IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF TEXAS

BEAUMONT DIVISION

FIRST BAPTIST CHURCH DAISETTA 

TEXAS,

Plaintiff,

vs. 

CHURCH MUTUAL INSURANCE 

COMPANY,

Defendant.

NO. 1:23-CV-00193-MAC-ZJH

REPORT AND RECOMMENDATION GRANTING DEFENDANT’S MOTION FOR 

SUMMARY JUDGMENT

This case is assigned to the Honorable Marcia A. Crone, United States District Judge. On 

May 26, 2023, Judge Crone referred this case to the undersigned United States Magistrate Judge 

for pretrial management. Doc. No. 8. Pending before the court is Defendant Church Mutual 

Insurance Company (“Church Mutual”)’s Motion for Summary Judgment. Doc. No. 13. After 

careful consideration of the filings and applicable law, the undersigned concludes that Church 

Mutual’s instant motion (Doc. No. 13) should be granted. 

I. Factual and Procedural Background

This case arises from a first party insurance dispute over property damage. According to 

the facts alleged in the First Amended Complaint, Church Mutual insured a building and personal 

property owned by Plaintiff First Baptist Church of Daisetta Texas (“First Baptist”). Doc. No. 12 

at 4, ⁋⁋ 15–16. On February 22, 2022, the insured building suffered wind and hail damage. Id., ⁋ 

17. First Baptist timely reported the damage to Church Mutual. Id., ⁋ 18.

Church Mutual relied on an independent adjuster to inspect the insured building and 

prepare an estimate of covered damages. Id., ⁋ 19. Church Mutual also relied on an engineering 

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firm to inspect the insured building. Id., ⁋ 21. On June 13, 2022, Church Mutual submitted the

engineering report, the independent adjuster’s estimate, and Church Mutual’s estimate of the 

replacement cost value to First Baptist. Id., ⁋ 30; Doc. No. 13 at 2, ⁋ 1. Church Mutual’s estimate 

of the replacement cost value of the damage to the insured property was $677.39, which was less 

than the policy’s $5,000 deductible. Doc. No. 12 at 6, ⁋ 31. Church Mutual denied coverage based 

on this estimate. Id. 

On June 14, 2022, First Baptist provided Church Mutual with presuit notice. Id., ⁋ 34. On 

June 23, 2022, First Baptist invoked appraisal under the policy’s appraisal clause and identified its 

appointed appraiser. Id., ⁋ 35. On July 13, 2022, Church Mutual appointed its own appraiser. Id., 

⁋ 36. On October 15, 2022, First Baptist’s appraiser and the agreed-upon umpire signed an 

appraisal award that determined the replacement cost value of the damage to the insured building 

was $87,015.86. Id., ⁋ 39. The actual cash value of this award was $72,031.77. Id. 

On October 19, 2022, Church Mutual tendered payment of $67,031.77 to First Baptist to 

satisfy the appraisal award. Doc. No. 13 at 3, ⁋ 4; Doc. No. 12 at 8, ⁋ 40. This amount consisted 

of the $72,031.77 actual cash value minus the $5,000 deductible. Doc. No. 13 at 3, ⁋ 4. On 

November 4, 2022, First Baptist tendered presuit notice to Church Mutual contending that Church 

Mutual owed $3,764.80 for violations of the Texas Prompt Payment of Claims Act. Doc. No. 13 

at 3, ⁋ 5. In response, on December 7, 2022, Church Mutual tendered payment of $3,764.80 in 

satisfaction of the “late payment interest for the claim.” Id., ⁋ 6. 

On January 30, 2023, First Baptist filed its Original Petition against Church Mutual in 

Liberty County Court at Law, and on May 5, 2023, filed its First Amended Petition. Doc. No. 4, 

6. On May 17, 2023, Church Mutual removed the case to this court. Doc. No. 1. On October 6, 

2023, First Baptist filed its First Amended Complaint alleging prompt payment claims under TEX.

