Case 4:13-cv-00413-ALM Document 63 Filed 07/29/16 Page 1 of 15 PageID #: 1283
`
`United States District Court
`EASTERN DISTRICT OF TEXAS
`SHERMAN DIVISION
`
`§
`§
`§
`§
`§
`
`CASE NO. 4:13-CV-413
`Judge Mazzant
`
`RONALD STUDER
`
`v.
`
`STATE FARM LLOYDS
` 
`
`MEMORANDUM OPINION AND ORDER
`
`Pending before the Court are Plaintiff’s Motion to Set Aside Appraisal Award (Dkt. #57)
`
`
`
`and Defendant’s Motion for Summary Judgment (Dkt. #58). After reviewing the relevant
`
`pleadings, the Court finds that Plaintiff’s motion to set aside the appraisal award should be
`
`denied, and Defendant’s motion for summary judgment should be granted.
`
`BACKGROUND
`
`
`
`The issue before the Court whether the appraisal award issued in the above-referenced
`
`case should be set aside due to mistake. On or about June 21, 2011, Plaintiff’s property,
`
`including his glass solarium, was struck by hail stones during a storm (Dkt. #57 at p. 1). Plaintiff
`
`filed a claim for damage to his roof, gutters, siding, windows, skylight, and glass solarium with
`
`Defendant State Farm Lloyds (“Defendant” or “State Farm”) (Dkt. #57 at p. 1). State Farm
`
`inspected the property on several occasions (Dkt. #58 at p. 41; Dkt. #58, Exhibit B1). State Farm
`
`retained Rimkus Engineering to inspect the solarium and give a cause of loss (Dkt. #58 at p. 4).
`
`Rimkus inspected and photographed the property, interviewed Plaintiff, reviewed records at the
`
`Denton County Appraisal District, and reviewed measurements and pictures of the solarium
`
`                                                            
`1 As a preliminary issue, Plaintiff assert that Defendant’s Motion for Summary Judgment is procedurally defective
`because it does not contain “a ‘Statement on Undisputed Material Facts[.]’” (Dkt. #59 at pp. 1-2). The Court finds
`that Plaintiff’s objection should be overruled. Defendant’s Motion for Summary Judgment contains a “Relevant
`Background” section, which contains the facts of the present action. The Court finds that Defendant’s motion is not
`procedurally defective, and thus, will address the motion.
`
` 
`
`1
`
`

`
`Case 4:13-cv-00413-ALM Document 63 Filed 07/29/16 Page 2 of 15 PageID #: 1284
`
`(Dkt. #58 at p. 4; Dkt. #58, Exhibit B2). On May 29, 2012, Rimkus issued its report, and found,
`
`in part, the following:
`
`1.
`
`2.
`
`3.
`4.
`
`5.
`
`Cracks and separation in the sealant of the metal frame joints and along
`the edges of the metal frame components were due to long-term exposure
`to weather and normal wear and tear, but were not consistent with having
`been caused by hail.
`The water shedding ability of the solarium had been compromised due to
`long-term deterioration of the sealant and the rubber seal. Hail did not
`cause damage to the sealant and the rubber seal.
`Hail did not compromise the water shedding ability of the solarium.
`The cracked and missing exterior glass panels were consistent with having
`been caused by impact forces from unknown objects and not consistent
`with hail damage.
`The missing layer of the glass panel on the underside of the solarium roof
`was consistent with a suspected past impact from an unknown object
`inside the solarium. Hail did not cause the breaking of the inner glass
`pane.
`
`
`(Dkt. #58, Exhibit B2 at p. 2). On June 12, 2012, State Farm discussed the Rimkus Report with
`
`Plaintiff; Plaintiff disagreed with the findings (Dkt. #58 at p. 5). State Farm covered the hail
`
`damage to the roof, gutters, siding, windows, and skylight, but denied coverage as to the glass
`
`solarium, claiming that the damage was due to manufacturing defects that pre-dated the storm
`
`(Dkt. #57 at p. 1).
`
`
`
`On June 18, 2013, Plaintiff filed his Original Petition in the 362nd Judicial District of
`
`Denton County, Texas (Dkt. #2). The case was later removed to this Court on July 22, 2013
`
`(Dkt. #1). On April 30, 2014, Plaintiff filed his Second Amended Complaint, in which he
`
`asserted the following claims: (1) breach of contract; (2) prompt payments of claims; and (3)
`
`bad faith violations under § 541.051 of the Texas Insurance Code (Dkt. #33).
