                              Fourth Court of Appeals
                                     San Antonio, Texas
                                            OPINION
                                        No. 04-16-00209-CV

                                        Candelaria GARCIA,
                                             Appellant

                                                 v.

                            STATE FARM LLOYDS and Sylvia Garza,
                                        Appellees

                         From the County Court at Law, Starr County, Texas
                                    Trial Court No. CC-15-106
                            Honorable Romero Molina, Judge Presiding

Opinion by:       Sandee Bryan Marion, Chief Justice

Sitting:          Sandee Bryan Marion, Chief Justice
                  Rebeca C. Martinez, Justice
                  Luz Elena D. Chapa, Justice

Delivered and Filed: December 14, 2016

AFFIRMED

           In the underlying lawsuit, Candelaria Garcia alleged State Farm Lloyds and Sylvia Garza

(collectively, “appellees”) failed to properly investigate and adjust an insurance claim made under

Garcia’s State Farm homeowner’s policy. After the lawsuit was filed, the parties agreed to an

appraisal for the purpose of determining the amount of the loss. After completion of the appraisal,

State Farm paid the appraisal award and appellees moved for summary judgment on all of Garcia’s

claims. Garcia then amended her petition to ask that the appraisal award be set aside. The trial
                                                                                   04-16-00209-CV


court rendered summary judgment in favor of appellees and signed a final judgment disposing of

all of Garcia’s claims. Garcia now appeals the trial court’s summary judgment.

                                       BACKGROUND

       In 2014, State Farm issued a homeowner’s policy to Garcia providing coverage for her

home. Following storm damage to her house, Garcia retained a private adjustor to “examine,

investigate, estimate, collect documentation, and communicate” with State Farm with regard to

any and all claims for damages. One day later, on January 22, 2015, Garcia submitted a claim to

State Farm for hail-related and possibly wind-related damage to her house. State Farm assigned

the claim to its own adjustor, Sylvia Garza. On February 26, 2015, Garza inspected Garcia’s house

and prepared an estimate of damage, which concluded the $902.37 loss did not exceed Garcia’s

$1,760.00 deductible. On March 2, 2015, State Farm advised Garcia that no payment would be

made to her.

       On April 8, 2015, Garcia sued appellees, alleging breach of contract, breach of duty of

good faith and fair dealing, as well as violations of the Texas Prompt Payment of Claims Act, the

Insurance Code, and the DTPA. Thereafter, State Farm demanded the appraisal process provided

in the insurance policy and appointed Lee Moynahan as its appraiser. Garcia responded and

appointed Jamie Wesselski as her appraiser. Litigation was stayed pending the appraisal. On

September 23, 2015, the appraisers signed an agreement estimating an actual cash value of

$6,142.92 and a replacement cost value of $7,835.70 for hail damage to the house. The award was

subject to the policy’s provisions and deductibles. Three business days later, State Farm tendered

payment of the award (the replacement cost value, less depreciation and deductible) in the amount

of $4,382.92.

       On December 11, 2015, State Farm notified Garcia the litigation stay was lifted. Appellees

then moved for summary judgment, alleging State Farm’s payment of the appraisal award estopped
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Garcia from maintaining a breach of contract claim and, without a contract claim, she could not

maintain her extra-contractual claims.

       On January 27, 2016, Garcia’s attorney notified State Farm’s attorney that Garcia was

rejecting State Farm’s offer to pay $4,382.92. On February 25, 2016, Garcia filed an amended

petition, in which she added a request that the appraisal award be set aside and disregarded. Garcia

also filed a response to appellees’ motion for summary judgment. Appellees filed a reply in

support of their motion for summary judgment responding to Garcia’s claim that the appraisal

award should be set aside and disregarded. On March 10, 2016, the trial court rendered summary

judgment in favor of appellees.

        WAS SUMMARY JUDGMENT RENDERED ON GROUNDS NOT ADDRESSED
               IN THE MOTION FOR SUMMARY JUDGMENT?

       In their answer to Garcia’s petition, appellees pled the affirmative defense of estoppel,

asserting Garcia’s breach of contract claim, extra-contractual claims, and any claims under the

Prompt Payment of Claims Act were all barred by State Farm’s payment of the appraisal award.

In the motion for summary judgment, appellees asserted that payment of the appraisal award

resolved and disposed of all claims in the lawsuit.

       In her first issue on appeal, Garcia asserts the trial court erred when it rendered summary

judgment on her claim to set aside and disregard the appraisal award because appellees’ motion

for summary judgment did not address that claim and appellees did not file an amended or

supplemental motion for summary judgment after she filed her amended petition raising that claim.

Garcia also asserts the trial court could not consider appellees’ reply in support of their motion for

summary judgment in ruling on the motion. Appellees counter that their motion for summary

judgment was broad enough to encompass Garcia’s amended petition because the validity of the




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appraisal award was central to their motion for summary judgment; therefore, the trial court did

not err in rendering summary judgment on all of Garcia’s claims.

       A trial court may grant a party summary judgment only on a ground raised in that party’s

motion. See Lehmann v. Har-Con Corp., 39 S.W.3d 191, 200 (Tex. 2001). Although a trial court

generally commits reversible error by granting summary judgment on a ground or claim not

addressed in the motion, such error is rendered harmless if “the omitted cause of action is precluded

as a matter of law by other grounds raised in the case.” G & H Towing Co. v. Magee, 347 S.W.3d

293, 297-98 (Tex. 2011). Similarly, when a summary judgment movant fails to amend its motion

after an amended or supplemental petition, we may affirm the summary judgment if (1) the

amended or supplemental petition essentially reiterates previously pleaded causes of action, (2) a

ground asserted in the motion for summary judgment conclusively negates a common element of

the newly and previously pleaded claims, or (3) the original motion is broad enough to encompass

the newly asserted claims. Callahan v. Vitesse Aviation Serv., LLC, 397 S.W.3d 342, 350 (Tex.

App.—Dallas 2013, no pet.); Coterill–Jenkins v. Texas Med. Ass’n Health Care Liability Claim

Trust, 383 S.W.3d 581, 592 (Tex. App.—Houston [14th Dist.] 2012, pet. denied). To determine

whether appellees’ motion for summary judgment was broad enough to encompass Garcia’s claim

that the appraisal award should be set aside, we examine the parties’ respective burdens of proof.

       “We review a trial court’s grant of summary judgment de novo.” Frost Nat’l Bank v.

Fernandez, 315 S.W.3d 494, 508 (Tex. 2010). Estoppel is an affirmative defense. TEX. R. CIV. P.