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INS. CODE § 542, breach of the common law duty of good faith and fair dealing, and bad faith 

claims under TEX. INS. CODE § 541. Doc. No. 12. 

On November 7, 2023, Church Mutual filed the instant Motion for Summary Judgment. 

Doc. No. 13. On November 29, 2023, First Baptist filed a Response (Doc. No. 14), and on 

December 5, 2023, Church Mutual filed a Reply (Doc. No. 15). 

II. Legal Standards

Summary judgment shall be granted when the pleadings, discovery and disclosure 

materials on file, and any affidavits show that there is no genuine dispute as to any material fact 

and the moving party is entitled to judgment as a matter of law. FED. R. CIV. P. 56(a); Celotex 

Corp. v. Catrett, 477 U.S. 317, 323‒25 (1986); Edwards v. Oliver, 31 F.4th 925, 929 (5th Cir. 

2022). A dispute is genuine if the evidence is sufficient for a reasonable jury to return a verdict

for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A fact is

material when it is relevant or necessary to the ultimate outcome of the case. Id. (“[T]he

substantive law will identify which facts are material”). The moving party has the burden of

demonstrating that there are no genuine issues of material fact in dispute. See Celotex, 477 U.S. 

at 323; Harvill v. Westward Commc’ns, LLC, 433 F.3d 428, 433 (5th Cir. 2005). The court resolves 

any doubts and draws all reasonable inferences in favor of the nonmoving party. Matsushita Elec. 

Indus. Co. v. Zenith Radio, 475 U.S. 574, 587 (1986); United States ex rel. Longhi v. United States, 

575 F.3d 458, 465 (5th Cir. 2009).

The movant must support its assertion by “citing to particular parts of materials in the 

record . . . showing that the materials cited do not establish the . . . presence of a genuine dispute, 

or [showing] that an adverse party cannot produce admissible evidence to support the fact.” FED. 

R. CIV. P. 56 (c)(1)(A)‒(B). “[T]he court . . . may not make credibility determinations or weigh

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the evidence.” Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000); Anderson, 

477 U.S. at 255. “The party opposing summary judgment is required to identify specific evidence 

in the record and to articulate the precise manner in which that evidence supports his or her claim.” 

Ragas v. Tennessee Gas Pipeline Co, 136 F.3d 455, 458 (5th Cir. 1998).

Rule 56 does not impose a duty on the court to “sift through the record in search of 

evidence” to support the nonmovant’s opposition to the motion for summary judgment. Adams v. 

Travelers Indem. Co. of Conn., 465 F.3d 156, 164 (5th Cir. 2006). As a result, “[i]f the record, 

taken as a whole, could not lead a rational trier of fact to find for the non-moving party, then there 

is no genuine issue for trial.” Hernandez v. Yellow Transp., Inc., 670 F.3d 644, 650 (5th Cir. 2012) 

(quoting Harvill, 433 F.3d at 433). “Only disputes over facts that might affect the outcome of the 

suit under the governing laws will properly preclude the entry of summary judgment.” Anderson, 

477 U.S. at 248. If the nonmoving party fails to make a showing sufficient to establish the 

existence of an element essential to its case on which it will bear the burden of proof at trial, 

summary judgment must be granted. Celotex, 477 U.S. at 322. 

Finally, “even if the standards of Rule 56 are met, a court has discretion to deny a motion 

for summary judgment if it believes that ‘a better course would be to proceed to a full trial.’” Kunin 

v. Feofanov, 69 F.3d 59, 61 (5th Cir. 1995) (quoting Anderson, 477 U.S. at 255–56).

III. Discussion

First Baptist alleges nine claims against Church Mutual related to Church Mutual’s 

handling of its damages claim under the insurance policy. Doc. No. 12 at 9–19. There are two 

general types of claims. The first is “prompt payment” claims under TEX. INS. CODE § 542, which 

is the Texas Prompt Payment of Claims Act (“TPPCA”). Id. at 9, ⁋⁋ 49–63. The second is bad 

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faith claims under the common law and TEX. INS. CODE § 541. Id. at 12, ⁋⁋ 64–112. The 

undersigned will address the prompt payment and bad faith claims separately.

