PROPERTY INSURER CUTS OFF POST-APPRAISAL PROMPT PAYMENT CLAIMS BY PROMPTLY PAYING WHAT IT OWES

Last Wednesday, a property insurer facing a post-appraisal claim under Texas Insurance Code Chapter 542 (Prompt Payment of Claims) won a summary judgment.  In Abundis v. Allstate Texas Lloyd's, No. CV H-19-0953, 2020 WL 6060971 (S.D. Tex. Oct. 14, 2020) (slip op.), the policyholder invoked appraisal during litigation, and Allstate ultimately paid an appraisal award on a residential hail claim. 

Mindful of the Texas supreme court’s holding in Barbara Technologies Corp. v. State Farm Lloyds, 589 S.W.3d 806 (Tex. 2019), which allowed policyholders to continue pursuing Chapter 542 claims after payment of an appraisal award in certain circumstances, Allstate also made an additional payment to cover any interest it might owe under Chapter 542, and then made an offer of judgment in an amount designed to cover the plaintiff’s incurred attorney fees up to that point.

After the policyholder rejected the offer of judgment, Allstate moved for summary judgment.  Considering the reasoning applied by the supreme court in Barbara Tech, the district court here concluded Allstate had successfully shown it could not owe any more 542 interest on the claim because it had already paid all the interest owed.  Likewise, the offer of judgment cut off any ability to cover later-accrued attorney fees. Thus, Allstate was entitled to summary judgment.