94. A defendant moving for summary judgment on an affirmative defense has the burden to

conclusively establish that defense. Diversicare Gen. Partner, Inc. v. Rubio, 185 S.W.3d 842, 846

(Tex. 2005). A defendant who conclusively establishes an affirmative defense is entitled to

summary judgment. Fernandez, 315 S.W.3d at 508. “When reviewing a summary judgment, we

take as true all competent evidence favorable to the nonmovant, and we indulge every reasonable
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inference and resolve any doubts in the nonmovant’s favor.” Diversicare Gen. Partner, 185

S.W.3d at 846. Once the movant has established a right to summary judgment, the nonmovant

must expressly present any reasons seeking to avoid the movant’s entitlement and must support

the reasons with summary judgment proof to establish a fact issue. City of Houston v. Clear Creek

Basin Auth., 589 S.W.2d 671, 678 (Tex. 1979). If the nonmovant does not raise a fact issue as to

every element of the estoppel defense, summary judgment is proper. See Toonen v. United Serv.

Auto. Ass’n, 935 S.W.2d 937, 940 (Tex. App.—San Antonio 1996, no writ) (“As a general rule, a

party seeking to avoid a summary judgment by virtue of an affirmative defense bears the burden

of raising a material issue of fact on that defense.”).

       In this case, appellees bore the initial summary judgment burden on their estoppel defense

to conclusively establish that all of Garcia’s claims were barred by the payment of the appraisal

award. If they satisfied that burden, the burden shifted to Garcia to raise a fact issue on whether

the appraisal award should be set aside. See Barnes v. Western Alliance Ins. Co., 844 S.W.2d 264,

267 (Tex. App.—Fort Worth 1992, writ dism’d by agr.) (burden of proof on party seeking to avoid

award). In her response to appellees’ motion for summary judgment, Garcia argued genuine issues

of material fact existed as to whether the appraisal award should be set aside. Therefore, whether

she raised this argument in her amended petition or in her response to appellees’ motion for

summary judgment, the issue of whether the appraisal award should be set aside was encompassed

within appellees’ motion for summary judgment.

          APPELLEES’ ENTITLEMENT TO SUMMARY JUDGMENT
 ON THEIR ESTOPPEL DEFENSE TO GARCIA’S BREACH OF CONTRACT CLAIM

       Appraisal awards made pursuant to the provisions of an insurance contract are binding and

enforceable. Providence Lloyds Ins. Co. v. Crystal City Indep. Sch. Dist., 877 S.W.2d 872, 875

(Tex. App.—San Antonio 1994, no writ). The effect of an appraisal provision is to estop one party


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                                                                                      04-16-00209-CV


from contesting the issue of damages in a suit on the insurance contract, leaving only the question

of liability for the court. Franco v. Slavonic Mut. Fire Ins. Ass’n, 154 S.W.3d 777, 786 (Tex.

App.—Houston [14th Dist.] 2004, no pet.). An appraisal award made pursuant to an insurance

policy is binding and enforceable unless the insured proves that the award should be set aside.

Toonen, 935 S.W.2d at 940.

       Here, the parties do not dispute the contractual validity of the appraisal clause contained in

the insurance policy as a manner of resolving a dispute as to the amount of Garcia’s loss. There

also is no dispute (1) Garcia’s claim was appraised pursuant to the appraisal clause, (2) the two

appraisers agreed on the amount of the loss and they both signed the “Insurance Appraisal Award

Agreement,” and (3) State Farm tendered the award amount to Garcia. Accordingly, appellees

were entitled to summary judgment in their favor on their estoppel defense to Garcia’s breach of

contract claim unless Garcia raised an issue of fact as to a ground for setting aside the appraisal

award or that appellees’ estoppel defense fails because she rejected payment of the award. See id.

(holding, USAA’s motion and supporting proof were legally sufficient to establish (1) insured’s

claim had been appraised pursuant to the policy, and (2) USAA had tendered the amount awarded

by the appraisers; accordingly, USAA was entitled to summary judgment in its favor on insured’s

breach of contract claim unless insured raised a fact issue on ground for setting aside the appraisal

award); see also Cantu v. S. Ins. Co., 03-14-00533-CV, 2015 WL 5096858, at *4 (Tex. App.—

Austin Aug. 25, 2015, no pet.) (“Southern offered as summary judgment evidence the appraisal

award signed by the umpire and one appraiser. Thus, Southern met its summary judgment burden

to establish that the appraisal was valid and binding, and the burden shifted to [the insured] to

create a fact issue as to one of the three grounds for setting aside an appraisal award.”).

       Because every reasonable presumption will be indulged to sustain an appraisal award, the

burden of proof is on the party seeking to avoid the award. Barnes, 844 S.W.2d at 267. However,
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although every reasonable presumption will typically be made in favor of an appraisal award, when

reviewing a summary judgment, that rule must yield to the degree its application conflicts with the

presumptions required to be made in favor of a summary judgment non-movant. Wells v. Am.

States Preferred Ins. Co., 919 S.W.2d 679, 683 (Tex. App.—Dallas 1996, writ denied); Hennessey

v. Vanguard Ins. Co., 895 S.W.2d 794, 798 (Tex. App.—Amarillo 1995, writ denied). Therefore,

although Garcia had the burden to raise a fact issue on setting aside the appraisal award, we are

required to view the summary judgment proof in the light most favorable to Garcia, as the non-

movant, and to resolve against appellees any doubt as to the existence of a genuine issue of material

fact on their estoppel defense. Mays v. Foremost Ins. Co., 627 S.W.2d 230, 233-34 (Tex. App.—

San Antonio 1981, no writ).

A.     Should the Award Be Set Aside?

       Texas courts recognize three grounds on which the results of an otherwise binding appraisal

may be set aside: (1) when the award was made without authority; (2) when the award was made

as a result of fraud, accident, or mistake; or (3) when the award was not in compliance with the

requirements of the policy. Wells, 919 S.W.2d at 683; Providence Lloyds Ins. Co., 877 S.W.2d at

875-76. Garcia argues the award should be set aside based only on the first and second grounds.

       1. Was the award made without authority?

       Garcia’s public adjuster estimated costs to repair, among other items, one turtle-type roof

vent, the interior kitchen ceiling, and the dining room ceiling. State Farm and its adjustor (Garza)

estimated costs to repair these same items, but for a lesser amount. Therefore, Garcia contends

the parties had a dispute regarding the amounts necessary to repair these items, not whether the

items were part of the covered loss. However, during the appraisal, the appraisers did not include

these items in their appraisal estimate. Garcia argues that because her adjuster and State Farm’s

adjuster had already determined these items were covered, the appraisers had no authority to
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determine the items were not covered and exclude them from the appraisal award. Garcia contends

her and State Farm’s prior damage estimates are relevant to the existence of a fact issue on whether

the appraisers exceeded their authority because the differences between the pre-appraisal damage

estimates and the appraisal award indicate the appraisers exceeded their authority. State Farm

counters that Garcia is merely speculating that because the appraisal award’s scope differs in some

way from the pre-appraisal estimates, the appraisal award does not reflect the appraisers’ intent.

       An appraisal “binds the parties to have the extent or amount of the loss determined in a

particular way.” Scottish Union & Nat’l Ins. Co. v. Clancy, 71 Tex. 5, 8 S.W. 630, 631 (1888).