A. Prompt Payment Claims

First Baptist alleges three prompt payment claims under the Texas Prompt Payment of 

Claims Act (“TPPCA”): TEX. INS. CODE §§ 542.055, 542.056, and 542.058. Doc. No. 12 at 9, ⁋⁋ 

49–63. In its instant motion, Church Mutual contends that First Baptist’s prompt payment claims 

fail as a matter of law because it paid First Baptist the full amount of interest owed under the 

TPPCA. Doc. No. 13 at 10. According to Church Mutual, even though payment of an appraisal 

award does not itself bar TPPCA liability, TPPCA claims are nonetheless barred if the insurer paid 

the insured the full amount of interest potentially owed under the TPPCA. Id. First Baptist did 

not respond to any of Church Mutual’s arguments regarding its prompt payment claims. See 

generally Doc. No. 14. 

In its First Amended Complaint, First Baptist contends that it “did not enter an agreement 

with Church Mutual that it accepted these post-appraisal payments as full satisfaction or release” 

of its prompt payment claims. Doc. No. 12 at 8, ⁋ 42. First Baptist also vaguely alleges that it is 

entitled to “actual damages and prompt payment penalties at the rate of 5% interest” on each of its 

three prompt payment claims. Id. at 10, ⁋ 55. It is undisputed that Church Mutual paid First 

Baptist $67,031.77, the full amount of the appraisal award, and an additional sum of $3,764.80, 

which Church Mutual contends is the total amount of TPPCA interest that First Baptist could 

possibly recover. Doc. No. 13 at 3, ⁋⁋ 4–6; Doc. No. 12 at 8, ⁋ 40. First Baptist does not dispute 

Century’s argument that $3,764.80 was the total amount of TPPCA interest to which First Baptist 

was entitled. Moreover, First Baptist offers no summary judgment evidence showing it is entitled 

to any amount of interest greater than what Church Mutual has already paid. Thus, based on the 

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undisputed facts that Church Mutual paid the entire appraisal award plus applicable statutory 

interest, the undersigned finds that First Baptist’s TPPCA claims fail as a matter of law.

The Fifth Circuit and multiple Texas district courts have held that when an insurer pays an 

appraisal award and any applicable interest under the TPPCA, the insured may not recover 

anything under their TPPCA claims. See Quibodeaux v. Nautilus Ins. Co., 655 F. App’x 984, 988–

89 (5th Cir. 2016) (holding that the district court’s grant of summary judgment on a TPPCA claim 

was proper where the insurer demonstrated that it had paid the insured the amount of penalty 

interest that accrued due to the insurer’s delay); White v. Allstate Vehicle & Prop. Ins. Co., No. 

6:19-CV-00066, 2021 WL 4311114, at *8 (S.D. Tex. Sept. 21, 2021) (granting summary judgment 

where insurer paid the full appraisal award and maximum amount of TPPCA interest that insured 

could demand and insured failed to present evidence that he was entitled to any additional interest); 

Atkinson v. Meridian Sec. Ins. Co., No. SA-21-CV-00723-XR, 2022 WL 3655323, at *7 (W.D. 

Tex. Aug. 24, 2022) (same); Trujillo v. Allstate Vehicle & Prop. Ins. Co., No. CV H-19-3992, 2020 

WL 6123131, at *5–6 (S.D. Tex. Aug. 20, 2020) (same). Accordingly, Church Mutual is entitled 

to summary judgment on First Baptist’s prompt payment claims under the TPPCA: TEX.INS.CODE 

§§ 542.055, 542.056, and 542.058.

First Baptist also contends it is entitled to attorney’s fees for its TPPCA claims. Doc. No. 