`
`
`
`On June 6, 2014, Plaintiff invoked the appraisal provision of his State Farm insurance
`
`policy, and appointed his appraiser, Ray Choate (“Choate”) (Dkt. #57 at p. 1; Dkt. #57, Exhibit
`
` 
`
`2
`
`

`
`Case 4:13-cv-00413-ALM Document 63 Filed 07/29/16 Page 3 of 15 PageID #: 1285
`
`A). Plaintiff invoked his right to appraisal under the standard State Farm policy language, which
`
`stated as follows:
`
`4. Appraisal. If you and we fail to agree on the amount of loss, either one can
`demand that the amount of the loss be set by appraisal. If either makes a written
`demand for appraisal, each shall select a competent, disinterested appraiser. Each
`shall notify the other of the appraiser’s identity within 20 days of receipt of the
`written demand. The two appraisers shall then select a competent, impartial
`umpire. If the two appraisers are unable to agree upon an umpire within 15 days,
`you or we can ask a judge of a court of record in the state where the residence
`premises is located to select an umpire. The appraisers shall then set the amount
`of the loss. If the appraisers submit a written report of an agreement to us, the
`amount agreed upon shall be the amount of loss. If the appraisers fail to agree
`within a reasonable time, they shall submit their differences to the umpire.
`Written agreement signed by any two of these shall set the amount of the loss.
`Each appraiser shall be paid by the party selecting that appraiser. Other expenses
`of the appraisal and the compensation of the umpire shall be paid equally by you
`and us.
`
`(Dkt. #57, Exhibit A at p. 1). On June 26, 2014, State Farm agreed to participate in an appraisal,
`
`limited to the glass solarium, and appointed its appraiser, Timothy Lozos (“Lozos”) (Dkt. #57 at
`
`pp. 1-2; Dkt. #57, Exhibit B). On July 30, 2014, the Court appointed the Hon. Karen Gren
`
`Scholer, State District Judge (ret.), as the umpire in the action (Dkt. #45).
`
`
`
`Each appraiser’s estimate was submitted to the umpire in accordance with the insurance
`
`policy (Dkt. #57 at p. 2). Lozos submitted an estimate to the umpire to repair the solarium at a
`
`cost of $2,420.78 (Dkt. #57 at p. 2; Dkt. #60 at p. 1; see Dkt. #57, Exhibit C). Choate submitted
`
`his estimate to the umpire to repair the solarium at a cost of $62,5782 (Dkt. #57 at p. 2; Dkt. #57,
`
`Exhibit D). On March 20, 2015, the umpire issued her award, in which she awarded a total of
`
`$2,420.78 (Dkt. #57, Exhibit E). The umpire and Lozos signed the appraisal award (Dkt. #57,
`
`Exhibit E).
`
`                                                            
`2 Plaintiff asserts that Choate’s estimate was at a cost of $75,093.60; however, upon the Court’s review of Choate’s
`appraisal it appears that his estimate to repair the glass solarium was at a cost of $62,578 (see Dkt. #60 at p. 1).
`
` 
`
`3
`
`

`
`Case 4:13-cv-00413-ALM Document 63 Filed 07/29/16 Page 4 of 15 PageID #: 1286
`
`
`
`After the award was issued, Choate contacted Binswanger Glass, who was used by Lozos
`
`in his estimate, and “requested they inspect the property and provide a repair estimate for the
`
`wind and hail damages to the solarium.” (Dkt. #57 at p. 2). After they inspected the solarium,
`
`Binswanger determined that its cost of the repair would be $84,602 (see Dkt. #57, Exhibit F1).
`
`
`
`On February 10, 2016, Plaintiff filed his Motion to Set Aside Appraisal Award (Dkt.
`
`#57). On March 2, 2016, State Farm filed its response (Dkt. #60).
`
`
`
`Also on February 10, 2016, Defendant filed its Motion for Summary Judgment (Dkt.
`
`#58). On February 24, 2016, Plaintiff filed his response (Dkt. #59). On March 9, 2016,
`
`Defendant filed its reply (Dkt. #61).
`
`LEGAL STANDARD
`
`The purpose of summary judgment is to isolate and dispose of factually unsupported
`
`claims or defenses. See Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986). Summary judgment
`
`is proper if the pleadings, the discovery and disclosure materials on file, and any affidavits
`
`“[show] that there is no genuine dispute as to any material fact and that the movant is entitled to
`
`judgment as a matter of law.” FED. R. CIV. P. 56(a). A dispute about a material fact is genuine
`
`“if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.”
