Ortiz v. State Farm Lloyds

The Supreme Court affirmed in part and reversed in part the judgment of the court of appeals in this insurance dispute, holding that an insurer's payment of an appraisal award bars an insured's breach of contract claim and bad faith claims but that an insured may proceed on his claim under the Texas Prompt Payment of Claims Act, Tex. Ins. Code chapter 542.Insured sued Insurer for breach of contract, violations of the Prompt Payment Act, and statutory and common law bad faith insurance practices. Insurer filed a motion to compel appraisal, which the trial court granted. Insurer then filed a motion for summary judgment, arguing that its payment of the appraisal award resolved all claims in the lawsuit. The trial court granted the motion. The court of appeals affirmed. The Supreme Court affirmed, holding (1) the payment barred Insured's breach of contract claim premised on failure to pay the amount of the covered loss; (2) the payment barred Insured's bad faith insurance practices claims to the extent the only actual damages sought were lost policy benefits; and (3) in accordance with today's decision in Barbara Technologies Corp. v. State Farm Lloyds, __ S.W.3d __ (Tex. 2019), Insured may proceed on his claim under the Prompt Payment Act. View "Ortiz v. State Farm Lloyds" on Justia Law