisal award made pursuant to
insurance contract is to estop one party from
contesting issue of damages in suit on contract,
leaving only question of liability for court.
[12) Appeal and Error <£=934(1)
30k934(1) Most Cited Cases
In reviewing sununary judgment proceeding
concerning appraisal award made pursuant to
insurance contract, rule that every reasonable
presumption should be made in favor of appraisal
award must yield to degree its application conflicts
with presumptions required to be made in favor of
nonmovant.
[13] Insurance <£=2120
217k2120 Most Cited Cases
(Formerly 217k417.1)
Questions of what caused or did not cause loss, so
as to trigger coverage for loss under insurance
policy, are questions to be decided by court, absent
agreement to contrary.
[14] Insurance <£=3249
217k3249 Most Cited Cases
(Formerly 217k576(1»
Insured's partIcIpation in appraisal process
conceming loss potentially covered under insurance
policy does not constitute agreement by insured to
authorize appraisal panel to determine questions of
what caused or did not cause loss.
Page 3 of9
Page 2
[15] Insurance <£=3262
217k3262 Most Cited Cases
(Formerly 217k574(5»
Appraiser's acts in excess of authority conferred
upon him by appraisal agreement are not binding on
parties.
[16) Insurance <£=3249
217k3249 Most Cited Cases
(Formerly 217k576(1»
Issue of whether insureds were obligated to comply
with appraisal provisions of their homeowners'
policy as condition precedent to filing counterclaim
against insurer was rendered moot where insureds in
fact submitted to appraisal, notwithstanding that the
appraisal procedure was defective due to appraisers
exceeding their authority.
*680 On Appeal from the 199th Judicial District
Court Collin County; Trial Court Cause No.
199-1235-92.
Thomas M. Richards, Smith Merrifield &
Richards, L.L.P., Dallas, Dixon Jace Reynolds,
Bush, Fulton, Hurlbut & Monison, P.c., Arlington,
Gayle E. Oler, Dallas, for Appellants.
Wesley W. Chambers, Gollaher & Chambers,
Dallas, for Appellee.
Before LAGARDE, BARBER and WHITHAM
[FN1], J1.
FNI. The Honorable WaITen Whitham,
Justice, Retired, Court of Appeals, Fifth
District of Texas at Dallas, sitting by
assignment.
OPINION
WHITHAM (Retired), Justice.
Appellants, Donald Wells and wife, Emma Wells,
appeal from a summary judgment in favor of
appellee, American States Prefened Insurance
Company. The principal issues involve the appraisal
provision of the Texas Homeowner's Policy and the
interpretation and consequences of the appraisal
made pursuant to that insurance policy. The issues
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919 S.W.2d 679
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focus upon the question of whether the appraisers
are authorized and empowered to determine what
caused or did not cause the loss claimed. Here, the
policy insured the dwelling against foundation and
structural *681 damage due to foundation
movement caused by leaks in the plumbing system.
The Wellses assert the dwelling suffered
foundation and structural damage caused by a
plumbing leak. The Wellses made a claim on the
policy. American States denied the claim,
demanded an appraisal, and then sued to require an
appraisal. The Wellses counterclaimed on the
policy and on other causes of action. The trial
court abated the counterclaim until an appraisal was
done. The two appraisers and an umpire
determined that the resulting damage to the
dwelling due to foundation movement was
$22,875.94. However, one appraiser and the
umpire also determined that the plumbing leak
caused no loss ; i.e., that the plumbing leak did not
cause the damage. Based on this latter
determination, the trial COUlt entered a take-nothing
summary judgment against the Wellses. Because
we conclude that the appraisal section of the policy,
as a matter of law, did not authorize the appraiser
and umpire to determine that the plumbing leak did
not cause the damage and loss to the Wellses'
property, we conclude that the trial court erred in
entering a take-nothing judgment against the
Wellses. Accordingly, we reverse and remand.
Factual Background
Donald and Emma Wells own a home in Wylie,
Texas. American States insured the home under a
Texas Homeowner's Policy. The policy contained
the following provision for determining the amount
of loss by appraisal at request of either party:
7. Appraisal. If you and we fail to agree on the
actual cash value, amount of loss or the cost of
repair or replacement, either can make a written
demand for appraisal. Each will then select a
competent, independent appraiser and notify the
other of the appraiser's identity within 20 days of
receipt of the written demand. The two
appraisers will choose an umpire. If they cannot
agree upon an umpire within 15 days, you or we
may request that the choice be made by a judge of
a district court of a judicial district where the loss
OCCUlTed. The two appraisers will then set the
amount of loss, stating sepamtely the actual cash
value and loss to each item. If you or we request
that they do so, the appraiser will also set:
Page 4 of9
Page 3
a. the full replacement cost of the dwelling.
b. the full replacement cost of any other building
upon which loss is claimed.
c. the full cost of repair or replacement of loss to
such building, without deduction for depreciation.
