Alamo Cas. Co. v. Trafton

• Decision Date: 24 May 1950
• Docket Number: No. 12095,12095
• Citation: 231 S.W.2d 474
• Parties: ALAMO CASUALTY CO. v. TRAFTON.
• Court: Texas Court of Appeals

Page 474

231 S.W.2d 474

ALAMO CASUALTY CO. v. TRAFTON.

No. 12095.

Court of Civil Appeals of Texas, San Antonio.

May 24, 1950.

Rehearing Denied June 14, 1950.

Perkins & Floyd, Alice, Paul B. Miller, Jr., Alice, for appellant.

Werner A. Gohmert, Alice, J. Earl Barnhouse, Alice, for appellee.

BROETER, Justice.

This is an appeal from a judgment obtained by W. A. Trafton against Alamo Casualty Company upon a standard $100 deductible insurance policy issued to him, covering a 1936 Chrysler passenger automobile alleged to have been totally destroyed as a result of a collision. The trial was with the aid of a jury and, upon special issues submitted to them by which the jury found plaintiff's automobile was totally destroyed and was of the value of $550 at the time of destruction, the trial court entered judgment for plaintiff for $450, interest and costs.

By the first point the appellant contends the trial court erred in overruling its plea in abatement. As a basis for its plea in abatement defendant claimed that plaintiff had failed to comply with two conditions precedent before bringing suit; that the policy on which plaintiff sued required that plaintiff furnish 'proof of loss' within 91 days after date of loss, and further provided that in the event the parties could not agree on the amount of loss, then appraisers should be appointed in accordance with the terms of the policy; that plaintiff had failed to agree on the amount of loss and had not furnished proof of loss, and although defendant had demanded an appraisal and plaintiff and defendant had each appointed appraisers, plaintiff's appraiser had refused to act, whereupon defendant alleged the plaintiff could not bring suit until such conditions had been complied with, and the suit should be abated or dismissed for failure of plaintiff to comply with the conditions of the policy.

Plaintiff, in his original reply to the plea in abatement, denied the allegations of defendant's plea and alleged that defendant had not made a valid demand for appraisal under the conditions of the policy; that it had actual knowledge of all matters material to the loss involved and proof of loss was not necessary, and that if proof of loss was required to be submitted or if defendant was entitled to an appraisal such rights were waived. Plaintiff further filed an amended reply to defendant's plea in abatement, in which he again denied the allegations of the plea in abatement and alleged defendant had actual knowledge of all material matters to the loss and proof of loss was unnecessary; and that defendant had made demand for appraisal and had made bona fide offer of settlement, and such demand and offer waived submission of proof of loss, and that by bona fide offer of settlement defendant waived its right to have the loss appraised.

The policy sued on herein required that 'when loss occurs the named insured shall file proof of loss with the company within ninety-one days after the occurrence of loss, unless such time is extended in writing by the company in the form of a sworn statement of the named insured,' and recites what such proof of loss shall contain. And the policy further provides that 'if the named insured and the company fail to agree as to the amount of loss each shall on the written demand of either made within sixty days after receipt of proof of loss by the company, select a competent and disinterested appraiser and the appraisal shall be made at a reasonable time and place. The appraisers shall first select a competent and disinterested umpire and failing for fifteen days to agree upon such umpire, then upon the request of the named insured or the company, such impire shall be selected by a judge of court of record in the County and State in which such appraisal is pending. The appraisers shall then appraise the loss stating separately the actual cash value at the time of loss and the amount of loss, and failing to agree shall submit their differences to the umpire.' The policy further provides that 'payment for loss may not be required nor shall action lie against the company unless as a condition precedent thereto, the named insured shall have fully complied with all the terms of this policy * * *.'

The hearing on this plea in abatement was had before the county judge prior to the trial of the case upon the merits, and was by the court overruled. It is well established that proof of loss, such as is required in the policy involved in this case, may be waived. 2 Tex.Jur. 1109; 14 Ruling Case Law p. 1349, pars. 521 and 524.

The evidence introduced on this hearing shows that the insurer knew the insured had damaged his car by collision and upon request of the insurer an adjuster sent a representative from Corpus Christi to Alice, Texas, to investigate the claim of loss and settle the same if possible; that the adjuster's representative went to Alice, viewed the wrecked automobile and interviewed the insured and told him to go to Corpus Christiand see the adjuster. This the insured did and in conversation with the adjuster he admitted the automobile was a total loss and offered $220 in settlement of the claim. The insured claimed his car was worth $550 and asked payment in such amount. We quote part of the adjuster's testimony on this hearing, as follows: 'Mr. Trafton came by my office on February 4, 1949. At this time we had a conversation about Mr. Trafton's claim. Mr. Trafton wanted to know what the Insurance Company would give him for the damages to his car. We had an estimate to repair that was so high. I knew that the car was damaged so much it wouldn't pay to repair it. I assumed it was a total loss and told Mr. Trafton we would give him the N.A.D.A. value for the car of $220.00, which I explained was how the company figured values of cars. The N.A.D.A. book is an official guide to the price of used cars and we use it as a guide in determining values of used cars on which claims are being made against insurance companies. Mr. Trafton said he wanted $550.00 valuation which was what he paid for the car.'

It is apparent from the record in this case that no serious dispute existed between the parties as to the total destruction of the car, but the parties failed to compromise the claim. The insured was never notified that his claim for $550 would not be paid, and the evidence further shows that the insurer demanded an appraisal while negotiations for settlement were pending.

The requirement contained in the policy for submittion of proof of loss by the insured was waived by demand for appraisal, 2 Tex.Jur. 1109, par. 291; by offering to pay part or all of the loss, 14 R.C.L. 1349; and by admitting liability, St. Paul Fire and Marine Insurance Co. v. Pipkin, Tex.Civ.App., 207 S.W. 360; Commercial Union Assurance Co. of London, Ltd. v. Meyer, 9 Tex.Civ.App. 7, 29 S.W. 93.

The evidence in this case establishes that the insurer appointed an appraiser and the insured also appointed an appraiser. The record does not establish that the insurer at any time requested either of the appraisers to appoint an umpire. The insurer had notice of who the insured had appointed as his appraiser, but except for making an effort to locate him did nothing more. Such appraiser was located but would not make an appraisal and said that he did not know enough about automobiles and that he wanted to talk it over with some people he knew. Neither appraiser did anything further. The appraisers never agreed on the value of the damaged automobile. Insurer made no effort to have another appraiser appointed or have the two appraisers agree upon an umpire. The clause providing for the appointment of appraisers, as hereinabove quoted, requires that before appraisers may be appointed the insured and company shall fail to agree as to the amount of loss. The insurer quit negotiating for settlement with a statement by the adjuster to the insured that he would submit the insured's claim for $550 to the insurance company. The insured was never notified that his claim was denied. Under the evidence in this case we do not believe that the parties failed to agree upon the loss. The loss was total, but the parties could not reach a settlement. There was no failure to agree, as is required by the decisions of our courts and the appraisal clause quoted above before appraisers may be appointed. Disagreement is a prerequisite to the right to demand arbitration, and arbitration becomes a prerequisite to the maintenance of suit on the policy. It is said in 24 Tex.Jur. § 298: 'Where a policy provides for arbitration as to the amount of the loss, in the event of a disagreement between the parties, such a disagreement is a prerequisite to the right to demand such arbitration. The disagreement must be one of fact, evidenced by an attempt in good faith on the part of the party demanding arbitration to agree as to the loss. A mere arbitrary refusal to pay the amount demanded and offering a less amount does not constitute such a disagreement as is...