Klinckwort et al v. Meridian Security Insurance Company

UNITED STATES DISTRJCT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
ANDREAS AND STACEY KLINCKWORT, 	§
Plaintiffs,
vs. 	CIVIL ACTION NO. 4:26-CV-00505
MERIDIAN SECURITY INSURANCE
COMPANY,
§
§
§
§
§
§
§
§
Defendant.
ORDER
Pending 	before 	this 	Court 	is 	Defendant 	Meridian 	Security 	Insurance 	Company's
("Meridian") Motion to Compel Appraisal and to Abate. (Doc. No. 4) . Plaintiffs Andreas
Klinckwort and Stacey Klinckwort (collectively, "Plaintiffs") responded, (Doc. No. 6), and
Meridian replied (Doc. No. 7). Upon careful review of the pleadings, uncontested facts , and
relevant legal standards, the Court hereby GRANTS the Motion to Compel Appraisal and to Abate
(Doc. No. 4) .
I. 	Factual Background
This is a first-party insurance dispute. To address the issue of appraisal, the Court finds
that it may be helpful to set out a timeline of the events in the dispute based on the documents and
uncontested facts provided by both parties. On May 28 , 2024, the Plaintiffs allege that a severe
hailstorm damaged their property located in Montgomery, Texas. (Doc. No. 1-4 at 5) . Nearly one
year later, on March 27 , 2025 , the Plaintiffs submitted a claim for this alleged storm damage to
their home insurance company, Meridian. See (Doc. No. 6-2). Meridian hired a third-party
adjuster, and the property was inspected on April 1, 2025. See (Doc. No. 6-3). The third-party
United States District Court
Southern District of Texas
ENTERED
April 21, 2026
Nathan Ochsner, Clerk
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adjuster determined that "[no] wind or hail damage was found on any slope." (Id. 	at 3) .
Accordingly, Meridian determined that the "only observable covered damage" from the storm was
to a window screen and the downspouts on the property. (Doc. Nos. 6-4, 6-5). Nevertheless,
Meridian found that those repair costs fell well below the deductible, and Meridian sent a partial
denial letter to the Plaintiffs. (Id.).
After the partial denial letter, the Plaintiffs retained a public adjuster, and the public
adjuster requested "an additional inspection of the dwelling to address the damages that were not
addressed or not adequately address at the initial inspection." (Doc. No. 6-6). Subsequently,
Meridian complied with the request and retained a second third-party adjuster to inspect the
property on July 1, 2025 . (Doc. No. 6-7). The second inspection report stated that while the
window screen and metal downspouts were damaged by hail, "the exterior wall siding finished are
not hail damaged" and "the roof shingles are not hail damaged." (Doc. No. 6-7 at 13 - 14). Meridian
then issued another partial denial letter to the Plaintiffs, stating that:
Based on the inspection report, the shingles have no damage caused from hail
damage. Your roof does show signs of normal wear, tear and maintenance related
issues for a roof of its age. There is no coverage to replace the roof as wear, tear
and maintenance are not covered under your policy. Coverage has been allowed to
replace the hail damaged window screen and downspouts that was document[ ed] in
the initial inspection of your home.
(Doc. No. 6 -8 ).
On August 29 , 2025, Plaintiffs' counsel sent Meridian a pre-suit notice in accerdance with
the Texas Insurance Code. (Doc. No. 6-9). On September 26, 2025 , Meridian responded to the pre-
suit notice and stated that "this letter shall serve as written request to inspect, photograph, or
evaluate, in a reasonable manner and at a reasonable time, the property that is the subject of the
claim." (Doc. No. 6-10). On December 5, 2025, the Plaintiffs filed this lawsuit in Montgomery
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County, Texas state court, and Meridian later timely removed the case to this Court. (Doc. No. 1-
4). On December 10, just five days after the Plaintiffs filed the lawsuit, Meridian sent a letter to
demand appraisal pursuant to the insurance policy. (Doc. No. 5). The policy states:
Appraisa l. If you and we fail to agree on the amount of loss, either may demand
an appraisal of the loss. In this event, each party will choose a competent and
impartial appraiser within 20 days after receiving a written request from the other.
The two appraisers will choose an umpire. If they cannot agree upon an umpire
within 15 days, you or we may request that the choice be made by a judge of a court
of record in the state where the Described Location is located. The appraisers will
separately set the amount of loss. If the appraisers submit a written report of an
agreement to us, the amount agreed upon will be the amount of loss. If they fail to
agree, they will submit their differences to the umpire. A decision agreed to by any
two will set the amount of loss.
(Doc. No. 6-1 at 66).
To date, the Plaintiffs have not submitted to the appraisal. As a result, Meridian filed its
Motion to Compel Appraisal on January 29 , 2026, arguing that the appraisal clause in the insurance
policy mandates compliance with the appraisal proces s. (Doc. No. 4). The Plaintiffs have taken
the position that Meridian has "arguably waived its right to appraisal" and that appraisal is not
appropriate in cases "where the fundamental dispute concerns coverage and not the amount of
loss." (Doc. No. 6). The Court addresses the pending Motion below.