If the appraisers fail to agree, they will submit
their difference to the umpire. An itemized
decision agreed to by any two of these three and
filed with us will set the amount of the loss .
Such award shall be binding on you and us.
Each party will pay its own appraiser and bear the
other expenses of the appraisal and umpire
equally.
When their home sustained damage due to
foundation movement, the Wellses investigated.
They discovered a leak in the plumbing system
underneath the foundation. A structural engineer
who examined the property reported that the
plumbing leak caused the foundation movement.
On April 20, 1992, the Wellses made a claim on the
policy. An adjuster from American States
inspected the property and stated that the sewer-line
leak did not cause the damage. The adjuster
included that statement on a written non-waiver
agreement dated May 7, 1992, which Donald Wells
signed only after noting on the writing his
disagreement with the statement. American States
then had its own engineer examine the property,
who reported that the plumbing leak did not cause
the foundation movement, conflicting with the
repOlt from the Wellses' engineer as to causation of
the loss.
On July 20, 1992, American States again denied
the Wellses' claim and at the same time demanded
an appraisal under the "Appraisal" section quoted
above, designating John O. Lochridge, Jr. as its
appraiser. American States then sued for a
declaratory judgment that it had properly invoked
the appraisal provisions of the policy. American
States also asked for an order requiring the Wellses
to submit their claim to appraisal. The Wellses
answered and filed a counterclaim on the policy and
on other causes of *682 action. American States
responded with a first supplemental petition
containing a plea that the Wellses' counterclaims be
abated until they participated in an appraisal and the
appraisal was completed. The trial court sustained
the plea in abatement. Thereafter, the Wel1ses
designated Rob Brown as their appraiser, and the
two appraisers designated Mitchell L. Butler as
umpIre.
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919 S.W.2d 679
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Both appraisers and the umpire unanimously
determined that the Wellses' home had resulting
damage to the dwelling due to foundation
movement in the amount of $22,875.94. However,
appraiser Lochridge and umpire Butler determined
that damage to the dwelling related to the plumbing
leak was zero.
American States then filed its motion for summary
judgment based on the appraisal determination that
the plumbing leak did not cause the loss claimed.
The Wellses filed their own motion for partial
summary judgment based on the unanimous
determination of the appraisers and umpire that the
anlount of loss to the dwelling resulting from
foundation movement was $22,875.94. American
States responded to the Wellses' motion, and the
Wellses responded to American States's motion.
The trial court granted American States's motion,
denied the Wellses' motion, and rendered a
take-nothing summary judgment against the Wellses.
The trial court's summary judgment contains this
language:
The court further finds that [American States] is
entitled to a Declaratory Judgment maturing the
appraisal award rendered herein, into a final
judgment as requested and prayed for in
[American States's] Summary Judgment and thus,
it is further ORDERED, ADJUDGED and
DECREED that Declaratory Judgment be, and
the same hereby is, rendered in favor of
[American States] and against [the Wellses),
that the appraisal award rendered on or about
June 24, 1994 is binding on and enforceable
against [the Wellses], that said appraisal award's
finding that the amount of loss is zero be matured
into final judgment, and judgment is hereby
RENDERED that [American States] is not liable
to [the Wellses] on [the Wellses'] insurance claim
made the basis of this suit.
Summary Judgment Principles
[1][2][3][4][5] We begin by repeating well-known
rules governing tl1e sUll1ffiary judgment practice.
The function of a summary judgment is not to
deprive a litigant of his right to a full hearing on the
merits of any real issue of fact, but to elinlinate
patently unmeritorious claims and untenable
defenses. Gulbenhan v. Penn, 151 Tex. 412,
415-16, 252 S.W.2d 929, 931 (1952). The
standards for reviewing a motion for summary
Page 5 of9
Page 4
judgment are well established. As mandated by the
Supreme Court of Texas, they are as follows :
1. The movant for summary judgment has the
burden of showing that there is no genuine issue
of material fact and that it is entitled to judgment
as a matter oflaw.
