Court Opinion

ID: 4454751
Source: CourtListenerOpinion
Date Created: 2019-11-09 07:26:11.273735+00
Date Added: 2024-06-11T14:44:59.189770
License: Public Domain

In the
                             Court of Appeals
                     Second Appellate District of Texas
                              at Fort Worth
                            ___________________________
                                 No. 02-17-00374-CV
                            ___________________________

              JOSEPH LAMBERT AND SUSAN LAMBERT, Appellants

                                               V.

              STATE FARM LLOYDS AND TEVIN SENNE, Appellees

                         On Appeal from the 415th District Court
                                 Parker County, Texas
                              Trial Court No. CV16-0048

                           Before Sudderth, C.J., and Kerr, J. 1
                          Memorandum Opinion by Justice Kerr

       1
        Justice Bill Meier was a member of the original panel but has since retired. Because they
agree on the judgment, the two remaining justices decided the case. See Tex. R. App. P. 41.1(b).
                           MEMORANDUM OPINION

                                  I. INTRODUCTION

       Appellants Joseph and Susan Lambert appeal the trial court’s order granting

summary judgment in favor of appellees State Farm Lloyds and adjuster Tevin Senne2

and denying the Lamberts’ motion for partial summary judgment. In two issues, the

Lamberts argue (1) that their extracontractual claims remain viable even though State

Farm eventually paid their homeowner’s-insurance claim after the parties engaged in

the policy’s appraisal process and (2) that the trial court erred by granting State Farm’s

summary-judgment motion and denying their own motion concerning State Farm’s

liability—despite its timely paying the appraisal amount—for statutory interest and

attorney’s fees under the Texas Prompt Payment of Claims Act (“TPPCA”).

       Because we hold that the Lamberts have failed to provide any evidence of

actual damages aside from compensation to which they were entitled under their

homeowner’s policy and because payment of an appraisal award does not bar a

TPPCA claim but also does not conclusively establish that the Lamberts are entitled

to summary judgment, we will affirm the trial court’s judgment in part and reverse it

in part.

       2
        Unless we need to distinguish between them, we will refer to the appellees
collectively as “State Farm.”

                                            2
                                  II. BACKGROUND

      This suit began over the way State Farm handled the Lamberts’ claim for hail

and wind damage to their home from a May 2015 storm.

      The Lamberts submitted a claim for damages under their homeowner’s-

insurance policy. State Farm assigned adjuster Senne to their claim; he inspected the

Lamberts’ home and found $4,935.97 worth of damage to it. Because depreciation

and their policy deductible amounted to more than the $5,000 in damage, State Farm’s

letter to the Lamberts showed a “Total Payable” of “$-0-.” Soon after, the Lamberts

asked State Farm to reinspect their home, which Senne did in October 2015, this time

finding closer to $10,000 in damage and netting the Lamberts some $1,700 after

subtracting depreciation and the deductible.

      Dissatisfied, the Lamberts sued State Farm in January 2016, asserting claims for

breach of contract, unfair settlement practices under the Texas Insurance Code,

violations of the TPPCA, breach of the duty of good faith and fair dealing, violations

of the Deceptive Trade Practices Act, and fraud. State Farm then moved to compel

appraisal under the appraisal provision in the Lamberts’ policy. The Lamberts and

State Farm followed that procedure, designating appraisers who then jointly

appointed an umpire. The appraisal panel ultimately set the amount of loss to the

Lamberts’ home at $99,112.72 on a replacement-cost basis and $70,965.54 on an

                                          3
actual-cash-value basis.3 Two days after learning of the award, and after deducting

depreciation and the past payment of roughly $1,700, in mid-August 2016 State Farm

paid the Lamberts $63,404.63.4

      The next month, State Farm moved for summary judgment arguing that

because it had paid the amount of loss as determined by appraisal and because the

Lamberts had not alleged an independent injury separate from their rights under the

policy, State Farm was entitled to a take-nothing judgment in its favor. The Lamberts

then moved for partial summary judgment on their TPPCA claim, specifically

claiming that they were entitled to statutory interest and attorney’s fees under Section

542 of the Texas Insurance Code. Tex. Ins. Code Ann. § 542.060(a). Although the

trial court initially granted the Lamberts’ motion and denied State Farm’s, it later

granted State Farm’s motion for reconsideration and signed a final judgment in State

Farm’s favor on September 29, 2017. That judgment expressly denied the Lamberts’

partial-summary-judgment motion and granted State Farm’s motion “in its entirety.”

The Lamberts appealed.

      3
       The award was not unanimous among the two appraisers and the umpire, but
rather was signed by only one appraiser and the umpire, which the appraisal process
allowed for.
      4
        State Farm simultaneously notified the Lamberts that they had remaining
replacement-cost benefits of over $28,000 available to them if they made “actual
repairs or replacement of the damaged part of the property by July 11, 2018.” The
record does not show that the Lamberts ever claimed those benefits, and they are not
at issue on appeal.

