Commercial Property Owner Successfully Defeats Property Insurance Company’s Efforts to Avoid $1,000,000 Appraisal Award For Extensive Roof Damage Caused by Hailstorm

A commercial property owner filed a claim with its property insurance company for extensive hail damage caused to the roofs of two of its covered commercial buildings. The property owner expected prompt payment of its claim and not a 3-year legal battle with the insurance company.

Introduction

After a severe hailstorm struck the Dallas-Fort Worth area in June 2021, a commercial property owner filed a property damage claim with its insurance company. The storm had caused significant damage to two commercial buildings, requiring full roof replacements. While the insurer accepted part of the appraisal award for one building, it refused to pay the $1 million awarded for the second, leaving the client with a leaking roof and a costly legal battle ahead.

Problem

The commercial property owner submitted to the appraisal award process required by the insurance policy. The insurance company decided to accept the portion of the appraisal award for one of the commercial buildings and to reject the $1 million portion of the appraisal award for the other commercial building.

The insurance company argued that the appraisal award was invalid due to procedural missteps and alleged errors in the appraisal process. The insurance company’s defenses included:

Improper court jurisdiction for appointing an umpire.
Claims that the award was based on fraud, accident, or mistake.
Disputes over the appraisal methodology and pricing.
Attempts to disqualify the commercial property owner’s roofing expert.

The commercial property owner retained Shields Legal Group to uphold the binding and enforceable appraisal award against the insurance company. Shields Legal’s litigation team designed and launched an effective litigation plan, including:

Filing for summary judgment to eliminate the insurance carrier’s weak defenses.
Deposing key personnel from the insurance carrier.
Defending the credibility of the client’s expert, a seasoned roofing contractor.
Demonstrating that the appraisal process followed policy terms and relevant legal precedent.

Solution

Shields Legal’s litigation plan resulted in a win for our commercial property-owner client. The court issued a 30-page summary judgment opinion largely in favor of the client,[1] including:

Upholding the appraisal award as binding and enforceable.
Rejecting the insurer’s claims of fraud or mistake due to lack of evidence.
Denying the motion to strike the client’s expert, citing their practical experience and methodology.

Significantly, the court allowed our commercial property owner client’s claims for bad faith, statutory violations, and consequential damages (e.g., lost rental income) to proceed to trial.

[1] The Court’s summary judgment opinion is set forth in HWY 67 Dealership JV v. Depositors Ins. Co., No. 3:22-CV-00784-L, 2024 WL 3759752 (N.D. Tex. June 17, 2024), report and recommendation adopted, No. 3:22-CV-00784-L, 2024 WL 3493790 (N.D. Tex. July 22, 2024).

Conclusion

As a result of Shields Legal’s thoughtfully designed and carefully executed litigation plan, our commercial property owner client successfully overcame a three-year legal battle and positioned itself for a full recovery under the property insurance policy. At Shields Legal, we understand that the outcome of litigation matters to our clients, and we stand by their side each step of the way.