2. In deciding whether there is a disputed material
fact issue precluding summary judgment,
evidence favorable to the nOl1ll1ovant will be
taken as true .
3. Every reasonable inference must be indulged in
favor of the nonmovant and any doubts resolved
in its favor.
Nixon v. Mr. Property Management, 690 S.W.2d
546, 548-49 (Tex. 1985). It is not the purpose of
the sUll1ffiary judgment rule to provide either a trial
by deposition or a trial by affidavit, but rather to
provide a method of summarily terminating a case
when it clearly appears that only a question of law
is involved and that there is no genuine issue of
fact. Gaines v. Hamman, 163 Tex. 618, 626, 358
S.W.2d 557,563 (1962).
[6] Moreover, when the counterclaim defendant is
the movant, as in the present case, we must be alert
to additional rules controlling summary judgment
practice. The question on appeal, as well as in the
trial court, is not whether the summary judgment
proof raises fact issues with reference to the
essential elements of a counterclaim plaintiffs cause
of action, but is whether the summary judgment
proof establishes as a matter of law that there is no
genuine issue of fact as to one or more of the
essential elements of tl1e counterclaim plaintiff's
cause of action. Gibbs v. General Motors Corp. ,
450 S.W.2d 827, 828 (Tex. 1970). Therefore, a
counterclaim *683 defendant is entitled to a
summary judgment if he establishes, as a matter of
law, that at least one element of counterclaim
plaintiffs cause of action does not exist. See Rosas
v. Buddies Food Store, 518 S.W.2d 534, 537
(Tex. 1975).
[7] Fmthernlore, summary judgment is not entitled
to the same deference given to a judgment
following a trial on the merits. Elam v. Yale Clinic,
783 S.W.2d 638, 641 (Tex.App.--Houston [14th
Dist.] 1989, no writ). Unlike an appeal following a
trial on the merits, when reviewing a sUll1ffiary
judgment, the appellate court does not view the
evidence in tlle light most favorable to the judgment
of the trial court. Elam, 783 S.W.2d at 641. With
these principles in mind, we tum to consider the
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Wellses' first point of eITor in which the Wellses
contend that the trial court eITed in granting
American States's motion for sununary judgment.
The Appraisal Award
[8] In the present case, the We11ses insist that the
appraisal section of the policy, as a matter of law,
did not authorize the appraisers and umpire to
determine that the plumbing leak did not cause the
loss to the Wellses' property. Thus, we reach the
question whether the appraisal section of the policy,
invoked by American States, authorized and
empowered the appraisers to detelTlline what caused
or did not cause the loss clainled. It is obvious that
two of the three designated persons named to make
the appraisal determined that the Wellses' amount of
loss also included authority to determine that the
loss was not caused by the undisputed plumbing
leak. We reach this conclusion because the
"Appraisal Award" recites:
Damage to dwelling related to plumbing leak.
Loss Replacement Cost -0-
Loss Actual Cash Value -0-
CLARIFICATIONS IF ANY: Resulting damage
to dwelling due to foundation movement
$22,875.94
We note the appraisal award's language "Damage
to dwelling related to plumbing leak," and followed
by two loss figures of "0." We interpret this
language as a determination that the "plumbing
leak" was not the cause of any damage, hence the
two "Loss" findings of "-0-." We reach the
interpretation because the appraisal award proceeds
to detelTlline the cause of damage to the dwelling to
be due to "foundation movement." Taken in the
context of this litigation, we treat "Damage to
dwelling" and "Loss" to be one and the same.
Therefore, for the reasons that follow, we conclude
that the appraisal section of the policy invoked by
American States does not authorize and empower
the appraisers to determine what caused or did not
cause the loss claimed.
Helpful Texas Cases
[9][10][11][12] In reaching this conclusion, we
find language in certain Texas cases to be
instructive. An appraisal award made pursuant to
the provisions of an insurance contract is binding
Page 6 of9
Page 5
and enforceable. Barnes v. Western Alliance Ins.
Co., 844 S.W.2d 264, 267 (Tex.App.--Fort Worth
1992, writ dism'd by agr.). Texas courts recognize
three situations in which an appraisal award may be
disregarded: (1) when the award was made without
authority; (2) when the award was the result of
fraud, accident, or mistake; or (3) when the award
was not made in substantial compliance with the
terms of the contract. Providence Lloyds Ins. Co. v.
