/>iOn May 6, 2011, the Texas Supreme Court addressed the issue of whether a showing of prejudice is required in order to establish waiver of the right to demand an appraisal under an insurance policy.
Grubbs Infiniti made a claim for hail damage under its property coverage with Universal Underwriters of Texas, and after Universal made some payments, a dispute arose as to the extent of the damage. Months later, Grubbs claimed underpayment and sued for breach of contract and bad faith. In response, Universal invoked the policy's appraisal clause seeking an appraisal of the loss. Grubbs claimed that Universal had waived its right to an appraisal by not invoking it sooner, so Universal moved to compel an appraisal and to abate all proceedings during the interim.
After the trial court denied the motion, Universal petitioned the Supreme Court for mandamus relief. The Court held that mere delay is insufficient to establish waiver of an appraisal clause; the party claiming waiver must also show prejudice. In Re Universal Underwriters of Texas Insurance Company, 54 Tex.Sup.Ct.J. 931 (Tex. 2011) (the Court also declared that mandamus relief is appropriate to enforce an appraisal clause).
Once again the Texas Supreme Court has required a showing of prejudice by a party claiming forfeiture of rights and benefits under an insurance policy, expanding the prejudice rule for the first time to appraisal clauses, stating that "Our failure to explicitly require prejudice is more a function of the paucity of cases in which we have addressed waiver of appraisal than its inapplicability to the doctrine."
