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by Scott Keffer

The U.S. District Court for the Northern District of Texas, Fort Worth Division, recently granted an insurer’s motion for summary judgment, rejecting the insured’s argument that the contractual limitations period (2 years + 1 day) contained in its policy was unlawful and that the policy’s appraisal provision constituted a condition precedent that must be invoked prior to filing suit (despite filing suit prior to demanding appraisal) and before a limitations period begins to accrue or there would be waiver. Christian Care Ctr. v. Am. Alternative Ins. Corp., No. 4:25-CV-00321-O, 2025 WL 2831472 (N.D. Tex. Oct. 6, 2025).

The insured submitted a property damage claim, which the insurer denied on July 29, 2022. On February 18, 2025, the insured filed suit alleging breach of contract and violations of the Texas Insurance Code. Id. at *1. The insurer sought summary judgment, arguing that all of the insured’s claims were time-barred. Conversely, the insured argued that because the policy unlawfully reduced the limitations period, its claim was subject to a four-year limitations period and that such period had not yet been triggered because the policy’s appraisal provision had not been waived or invoked as a condition precedent to filing suit (without acknowledging that it was the insured, in fact, who filed suit before demanding appraisal). Id. at *2.

The court quickly found that the policy’s two-year-and-one-day limitations period was enforceable under Texas law. Id. Moreover, the court also found that the denial letter “unambiguously stated that Plaintiff would not receive any insurance payments, thus triggering the accrual date. . . . [and because] Plaintiff filed its claims over two years and six months after the accrual date, these claims are time-barred.” Id. at *3. Further, the court concluded that reopening the claim for appraisal and then affirming the prior claim denial did not alter the trigger date for the limitations period—rather it remained the date of the initial claim determination that was issued on July 29, 2022. Id. at *2.

Finally, the court explained that the policy’s appraisal provision utilized permissive rather than mandatory language and that such language evidenced an intent that appraisal be an optional remedy in the event of dispute on the amount of loss rather than a mandatory condition precedent to filing suit. Id. at *3 (“The Court declines to strain the construction of the provision to require express invocation or waiver of a conditional right prior to filing suit . . . .”).

As such, the court granted the insurer’s motion for summary judgment and dismissed the case with prejudice. Id. at *4.

The Lowdown: Texas courts enforce lawful contractual limitations periods and will likely not consider a permissive appraisal provision to constitute a condition precedent to filing suit or a trigger for a limitations period to begin accruing. Instead, the date of the claim denial triggers the limitations period, which is not affected by reopening the claim to participate in an appraisal that does not alter the initial claim determination.

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The opinions expressed are those of the authors and do not necessarily reflect the views of the firm or its clients. This article is for general information purposes and is not intended to be and should not be taken as legal advice.