CJystal City Indep. Sch. Dist., 877 S.W.2d 872, 875
(Tex.App.--San Antonio 1994, no writ). The effect
of an appraisal award is to estop one party from
contesting the issue of damages in a suit on the
insurance contract, leaving only the question of
liability for the court. Scottish Union & Nat'l Ins.
Co. v. Clancy, 71 Tex. 5, 8 S.W. 630, 631 (1888);
Hennessey v. Vanguard Ins. Co. , 895 S.W.2d 794,
797-98 (Tex.App.--Amarillo 1995, writ denied).
Although every reasonable presumption will
typically be made in favor of an appraisal award,
when reviewing a sununary judgment proceeding,
that rule must yield to the degree its application
conflicts with the presumptions required to be made
in favor of a nonmovant. Hennessey, 895 S.W.2d at
798.
The parties agree that no reported Texas case has
decided the issue of whether the authority of
appraisers under the appraisal *684 section of an
insurance policy is 1in1ited to detelTllination of only
the amount of loss as distinguished from
determining cause of loss, and coverage and liability
for the loss. We conclude, however, that the
weight of authority from other jurisdictions
discussing the issue follows the rule that appraisers
have no power or authority to detelmine questions
of causation, coverage, or liability, which is
consistent with the Texas courts' discussion of the
effect of the appraisal award. See Scottish Union,
8 S.W. at 631; Hennessey, 895 S.W.2d at 798.
Applicable Holdings of Other Jurisdictions
We have considered the holdings of other
jurisdictions interpreting appraisal provisions
containing substantially similar language to that
contained in the policy at issue in this case in
concluding that appraisers have no power to
detelmine the cause of the damages. Their power
is limited to the function of detelmining the money
value of the property damage. Munn v. National
Fire Ins. Co. of Hartford, 237 Miss. 641, 115 So.2d
54, 55, 58 (1959) ("The chancellor should have
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judicially detennined what force caused the walls to
lean and twist[;] [t]hat was not a question for the
appraisers to decide. If that damage was the result
of the storm, then the appraisers should have been
directed to estimate the value of the loss occasioned
by the walls being damaged."); see also Jefferson
Ins. Co. ofN. Y. v. Superior Court, 3 Ca1.3d 398, 90
Cal.Rptr. 608, 475 P.2d 880, 883 (1970) (the
function of the appraisers is to determine the
amount of damage resulting to various items
submitted for their consideration, and not to resolve
questions of coverage and interpret provisions of
the policy, which exceed the scope of their powers);
Appalachian Ins. Co. v. Rivcom Corp., 130
Cal.App.3d 818, 182 Cal.Rptr. 11, 16 (Ct.App. 2d
Dist.l982) (the appraisal clause provides the device
to be utilized to determine the amount of loss if the
parties cannot agree on the amount; once the
amount of the loss has been fixed, whether by
agreement between insurer and insured or by
appraisal procedure, if the insurer refuses to pay
such amount, the insured is not without jury trial
rights); Lewis Food Co. v. Fireman's Fund Ins. Co.,
207 Cal.App.2d 515, 24 Cal.Rptr. 557, 561
(Ct.App. 2d Dist.l962) (the appraisers' function
under the policy is to determine the amount of
damage resulting to various items submitted for
their consideration; it is certainly not their function
to resolve questions of coverage and interpret
provisions of the policy); Oakes v. Franklin Fire
Ins. Co. , 122 Me. 361, 120 A. 53, 54 (1923) (the
right of the insured to recover the loss is not
submitted to the referees, only the amount of the
damages); Wausau Ins. Co. v. Herbert Halperin
Dist. CO/p., 664 F.Supp. 987, 989 (D.Md.1987)
(where insurer does not factually dispute the
consequences of the occun-ence, but contests the
issue of legal "causation" on the basis that the
policy exclusions apply so as to limit the scope of
coverage, the issue is one of contract interpretation,
and is within the competence of the court, not an
appraiser, to resolve); Hogadone v. Grange Mut.
