{"id":898691,"date":"2021-04-27T14:33:52","date_gmt":"2021-04-27T20:33:52","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=898691"},"modified":"2021-04-27T14:33:57","modified_gmt":"2021-04-27T20:33:57","slug":"appraisal-award-statutory-liability","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/appraisal-award-statutory-liability\/","title":{"rendered":"Texas Supreme Court Finds Payment of Appraisal Award Does Not Absolve Insurer of Statutory Liability"},"content":{"rendered":"\n<p>Allison Griswold and Sarah Smith | <a href=\"https:\/\/lewisbrisbois.com\/newsroom\/legal-alerts\/texas-supreme-court-finds-payment-of-appraisal-award-does-not-absolve-insurer\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Lewis Brisbois<\/a><\/p>\n\n\n\n<p>The Texas Supreme Court recently published its long-awaited decision in the\u00a0<em>Hinojos v. State Farm Lloyds<\/em>. In it, the court affirmed its holding in\u00a0<em>Barbara Technologies<\/em>, finding that payment of an <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/payment-of-appraisal-awards\/\" target=\"_blank\" rel=\"noreferrer noopener\">appraisal award<\/a> does not absolve an insurer of statutory liability when the insurer accepts a claim but pays only part of the amount it owes within the statutory deadline, and a policy holder can proceed with an action under the Texas Prompt Payment of Claims Act.<\/p>\n\n\n\n<p>In 2013, Louis Hinojos made a claim for storm damage to his home. State Farm\u2019s initial inspection resulted in an estimate below the deductible, but Hinojos disagreed and requested a second inspection. At the second inspection, the adjuster identified additional damage resulting in a payment to Hinojos of $1,995.11. Hinojos then sued State Farm \u2013 and State Farm invoked appraisal approximately 15 months after suit was filed. The appraisal resulted in State Farm tendering an additional payment of $22,974.75. State Farm moved for summary judgment, arguing that timely payment of an appraisal award precluded prompt payment (or Chapter 542) damages. The trial court granted summary judgment and Hinojos appealed (notably&nbsp;<em>Barbara Technologies&nbsp;<\/em>had not yet been decided). The Court of Appeals affirmed State Farm\u2019s victory on the basis that \u201cState Farm made a reasonable payment on Hinojos\u2019s claim within the sixty-day statutory limit\u2026.\u201d Hinojos petitioned the Texas Supreme Court for review.<\/p>\n\n\n\n<p>In front of the high court, State Farm again relied on the argument that its prior payment was reasonable \u2013 a position the court found \u201cunavailing.\u201d The court focused on Chapter 542\u2019s definition of \u201cclaim\u201d, which referred to an amount that \u201cmust be paid by the insurer\u201d, and noted that nothing in Chapter 542 absolved an insurer of prompt payment liability based on partial payments because the amount that \u201cmust be paid\u201d referred to the amount ultimately determined to be owed. The court opined that to find partial payments to exempt insurers from prompt payment liability would encourage insurers to pay a nominal amount toward a valid claim to avoid prompt payment liability.<\/p>\n\n\n\n<p>Justice Blacklock dissented, joined by Justice Guzman. The dissent notes that&nbsp;<em>Barbara Technologies<\/em>\u2019 holding repeatedly states it is applicable to claims that have initially been rejected or denied. Justice Blacklock suggests the holding does not apply to situations like&nbsp;<em>Hinojos&nbsp;<\/em>in which an insurer makes an initial timely payment but there is a disagreement as to the amount. He suggests the majority decision places the insurer \u201cin no man\u2019s land\u201d because \u201cit has no way of knowing whether it has paid the claim or delayed paying the claim until the insured accepts a settlement or an amount owed is fixed through appraisal or litigation.\u201d<\/p>\n\n\n\n<p>In a separate dissent by Justice Guzman (who joined the majority in&nbsp;<em>Barbara Tech<\/em>), she argued further that the&nbsp;<em>Hinojos<\/em>&nbsp;majority did not comport with the statute as written. Justice Guzman wrote that while she understood the majority\u2019s concern that an insurer could easily avoid prompt payment liability by low balling the insured, the court was without authority to expand or contract statutory text, and the legislature has enacted other remedies to address such bad faith conduct.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Allison Griswold and Sarah Smith | Lewis Brisbois The Texas Supreme Court recently published its long-awaited decision in the\u00a0Hinojos v. State Farm Lloyds. In it, the court affirmed its holding in\u00a0Barbara Technologies, finding that payment of an appraisal award does not absolve an insurer of statutory liability when the insurer accepts a claim but pays&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/appraisal-award-statutory-liability\/\">Continue reading <span class=\"screen-reader-text\">Texas Supreme Court Finds Payment of Appraisal Award Does Not Absolve Insurer of Statutory Liability<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[10235],"tags":[9895,9151,11462],"class_list":["post-898691","post","type-post","status-publish","format-standard","hentry","category-insurance-appraisal","tag-advise-consult","tag-appraisal-award","tag-statutory-liability","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Texas Supreme Court Finds Payment of Appraisal Award Does Not Absolve Insurer of Statutory Liability - Advise &amp; 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