                                           4
                                    III. DISCUSSION

A.    Standard of Review

      The same well-known standard of review applies to both issues in this appeal,

involving as they do the propriety of a summary judgment.

      We review a summary judgment de novo. Travelers Ins. v. Joachim, 315 S.W.3d
860, 862 (Tex. 2010). We consider the evidence presented in the light most favorable

to the nonmovant, crediting evidence favorable to the nonmovant if reasonable jurors

could, and disregarding evidence contrary to the nonmovant unless reasonable jurors

could not. Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844,

848 (Tex. 2009). We indulge every reasonable inference and resolve any doubts in the

nonmovant’s favor. 20801, Inc. v. Parker, 249 S.W.3d 392, 399 (Tex. 2008). A

defendant that conclusively negates at least one essential element of a plaintiff’s cause

of action is entitled to summary judgment on that claim. Frost Nat’l Bank v. Fernandez,

315 S.W.3d 494, 508 (Tex. 2010); see Tex. R. Civ. P. 166a(b), (c). Conversely, a plaintiff

is entitled to summary judgment on a cause of action if it conclusively proves all

essential elements of the claim. See Tex. R. Civ. P. 166a(a), (c); MMP, Ltd. v. Jones,

710 S.W.2d 59, 60 (Tex. 1986).

      When both parties move for summary judgment and the trial court grants one

motion and denies the other, the reviewing court should review both parties’

summary-judgment evidence and determine all questions presented. Mann Frankfort,
289 S.W.3d at 848. We should then render the judgment that the trial court should

                                            5
have rendered. See Myrad Props., Inc. v. LaSalle Bank Nat’l Ass’n, 300 S.W.3d 746,

753 (Tex. 2009); Mann Frankfort, 289 S.W.3d at 848.

B.    The Lambert’s Extracontractual Claims

      In their first issue, the Lamberts argue that their extracontractual claims are still

viable even though State Farm has paid the appraisal award. 5 We will thus examine

whether the trial court properly granted summary judgment in State Farm’s favor on

the Lamberts’ common-law claims for bad faith and fraud, as well as on their

extracontractual statutory claims.6

      For extracontractual claims to survive, a breach of contract does not necessarily

have to be present. Ortiz v. State Farm Lloyds, --- S.W.3d ---, No. 17-1048,

2019 WL 2710032, at *5 (Tex. June 28, 2019) (citing USAA Tex. Lloyds Co. v. Menchaca,

545 S.W.3d 479, 489 (Tex. 2018)). But to recover on extracontractual claims when an

appraisal has been completed, the plaintiff must allege a “statutory violation that

causes an injury independent of the loss of benefits” under the policy. Id. at *5, *15.

That is, the plaintiff must claim “actual damages” that have not already been paid

      5
        Without directly saying so, the Lamberts seem to agree with State Farm that its
paying the appraisal award foreclosed their breach-of-contract claim. Indeed, in their
brief and at oral argument, the Lamberts phrased their first issue to be that their
“extra-contractual claims . . . do not depend [on] the viability of their breach-of-
contract claim.” And at oral argument, the Lamberts conceded that “right now, we are
at the minimum, we got our policy benefits.”
      6
       The Lamberts’ second issue involves the specific extracontractual statutory
claim of interest and attorney’s fees under the TPPCA, which we address separately
below.

                                            6
following the appraisal process. See id. at *5 (concluding appraisal mooted certain bad-

faith claims where “the only ‘actual damages’ [appellant sought were] the policy

benefits wrongfully withheld, and those benefits ha[d] already been paid pursuant to

the policy”). Attorney’s fees, court costs, and exemplary damages are not considered

actual damages, but would be recoverable only upon an award of underlying actual

damages. Id. at *5.

      Like their breach-of-contract claim, the Lamberts’ extracontractual claims are

moot to the extent they seek damages for policy benefits that State Farm paid

following the appraisal process. Id. That these are the only types of damages they

seek—and therefore that all of their extracontractual claims are moot—appears to be

the case. Indeed, in their response to State Farm’s summary-judgment motion, the

Lamberts specifically argued that they “need not prove any injury independent of the

policy in order to maintain their extra-contractual claims.” They also argued that

“there is no need to impose an additional burden of proving an injury beyond and/or

independent of nonpayment of policy benefits, and an insured need not make a

showing in order to recover for what would otherwise be a valid and viable claim

under the Texas Insurance Code.” The Lamberts’ summary-judgment response

further asserted that “because [their] claim is indeed covered, no injury independent

of the policy is needed for [the Lamberts’] extra-contractual claims to survive, and

therefore, [State Farm’s] summary judg[]ment must be denied.”

