Court Opinion

ID: 9956848
Source: CourtListenerOpinion
Date Created: 2024-04-03 00:00:29.806959+00
Date Added: 2024-06-11T08:17:55.753994
License: Public Domain

Case: 22-10662       Document: 60-1      Page: 1    Date Filed: 04/02/2024

        United States Court of Appeals
             for the Fifth Circuit
                             ____________
                                                                 United States Court of Appeals
                                                                          Fifth Circuit
                              No. 22-10662
                             ____________                               FILED
                                                                     April 2, 2024
Carl Schnell; Mary Ellen Schnell,                                  Lyle W. Cayce
                                                                        Clerk
                                                      Plaintiffs—Appellants,

                                   versus

State Farm Lloyds,

                                         Defendant—Appellee.
               ______________________________

               Appeal from the United States District Court
                   for the Northern District of Texas
                         USDC No. 4:21-CV-558
               ______________________________

Before Dennis, Engelhardt, and Oldham, Circuit Judges.
James L. Dennis, Circuit Judge:
      After a hailstorm damaged their home’s tiled roof, Plaintiff-
Appellants Carl and Mary Ellen Schnell filed insurance claims with their
home insurer Defendant-Appellee State Farm Lloyds (“State Farm”). While
State Farm accepted coverage for certain claims, it denied coverage for
others, including the claim that the City of Fort Worth required the Schnells
to replace their whole roof, rather than just the damaged tiles. The Schnells
sued, and the district court granted summary judgment to State Farm. We
VACATE in part, AFFIRM in part, and REMAND.
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                                 No. 22-10662

                                      I.
       The Schnells owned a home in Fort Worth, Texas, which had a roof
covered in concrete tiles manufactured by Monier Lifetile. On April 11, 2017,
a wind and hailstorm damaged the Schnells’ roof. At the time of the storm,
the Schnells had a homeowner’s insurance policy with State Farm.
       The Schnells’ insurance policy covered the typical “accidental direct
physical loss” to their home. However, the Schnells’ policy also covered
increased repair costs due to building code enforcement under the policy’s
Building Ordinance or Law provision, known as “Option OL.” Option OL
stated in relevant part:
       2. Damaged Portions of Dwelling.
       When the dwelling covered under COVERAGE A –
       DWELLING is damaged by a Loss Insured we will pay for the
       increased cost to repair or rebuild the physically damaged
       portion of the dwelling caused by the enforcement of a
       building, zoning or land use ordinance or law if the
       enforcement is directly caused by the same Loss Insured and
       the requirement is in effect at the time the Loss Insured occurs.
       3. Undamaged Portions of Damaged Dwelling.
       When the dwelling covered under COVERAGE A –
       DWELLING is damaged by a Loss Insured we will also pay
       for:
       a. the cost to demolish and clear the site of the undamaged
       portions of the dwelling caused by the enforcement of a
       building, zoning or land use ordinance or law if the
       enforcement is directly caused by the same Loss Insured and
       the requirement is in effect at the time the Loss Insured occurs;
       and
       b. loss to the undamaged portion of the dwelling caused by
       enforcement of any ordinance or law if:

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             (1) the enforcement is directly caused by the same Loss
             Insured;
             (2) the enforcement requires the demolition of portions
             of the same dwelling not damaged by the same Loss
             Insured;
             (3) the ordinance or law regulates the construction or
             repair of the dwelling, or establishes zoning or land use
             requirements at the described pre-mises; and
             (4) the ordinance or law is in force at the time of the
             occurrence of the same Loss Insured;
      ....
      c. legally required changes to the undamaged portions of any
      specific dwelling features, dwelling systems or dwelling
      components caused by the enforcement of a building, zoning or
      land use ordinance or law, if:
             (1) the enforcement is directly caused by the same Loss
             Insured; and
             (2) the requirement is in effect at the time the Loss
             Insured occurs.
      We will not pay for legally required changes to specific dwelling
      features, dwelling systems or dwelling components that have
      not been physically damaged by the Loss Insured.
      On September 8, 2017, the Schnells submitted a claim to State Farm
for the physical damage to their home from the storm. State Farm inspected
the Schnell residence on October 5, 2017. That day, State Farm estimated
covered damages totaling $5,144.99. This estimate included damage to
roofing components and gutters; however, State Farm denied coverage for
damaged roof tiles and certain other exterior roofing components, finding
this damage “was not caused by wind or hail” but instead by wear and tear
or rot, which was not covered. Because the estimated covered damages fell
below the Schnells’ $9,879.00 deductible, State Farm issued no payment.

