In a per curiam opinion issued this morning Marchbanks v. Liberty Insurance Corporation (No. 18-0977), the Texas Supreme Court reversed a decision by the Houston Court of Appeals [14th Dist.] that payment of an appraisal award bars an insured’s claims under the Texas Prompt Payment of Claims Act (Chap. 542, Insurance Code). SCOTX has previously ruled in two cases, Barbara Technologies Corp. v. State Farm Lloyds, 589 S.W.3d 806, 820 (Tex. 2019) and Ortiz v. State Farm Lloyds, 589 S.W.3d 127 (Tex. 2019), that the insurer’s payment of an appraisal award is “neither an acknowledgement nor a determination of liability under the policy” for purpose of damages under § 542.060, Insurance Code, and thus such payment does not bar as a matter of law an insured’s claims under Chapter 542.
The case originally arose from a hailstorm claim that the insurer initially denied. When the insured sought a new inspection 15 months later, the insurer assessed damages at less than the insured’s deductible and did not inform the insured of its decision for another three months. The insured filed suit, and the trial court awarded appraisal, which found damages in excess of the insurer’s determination. The insurer paid the appraisal and moved for summary judgment. The trial court granted summary judgment and the the court of appeals affirmed, holding that payment of the appraisal barred the insured’s claims under the Prompt Payment of Claims Act as a matter of law.