In The Court of Appeals Seventh District of Texas at Amarillo
No. 07-18-00204-CV
UNITED FIRE & CASUALTY COMPANY, APPELLANT
V.
GOSSETTS, INC., APPELLEE
On Appeal from the 181st District Court Potter County, Texas Trial Court No. 104,412-B, Honorable John B. Board, Presiding
June 21, 2019
MEMORANDUM OPINION Before QUINN, C.J., and CAMPBELL and PIRTLE, JJ.
United Fire & Casualty Company (United Fire) appeals from the trial court’s
summary judgment granted in favor of Gossetts, Inc. (Gossetts). The suit arose from a
dispute regarding payment for loss allegedly caused by a May 2013 hailstorm. The loss
encompassed damage to the roof of a building that Gossetts owned. United Fire
questioned whether the storm caused any damage to the roof, but upon reserving that
position, it agreed to submit the claim to appraisal in accordance with the terms of the
insurance policy. Appraisers were selected, as was an umpire. The latter subsequently issued an appraisal award in the approximate amount of $212,000, to which award
Gossetts’ appraiser agreed. As this process was occurring, so too was litigation initiated
by Gossetts against United Fire. The former had sued the latter, averring causes of action
arising from the common law and statute and pertaining to United Fire’s failure to pay the
insurance claim. United Fire would eventually counterclaim for a declaratory judgment
negating the appraisal due to various purported errors in the appraisal process. The
validity of the appraisal award underlies this appeal.
The litigants each filed motions for summary judgment. The partial motion of
Gossetts sought recovery based on the appraisal award and the failure to promptly pay
it. Those of United Fire (i.e., both a traditional and a no-evidence motion) sought to nullify
the appraisal and negate liability for the breach of contract and statutory claims asserted
by Gossetts. The trial court denied the motions of United Fire but granted that of
Gossetts. So too did it enter judgment awarding Gossetts damages equal to the appraisal
award, statutory penalties for United Fire’s failure to promptly pay the award, and
attorney’s fees. The remaining statutory claims of Gossetts were then severed, resulting
in the summary judgment becoming final and appealable.
Through eight issues, United Fire continues its effort to negate the appraisal award
and thereby reverse the trial court’s judgment. We find one such issue dispositive of the
appeal and address it. The issue concerns whether the appraisal award resulted from
mistake. Concluding that it did, we reverse.
2 Mistake
According to United Fire, a mistake occurred when the appraisal award
incorporated damages to a portion of the roof owned by a third-party. The third-party was
not an insured under the policy. We sustain the issue.
Appraisal awards made per the terms of an insurance policy are binding and
enforceable. Garcia v. State Farm Lloyds, 514 S.W.3d 257, 264 (Tex. App.—San Antonio
2016, pet. denied). Yet, they may be vacated, though the grounds upon which they can
are few. One such ground is mistake. Abdalla v. Farmers Ins. Exch., No. 07-17-00020-
CV, 2018 Tex. App. LEXIS 3358, at *3 (Tex. App.—Amarillo May 14, 2018, no pet.) (mem.
op.); Providence Washington Ins. Co. v. Farmers Elevator Co., 141 S.W.2d 1024, 1026
(Tex. Civ. App.—Amarillo 1940, no writ) (stating that “it is well settled that a court will not
substitute its judgment for that of the appraisers in the absence of a showing that the
award was induced by fraud, accident, mistake or some circumstance which would render
it unjust and unfair to one or both of the interested parties”).
Mistake applies when evidence establishes that the appraisers operated under a
mistake of fact resulting in an unintended award. Abdalla, 2018 Tex. App. LEXIS 3358,
at *3; Providence Washington Ins. Co., 141 S.W.2d at 1026-27. Furthermore, a court
begins its assessment of one’s claim of mistake by presuming that the appraisal is
legitimate. See Providence Washington Ins. Co., 141 S.W.2d at 1027 (stating that
“[e]very presumption will be indulged in [the award’s] favor unless contradicted by proof”).
