Payment of Appraisal Award and Interest Results in Summary Judgment

A Harris County judge held that an insurer who pays an appraisal award of a weather claim and all interest which may be due under Texas Insurance Code Chapter 542A (a/k/a the Texas Prompt Payment of Claims Act) defeats any remaining claim for 542A interest and attorney fees as a matter of law. 

The suit involved a property claim for storm damage. After the parties disagreed on the value of the claim, the policyholder filed suit, and also demanded appraisal.  When appraisal was complete, the insurer promptly paid the resulting award and an added amount which was intended to cover all Chapter 542A interest that could potentially be due.  The payment did not include any amount of attorney fees. 

The insurer moved for summary judgment on all claims, and the policyholder agreed to nonsuit all claims except the Chapter 542A claim.  The policyholder did not argue that the additional payment was insufficient to cover the statutory interest due, but instead argued more generally that the insurer could not nullify his right to litigate the 542A claim and recover attorney fees by pre-emptively paying the interest due.

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