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       Unsatisfied with State Farm’s estimate, the Schnells invoked
appraisal, a process under the policy that allows appraisers appointed by each
party, along with an umpire, to set the amount of loss, without consideration
of causation or coverage. On March 3, 2020, the appraisers issued a final
award estimating the total amount of loss as $165,848.66. This award
consisted of $32,234.13 in “Building” damages—that is, costs to cover
accidental direct physical loss to the home—and $133,614.53 in “Building
Code” damages—that is, costs to cover the increased repair costs due to
building code enforcement. The appraisal included “Building Code”
damages because the Schnells’ homeowners association rejected their
application to replace only their broken tiles, instead requiring them to
replace the whole roof. Specifically, the Schnells discovered that the
manufacturer of their roof tiles, Monier Lifetile, had been purchased by Boral
Roofing, which did not make the same tile, and the homeowners association
refused to allow spot repairs with the new Boral tiles.
       On April 2, 2020, State Farm sent a payment to the Schnells for
$21,277.28, reflecting the $32,234.13 appraisal award for “Building”
damages, less their $9,879.00 deductible. State Farm refused to pay the
Building Code appraisal award, stating the application rejection by the
homeowners association did not count as enforcement of an ordinance or law
under Option OL since “[b]uilding codes are enacted and enforced by state
and/or local governments.” As part of its payment, State Farm included the
statement, “Please be advised, neither participation in the appraisal process
nor subsequent payment of any sum of money constitutes or should be
construed as an admission of liability by State Farm. State Farm is not
waiving any of the policy’s coverage’s [sic], limitations, exclusion, or
provisions, all of which are specifically reserved.”
       Following State Farm’s instruction that enforcement by state or local
government is required to trigger Option OL coverage, the Schnells sought a

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permit to use Boral tiles for spot repairs on their roof from the City of Fort
Worth. On September 9, 2020, Fort Worth Building Code Administrator
Evan Roberts informed the Schnells by e-mail of the following determination
under the building code:
       Based on Jeff’s email [sic] attached here is the determination
       we’ve made:
       If the existing concrete tiles do not interlock with the new tiles
       and proper water drainage cannot be achieved do you concur
       that they don’t meet:
              R102.7.1 Additions, alterations, repairs.
              Additions, alterations or repairs to any structure shall
              conform to the requirements for a new structure
              without requiring the existing structure to comply with
              the requirements of this code, unless otherwise stated.
              Additions, alterations, repairs and relocations shall not
              cause an existing structure to become unsafe or
              adversely affect the performance of the building.
       As the lack of a water channel will adversely affect the
       performance of the building.
              R904.2 Compatibility of materials.
              Roof assemblies shall be made of materials that are
              compatible with each other and with the building or
              structure to which the materials are applied.
       Since they do not inter lock [sic] they are not compatible with
       each other.
As Roberts’s e-mail alluded to, he relied on the following opinion of Jeff
Driver, Sales Director of Boral, for the determination that the old Monier
tiles did not interlock with the new Boral tiles:
       The roof tiles installed at 6512 Saucon Valley Dr., Fort Worth,
       TX 76132 (Carl Schnell’s residence) were manufactured by
       Monierlifetile [sic] which was purchased by Boral. These roof