`
`Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The trial court must resolve all
`
`reasonable doubts in favor of the party opposing the motion for summary judgment. Casey
`
`Enters., Inc. v. Am. Hardware Mut. Ins. Co., 655 F.2d 598, 602 (5th Cir. 1981) (citations
`
`omitted). The substantive law identifies which facts are material. Anderson, 477 U.S. at 248.
`
`
`
`The party moving for summary judgment has the burden to show that there is no genuine
`
`issue of material fact and that it is entitled to judgment as a matter of law. Id. at 247. If the
`
`movant bears the burden of proof on a claim or defense on which it is moving for summary
`
` 
`
`4
`
`

`
`Case 4:13-cv-00413-ALM Document 63 Filed 07/29/16 Page 5 of 15 PageID #: 1287
`
`judgment, it must come forward with evidence that establishes “beyond peradventure all of the
`
`essential elements of the claim or defense.” Fontenot v. Upjohn Co., 780 F.2d 1190, 1194 (5th
`
`Cir. 1986). Where the nonmovant bears the burden of proof, the movant may discharge its
`
`burden by showing that there is an absence of evidence to support the nonmovant’s case.
`
`Celotex, 477 U.S. at 325; Byers v. Dall. Morning News, Inc., 209 F.3d 419, 424 (5th Cir. 2000).
`
`Once the movant has carried its burden, the nonmovant must “respond to the motion for
`
`summary judgment by setting forth particular facts indicating there is a genuine issue for trial.”
`
`Byers, 209 F.3d at 424 (citing Anderson, 477 U.S. at 248-49). The nonmovant must adduce
`
`affirmative evidence. Anderson, 477 U.S. at 257. No “mere denial of material facts
`
`nor…unsworn allegations [nor] arguments and assertions in briefs or legal memoranda” will
`
`suffice to carry this burden. Moayedi v. Compaq Comput. Corp., 98 F. App’x 335, 338 (5th Cir.
`
`2004). Rather, the Court requires “significant probative evidence” from the nonmovant in order
`
`to dismiss a request for summary judgment supported appropriately by the movant. United
`
`States v. Lawrence, 276 F.3d 193, 197 (5th Cir. 2001). The Court must consider all of the
`
`evidence, but must refrain from making any credibility determinations or weighing the evidence.
`
`See Turner v. Baylor Richardson Med. Ctr., 476 F.3d 337, 343 (5th Cir. 2007).
`
`Plaitniff’s Motion to Set Aside Appraisal (Dkt. #57)
`
`ANALYSIS
`
`
`
`As a preliminary matter, State Farm objects to the Choate Affidavit (Dkt. #57, Exhibit F)
`
`as Choate’s testimony is speculative, vague, and conclusory (Dkt. #60 at p. 7). State Farms also
`
`contends that the Court should strike the affidavit because it is irrelevant, as Choate was not a
`
`signatory to the appraisal award (Dkt. #60 at p. 7). To the extent that the Court considered the
`
` 
`
`5
`
`

`
`Case 4:13-cv-00413-ALM Document 63 Filed 07/29/16 Page 6 of 15 PageID #: 1288
`
`Choate Affidavit for purposes of this motion, the Court finds that State Farm’s objections should
`
`be overruled.
`
`
`
`State Farm also objects to the Binswanger bid proposal (Dkt. #57, Exhibit F-1), and
`
`asserts that it is irrelevant and constitutes hearsay (Dkt. #60 at p. 7). To the extent that the Court
`
`relies upon the Binswanger bid proposal, it finds that State Farm’s objections should be
`
`overruled.
`
`
`
`In a diversity case, state law provides the elements of the case pursuant to the substantive
`
`law of the forum state. Thrash v. State Farm Fire & Cas. Co., 992 F.2d 1354, 1356 (5th Cir.
`
`1993). “Therefore the Court looks to final decisions by the Texas Supreme Court or, where there
`
`are none, attempts to determine as best as it can what that high court would decide about an issue
`
`by examining decisions of intermediate appellate state courts.” United Neurology, P.A. v.
`
`Hartford Lloyd’s Ins. Co., 101 F. Supp. 3d 584, 591 (S.D. Tex. 2015) (citing James v. State
`
`Farm Mut. Auto. Ins. Co., 719 F.3d 447, 451 (5th Cir. 2013) (citing Westlake Petrochemicals,
`
`L.L.C. v. United Polychemical, Inc., 688 F.3d 232, 238 n. 5 (5th Cir. 2012); Howe ex rel. Howe
`
`v. Scottsdale Ins. Co., 204 F.3d 624, 627 (5th Cir. 2000))).
`
`The Texas Supreme Court has long recognized the validity of appraisal provisions.
