                                                                         ACCEPTED
                                                                    07-17-00020-CV
                                                        SEVENTH COURT OF APPEALS
                                                                  AMARILLO, TEXAS
                                                                   7/5/2017 4:12 PM
                                                                   Vivian Long, Clerk


                    Oral	Argument	Conditionally	Requested	

                                                     FILED IN
          No.	07‐17‐00020‐CV	                 7th COURT OF APPEALS
                                                AMARILLO, TEXAS
        In	The	Court	Of	Appeals	              7/5/2017 4:12:31 PM
   For	The	Seventh	District	Of	Texas	              VIVIAN LONG
                                                      CLERK
            Amarillo,	Texas

       MAHMOUD	ABDALLA	
                        	
                       v.	
FARMERS	INSURANCE	EXCHANGE	
                        	

On	Appeal	From	the	153rd	Judicial	District	Court	
Tarrant	County,	Texas,	Cause	No.	153‐269720‐13 



   APPELLEE’S	BRIEF	
                        
       Scot	G.	Doyen	–	SBN	00792982	
           sdoyen@ds‐lawyers.com	
      Alasdair	Roberts	–	SBN	24068541	
          aroberts@ds‐lawyers.com	
         DOYEN	SEBESTA,	LTD.,	L.L.P.	
          450	Gears	Road,	Suite	350	
            Houston,	Texas	77067	
          Telephone:	713‐580‐8900	
          Facsimile:	713‐580‐8910	
                        

     ATTORNEYS	FOR	APPELLEE	
   FARMERS	INSURANCE	EXCHANGE	
                       	
                       	
                       	
                                          TABLE	OF	CONTENTS	

ISSUES	PRESENTED	.................................................................................................	viii	
 
STATEMENT	OF	FACTS	................................................................................................	1	
 
STANDARD	OF	REVIEW	...............................................................................................	6	
 
ARGUMENT	.................................................................................................................	8	
 
    I.  The	Appraisal	Award	was	not	Rendered	as	the	Result	of	Mistake	or	
        Accident ........................................................................................... 8 
 
    II.  Timely	Payment	of	the	Appraisal	Award	Precludes	Contractual	
         Liability ......................................................................................... 14 
 
    III. Tendering	Payment	of	an	Appraisal	Award	Estops	a	Breach	of	
         Contract	Cause	of	Action	Regardless	of	Whether	Payment	was	
         Accepted........................................................................................ 15	
 
    IV.  Timely	Payment	of	the	Appraisal	Award	Precludes	Chapter	542	
         Liability ......................................................................................... 16 
 
    V.  Timely	Payment	of	the	Appraisal	Award	and	Lack	of	Independent	
        Injury	Precludes	Extra‐Contractual	Liability ............................ 19 
 
CONCLUSION	AND	PRAYER	.......................................................................................	25 
	

                                                                ii
                                         TABLE	OF	AUTHORITIES	
Cases	
Amine	v.	Liberty	Lloyds	of	Tex.	Ins.,.		
 No.	01‐06‐00396‐CV,	2007	WL2264477	(Tex.App.—Houston	[1st	Dist.]	
 2007,	no	pet.)	....................................................................................................................	16,	17	

Anderson	v.	Am.	Risk	Ins.	Co.,	Inc.,		
 2016	WL3438243	(Tex.App.—Houston	[1st	Dist.]	2016,	no	pet.)	......................	20	

Barnes	v.	Western	Alliance	Ins.	Co.		
 844	S.W.2d	264	(Tex.App.	—Fort	Worth	1992,	writ	dism'd	by	agr.)	.................	9	

Breshears	v.	State	Farm	Lloyds,		
 155	S.W.3d	340	(Tex.App.—Corpus	Christi	2004,	pet.	denied)	.............	14,16,20	

City	of	Keller	v.	Wilson,	
  168	S.W.3d	802	(Tex.	2005)	.................................................................................................	7	

Davis	v.	Nat.	Lloyds	Ins.	Co.,		
 484	S.W.3d	459	(Tex.App.—Houston	[1st	Dist.]	2015,	pet.	filed)	.......................	19	


Douglas	v.	State	Farm	Lloyds		
 37	F.Supp.2d	532	(S.D.	Tex.	1999)	...................................................................................	20	

Fisch	v.	Transcon.	Ins.	Co.,	
  356	S.W.2d	186	(Tex.	Civ.	App.	—Houston	1962,	writ	ref'd	n.r.e.)	....................	10	

Franco	v.	Slavonic	Mut.	Fire	Ins.,	
  154	S.W.3d	777	(Tex.App.—Houston	[14th	Dist.]	2004,	no	pet.)	......................	14	

Garcia	v.	Lloyds,		
 514	S.W.3d	257	(Tex.App.—San	Antonio	2016,	pet.	
 denied)	........................................................................................................	8,9,10,11,12,16,17	



                                                                   iii
Gardner	v.	State	Farm	Lloyds,		
 76	S.W.3d	140	(Tex.App.—Houston	[1st	Dist],	no	pet.)	..........................................	14	

In	re	Slavonic	Mut.	Fire	Ins.	Ass'n,		
  308	S.W.3d	556	(Tex.App.—Houston	[14th	Dist]	2010,	no	pet.)	..................	16,17	

JM	Walker	LLC	v.	Acadia	Ins.	Co.		
  No.	09‐10562,	2009	WL4884943	(5th	Cir.	Dec.	18,	2009)	...................................	12	

Mack	Trucks,	Inc.	v.	Tamez,		
 206	S.W.3d	572	(Tex.	2006).	................................................................................................	7	

MLCSV10	v.	Stateside	Enter.	Inc.,		
 866	F.Supp.2d	691	(S.D.	Tex.	2012).	................................................................................12	

Nat.	Security	Fire	&	Cas.	Co.	v.	Hurst,		
 No.	14‐15‐00714‐CV,	2017	WL	2258243	(Tex.	App.—Houston	[14th	Dist.]	
 2017,	no	pet.	h.)	...................................................................................................	15,16,21,23	

Providence	Lloyds	Ins.	Co.	v.	Crystal	City	Indep.	Sch.	Dist.,		
  877	S.W.2d	872	(Tex.App.—San	Antonio	1994,	no	writ)	...........................	6,8,9,13	

Republic	Ins.	v.	Stoker,	
 903	S.W.2d	338	(Tex.	1995)	...............................................................................................	19	

Scottish	Union	&	Nat'l	Ins.	Co.	v.	Clancy,		
  71	Tex.	5,	8	S.W.	630	(Tex.	1888)	.....................................................................................	14	

Spicewood	Summit	Office	Condo.	Ass'n,	Inc.	v.	First	Lloyd's	Ins.	Co.,	
  287	S.W.3d	461	(Tex.App.—Austin	2009,	pet.	denied)	..........................................	20	

Texas	Mut.	Ins.	Co.	v.	Sara	Care	Child	Care	Ctr.,	Inc.,	
 324	S.W.3d	305	(Tex.App.—El	Paso	2010,	pet.	denied)	.........................................	20	

Transp.	Ins.	Co.	v.	Moriel,	
  879	S.W.2d	10	(Tex.	1994)	..................................................................................................	19	

                                                               iv
USAA	Tex.	Lloyds	Co.	v.	Menchaca,	
 No.	14‐07121,	2017	WL1311752	(Tex.	2017)	..............................................	20,22,23	

Valence	Operating	Co.	v.	Dorsett,		
 164	S.W.3d	656	(Tex.	2005)	.................................................................................................	6	

Wells	v.	Am.	States	Preferred	Ins.	Co.,		
 919	S.W.2d	679	(Tex.App.—Dallas	1996,	writ	denied)	..........................................	14	
Statutes	
TEX.	INS.	CODE	§541.151	............................................................................................................	21	
TEX.	INS.	CODE	§542.056(a)	......................................................................................................18	
TEX.	INS.	CODE	§542.058	......................................................................................................17,18
TEX.	INS.	CODE	§542.060	............................................................................................................	18	
Rules	
TEX.	R.	CIV.	P.	166a(c)	...................................................................................................................	6	




                                                                     v
                   RECORD	REFERENCES
CR2	   Clerk’s	Record	page	2	




                                vi
                             STATEMENT	OF	THE	CASE	
 

    Nature of the Case:           Property insurance suit filed by Plaintiff
                                  Mahmoud Abdalla against his insurer,
                                  Farmers Insurance Exchange, claiming
                                  damages after a water discharge event
                                  (CR5-23). Suit was filed prior to the
                                  completion of the appraisal process
                                  invoked by Plaintiff.

    Course of Proceedings:        Defendant     moved      for   summary
                                  judgment twice based on its timely
                                  payment of an appraisal award. The
                                  153rd Judicial District Court of Tarrant
                                  County, Texas, the Hon. Susan Heygood
                                  McCoy presiding, granted summary
                                  judgment after three hearings on the
                                  motion (CR305, 512, 641).

