United States District Court, W.D. Texas, Austin Division
THOMAS G. KEZAR and SYLVA SHROYER KEZAR, Plaintiffs,
STATE FARM LLOYDS, Defendant.
PITMAN UNITED STATES DISTRICT JUDGE
the Court is Defendant State Farm Lloyds' (“State
Farm”) Motion for Partial Summary Judgment, (Dkt. 21),
and the parties' responsive briefing. Having considered
the parties' arguments and the relevant law, the Court
will grant the motion.
Thomas G. and Sylva Shroyer Kezar (“the Kezars”)
own a home that was damaged by a fire in August 2015, for
which they filed a homeowners insurance claim with State
Farm. (First Am. Pet., Dkt. 1-5, at 2). The Kezars allege
that State Farm provided them with an inadequate initial
claims estimate; that State Farm failed to timely address
damaged temporary roof coverings, causing more damage; and
that State Farm delayed in responding to settlement
communications. (Id. at 2-3). Out of these
allegations, the Kezars assert causes of action against State
Farm for fraud, negligence, breach of contract, breach of the
duty of good faith and fair dealing, and unfair settlement
practices. (Id. at 3-4).
instant motion, State Farm asks the Court to grant summary
judgment with respect to the causes of action arising out of
only one of three components of their policy: the component
pertaining to the dwelling (“the Coverage A
claim”). (Part. Mot. Summ. J., Dkt. 21, at 1).
State Farm argues that the Coverage A claim is subject to the
policy's appraisal provision and that its payment of an
appraisal award precludes relief under each of the
Kezars' causes of action with respect to that claim.
(Id. at 6-17). The Kezars respond that summary
judgment is inappropriate with respect to their breach of
contract cause of action regarding the Coverage A claim
because State Farm failed to timely pay the appraisal award.
(Resp. Part. Mot. Summ. J., Dkt. 23, at 4-7).
judgment is appropriate under Rule 56 of the Federal Rules of
Civil Procedure only “if the movant shows that there is
no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” Fed.R.Civ.P.
56(a). A dispute is genuine only 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, 254 (1986). “A fact issue is ‘material'
if its resolution could affect the outcome of the
action.” Poole v. City of Shreveport, 691 F.3d
624, 627 (5th Cir. 2012).
party moving for summary judgment bears the initial burden of
“informing the district court of the basis for its
motion, and identifying those portions of [the record] which
it believes demonstrate the absence of a genuine issue of
material fact.” Celotex Corp. v. Catrett, 477
U.S. 317, 323 (1986). The burden then shifts to the nonmoving
party to establish the existence of a genuine issue for
trial. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio
Corp., 475 U.S. 574, 585-87 (1986); Wise v. E.I.
Dupont de Nemours & Co., 58 F.3d 193, 195 (5th Cir.
1995). After the non-movant has been given the opportunity to
raise a genuine factual issue, if no reasonable juror could
find for the non-movant, summary judgment will be granted.
Miss. River Basin Alliance v. Westphal, 230 F.3d
170, 175 (5th Cir. 2000).
The Breach of Contract Claim
Texas, an appraisal award made pursuant to the provisions of
an insurance contract is binding and enforceable. Franco
v. Slavonic Mut. Fire Ins. Ass'n, 154 S.W.3d 777,
786 (Tex. App.- Houston [14th Dist.] 2004, no pet.) When an
insurer makes timely payment of a binding and enforceable
appraisal award, and the insured accepts the payment, the
insured is “estopped by the appraisal award from
maintaining a breach of contract claim against [the
insurer].” Blum's Furniture Co. v. Certain
Underwriters at Lloyds London, 459 Fed.Appx. 366, 368
(5th Cir. 2012) (citing Franco, 154 S.W.3d at 787).
Because “every reasonable presumption will be indulged
to sustain an appraisal award, ” the party seeking to
avoid the award bears the burden of proof. Id.
parties agree that the Kezars' insurance policy has an
appraisal provision, (see Policy, Dkt. 21-1, at 17),
and that State Farm initiated the appraisal process after the
parties failed to agree on the amount of loss. (Part. Mot.
Summ. J., Dkt. 21, at 5; Resp. Part. Mot. Summ. J., Dkt. 23,
at 5). The parties also agree that State Farm made a payment
of an appraisal award and that the Kezars received that
payment. (Part. Mot. Summ. J., Dkt. 21, at 5-6; Resp. Part.
Mot. Summ. J., Dkt. 23, at 6). The parties disagree only
about whether that payment was timely.
written agreement signed by State Farm's appraiser and
the umpire set the amount of the loss on June 23, 2017.
(Appraisal Award, Dkt. 21-8; Resp. Part. Mot. Summ. J., Dkt.
23, at 5-6). The signed appraisal award was delivered to
State Farm on July 5, 2017, and State Farm notified the
Kezars of the award and delivered a check in the amount of
the award to the Kezars on July 14, 2017. (Part. Mot. Summ.
J., Dkt. 21, at 5-6; Resp. Part. Mot. Summ. J., Dkt. 23, at
6). The “Loss Payment” section of the policy
contains a clause that reads:
If we notify you that we will pay your claim, or part of your
claims, we must pay within 5 business days after we notify
you. If payment of your claim or part of your claim requires
the performance of an act by you, we must pay ...