So, the burden lies with the party attempting to avoid the award to prove mistake. Garcia,
514 S.W.3d at 265; Barnes v. Western Alliance Ins. Co., 844 S.W.2d 264, 267 (Tex.
App.—Fort Worth 1992, writ dism’d by agr.). Circumstances found to be outside the
3 umbrella of mistake, though, are situations where 1) an appraiser disagrees with an
umpire’s decision, 2) an aspect of damage is omitted from an appraisal, or 3) appraisers
disagree about the extent of the loss. Abdalla, 2018 Tex. App. LEXIS 3358, at *3-5.
Having said this, we turn to the record before us.
According to United Fire, the award included purported loss to property which
Gossetts did not own. To support its contention, the insurer appended to its traditional
motion for summary judgment evidence of a common roof covering what is known as the
Duniven Building. That building straddled two lots, apparently. Gossetts owned one lot
while a separate entity (Gaut) owned the other part. Other evidence illustrated that 1) the
Gossetts’ appraiser (Owens) included in his loss estimate the entire Duniven building roof,
including the portion over that part of the edifice owned by Gaut, 2) Owens did not know
that Gossetts failed to own the entire structure, 3) Owens would have excluded the
unowned portion of the roof from his estimate had he known it to be unowned by Gossetts,
4) Gaut or its predecessor in title repaired the portion of the Duniven roof it owned after
the hailstorm, 5) the umpire reviewed and relied upon the Owens appraisal in deriving his
loss calculations, 6) the umpire also lacked knowledge about Gossetts owning less than
all of the Duniven roof, 7) the umpire agreed that his award “would be off by that amount
of square footage” (of the unowned roof) improperly included in the square footage
calculation, and 8) the umpire represented that his replacement cost value estimate “on
the roof” could not be recalculated since his “exact calculations” failed to show how “the
sausage” was made.
The foregoing, and uncontested, evidence provides basis upon which a fact-finder
could only reasonably infer the presence of a mistake of fact resulting in an unintended
4 award. No doubt, the umpire and appraiser had the task of calculating the loss. Hall v.
Germania Farm Mut. Ins. Ass’n, No. 07-16-00304-CV, 2017 Tex. App. LEXIS 9654, at *7
(Tex. App.—Amarillo Oct. 13, 2017, no pet.) (mem. op.) (noting that the effect of an
appraisal award estops one party from contesting the issue of damages while leaving
open the question of liability). So, they obviously intended to calculate the cost of
repairing or replacing property covered by the policy and owned by the insured. Their
calculation exceeded that purpose and intent due to their mistaken inclusion into their
calculations the cost of repairing or replacing property that the insured did not own and
that fell outside policy coverage.
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In The Court of Appeals Seventh District of Texas at Amarillo
No. 07-18-00204-CV
UNITED FIRE & CASUALTY COMPANY, APPELLANT
V.
GOSSETTS, INC., APPELLEE
On Appeal from the 181st District Court Potter County, Texas Trial Court No. 104,412-B, Honorable John B. Board, Presiding
June 21, 2019
MEMORANDUM OPINION Before QUINN, C.J., and CAMPBELL and PIRTLE, JJ.
United Fire & Casualty Company (United Fire) appeals from the trial court’s
summary judgment granted in favor of Gossetts, Inc. (Gossetts). The suit arose from a
dispute regarding payment for loss allegedly caused by a May 2013 hailstorm. The loss
encompassed damage to the roof of a building that Gossetts owned. United Fire
questioned whether the storm caused any damage to the roof, but upon reserving that
position, it agreed to submit the claim to appraisal in accordance with the terms of the
insurance policy. Appraisers were selected, as was an umpire. The latter subsequently issued an appraisal award in the approximate amount of $212,000, to which award
Gossetts’ appraiser agreed. As this process was occurring, so too was litigation initiated
by Gossetts against United Fire. The former had sued the latter, averring causes of action
arising from the common law and statute and pertaining to United Fire’s failure to pay the
insurance claim. United Fire would eventually counterclaim for a declaratory judgment
negating the appraisal due to various purported errors in the appraisal process. The
validity of the appraisal award underlies this appeal.
