Source: https://www.dallasfortworthinsurancelawyerblog.com/category/delay-in-paying-claim/
Timestamp: 2019-04-23 14:47:54+00:00

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Delay in Paying Claim Category Archives — Dallas Fort Worth Insurance Lawyer Blog Published by Weatherford Insurance Attorney — Grand Prairie Denied Insurance Claims Lawyer — Mark S. Humphreys, P.C.
The Texas Prompt Payment of Claims Act was interpreted by the United States Fifth Circuit in this 2015 opinion. The opinion is styled, Cox Operating, L.L.C. v. St. Paul Surplus Lines Insurance Company.
The facts are kinda long ans somewhat confusing, plus there are other issues in the case. Of relevance here is the Court’s discussing of the Texas Prompt Pay statutes.
Texas Insurance Code, Section 542.054 says in order “to promote the prompt payment of claims,” the act provides for a series of deadlines to which insurers must adhere at each stage of the claim handling process.
The Texas Prompt Payment of Claims Act was not violated in this situation.
The case is from the Southern District of Texas, Laredo Division. It is styled, Jonnie Byrd v Liberty Insurance Corporation, et al.
Following a hail storm, Byrd made a claim against her homeowner’s policy with Liberty for damage to the roof and interior his home. Liberty’s adjuster found no hail damage to the roof but did find water damage of a little over $3,000, which was less than the deductible. Byrd then sent a demand letter seeking $55,731. Liberty closed the file and Byrd sued for various causes of action including violation of the Prompt Payment of Claims Act.
Insurance lawyers will often run across the situation at issue in the 2018, Dallas Court of Appeals opinion, George Bryant v. Progressive County Mutual Insurance Company and Kristen Winkler.
This is a uninsured motorist (UM) case wherein Bryant sued Progressive and the adjuster, Winkler, for the harm caused by the UM driver and numerous insurance code violations. The trial court severed the auto wreck from the bad faith insurance claims. In an UM case, Brant first had to prevail at trial, which he did. Bryant then continued his claims for insurance code violations. The trial court granted a motion for summary judgment in favor of Progressive and this appeal followed.
Bryant alleged numerous appeal points but the one discussed here is the issue regarding the Texas Prompt Payment of Claims Act (PPCA).
Here is an opinion from the 14th Court of Appeals that concerns the Prompt Payment of Claims Act. The opinion is styled, William Marchbanks v. Liberty Insurance Corporation.
This is an appeal from the trial court granting summary judgment in favor of Liberty. This appeals court affirmed the trial court.
Marchbanks reported a hail damage claim to Liberty and the same day Liberty acknowledged the claim and sent an adjuster to the property the next day. The adjuster determined that any roof damage was not storm related and Liberty sent a denial letter explaining no storm related damaged was found.
Here is a case where the Prompt Payment of Claims Act was not violated, even though at first glance it appears it was violated. Knowing how the facts and the law square on these issues is important in evaluating a case. This 2018, case is from the Amarillo Court of Appeals and is styled, Steven Biasatti And Paul Gross D/B/A Topdog Properties v. GuideOne National Insurance Company and John Karl Graves.
TopDog was insured with GuideOne and suffered property damage during a storm. A claim was made and GuideOne adjusted the loss as being $1,896.88. TopDog requested an additional inspection. GuideOne retained an engineer who confirmed the adjuster’s findings. TopDog wished to proceed with an appraisal and GuideOne responded that only they, GuideOne, could invoke the appraisal process.
TopDog filed this lawsuit and then GuideOne invoked the appraisal clause in the insurance contract. The trial court ordered appraisal, the parties designated appraisers, and the court appointed an umpire. The umpire filed the appraisal award, in which the parties’ appraisers and the umpire unanimously set the amount of loss at $168,808.
What is the result oi an insurance company pays a claim after an appraisal even if you don’t agree with the appraisal? This issue is addressed in a Houston Court of Appeals [14th Dist.] opinion. It is styled, National Security Fire & Casualty Co. v. Hurst.
This is an appeal from a jury trial in favor of Hurst against National. This appeals court reversed the jury trial results.
Dissatisfied with the initial estimate and payment, Hurst sued National and others for claims arising out of a wind and hail storm damage to his home. This lawsuit also claimed violations of the Texas Prompt Payment of Claims Act. National hired adjusters who assessed the damage and paid Hurst $3,524.56 (accounting for the $1,000 policy deductible), which Hurst accepted. Hurst proceeded to file suit on September 7, 2010.
Does a violation of the Texas Prompt Payment of Claims Act survive an appraisal that is promptly paid? This issue is addressed in an opinion from the San Antonio Court of Appeals. The case is styled, Barbara Technologies Corporation v. State Farm Lloyds.
Barbara Technologies had a policy of insurance with State Farm insuring property that was damaged in a hail storm on March 31, 2013. A claim was made on October 17, 2013 and on October 31, 2013, State Farm inspected the property. On November 4, State Farm sent a letter stating the property sustained damage of $3,153.57, but did not issue payment because the amount was less that the $5,000.00 deductible. On February 21, 2014, Barbara Technologies requested a re-inspection which was done and State Farm did not change it’s earlier statement.
Barbara Technologies filed suit for various violations of the Insurance Code including claims for violation of the Prompt Pay Act pursuant to Sections 542.058(a) and 542.060.
The Fort Worth Court of Appeals delivered an opinion in 2006, that is relevant to all insurance lawyers in Texas. The case has to do with who can assert a claim under the Texas Prompt Payment of Claims Act. The opinion is styled, American National Fire Insurance Company v. Hammer Trucking, Inc.
In November 2006, the Fort Worth Court of Appeals held that the Prompt Payment of Claims Act doe not apply to an indemnity claim against an excess carrier for payments made to settle a liability claim. In so holding, the Court stated that this Act only applies to first party claims between the insurance company and their customer. However, the Texas Supreme Court recently held, in response to a certified question from the Fifth Federal Circuit on a CGL case, that the Prompt Payment of Claims Act applied to the insurance company’s obligation to pay third party claims.
The prompt-payment statute provides that an insurer, who is “liable for a claim under an insurance policy” and who does not promptly respond to, or pay, the claim as the statute required, is liable to the policyholder or beneficiary not only for the amount of the claim, but also for interest on the amount of the claim at the rate of eighteen percent a year as damages, together with reasonable attorney’s fees pursuant to Texas Insurance Code, Section 542.060(a). “Claim” is defined as “a first party claim made by an insured or policyholder under an insurance policy or contract or by a beneficiary named in the policy or contract that must be paid by the insurer directly to the insured or beneficiary.” This is found in Texas Insurance Code, Section 542.051(2). The statute does not separately define “a first party claim,” and Texas cases are divided as to its meaning.

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