    Trial Court’s Disposition:    The trial court granted summary
                                  judgment on the breach of contract cause
                                  of action on April 6, 2016 (CR305).
                                  Subsequently the trial court granted
                                  summary judgment on Plaintiff’s causes
                                  of action for breach of the common law
                                  duty of good faith and fair dealing and
                                  negligent      misrepresentation      on
                                  September 22, 2016 (CR512). The trial
                                  court granted summary judgment on all
                                  remaining causes of action and awarded
                                  Defendant costs of court in the amount of
                                  $1,276.10 on December 5, 2016 (CR641).




                                         vii
                         ISSUES	PRESENTED	
     Whether the trial court erred in refusing to vacate the appraisal

award.

     Whether the trial court erred in granting Appellee’s motion for

summary judgment.



            STATEMENT	REGARDING	ORAL	ARGUMENT		

     Appellee believes this case can be decided on the briefs without oral

argument.    Nevertheless, Appellee would be pleased to present oral

argument should the Court request it.




                                  viii
                          STATEMENT	OF	FACTS		
      Appellant	 was	 insured	 under	 a	 Business	 Owners	 Policy	 issued	 by	

Appellee	 (CR334‐453).	 The	 policy	 also	 includes	 an	 appraisal	 clause,	 which	

was	 invoked	 by	 the	 Appellant	 when	 a	 disagreement	 arose	 over	 the	 dollar	

amount	of	damages	to	the	property	(CR465‐66).		The	appraisal	clause	is	as	

follows:	




                                                                                   	




                                                                                   	

      (Tab	A,	CR438‐439)	

      On	 February	 21,	 2012	 the	 Appellant,	 Mahmoud	 Abdalla,	 suffered	 a	

water	leak	at	his	tire	warehouse	in	Arlington,	Texas	(CR459).		An	insurance	

claim	 was	 reported	 to	 Appellee	 that	 same	 day	 (CR459).	 	 Appellee	 assigned	


                                         1
the	 claim	 to	 an	 adjuster	 named	 Tonya	 Stillwell	 who	 proceeded	 with	

investigation	of	the	claim	(CR459).	

      Over	 the	 course	 of	 Appellee’s	 investigation	 it	 issued	 $264,829.29	 in	

payments	to	Appellant	for	covered	losses	at	the	property	(Tab	C,	CR468).			

      On	 March	 28,	 2013,	 Appellant	 invoked	 the	 appraisal	 process	 and	

designated	 Tony	 Siahpush	 as	 his	 appraiser	 (CR465).	 	 Appellee	 designated	

Kyle	 Albright	 as	 its	 appraiser	 (Tab	 C,	 CR468).	 	 Relevant	 dates	 following	

invocation	of	appraisal	are	as	follows:	

      1. Appellant	filed	the	instant	lawsuit	on	December	19,	2013	(CR5‐23);	

      2. Appellee	answered	the	lawsuit	on	January	12,	2014	(CR24‐26);	

      3. On	 May	 30,	 2014	 the	 trial	 court	 conducted	 a	 conference	 with	 the	

         attorneys	regarding	resolution	of	the	case	and	on	July	2,	2014	issued	

         an	order	appointing	Judge	Charles	Bleil	as	the	umpire	(CR642);	

      4. On	October	8,	2014	Judge	Bleil	issued	his	“Award	of	Umpire”	(Tab	B,	

         CR27‐29).	

      Judge	Bleil’s	award	reflects	that	both	sides’	appraisers	had	completed	

their	 assignments,	 and	 that	 he	 was	 submitting	 his	 award	 to	 conclude	 the	

appraisal	process	(Tab	B,	CR27).		The	award	attached	the	“Appraisal	Award”	

(“Award”)	prepared	by	Appellee’s	appraiser,	Kyle	Albright,	and	stated:	

                                         2
      This	 appraisal	 is	 evidenced	 by	 the	 document	 attached	 to	 this	
      award.			
      It	is	the	Umpire’s	considered	opinion	that	the	Albright	appraisal	
      of	 an	 actual	 cash	 value	 loss	 amount	 of	 $345,664.21	 (three	
      hundred	forty‐five	thousand,	six	hundred	sixty‐four	dollars	and	
      twenty‐once	 cents)	 is	 the	 more	 sound	 and	 well	 supported	
      appraisal.	 	 Accordingly,	 the	 Umpire	 hereby	 award	 the	 sum	 of	
      money	 to	 make	 whole	 the	 damages	 caused	 to	 the	 subject	
      property.	
      (Tab	B,	CR27‐28).	
The	Award	of	Umpire	was	signed	by	Judge	Bleil	and	Mr.	Albright,	which	made	

the	award	binding	per	the	terms	of	the	policy	(Tab	A,	CR438‐439).	

      On	October	15,	2014,	seven	days	after	the	Award	of	Umpire	was	issued,	

Appellee	 tendered	 payment	 to	 Plaintiff	 for	 $76,125.81	 (building	 coverage)	

and	 $5,855.98	 (business	 personal	 property	 coverage)	 which	 reflected	 the	

actual	 cash	 value	 amounts	 owed	 under	 the	 Award	 of	 Umpire	 less	

depreciation,	policy	deductible,	and	prior	payments	(Tab	C,	CR468‐470).		The	

letter	 accompanying	 the	 payments	 provided	 the	 following	 concise	

breakdown	of	the	amounts	tendered:		




                                        3
                                                                                     	

(Tab	C,	CR468)	

	    The	 deadline	 under	 the	 insurance	 policy	 for	 Appellee	 to	 pay	 an	

appraisal	award	is	five	business	days	after	an	appraisal	award	has	been	made	

(Tab	A,	CR440).		Payment	was	timely	tendered	per	the	terms	of	the	policy,	as	

seven	days	cannot	elapse	with	more	than	five	business	days	elapsing	within	

the	same	time	period.	

	    Dissatisfied	 with	 the	 award,	 Appellant	 moved	 for	 vacation	 of	 the	

appraisal	award	of	October	27,	2014	on	the	basis	that	the	Award	of	Umpire	

was	a	product	of	mistake	(CR30‐37).		The	trial	court	entertained	the	motion	

and	denied	it	on	April	6,	2016	(CR304).	

	    Having	 satisfied	 its	 duties	 to	 Appellant	 under	 the	 Policy,	 Appellee	

moved	 for	 summary	 judgment	 on	 October	 21,	 2015	 and	 argued	 that	 the	

                                       4
timely	payment	of	the	Award	meant	there	was	no	genuine	issue	of	material	

fact	on	Plaintiff’s	causes	of	action	for	breach	of	contract,	breach	of	the	duty	

of	good	faith	and	fair	dealing,	and	violations	of	Chapters	541	and	542	of	the	

Texas	 Insurance	 Code	 (CR50‐201).	 	 The	 trial	 court	 granted	 summary	

judgment	on	Appellee’s	breach	of	contract	cause	of	action	on	April	6,	2016	

and	 re‐opened	 discovery	 with	 regard	 to	 the	 extra‐contractual	 causes	 of	

action	(CR305).	

	     Following	 the	 trial	 court’s	 April	 6,	 2016	 rulings,	 Mr.	 Abdallah	 was	

presented	for	deposition	and	testified	that	he	was	only	seeking	damages	for	

amounts	 owed	 under	 the	 insurance	 contract	 (CR504).	 	 Having	 established	

that	there	was	no	independent	injury	to	Appellant	that	would	serve	as	a	basis	

for	his	extra‐contractual	causes	of	action,	Appellee	again	asserted	a	motion	

for	summary	judgment	on	all	remaining	causes	of	action	(CR312‐506).	

	     On	 August	 25,	 2016	 a	 hearing	 was	 held	 on	 Appellee’s	 motion	 for	

summary	 judgment	 and	 the	 Court	 issued	 an	 order	 granting	 summary	

judgment	on	Appellee’s	causes	of	action	for	breach	of	the	duty	of	good	faith	

and	 fair	 dealing	 and	 negligent	 misrepresentation	 (CR512).	 	 At	 the	 same	

hearing,	 the	 trial	 court	 withheld	 ruling	 on	 the	 remaining	 causes	 of	 action	

until	Tonya	Stillwell,	Appellee’s	claims	adjuster,	could	be	deposed	(CR643).	


                                          5
	     Ms.	Stillwell	was	presented	for	deposition	on	September	15,	2016,	and	

Appellee	reset	its	motion	for	summary	judgment	for	hearing	on	November	

11,	 2016	 (CR527‐49).	 	 The	 trial	 court	 granted	 summary	 judgment	 on	 all	

remaining	 causes	 of	 action	 and	 on	 December	 5,	 2016	 the	 Court	 rendered	

judgment	that	Appellant	take	nothing	and	that	Appellee	recover	its	costs	of	

court	in	the	amount	of	$1,276.10	(CR641).	


