Insurer Entitled to Summary Judgment in Post-Menchaca Appraisal Case

Originally published by Anne-Marie Abarado.

In Wellington Ins. Co. v. Banuelos, No. 04-17-00365-CV, 2018 WL 626534, at * 2 (Tex. App.—San Antonio Jan. 31, 2018, no pet. h.) the San Antonio Court of Appeals reaffirmed its decisions in Garcia v. State Farm Lloyds and Ortiz v. State Farm Lloyds that “an insurer’s payment of an appraisal award entitled an insurer to summary judgment on the insured’s contractual and extra-contractual claims” and that the Supreme Court’s decision in USAA Tex. Lloyds Co. v. Menchaca did not require them to revisit their holding in Garcia.

In the Wellington case, Banuelos submitted a claim to his insurer for damages from a storm.  An independent adjuster inspected the property and determined that the loss did not exceed Banuelos’ deductible.  Banuelos then sued Wellington for breach of contract, breach of the duty of good faith and fair dealing, violations of the prompt payment and unfair settlement provisions of the Texas Insurance Code, and violations of the Texas Deceptive Trade Practices Act. Banuelos invoked the appraisal clause.  After the appraisal award was issued, Wellington issued the net appraisal award to Banuelos.

Wellington filed a traditional motion for summary judgment arguing that the timely payment estopped Banuelos from recovering under his breach of contract and extra-contractual claims. The trial court denied the motion for summary judgment, but allowed a permissive interlocutory appeal.  The court of appeals held that the trial court erred in denying the motion for summary judgment because Wellington timely paid the appraisal award and Banuelos “failed to assert any ground for setting aside the appraisal award or present evidence of an act so extreme that it caused him injury independent of his claim under the policy.”  Id.  The decisions in Garcia, Ortiz, and now Banuelos reflect the San Antonio Court of Appeals’ consistent position that timely payment of an appraisal award estops insureds from recovering damages for breach of contract and extra-contractual claims absent a showing of an injury independent of their claim.

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