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       tiles do not interlock with Boral’s current product offering.
       Since these tiles do not interlock, there will not be a proper
       water channel for drainage and would void any warranty.
After receiving Roberts’s determination, the Schnells withdrew their permit
application.
       After the Schnells informed State Farm of Roberts’s decision, State
Farm determined, contrary to the opinion of Boral representative Driver,
that the Monier and Boral tiles would properly interlock and consequently
denied payment under Option OL. State Farm informed Roberts of its
findings, but, when Roberts asked for documentation on the new Boral tiles
and their compatibility with the old Monier tiles, State Farm did not provide
any, instead providing the phone number for the contractor it consulted on
the issue. Roberts did not ever receive any documentation from State Farm
or hear from them again.
       After this litigation commenced, Roberts provided two declarations
regarding the intent behind his September 2020 decision. In a March 18,
2022, declaration, Roberts stated it was his “intent to produce and convey a
clear determination regarding the Schnells’ home that their roof could not be
repaired with new tiles of different dimensions from the existing tiles and
specifically that the new tiles referenced in the proposed repair estimate were
not compatible with the Schnells’ existing tiles.” He further stated the
position of the City of Fort Worth—which is “accurately reflected” by his
determination—“has not changed.” However, in a May 17, 2022,
declaration, Roberts stated differently that his “determination was
conditioned upon the replacement tiles not interlocking with the original tiles
on the roof,” that he had “not inspected the replacement or original tiles,”
and he had “no opinion as to whether or not the tiles do or do not interlock.”
He further stated, “If the replacement tiles interlock, in accordance with the
manufacture’s [sic] installation instructions, with the original tiles on the

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roof, the Schnells may make any spot repairs necessary without the need for
a permit.”
       On February 25, 2021, the Schnells filed suit against State Farm in the
District Court for Tarrant County, Texas. The Schnells brought claims for
breach of contract; violations of chapter 541 of the Texas Insurance Code for
misrepresentations and other statutory violations during the claims process;
violations of chapter 542 of the Texas Insurance Code, known as the Texas
Prompt Payment of Claims Act (TPPCA), for failure to timely tender
payment after notice of liability; and breach of the common law duty of good
faith and fair dealing. State Farm removed the case to the U.S. District Court
for the Northern District of Texas on the basis of diversity jurisdiction. See
28 U.S.C. §§ 1332(a), 1441. State Farm moved for summary judgment on all
of the Schnells’ claims, which the district court granted. 1 The Schnells timely
appealed.
                                          II.
       We review a district court’s grant of summary judgment de novo.
Sanders v. Christwood, 970 F.3d 558, 561 (5th Cir. 2020). “Summary
judgment is proper ‘if the movant shows that there is no genuine dispute as
to any material fact and the movant is entitled to judgment as a matter of
law.’” Id. (quoting Fed. R. Civ. P. 56(a)). “A genuine issue of material
fact exists when there is evidence sufficient for a rational trier of fact to find
for the non-moving party.” Perez v. Region 20 Educ. Serv. Ctr., 307 F.3d 318,
323 (5th Cir. 2002) (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
475 U.S. 574, 586–87 (1986)). When reviewing an appeal from summary

       _____________________
       1
          In the same order granting summary judgment to State Farm, the district court
denied the Schnells’ cross motion for partial summary judgment as moot. The Schnells do
not challenge this denial on appeal.