                          STANDARD	OF	REVIEW	
      When examining an appraisal award every reasonable presumption

will be indulged to sustain the award. Providence	Lloyds	Ins.	Co.	v.	Crystal	City	

Indep.	Sch.	Dist.,	877	S.W.2d	872,	875	(Tex.App.—San	Antonio	1994,	no	writ).		

An	award	entered	by	the	umpire	and	appraisers	can	only	be	disregarded	if:	(1)	

the	award	was	made	without	authority;	(2)	the	award	was	issued	as	a	result	of	

fraud,	 accident,	 or	 mistake;	 or	 (3)	 the	 award	 was	 not	 made	 in	 substantial	

compliance	with	the	terms	of	the	policy.	Id.	at	875‐76.

      The trial court’s summary judgment is reviewed de novo. Valence

Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). On its traditional

motion for summary judgment, Appellee must show that there is no

genuine issue of material fact and that it is entitled to judgment as a matter

of law. Tex. R. Civ. P. 166a(c).

                                          6
      A no evidence motion for summary judgment is functionally identical

to a motion for directed verdict. Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572,

581 (Tex. 2006). Appellate courts view the evidence in the light most

favorable to the non-movant, but do not disregard evidence that supports

the motion. See City of Keller v. Wilson, 168 S.W.3d 802, 824 (Tex. 2005).



                         SUMMARY	OF	ARGUMENT	

      The trial court properly denied the motion to vacate the appraisal

award, then properly granted summary judgment on the causes of action

asserted by the Appellant.	


	     The	Appellant	invoked	the	appraisal	provision	of	his	policy,	the	Award	

of	 Umpire	 was	 not	 the	 result	 of	 mistake,	 accident,	 or	 fraud,	 and	 Appellee	

promptly	 and	 timely	 tendered	 payment	 of	 the	 amount	 owed.	 	 The	 timely	

payment	of	the	Award	precludes	liability	under	the	contract	and	established	

that	 Appellant	 had	 no	 further	 right	 to	 recovery	 of	 policy	 benefits.	 Without	

any	further	right	to	policy	benefits,	Appellant	has	no	independent	injury	to	

serve	as	a	basis	for	damages	under	extra	contractual	causes	of	action.			

	     The	evidence	submitted	by	Appellee	to	the	trial	court	shows	that	there	

was	no	genuine	issue	of	material	fact	as	to	whether	it	failed	to	timely	tender	

                                          7
payment	of	the	Award,	or	whether	Appellant	suffered	an	independent	injury	

that	would	support	extra‐contractual	causes	of	action.	

	        Alternatively,	 the	 evidence	 submitted	 to	 the	 trial	 court	 by	 Appellant	

was	legally	and	factually	insufficient	to	support	a	breach	of	contract,	or	extra‐

contractual	causes	of	action.	

	        The	judgment	of	the	trial	court	must	be	affirmed.	


                                    ARGUMENT	
 

    I.      The	Appraisal	Award	was	not	Rendered	as	the	Result	of	Mistake	
            or	Accident	
 

         An	appraisal	award	made	pursuant	to	the	 provisions	of	 an	insurance	

policy	 is	 binding	 and	 enforceable.	 Garcia	 v.	 Lloyds,	 514	 S.W.3d	 257,	 264	

(Tex.App.—San	Antonio	2016,	pet.	denied);	Providence,	877	S.W.2d	at	875.		The	

burden	to	set	aside	an	appraisal	award	lies	squarely	upon	the	Appellant.		Garcia,	

514	S.W.3d	at	264‐65.		There	are	three	grounds	upon	which	an	appraisal	award	

can	be	set	aside:	

         1. The	award	was	made	without	authority;	

         2. The	award	was	made	as	the	result	of	fraud,	accident,	or	mistake;	or	




                                            8
      3. The	award	was	not	made	in	compliance	with	the	requirements	of	the	

          policy.	

      Id.	at	265;	Providence,	877	S.W.2d	at	875‐76.	

	     Appellant	argues	that	the	Award	is	the	result	of	mistake	or	an	accident.		

The	law	in	Texas	is	clear	that	an	appraisal	award	may	only	be	set	aside	on	the	

basis	of	accident	or	mistake	“upon	a	showing	that	the	award	does	not	speak	the	

intention	 of	 the	 appraisers.”	 	 Garcia,	 514	 S.W.3d	 at	 269	 (internal	 citations	

omitted).		Mistake	is	further	defined	as	“a	situation	where	the	appraisers	and	

umpire	were	laboring	under	a	mistake	of	fact	by	which	their	appraisal	award	

was	made	to	operate	in	a	way	they	did	not	intend,	such	that	the	award	does	not	

speak	the	intention	of	the	appraisers	and	umpire…”		Barnes	v.	Western	Alliance	

Ins.	Co.,	844	S.W.2d	264,	268	(Tex.App.—Fort	Worth	1992,	writ	dism’d	by	agr.).			

      Appellant	 has	 offered	 no	 evidence	 that	 the	 Award	 failed	 to	 reflect	 the	

intent	of	the	appraisers	or	the	umpire.		Appellant	relied	predominantly	on	the	

Affidavit	 of	 Max	 Judge	 which	 detailed	 differences	 between	 his	 appraisal	 and	

that	of	Mr.	Albright’s,	but	wholly	failed	to	identify	the	intent	of	the	appraisers	

or	the	umpire.	(CR39‐41).		The	intent	of	Judge	Bleil	and	Appellee’s	appraiser	is	

clear	in	the	Award,	and	the	Award	was	consistent	with	that	intent:	




                                          9
      It	is	the	Umpire’s	considered	opinion	that	the	Albright	appraisal	
      of	 an	 actual	 cash	 value	 loss	 amount	 of	 $345,664.21	 (three	
      hundred	forty‐five	thousand,	six	hundred	sixty‐four	dollars	and	
      twenty‐once	 cents)	 is	 the	 more	 sound	 and	 well	 supported	
      appraisal.	 	 Accordingly,	 the	 Umpire	 hereby	 award	 the	 sum	 of	
      money	 to	 make	 whole	 the	 damages	 caused	 to	 the	 subject	
      property.	
      (Tab	B,	CR27‐28).	
The	law	recognizes	that	mere	disagreements	between	the	appraisers	and	the	

umpire	do	not	mean	the	Award	was	the	result	of	mistake	or	accident,	and	that	

a	decision	by	an	umpire	to	use	one	estimate	over	another	does	not	establish	

mistake	or	accident.	See	Garcia,	514	S.W.3d	at	270.		

      The	 affidavit	 takes	 issue	 with	 Defendant’s	 appraiser’s	 method	 of	

calculating	demolition	and	excavation	activities	(CR33,	39‐40,	Appellant	Br.	12).	

The	affidavit	also	states	“I	believe	I	have	adequately	address	[sic]	the	issue	of	

erosion	in	my	estimate	and	I	don’t	believe	Mr.	Albright	did.”	(CR33,	40,	Appellant	

Br.	12).		The	Policy	requires	the	appraisers	to	submit	their	differences	to	the	

umpire,	so	in	instances	where	an	umpire	is	appointed	a	disagreement	between	

the	 appraisers	 is	 a	 necessity.	 	 In	 fact,	 the	 whole	 purpose	 of	 the	 Court’s	

appointment	of	an	Umpire	is	to	resolve	disagreements	between	the	respective	

appraisers.	 Fisch	 v.	 Transcon.	 Ins.	 Co.,	 356	 S.W.2d	 186,	 189	 (Tex.	 Civ.	 App.—

Houston	1962,	writ	ref’d	n.r.e.).		If	appraisers	did	not	fail	to	agree,	there	would	

be	nothing	to	submit	to	the	umpire	and	nothing	upon	which	he	could	act.	Id.		


                                           10
Appellant’s	argument	that	disagreement	between	the	appraisers	constitutes	a	

mistake	contradicts	the	purpose	of	appointing	an	umpire.	

      The	 Affidavit	 argues	 that	 the	 Award	 improperly	 relies	 upon	 an	

engineering	report	created	by	Rimkus	Engineering	and	disregards	the	findings	

of	an	engineering	report	prepared	by	Syntec.	(CR32,	39‐40,	Appellant	Br.	11).		

The	Garcia	court	examined	the	issue	of	whether	a	difference	in	scope	between	

an	appraisal	award	and	pre‐appraisal	estimates	is	evidence	the	award	does	not	

reflect	the	appraiser’s	intent	and	held	that	the	policy’s	appraisal	clause	did	not	

specify	the	manner	in	which	the	appraisers	were	to	set	the	amount	of	loss	nor	

did	it	require	the	appraisers	to	rely	on	or	refer	to	prior	damage	estimates.		See	

Garcia,	514	S.W.3d	at	266‐67.		The	same	logic	applies	here.		There	is	nothing	in	

the	 Policy’s	 appraisal	 clause	 that	 dictates	 the	 method	 the	 appraisers	 and	

umpire	should	employ	in	determining	the	amount	of	the	loss,	nor	is	there	an	

instruction	 to	 consider	 or	 disregard	 estimates	 or	 engineering	 reports	

previously	created	by	either	side	(Tab	A,	CR438‐439).		Like	the	appraisers	in	

Garcia,	 Judge	 Bleil’s	 decision	 to	 adopt	 or	 disregard	 portions	 of	 an	 engineer’s	

report	does	not	mean	his	Award	was	rendered	as	the	result	of	an	accident	or	

mistake.	




