The Amarillo court of appeals recently issued the latest opinion in a growing body of law confirming that an insurance breach of contract and bad faith suit is effectively over once the carrier pays an appraisal award. In Turner v. Peerless Indemnity Ins. Co., No. 07-17-00279-CV, 2018 WL 2709489 (Tex. App.—Amarillo June 5, 2018) (slip op.), an appraisal was conducted while the lawsuit was pending. Peerless promptly paid the resulting award and moved for summary judgment on all claims, which the district court granted. Turner appealed.

The court of appeals seemed genuinely mystified what Turner’s alleged contractual damages could be when he had been promptly paid all he was entitled to under the appraisal award and the policy’s appraisal clause. The court axiomatically rejected the idea that the difference between the carrier’s initial claim payment and the amount of the appraisal award could constitute damages for a breach of contract, because the appraisal itself was a process provided for by the contract and the award was in compliance with the contract. Perhaps significantly, the court also held that the carrier’s payment of the award 13 days after the award was issued, which included a delay of several days while the carrier sought confirmation of payment instructions, was timely and reasonable as a matter of law. Thus, there was no breach of contract the court could identify, and the court upheld dismissal of the contract claim

With regard to Turner’s extra-contractual claims, the court noted “the independent injury rule is alive and well, as reiterated by the Texas Supreme Court in its recent Menchaca opinion…” Because Turner could not raise a fact issue implicating any injury that was genuinely independent of his failure to receive the policy benefits he wanted, the court found no independent injury and also upheld the dismissal of the extra-contractual claims.

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