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Ortiz v. State Farm Lloyds

Court of Appeals of Texas, Fourth District, San Antonio

November 8, 2017

Oscar ORTIZ, Appellant
v.
STATE FARM LLOYDS, Appellee

         From the 37th Judicial District Court, Bexar County, Texas Trial Court No. 2015CI06130 Honorable Peter A. Sakai, Judge Presiding

          Sandee Bryan Marion, Chief Justice, Marialyn Barnard, Justice, Luz Elena D. Chapa, Justice.

          MEMORANDUM OPINION

          SANDEE BRYAN MARION, CHIEF JUSTICE.

         The sole issue presented in this appeal is whether the trial court erred in granting summary judgment in favor of State Farm Lloyds on Oscar Ortiz's Texas Insurance Code and common law bad faith claims following State Farm's payment of an appraisal award. Ortiz asserts this court must reconsider our decision in Garcia v. State Farm Lloyds, 514 S.W.3d 257 (Tex. App.-San Antonio 2016, pet. denied), in light of the Texas Supreme Court's decision in USAA Tex. Lloyds Co. v. Menchaca, No. 14-0721, 2017 WL 1311752 (Tex. Apr. 7, 2017). We disagree and affirm the trial court's judgment.

         Background

         Ortiz submitted a claim to State Farm for damage to his property resulting from wind and a hailstorm. After inspecting the property, State Farm determined Ortiz sustained $723.53 in damages to his property and informed Ortiz that no payment would be made for the claim since the damage amount did not exceed Ortiz's deductible. After a second inspection, State Farm found some additional damage but the damage total still did not exceed Ortiz's deductible, so no payment was made.

         On April 14, 2015, Ortiz sued State Farm asserting contractual and extra-contractual claims. On August 4, 2015, State Farm invoked the appraisal process provided in Ortiz's insurance policy, and Ortiz's lawsuit was abated pending the completion of the appraisal process. On December 15, 2015, an appraisal award was issued in the amount of $9, 447.52. On December 30, 2015, State Farm paid Ortiz $4, 243.93, representing the actual cost value of the loss minus the deductible and recoverable depreciation. State Farm recognized that Ortiz would be entitled to the depreciation after he made the repairs.

         On February 24, 2016, State Farm filed a motion for summary judgment asserting its payment of the appraisal award estopped Ortiz from maintaining a breach of contract claim. State Farm further asserted the payment of the appraisal award also precluded Ortiz's extra-contractual claims. The trial court granted summary judgment in favor of State Farm, and Ortiz appeals.

         Standard of Review

         We review the grant of a summary judgment de novo. Katy Venture, Ltd. v. Cremona Bistro Corp., 469 S.W.3d 160, 163 (Tex. 2015). To prevail on a traditional motion for summary judgment, the movant must show "there is no genuine issue as to any material fact and the [movant] is entitled to judgment as a matter of law." Tex.R.Civ.P. 166a(c).

         Garcia v. State Farm Lloyds

         In Garcia, this court addressed the effect of an insurer's payment of an appraisal award on an insured's contractual claims. 514 S.W.3d at 264-65. We held an insurer's payment of an appraisal award entitled the insurer to summary judgment on its estoppel defense to an insured's contractual claims unless the insured raised an issue of fact as to a ground for setting aside the appraisal award. Id. at 265. In our analysis, we noted, "Texas law clearly holds the discrepancy between the initial estimate and the appraisal award cannot be used as evidence of breach of contract." Id. at 273 (internal quotation omitted).

         We next addressed the effect of the insurer's payment of an appraisal award on an insured's extra-contractual claims. Id. at 276-79. With regard to an insured's common law bad faith claim, we noted that evidence showing "a bona fide dispute about the insurer's liability on the contract does not rise to the level of bad faith." Id. at 276. Instead, in order to defeat a summary judgment on a common law bad faith claim, we held the insured had the burden to raise a genuine issue of material fact that the insurer failed to timely investigate the claim or the insurer committed some act, so extreme, that it would cause injury independent of the policy claim. Id. at 277. After concluding the insured in Garcia failed to present evidence of an act so extreme that it caused injury independent of the policy claim, we held the trial court properly granted summary judgment on the insured's common law bad faith claim. Id. at 278. With regard to the insured's statutory bad faith claims under the Texas Insurance Code and DTPA, we noted that when statutory bad faith claims are based on the same wrongful conduct underlying the insured's common law bad faith claim, there can be no liability on the statutory claims if there is no merit to the common law bad faith claim. Id. at 279. Because the insured's statutory claims in Garcia arose from the same underlying theory as her common law bad faith claim, we held "that because she failed to present evidence on her breach of common law bad faith claim or of an independent injury, and because State Farm timely paid all covered damages determined by the appraisal award, [the insured's] statutory bad faith claims [were] foreclosed." Id.

         USAA Tex. Lloyds ...


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