`
`Hudgens v. Allstate Tex. Lloyd’s, No. H-11-2716, 2012 WL 2887219, at *8 (S.D. Tex. July 13,
`
`2012) (citing Scottish Union & Nat’l Ins. Co. v. Clancy, 8 S.W. 630, 631 (Tex. 1888)). Under
`
`Texas law, “‘appraisal awards made pursuant to the provisions of an insurance contract are
`
`binding and enforceable, and every reasonable presumption will be indulged to sustain an
`
`appraisal award.’” JM Walker LLC v. Acadia Ins. Co., 356 F. App’x 744, 746 (5th Cir. 2009)
`
`(quoting Franco v. Slavonic Mut. Fire Ins. Ass’n, 154 S.W.3d 777, 786 (Tex. App.—Houston
`
`[14th Dist.] 2004, no pet.)). “The effect of an appraisal provision is to estop one party from
`
` 
`
`6
`
`

`
`Case 4:13-cv-00413-ALM Document 63 Filed 07/29/16 Page 7 of 15 PageID #: 1289
`
`contesting the issue of damages in a suit on the insurance contract, leaving only the question of
`
`liability for the court.” Franco, 154 S.W.3d at 786 (citing Wells v. Am. States Preferred Ins. Co.,
`
`919 S.W.2d 679, 683-85 (Tex. App.—Dallas 1996, writ denied)); MLCSV10 v. Stateside Enters.,
`
`Inc., 866 F. Supp. 2d 691, 698 (S.D. Tex. 2012). “Because every reasonable presumption will be
`
`indulged to sustain an appraisal award, the burden of proof is on the party seeking to avoid the
`
`award.” Franco, 154 S.W.3d at 786 (citing Barnes v. W. Alliance Ins. Co., 844 S.W.2d 264, 267
`
`(Tex. App.—Fort Worth 1992, writ dism’d by agr.)); MLCSV10, 866 F. Supp. 2d at 698. “Texas
`
`courts recognize three situations in which the results of an otherwise binding appraisal may be
`
`disregarded: (1) when the award was made without authority; (2) when the award was made as a
`
`result of fraud, accident, or mistake, or (3) when the award was not in compliance with the
`
`requirements of the policy.” Franco, 154 S.W.3d at 786 (citing Wells, 919 S.W.2d at 683;
`
`Providence Lloyds Ins. Co. v. Crystal City Indep. Sch. Dist., 877 S.W.2d 872, 875 (Tex. App.—
`
`San Antonio 1994, no writ)).
`
`In the present case, Plaintiff argues that the second exception applies, or that the award
`
`was made as a result of mistake (Dkt. #57 at p. 3). Plaintiff contends that “Mr. Choate…finds
`
`that Mr. Lozos failed to use a reliable and reasonable appraisal methodology, the appraisal award
`
`does not reflect the true intention of appraisal, and had Mr. Lozos utilized a reliable and
`
`reasonable appraisal methodology, the true intention of appraisal…would have been realized
`
`(Dkt. #57 at p. 5). Additionally, Plaintiff asserts that the award should be set aside as
`
`the appraisal award was signed only by Lozos and the umpire, not Choate (Dkt. #57 at p. 5, see
`
`Dkt. #57, Exhibit E).
`
`After reviewing the relevant pleadings, the Court finds that Plaintiff has not met his
`
`burden of demonstrating the award was made as a result of mistake. First, the appraisal
`
`7
`
`

`
`Case 4:13-cv-00413-ALM Document 63 Filed 07/29/16 Page 8 of 15 PageID #: 1290
`
`provision in the State Farm contract states as follows: “Written agreement signed by any two of
`
`these [the appraisers and/or the umpire] shall set the amount of the loss.” (Dkt. #57, Exhibit A at
`
`p. 1). The appraisal award issued by the umpire was signed by the umpire and Lozos (Dkt. #57,
`
`Exhibit E). As such, it follows the provisions of the State Farm policy, and the Court finds that it
`
`is binding, as long as Plaintiff does not prove it was formed by mistake.
`
`
`
`However, Plaintiff has presented no evidence that neither the umpire nor Lozos, the
`
`signers of the appraisal award, disagree with the appraisal award, or believe that it was entered
`
`into as a result of mistake. The evidence before the Court demonstrates that Choate disagreed
`
`with the umpire’s decision, not that a mistake was made. During the appraisal process, the
`
`umpire was presented with the appraisers’ competing estimates, and that “[t]he same evidence
`
`[as is presented within Plaintiff’s motion] was presented to the appraisal panel (including the
`
`umpire) by appraiser Choate and addressed in appraiser Lozos’ rebuttal report.” (Dkt. #60 at p.