II. 	Analysis
Appraisal clauses "provide a means to resolve disputes about the amount of loss for a
covered claim." In re Universal Underwriters of Tex. In s., 345 S.W.3d 404, 407 (Tex. 2011).
"These clauses are generally enforceable, absent illegality or waiver." Id. Because appraisals "can
provide a less expensive, more efficient alternative to litigation," id. , the Texas Supreme Court has
held that appraisals "should generally go forward without preemptive intervention by the courts."
State Farm Lloyds v. Johnson, 290 S.W.3d 886, 895 (Tex. 2009). Nevertheless, the Plaintiffs argue
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that the Court should not compel appraisal in this case because (1) appraisal is not appropriate for
coverage disputes and (2) Meridian has waived its right to appraisal through delay and prejudice
to the Plaintiffs. The Court addresses each of these arguments, in turn.
A. Appropriateness of the Appraisal
The Plaintiffs argue that "appraisal is not a proper mechanism to resolve this claim because
the primary dispute pertains to coverage for alleged storm damage to the roof ... and is not a
dispute regarding the amount of loss." (Doc. No. 6 at 4). It is well-settled that an appraiser must
"decide the ' amount of loss,' not to construe the policy or decide whether the insurer should pay."
Johnson, 290 S.W.3d at 890. Nevertheless, "[u]nless the amount of loss will never be needed ...
appraisals should generally go forward without preemptive intervention by the courts." Id. at 895.
The Plaintiffs argue that the July 7, 2025 Coverage Letter was a full denial of the claims
based on policy coverage- 	not the amount of loss. Accordingly, the Plaintiffs contend that
appraisal would not be appropriate case because the amount of loss is not at issue. Nevertheless,
while the Coverage Letter states that "[t]here is no coverage to replace the roof as wear, tear and
maintenance are not covered under your policy," it also states that "[ c]overage has been allowed
to replace the hail damaged window screen and downspouts that was document[ ed] in the initial
inspection of your home." (Doc. No. 6-8). The Letter also referred to and included the initial
estimate for these repairs, which Meridian determined fell below the policy deductible. (Doc. Nos.
6-5 , 6-8). The Court finds that the two Coverage Letters were only partial denials of the claims,
and the amount of loss for the repairs to the window screen and downspouts remain at issue.
Furthermore, the Court notes that the amount of loss related to the alleged damages to the
roof may still be relevant in this case. The Supreme Court of Texas has advised that "[w]hen an
insurer denies coverage, appraisers can still set the amount of loss in case the insurer turns out to
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be wrong." Johnson , 290 S.W.3d at 894. While the Johnson court recognized that there may be
cases in which "appraisal is so expensive and coverage is so unlikely that it is worth considering
beforehand whether an appraisal is truly necessary," such is not the case here. Id. at 895. The Court
finds that the appraisal process will benefit all Parties to determine the amount of loss for the
alleged hail-related damages to the roof "in case the insurer turns out to be wrong." Id.
B. 	Waiver
The Plaintiffs also contend that Meridian has "waived its right to appraisal through delay
and prejudice." It is undisputed that the right to demand appraisal may be waived. See, e.g. , JM
Walker LLC v. Acadia In s., 356 F. App'x 744, 748 (5th Cir. 2009). "Waiver is largely a matter of
intent, and for implied waiver to be found through a party 's actions, intent must be clearly
demonstrated by the surrounding facts and circumstances." Wright v. AS] Lloyds, No. 23-40719,
2025 WL 1588832, at *5 (5th Cir. June 5, 2025) (per curiam) (quoting Addicks Servs. , Inc. v. GGP-
Bridgeland, LP, 596 F.3d 286, 298 (5th Cir. 2010)). "Waiver of an appraisal clause occurs if (1)
the parties previously reached an ' impasse '; (2) following the impasse, one party unreasonably
delayed seeking an appraisal; and (3) that party's delay was prejudicial." Elevia, Inc. v. Amguard
Ins. Co., No. H-19-4028, 2020 WL 6192008, at *2 (S.D. Tex. May 21 , 2020). An impasse is a
"mutual understanding that neither [party] will negotiate further" and " is not the same as a
disagreement about the amount ofloss." Universal Underwriters, 345 S.W.3d at 410. The Supreme
Court of Texas has advised that " [o]ngoing negotiations, even when the parties disagree, do not
trigger a party 's obligation to demand appraisal." Id. "[W]hile an unreasonable delay is a factor in
finding 	waiver, 	reasonableness must be measured from 	the point of impasse." 	Universal
Underwriters, 345 S.W.3d at 408.