Appraisers have no authority to determine questions of causation, coverage, or liability. Wells,

919 S.W.2d at 684. “[T]he function of the appraisers is to determine the amount of damage

resulting to the property submitted for their consideration. It is certainly not their function to

resolve questions of coverage and interpret provisions of the policy.” Id. at 685. “The principle

in Wells was that the appraisers have certain powers and that, acting within those powers, their

determination ‘can estop one party . . . from contesting the issue of damages in a suit on the

insurance contract, leaving only the question of liability for the court.’” Johnson v. State Farm

Lloyds, 204 S.W.3d 897, 902 (Tex. App.—Dallas 2006) (quoting Wells), aff’d, 290 S.W.3d 886

(Tex. 2009). “Actions beyond those powers are not given estoppel effect.” Id.

       However, whether causation is a liability question or a damages question depends on the

circumstances. For example, “when different causes are alleged for a single injury to property,

causation is a liability question for the courts.” State Farm v. Johnson, 290 S.W.3d 886, 892 (Tex.

2009). “Appraisers can decide the cost of repairs in this context, but if they can also decide

causation there would be no liability questions left for the courts.” Id. “By contrast, when different

types of damage occur to different items of property, appraisers may have to decide the damage

caused by each before the courts can decide liability.” Id. In this context, courts can decide
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whether a particular type of damage is covered, “but if [the courts] can also decide the amount of

damage caused by each, there would be no damage questions left for the appraisers.” Id.

       The same is true when the causation question involves separating loss due to a
       covered event from a property’s pre-existing condition. Wear and tear is excluded
       in most property policies . . . because it occurs in every case. If . . . appraisers can
       never allocate damages between covered and excluded perils, then appraisals can
       never assess hail damage unless a roof is brand new. That would render appraisal
       clauses largely inoperative, a construction [courts] must avoid.

Id. at 892-93 (footnotes omitted).

       Distinguishing between causation as a damages question and causation as a liability

question is complicated by the practical reality that

       [a]ppraisers must always consider causation, at least as an initial matter. An
       appraisal is for damages caused by a specific occurrence, not every repair a home
       might need. When asked to assess hail damage, appraisers look only at damage
       caused by hail; they do not consider leaky faucets or remodeling the kitchen. . . .
       Any appraisal necessarily includes some causation element, because setting the
       ‘amount of loss’ requires appraisers to decide between damages for which coverage
       is claimed from damages caused by everything else.

Id. at 893. Ultimately, “whether the appraisers have gone beyond the damage questions entrusted

to them will depend on the nature of the damage, the possible causes, the parties’ dispute, and the

structure of the appraisal award.” Id.

       The appraisal clause in this case allowed Garcia and State Farm to each “select a competent,

disinterested appraiser.” The clause further provided as follows:

       The two appraisers shall then select a competent, impartial umpire. . . . The
       appraisers shall then set the amount of the loss. If the appraisers submit a written
       report of an agreement to [State Farm], the amount agreed upon shall be the amount
       of the loss. If the appraisers fail to agree within a reasonable time, they shall submit
       their differences to the umpire. Written agreement signed by any two of these three
       shall set the amount of the loss.

       Garcia and State Farm each selected an appraiser. The two appraisers agreed on the amount

of the loss; therefore, an umpire was not necessary. Both appraisers signed the “Insurance

Appraisal Award Agreement.” Nothing in the appraisal clause specifies the manner in which the
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appraisers were to determine the amount of the loss, nor were they required to rely on—or even

refer to—any prior damage estimates.           Instead, the appraisers were required only to be

“disinterested” and “set the amount of the loss.” The appraisal award states:

        We, the undersigned [both appraisers], do solemnly swear that we have acted with
        strict impartiality in making an appraisement of the actual cash value and the
        amount of loss upon the property hereinbefore mentioned, in accordance with the
        appointment, and that we have made a true, just and conscientious award of the
        same, according to the best of our knowledge, skill and judgment. We are not
        related to the insured, either as creditors or otherwise, and are not interested in said
        property or the insurance thereon.

        In an unpublished opinion cited by State Farm, a federal district court addressed whether

an appraisal panel was required to consider earlier damage estimates. In Gronik v. Chubb

Indemnity Insurance Co., Nos. 10-cv-0954, 11-cv-697, 2015 WL 7430026, at *2 (E.D. Wis. Nov.

20, 2015), a dispute over which line items of the appraisal award were still in dispute and should

be presented at trial arose because, before the appraisal process was completed, the insurance

company made a series of payments to the insureds, which they accepted, for structural damage to

the property. The insurance company made these payments based on estimates from Belfor, a

property restoration company, and the process Belfor used in assessing damage was different from

the process the appraisers used. Thus, when the appraisal was complete and confirmed, it proved

impossible for the parties to line up the pre-payments with specific line items listed in the appraisal.

Subsequently, the insurance company went through the appraisal line items and concluded that a

total of $661,383.61 of the line item damages from Part 1 of the award was covered under the

policy. Because the insurance company had already issued several pre-payments for property

damage totaling $481,880.70, it paid the insureds the balance—$179,502.91—and provided them

with a list of appraisal items it felt were not covered and therefore still at issue in the case.

        The insured argued the line items the insurance company agreed were covered were still at

issue in the case because the insurance company could not prove the pre-payments it issued before
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the appraisal were issued for specific line items of damage listed in the appraisal. The district

court disagreed, stating:

              As noted above, the appraisal award set the total amount of loss to the
       property. Thus, [the insurance company] is not obligated to pay more than what
       the appraisal awarded, including any pre-payments it made. Once the appraisal was
       confirmed, any previous estimates from Belfor or anyone else became meaningless,
       and the only damages estimate that mattered was the appraisal award.
                                             ...

              It does not matter that it could not line up Belfor’s estimate process with the
       appraisal award because once the appraisal award was confirmed, Belfor’s
       estimates no longer mattered. [The insurance company] correctly reassessed its
       coverage opinion under the now-governing appraisal award, and it reallocated its
       pre-payments to line up with this award.

Id.
       The holding in Gronik is consistent with the holding in Providence Lloyds Insurance Co.,

wherein a panel of this court considered the appellee’s argument that the appraisal award was not

made in substantial compliance with the appraisal provisions because the umpire exercised

independent judgment with regard to five items, instead of simply agreeing with one appraiser or

the other as to those items. 877 S.W.2d at 876. This court stated

               The duty of the umpire under the terms of the insurance policy was to
       ascertain and determine, in the exercise of his own best judgment, the cash value of
       the items of property about which the appraisers had disagreed, independent of the
       findings of the appraisers, or either of them. This is what the umpire did, according
       to the record, and both appraisers agreed with his findings and signed the award,
       which included their agreed findings.

                                              ...

               [W]e find that in acting independently as to the disputed values, the umpire
       did not exceed the authority conferred upon him. On the contrary, it was the duty
       of the umpire under the terms of the contract of insurance to ascertain and
       determine, in the exercise of his own judgment and as the result of his own
       investigation, the cost values of the disputed items, independent of the findings of
       the appraisers, or either of them.

Id. at 877-78.