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judgment, we must view the facts and evidence in the light most favorable to
the nonmovants and draw all reasonable inferences in their favor. Hanks v.
Rogers, 853 F.3d 738, 743–44 (5th Cir. 2017).
                                      III.
       The Schnells challenge the grant of summary judgment to State Farm
on each of their four claims. We address each claim in turn.
                            A. Breach of Contract
       The Schnells first challenge the district court’s grant of summary
judgment to State Farm on their breach of contract claim. Under Texas law,
insurance policies are construed in accordance with the same rules as
contracts generally. Canutillo Indep. Sch. Dist. v. Nat’l Union Fire Ins. Co. of
Pittsburgh, Pa., 99 F.3d 695, 700 (5th Cir. 1996) (citing Forbau v. Aetna Life
Ins. Co., 876 S.W.2d 132, 133 (Tex. 1994)). “The terms used in an insurance
policy are given their ordinary and generally accepted meaning, unless the
policy shows that the words were meant in a technical or different sense.” Id.
(citing Sec. Mut. Cas. Co. v. Johnson, 584 S.W.2d 703, 704 (Tex. 1979)).
“When the terms of an insurance policy are clear and unambiguous a court
may not vary those terms.” Id. (citing Royal Indem. Co. v. Marshall, 388
S.W.2d 176, 181 (Tex. 1965)). “A contract . . . is ambiguous when its meaning
is uncertain and doubtful or it is reasonably susceptible to more than one
meaning.” Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983). When language
in an insurance policy “is susceptible to more than one construction, it
generally is construed strictly against the insurer and liberally in favor of the
insured.” Bitco Gen. Ins. Corp. v. Monroe Guar. Ins. Co., 31 F.4th 325, 331 (5th
Cir. 2022) (quoting Gonzalez v. Mid-Continent Cas. Co., 969 F.3d 554, 557
(5th Cir. 2020)).
       The Schnells claim that State Farm breached the insurance contract
by denying Option OL coverage after Roberts determined their roof would

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need to be replaced because the old Monier and new Boral tiles do not
interlock. Below, the district court granted summary judgment to State Farm
after finding 1) that Roberts’s enforcement decision did not flatly deny the
Schnells’ permit for spot repairs but did so conditioned on the Schnells
confirming that the old Monier and new Boral tiles do not interlock, and 2)
under that understanding of Roberts’s decision, the Schnells were required
to present evidence that the Monier and Boral tiles do not interlock, which
they failed to do. On appeal, the Schnells argue genuine issues of material fact
preclude summary judgment because they have presented evidence that
Roberts himself determined the tiles do not interlock and flatly denied their
permit for spot repairs and, even if his determination was conditioned, they
have presented evidence the tiles do not interlock.
       We first address the district court’s determination that Roberts’s
September 2020 e-mail did not flatly deny their permit for spot repairs but
instead did so conditioned on the Schnells confirming that the old Monier
and new Boral tiles do not interlock. Option OL requires that the roof tile
replacement be “caused by the enforcement of a building, zoning, or land use
ordinance or law.” This language is unambiguous: To “enforce” means
“[t]o give force or effect to (a law, etc.); to compel obedience to.” Enforce,
Black’s Law Dictionary (11th ed. 2019). 2 Enforcement turns not on
what the code technically says but on what building officials actually require.
St. Luke’s Episcopal Health Sys. Corp. v. Factory Mut. Ins. Co., No. H–03–
5534, 2007 WL 1217763, at *2 (S.D. Tex. Apr. 24, 2007). The undisputed
evidence shows that Roberts’s September 2020 e-mail was an enforcement

       _____________________
       2
          Other dictionaries provide similar definitions. See, e.g., Enforce, Webster’s
Third New International Dictionary (2002 ed.) (“to put in force : to cause
to take effect : give effect to esp. with vigor ‹~laws›”); Enforce, Oxford English
Dictionary (2d ed. 1989) (“To compel the observance of (a law)”).