                                           7
       Neither to the trial court nor to us have the Lamberts pointed to any evidence

that they seek actual damages that are different from, in addition to, or aside from

what they have now received under the policy.7

       Because the Lamberts have provided no evidence of actual damages

independent of benefits now paid under their policy, the trial court did not err by

granting State Farm’s summary-judgment motion regarding the extracontractual

claims addressed in this issue. See id. We overrule the Lamberts’ first issue.

C.     The Lamberts’ TPPCA Claim

       In their second issue, the Lamberts argue that the trial court erred by granting

summary judgment to State Farm on their TPPCA claim and by not granting them

partial summary judgment on that same claim. Specifically, the Lamberts alleged that

State Farm failed to follow the TPPCA’s prompt-payment deadlines and thus they

       Other than arguing in their first issue that they are entitled to pursue their
       7

extracontractual claims, the Lamberts do not analyze any of their extracontractual
claims nor do they specify what evidence supports which elements of those claims.
And at oral argument, the Lamberts seem to have conceded that they are now
pursuing damages only under the TPPCA. During argument, the following exchange
occurred during the Lamberts’ rebuttal:

       Justice Kerr: “But as far as other types of damages, I mean, you’re
       just . . . are you just wanting the eighteen percent and attorney’s fees or
       are you saying that on your other extracontractual claims that you have
       additional damages?”

       Lambert’s Attorney: “The former your honor. All we’re asking for is to
       recover the amount of attorney’s fees and a percentage of interest on the
       policy benefits.”

                                            8
were entitled to statutory interest and attorney’s fees. See Tex. Ins. Code Ann.

§ 542.060(a).

      The TPPCA sets out guidelines facilitating the timely payment of insurance

claims. Id. §§ 542.054, 542.057. While the TPPCA does not explicitly address how

initiating the appraisal process affects the Act’s timing guidelines, the Texas Supreme

Court has recently offered guidance in a case that controls our disposition of the

Lamberts’ second issue. Barbara Techs. Corp. v. State Farm Lloyds, --- S.W.3d ---, No. 17-

0640, 2019 WL 2710089, at *1 (Tex. June 28, 2019). The facts in Barbara Tech were

much like the ones we face here: State Farm twice denied its insured’s claim for

storm-related damages because, State Farm asserted, the damages did not exceed

Barbara Tech’s deductible. Id. Barbara Tech sued, prompting State Farm to invoke the

policy’s appraisal provision. Id. Barbara Tech accepted the resulting appraisal-award

payment but still claimed that statutory damages were appropriate because State Farm

had failed to comply with the TPPCA’s 60-day time limit for payment. Id. Although

both the trial and appellate courts found that a payment of an appraisal award barred

a TPPCA claim as a matter of law, the Texas Supreme Court disagreed. Id. at *2, *17.

      The court interpreted the TPPCA’s lack of any appraisal-related language to

mean that the legislature intended neither to impose specific deadlines for the

contractual appraisal process within the prompt-pay scheme nor to exempt the

contractual appraisal process from the deadlines. Id. at *5. The court concluded that

an insured could be entitled to a recovery by showing that (1) the insurer was initially

                                            9
liable for the claim under the policy and (2) the insurer violated a TPPCA provision.

Id. at *4–5. Because in Barbara Tech State Farm had not accepted liability under the

policy and had not yet had its liability adjudicated one way or another, Barbara Tech

was not entitled to TPPCA damages as a matter of law. Id. at *16. By the same token,

State Farm’s invoking appraisal and promptly paying the resulting award did not

automatically exempt it from TPPCA damages, either. Id. For these reasons, the court

remanded the case for the trial court to first determine liability and then sort through

TPPCA timing requirements. Id. at *17.

      Here, as State Farm noted in its postsubmission letter brief discussing Barbara

Tech, the Lamberts’ TPPCA claim is “in the same procedural posture” and should be

remanded for the same reasons. We agree. We thus overrule the part of the Lamberts’

second issue arguing that they are entitled to summary judgment on their TPPCA

claim, sustain the Lamberts’ second issue on the argument that the trial court erred by

granting summary judgment in State Farm’s favor, reverse the part of the trial court’s

order granting summary judgment for State Farm on the Lamberts’ TPPCA claim,

and remand the case on that claim.

                                  IV. CONCLUSION

      Having overruled the Lamberts’ first issue and part of their second, but having

sustained their second issue in part, we affirm the trial court’s summary judgment for

State Farm on all of the Lamberts’ claims except their TPPCA claim, reverse the

                                          10
summary judgment for State Farm on the Lamberts’ TPPCA claim, and remand this

case to the trial court for proceedings consistent with this opinion.

                                                       /s/ Elizabeth Kerr
                                                       Elizabeth Kerr
                                                       Justice

Delivered: November 7, 2019

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