`
`5; see Dkt. #60, Exhibit 1). After reviewing the evidence presented, the umpire agreed with
`
`Lozos’ estimate. The umpire’s decision to use Lozos’ estimate, rather than Choate’s, does not
`
`mean that the appraisal award resulted from accident or mistake. See MLCSV10, 866 F. Supp. 2d
`
`at 702.
`
`
`
`It is well-settled that a court will not substitute its judgment for that of the appraisers in
`
`the absence of a showing that the award was induced by fraud, accident, mistake, or some
`
`circumstance that would render it unjust and unfair to one or both of the interest parties.
`
`Providence Wash. Ins. Co. v. Farmers Elevator Co., 141 S.W.2d 1024, 1026 (Tex. App.—
`
`Amarillo 1940, no writ). Plaintiff has not presented the Court with evidence that a mistake
`
`occurred in the determination of the appraisal award; therefore, the Court finds that Plaintiff’s
`
`motion to set aside the appraisal award should be denied.
`
` 
`
`8
`
`

`
`Case 4:13-cv-00413-ALM Document 63 Filed 07/29/16 Page 9 of 15 PageID #: 1291
`
`Defendant’s Motion for Summary Judgment (Dkt. #58)
`
`
`
`State Farm moves for summary judgment on the following claims: (1) breach of
`
`contract; (2) bad faith violations; and (3) prompt payment of claims violations (Dkt. #58).
`
`Breach of Contract
`
`In the present case, State Farm asserts that the Court should grant summary judgment as
`
`to Plaintiff’s breach of contract claim because State Farm’s payment of the appraisal award bars
`
`Plaintiff from maintaining the claim (Dkt. #58 at p. 6). Plaintiff asserts that the appraisal award
`
`should be set aside, as it was made as the result of mistake, and therefore, Plaintiff’s breach of
`
`contract claim should remain (Dkt. #59 at pp. 8-9).
`
`
`
`Under Texas law, insurance policies are construed under the usual principles of contract
`
`law. Id. (citing Am. States Ins. Co. v. Bailey, 133 F.3d 363, 369 (5th Cir. 1998)). Therefore,
`
`“[t]he court’s primary role is to give effect to the written expression of the parties’ intent.” Id.
`
`(citing Balandran v. Safeco Ins. Co. of Am., 972 S.W.2d 738, 741 (Tex. 1998)). “In defining the
`
`scope of coverage, the court examines the entire policy to determine the true intent of the
`
`parties.” Id. (citing Utica Nat’l Ins. Co. of Tex. v. Am. Indem. Co., 141 S.W.3d 198, 202 (Tex.
`
`2004)). The court must read the policy as a whole and give effect to each of its contractual
`
`provisions, so that none are rendered meaningless. Id. (citing Am. Mfrs. Mut. Ins. Co. v.
`
`Schaefer, 124 S.W.3d 154, 157 (Tex. 2003)). When a contract is clear and unambiguous, the
`
`court enforces it as written. Id. (citing Nat’l Union Fire Ins. Co. of Pittsburgh, Pa. v. CBI Indus.,
`
`Inc., 907 S.W.2d 517, 520 (Tex. 1995)). However if an insurance policy is ambiguous, the court
`
`must resolve the ambiguity in favor of the insured. Id. (citing Progressive Cty. Mut. Ins. Co. v.
`
`Sink, 107 S.W.3d 547, 551 (Tex. 2003)); see Mid-Continent Cas. Co. v. Swift Energy Co., 206
`
`F.3d 487, 491 (5th Cir. 2000) (“In Texas, when an insurance policy is ambiguous or inconsistent,
`
` 
`
`9
`
`

`
`Case 4:13-cv-00413-ALM Document 63 Filed 07/29/16 Page 10 of 15 PageID #: 1292
`
`the construction that would afford coverage to the insured must govern.”).
`
`
`
`“Under Texas law, to prevail on a breach of contract claim, the plaintiff must prove (1)
`
`the existence of a valid contract, (2) performance or tendered performance by the plaintiff, (3)
`
`breach of the contract by the defendant, and (4) damages sustained as a result of the breach.”
