Alvarez v. State Farm Lloyds

Decision Date17 April 2020
Docket NumberNO. 18-0127,18-0127
Citation601 S.W.3d 781
Parties Juan ALVAREZ, Petitioner, v. STATE FARM LLOYDS, Respondent
CourtTexas Supreme Court

Joshua P. Davis, Katherine Mary James, Davis Law Group, Houston, TX, for Juan Alvarez.

Melissa A. Lorber, Craig T. Enoch, Enoch Kever PLLC, Austin, TX, Amanda Louise Hazleton, Jennifer Gibbins Durbin, Allen, Stein & Durbin, P.C., San Antonio, TX, for State Farm Lloyds.


In this insurance dispute, we consider whether an insurer's payment of an appraisal award bars an insured's claim under the Texas Prompt Payment of Claims Act (TPPCA), codified in Chapter 542 of the Insurance Code. See TEX. INS. CODE §§ 542.051 –.061 (Subchapter B. Prompt Payment of Claims). The court of appeals concluded it did. Because the court of appeals' opinion is inconsistent with our recent decisions on this issue, we now reverse.

Juan Alvarez's residential property sustained wind and hail damage. After its first inspection, State Farm determined that the property's damages fell below Alvarez's deductible. After a second inspection, however, State Farm observed additional damage, revised its estimate, and issued Alvarez payment under his insurance policy. Believing the property damages still undervalued, Alvarez sued State Farm. In response, State Farm successfully moved the trial court to compel appraisal. The appraisal award exceeded State Farm's prior estimates. State Farm accordingly paid the award to Alvarez and subsequently moved for summary judgment on all of Alvarez's claims. The trial court granted State Farm's motion and rendered a take-nothing judgment. The court of appeals affirmed, holding that (1) payment of an appraisal award entitled an insurer to summary judgment on all of the insured's contractual and extra-contractual claims and (2) our decision in USAA Texas Lloyds Co. v. Menchaca , 545 S.W.3d 479 (Tex. 2018), did not change that conclusion. 598 S.W.3d 273 (Tex. App.—San Antonio 2018) (mem. op.).

Alvarez thereafter petitioned this Court to decide whether the court of appeals' opinion comported with Menchaca . In the interim, however, we decided two cases relevant to the issues Alvarez raises in his petition. In Barbara Technologies Corp. v. State Farm Lloyds , we held that "payment in accordance with an appraisal is neither an acknowledgment of liability nor a determination of liability under the policy for purposes of TPPCA damages under section 542.060." 589 S.W.3d 806, 820 (Tex. 2019). On the same day, we restated in Ortiz v. State Farm Lloyds that "an insurer's payment of an appraisal award does not as a matter of law bar an insured's claims under the Prompt Payment Act." 589 S.W.3d 127, 135 (Tex. 2019).

Alvarez originally sought damages from State Farm for breach of contract, breach of the duty of good faith and fair dealing, unjust enrichment, negligence, negligent misrepresentation, and violations...

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6 cases
  • Hinojos v. State Farm Lloyds
    • United States
    • Texas Supreme Court
    • March 19, 2021
    ...appraisal award precluded liability. Without the benefit of our decisions in Barbara Technologies Corp. v. State Farm Lloyds3 and Alvarez v. State Farm Lloyds ,4 the trial court granted summary judgment, and the court of appeals affirmed.5 We granted the homeowner's petition for review.Appl......
  • Newton v. State Farm Lloyds
    • United States
    • U.S. District Court — Eastern District of Texas
    • May 17, 2022
    ... ... First United Methodist Church v. Church Mut. Ins ... Co. , No. 13-18-00048-CV, 2021 WL 3776728, at *2 (Tex ... App.- Corpus Christi-Edinburg Aug. 26, 2021, no pet.) ... (internal citations omitted) (citing Hinojos , 619 ... S.W.3d at 655, 658; then citing Alvarez v. State Farm ... Lloyds , 601 S.W.3d 781, 783 (Tex. 2020) (holding that ... the payment of the appraisal award did not bar the ... insured's TPPCA claim)) ... [ 12 ] In Barbara Tech , the Fifth ... Circuit reversed the trial court's grant of summary ... ...
  • Lockheed Martin Corp. v. Hegar
    • United States
    • Texas Supreme Court
    • May 1, 2020
    ... ... Glenn HEGAR, Comptroller of Public Accounts of the State of Texas, and Ken Paxton, Attorney General of the State of Texas, ... ...
  • Crayton v. Homeowners of Am. Ins. Co.
    • United States
    • Texas Court of Appeals
    • December 23, 2020
    ...that the insured "could not maintain his TPPCA claim due to [the insurer's] payment of the appraisal award"); Alvarez v. State Farm Lloyds, 601 S.W.3d 781, 783 (Tex. 2020) (same); Lambert v. State Farm Lloyds, No. 02-17-00374-CV, 2019 WL 5792812, at *3 (Tex. App.—Fort Worth Nov. 7, 2019, pe......
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