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       We hold that, under Gronik and Providence Lloyds Insurance Co., the damage estimates

prepared by Garcia’s adjuster and by State Farm’s adjuster no longer mattered once the appraisal

process was complete. The only obligation imposed on the appraisers in this case was to be

“disinterested,” and the only obligation imposed on an umpire was to be “impartial.” Also, there

is no summary judgment evidence establishing the appraisers determined the omitted items were

not damaged by hail. Instead, they simply omitted certain items from the appraisal award, and

Garcia provided no summary judgment evidence regarding why both appraisers decided to omit

the items. See Johnson, 290 S.W.3d at 892-94 (appraisers do not exceed their authority when they

consider whether the damage was caused by a particular event or was instead the result of non-

covered pre-existing perils like wear and tear); see also TMM Inv., Ltd. v. Ohio Cas. Ins. Co., 730

F.3d 466, 475 (5th Cir. 2013) (“To the extent the appraisers merely distinguished damage caused

by pre-existing conditions from damage caused by the storm, they were acting within their

authority.”). The fact that the appraisers’ findings differed from the findings of Garcia’s and State

Farm’s adjustors is not evidence—standing alone—that the appraisers acted outside the scope of

their authority. Therefore, we conclude Garcia did not carry her burden to raise a fact issue on

whether the appraisers exceeded their authority.

       2. Was the award made as a result of fraud, accident, or mistake?

       In her response to appellees’ motion for summary judgment and on appeal, Garcia does not

distinguish between fraud, accident, or mistake.         Instead, she broadly alleges the evidence

regarding the appraisers’ omission of damage items that were part of the prior damage estimates

may be construed to show such omissions were due to fraud, accident, or mistake. Because Garcia

did not specifically argue fraud and submitted no evidence in support of any claim that the

appraisers’ actions were fraudulent, we conclude she did not carry her burden to raise a fact issue

on that ground. Regarding accident or mistake, in her brief on appeal, Garcia complains about the
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“omission” of various items 1 from the appraisal award and she contends the award was “flawed

and does not provide a correct appraisement of the full amount of loss.” We interpret this as an

argument that the appraisal award should be set aside due to accident or mistake.

         “A court may set aside an award on the ground of mistake [or accident] only ‘upon a

showing that the award does not speak the intention of the appraisers.’” MLCSV10 v. Stateside

Enter., Inc., 866 F. Supp. 2d 691, 702 (S.D. Tex. 2012) (quoting Providence Washington Ins. Co.

v. Farmers Elevator Co., 141 S.W.2d 1024, 1026 (Tex. Civ. App.—Amarillo 1940, no writ)).

“Mistake” in this context has a narrowly defined meaning: an actionable “mistake” is one that

caused an award to operate in a way the appraisers did not intend. Providence Washington Ins.,

141 S.W.2d at 1026-27 (trial court’s judgment setting aside an award by two appraisers and an

umpire reversed and rendered because there was no mistake—the award was the intended result);

see also Continental Ins. Co. of N.Y. v. Guerson, 93 S.W.2d 591, 594 (Tex. Civ. App.—San

Antonio 1936, writ dism’d) (“Any errors of judgment, honestly and fairly exercised, on the part of

the [appraisers] in making the award, are matters with which the courts cannot concern themselves;

but if the award returned does not embody their real judgment on the matters as submitted for their

determination and award, the courts, under proper pleading and proof, can and should grant

relief.”). The Fort Worth Court of Appeals has defined “mistake” 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, or
         where the error resulting in the award is so great as to be indicative of gross
         partiality, undue influence, or corruption.

Barnes, 844 S.W.2d at 268 (quoting district court’s jury instruction).




1
  In addition to the turtle vent, kitchen ceiling, and dining room ceiling, Garcia contends the appraisers did not include
labor minimums, which her adjuster and State Farm’s adjuster had included in their damage estimates.

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         In MLCSV10, the court considered whether the appraisal award was the result of fraud,

mistake, or accident. The insured’s appraiser (Haden) refused to sign the appraisal award, in part,

because he disagreed with the appraised amounts for repairing various items. 866 F. Supp. 2d at

697.    Haden testified he disputed the umpire’s incorporation of the insurance company’s

appraiser’s (Lochridge) estimates rather than Haden’s to arrive at the appraisal amounts for these

categories of damage. One reason for Haden’s disagreement was that he had submitted various

contractors’ reports to support his numbers and Lochridge had not. Id.

         On appeal, the court determined the insured provided no evidence that the appraisal award

did not reflect the umpire’s intent. Id. at 702. “To the contrary, the record is clear that, for certain

damages, [the umpire] decided to use Lochridge’s estimates over Haden’s. An umpire must often

choose between two competing values. [The umpire’s] decision to use Lochridge’s estimates

rather than Haden’s does not mean that the appraisal award resulted from accident or mistake.”

Id. The court also concluded there was no evidence anyone lied to the appraisers or to the umpire

during the appraisal process, or that the appraisal panel was confused as to what damage the

property sustained as a result of the hurricane and vandalism. Id.

         Here, Garcia’s summary judgment evidence includes the original damage estimates

provided by the parties’ adjusters, both of which included estimated costs to repair certain items,

albeit for different amounts. However, the appraisers did not include some of these items in their

appraisal award. Other than the prior damage estimates, Garcia provided no other summary

judgment evidence; for example, an affidavit from either appraiser. 2 Garcia also did not allege the

error resulting in the award is so great as to be indicative of gross partiality, undue influence, or



2
  In Scalise v. Allstate Texas Lloyds, No. 7:13-CV-178, 2014 WL 1401679, *3 (S.D. Tex. April 10, 2014), the court
determined it could not discern from the appraiser estimates and award whether either appraiser impermissibly refused
to inspect or consider the damages asserted by the insured.

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corruption. Thus, we conclude Garcia did not raise a fact issue on whether the appraisers “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.” Barnes, 844

S.W.2d at 268.

B. Effect of Garcia’s Rejection of the Appraisal Award

        On appeal, Garcia argues appellees failed to conclusively establish their estoppel defense,

in part, because they cannot show she accepted payment of the appraisal award because her

attorney sent a letter to State Farm formally rejecting its offer to pay $4,382.92 as the proper

appraisal award amount. Garcia’s letter stated, in pertinent part, as follows:

                 Plaintiff rejects such payment because appraisal only sets the amount of loss
        and leaves questions of liability to be decided by the court. Thus, unless Defendants
        admit their liability, Plaintiff has the right to have a jury decide the questions of
        liability in this case on the merits. Moreover, the appraisal award set the amount
        of loss at $7,835.70 on a replacement cost basis, and Plaintiff should have originally
        received that amount, minus the applicable deductible, without incurring the delay
        and expense of litigation and appraisal.

                 Therefore, we will continue to pursue discovery and judgment to recover
        the full amount of actual damages, additional treble damages, exemplary damages,
        attorneys’ fees, and costs to which Plaintiff is entitled on all her contractual and
        extra-contractual claims.