The litigants each filed motions for summary judgment. The partial motion of
Gossetts sought recovery based on the appraisal award and the failure to promptly pay
it. Those of United Fire (i.e., both a traditional and a no-evidence motion) sought to nullify
the appraisal and negate liability for the breach of contract and statutory claims asserted
by Gossetts. The trial court denied the motions of United Fire but granted that of
Gossetts. So too did it enter judgment awarding Gossetts damages equal to the appraisal
award, statutory penalties for United Fire’s failure to promptly pay the award, and
attorney’s fees. The remaining statutory claims of Gossetts were then severed, resulting
in the summary judgment becoming final and appealable.
Through eight issues, United Fire continues its effort to negate the appraisal award
and thereby reverse the trial court’s judgment. We find one such issue dispositive of the
appeal and address it. The issue concerns whether the appraisal award resulted from
mistake. Concluding that it did, we reverse.
2 Mistake
According to United Fire, a mistake occurred when the appraisal award
incorporated damages to a portion of the roof owned by a third-party. The third-party was
not an insured under the policy. We sustain the issue.
Appraisal awards made per the terms of an insurance policy are binding and
enforceable. Garcia v. State Farm Lloyds, 514 S.W.3d 257, 264 (Tex. App.—San Antonio
2016, pet. denied). Yet, they may be vacated, though the grounds upon which they can
are few. One such ground is mistake. Abdalla v. Farmers Ins. Exch., No. 07-17-00020-
CV, 2018 Tex. App. LEXIS 3358, at *3 (Tex. App.—Amarillo May 14, 2018, no pet.) (mem.
op.); Providence Washington Ins. Co. v. Farmers Elevator Co., 141 S.W.2d 1024, 1026
(Tex. Civ. App.—Amarillo 1940, no writ) (stating that “it is well settled that a court will not
substitute its judgment for that of the appraisers in the absence of a showing that the
award was induced by fraud, accident, mistake or some circumstance which would render
it unjust and unfair to one or both of the interested parties”).
Mistake applies when evidence establishes that the appraisers operated under a
mistake of fact resulting in an unintended award. Abdalla, 2018 Tex. App. LEXIS 3358,
at *3; Providence Washington Ins. Co., 141 S.W.2d at 1026-27. Furthermore, a court
begins its assessment of one’s claim of mistake by presuming that the appraisal is
legitimate. See Providence Washington Ins. Co., 141 S.W.2d at 1027 (stating that
“[e]very presumption will be indulged in [the award’s] favor unless contradicted by proof”).
So, the burden lies with the party attempting to avoid the award to prove mistake. Garcia,
514 S.W.3d at 265; Barnes v. Western Alliance Ins. Co., 844 S.W.2d 264, 267 (Tex.
App.—Fort Worth 1992, writ dism’d by agr.). Circumstances found to be outside the
3 umbrella of mistake, though, are situations where 1) an appraiser disagrees with an
umpire’s decision, 2) an aspect of damage is omitted from an appraisal, or 3) appraisers
disagree about the extent of the loss. Abdalla, 2018 Tex. App. LEXIS 3358, at *3-5.
Having said this, we turn to the record before us.
According to United Fire, the award included purported loss to property which
Gossetts did not own. To support its contention, the insurer appended to its traditional
motion for summary judgment evidence of a common roof covering what is known as the
Duniven Building. That building straddled two lots, apparently. Gossetts owned one lot
while a separate entity (Gaut) owned the other part. Other evidence illustrated that 1) the
Gossetts’ appraiser (Owens) included in his loss estimate the entire Duniven building roof,
including the portion over that part of the edifice owned by Gaut, 2) Owens did not know
that Gossetts failed to own the entire structure, 3) Owens would have excluded the
unowned portion of the roof from his estimate had he known it to be unowned by Gossetts,
4) Gaut or its predecessor in title repaired the portion of the Duniven roof it owned after
the hailstorm, 5) the umpire reviewed and relied upon the Owens appraisal in deriving his
loss calculations, 6) the umpire also lacked knowledge about Gossetts owning less than
all of the Duniven roof, 7) the umpire agreed that his award “would be off by that amount
of square footage” (of the unowned roof) improperly included in the square footage
calculation, and 8) the umpire represented that his replacement cost value estimate “on
the roof” could not be recalculated since his “exact calculations” failed to show how “the
sausage” was made.
