In re ACE American Insurance Company; Endurance American Specialty Insurance Company; GuideOne National Insurance Company; Certain Underwriters at Lloyd's, London and Company Market, Subscribing to Policy No. PTNAM2206330; StarStone Specialty Insurance Company; Starr Specialty Lines Insurance Agency, LLC; and Shelf OPCO Bermuda Ltd. for and on behalf of Fidelis Insurance Bermuda Ltd.

Summary

The Supreme Court of Texas conditionally granted the insurers’ petition for writ of mandamus and directed the trial court to compel appraisal under the parties’ property-insurance policy. The Court held that disputes involving the amount of loss may proceed to appraisal even when related coverage, causation, or allocation issues remain for judicial resolution. The Court also held that alleged bad-faith claims handling and prior material breach do not, at this stage, create an exception to enforcement of the appraisal clause.

Holdings

1. The dispute was at least partly about the amount of loss because the parties disagreed about the cost and extent of mold remediation, necessary repairs, replacement methods and materials, and building-code-related expenses. Potential coverage or causation disputes did not defeat the contractual right to appraisal in the first instance.
2. A genuine disagreement existed because the insurers consistently maintained that they had paid all amounts owed while the insured maintained that additional funds were owed. The appraisal provision did not require the insurers to maintain an unchanging or specially formal valuation.
3. Alleged bad faith, untimely adjustment, nonpayment, or unfounded coverage defenses did not create an exception to enforcement of the appraisal clause and did not excuse the insured from participating in appraisal.
4. The trial court clearly abused its discretion by denying the insurers' motion to compel appraisal, and the insurers lacked an adequate remedy by appeal. The Supreme Court conditionally granted the petition for writ of mandamus.

Questions Presented

1. Whether the parties' dispute was at least partly about the amount of loss and therefore within the scope of the policy's appraisal provision despite the insured's assertion that the dispute involved coverage, causation, and the existence of damage.
2. Whether a genuine disagreement about the amount of loss existed even though the insurers' valuation of the claim allegedly changed over time.
3. Whether the insured's allegations that the insurers breached the policy or acted in bad faith excused compliance with the appraisal provision.
4. Whether the trial court clearly abused its discretion by denying the insurers' motion to compel appraisal and whether mandamus was warranted.

Disposition

writ_granted