Garcia contends that, in viewing the evidence in the light most favorable to her as the non-movant,

this court may infer she did not voluntarily accept the tendered amount with full knowledge of all

material facts and as a full and final release.

        Appellees rely on several cases for their argument that their estoppel defense is not defeated

by Garcia’s rejection of the appraisal award on the ground that if an appraisal award has been

reached in accordance with the terms of the insurance policy and the insurer has timely tendered

the full amount awarded by the appraisers, that conduct is legally sufficient to entitle the insurer

to summary judgment on the breach-of-contract claim against it. See, e.g., United Neurology, P.A.


                                                  - 15 -
                                                                                         04-16-00209-CV


v. Hartford Lloyd’s Ins. Co., 101 F. Supp. 3d 584, 619-20 (S.D. Tex. 2015) (finding that United

Neurology and Hartford were in substantial compliance with the appraisal award clause in the

policy, that the award was binding and enforceable, and despite United Neurology’s refusal to

accept the payment tendered, it failed to show that Hartford breached the contract), aff’d, 624 Fed.

Appx. 225 (5th Cir. 2015); Brownlow v. United Serv. Auto. Ass’n, No. 13-03-758-CV, 2005 WL

608252, at *2 (Tex. App.—Corpus Christi Mar. 17, 2005, pet. denied) (insured claimed breach of

contract because USAA did not pay the full value of a plumbing re-route job; court held, “USAA

participated in the appraisal process and tendered the amount awarded by the umpire. Because

USAA complied with the requirements of the contract it cannot be found in breach.”); Caso v.

Allstate Texas Lloyds, Civ. A. No. 7:12-CV-478, 2014 WL 528192, at *5 (S.D. Tex. Feb. 7, 2014)

(insured returned tendered award; court held, “the award remains both binding and enforceable

until it is set aside, notwithstanding Plaintiffs’ rejection of Allstate’s tender, an apparently-baseless

rejection for which Plaintiffs have not offered an explanation.”); Devonshire Real Estate & Asset

Mgmt., LP v. American Ins. Co., 3:12-CV-2199-B, 2014 WL 4796967, *18 (N.D. Tex. Sept. 26,

2014) (“[S]o long as there is a binding and enforceable appraisal award and the insurer timely and

full[ly] pays the resulting award, estoppel should apply regardless of whether the insured actually

accepts payment.”).

        Garcia, on the other hand, relies on other cases for her argument that an insured is not

estopped from pursuing a breach of contract claim unless she accepts payment of the appraisal

award as a full and final release. See, e.g., Blum’s Furniture Co. v. Certain Underwriters at Lloyds

London, CIV.A. H-09-3479, 2011 WL 819491, at *3 (S.D. Tex. Mar. 2, 2011) (“A plaintiff,

however, is estopped from pursuing a breach of contract claim not by the issuance of the appraisal

award. Instead, the plaintiff is estopped only where, as here, the plaintiff accepts payment of the

appraisal amount from the insurer.”) (emphasis in original), aff’d, 459 Fed. Appx. 366 (5th Cir.
                                                  - 16 -
                                                                                                    04-16-00209-CV


2012); see also Church on the Rock N. v. Church Mut. Ins., Co., 3:10-CV-0975-L, 2013 WL

497879, at *9 (N.D. Tex. Feb. 11, 2013) (citing to Blum’s Furniture and concluding a genuine

dispute of material fact existed as to whether the insured accepted the insurance company’s post-

appraisal payments with understanding it would be bound by the award and barred from pursuing

claims against the insurance company for additional damages).

         But the cases on which Garcia relies are distinguishable on their facts. In Blum’s Furniture,

there was no dispute that the insured accepted the appraisal award payment from the insurance

company; therefore, its holding may be dicta. In Church on the Rock North, the court held the

insurer could not establish its entitlement to estoppel as a matter of law because, based on the

evidence presented in that case, (1) the insurer failed to establish the appraisal award was binding

and enforceable against the insured, (2) a genuine dispute of material fact existed on whether the

insurer’s payments of the appraisal award were timely, and (3) a genuine dispute of material fact

existed as to whether the insured accepted the insurer’s post-appraisal payments with the

understanding that it would be bound by the award and barred from pursuing claims against the

insurer for additional damages. 2013 WL 497879, at *9. Also, Church on the Rock North’s

requirement of acceptance for estoppel effectiveness was due, in part, to retention-of-rights

language in the appraisal clause. 3

         There is a strong public policy favoring enforcement of appraisal clauses and every

reasonable presumption is indulged to sustain an award. United Neurology, 101 F. Supp. 3d at



3
 The appraisal clause in Church on the Rock North contained the following provision: “If there is an appraisal: a. You
will still retain your right to bring a legal action against us, subject to the provisions of the Legal Action Against
Us Property Condition; and b. We will still retain our right to deny the claim.” 2013 WL 497879, at *7 (emphasis
added in original). Also, the court noted the two Acknowledgments signed by the insured upon receipt of the insurance
company’s post-appraisal payments undermined the company’s argument that the appraisal award and its post-
appraisal payments estopped the insured from seeking additional damages based on breach of contract and extra-
contractual theories. The acknowledgement stated, in part: “The receipt of payment on this claim by [insured] shall
not be construed as a full and final release of all claims against [insurance company] . . . .” Id. at *7-8.

                                                        - 17 -
                                                                                     04-16-00209-CV


595; see also Johnson, 290 S.W.3d at 895 (“But in every property damage claim, someone must

determine the ‘amount of loss,’ as that is what the insurer must pay. An appraisal clause ‘binds

the parties to have the extent or amount of the loss determined in a particular way.’ Like any other

contractual provision, appraisal clauses should be enforced.”). The purpose of an appraisal clause

is to provide a binding, extra-judicial remedy for any disagreement regarding the amount of the

loss. Amine v. Liberty Lloyds of Texas Ins. Co., No. 01-06-00396-CV, 2007 WL 2264477, at *3

(Tex. App.—Houston [1st Dist.] Aug. 9, 2007, no pet.).

         Here, the insurance policy clearly specified an appraisal process was the remedy for any

disagreement regarding the amount of loss, and that the decision reached by the appraisers and

umpire “will set the amount of the loss” and “shall be the amount of the loss.” Garcia chose to

take advantage of the insurance policy’s contractual, extra-judicial means of resolving the amount

of loss; State Farm and Garcia participated in the appraisal process; and State Farm fully paid the

amount of loss set by the appraisers. On this record, we conclude Garcia cannot defeat an

otherwise valid and binding appraisal award simply by rejecting State Farm’s payment of the

award.

                     FACT QUESTION ON BREACH OF CONTRACT CLAIM

         Garcia argues that, even if the appraisal award is binding and enforceable, summary

judgment in favor of appellees should still be reversed because there are genuine issues of material

fact on whether State Farm breached the insurance contract. Garcia attempts to create a fact issue

by arguing the summary judgment evidence shows State Farm failed to pay for all the hail-related

damage to her house, including roof shingles, exterior wood fascia, window screens, and amounts

for contractor overhead and profit. According to Garcia, State Farm denied coverage for these

items, which the appraisers later included in their appraisal award. Garcia asserts this amounts to



                                               - 18 -
                                                                                                    04-16-00209-CV


evidence that State Farm breached the insurance contract by wrongfully denying coverage. This

argument has been rejected by numerous courts.

