Court Opinion

ID: 6347097
Source: CourtListenerOpinion
Date Created: 2022-06-06 00:00:24.648776+00
Date Added: 2024-06-11T15:49:22.262521
License: Public Domain

Case: 21-11220     Document: 00516344087         Page: 1     Date Filed: 06/03/2022

              United States Court of Appeals
                   for the Fifth Circuit                             United States Court of Appeals
                                                                              Fifth Circuit

                                                                            FILED
                                  No. 21-11220                           June 3, 2022
                                Summary Calendar                       Lyle W. Cayce
                                                                            Clerk

   Sean Parsons,

                                                           Plaintiff—Appellant,

                                       versus

   Liberty Insurance Corporation,

                                                           Defendant—Appellee.

                  Appeal from the United States District Court
                      for the Northern District of Texas
                            USDC No. 3:20-cv-1682

   Before Smith, Stewart, and Graves, Circuit Judges.
   Per Curiam:*
          Sean Parsons (“Parsons”) appeals the district court’s grant of
   summary judgment for Liberty Insurance Corporation (“Liberty”). He
   claims Liberty failed to timely pay him under his homeowner’s insurance
   policy (the “Policy”) because the appraisal award was issued on April 2,

          *
            Pursuant to 5th Circuit Rule 47.5, the court has determined that this
   opinion should not be published and is not precedent except under the limited
   circumstances set forth in 5th Circuit Rule 47.5.4.
Case: 21-11220       Document: 00516344087           Page: 2   Date Filed: 06/03/2022

                                      No. 21-11220

   2021, and he did not receive payment until six business days later, on April
   13, 2021. However, both the Policy’s explicit language and Texas Insurance
   Code provide that payment must be made within five business days of
   notifying the claimant that the insurer will pay the claim, not the date of an
   award’s issuance. Because Liberty mailed its notification of acceptance
   together with the payment, it timely paid Parsons.
            We AFFIRM.
                                  BACKGROUND
            In June 2019, a hailstorm damaged Sean Parsons’s home. He
   submitted a claim under his homeowner’s insurance policy to Liberty
   Insurance Corporation. Over the next year, Liberty made several payments
   to Parsons, but Parsons disagreed with Liberty’s assessments of damages. So,
   in May 2020, before Parsons filed suit, Liberty demanded an appraisal of the
   damages under the Policy’s appraisal clause.
            The parties do not dispute the timeline post-appraisal: On Friday,
   April 2, 2021, the umpire issued the appraisal award. On Tuesday, April 6,
   2021, Liberty “issued” payment to Parsons by writing a check and sending it
   to its general counsel. On Monday, April 12, 2021, Liberty’s counsel received
   the check and mailed a letter notifying Parsons’s counsel that Liberty would
   pay the award. Liberty included the payment with the notice. On Tuesday,
   April 13, 2021, Parsons’s counsel received the letter and the check.
            Under the Policy’s Loss Payment provision, payment must be made
   within five business days of Liberty notifying the claimant that it will pay the
   claim:
            If we notify you that we will pay your claim, or part of your
            claim, we must pay within 5 “business days” after we notify you.
            If payment of your claim or part of your claim requires the

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                                     No. 21-11220

          performance of an act by you, we must pay within 5 “business
          days” after the date you perform the act.
          Parsons filed suit against Liberty alleging breach of contract, unfair
   trade practices, breach of good faith and fair dealing, breach of express and
   implied warranty, insurance fraud, and violations of the Texas Prompt
   Payment of Claims Act. The parties filed cross-motions for summary
   judgment. After reviewing the magistrate’s report and recommendation
   recommending a partial grant, the district court granted summary judgment
   on Parsons’s claims. It also reviewed de novo the portion of the report to
   which Liberty had objected and concluded there was “no genuine issue of
   material fact as to [Liberty’s] full payment of potential interest owed.” It thus
   rejected part of the magistrate’s report and instead granted summary
   judgment in full for Liberty.
          On appeal, Parsons challenges the district court’s grant of summary
   judgment for Liberty only as it relates to the payment of his claim after the
   appraisal. He argues that Liberty did not pay him within five days of the
   umpire’s appraisal award, so the payment was untimely under the Texas
   Insurance Code and the Loss Payment provision of the Policy. Liberty asserts
   the uncontested fact that, because it sent notice of the payment along with
   the payment itself, it satisfied the timeliness requirements. It argues in the
   alternative that, even if the umpire’s award controlled the five-day window,
   its issuance of the check one day after the award satisfies this requirement.
                           STANDARD OF REVIEW
          Usually, we review the grant of summary judgment de novo. Dillon v.
   Rogers, 596 F.3d 260, 266 (5th Cir. 2010). But plain error review applies
   where “a party did not object to a magistrate judge’s findings of fact,
   conclusions of law, or recommendation to the district court” despite being
   “served with notice of the consequences of failing to object.” United States

