HOUSTON – A Texas appellate court recently reversed a judgment won by the Mostyn Law Firm in a Hurricane Ike lawsuit, wiping away hundreds of thousands of dollars in damages and attorney’s fees.

Dissatisfied with his payment, plaintiff Ozier Hurst filed suit against National Security Fire & Casualty Company, Action Claim Services and Aaron Timmins (an independent adjuster) on September 7, 2010.

Court records show Hurst submitted a damage claim to National 670 days after the hurricane. National assigned the claim to Action, who in turn dispatched Timmins to assess the damage done to Hurst’s home.

In accordance with Timmins’ appraisal, National paid Hurst $3,524.56 (accounting for the $1,000 policy deductible), which Hurst accepted.

Although Hurst cashed the check, he did not use any of the money to repair his property, nor did he request re-inspection or inspection of additional property.

Several years into the litigation, Hurst’s counsel, Gregory Cox of Mostyn Law, invoked the appraisal clause. Hurst was issued an award of $7,166.36, court records show.

However, Hurst never returned or cashed the check, opting to pursue the litigation instead.

A jury found National, Action and Timmins engaged in deceptive acts, awarding tens of thousands of dollars in damages.

A final judgment awarded Hurst $55,993.60 from National, $22,731.22 from Action and $22,731.22 from Timmins, plus $165,000 in attorney’s fees, court records show.

National, Action and Timmins appealed and on May 23 the 14th Court of Appeals reversed and remanded the trial court, finding that the binding appraisal process is an extra-judicial means designed to avoid litigation on the issue of damages.

“We conclude that an insured cannot defeat an otherwise valid and binding appraisal award simply by refusing to accept the insurer’s payment of the award or by asserting extra-contractual claims that are derivative of the policy claim,” the opinion states.

“To hold otherwise would obviate the very purpose of the binding appraisal process. Accordingly, the trial court erred in denying the motion for directed verdict. We therefore reverse the judgment of the trial court and render judgment that Hurst’s take nothing on his claims.”

Appeals case No. 14-15-00714-CV

Galveston County case No. 10-CV-2657

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