         “Texas law clearly holds the discrepancy between the initial estimate and the appraisal

award cannot be used as evidence of breach of contract.” Gabriel v. Allstate Texas Lloyds, No.

7:13-CV-181, 2013 WL 7885700, at *3 (S.D. Tex. Nov. 1, 2013). In Breshears v. State Farm

Lloyds, 155 S.W.3d 340, 343 (Tex. App.—Corpus Christi-Edinburg 2004, pet. denied), the

insureds argued that because the appraisal award was greater than the initial payment made by

State Farm, State Farm was in breach of the contract as a matter of law. The court held:

         [Plaintiffs] overstate the effect of appraisal decisions: an appraisal decision is
         intended “to estop one party from contesting the issue of the value of damages in a
         suit on the insurance contract,” . . . not to facilitate this type of liability. [Plaintiffs]
         may not use the fact that the appraisal award was different than the amount
         originally paid as evidence of breach of contract, especially when the contract they
         claim is being breached provides for resolution of disputes through appraisal.

Id. (citation omitted).

         The reason for this defense is to prevent the insured from taking advantage of the binding

appraisal process to determine the value of its claim and then, after the insurer fully pays the

appraisal award, suing the insurer for its initial failure to pay. See id. The defense applies with

special force where, as here, “the contract [the insured] claim[s] is being breached provides for

resolution of disputes through appraisal.” Id.

         Here, the language of the appraisal clause, as in Breshears and Gabriel, describes

disagreement as to the amount of loss as a condition precedent to the appraisal process, 4 rendering

the asserted discrepancy an immaterial fact issue for a breach of contract claim. See also Anderson

v. Am. Risk Ins. Co., Inc., 01-15-00257-CV, 2016 WL 3438243, at *5 (Tex. App.—Houston [1st



4
  The appraisal clause in the policy begins: “If you and we fail to agree on the amount of loss, either one can demand
that the amount of the loss be set by appraisal.”

                                                        - 19 -
                                                                                                       04-16-00209-CV


Dist.] June 21, 2016, no pet.) (“The fact that State Farm did not pay the amount of the award

earlier, alone, does not raise a fact issue on Anderson’s claim for breach of contract.”); Graber v.

State Farm Lloyds, No. 3:13-CV-2671-B, 2015 WL 3755030, at *4 (N.D. Tex. June 15, 2015)

(concluding insured “estopped from relying on the appraisal award to demonstrate that [insurer]

breached the Policy when it initially issued payment to [insured] for an amount less than the

appraisal”); Scalise, 2013 WL 6835248, at *5 (“[W]here the parties disagree on the amount of loss

and submit to the contractual appraisal process to resolve that dispute, and the insurer pays all

covered damages determined by the award, the insured may not then argue that the initial failure

to pay those damages equates to a breach of contract.”).

         We hold Garcia failed to raise a fact issue on her breach of contract claim because she

cannot use the fact that the appraisal award was different from the original damage estimates as

evidence of a breach of contract. Also, Garcia has failed to point to any provision of the insurance

policy that was breached by State Farm’s purportedly unreasonable investigation or point to any

evidence other than the appraisal award to support her claim. See Graber, 2015 WL 3755030, at

*4 (holding same).

                               GARCIA’S PROMPT PAYMENT CLAIM

         Garcia asserted a claim under Texas Insurance Code Chapter 542, the Prompt Payment of

Claims Act. The Act provides that an insurer shall pay damages, with interest, and attorney’s fees

if an insurer delays payment of a claim for longer than sixty days. TEX. INS. CODE ANN.

§ 542.058(a) (West Supp. 2016). 5



5
  “Except as otherwise provided, if an insurer, after receiving all items, statements, and forms reasonably requested
and required under Section 542.055, delays payment of the claim for a period exceeding the period specified by other
applicable statutes or, if other statutes do not specify a period, for more than 60 days, the insurer shall pay damages
and other items as provided by Section 542.060.” TEX. INS. CODE § 542.058(a). “If an insurer that is liable for a
claim under an insurance policy is not in compliance with this subchapter, the insurer is liable to pay the holder of the
policy or the beneficiary making the claim under the policy, in addition to the amount of the claim, interest on the

                                                         - 20 -
                                                                                                        04-16-00209-CV


         In this case, Garcia reported her claim to State Farm on January 22, 2015. On January 24,

2015, Garcia’s adjuster sent a notice of representation to State Farm. By letter dated February 17,

2015, Garza wrote to Garcia’s adjuster requesting the adjuster’s estimates and photographs. Garcia

contends State Farm received the requested items on February 18, 2015. State Farm inspected the

house on either February 26 or 28, 2015. 6 On March 2, 2015, State Farm sent a denial letter to

Garcia. 7 Garcia filed suit on April 8, 2015, and State Farm invoked the appraisal clause on July

21, 2015. State Farm received the itemized appraisal award on September 23, 2015, and paid the

award to Garcia on September 28, 2015.

         On appeal, Garcia argues that, notwithstanding a valid appraisal award, case law does not

support a conclusion that the award precludes statutory interest damages for violations of the Act

that occurred before the appraisal was invoked. Garcia asserts that, at best, an appraisal only tolls

the accrual of statutory interest damages from the date of the alleged wrongful denial (March 2,

2015) to the date appraisal was invoked (July 21, 2015). State Farm argues it is entitled to

judgment as a matter of law on Garcia’s prompt payment claim because it is undisputed that it

timely paid the appraisal award.

         Garcia relies on the opinion in Graber, in which the insured alleged State Farm violated

the Act by delaying full payment of his claim until twenty-eight months after he submitted the

claim. State Farm did not dispute that it did not pay the insured’s claim in full until twenty-eight

months after the claim was submitted, but argued its full and timely payment of the appraisal award



amount of the claim at the rate of 18 percent a year as damages, together with reasonable attorney’s fees. . . . If a suit
is filed, the attorney’s fees shall be taxed as part of the costs in the case.” Id. § 542.060 (West 2009).
6
  State Farm’s claim activity file notes indicate the inspection occurred on February 28, but the copy of the estimate
sent to Garcia indicates the inspection occurred February 26.
7
 In its letter to Garcia, State Farm agreed there was covered damage caused by the hail, but in an amount less than
her deductible.

                                                          - 21 -
                                                                                         04-16-00209-CV


precluded an award of penalties under the Act as a matter of law. 2015 WL 3755030, at *9. The

court concluded State Farm’s full and timely payment of the appraisal award did not preclude the

insured’s claim for statutory interest under the Act. Id. at *10. The court reached this conclusion

after determining State Farm’s defense was without basis in the text of the Act or the Texas

Supreme Court and Fifth Circuit decisions construing the Act. Graber relied on Higginbotham v.