12 at 10, ⁋⁋ 55, 59, 63. The undersigned disagrees. First Baptist cannot recover attorney’s fees 

because Church Mutual paid the entire appraisal award and all applicable TPPCA interest. See 

Rodriguez v. Safeco Insurance Company of Indiana, 684 S.W.3d 789, 790 (Tex. 2024) (holding 

that an insurer’s payment of the full appraisal award plus any possible statutory interest precludes 

recovery of attorney’s fees in an action under the TPPCA). Accordingly, Church Mutual is entitled 

to summary judgment on First Baptist’s claims for attorney’s fees for its TPPCA claims.

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B. Bad Faith Claims

First Baptist alleges that Church Mutual breached the common law duty of good faith and 

fair dealing and committed violations of TEX.INS.CODE § 541.060(a)(2), (3), (4)(A), and (7) based 

on its handling of First Baptist’s damages claim under the policy. Id., ⁋⁋ 64–112. In its instant 

motion, Church Mutual contends that its payment of the entire appraisal award bars First Baptist’s 

common law and statutory bad faith claims as a matter of law. Doc. No. 13 at 5. Additionally, 

Church Mutual contends that First Baptist has not alleged any “actual damages” caused by Church 

Mutual’s alleged violations of the Texas Insurance Code. Id. at 7–8. Thus, according to Church 

Mutual, First Baptist’s bad faith claims fail as a matter of law. Id.

First Baptist disagrees. It contends that Church Mutual’s payment of the appraisal award 

does not bar its bad faith claims. Doc. No. 14 at 3. First Baptist does not dispute that it has 

received all policy benefits to which it is entitled after receiving Church Mutual’s payment of the 

full appraisal award. Doc. No. 12 at 7–8, ⁋⁋ 38–40. Rather, First Baptist contends that it can 

recover damages for its claims in addition to policy benefits. Doc. No. 14 at 5. According to First 

Baptist, “[d]amages for a violation of Chapter 541 are available for each ‘act’ causing actual 

damages to plaintiff.” Id. First Baptist notes that in Ortiz v. State Farm Lloyds, the Texas Supreme 

Court acknowledged that an insurer’s payment of an appraisal award does not bar extracontractual 

bad faith claims under the common law or TEX. INS. CODE § 541. Id. at 8 (citing 589 S.W.3d 127, 

129 (Tex. 2019)). First Baptist contends that unlike the plaintiff in Ortiz, it alleges more than mere 

underpayment of the claim as evidence of damages for its bad faith claims. Id. at 8. 

In Ortiz, the Texas Supreme Court recognized that there are two theories under which an 

insured can recover on bad faith claims under the Texas Insurance Code. 589 S.W.3d at 134. First, 

“an insured can establish he sustained actual damages by not receiving benefits under an insurance 

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policy to which he is entitled and that such damages were caused by the insurer’s statutory 

violation.” White, 2021 WL 4311114 at *5 (citing Ortiz, 589 S.W.3d at 134). This theory does 

not apply here, as it is undisputed that Church Mutual paid the entire appraisal award and First 

Baptist has received all benefits under the policy to which it is entitled. See Doc. No. 13 at 6, ⁋⁋ 

14–15; Doc. No. 12 at 7–8, ⁋⁋ 38–40. 

Turning to the second theory, “an insured may recover on his bad faith claim, even if he is 

not entitled to benefits under the insurance policy, if he can show he sustained ‘damages for a 

statutory violation that cause[d] an injury independent from the loss of the benefits.’” White, 2021 

WL 4311114 at *5 (quoting Ortiz, 589 S.W.3d at 134) (emphasis added). The Texas Supreme 

Court has recognized this as the “independent injury rule.” USAA Texas Lloyds v. Menchacha, 545 

S.W.3d 479, 499–500 (Tex. 2018). In Menchacha, the court noted that the damages for a bad faith 

claim must be “truly independent of the insured’s right to receive policy benefits.” 545 S.W.3d at 

500 (emphasis added). An insured cannot recover for statutory or extracontractual claims if the 

damages sought “are predicated on, flow from, or stem from policy benefits.” Id. (internal 

quotations omitted). Thus, extracontractual claims seeking damages in addition to policy benefits

“must satisfy the independent injury rule.” Atkinson, 2022 WL 3655323 at *6.