`
`United Neurology, P.A., 101 F. Supp. 3d at 593 (citing Mullins v. TestAmerica, Inc., 564 F.3d
`
`386, 418 (5th Cir. 2009) (citing Aguiar v. Segal, 167 S.W.3d 443, 450 (Tex. App.—Houston
`
`[14th Dist.] 2005, pet denied))); Quibodeaux v. Nautilus Ins. Co., No. 1:10-CV-739, 2015 WL
`
`1406375, at *4 (E.D. Tex. Mar. 25, 2015). “To recover under an insurance policy, a plaintiff
`
`must allege facts showing that the alleged damages are covered by his insurance policy.” United
`
`Neurology, P.A., 101 F. Supp. 3d at 593 (citing Emp’rs Cas. Co. v. Block, 744 S.W.2d 940, 944
`
`(Tex. 1998), overruled on other grounds by State Farm Fire & Cas. v. Gandy, 925 S.W.2d 696
`
`(Tex. 1996); Data Specialties, Inc. v. Transcontinental Ins. Co., 125 F.3d 909 (5th Cir. 1997)
`
`(“Texas law clearly states that for an insurance company to be liable for breach of its duty to
`
`satisfy a claim presented by its insured, the insured must prove that its claim falls within the
`
`insuring agreement of the policy. The insurer’s duty to indemnify, or provide coverage, is
`
`triggered by the actual facts establishing liability in the underlying suit.”).
`
`
`
`However, “[a]n appraisal clause…‘binds the parties to have the extent or amount of the
`
`loss determined in a particular way.’” Quibodeaux, 2015 WL 1406375, at *4 (quoting State
`
`Farm Lloyds v. Johnson, 290 S.W.3d 886, 895 (Tex. 2009) (quoting In re Allstate Cty. Mut. Ins.
`
`Co., 85 S.W.3d 193, 195 (Tex. 2002))). “The effect of an appraisal provision is to estop one
`
`party from contesting the issue of damages in a suit on the insurance contract, leaving only the
`
`question of liability for the court.” Id. “Though the line between the two is not always clear, the
`
`scope of appraisal is limited to questions of damages, not liability.” Id. (citing Johnson, 290
`
` 
`
`10
`
`

`
`Case 4:13-cv-00413-ALM Document 63 Filed 07/29/16 Page 11 of 15 PageID #: 1293
`
`S.W.3d at 889-90).
`
`
`
`“To estop a breach of insurance claim a defendant must show ‘(1) the existence and
`
`enforceability of an appraisal award; (2) the timely payment of the award [by the insurer]; and
`
`(3) the acceptance of the appraisal award.’” United Neurology, P.A., 101 F. Supp. 3d at 598
`
`(quoting Gabriel v. Allstate Tex. Lloyds, No. 7:13-CV-181, 2013 WL 7885700, at *3 (S.D. Tex.
`
`Nov. 1, 2013) (citing Blum’s Furniture Co., Inc. v. Certain Underwriters at Lloyds London, 459
`
`F. App’x 366, 368 (5th Cir. 2012))); Breshears v. State Farm Lloyds, 155 S.W.3d 340, 344 (Tex.
`
`App.—Corpus Christi 2004, pet. denied) (insurer met every requirement of the insurance
`
`contract where is participated in the appraisal process and paid the appraisal amount set by the
`
`appraisers and umpire; because the insurer “complied with every requirement of the contract, it
`
`cannot be found to be in breach.”); see Quibodeaux, 2015 WL 1406375, at *4. “[W]here the
`
`parties disagree on the amount of loss and submit to the contractual appraisal process to resolve
`
`the dispute, and the insurer pays all covered damages determined by the award, the insured may
`
`not then argue that the initial failure to pay those damages equates to a breach of the contract.”
`
`Scalise v. Allstate Tex. Lloyds, No. 7:13-CV-178, 2013 WL 6835248, at *5 (S.D. Tex. Dec. 20,
`
`2013); see Quibodeaux, 2015 WL 1406375, at *4.
`
`
`
`“The reason for the estoppel defense is to prevent the insured from taking advantage of
`
`the binding appraisal process to determine the value of its claim and then, after the insurer fully
`
`pays the appraisal award, suing the insurer for its initial failure to pay.” Quibodeaux, 2015 WL
`
`1406375, at *5 (citing Devonshire Real Estate & Asset Mgmt., LP v. Am. Ins. Co., No. 3:12-CV-
`
`2199-B, 2014 WL 4796967, at *15 (N.D. Tex. Sept. 26, 2014) (citing Breshears, 155 S.W.3d at
`
`343)). “The defense applies with special force when the contract the insured claims is being
`
`breached provides for resolution of disputes through appraisal.” Id.
