The Texas Court of Appeals in Fort Worth joined the Dallas court of appeals and others across the state in holding that an insurer’s payment of an appraisal award and interest precludes an award of attorney’s fees under the Texas Prompt Payment of Claims Act (TPPCA). In Kester v. State Farm Lloyds, 2023 WL 4359790 (Tex. App—Fort Worth), Kester suffered damage to his home in Southlake, Texas in an October 2019 storm.  He submitted a claim to State Farm, which found covered damage to be $17,000 and then issued him a payment of $2,270 after subtracting his depreciation and deductible.  Kester demanded more and eventually an appraisal, resulting in an appraised cost of replacement of $48,000.  State Farm complied with the appraisal award by paying Kester $21,000.

Kester sued State Farm a few months later for violating the TPPCA, breach of contract, and Texas Insurance Code Violations.  A few months into the lawsuit, State Farm voluntarily paid him $2,965.15 to resolve any potential “questions or concerns” regarding interest accrued and $5,000 in attorney’s fees for its delayed payment (in reference to the TPPCA’s penalties).  Shortly thereafter, State Farm moved for summary judgment dismissal of the lawsuit claiming there were no further amounts Kester could recover.  Kester argued that State Farm’s “gratuitous payment” did not moot his right to attorney’s fees.  The trial court, and subsequently the Fort Worth court of appeals sided with State Farm, noting the Dallas court of appeals, and a growing number of federal and state courts hold that an appraisal award and interest payment did in fact preclude an attorney fee award under the TPPCA.  It accordingly affirmed the trial court’s dismissal of the lawsuit.

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