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Two More Wins for the Policyholder: The Texas Supreme Court Twice More Finds Extra-Contractual Claims Survive Payment of Appraisal Award

The Texas Supreme Court is on a roll for policyholders!  We recently reported on the Barbara decision where the Texas Supreme Court upheld extra-contractual claims of insureds even after an appraisal award was paid by the insurer (read more about it on our previous article here) and three cases that followed  (you can learn about those cases by clicking here).  The Court continues its policyholder wins in two new opinions holding that an insured’s claim under the Texas Prompt Payment of Claims Act (“TPPCA”) is not barred by the payment of an appraisal award.

In Marchbanks v. Liberty Ins. Corp. (available at here are the Texas court documents), the Court reversed the judgment of the court of appeals concluding that an insurer’s payment of an appraisal award barred an insured’s claims under the TPPCA.  In Marchbanks, the insured sustained hail and wind damage.  The insurer valued it at $387.  The insured sued and the insurer subsequently demanded appraisal.  The appraisal award exceeded the insurer’s prior estimate of damage.  The insurer paid the award and sought to dismiss the remaining extra-contractual claims of the insured.  The trial court granted the insurer’s motion and the court of appeals affirmed.  Citing Barbara, the Texas Supreme Court reversed the holding and ruled that the insured’s extra-contractual claims survived the payment of the appraisal award.

In Perry v. United Services Automobile Ass’n (you can read the available supreme court opinions on this case here), the facts and outcome were very similar to those at issue in Marchbanks.  The insurer undervalued the insured’s wind and hail damage claim.  The insured filed suit and the insurer subsequently demanded appraisal.  The appraisers valued the damage at nearly three times that estimated by the insurer pre-suit.  The insurer paid the appraisal award and sought to dismiss the insured’s extra-contractual claims.  The trial court dismissed the claims and the court of appeals affirmed the decision.  The Texas Supreme Court, citing Barbara, reversed and remanded in favor of the policyholder.

The tide appears to be in the favor of policyholders and we are encouraged as policyholder lawyers.  The lawyers of LeMaster & Ahmed PLLC are here to help if an insurer denied, delayed, or underpaid your business or residential insurance claim.  Contact us at our Houston location at 832-356-7983 or our DFW location at 972-483-0410. You can also message us any inquiries directly on our website.

***The foregoing is not meant to serve as legal advice relating to your insurance coverage issue. Please contact one of our lawyers if you have questions specific to your particular insurance issue.

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