                                           11
      Plaintiff’s	 argument	 that	 an	 umpire’s	 decision	 to	 adopt	 the	

recommendations	 from	 one	 appraiser	 over	 another	 constitutes	 mistake	 is	

nonsensical.	 The	 MLCSV10	 court	 confronted	 whether	 an	 appraisal	 award	

should	be	set	aside	on	the	basis	of	mistake	when	one	appraiser’s	estimate	was	

allegedly	 not	 based	 upon	 a	 reliable	 methodology	 and	 whether	 the	 umpire’s	

selection	 of	 one	 appraiser’s	 estimate	 over	 another	 constituted	 mistake.	 	 The	

court	determined	that:	

      An	 umpire	 must	 often	 choose	 between	 two	 competing	 values.	
      McCool's	 [the	 umpire’s]	 decision	 to	 use	 Lochridge's	 [one	
      appraiser’s]	 estimates	 rather	 than	 Haden's	 [the	 other	 appraiser]	
      does	not	mean	that	the	appraisal	award	resulted	from	accident	or	
      mistake.			
Garcia,	 514	 S.W.3d	 at	 269	 (quoting	 MLCSV10	 v.	 Stateside	 Enter.,	 Inc.,	 866	 F.	

Supp.	2d	691,	702	(S.D.	Tex.	2012).	

      Similarly,	 in	 JM	 Walker,	 the	 court	 determined	 that	 a	 difference	 in	 roof	

measurements	did	not	constitute	a	mistake	because	the	insured	provided	no	

evidence	that	the	award	did	not	speak	to	the	umpire’s	intent.		JM	Walker	LLC.	v.	

Acadia	Ins.	Co.,	No.	09‐10562,	2009	WL4884943,	at	*746‐47	(5th	Cir.	Dec.	18,	

2009).	 	 The	 Court	 stated,	 “[a]n	 umpire	 often	 must	 choose	 between	 two	

competing	values,	and	LaFluer’s	decision	to	go	with	Gillespie’s	measurement,	

rather	than	Austin’s	does	not	mean	his	award	was	premised	on	a	mistake.”	Id.	

The	 facts	 in	 this	 particular	 case	 are	 even	 less	 compelling	 because	 there	 isn’t	
                                           12
even	 an	 allegation	 of	 a	 disagreement	 regarding	 an	 objectively	 verifiable	 fact	

(such	as	a	roof	measurement).	In	the	present	case,	there	was	purely	a	difference	

of	 opinion	 between	 the	 appraisers	 that	 was	 resolved	 by	 the	 umpire.	 This	 is	

exactly	how	the	appraisal	process	is	designed	to	work.	

	      The	points	raised	by	Appellant	exhibit	no	more	than	a	dispute	between	

his	own	appraiser	and	the	Appellee’s	appraiser	and	the	Umpire	concerning	the	

value	of	damages	to	the	property	based	on	the	reliance	of	certain	evidence	at	

the	expense	of	other	evidence.		This	is	not	evidence	of	mistake	or	accident	in	

the	 appraisal	 process,	 the	 Award	 is	 clear	 as	 to	 the	 intent	 of	 Judge	 Bleil,	 he	

considered	 Mr.	 Albright’s	 appraisal	 to	 be	 a	 sounder	 and	 better	 supported	

appraisal	and	the	Award	issued	was	consistent	with	that	decision.		Appellant	

has	 not	 carried	 his	 burden	 to	 set	 aside	 the	 appraisal	 award	 because	 he	 has	

presented	 no	 evidence	 of	 mistake,	 accident,	 or	 contrary	 intent.	 Every	

reasonable	 presumption	 will	 be	 indulged	 to	 sustain	 the	 Award,	 and	 there	 is	

ample	evidence	showing	the	Award	reflected	the	intent	of	Judge	Bleil	(Tab	B,	

CR27‐29).	Providence,	877	S.W.2d	at	875.	Therefore,	the	Trial	Court	was	correct	

in	denying	the	motion	to	vacate	the	appraisal	award.	

	




                                            13
    II.      Timely	Payment	of	the	Appraisal	Award	Precludes	Contractual	
             Liability	
 

          When	 an	 insurer	 participates	 in	 the	 appraisal	 process	 and	 pays	 the	

amount	 set	 by	 the	 appraisers	 and	 umpire	 there	 is	 no	 breach	 of	 contract.	

Breshears	v.	State	Farm	Lloyds,	155	S.W.3d	340,	344	(Tex.App.—Corpus	Christi	

2004,	 pet.	 denied);	 Franco	 v.	 Slavonic	 Mut.	 Fire	 Ins.,	 154	 S.W.3d	 777,	 787	

(Tex.App.—Houston	 [14th	 Dist.]	 2004,	 no	 pet.).	 That	 is	 because	 the	 policy’s	

appraisal	provision	estops	a	party	from	contesting	the	issue	of	damages	in	a	

breach	of	contract	dispute	leaving	only	a	liability	question	for	the	court.	Scottish	

Union	&	Nat’l	Ins.	Co.	v.	Clancy,	71	Tex.	5,	8	S.W.	630,	631	(1888);	Wells	v.	Am.	

States	Preferred	Ins.	Co.,	919	S.W.2d	679,	683‐84	(Tex.App.—Dallas	1996,	writ	

denied)(internal	 citations	 omitted);	 et	 al.	 Under	 Texas	 law,	 a	 contract	 claim	

does	not	survive	the	insurer's	payment	of	an	appraisal	award.		For	instance,	in	

Franco,	the	insureds	alleged	after	invoking	appraisal	that	the	insurer’s	payment	

of	the	appraisal	award	did	not	defeat	their	breach	of	contract	cause	of	action.	

Franco,	154	S.W.3d	at	786.	The	appellate	court	disagreed,	holding	that	because	

the	 insurer	 paid	 the	 appraisal	 award,	 the	 insureds	 were	 estopped	 from	

maintaining	a	breach	of	contract	claim	against	the	insurer.	Id.;	see	also	Gardner	

v.	 State	 Farm	 Lloyds,	 76	 S.W.3d	 140,	 143‐44	 (Tex.App.—Houston	 [1st	 Dist.]	




                                           14
2002,	 no	 pet.).	 Simply	 put,	 compliance	 with	 the	 contractual	 appraisal	 award	

negates	any	claim	for	breach	of	contract	as	a	matter	of	law.			

           Like	 the	 insurer	 in	 Franco,	 Farmers	 fully	 participated	 in	 the	 appraisal	

process	and	timely	tendered	payment	of	the	Award	(Tab	B,	CR27‐29,	Tab	C,	468‐

473).				There	is	no	genuine	issue	of	material	fact	as	to	whether	payment	was	

tendered,	or	whether	the	tender	was	timely.		The	record	shows	that	the	Award	

was	 dated	 October	 8,	 2014	 and	 payment	 was	 tendered	 on	 October	 15,	 2014	

(Tab	 B,	 CR27‐29,	 Tab	 C	 468‐473).	 	 Appellant	 did	 not	 address	 the	 breach	 of	

contract	cause	of	action	other	than	to	argue	that	the	award	should	be	vacated	

due	to	accident	or	mistake.	Appellant	Br.	14.	Viewing	the	evidence	in	the	light	

most	 favorable	 to	 Appellant	 does	 not	 create	 a	 genuine	 issue	 of	 material	 fact	

because	it	is	undisputed	that	Appellee	fully	participated	in	and	timely	tendered	

payment	of	the	Award	(Tab	B,	CR27‐29,	Tab	C	468‐473).		

    III.      Tendering	Payment	of	an	Appraisal	Award	Estops	a	Breach	of	
              Contract	Cause	of	Action	Regardless	of	Whether	Payment	was	
              Accepted	
 

           Even	when	an	insured	does	not	accept	payment	of	an	appraisal	award,	

tender	of	the	amount	owed	pursuant	to	the	conditions	of	the	appraisal	clause	

estops	 an	 insured	 from	 asserting	 a	 breach	 of	 contract	 cause	 of	 action.	 	 Nat.	