`
` 
`
`11
`
`

`
`Case 4:13-cv-00413-ALM Document 63 Filed 07/29/16 Page 12 of 15 PageID #: 1294
`
`Plaintiff’s insurance policy set out the appraisal procedure invoked in the present action
`
`(Dkt. #58, Exhibit A). The standard State Farm policy language stated as follows:
`
`4. Appraisal. If you and we fail to agree on the amount of loss, either one can
`demand that the amount of the loss be set by appraisal. If either makes a written
`demand for appraisal, each shall select a competent, disinterested appraiser. Each
`shall notify the other of the appraiser’s identity within 20 days of receipt of the
`written demand. The two appraisers shall then select a competent, impartial
`umpire. If the two appraisers are unable to agree upon an umpire within 15 days,
`you or we can ask a judge of a court of record in the state where the residence
`premises is located to select an umpire. The appraisers shall then set the amount
`of the loss. If the appraisers submit a written report of an agreement to us, the
`amount agreed upon shall be the amount of loss. If the appraisers fail to agree
`within a reasonable time, they shall submit their differences to the umpire.
`Written agreement signed by any two of these shall set the amount of the loss.
`Each appraiser shall be paid by the party selecting that appraiser. Other expenses
`of the appraisal and the compensation of the umpire shall be paid equally by you
`and us.
`
`(Dkt. #58, Exhibit A at p. 13). The Court has already found that the appraisal award is valid, and
`
`should be not set aside. The clause is not ambiguous, and neither party argues otherwise. The
`
`independent umpire, Judge Scholer and State Farm’s appraiser, Lozos, satisfied the requirements
`
`of the policy’s appraisal process by signing the appraisal award, even though Plaintiff’s
`
`appraiser, Choate, refused to sign (Dkt. #58, Exhibit B4). The Court has rejected Plaintiff’s
`
`argument, in his motion to set aside the appraisal award (Dkt. #57), that the appraisal award was
`
`determined as the result of mistake.
`
`
`
`Additionally, there is evidence that State Farm paid the appraisal award to Plaintiff (Dkt.
`
`#58, Exhibit B5; Dkt. #59, Exhibit 5). Plaintiff does not contend that the appraisal award has not
`
`been accepted. However, “[a] number of court have addressed the issue of the insured’s
`
`rejection of a timely and full payment of the appraisal award amount by the insurer under Texas
`
`law and determined that if the appraisal award has been reached in accordance with the terms of
`
`the insurance policy and the insurer has timely tendered the full amount awarded by the
`
` 
`
`12
`
`

`
`Case 4:13-cv-00413-ALM Document 63 Filed 07/29/16 Page 13 of 15 PageID #: 1295
`
`appraisers, that conduct is legally sufficient to entitle the insurer to summary judgment on the
`
`breach-of-contract claim against it.” United Neurology, P.A., 101 F. Supp. 3d at 619; see, e.g.,
`
`Providence Lloyds Ins. Co., 877 S.W.2d at 875-76 (holding that the appraisal award was made in
`
`substantial compliance with the terms of the contract, was not made without authority, and was
`
`not the result of fraud, accident or mistake, and is therefore binding, and that appellee should
`
`take nothing on its breach of contract claim); Toonen v. United Servs. Auto. Ass’n, 935 S.W.2d
`
`937, 940 (Tex. App.—San Antonio 1996, no writ) (holding that the insurer was entitled to
`
`summary judgment on the insured’s breach of contract claim because it had paid the appraisal
`
`award pursuant to the contract); Caso v. Allstate Tex. Lloyds, Civ. A. No. 7:12-CV-748, 2014
`
`WL 528192, at *5 (S.D. Tex. Feb. 7, 2014) (“[T]he award remains both binding and enforceable
`
`until it is set aside, not withstanding Plaintiffs’ rejection of Allstate’s tender, an apparently-
`
`baseless rejection for which Plaintiffs have not offered an explanation.”); Devonshire, 2014 WL
`
`4796967, at *18 (“[S]o long as there is a binding and enforceable appraisal award and the insurer
`
`timely and full[ly] pays the resulting award, estoppel should apply regardless of whether the
`
`insured actually accepts payment.”). Therefore, the Court finds that the other two elements have
`
`been proven by State Farm, and Plaintiff is estopped from bringing its breach of contract claim. 3
`
`Therefore, the Court finds that Defendant’s motion for summary judgment should be granted.
`
`Extra-Contractual Claims
`
`                                                            
`3 In his response, Plaintiff asserts that the breach of contract claim should remain because “State Farm and the
`Plaintiff disagree as to State Farm’s liability under [the Loss Settlement clause of the Policy].” (Dkt. #59 at p. 8).
