Most homeowner’s policies contain appraisal language providing for judicial appointment of umpires. However, “selection of an umpire by a judge in accordance with the terms of [an insurance policy] does not require the filing of a lawsuit or invoking the subject matter jurisdiction of a court.” Texas Mun. League Joint Self-insurance Fund v. Hous. Auth. of the City of Alice, №04–15–00069-CV, 2015 WL 5964182 at *2 (Tex.App. — San Antonio Oct. 14, 2015, not pet.) (memo. op.).
“Appraisal clauses, commonly found in homeowners, automobile, and property policies in Texas, provide a means to resolve disputes about the amount of loss for a covered claim.” In re Universal Underwriters of Tex. Ins. Co., 345 S.W.3d 404, 406–07 (Tex. 2011), citing State Farm Lloyds v. Johnson, 290 S.W.3d 886, 888 (Tex. 2009). When the amount of loss is in dispute, appraisal is a precondition to a policyholder’s suit against an insurance company for violating the policy. Johnson, 290 S.W.3d at 894.
“Appraisals require no attorneys, no lawsuits, no pleadings, no subpoenas, and no hearings.” Johnson, 290 S.W.3d at 894. When appointment of an umpire is necessary, either party may request a judge of a court of record to perform this role. However, “the selection of an umpire by a judge in accordance with the terms of [an insurance policy] does not require the filing of a lawsuit or invoking the subject matter jurisdiction of a court.” Texas Mun. League Joint Self-insurance Fund v. Hous. Auth. of the City of Alice, №04–15–00069-CV, 2015 WL 5964182 at *2 (Tex.App.–San Antonio Oct. 14, 2015, no pet.) (memo. op.). Appointment of an umpire is “not a judicial act,” but “a mere ministerial act pursuant to contract[.]” Id., quoting Application of Roberts Co., 258 N.C. 184, 186, 128 S.E.2d 137, 138–39 (1962). Therefore, appointment of an umpire is appropriately obtained informally by a person who happens to be a judge, not formally by an order of the court. Texas Mun. League Joint Self-insurance Fund, 2015 WL 5964182 at *2. This request is presented to the judge “outside the judicial system.” Id. at *3 n. 2.
See also: Lyndon Southern Ins Co v Parnell, No. 05-19-01524-CV, 5th Dist (Dallas 2021)(recognizing appointment of an umpire in not a judicial act and informal–citing Texas Mun. League Joint Self-insurance Fund, supra.
Also note: Houston has its own informal system for umpire appointment and El Paso has also in the past allowed informal appointment of an umpire.
Selection of an umpire does not resolve disputes between parties, but merely provides a mechanism by which a disagreement regarding the amount of loss may be determined pursuant to the terms of the contract between the parties. Texas Mun. League Joint Self-insurance Fund, 2015 WL 5964182 at *3. Because pleadings requesting appointment of umpire do “not present any real controversy between the parties that would be actually determined by the litigation, there [is] no justiciable controversy, and the trial court’s subject matter jurisdiction [is] not invoked.” Id.Therefore, the Court lacks jurisdiction to hear a suit requesting appointment of an umpire.
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