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The United States Court of Appeals for the Fifth Circuit in Agredano v. State Farm Lloyds, No. 19-50656 (September 16, 2020), has reaffirmed that Texas Insurance Code §542.060, the Texas Prompt Payment of Claims Act (“TPPCA”), is a strict liability statute. Here, Agredano sued State Farm Lloyds (“State Farm”) under their homeowner’s insurance policy for windstorm damages to their home. The district court granted a partial summary judgement to State Farm on all insured’s causes of action except for breach of contract. A jury found for the insured on the breach of contract claim.…
Continue Reading The Texas Prompt Payment of Claims Act Is Reaffirmed As a Strict Liability Statute

Recent trends of insurers revising the appraisal provisions in insurance policies have clouded the original effect of the appraisal process as an alternative dispute resolution process in lieu of litigation. For many years the insurers reaped a benefit of an appraisal award as a bar to the insured’s breach of contract case after payment of the award pursuant to the policy’s appraisal provision.…
Continue Reading Clear Waters of Texas Appraisals – Prompt Payment Claim After Appraisal

Texas law is currently silent on the issue of whether insurance companies may sell insurance policies that require policyholders to bring coverage disputes to an arbitrator rather than the courts. Texas has no statute or regulation in force that prohibits or restricts mandatory arbitration.1…
Continue Reading Can Nonsignatories to an Insurance Policy Enforce its Arbitration Provision?

Several weeks ago, the Texas Supreme Court issued a trilogy of per curiam opinions: TopDog Properties v. GuideOne National Insurance Company,1 Alvarez v. State Farm Lloyds,2 and Lazos v. State Farm Lloyds,3 and remanded these cases because the trial courts and appellate courts failed to follow the Texas Supreme Court’s opinions in Barbara Technologies Corp. v. State Farm Lloyds,4 and Ortiz v. State Farm Lloyds.5 Except for TopDog which has a unilateral appraisal clause in its policy, all three cases have nearly identical facts.…
Continue Reading Policyholders Continue to Prevail As “Top Dogs” – Court Confirms Payment of Appraisal Award Not a Bar to Insurer’s Liability Under Prompt Payment of Claims Act

Prior to the 2009 Texas Supreme Court decision in State Farm Lloyds v. Johnson,1 Texas courts were split regarding the line between damage and liability, and when an appraiser could decide causation as part of the damage determination. For the most part, that issue has been resolved.…
Continue Reading Texas Court Rules in Appraisal Dispute—You Can’t Have Your Cake and Eat it, Too!

Last week, the Texas Second Court of Appeals issued Lambert v. State Farm Lloyds,1 which follows the Texas Supreme Court’s recent opinion in Barbara Technologies Corp. v. State Farm Lloyds.2

In a recent blog post, Payment of an Appraisal Award: Is There More, I reviewed Barbara Tech and its companion case, Ortiz v. State Farm Lloyds.3 These two landmark cases hold that an insurer’s full and timely payment of an appraisal award, bars an insured’s causes of action for breach of contract and any common law and statutory bad faith claims, to the extent the bad faith claims seek only actual damages that are considered lost policy benefits.…
Continue Reading Invoking Appraisal – Be Careful What You Ask For

The Round-up: The Texas Association of Public Insurance Adjusters (“TAPIA”) has lassoed and corralled a great group of speakers and events that you absolutely will not want to miss this fall in Fort Worth. If you register by August 31st, members will only have to “pony-up” $149 and non-member, first timers $195. If you don’t have a bed roll or pup-tent to pitch, early registration is already open at Embassy Suites Downtown Fort Worth at 600 Commerce Street. You can save a nickel at Embassy Suites if you register by September 16th and mention “TAPIA” to get a TAPIA rate. Register either on line or call (817) 332-6900.…
Continue Reading Yee-Haw!! Meet Your Tapia Cowpoke Friends in the Cowtown Capital of Texas—Fort Worth—For the Fall Conference October 15-17, 2019

The infamous “Hail Bill” will be celebrating its second birthday this September 1, 2019. Whether there will be any celebrations is another question. The “Hail Bill” – the Chapter 542A amendment to the Texas Insurance Code—covers first-party claims arising from “forces of nature.”1 Within that chapter, one notably section is 542A.006, which allows an insurer to elect to assume its agent’s civil liability for the agent’s conduct related to the handling of a claim. This section has been seeing a lot of litigation of late.…
Continue Reading Remand From Federal Court After Passage of the “Hail Bill:” Section 542A.006 and the Election of Legal Responsibility

Current Justices of the Texas Supreme Court

The Texas Supreme Court recently answered the question above in two cases with different results depending on what type of insurance code violations the insured is alleging. The court addressed Texas Insurance Code chapter 542 violations (often called prompt payment of claims) in Barbara Technologies Corporation v. State Farm Lloyds.1…
Continue Reading Does Payment of an Appraisal Award Wipe Out Claims Handling Insurance Code Violations?