Security	 Fire	 &	 Cas.	 Co.	 v.	 Hurst,	 ‐‐S.W.3d‐‐,	 No.	 14‐15‐00714‐CV,	 2017	 WL	


                                              15
2258243	 *3‐4	 (Tex.App.—Houston	 [14th	 Dist.]	 2017,	 no	 pet.	 h.).	 (internal	

citations	omitted);	See	Garcia,	514	S.W.3d	at	271.	In	response	to	Appellee’s	first	

motion	for	summary	judgment,	Appellant	argued	that	the	Award	needed	to	be	

vacated	and	that	he	had	not	negotiated	the	payment	tendered	(CR229).		But	the	

law	is	clear	that	payment	does	not	have	to	be	accepted	to	preclude	a	breach	of	

contract	 cause	 of	 action.	 Id.	 Further,	 Appellant	 introduced	 no	 evidence	 of	

mistake	or	accident	that	justifies	the	vacation	of	the	Award.	

              		Accordingly,	as	a	matter	of	law,	there	is	no	breach	of	contract,	and	the	

Trial	Court’s	summary	judgment	on	Appellant’s	breach	of	contract	claim	was	

properly	rendered.	

       IV.            Timely	Payment	of	the	Appraisal	Award	Precludes	Chapter	542	
                      Liability	
 

              Full	and	timely	payment	of	an	appraisal	award	precludes	liability	under	

Chapter	542.1		There	is	no	provision	in	Chapter	542	that	establishes	a	deadline	

for	payment	of	an	appraisal	award.		In	re	Slavonic,	308	S.W.3d	at	563,	n.5.		In	

Breshears	 the	 payment	 of	 the	 appraisal	 award	 was	 tendered	 “[w]ithin	 thirty	

                                                            
1
  In	re	Slavonic	Mut.	Fire	Ins.	Ass'n,	308	S.W.3d	556,	563‐64	(Tex.	App.—Houston	[14th	Dist.]	
2010,	no	pet.));	See	Amine	v.	Liberty	Lloyds	of	Tex.	Ins.	Co.,	No.	01–06–00396–CV,	2007	WL	
2264477,	*4	(Tex.App.‐Houston.	[1st	Dist.]	Aug.	9,	2007,	no	pet.)	(mem.	op.)	(holding	that	
where	insurer	makes	timely	payment	pursuant	to	an	appraisal	award,	there	is	no	violation	
of	the	code's	prompt	payment	deadlines);	and	Breshears,	155	S.W.3d	at	344–45	(holding	that	
insurer	did	not	breach	contract	and	insureds	were	not	entitled	to	payment	of	penalty,	even	
though	final	payment	was	delayed	until	completion	of	appraisal	process).

                                                               16
days”	of	the	umpire’s	decision	and	the	Court	found	no	basis	for	extending	542	

liability	 to	 the	 insurer.	 Breshears,	 155	 S.W.3d	 at	 342,	 344‐45.	 In	 Hurst,	 the	

insurer	tendered	payment	of	the	appraisal	award	30	days	after	the	issuance	of	

the	 award	 and	 the	 Court	 held	 that	 the	 payment	 was	 issued	 “well	 within	 the	

timeliness	requirements	of	section	542.058.”		Hurst,	2017	WL	2258243	at	*5.	

The	 Amine	 Court	 considered	 whether	 there	 was	 any	 violation	 of	 the	 prompt	

payment	 of	 claims	 act	 and	 adopted	 the	 reasoning	 of	 the	 Breshears	 Court	 in	

holding	 that	 timely	 payment	 of	 an	 appraisal	 award	 precludes	 an	 award	 of	

penalty	interest	as	a	matter	of	law.		Amine,	2007	WL	2264477	at	*4.		In	Garcia,	

the	insured	argued	on	appeal	that	notwithstanding	a	valid	appraisal	award,	an	

insurer	 should	 still	 be	 liable	 for	 prompt	 payment	 of	 claims	 violations	 that	

occurred	before	the	appraisal	clause	was	invoked.	Garcia,	514	S.W.3d	at	274.		

The	Garcia	Court	rejected	this	argument	and	relied	on	In	re	Slavonic,	Breshears,	

et	al.	in	holding	that	timely	payment	of	an	appraisal	award	precludes	imposition	

of	penalties	under	Chapter	542.		Id.	at	275	(internal	citations	omitted).	

      Even	if	the	law	dictated	that	an	insurer	could	be	liable	under	Chapter	542	

for	 violations	 that	 occurred	 prior	 to	 the	 invocation	 of	 appraisal,	 Appellant	

would	not	be	liable	in	this	case.		Appellant	argues	that	Appellee	did	not	accept	

or	reject	the	claim	until	March	20,	2012	which	was	greater	than	15	business	



                                           17
days	 after	 the	 claim	 was	 reported	 on	 February	 22,	 2012.	 	 Appellant	 Br.	 19.		

However,	 Appellant	 ignores	 that	 the	 15	 business	 day	 deadline	 to	 accept	 or	

reject	a	claim	does	not	arise	until	after	the	insurer	has	“all	items,	statements	

and	forms	required	by	the	insurer	to	secure	final	proof	of	loss.”		Tex.	Ins.	Code	

§542.056(a).		Appellant	has	entered	no	evidence	into	the	record	to	establish	the	

date	Appellant	received	the	necessary	information	to	secure	final	proof	of	loss.			

Ms.	 Stillwell	 testified	 in	 her	 deposition	 that	 the	 date	 Appellant	 received	 all	

items,	 statements,	 and	 forms	 required	 to	 secure	 final	 proof	 of	 loss	 was	 on	

October	 9,	 2014	 when	 the	 Award	 was	 received	 by	 Appellant	 (CR547).2		

Therefore,	the	15	business	day	period	under	Section	542.056	and	the	60	day	

time	period	under	Section	542.058	of	Chapter	542	did	not	begin	running	until	

October	9,	2014	and	payment	was	then	tendered	six	days	later	(Tab	B,	CR27‐

29,	Tab	C,	and	CR468‐473).		Tex.	Ins.	Code	§542.056(a)	and	§542.058.		Therefore,	

liability	and	a	right	to	damages	under	Section	542.060	would	not	arise	even	if	

appraisal	had	not	been	invoked.		Tex.	Ins.	Code	§542.060.	There	is	no	evidence	

in	the	record	that	Appellee	can	rely	on	to	create	a	genuine	issue	of	material	fact	




                                                            
2
 This evidence was presented to the trial court by Appellant in its Reply to Plaintiff’s Amended
Response to Defendant Farmers Insurance Exchange’s Motion for Summary Judgment (CR636-
638).

                                                               18
as	to	whether	October	9,	2014	was	the	date	upon	which	Appellant	had	secured	

final	proof	of	loss	and	could	accept	the	claim	and	issue	payment.	

        	Upon	the	issuance	of	the	Award	of	Umpire,	Defendant	tendered	payment	

of	the	award	seven	days	 later	(Tab	B,	 CR27‐29,	 Tab	C,	and	CR468‐473).	 	 As	 a	

matter	of	law,	there	is	no	Chapter	542	liability	because	Appellee	timely	paid	the	

Award	and	there	is	no	evidence	in	the	record	that	Appellee	can	point	to	that	

creates	a	genuine	issue	of	material	fact	as	to	the	timeliness	of	payment.			

   V.     Timely	Payment	of	the	Appraisal	Award	and	Lack	of	Independent	
          Injury	Precludes	Extra‐Contractual	Liability	

        There	can	be	no	claim	for	bad	faith	absent	a	breach	of	the	underlying	

insurance	contract.	See	Republic	Ins.	Co.	v.	Stoker,	903	S.W.2d	338,	341	(Tex.	

1995);	Davis	v.	Nat.	Lloyds	Ins.	Co.,	484	S.W.3d	459,	474	(Tex.App.	–	Houston	

[1st	Dist.]	2015,	pet.	filed).		Further,	for	conduct	to	evolve	from	a	mere	breach	

of	contract	to	bad	faith,	the	breach	of	contract	has	to	be	accompanied	by	an	

independent	 tort.	 Transp.	 Ins.	 Co.	 v.	 Moriel,	 879	 S.W.2d	 10,	 17	 (Tex.1994).	

When	a	plaintiff	“joins	claims	under	the	Texas	Insurance	Code	and	DTPA	with	

a	bad	faith	claim,	all	asserting	a	wrongful	denial	of	policy	benefits,	if	there	is	

no	merit	to	the	bad	faith	claim,	there	can	be	no	liability	on	either	statutory	




                                         19
claim.”3		Appellee	moved	for	summary	judgment	on	these	extra‐contractual	

causes	of	action	on	the	grounds	that	there	was	no	underlying	breach	of	the	

insurance	 contract	 and	 that	 there	 was	 no	 evidence	 or	 genuine	 issue	 of	

material	fact	as	to	the	existence	of	an	independent	injury	(CR317‐318,	508‐

509,	and	634‐635).	