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decision, as he later stated in his March 18, 2022, declaration that it
accurately reflects the position of the City of Fort Worth on the Schnells’
roof under the building code. The question, then, is whether Roberts’s
enforcement decision required the Schnells to replace their entire roof.
       We conclude a genuine dispute of material fact exists about what
Roberts required, and the district court erred in choosing the interpretation
that Roberts’s decision was conditioned. In his September 2020 e-mail,
Roberts stated, “since [the two types of tiles] do not inter lock [sic] they are
not compatible with each other.” Roberts later confirmed in his March 18,
2022, declaration that he intended his e-mail to “convey a clear
determination” that “the new tiles referenced in the proposed repair
estimate were not compatible with the Schnells’ existing tiles.” This
evidence supports the interpretation that Roberts determined the Monier
and Boral tiles did not interlock, were therefore incompatible under the
building code, and flatly denied the Schnells’ request for spot repairs.
However, other evidence supports the interpretation that Roberts
conditioned his decision by stating that spot repairs would violate the
building code only if the Monier and Boral tiles did not interlock, which he
left to the Schnells to determine. In his September 2020 e-mail, Roberts
asked the Schnells, “do you concur that [the Monier and Boral tiles] don’t
meet.” Furthermore, in a declaration on May 17, 2022, Roberts backtracked
from his March 18, 2022, statement noted above, stating that his
“determination was conditioned upon the replacement tiles not interlocking
with the original tiles on the roof,” that he had “not inspected the
replacement or original tiles,” and he had “no opinion as to whether or not
the tiles do or do not interlock.” This conflicting evidence creates a genuine
dispute of material fact, and the district court erred in choosing one
interpretation of Roberts’s decision over the other. See Guzman v. Allstate
Assurance Co., 18 F.4th 157, 160 (5th Cir. 2021) (stating courts may not

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evaluate the credibility of the witnesses, weigh the evidence, or resolve
factual disputes on summary judgment).
       We next address the district court’s requirement that the Schnells
present evidence that the Monier and Boral tiles do not interlock. As stated,
the import of enforcement is what building officials actually require. See St.
Luke’s, 2007 WL 1217763, at *2. If Roberts determined the Monier and Boral
tiles were incompatible under the building code and flatly denied the
Schnells’ request for spot repairs, the Schnells were not required to prove
whether the tiles actually interlocked, as Roberts already determined they did
not. The policy requires only a code enforcement decision mandating
increased repairs or changes; the Schnells need not defend the validity of the
City’s enforcement decision. However, if Roberts’s denial was conditioned
on the Schnells confirming the tiles do not interlock, the Schnells would have
to present such evidence to show Roberts required a full roof replacement.
       Even assuming Roberts’s determination was conditioned, the
Schnells have produced evidence that the Monier and Boral tiles do not
interlock. Roberts stated his concern was whether “the replacement tiles
interlock, in accordance with the manufacture’s [sic] installation
instructions, with the original tiles on the roof.” The Schnells have provided
the statement by Driver, the Boral Sales Director, that the old Monier tiles
and new Boral tiles do not interlock. While State Farm has presented several
witnesses who have stated the tiles do interlock, the manufacturer, whom
Roberts credited, stated they do not. This dispute of fact precludes summary
judgment. See Guzman, 18 F.4th at 160.
       State Farm also suggests we may affirm summary judgment on an
alternative ground not addressed by the district court. State Farm argues that
the Schnells’ roof tiles were damaged by wear and tear or rot, not a covered
risk like wind or hail, and that the Schnells, therefore, cannot show their

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home was “damaged by a Loss Insured” as required by Option OL. Because
the district court did not address this argument, we decline to do so in the
first instance on appeal. See Magnolia Island Plantation, L.L.C. v. Whittington,
29 F.4th 246, 252 (5th Cir. 2022).
                 B. Texas Prompt Payment of Claims Act
       The Schnells next challenge the district court’s grant of summary
judgment to State Farm on their TPPCA claims. The TPPCA provides, in
relevant part, that when “an insurer that is liable for a claim under an
insurance policy,” Tex. Ins. Code § 542.060, “after receiving all items,
statements, and forms reasonably requested and required under Section
542.055, delays payment of the claim . . . for more than 60 days,” id. §
542.058, “the insurer is liable to pay the holder of the policy or the
beneficiary making the claim under the policy, in addition to the amount of
the claim, interest on the amount of the claim at the rate of 18 percent a year
as damages, together with reasonable and necessary attorney’s fees,” id. §
542.060. A plaintiff seeking TPPCA damages “must establish: (1) the
amount for which [the insurer] is contractually liable under the insurance
policy; (2) that [the insurer] failed to comply with statutory deadlines; and
(3) statutory damages based on the amount contractually owed less the
amounts paid within the statutory deadline.” Hinojos v. State Farm Lloyds,
619 S.W.3d 651, 658–59 (Tex. 2021) (footnote omitted). “[A]n 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.” Id. at 658. “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.” Id.