The foregoing, and uncontested, evidence provides basis upon which a fact-finder
could only reasonably infer the presence of a mistake of fact resulting in an unintended
4 award. No doubt, the umpire and appraiser had the task of calculating the loss. Hall v.
Germania Farm Mut. Ins. Ass’n, No. 07-16-00304-CV, 2017 Tex. App. LEXIS 9654, at *7
(Tex. App.—Amarillo Oct. 13, 2017, no pet.) (mem. op.) (noting that the effect of an
appraisal award estops one party from contesting the issue of damages while leaving
open the question of liability). So, they obviously intended to calculate the cost of
repairing or replacing property covered by the policy and owned by the insured. Their
calculation exceeded that purpose and intent due to their mistaken inclusion into their
calculations the cost of repairing or replacing property that the insured did not own and
that fell outside policy coverage.
Gossetts argues that the mistake is inconsequential which, in its estimation, would
render the matter irrelevant. Yet, the authority we cited above did not incorporate into the
mistake equation an element of severity or harm attributable to the mistake. And, to the
extent that some de minimus mistake would fall outside the doctrine’s scope, the umpire
at bar agreed, while being deposed, that his estimate “on the roof” could not be
recalculated since the award did not evince how the “sausage” was made. That umpire
did not testify, nor did the record contain evidence, that the effect of the mistake was
miniscule. Indeed, pictures of the area in question after being repaired by the actual
owner dispel the notion that the mistake had little to no consequence on the final award.
The sum attributable to repairing the unowned portion may be small in relationship to the
cost of repairing the rest of the roof, but certainly one could not reasonably attribute the
cost to be non-existent or de minimis given the evidence of record.
In short, the uncontested summary judgment evidence established, as a matter of
law, the existence of mistake. When reviewing decisions regarding cross-motions for
5 summary judgment, we consider the evidence presented by each movant, determine all
questions presented, and, if the court erred, render the judgment the trial court should
have rendered. Tex. Workforce Comm’n v. Wichita Cty, 548 S.W.3d 489, 492 (Tex. 2018).
The judgment the trial court should have entered was one granting United Fire’s
traditional motion and vacating the appraisal award due to mistake. And, because the
judgment actually entered and awarding damages to Gossetts was dependent upon the
existence of a viable appraisal award, the judgment must be reversed.
No-Evidence Motion
The foregoing decision would effectively dispose of the appeal. Yet, because
United Fire also moved for a no-evidence summary judgment, authority obligates us to
consider aspects of it as well. Indeed, that should have been the first matter we
considered, according to precedent. See KMS Retail Rowlett, LP v. City of Rowlett, __
S.W.3d __, __, 2019 Tex. LEXIS 463, at *10 (Tex. May 17, 2019) (stating that “when
parties move for summary judgment on both traditional and no-evidence grounds, we first
consider the no-evidence motion”).
The three grounds mentioned in United Fire’s no-evidence motion concerned the
causes of action founded upon breached contract and the violation of Texas Insurance
Code provisions involving misrepresentation. As previously mentioned, the latter claims
were severed from the former into a separate suit; they are not part of this appeal. Thus,
we address only the argument pertaining to the breached contract claim.
Per the argument, United Fire alleged that Gossetts had no evidence that hail from
the May 2013 storm in question damaged the roof. Our review of the summary judgment
record uncovered such evidence within the deposition of Owens. He testified that both
6 he and the appraiser for United Fire discovered hail damage. See Ford Motor Co. v.
Ridgway, 135 S.W.3d 598, 600 (Tex. 2004) (stating that a question of material fact arises
and precludes summary judgment if more than a scintilla of evidence establishing the
existence of the challenged element is provided). Consequently, the trial court did not err
in denying this ground of the no-evidence motion.
The final judgment is reversed, and the cause is remanded to the trial court for
further proceedings.
Brian Quinn Chief Justice