              There	was	no	underlying	breach	of	contract	because	Appellant	invoked	

the	policy’s	appraisal	clause,	and	Appellee	timely	paid	the	Award.	Breshears,	

155	S.W.3d	at	344,	et	al.;	(Tab	B,	CR27‐19,	Tab	C,	and	CR468‐473).		

              Upon	 payment	 of	 the	 Award	 Appellant	 was	 no	 longer	 entitled	 to	 any	

benefits	under	the	policy	that	could	serve	as	a	basis	for	damages	under	an	extra‐

contractual	theory	of	recovery.		Without	a	basis	for	further	recovery	of	policy	

benefits,	Appellant’s	only	avenue	to	damages	under	an	extra‐contractual	cause	

of	 action	 is	 by	 establishing	 an	 independent	 injury.	 USAA	 Tex.	 Lloyds	 Co.	 v.	

Menchaca,	___S.W.3d	___	2017	WL	1311752	*4‐12	(Tex.	2017).	




                                                            
3
  Anderson v. Am. Risk. Ins. Co., Inc., 2016 WL 3438243 *7 (Tex.App.—Houston [1st Dist.] 2016,
no pet.). See Tex. Mut. Ins. Co. v. Sara Care Child Care Ctr., Inc., 324 S.W.3d 305, 317 (Tex.
App.—El Paso 2010, pet. denied); Spicewood Summit Office Condo. Ass'n, Inc. v. Amer. First
Lloyd's Ins. Co., 287 S.W.3d 461, 468 (Tex.App.—Austin 2009, pet. denied) quoting Douglas v.
State Farm Lloyds, 37 F.Supp.2d 532, 544 (S.D.Tex. 1999) (“[W]hen an insured joins claims under
the Texas Insurance Code and the DTPA with a bad faith claim, all asserting a wrongful denial of
policy benefits, if there is no merit to the bad faith claim, there can be no liability on either of the
statutory claims.”).

                                                               20
              There	 was	 no	 evidence	 of	 an	 independent	 injury	 in	 this	 case.	 	 The	

Appellant	had	an	opportunity	to	present	evidence	of	an	independent	injury	

during	his	deposition	but	confirmed	that	his	complaint	against	Appellee	was	

that	 he	 was	 not	 paid	 amounts	 owed	 to	 him	 under	 the	 policy	 (CR504).		

Underpayment	 is	 not	 an	 injury	 independent	 of	 damages	 under	 the	 policy.		

Hurst,	2017	WL	2258243	at	*6.				Even	faced	with	the	opportunity	to	develop	

evidence	of	an	independent	injury	through	Ms.	Stillwell,	Appellant	failed	to	

do	 so.	 	 Appellant	 also	 opted	 to	 attach	 no	 evidence	 to	 his	 responses	 to	 the	

multiple	 motions	 for	 summary	 judgment	 that	 would	 be	 indicative	 of	 an	

independent	 injury	 (CR226‐290,	 513‐632).	 	 Appellant	 created	 no	 genuine	

issue	of	material	fact	as	to	whether	he	suffered	an	independent	injury.		With	

no	 independent	 injury	 and	 no	 breach	 of	 contract,	 the	 trial	 court	 properly	

granted	summary	judgment	on	causes	of	action	for	violations	of	Chapter	541,	

the	DTPA,	and	the	duty	of	good	faith	and	fair	dealing.4	



                                                            
4
  Appellant points to two issues in his brief that he argues constitute an issue of material fact to
serve as a basis for extra-contractual liability. The first is that Appellee’s file contained two letters
which contained inconsistencies, one of which was sent to Appellant. Appellant Br. 17. The
second is that based upon the timeline by which Appellee accepted coverage following Appellant’s
reporting of the claim. Appellant Br. 17-19. To the extent Appellant argues that these issues are
evidence of a violation of Chapter 542, Section IV of this brief addresses those issues. To the
extent Appellant argues these issues create a genuine issue of material fact to establish a violation
of Chapter 541 or the DTPA, Appellant has still not presented any evidence or created a genuine
issue of material fact as to whether he sustained damages as required by Section 541.151 of the
Texas Insurance Code. Tex. Ins. Code §541.151.

                                                               21
      The	 Menchaca	 opinion	 was	 issued	 by	 the	 Supreme	 Court	 of	 Texas	 on	

April	7,	2017	between	the	judgment	in	this	case	and	Appellant’s	deadline	to	

file	 his	 brief.	 Menchaca,	 2017	 WL	 1311752	 at	 *1.	 	 In	 Appellant’s	 brief,	 he	

argues	that	the	Menchaca	opinion	clarifies	that	“…a	breach	of	contract	is	not	

required	for	a	plaintiff	to	recover	extra‐contractual	and	statutory	damages.”		

Appellant	 Br.	 15.	 This	 interpretation	 of	 Menchaca	 ignores	 the	 issue	 of	 an	

independent	injury,	and	ignores	the	opinion	in	Hurst	issued	on	May	23,	2017	

by	Houston’s	14th	District	Court	of	Appeals.		The	Menchaca	opinion	provides	

five	distinct	but	interrelated	rules	governing	the	interplay	of	contractual	and	

extra‐contractual	claims	arising	from	an	insurance	policy.		Menchaca,	2017	WL	

1311752	at	*4.		But	the	Menchaca	case	is	not	an	appraisal	case,	and	the	opinion	

notes	that	neither	party	invoked	the	appraisal	clause	“as	a	method	for	resolving	

this	 dispute.”	 	 Menchaca,	 2017	 WL	 1311752	 at	 n.2.	 	 Menchaca	 examined	

whether	an	insured	can	recover	policy	benefits	for	violation	of	Chapter	541	of	

the	Texas	Insurance	Code	when	the	insurer	has	complied	with	its	duties	under	

the	 policy.	 Menchaca,	 2017	 WL	 1311752	 at	 *1.	 The	 five	 rules	 espoused	 in	

Menchaca	 do	 not	 provide	 Appellant	 a	 path	 to	 recovery	 for	 extra‐contractual	

damages	 because	 the	 only	 rule	 that	 applies	 to	 Appellant	 is	 the	 independent	




                                          22
injury	 rule	 and	 Appellant	 has	 no	 evidence	 of	 an	 independent	 injury.5	 The	

independent	 injury	 rule	 in	 Menchaca	 has	 two	 aspects:	 (1)	 when	 an	 insurer’s	

541	violation	causes	an	injury	independent	of	policy	benefits	the	insured	may	

recover	damages	for	the	injury	even	if	the	insured	is	not	entitled	to	benefits;	

and	 (2)	 an	 insurer’s	 violation	 of	 541	 does	 not	 permit	 the	 recovery	 of	 any	

damages	other	than	policy	benefits	unless	there	is	an	injury	independent	of	the	

policy	benefits.	Id	at	*11.	The	Appellant	presented	no	evidence	to	the	court	that	

he	 had	 suffered	 an	 injury	 independent	 of	 the	 insurance	 contract,	 and	 in	 fact	

confirmed	that	his	complaint	was	that	he	was	not	paid	the	amounts	owed	under	

the	policy	(CR504).		

              		The	Hurst	court	applied	the	Menchaca	opinion	to	an	appraisal	case	and	

held	that:	



                                                            
5	The	first	rule	(an	insured	cannot	recover	policy	benefits	for	a	statutory	violation	if	there	is	

no	right	to	the	benefits	under	the	policy)	does	not	apply	because	there	is	clearly	a	right	to	
policy	benefits	in	this	case.	Menchaca,	2017	WL	1311752	at	*4‐5.		The	second	rule	(an	insured	
who	established	a	right	to	recover	benefits	under	a	policy	can	recover	those	benefits	as	actual	
damages	under	Chapter	541	if	the	Chapter	541	violation	causes	the	loss	of	a	benefit)	does	not	
apply	 because	 the	 timely	 payment	 of	 the	 appraisal	 award	 means	 no	 benefits	 were	 lost.	
Menchaca,	2017	WL	1311752		at	*7‐9.		The	third	rule	(an	insured	can	recover	policy	benefits	
even	if	the	policy	does	not	provide	for	them	if	the	conduct	of	the	insurer	caused	the	insured	
to	lose	the	contractual	right	to	those	benefits)	does	not	apply	because	the	insured	is	entitled	
to	benefits	under	the	policy	and	received	them	through	the	appraisal	award.		Menchaca,	2017	
WL	 1311752	 at	 *9‐10.	 The	 fifth	 rule	 (that	 no	 damages	 can	 be	 recovered	 for	 a	 statutory	
violation	unless	the	insured	proves	a	right	to	benefits	under	the	policy	or	an	independent	
injury)	does	not	apply	because	all	benefits	have	been	tendered	per	the	appraisal	award	and	
there	is	no	independent	injury.		Menchaca,	2017	WL	1311752	at	*12.	

                                                               23
      1. to	recover	damages	beyond	policy	benefits	the	bad	faith	or	statutory	

          violation	must	cause	an	independent	injury;	

      2. that	an	independent	injury	is	rare	and	no	Texas	court	has	encountered	

          one;	and		

      3. that	timely	tender	of	an	appraisal	award	afforded	the	insured	all	policy	

          benefits	he	was	entitled	to	and	that	there	was	no	independent	injury	

          that	 would	 entitle	 the	 insured	 to	 recover	 under	 extra	 contractual	

          theories.			

