Court Opinion

ID: 9960766
Source: CourtListenerOpinion
Date Created: 2024-04-17 00:00:41.236443+00
Date Added: 2024-06-11T08:19:51.994239
License: Public Domain

Case: 22-11070           Document: 93-1         Page: 1      Date Filed: 04/16/2024

          United States Court of Appeals
               for the Fifth Circuit
                                  ____________
                                                                            United States Court of Appeals
                                                                                     Fifth Circuit
                                    No. 22-11070
                                  ____________                                     FILED
                                                                               April 16, 2024
Mario Rodriguez,                                                              Lyle W. Cayce
                                                                                   Clerk
                                                                 Plaintiff—Appellant,

                                         versus

Safeco Insurance Company of Indiana,

                                            Defendant—Appellee.
                  ______________________________

                  Appeal from the United States District Court
                      for the Northern District of Texas
                            USDC No. 5:20-CV-168
                  ______________________________

Before Higginbotham, Graves, and Douglas, Circuit Judges.
Per Curiam: *
      After a tornado struck Mario Rodriguez’s home, he notified his
insurer, Safeco Insurance Company of Indiana (“Safeco”). In response,
Safeco sent an adjuster, who inspected the home and determined the cash
value of the damage. Believing that amount insufficient, however, Rodriguez
sent Safeco a notice explaining that he was entitled to more money under his
insurance policy. Although Safeco received the letter, it never replied. So

      _____________________
      *
          This opinion is not designated for publication. See 5th Cir. R. 47.5.
Case: 22-11070        Document: 93-1       Page: 2     Date Filed: 04/16/2024

                                  No. 22-11070

Rodriguez pursued litigation, citing the Texas Prompt Payment of Claims
Act (“TPPCA”), a statute that aims to prevent insurers from delaying
payment of claims. See Tex. Ins. Code § 542. If an insurer violates the
TPPCA, the statute mandates that insurers pay damages, including
statutory interest on the claim along with reasonable and necessary
attorney’s fees. Id. § 542.060.
       More than a year after Rodriguez filed his lawsuit, Safeco invoked a
provision in the policy that permits an appraisal by disinterested third parties.
The appraisal panel determined the replacement cost value of the damage to
Rodriguez’s home, and Safeco paid the amount in full minus the deductible,
policy limits, and prior payment. Safeco also paid Rodriguez an additional
sum, claiming that the supplementary amount represented “any conceivable
interest Plaintiff could allege to be owed under the [TPPCA] on the above-
referenced appraisal award payment.”
       Though Safeco believed that its payments resolved the lawsuit,
Rodriguez disagreed. As pertinent here, Rodriguez claimed that he was
entitled to attorney’s fees under the TPPCA. The parties’ dispute was
rooted in the Texas legislature’s recent amendment to the statute, which
changed the method for determining the amount of attorney’s fees and
interest that a court may award for weather-related insurance disputes. See
§§ 542A.001–.007. Relevant to Rodriguez’s case, the new method involves a
two-step calculation. Id. § 542A.007(a)(3). Step one requires dividing the
amount to be awarded in the judgment by the amount the insured demanded
before filing suit. See id. § 542A.007(a)(3)(A). The second step calls for
multiplying the figure from step one by “the total amount of reasonable and
necessary attorney’s fees supported at trial . . . .” Id. § 542A.007(a)(3)(B).
       Because Safeco paid all amounts owed under the policy plus any
possible statutory interest, it said the amount to be awarded in the judgment

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 Case: 22-11070         Document: 93-1       Page: 3   Date Filed: 04/16/2024

                                  No. 22-11070

was zero. And because zero divided or multiplied by any other number is
zero, Safeco reasoned that Rodriguez was not entitled to attorney’s fees.
Safeco accordingly moved for summary judgment, and the district court
granted the motion, dismissing all of Rodriguez’s claims. Rodriguez timely
appealed that ruling.
       In addressing Rodriguez’s challenge on appeal, we recognized the
difficulty in applying the TPPCA attorney’s fee provision in dispute.
Rodriguez v. Safeco Ins. Co. of Ind., 73 F.4th 352, 356 (5th Cir. 2023), certified
question accepted (July 21, 2023), certified question answered, No. 23-0534,
2024 WL 388142 (Tex. Feb. 2, 2024). The problem was that state and federal
courts reviewing the same statute had reached conflicting conclusions. Id.
at 355. Some courts held that the modified attorney’s fee provision did not
apply in situations like Rodriguez’s, while others took a different view. Id.
Considering this split in state authority, we certified the following question
to the Texas Supreme Court:
       In an action under Chapter 542A of the Texas Prompt Payment
       of Claims Act, does an insurer’s payment of the full appraisal
       award plus any possible statutory interest preclude recovery of
       attorney’s fees?
Id. at 356.
       The Court recently answered that question in the affirmative.
Rodriguez, 2024 WL 388142, at *5. It held that “[S]ection 542A.007 of the
Insurance Code prohibits an award of attorney’s fees when an insurer has
fully discharged its obligations under the policy by voluntarily paying the
appraised amount, plus any statutory interest, in compliance with the
policy’s appraisal provisions.” Id. at *2. In this case, Safeco discharged its
policy obligations and paid the necessary statutory interest. The Texas
Supreme Court’s holding thus requires that we AFFIRM the district

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 Case: 22-11070         Document: 93-1          Page: 4      Date Filed: 04/16/2024

                                      No. 22-11070

court’s judgment in all respects. 1 All pending motions are DENIED as
moot.

        _____________________
        1
           In our prior panel opinion, we affirmed the district court’s ruling concerning
Rodriguez’s challenge arising under § 541 of the Texas Insurance Code. Rodriguez, 73 F.4th
at 353 n.1. The only remaining issue on appeal was the one that the Texas Supreme Court
squarely addressed.

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