Fire Ins. Co., 133 Mich. 339, 94 N.W. 1045, 1047
(1903) (the policy provision relates only to cases of
disagreement as to the amount of valuation, in
whole or in part, and not whether the claim itself is
valid); Denton v. Farmers' Mut. Fire Ins. Co., 120
Mich. 690, 79 N.W. 929, 930 (1899) (the sections
of the chal1er do not give board of auditors the
power to pass upon questions of liability, but
contemplate a valid loss, and confer upon the
auditors only the power to fix the amount); St. Paul
Fire & Marine Ins. Co. v. Wright, 97 Nev. 308, 629
Page 7 of9
Page 6
P.2d 1202, 1203 (1981) (contrary to arbitration,
where the arbitrator is frequently given broad
powers, appraisers generally have more limited
powers; an appraiser's power generally does not
encompass the disposition of the entire controversy
between the paliies, but extends merely to the
resolution of the specific issues of actual cash value
and the amount of loss); In re Delmar Box Co., 309
N.Y. 60, 127 N.E.2d 808, 811 (1955) (agreement
for appraisal extends merely to the resolution of
specific losses of actual cash value and the amount
of loss, with all other issues being reserved for
detennination in a plenary action); United Boat
Servo Corp. v. Fulton Fire Ins. Co. , 137 N.Y.S.2d
670, 671 (Sup.Ct.l955) (where appraisers made a
detennination of a question of liability, they
exceeded the powers conferred *685 upon them,
and summary judgment is improper); Kentner v.
Gulf Ins. Co. , 66 Or.App. 15, 673 P.2d 1354, 1356
(1983) (statutory policy language establishes an
appraisal procedure to determine the amount of the
insured's loss; the procedure does not apply to the
determination ofthe insurer's responsibility).
Application of the Law
With the above cases in mind, we look to the first
sentence of the appraisal clause at issue in the
present case. We quote:
If you and we fail to agree on the actual cash
value, amount of loss, or the cost of repair or
replacement, either can make a written demand
for appraisal.
(Emphasis added.) Hence, we must conclude that
the appraisal clause at issue pertains to a dispute
over the amount of money involved in the
controversy. Indeed, we read the phrases "actual
cash value," "amount of loss," and "cost of repair or
replacement" as triggering the demand for
appraisal. It cannot be doubted that these are
"dollar" controversies. Thus, nowhere do we read a
"causation dispute" or a "liability dispute" as the
means or manner by which the demand for appraisal
can be made operative.
[13][14] We conclude that the authority of the
appraisal panel in the present case was limited to
determining only the amount of loss. Therefore,
we conclude further that the appraisal section of the
policy, as a matter of law, did not authorize and
empower the appraisal panel to determine that the
plumbing leak did not cause the loss to the Wellses'
propeliy. It follows, and we so hold, that the
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appraisal section of the Texas Homeowner's Policy
quoted above establishes an appraisal procedure to
determine the dollar amount of the insured's loss
only, and that it does not authorize or empower the
appraisal panel created thereunder to determine
what caused or did not cause that loss. Indeed, we
hold that, absent an agreement to the contrary,
questions of what caused or did not cause the loss
are questions to be decided by the court. Moreover,
we hold that participation by the insured in the
appraisal process does not constitute agreement by
the insured to authorize and empower the appraisal
panel to determine questions of what caused or did
not cause the loss.
[15] In the present case, we conclude that the one
appraiser and the umpire exceeded their authority
when they determined that the plumbing leak did
not cause the Wellses' loss. It follows, and we so
hold, that the trial comi erred in finding that
American States is entitled to a declaratory
summary judgment maturing the appraisal award in
the present case and entering a take- nothing
summary judgment against the Wellses based upon
that determination. Indeed, an appraiser's acts in
excess of the authority confened upon him by the
appraisal agreement are not binding on the parties.
Fisch v. Transcontinental Ins. Co., 356 S.W.2d
186, 190 (Tex.Civ.App.--Houston 1962, writ rei'd
n.r.e.). Instead, the effect of an appraisal award is
to estop one party, here the plaintiff, from
contesting the issue of damages in a suit on the
insurance contract, leaving only the question of
liability for the court. Scottish Union, 8 S.W. at 631;
Hennessey, 895 S.W.2d at 797-98.
In the present case, we note that nowhere in the
standard form for submission to appraisal is any
power vested in or conferred upon the appraisers to
determine the cause of the loss, the value of which
they are to appraise. See Munn, 115 So.2d at 56.
Therefore, we hold, as did the Supreme Court of
Mississippi, that the appraisers are not arbitrators.
They have no power to arbitrate disputes between
the property owner and the insurance company,
other than to value the property damage. Munn,
115 So.2d at 56. Indeed, the function of the
appraisers is to determine the amount of damage
resulting to the property submitted for their
consideration. It is certainly not their function to
resolve questions of coverage and interpret
provisions of the policy. St. Paul Fire & Marine
Ins. Co., 629 P.2d at 1203. Consequently, we
Page 8 of9
Page 7
conclude that the trial court erred in granting
American States's motion for summary judgment.