The undersigned has previously noted that “payment of an appraisal award forecloses an 

insurer’s liability for common law and statutory bad faith unless the insured suffered an

independent injury.” Saleme v. State Farm Lloyds, No. 118CV00632MACZJH, 2021 WL 

4206177, at *4 (E.D. Tex. Aug. 27, 2021), report and recommendation adopted, No. 

118CV00632MACZJH, 2021 WL 4197622 (E.D. Tex. Sept. 14, 2021) (citing Biasatti v.

GuideOne Nat’l Ins. Co., 601 S.W.3d 792, 794 (Tex. 2020)). However, “[i]f the insured can point 

to some independent injury, the insurer cannot prevail on summary judgment merely by paying 

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the appraisal award.” Id. The Texas Supreme Court has suggested that successful independent 

injury claims are “rare.” See Menchacha, 545 S.W.3d at 500. An example of a potential successful 

independent injury claim recognized by this court was where the insured alleged that the insurer’s 

unreasonable investigation caused consequential damage in addition to the denial of policy 

benefits. See Saleme, 2021 WL 4206177 at *4–5. In Saleme, the insured alleged that he paid 

$5,000 to fix mold damage caused by the leaking roof which the insurer refused to replace. Id. 

First Baptist has not sufficiently alleged an independent injury that is “truly independent” 

of its right to receive policy benefits. The only potential independent injury that First Baptist 

alleges with any specificity is costs incurred for “appraisal expenses.” Doc. No. 12 at 9, ⁋ 44. This 

claim does not constitute an independent injury for multiple reasons. First, although neither party 

cites to the insurance policy in the briefing, the policy specifies that “[e]ach party will: a. Pay its 

chosen appraiser; and b. Bear the other expenses of the appraisal and umpire equally.”1 Doc. No. 

12-1 at 39. The plain language of the parties’ insurance contract forecloses First Baptist’s claim 

for “appraisal expenses” because First Baptist contractually agreed to pay its own appraisal costs. 

See Roeder v. Allstate Vehicle & Prop. Ins. Co., No. CV H:22-4275, 2023 WL 5985240, at *5 

(S.D. Tex. Sept. 14, 2023) (finding no basis for insured to recover appraisal costs where insurance 

contract provided that each party must pay for its own appraisers). 

Second, even if the policy did not provide that each party should pay its own appraiser, 

“appraisal expenses” still do not constitute an independent injury because they “flow from” a claim 

for policy benefits. See Menchacha, 545 S.W.3d at 500; Gonzalez v. Allstate Vehicle & Prop. Ins.

Co., 474 F. Supp. 3d 869, 875 (S.D. Tex. 2020) (finding that plaintiff’s claim for appraisal 

expenses, without more, is not sufficient to support an “independent injury”); see also Ortiz, 589 

1 FED R. CIV. P. 56(c)(3) provides that “[t]he court need consider only the cited materials, but it may consider 

other materials in the record.” Here, First Baptist attached the insurance policy to its Complaint. See Doc. No. 12-1.

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S.W.3d at 135 (noting that “Texas law is clear that attorney’s fees and costs incurred in the

prosecution or defense of a claim, although ‘compensatory in that they help make a claimant

whole,’ are not damages”). Thus, First Baptist’s allegation of “appraisal expenses” is insufficient

to constitute an independent injury.

Other than appraisal expenses, First Baptist offers only vague allegations of damages such 

as “additional costs, economic hardship, losses due to nonpayment of the amount Church Mutual 

owed, and exemplary damages.” Doc. No. 12 at 13, ⁋ 72. Additionally, First Baptist vaguely 

alleges it suffered “actual damages” stemming from Church Mutual’s violations of § 541 but 

alleges no facts showing the basis of such damages. Doc. No. 12 at 14, ⁋⁋ 79, 84, 87, 92, 95, 100, 

103, 108, 111. Moreover, First Baptist provides no summary judgment evidence to support the

existence of any of the alleged damages it suffered. 

