In a pair of brief, almost identical per curiam opinions issued last Friday, the Supreme Court of Texas reversed two different appellate courts who had previously granted summary judgment for insurers who promptly paid appraisal awards.  In Marchbanks v. Liberty Ins. Corp., 18-0977, 2020 WL 3393472, (Tex. June 19, 2020) and Perry v. United Services Auto. Ass'n, 19-0210, 2020 WL 3393470 (Tex. June 19, 2020) the Texas Supreme Court reaffirmed its commitment to allowing policyholders to pursue claims under Insurance Code Chapter 542 (Prompt Payment of Claims) after payment of an appraisal award, even though the payment of the award extinguishes all other claims.  It appears that in the wake of Barbara Technologies, post-appraisal litigation may be here to stay, at least on a limited scope.

Editor’s note: One alternative to post-appraisal litigation may be to calculate the Chapter 542 interest due and include it with the appraisal award.  However, one problem to this approach, as occurred in at least one of these cases, is that the insured may allow considerable time to elapse before pursuing the claim or demanding appraisal, leaving a potential legal question whether the insured is entitled to accrue the financial benefit of the relatively high interest rates imposed by Chapter 542 after allowing the claim to lie fallow for many months.  This may lead to arguments over whether the accrual of Chapter 542 interest should be tolled when the insured’s inaction is the cause of a significant delay, particularly when the insurer is not aware there is a dispute.

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