When an insurance claim goes to appraisal, policyholders and insurers alike often wonder — once the award is signed, can anyone change it?
A recent Texas appellate decision in Mallady v. Homeowners of America Insurance Company answers that question with a clear no. Once two members of the appraisal panel sign the award, it becomes binding. The umpire cannot rescind or “fix” it unless very limited exceptions apply.
The Background
- Date of Loss: January 24, 2020
- Cause: Nearby industrial explosion at Watson Grinding & Manufacturing Co.
- Policyholder: Kelly Mallady
- Insurer: Homeowners of America Insurance Company (HOAIC)
HOAIC valued Mallady’s dwelling damage at $53,059.54 RCV. She disagreed and estimated $104,093.04. When negotiations stalled, she invoked the policy’s appraisal clause.
Each party appointed an appraiser — Ray Choate for Mallady and Kevin Hromas for HOAIC — and the two selected William McLeod as umpire.
The Appraisal Twist
April 6, 2021 – The First Award (“April Award”)
McLeod issued an award for $24,000 RCV — covering only dwelling damages, no contents. He signed it electronically and sent it to both appraisers. Hromas quickly printed and signed it. Choate immediately protested, noting it came in lower than HOAIC’s original estimate.
The Umpire Tries to Void the Award
After hearing Choate’s concerns, McLeod emailed both appraisers, declaring the April Award “VOIDED” and promising to issue a revised award.
June 8, 2021 – The Second Award (“June Award”)
McLeod and Choate signed a second award for $215,616.65 RCV, which covered the dwelling, fence, and contents.
Litigation Begins
HOAIC moved to set aside the June Award, arguing the April Award already bound the parties. The trial court agreed, confirmed the April Award, and granted HOAIC summary judgment.
Mallady appealed.
The Court’s Ruling (Aug. 7, 2025)
1. The April Award Stands
The Texas Fourteenth Court of Appeals ruled:
- Once any two panel members sign an appraisal award, it binds the parties.
- An umpire does not have the unilateral authority to change a binding
- The April Award met all requirements, so McLeod’s attempt to void it had no effect.
2. Contents Claim Survives
Because the April Award only addressed dwelling damages, Mallady can still pursue her breach of contract claim for contents coverage.
3. Appraisers Are Not “Representatives”
HOAIC demanded that Choate, Mallady’s appraiser, sit for an Examination Under Oath (EUO). The court rejected the demand. The policy required appraisers to act independently and impartially, which conflicts with the role of a “representative.” The policy also treated “representatives” and “appraisers” as separate roles.
4. No Extra-Contractual Damages
The court rejected Mallady’s claims for mental anguish and attorney’s fees because those claims arose from the denial of policy benefits, not from an independent injury.
Practical Takeaways
- Finality Matters: In Texas, two signatures lock in an appraisal award. While some carriers may agree to changes in certain circumstances, sometimes the only way to “change” or “undo” an award is to move to legally set it aside – which is very difficult to do.
- Check the Scope: If an award omits certain categories (like contents), parties can still litigate those items.
- Know Your Roles: Appraisers act independently — insurers cannot treat them as party representatives for EUOs unless the policy says so explicitly.
- Frame Your Challenge Carefully: If you believe an award contains an error, and the insurance company does not agree to a change, the proper course may be to challenge it under the “mistake” exception rather than simply issuing a second award.
Case Citation: Mallady v. Homeowners of America Insurance Co., No. 14-24-00147-CV (Tex. App.—Houston [14th Dist.] Aug. 7, 2025) (mem. op.)