Vague, conclusory allegations that First Baptist suffered “actual damages,” unsupported by 

any evidence, are not sufficient to establish a genuine dispute of material fact as to whether First 

Baptist suffered an injury independent of its right to receive policy benefits. See, e.g., Bonner v.

Allstate Vehicle & Prop. Ins. Co., No. 3:23-CV-158, 2024 WL 718202, at *3 (S.D. Tex. Jan. 3, 

2024) (granting summary judgment to insurer on plaintiff’s extracontractual and common law bad 

faith claims where insurer paid the full appraisal award and plaintiff insured provided no evidence 

of its alleged emotional distress or financial loss sufficient to establish an independent injury).

2

Accordingly, Church Mutual is entitled to summary judgment with respect to First Baptist’s bad 

2 See also Atkinson, 2022 WL 3655323 at *6 (granting summary judgment for insurer on insured’s bad faith 

claims because insurer paid full appraisal award and insured presented no summary judgment evidence of her alleged 

damages); White, 2021 WL 4311114 at *6 (granting summary judgment to insurer on insured’s bad faith claim where

insurer paid full appraisal award and insured failed to proffer summary judgment evidence showing an injury 

independent of insured’s right to recover policy benefits).

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faith claims for breach of the common law duty of good faith and fair dealing and violations of

TEX. INS. CODE § 541.060(a)(2), (3), (4)(A), and (7).

First Baptist also alleges that it is entitled to attorney’s fees for its bad faith claims under § 

541 of the Texas Insurance Code. Doc. No. 12, ⁋ 113. The undersigned disagrees. Because First 

Baptist cannot prevail on its common law or statutory bad faith claims as a matter of law, it is not 

entitled to an award of attorney’s fees for any of its bad faith claims. See Ortiz, 589 S.W.3d at 135 

(noting that under chapter 541 of the Texas Insurance Code, a claimant must prevail on the 

underlying claim and recover damages in order to recover attorney’s fees). 

IV. Conclusion

Defendant Church Mutual Insurance Company has met its summary judgment burden of 

demonstrating that there are no genuine issues of material fact in dispute on all of Plaintiff First 

Baptist Church’s claims. Accordingly, the undersigned recommends GRANTING Defendant 

Church Mutual Insurance Company’s Motion for Summary Judgment (Doc. No. 13). 

V. Objections

Pursuant to 28 U.S.C. § 636(b)(1)(C), each party to this action has the right to file 

objections to this Report and Recommendation. Objections to this Report must (1) be in writing, 

(2) specifically identify those findings or recommendations to which the party objects, (3) be 

served and filed within 14 days after being served with a copy of this Report, and (4) be no more 

than eight (8) pages in length. See 28 U.S.C. § 636(b)(1)(C); FED. R. CIV. P. 72(b)(2); E.D. TEX.

CIV. R. CV-72(c). A party who objects to this Report is entitled to a de novo determination by the 

United States District Judge of those proposed findings and recommendations to which a specific 

objection is timely made. 28 U.S.C. § 636(b)(1)(C); FED. R. CIV. P. 72(b)(3).

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A party’s failure to file specific, written objections to the proposed findings of fact and 

conclusions of law contained in this Report, within 14 days of being served with a copy of this 

Report, bars that party from: (1) entitlement to de novo review by the United States District Judge 

of the findings of fact and conclusions of law, and (2) appellate review, except on grounds of plain

error, of any such findings of fact and conclusions of law accepted by the United States District 

Judge. See Rodriguez v. Bowen, 857 F.2d 275, 276–77 (5th Cir. 1988); Douglass v. United Servs. 

Auto. Ass’n, 79 F.3d 1415, 1428–29 (5th Cir. 1996) (en banc). 

_________________________

Zack Hawthorn

United States Magistrate Judge SIGNED this 29th day of May, 2024.

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