In In re Clarendon Insurance Company, No. 2-04-305-CV, 2004 WL 2984916 (Tex.App.--Fort Worth December 23, 2004, orig. proceeding), a homeowner filed a claim under his homeowner's insurance policy for water and mold damage to his home.
The insurer enlisted the help of a third-party claims administrator, which in turn, employed the services of an adjustor.
Upon learning that the homeowner was a homebuilder, the adjustor agreed to allow him to do his own repairs. The adjustor did not prepare any paperwork affixing the amount of the loss.
Instead, the homeowner was to submit invoices for the repair work and the insurer planned to reimburse him monthly.
After paying the homeowner more than $ 260,000 over a four month period, the insurer became concerned about the manner in which the claims were being handled by the third-party administrator. The insurer hired a new third-party claims administrator who retained another firm to examine the validity of the homeowner's claims.
The insurer stopped making payments to the homeowner because he would not allow anyone to enter his home to videotape or photograph the repairs. The homeowner had a duty under the contract to provide the insurer with access to the damaged property.
The homeowner subsequently made a policy limits settlement demand to the insurer and filed suit five days later.
During the discovery period, the insurer sent the homeowner a demand for an appraisal based on a provision in the policy. Because the homeowner opposed the appraisal, the insurer filed a motion to dismiss or abate the suit.
The trial court denied the motion and struck the insured's demand for an appraisal. The insurer sought mandamus relief.
The homeowner argued that the insurer had waived its right to an appraisal or was estopped from seeking an appraisal because its conduct was inconsistent with a demand for an appraisal and because it breached the insurance contract by failing to remit timely payments.
The Fort Worth Court of Appeals rejected this argument, holding that the insurer's payment of the invoices for four months and its attempts to examine the repairs performed by the homeowner did not constitute a waiver of the demand-for-appraisal provision. Id.