`Additionally, Plaintiff contends that “there is a question of policy coverage that cannot be determined by the
`appraisers or the umpire[].” (Dkt. #59 at p. 8). Plaintiff asserts that Quibodeaux is not applicable because “the court
`found that the Plaintiff[s] had not raised a genuine issue of material fact because they had not presented a claim to
`the insurance company for contents that were left out of the appraisal award. (Dkt. #59 at p. 9). The Court finds
`that Quibodeaux is applicable. In the present case, State Farm covered hail damage to the roof, gutters, siding,
`windows, and skylight. The only claim that went through the appraisal process was Plaintiff’s claim for damages to
`the solarium, and State Farm has subsequently paid the appraisal award (Dkt. #59, Exhibit 5). Therefore, the Court
`finds that Plaintiff is estopped from bringing its breach of contract claims.
`
`
`
` 
`
`13
`
`

`
`Case 4:13-cv-00413-ALM Document 63 Filed 07/29/16 Page 14 of 15 PageID #: 1296
`
`
`
`State Farm also asserts that the Court should grant summary judgment as to Plaintiffs’
`
`extra-contractual claims (See Dkt. #58).
`
`“Under Texas law, timely payment of an appraisal award under the policy precludes an
`
`award of statutory penalties under the Texas Insurance Code §§ 541 and 542 as a matter of law.”
`
`United Neurology, P.A., 101 F. Supp. 3d at 598 (citing Breshears, 155 S.W.3d at 344; Amine v.
`
`Liberty Lloyds of Tex., Inc., 2007 WL 2264477, at *4-6 (Tex. App.—Houston [1st. Dist.] Aug. 9,
`
`2007, no pet.); Blum’s Furniture Co. v. Certain Underwriters at Lloyds London, No. Civ. A. H-
`
`09-3479, 2011 WL 819491, at *3 (S.D. Tex. Mar. 2, 2011), aff’d, 459 F. App’x 366 (5th Cir.
`
`2012); Waterhill Cos. Ltd. v. Great Am. Assurance Co., Civ. A. No. 05-4080, 2006 WL 696577,
`
`at *2 (S.D. Tex. Mar. 16, 2006) (once appraisal is invoked, a delay in payment pursuant to the
`
`appraisal process does not constitute a violation of the Texas Insurance Code); see also Church
`
`on the Rock N. v. Church Mut. Ins. Co., No. 3:10-CV-0975-L, 2013 WL 497879, at *6 (N.D.
`
`Tex. Feb. 11, 2013); Scalise, 2013 WL 6835248, at *5. As the Deceptive Trade Practices Act
`
`(“DTPA”) claims are analyzed under the same standard, the Court finds that those claims are
`
`estopped, as well. See Scalise, 2013 6835248, at *8. Because Plaintiff’s breach of contract
`
`claim fails, its extra-contractual claims for bad faith violations under the DTPA and the Texas
`
`Insurance Code also fail.
`
`Furthermore, no genuine issue of material facts exists on Plaintiff’s prompt payment of
`
`claims violation under Chapter 542, as the evidence show that the appraisal provision of the
`
`insurance policy was invoked, and State Farm timely paid the appraisal award (Dkt. #58, Exhibit
`
`B5; Dkt. #58, Exhibit C; Dkt. #59, Exhibit 5). Quibodeaux, 2015 WL 1406375, at *9; see
`
`Medistar Twelve Oaks Partners, Ltd. v. Am. Economy Ins. Co., No. H. 09-3828, 2011 WL
`
`3236991, at *9 (S.D. Tex. July 27, 2011) (citing Breshears, 155 S.W.3d at 344-45). “Texas
`
` 
`
`14
`
`

`
`Case 4:13-cv-00413-ALM Document 63 Filed 07/29/16 Page 15 of 15 PageID #: 1297
`
`courts considering the [prompt payment] issue have concluded that full and timely payment of an
`
`appraisal award under the policy precludes an award of penalties under the [Texas] Insurance
`
`Code’s prompt payment provisions as a matter of law.” In re Slavonic Mut. Fire Ins. Ass’n, 308
`
`S.W.3d 556, 563 (Tex. App.—Houston [14th Dist.] 2010, orig. proceeding); see Amine, 2007
`
`WL 2264477, at *4 (Tex. App.—Houston [1st Dist.] Aug. 9, 2007, no pet.) (mem. op.);
`
`DeLaGarza v. State Farm Mut. Auto. Ins. Co., 175 S.W.3d 29, 32-33 (Tex. App.—Dallas 2005,
`
`pet. denied); Breshears, 155 S.W.3d at 344-45. Therefore, Defendant’s motion for summary
`
`judgment is granted.
`
`CONCLUSION
`
`
`
`It is therefore ORDERED