Court Opinion

ID: 4688017
Source: CourtListenerOpinion
Date Created: 2021-05-19 00:00:36.294827+00
Date Added: 2024-06-11T08:04:44.877426
License: Public Domain

Case: 19-20698     Document: 00515866568          Page: 1    Date Filed: 05/18/2021

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

                                                                            FILED
                                                                        May 18, 2021
                                   No. 19-20698
                                                                       Lyle W. Cayce
                                                                            Clerk
   Hyewon Shin,

                                                            Plaintiff—Appellant,

                                       versus

   Allstate Texas Lloyd's,

                                                            Defendant—Appellee.

                  Appeal from the United States District Court
                      for the Southern District of Texas
                              No. 4:18-cv-01784

   Before Wiener, Engelhardt, and Oldham, Circuit Judges.
   Per Curiam:*
          In this matter, Plaintiff-Appellant Hyewon Shin asserted a claim for
   penalties under the Texas Prompt Payment of Claims Act (“TPPCA”), Tex.
   Ins. Code, §§ 542.058 and 542.060. The district court granted summary
   judgment in favor of Defendant-Appellee Allstate Texas Lloyd’s
   (“Allstate”), concluding that Allstate’s pre-appraisal payment to Shin was

          *
            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   opinion should not be published and is not precedent except under the limited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: 19-20698      Document: 00515866568           Page: 2   Date Filed: 05/18/2021

                                     No. 19-20698

   both timely and reasonable as a matter of law notwithstanding that the final
   appraisal amount ($25,944.94) was 5.6 times greater than the pre-appraisal
   payment of $4,616.63.
           This appeal followed. On July 22, 2020, however, it was placed in
   abeyance pending the issuance of a ruling by the Texas Supreme Court in
   Hinojos v. State Farm Lloyds, et al., No. 19-0280. On March 19, 2021, the
   Texas Supreme Court rendered its opinion. Reversing the court of appeals’
   ruling in favor of the insurer, the Texas Supreme Court stated, in pertinent
   part:
           Chapter 542 [of the Texas Insurance Code] does not provide
           that a partial payment of a valid claim discharges liability for
           statutory interest. Accordingly, we hold that an insurer’s
           acceptance and partial payment of the claim within the
           statutory deadline does not preclude liability for interest on
           amounts owed but unpaid when the statutory deadline expires.
                  Our holding accords with our past decisions in [Republic
           Underwriters Ins. Co. v. Mex-Tex, Inc., 150 S.W.3d 423 (Tex.
           2004), Barbara Techs. Corp. v. State Farm Lloyds, 589 S.W.3d
           806 (Tex. 2019), and Alvarez v. State Farm Lloyds, 601 S.W.3d
           781 (Tex. 2020)], as well as the statute’s stated purpose of
           “promot[ing] the prompt payment of insurance claims.”
           [TEX. INS. CODE § 542.054]. By requiring insurers to
           promptly satisfy claims that they owe in their entirety, the
           [Texas] Legislature incentivizes insurers to resolve disputes
           and invoke the appraisal process sooner rather than later.
           Although the statute says nothing about reasonableness, a
           reasonable payment should roughly correspond to the amount
           owed on the claim. When it does not, a partial payment
           mitigates the damage resulting from a Chapter 542 violation.
           Interest accrues only on the unpaid portion of a claim.
   Hinojos v. State Farm Lloyds, 619 S.W.3d 651, 658 (Tex. 2021) (internal
   footnote omitted).

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Case: 19-20698     Document: 00515866568          Page: 3   Date Filed: 05/18/2021

                                   No. 19-20698

         Given the Texas Supreme Court’s ruling in Hinojos, we now Vacate
   the judgment of the district court and Remand this matter for further
   proceedings consistent with this opinion and Hinojos.

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