Hurst,	 2017	 WL	 2258243	 at	 6.	 	 The	 Hurst	 opinion	 noted	 that	 Hurst’s	 own	

testimony	was	that	his	dispute	with	the	insurer	was	that	the	initial	payment	

was	too	low.		Id.		The	substance	of	that	testimony	is	identical	to	that	of	Appellant	

(CR504).	 The	 Hurst	 Court’s	 application	 of	 Menchaca	 is	 correct	 and	 applies	 to	

this	 case	 because	 both	 Hurst	 and	 Appellant	 are	 owed	 no	 policy	 benefits	 that	

could	serve	as	a	measure	of	damages	under	the	Texas	Insurance	Code,	DTPA,	

or	duty	of	good	faith	and	fair	dealing,	and	neither	Hurst	nor	Appellant	had	any	

evidence	 of	 an	 independent	 injury	 that	 would	 serve	 as	 a	 basis	 for	 extra‐

contractual	damages.	Therefore,	there	is	no	genuine	issue	of	material	fact	as	to	

whether	Appellant	is	owed	policy	benefits	or	suffered	an	independent	injury.		

The	 trial	 court	 was	 correct	 in	 granting	 summary	 judgment	 on	 the	 causes	 of	



                                          24
action	pled	under	Chapter	541,	the	DTPA,	and	the	common	law	duty	of	good	

faith	and	fair	dealing.	


                           CONCLUSION	AND	PRAYER	
	

	     WHEREFORE,	 Appellee	 Farmers	 Insurance	 Exchange	 prays	 that	 this	

Court	affirm	the	District	Court’s	granting	of	summary	judgment	on	all	causes	

of	action	asserted	by	Appellant.	

                                Respectfully	submitted,	
	
	                               		s/	Scot	G.	Doyen	                   	
	                               Scot	G.	Doyen		
	                               Texas	Bar	No.	00792982	
	                               sdoyen@ds‐lawyers.com	
	                               Alasdair	Roberts	
	                               Texas	Bar	No.	24068541	
	                               aroberts@ds‐lawyers.com	
	                               DOYEN	SEBESTA,	LTD.,	L.L.P.	
	                               450	Gears	Road,	Suite	350	
	                               Houston,	Texas	77067	
	                               Telephone:	713‐580‐8900	
	                               Facsimile:	713‐580‐8910	
	
                                ATTORNEYS	FOR	DEFENDANT		
                                FARMERS	INSURANCE	EXCHANGE	
	
	
	                           	




                                       25
                      CERTIFICATE	OF	COMPLIANCE	
	
	      I	hereby	certify	that	the	number	of	words	contained	in	this	Appellee’s	
Brief	is	5914.	
	
	
                                			s/	Scot	G.	Doyen	                  	
                                Scot	G.	Doyen	
	

                          CERTIFICATE	OF	SERVICE	
	     I	 hereby	 certify	 that	 on	 July	 5,	 2017,	 true	 and	 correct	 copies	 of	 the	
above	and	foregoing	instrument	have	been	e‐served	on	the	following	counsel	
for	Appellant	Mahmoud	Abdalla:	
	
Chris	Schleiffer	
Scott	Hunziker	
The	Voss	Law	Firm,	P.C.	
26619	Interstate	45	South	
The	Woodlands,	Texas	77380	
(713)	861‐0015	
(713)	861‐0021	(Facsimile)	
scott@vosslawfirm.com		
	
	
                                 			s/	Scot	G.	Doyen	                            	
                                 Scot	G.	Doyen	




      	

                                            	
 




                                          26
                               TAB A
               153-269720-13



. . FARMERS'




                                        438
                               Farmers/Mahmoud
                                    8000290825
                                          4079
                TAB A
153-269720-13




                         439
                Farmers/Mahmoud
                     8000290825
                           4080
                TAB A
153-269720-13




                         440
                Farmers/Mahmoud
                     8000290825
                           4081
                TAB A
153-269720-13




                         441
                Farmers/Mahmoud
                     8000290825
                           4082
                                                                                TAB B
                                                 !S?-).t,q7~() ·13
                                     Cause No. 153-269926-13 •

MAHMOUD ABALLA,                                    §        IN THE DISTRICT COURT
                                                   §
                                                   §
V.                                                 §        TARRANT COUNTY, TEXAS
                                                   §
FARMERS INSURANCE                                  §
EXCHANGE                                           §         153'd JUDICIAL DISTRICT




                                      AW ARD OF UMPIRE


       Previously, the parties invoked the appraisal process in this matter. Because the parties,

through their designated appraisers, were unable to agree on an individual to serve as Umpire, the

Court duly appointed the undersigned to serve as Umpire in accordance with the applicable
                                                                                                        I
policy of insurance affecting the damaged property.

       The appraisers have completed their assignments of appraisal. Thus, this Award of

Umpire is submitted to the Court for filing and to conclude this process. This appraisal process

resulted from the parties' ,vritten agreement.

       Attached to this Award is a document entitled "Appraisal Award" prepared by one of the

duly selected appraisers, namely, Kyle P. Albright, Sr., IA, CGA, FCLS, P.O. Box 16026,

Galveston, TX, 77552-6026.

       This appraisal is evidenced by the document attached to this award.

       It is the Umpire's considered opinion that the Albright appraisal of an actual cash value

loss amount of $345,664.21 (three hundred forty-five thousand, six hundred sixty-four dollars

and twenty-one cents) is the more sound and well supported appraisal. Accordingly, the Umpire

                                                              J-~ dtC,..(,.u.,, s, .A..otf
                                            Page 1 of 2
                                                                     ~bit~
                                                                                           27
                                                                                Court's Minute~;.,
                                                                                Tr~n!';action # Lf.L-. - '
,   .                                                                              TAB B

        hereby awards this sum of money to make whole the damages caused to the subject property.

               Awarded and signed this 8'h day of October, 2014.




                                                                   Charles Bleil, Umpire




                                                 Page 2 of 2



                                                                                               28
.   .                                                                                              TAB B


                                               APPRAISAL AWARD


        Date: I0/7/2014

        Re:    lnsured(s):               Mahmoud Abdalla
               Claim#:                   sooo29oa2s
               Policy#:                  0604851630
               Date of Loss:             2/21/2012
               Location:                 1000 Avenue H E, Arlington, TX 76011

        We, the undersigned, pursuant to the within appointment, DO HEREBY CERTIFY that we have truly and
        conscientiously performed the duties assigned determined and do hereby award as the Actual Cash
        Value and the Replacement Cost Value of said property.



        Item: Dwelling:          RCV -   $ 340,688.03                    ACV -     $ 324,496.27

        ltem:APS                 RCV-    $      -0-                      ACV-      $      -0-

        Item: Contents:          RCV -   $ 23,314.19                     ACV-      $ 21,167.94

        Item: ALE{LOSS OF USE:           $      -0-


        TOTAL AMOUNT OF LOSS             $ 364,002.22

        AMOUNT OF DEPRECIATION           $ 18,338.01

        ACTUAL CASH VALUE OF LOSS        $ 345,664.21

        SPECIAL PROVISIONS:

                1. Subject to policy provisions and deductible
                2. Less any previous payments per this claim
                3. Policy coverage to be addressed by others
                4. The above amount(s} are all inclusive as relate to this claim



        APPRAISER-             --1.4f}~.t.¥tf}/6,LL-l='---:::;;:..~__,...,..,,.-,,_____,DATE    iv - ?   -:<o If
                                  ~llJ~,,,;f{l'~



        UMPIRE-               -~------r;W
                                     ____·__                                           D.ATE/0-          8-c(}//j,




                                                                                                                   29
                                                                                                   TAB C
                                                     153-269720-13
                                              ~
                                                                            Toll Free: (!100) ·135· 776-1

  ~ FARMERS                                                                 Send all correspondence to:
                                                                            Email: myclaim('! farmersinsurann·.com
                INSURANCE                                                   National Document Center
                                                                            P.O. Box 26!1994
                                                                            Oklahoma City, OK 73126-!1991
  Occober 15, 2014                                                          Fax: (!177) 217 -1389


  ATIN SCOTI HUNZIKER
  VOSS LAW FRIM
  26619 INTERSTATE 45
  SPRING TX 77380

     RE:     Insured:                              Mahmoud Abdalla and Nancy Abdalla
             Claim Unic Number:                    800029082 5-1-2
             Policy Number:                        0604851630
             Loss Dace:                            02/21/2012
             Lornrion of Loss:                     1000 Ave H E, Arlington, TX
             Subject:                              Serdemmt Notice

  Dear Mr. Hunziker:

  We appreciate the opporcunicy to serve our insured's insurance needs and we are here co help our customer
  through the claims process as efficiently as possible. Enclosed, please find actual cash value payment for your
  client's building and the replacement cosc value payment on their business personal property cl.Lim based on the
  signed appraisal award, less che applicable policy deductible and prior payments. I have attached a copy of the
  signed award for your records. As pare of the appraisal process our appraiser, Kyle Albright and your client's
  appraiser Max Judge submitted their evaluations of your client's damages co the selected umpire, Judge Charles
  Bleil. The award was signed by Mr. Albright on October 7, 2014 and by Mr. Bleil on October 8, 2014.