State Farm Mutual Automobile Insurance Co., 103 F.3d 456, 461 (5th Cir. 1997), which held that

an insurer’s wrongful rejection of a claim may be considered a delay in payment for purposes of

the Act’s sixty-day rule and statutory damages, even if the insurer’s denial was made in good faith.

The Texas Supreme Court case on which Graber relied, Republic Underwriters Ins. Co. v. Mex-

Tex, Inc., 150 S.W.3d 423, 427-28 (Tex. 2004), held insurers who partially pay claims are liable

for penalty interest on the unpaid portions of those claims until they are fully paid.

       But, neither Higginbotham nor Mex-Tex were appraisal cases. And, in Higginbotham, the

insurer was found liable on the breach of contract claim. After noting “there may be no liability

for statutory damages if it is subsequently determined, by litigation, that the claim in question is

invalid and not payable” the court held that “State Farm took a risk when it chose to reject

Higginbotham’s claim. State Farm lost when it was found liable for breach of contract. Therefore,

it must pay this 18 percent per annum interest and reasonable attorneys’ fees.” Higginbotham, 103

F.3d at 461.

       Contrary to the authorities on which Garcia’s relies, a long line of cases has held that full

and timely payment of an appraisal award under the policy precludes an insured from recovering

penalties under the Act as a matter of law. In re Slavonic Mut. Fire Ins. Ass’n, 308 S.W.3d 556,

563-64 (Tex. App.—Houston [14th Dist.] 2010, orig. proceeding) (citing Texas cases) (noting

Insurance Code does not expressly provide deadline for completion of appraisal process and that

“Texas courts considering the issue have concluded that full and timely payment of an appraisal
                                                - 22 -
                                                                                      04-16-00209-CV


award under the policy precludes an award of penalties under the Insurance Code’s prompt

payment provisions as a matter of law.”); see also Waterhill Cos. Ltd. v. Great Am. Assur. Co.,

No. Civ. A. H-05-4080, 2006 WL 696577, at *3 (S.D. Tex. Mar.16, 2006); Breshears, 155 S.W.3d

345; Anderson, 2016 WL 3438243, at *5; Bernstien v. Safeco Ins. Co. of Illinois, 05-13-01533-

CV, 2015 WL 3958282, at *1 (Tex. App.—Dallas June 30, 2015, no pet.); Amine, 2007 WL

2264477, at *4-5. In Scalise, the court

       recognize[d] that where an insurer breaches its contract with the insured by
       underpaying a covered claim, it can be held liable for penalties calculated on the
       difference between the amount initially tendered and the amount owed, from the
       time it should have been paid until judgment. Republic Underwriters Ins. Co. v.
       Mex–Tex, 150 S.W.3d 423, 427-28 (Tex. 2004). However, Mex-Tex was not an
       appraisal case, and more relevant authority directs that an insurer commits no
       prompt payment violation when it submits to the delay inherent in the contractual
       appraisal process (in this case, invoked by the insured) before paying all covered
       damages determined by that process.

2013 WL 6835248, at *6.

       We hold that because it is undisputed State Farm paid the appraisal award, Garcia cannot

sustain her late payment claim.

                        OTHER EXTRA-CONTRACTUAL CLAIMS

       Garcia also asserted claims for violations of the DTPA, unfair insurance practices, and

common law breach of duty of good faith and fair dealing. Garcia asserted appellees violated the

DTPA by (1) their unreasonable delays in the investigation, adjustment, and resolution of her

claim; failing to give her “the benefit of the doubt” and failing to pay for the proper repair to her

house; (2) misrepresenting the insurance policy and its benefits; (3) breaching an express warranty

that the damage caused by the hail storm would be covered; and (4) taking advantage of her lack

of knowledge, ability, and experience. As unfair insurance practices, Garcia alleged the same

actions, as well as a laundry-list of other violations. Under her breach of duty of good faith and

fair dealing, Garcia again alleged the same actions, as well as that State Farm unreasonably delayed
                                                - 23 -
                                                                                    04-16-00209-CV


payment or settlement of her entire claim. In their motion for summary judgment, appellees argued

they were entitled to summary judgment as a matter of law on Garcia’s extra-contractual claims

because (1) State Farm promptly investigated Garcia’s claim after she reported it, participated in

the appraisal process, and timely tendered payment of the appraisal award; and (2) Garcia did not

allege any facts giving rise to an independent injury claim.

       In her final issue on appeal, Garcia asserts a fact issue remains on her extra-contractual

claims because appellees failed to show that State Farm’s payment of the appraisal award

precluded liability on these claims. Garcia argues that even without an independent injury or even

if the insurer complied with the policy, an insurer is liable to pay the full amount owed for a

covered loss as damages on an extra-contractual claim.

       1. Common law bad faith claim

       Under Texas law, “[a]n insurer has a duty to deal fairly and in good faith with its insured

in the processing and payment of claims.” Republic Ins. Co. v. Stoker, 903 S.W.2d 338, 340 (Tex.

1995). An insurer breaches this duty of good faith and fair dealing “if the insurer knew or should

have known that it was reasonably clear that the claim was covered,” but denies or unreasonably

delays payment of the claim. Universe Life Ins. Co. v. Giles, 950 S.W.2d 48, 55-56 (Tex.1997).

       However, insurance coverage claims and bad faith claims are by their nature independent.

Liberty Nat’l Fire Ins. Co. v. Akin, 927 S.W.2d 627, 629 (Tex. 1996). In most circumstances, an

insured may not prevail on a bad faith claim without first showing that the insurer breached the

contract. Id.; Stoker, 903 S.W.2d at 341; Toonen, 935 S.W.2d at 941-42; Lundstrom, 192 S.W.3d

at 96 (holding there can be no claim for bad faith when insurer denies claim that is not covered

and has not otherwise breached contract). The threshold of bad faith is reached when a breach of

contract is accompanied by an independent tort. Transp. Ins. Co. v. Moriel, 879 S.W.2d 10, 17

(Tex. 1994), superseded by statute on other grounds, Act of June 2, 2003, 78th Leg., R.S., ch. 204,
                                               - 24 -
                                                                                       04-16-00209-CV


§ 13.02, 2003 Tex. Gen. Laws 847, 887). Evidence that merely shows a bona fide dispute about

the insurer’s liability on the contract does not rise to the level of bad faith. Id.; State Farm Fire &

Cas. Co. v. Simmons, 963 S.W.2d 42, 44 (Tex. 1998); Laird v. CMI Lloyds, 261 S.W.3d 322, 328

(Tex. App.—Texarkana 2008, pet. dism’d w.o.j.). Nor is bad faith established if the evidence

shows the insurer was merely incorrect about the factual basis for its denial of the claim, or about

the proper construction of the policy. Moriel, 879 S.W.2d at 18. A simple disagreement among

experts about whether the cause of the loss is one covered by the policy will not support a judgment

for bad faith. Id. An insured claiming bad faith must prove that the insurer had no reasonable

basis for denying or delaying payment of the claim, and that it knew or should have known that

fact. Id.