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       The Schnells argue State Farm violated the TPPCA in two ways.
First, the Schnells argue State Farm has delayed payment of damages under
Option OL past the statutory deadline. The district court granted summary
judgment to State Farm on this claim, reasoning that because it had already
granted summary judgment to State Farm on the Option OL breach of
contract claim, State Farm would not be liable for any further payment
beyond the statutory deadline. However, because, as explained above,
genuine issues of material of fact preclude summary judgment on the
Schnells’ Option OL breach of contract claim, summary judgment was also
improper on their Option OL TPPCA claim.
       The Schnells next argue State Farm violated the TPPCA in its late
payment of damages for accidental direct physical loss to the home. They
argue that State Farm became “liable” under the TPPCA for the accidental
direct physical loss to the home when State Farm accepted partial coverage
on October 5, 2017, with its initial $5,144.99 estimate. The Schnells argue
State Farm violated the TPPCA because it waited until April 2, 2020—past
the statutory deadline—to increase its payment for accidental damage to the
home to $21,277.28, when it paid the “Building” damages appraisal award.
The district court acknowledged this separate TPPCA argument but granted
summary judgment to State Farm without further explanation. On appeal,
State Farm argues that, under Texas law and by the terms of its April 2, 2020,
payment of the “Building” damages appraisal award, payment of an appraisal
award is not a determination of “liability” under the TPCCA when an
insurer initially denies coverage but later pays an appraisal award. State Farm
argues that because it denied coverage for the replacement of the Schnells’
roof tiles and payment of the appraisal award cannot establish liability, it was
never liable for payment so as to trigger the TPPCA’s statutory deadline.
       An insurer does not become “liable” for purposes of the TPPCA
“until it (1) has completed its investigation, evaluated the claim, and come to

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a determination to accept and pay the claim or some part of it; or (2) [has]
been adjudicated liable by a court or arbitration panel.” Barbara Techs. Corp.
v. State Farm Lloyds, 589 S.W.3d 806, 819 (Tex. 2019). Because appraisal is
a process to determine the value of damages without determining coverage,
“payment in accordance with an appraisal is neither an acknowledgment of
liability nor a determination of liability under the policy for purposes of
TPPCA damages.” Id. at 820. Thus, when an insurer “initially rejected a
claim” but later “paid the claimant an appraisal award,” the insurer was not
“liable” under the TPPCA solely due to the payment of the appraisal award.
Hinojos, 619 S.W.3d at 655 (citing Barbara, 589 S.W.3d 806). On the other
hand, because appraisal “has no bearing on any deadlines” under the
TPPCA, “[n]othing in the TPPCA would excuse an insurer from liability for
TPPCA damages if it was liable under the terms of the policy but delayed
payment beyond the applicable statutory deadline, regardless of use of the
appraisal process.” Barbara, 589 S.W.3d at 818–19. Thus, when an insurer
initially “accepted the claim,” establishing liability; then “appraisers
eventually determined that [the insurer] owed more on the claim than it had
paid”; and the insurer “paid the appraisal amount” past the TPPCA
deadline, “the later payment of the appraisal award did not bar Chapter 542
liability.” Hinojos, 619 S.W.3d at 656 (citing Alvarez v. State Farm Lloyds, 601
S.W.3d 781, 783 (Tex. 2020) (per curiam)); see also Randel v. Travelers Lloyds
of Tex. Ins. Co., 9 F.4th 264, 268–69 (5th Cir. 2021) (analyzing the
“substantial gap of roughly $185,000 between the preappraisal dwelling and
personal property payments and the appraisal award” for purposes of the
TPPCA).
       Here, State Farm confuses the scenario in which an insurer denies
coverage but later pays an appraisal award without admitting liability—in
which there would be no TPPCA violation—with the scenario in which an
insurer admits coverage, thus establishing liability, and later increases its