We reach this conclusion because the appraisal
section of the policy, as a matter of law, did not
authorize the appraisers and umpire to determine
that the plumbing leak did not *686 cause the loss
to the Wellses' property. We sustain the Wellses'
first point of error.
The Wellses' Partial Motion for Summary
Judgment
In their second point of error, the Wellses contend
that the trial court elTed in overruling their partial
motion for summary judgment. The Wellses
advance three principal arguments. First, the
Wellses argue that the appraisal panel has no
authority to determine the cause of the loss, only the
amount of the loss. We have held in disposition of
the Wellses' first point of elTor that the appraisal
panel has no authority to determine the cause of the
loss, only the amount of the loss. Thus, we agree
with the Wellses' first argument.
While we agree with the Wellses' first principal
argument, we are unable to extend that agreement to
the tluust of the Wellses' second principal
argument. In that second argument, the Wellses
reason that the $22,875.94 damage figure stated in
the appraisal award under the language:
CLARIFICATIONS IF ANY: Resulting damage
to dwelling due to foundation movement
$22,875.94
(Emphasis ours.) becomes the damage award for
the previously mentioned "phunbing leak," instead
of the figure "_0_" (zero). Hence, the Wellses
argue that the appraisal panel ascertained the
amount of damages of $22,875.94 as resulting from
the plumbing leak. We disagree. We note that the
danlage amount of $22,875.94 results from
"foundation movement."
"Foundation movement" appears to be excluded by
the policy:
We do not cover loss under Coverage A
(Dwelling) caused by settling, cracking, bulging,
shrinkage, or expansion of foundation, walls,
floors, ceilings, roof structures, walks, drives,
curbs, fences, retaining walls or swimming pools.
(Emphasis ours). Consequently, we decline to
read the appraisal award, as the Wellses would have
us do, to say that a plumbing leak caused foundation
damage to their dwelling in the amount of
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919 S.W.2d 679
(Cite as: 919 S.W.2d 679)
$22,875.94. We decline to do so because the
appraisal panel, on the face of its award, separated
the damage related to plumbing leak from damage
due to foundation movement. For these reasons,
we disagree with the Wellses' second principal
argument under their second point of enor.
Lastly, we dispose of the Wellses' third principal
argument under their second point of enor. Here,
the Wellses insist that they are entitled to our
determination that they recover their reasonable and
necessary attorney's fees incuned in this litigation,
the amount thereof to be determined at trial. In
light of our disposition of this appeal, all issues in
dispute between the parties will be before the trial
court on remand for new trial. Therefore, we
conclude that we have no basis at this time to
determine that the Wellses recover their reasonable
and necessary attorney's fees incurred in this
litigation. Hence, we decline to decide at this time
the liability of American States for the Wellses'
reasonable and necessary attorney's fees, if any,
incuned in this litigation. For the reasons
expressed above, we conclude that the trial court
did not en in ovenuling the Wellses' partial motion
for summalY judgment. We ovenuIe the Wellses'
second point of enor.
Abatement and Trial On The Merits
[16] In their third point of enor, the Wellses
contend that the trial court ened in abating the
Wellses' counterclaim until the Wellses participated
in the appraisal demanded by American States,
because the Wellses were not obligated to comply
with the appraisal provisions of the policy as a
condition precedent to filing their counterclaim
against American States. We conclude that we
need not address this point of enor. We reach this
conclusion because the issue is now moot. We
hold that the Wellses have now complied with any
obligations imposed by the appraisal provisions and
that their counterclaim is now properly before the
court on remand. Furthermore, the time has anived
to try this case on its merits in the trial court. The
appraisal has been made. The fact that the resulting
appraisal is defective is of no moment; the trial
court is directed to try all issues in dispute both as
to liability and as to damages. The Wellses *687
are not required to again participate involuntarily in
yet another appraisal. The Wellses have done all
that was required of them as an asserted condition
precedent to filing their counterclaim. We decline
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to penalize the Wellses by further delay when they
have suffered a defective appraisal process tlrrough
no fault of their own. We ovenule for mootness
the third point of enor.
We reverse the trial court's judgment and remand
the case to the trial court for trial on the merits.
919 S.W.2d 679
END OF DOCUMENT
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