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
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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
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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
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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
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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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