  Here is an explanation of the secclemenc:

    Line of Coverage                  Building                    Business Personal
                                                                  Property
    Replacement Cost                  $340,688.03                 $23,314.19
    Less: Depreciation                Sl6,l91.76                  SN/A
    Actual Cash Value                 $324,496.27                 SN/A
    Less: Policy Deductible           S l,000.00                  SN/A
    Setrh:ment Amount                 $323,196.27                 $23,314.19
    Less: Prior Payments              $247,370.46                 Sl7,458.83
    Amount                            $76, 125.81                 $5,855.98



  The customer"s policy has actual cash value and replacement cosc value settlement options for cheir business
  personal property claim. Actual cash value is an amount less chan che full replacement cost of the damaged
  property, and reflects a depreciated value based on the age and condition of che items at che cime of loss relative




V624VRN4

                                                                                               Farmers/Mahmoud
                                                                                                       8000290825
                                                                                                             3479    468
                                                                                                   TAB C
                                                     153-269720-13
   co che useful life of the property. We have elected co issue payment of chis cime for che full replacement cost of
   your client's businesss personal property claim per che appraisal award without deduction for depreciation.

   The policy provides actual cash value coverage for your client's building loss. Actual cash value is che
   replacement cosc of che damages less any applicable depreciation. The claim was seeded ac replacement cost less
   che appropriate deductions for depreciation based upon signed appraisal award.

   The policy requires I include the mortgage company as a payee on their building loss. li> minimizt: delays in
   repairs, we suggest our cuscomt:r concact their mortgage company co find out their requirements for endorsing
   che payment and releasing che funds.

   \Xie wish co inform you rhere are rime limirs as found in the Condirions language of your client'spolicy. These
   limirs may have bc:cn cxrcndcd by scarure in your scace. The rime period sec forth in che Conditions section
   is the shortest period which may apply. In regard to rime limits, chis policy has been modified by rhe TEXAS
   CHANGES Endorsemenr, sl987 3rd Edition which states:


      C.    Legal Action Against Us
             l.    The Legal Action Against Us Property Loss Condition is replaced by che following, except as
                    provided in F.2. below:
                   LEGAL ACTION AGAINST US
                   No one may bring a legal action against us under chis policy unless:
                   a.    There has been full compliance with all of che rerms of chis insurance; and
                   b.    The action is brought within 2 years and one day after the dace on which che direct
                          physical loss or damage occurred.


   Please note, on occasion, t:ndorsements are updated with newt:r t:dicions. \X'e encourage you   to   reference your
   client's policy and included endorst:mt:nts for any updart:s.

   By tht: writing of this letter, we do not waivc any of rhc ccrms, rnn<licions. or provisions of your clienr's
   insurance policy. all of which arc cxprcssly retaml·d and rcscrve<l. Any ,Ktivicy on our parry dot:s nor consciruce a
   waivt:r of our righcs.

   If you have any quescions about the claim, please do noc hesicace co contact me direccly ac my primary phone
   numbi:r (512) 619-24 75. Although not my main office numbt:r, in case of immediate need an alternative
   number for our claims office is (866) 850-6372.

  Thank you.

  Sincerely,
  Truck Insurance Exchange

    fUtUt~ ~
  Tonya Stilwell
  Senior Commercial Property General Adjuster
  (512)619-2475



V624VRN4

                                                                                              Farmers/Mahmoud
                                                                                                    8000290825
                                                                                                          3480  469
                                                 TAB C
                 153-269720-13
           CC: CARNAHAN AND THOMAS
           Check(s): 1607496704, 1607497 616
           Enclosure(s):
                Gen Supporting Documents




V624VRN4
                                               Farmers/Mahmoud
                                                    8000290825
                                                           470
                                                          3481
                                                                                                                           TAB C
                                                          153-269720-13
10/09/2014    12:52       817-989-2176                                FEDE>< OFFICE             0807                             PAGE   04




                                                    APPRAISAL AWARD


        D:ite: 1on12014

        Re:     lnsured(s}:                Mahmoud Abdalla
                Claim#-;                   sooo29oe:i~
                Policy#:                   060485t6J()
                Date of Loss:              2/2.112012
                Location:                 1000 Avenue HE, Arlington, TX 76011

        We, tha undersigned, pursuant to the within appelntment, 00 HEREBY CERTIFY that we have truly and·
        consciontlcusly perform,d the duties assigned determined and dn hereby award as thl? Actual Cash
        Value and the Replacement Cost Value of said propenv.



        Item: Dwelling:          RCV-     $ 340,688.03                           ACV-     S 324,496.27

        Item:~                   RCV-     s         -0-                          ACV·     s          -0-

        Item: contents:          RCV-     $ 23,314.19                            A.CV-    $ 21,167.94

        Item: AbE/LOSS OF USE:            s         ·O·

       TOTAL AMOUNT OF LOSS               $ 364,002.22

       AMOUNT OF OEPREOATION              s    18,338.01

       ~,cruAt. CASH VALUE OF LOSS        $ 345,664.21

       S?ECIAL PROVIS!CNS:

               l  Subject to pollcy prOVlSiQns and deduc:lble
               2. Less any previous pavments per this claim
               3. Policy coverage to be addressed by others
               4. The above amount(s) are all Inclusive as relate to this claim


                                 .........""'?.". . _...._J~.~----,,_, . . .-.,. .,. .,.,. ,_____DATE
                                _.~                                                                              ·?   -.'!loll
                                            ~ tNJ.,,:,;tJ,·r...
       APPRAISER-                          Mlhb'!"".                                                       11J




       UMPIRE·.                                                                               DATE




                                                                                                                       Farmers/Mahmoud
                                                                                                                             8000290825
                                                                                                                                   3482  471
                                                                                                  TAB C
                                                      153-269720-13
                                                              FEDEX OFFICE     0807                  PAGE     02
13/09/2014   12:52     817-589-2176
                                                           ~                          1 -             -~~'   \j~

                                           Cause No. 153-2619:20 B         . 11?.     ·~· _,        I·•      l
                                                           ..., ;;, ~ ,-:,7"'- ~- I 3
      MAH~Ot:D ABALLA.                                 §            rN THE DrSTRlCT COURT
                                                       §
                                                          s
      v.                                                  §          TAR.RANTCOUNTY,TEXA.S
                                                          §
      F.~V.SRS fNSURA!'!CE                                §
      EXCHA'.'JOE                                         §          I5/ 11 JUDrClAL DISTRlCT


                                            AWARD OF UMPLT{E


             Previously, the parties invoked the appraisal process in th.is matter. Because the parties,

      through their designated appraisers, were unable to agree on an lndividua.l to serve as Umpire, the           /

      Court duly appointed the undersigned to serve as Umpire in accordance with the applicable

      poiicy of insurance affecting the damaged property.

             The appraisers have completed their assignments of appnisal. Thus. this Award of

      Umpire is submitted to the Court for filing and to conclude this proces5. This appraisal process

     resulted from the pa:ties · v.Tittcn agreement

             Attached to th:s A ward is a documen: ~'I1ti~:ed "Appraisal Award" prepared by one of the

     duly selected appra:sers. namely, Kyie P. Albrig.ilt, Sr., IA, CGA. FCLS. P.O. Box 16026,

     Gaiveston. TX. 77552-6026.

             Tilis appraisal is evidenced by the document attached to th.is award.

             I~ is :he Umpire's considered opinion that the Albright appraisal of an actual cash value

      loss amount of $345,664.21 (three bundred forty-five thousand, s.x hundred sixty-four dollars

     and twenty-one cents) is the more sound and well supported appmi.sal. Accordingly, the Umpire
                                                                      J-,:ld    f~          I, ~o,f
                                                 Page 1 of 2
                                                                               01,-JJ.+"{5
                                                              ----                       ·--·- -·-·--···-···-----.




                                                                                                 Farmers/Mahmoud
                                                                                                           8000290825
                                                                                                                   472
                                                                                                                 3483
                                                                                            TAB C
                                               153-269720-13

10/0S/2814   12:52    817-989-2176                     FEDEX OFFICE      0807                  PAGE    03




      hereby awards this sum of money to make whole the damages ,:auscd to the subject property.

             Awarded and signed this 81~ day of October, 2014.




                                                                 Charles BJeil, Umpire




                                              Page 2 of 2




                                                                                         Farmers/Mahmoud
                                                                                                   6000290625
                                                                                                            473
                                                                                                         3464
