Dallas Fort Worth Insurance Lawyer Blog
Here is an insurance case that was appealed to the Fort Worth Court of Appeals. The case is styled, Joseph Lambert and Susan Lambert v. State Farm Lloyds and Tevin Senne. The appeal involved a few issues but the one focused on here deals with the Texas Prompt Payment of Claims Act (TPPCA).
The Lamberts are appealing a grant of summary judgment in favor of State Farm.
The Lamberts had their home damaged in a storm in May 2015. The y made a claim for benefits and after the first inspection, the damages did not not exceed the Lamberts deductible. A second inspection was requested, after which the Lamberts were issued a check fo $1,700, in October 2015.
The Lamberts sued State Farm in January 2016. State Farm then moved to compel appraisal resulting in the Lamberts recovering $63,404,63, that was paid in August 2016. The summary judgment motion was then filed by State Farm and granted in their favor.
The Lamberts argue that the trial court erred in granting summary judgment to State Farm on the TPPCA claim. Specifically, the Lamberts alleged that State Farm failed to follow the TPPCA’s prompt payment deadlines and thus the Lamberts are entitled to statutory interest and attorney’s fees.
Sections 542.054 and 542.057 of the TPPCA set out guidelines facilitating the timely payment of insurance claims. While the TPPCA does not explicitly address how initiating the appraisal process affects the TPPCA timing guidelines, this issue was offered guidance by the Texas Supreme Court in the opinion styled, Barbara Techs. Corp. v. State Farm Lloyds. The facts of the Barbara Tech were much like the facts of this case.
The court interpreted the TPPCA’s lack of any appraisal-related language to mean that the legislature intended neither to impose specific deadlines for the contractual appraisal process within the prompt-pay scheme nor to exempt the contractual appraisal process from the deadlines. The court concluded that an insured could be entitled to a recovery by showing that (1) the insurer was initially liable for the claim under the policy and (2) the insurer violated a TPPCA provision. Because in Barbara Tech, State Farm had not accepted liability under the policy and had not yet had its liability adjudicated one way or another, Barbara Tech was not entitled to TPPCA damages as a matter of law. By the same token, State Farm’s invoking appraisal and promptly paying the resulting award did not automatically exempt it from TPPCA damages, either. For these reasons, the court remanded the case for the trial court to first determine liability and then sort through TPPCA timing requirements.
Here, as noted in the post-submission letter brief discussing Barbara Tech, the Lamberts TPPCA claim is “in the same procedural posture” and should be remanded for the same reasons. This Court agreed.