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                                          No. 21-11220

   ex rel. Steury v. Cardinal Health, Inc., 735 F.3d 202, 205 n.2 (5th Cir. 2013)
   (citing Douglass v. United Servs. Auto Ass’n, 79 F.3d 1415, 1428–29 (5th Cir.
   1996) (en banc), superseded by statute on other grounds, 28 U.S.C. §
   636(b)(1)).
           Here, the magistrate judge warned Parsons that the failure to file
   written objections within 14 days from his receipt of the Findings,
   Conclusions, and Recommendations would bar him from attacking the
   factual findings and legal conclusions on appeal:
           Any party who objects to any part of these findings,
           conclusions, and recommendation must file specific written
           objections within 14 days after being served with a copy. In
           order to be specific, an objection must identify the specific
           finding or recommendation to which objection is made, state
           the basis for the objection, and specify the place in the
           magistrate judge’s findings, conclusions, and recommendation
           where the disputed determination is found . . . . Failure to file
           specific written objections will bar the aggrieved party from
           appealing the factual findings and legal conclusions of the
           magistrate judge that are accepted or adopted by the district
           court, except upon grounds of plain error.
           Nevertheless, Parsons did not file timely objections, so the district
   court did not conduct a de novo review of the record.1 As a result, the district
   court’s factual findings and legal conclusions are reviewed for plain error,
   despite Parsons’s contentions that review is de novo. To prevail under that
   standard, Parsons “must show (1) that an error occurred; (2) that the error

           1
             Liberty filed a partial objection to the report’s finding that there was a material
   issue of fact as to whether Liberty had paid interest to Parsons, so the district court
   reviewed the findings related to potential interest payments de novo. However, the district
   court reviewed “the remaining portions of the Report and Recommendation under the
   clearly erroneous or contrary to law standard.”

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                                         No. 21-11220

   was plain, which means clear or obvious; (3) the plain error must affect
   substantial rights; and (4) not correcting the error would seriously impact the
   fairness, integrity, or public reputation of judicial proceedings.” Ortiz v. City
   of San Antonio Fire Dep’t, 806 F.3d 822, 825–26 (5th Cir. 2015) (quoting
   Septimus v. Univ. of Hous., 399 F.3d 601, 607 (5th Cir. 2005)); see also
   Douglass, 79 F.3d at 1424.
                                       DISCUSSION
           The parties agree that the timeline for payment is governed by Texas
   Insurance Code Section 542.057(a). This provision states that “[e]xcept as
   otherwise provided by this section, if an insurer notifies a claimant . . . that
   the insurer will pay a claim or part of a claim, the insurer shall pay the claim
   not later than the fifth business day after the date notice is made.” Tex.
   Ins. Code Ann. § 542.057(a). Both parties state multiple times that the
   five-day window is tethered to the insurer’s notification that it will pay the
   award. And, the parties do not dispute that Liberty’s notification of payment
   occurred simultaneously with receipt of payment. But Parsons asserts,
   without any legal authority, that “there is at least a factual dispute about
   whether the umpire’s award or the letter from April 12 triggered the duty to
   pay” under Texas law. This unsupported argument contradicts his briefing,
   but it also has no legal support.2
           Texas Insurance Code specifically requires that payments be made
   within five days of the insurer notifying the claimant that it has accepted the
   claim. See, e.g., Weiser-Brown Operating Co. v. St. Paul Surplus Lines Ins. Co.,

           2
             Because Parsons cites no legal authority that the five-day payment window is
   governed by the appraisal award, this argument is likely waived. See Fed. R. App. P.
   (a)(9)(A) (stating that the appellant’s brief must contain its “contentions and the reasons
   for them, with citations to the authorities and parts of the record on which the appellant
   relies”).

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   801 F.3d 512, 518 (5th Cir. 2015) (“If the insurer accepts the claim and
   ‘notifies a claimant under [§ ] 542.056 that the insurer will pay a claim or part
   of a claim,’ it has five days to do so.”); Cox Operating, L.L.C. v. St. Paul
   Surplus Lines Ins. Co., 795 F.3d 496, 505 (5th Cir. 2015) (“[I]f the insurer
   notified the claimant . . . that it was accepting the claim, § 542.057 provides
   that ‘the insurer shall pay the claim not later than the fifth business day after
   the date notice is made.” (citation omitted)). Only if notification of
   acceptance occurs can the five-day countdown begin.3
           On April 13, 2021, Parsons received notice that Liberty would pay
   him. That same day, and in the same mailing, Parsons received the payment.
   The payment clearly falls within the five-day requirements of the Texas
   Insurance Code and the Policy’s Loss Payment provision. Parsons has failed
   to demonstrate any genuine issue of material fact that Liberty breached a
   contract or that the payment was untimely. And, at minimum, he has not
   shown that the district court’s grant of summary judgment for Liberty was
   plainly erroneous.
           For these reasons, we AFFIRM the district court.

           3
              To the extent Parsons argues that Liberty would be allowed to indefinitely
   withhold payment if it could send payment any time after the appraisal award, we note that
   other provisions of the Texas Insurance Code require deadlines to accept or reject payment
   of claims. See Tex. Ins. Code Ann. § 542.056 (mandating that “an insurer notify a
   claimant in writing of the acceptance or rejection of a claim not later than the 15th business
   day after the date the insurer receives all items, statements, and forms required by the
   insurer to secure final proof of loss”).

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