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payment pursuant to an appraisal award—in which there would be a TPPCA
violation. See Hinojos, 619 S.W.3d at 655–56.
       In the present case, State Farm accepted coverage for damage to
certain roofing components and gutters in its October 5, 2017, estimate. By
accepting coverage for certain roofing component and gutter damage, State
Farm admitted liability for that damage for purposes of the TPCCA. See
Barbara, 589 S.W.3d at 819. State Farm later paid $21,277.28 pursuant to the
“Building” damages appraisal award on April 2, 2020, and the itemized
estimate from the appraisal umpire shows updated costs for roofing
component and gutter repairs. The Schnells, therefore, have presented
evidence that payment of the “Building” damages appraisal award was a
delayed payment for that damage for which State Farm had already admitted
liability in 2017, and summary judgment for State Farm on those claims was
improper. See Hinojos, 619 S.W.3d at 656; Alvarez, 601 S.W.3d at 783; Randel,
9 F.4th at 268–69.
       However, State Farm has consistently denied coverage since 2017 for
other damage, such as broken roof tiles and certain other exterior roofing
components, which State Farm maintains were damaged by wear and tear or
rot, not a covered risk like wind or hail. As to this damage, State Farm has
not admitted liability. Because there has not yet been a determination of
liability as to this damage, it is a fact issue whether payment of the “Building”
damages appraisal award was a late payment under the TPPCA as to this
damage. See Barbara, 589 S.W.3d at 819. Although State Farm again argues
it is not liable for the damage to the roof tiles because it believes they were
not damaged by a covered risk like wind or hail, as stated above, the district
court did not address this argument, and we will not address it in the first
instance. See Magnolia Island Plantation, 29 F.4th at 252.

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  C. Chapter 541 of the Texas Insurance Code and the Common Law
                    Duty of Good Faith and Fair Dealing
         Finally, the Schnells challenge the district court’s grant of summary
judgment to State Farm on their claims that State Farm violated chapter 541
of the Texas Insurance Code by making misrepresentations during the claims
process and breached its common law duty of good faith and fair dealing. In
the short paragraphs the Schnells dedicate to these issues in their brief on
appeal, they cite no legal authority or evidence in the record.
         A party may forfeit an argument through inadequate briefing in several
ways, such as by failing to “offer any . . . citation to authority” or by failing
to “offer record citations.” Rollins v. Home Depot USA, 8 F.4th 393, 397 &
n.1 (5th Cir. 2021) (first quoting JTB Tools & Oilfield Servs., L.L.C. v. United
States, 831 F.3d 597, 601 (5th Cir. 2016); and then quoting United States v.
Rojas, 812 F.3d 382, 407 n.15 (5th Cir. 2016)); see also United States v. Upton,
91 F.3d 677, 684 n.10 (5th Cir. 1996) (same). Further, parties on appeal may
not incorporate by reference arguments made in filings before the district
court. See Morris v. Livingston, 739 F.3d 740, 752 (5th Cir. 2014) (citing
Sylvester v. Cain, 311 F. Appx. 733, 735 (5th Cir. 2009) (per curiam)
(unpublished)). Because the Schnells have failed to cite to any legal authority
or record evidence in their brief on appeal as to their chapter 541 and good
faith and fair dealing claims, they have forfeited their challenge to the district
court’s grant of summary judgment to State Farm on these claims. Although
the Schnells state they presented evidence to the district court below, they
do not cite to or even name any such evidence in their brief before us, and
they may not incorporate by reference on appeal the arguments they raised
below.

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Case: 22-10662      Document: 60-1        Page: 17      Date Filed: 04/02/2024

                                No. 22-10662

                                    IV.
       We VACATE the district court’s summary judgment in favor of
State Farm as to the Schnells’ breach of contract and TPPCA claims,
AFFIRM the remainder of the district court’s judgment, and REMAND
for further proceedings consistent with this opinion.

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