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The Plaintiffs contend that Meridian unreasonably delayed invoking the right to appraisal
after the parties reached an impasse when the public adjuster became involved on April 16 , 2025 ,
see (Doc. No. 6-6), which "effectively put Meridian on notice that there was a dispute regarding
the claim approximately eight months before Meridian attempted to invoke appraisal on December
10 , 2025." (Doc. No. 6 at 6). Nevertheless, the point of impasse must be the "breakdown of good-
faith negotiations such that both parties understand that further negotiations would be futile ."
Universal Underwriters , 345 S.W.3d at 410. On the current record, the Court does not find
evidence that a complete breakdown of good-faith negotiations occurred at or around the time that
the Plaintiffs retained the public adjuster. In fact, the parties continued to negotiate the claim
through a second inspection, second coverage letter, and the pre-suit notice through September
2025. Even in its response to the pre-suit notice, Meridian requested to again inspect the property.
See (Doc. No. 6-10) ("Please contact me at your earliest convenience to make arrangements for
this inspection."). There were no communications presented to the Court that would indicate an
impasse between the response to the pre-suit notice on September 26 , 2025, and December 5, 2025,
the date that the lawsuit was filed.
Without any evidence of an impasse during the pre-suit negotiations, the Court turns to the
filing of the lawsuit. "[T]he filing of a lawsuit does not always indicate a mutual impasse .. . it
signifies only a ' unilateral conclusion' that the parties were at an impasse." Hamorsky, 455 F.
Supp. 3d at 298 (quoting Universal Underwriters , 345 S.W. 3d at 409). Given that the documents
do not indicate a moment of impasse, or a total breakdown of negotiation, prior to the lawsuit, the
Court is only left with the "unilateral conclusion" that the parties were at an impasse. Accordingly,
the Court finds that under the facts and circumstances of this case, the point of impasse is the date
that the Plaintiffs filed this lawsuit. See, e.g., Harkless v. Allstate Vehicle, No. 4:23-CV-02097,
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2024 WL 5275031 , at *2 (S.D. Tex. Jan. 12 , 2024) ("[I]t is apparent from the evidence before the
Court that a point of impasse in negotiations was not reached until Plaintiff filed her lawsuit.");
Pek v. Allstate Vehicle and Prop. Ins. Co ., 2019 WL 6652011, at *3 (E.D. Tex. Mar. 14 , 2019)
("Impasse occurred ... when Plaintiffs filed suit in this matter." ).
Meridian sent its written notice demanding appraisal just five days after the Plaintiffs filed
this lawsuit. (Doc. No. 6 -11 ). The Court finds that Meridian was not "unreasonably delayed
seeking an appraisal." Elevia, 	Inc. , 2020 WL 6192008, at *2 . Finding that there was no
unreasonable delay, the Court holds that Meridian did not waive its right of appraisal.
The Court holds that Meridian invoked its demand for appraisal within a reasonable time
after the lawsuit was filed and that Meridian did not waive its right of appraisal. The Court also
finds that while there is a coverage dispute in this case, an appraisal is still relevant to the claims
in this case. Therefore, the Court hereby GRANTS the Motion to Compel Appraisal (Doc. No. 4).
C. Abatement
Having concluded that these claims are subject to appraisal, the Court now considers
whether this case should be abated pending the resolution of the appraisal. The Plaintiffs argue
that even if this Court compels appraisal, this case should not be abated because "[a]ppraisal would
not address the numerous other causes of action at iss ue in this litigation." (Doc. No. 6 at 9). "In
evaluating a motion to stay or abate proceedings to allow for completion of an insurance appraisal,
the primary question is whether the stay will 'a id judicial efficiency and economy."' Rockbrook
Place Townhomes Assoc ., Inc. v. LIO In s. Co., No. 4:24-CV-1021 , 2025 WL 2533999, at *4 (E .D .
Tex. Sep. 3, 2025) (quoting Gonzalez v. Allstate Fire & Cas. Ins., No. SA -1 8-CV-283, 2019 WL
609781, at *2 (W.D. Tex. Jan. 7, 2019)).
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Meridian contends that "abating this action until the appraisal is complete may wholly or
partially obviate the need for further litigation, thereby preserving limited judicial resources and
avoiding unnecessary time and expense spent by the parties" and that "abatement will properly
effectuate the intent of the appraisal clause by allowing the parties to contractually resolve the
amount ofloss." (Doc. No. 4 at 11). The Court agrees that the appraisal may streamline the issues
raised in this lawsuit, and in the interest of judicial economy and resources, the Court GRANTS
the Motion to Abate (Doc. No. 4).
III. 	Conclusion
For the foregoing reasons, the Court GRANTS the Motion to Compel Appraisal and to
Abate. (Doc. No. 4). The Plaintiffs are ordered to provide the name, address, and contact
information of their chose appraiser to Meridian by May 15, 2026. This case is abated and
administratively closed pending appraisal. The Parties should notify the Court within ten (10) days
of the completion of the appraisal process.
It is so ordered.
5-t-
Signed on this the~ day of April 2026.
fA)~
Andrew S. Han en
United States District Judge
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