        Here, State Farm agreed there was covered damage caused by hail, but in an amount that

was less than Garcia’s deductible. Therefore, State Farm did not pay her. State Farm also stated

its adjuster observed additional damage not caused by wind and hail and denied “coverage for

damage to shingles and other exterior roofing components, except those damages identified in [its]

estimate . . . .” About one month after receiving this notice from State Farm, Garcia filed suit.

State Farm then invoked the appraisal clause in the insurance policy. State Farm argues its

payment of all covered damages pursuant to the appraisal award extinguished any breach of

contract claim arising from the dispute; therefore, it is entitled to summary judgment on Garcia’s

extra-contractual claims in the absence of an independent injury. But, payment of an appraisal

award does not necessarily bar Garcia’s extra-contractual claims for pre-appraisal conduct. The

Texas Supreme Court has “left open the possibility that an insurer’s denial of a claim it was not

obliged to pay might nevertheless be in bad faith if its conduct was extreme and produced damages

unrelated to and independent of the policy claim.” Progressive Cty Mut. Ins. Co. v. Boyd, 177

S.W.3d 919, 922 (Tex. 2005) (per curiam); see also Stoker, 903 S.W.2d at 341 (“We do not
                                                 - 25 -
                                                                                       04-16-00209-CV


exclude, however, the possibility that in denying the claim, the insurer may commit some act, so

extreme, that would cause injury independent of the policy claim.”). Thus, in order to avoid

summary judgment on her common law bad faith claim, Garcia had the burden to raise a genuine

issue of material fact that appellees “commit[ed] some act, so extreme, that would cause injury

independent of the policy claim” or failed to timely investigate her claim. See Stoker, 903 S.W.2d

at 341.

          In her response to appellees’ motion for summary judgment and on appeal, Garcia does not

point to an independent tort. Instead, she relies on two cases for her argument that an independent

injury is not required in her case. The first case on which Garcia relies is United National

Insurance Co. v. AMJ Investments, LLC, in which the court held that an insurer’s “unfair refusal

to pay the insured’s claim causes damages as a matter of law in at least the amount of the policy

benefits wrongfully withheld.” 447 S.W.3d 1, 11 (Tex. App.—Houston [14th Dist.] 2014, pet.

dism’d) (quoting Vail v. Tex. Farm Bur. Mut. Ins. Co., 754 S.W.2d 129, 136 (Tex. 1988)). “If a

property insurer fails to pay the full amount of the claim as a result of an unfair claim-settlement

practice under the Insurance Code, the insured may elect to recover its damages under either a

breach-of-contract or a statutory-violation theory.” Id.

          The second case on which Garcia relies is USAA Texas Lloyd’s Co. v. Menchaca in which

USAA argued that because the jury found no breach of contract, the insured’s extra-contractual

claims failed as a matter of law. The court noted the general rule that, in most circumstances, an

insured may not prevail on a bad faith claim without first showing that the insurer breached the

contract. 13-13-00046-CV, 2014 WL 3804602, at *8 (Tex. App.—Corpus Christi-Edinburg July

31, 2014, pet. granted). But the court then noted

          USAA has not directed us to any cases, nor can we find any, involving a situation
          such as this one where (1) the insurer complied with the policy, but (2) nonetheless
          violated the insurance code, and (3) the insurer would have been contractually
                                                 - 26 -
                                                                                       04-16-00209-CV


        obligated to pay policy benefits had the insurer complied with the insurance code.
        Under the unique circumstances presented in this case, USAA did not breach the
        policy but policy benefits are indeed the correct measure of damages caused by
        USAA’s violation of the insurance code.

Id. at *9.

        AMJ Investments can be distinguished in that it did not involve an appraisal and the insured

pled and proved the insurer breached the insurance contract. Menchaca can be distinguished in

that it is not an appraisal case. Therefore, we do not find the holdings in these cases helpful.

        Although Garcia referred to her bad faith claims in her response to appellees’ motion for

summary judgment, she produced no summary judgment evidence related to bad faith claims,

much less any evidence of “extreme” behavior. Garcia only alleged that coverage and liability on

her breach of contract claim remained issues of material fact for the jury to decide; and material

issues of fact remained on whether the appraisal award should be set aside.

        We conclude Garcia did not present evidence of an act so extreme that it caused injury

independent of the policy claim. See Scalise, 2013 WL 6835248, at *7 (finding no independent

injury where insured “made only those fairly routine allegations of a substandard (albeit timely)

investigation and initial undervaluation of his covered claim, the entirety of which was timely paid

upon issuance of the appraisal award”); see also Mid-Continent Cas. Ins. Co. v. Eland Energy,

Inc., 709 F.3d 515, 521-22 (5th Cir. 2013) (noting that “in seventeen years since [Stoker] appeared,

no Texas court has yet held that recovery is available for an insurer’s extreme act . . . .”). Rather,

the summary judgment evidence demonstrates only a bona fide dispute about the amount necessary

to compensate Garcia for covered damage to her home. See Simmons, 963 S.W.2d at 44

(“Evidence establishing only a bona fide coverage dispute does not demonstrate bad faith.”). This

bona fide dispute was submitted to the appraisal process for resolution.




                                                - 27 -
                                                                                    04-16-00209-CV


       2. Statutory bad faith claims under the Insurance Code and the DTPA

       Under Texas law, an individual damaged by “unfair method[s] of competition or unfair or

deceptive act[s] or practice[s] in the business of insurance” may bring a cause of action under the

Texas Insurance Code. TEX. INS. CODE ANN. § 541.151(1) (West 2009). A violation of Chapter

541 of the Texas Insurance Code is also a violation of the DTPA. TEX. BUS. & COM. CODE ANN.

§ 17.50(a)(4) (West 2011) (“A consumer may maintain an action where [the use or employment

by any person of an act or practice in violation of Chapter 541, Insurance Code] constitute[s] a

producing cause of economic damages or damages for mental anguish.”). An insurer’s liability

under the Insurance Code and the DTPA incorporate the common-law bad faith standard

developed as part of the elements of a claim for breach of the duty of good faith and fair dealing.

See Boyd, 177 S.W.3d at 922; Texas 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.

Am. First Lloyd’s Ins. Co., 287 S.W.3d 461, 468 (Tex. App.—Austin 2009, pet. denied) (“Absent

legally sufficient evidence of bad faith, however, Spicewood’s claims under the common law,

insurance code chapter 541, and the DTPA are subject to summary judgment.”). “When 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 statutory claim.” Anderson, 2016 WL 3438243, at *7 (quoting O’Quinn v. Gen.

Star Indem. Co., No. 1:13-CV-471, 2014 WL 3974315, at *8 (E.D. Tex. Aug. 5, 2014)).

       Because Garcia’s unfair insurance practice claims and her DTPA section 17.50(a)(4) claim

arise from the same underlying theory as her common law bad faith claim, we hold 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,

Garcia’s statutory bad faith claims are foreclosed.
                                               - 28 -
                                                                                04-16-00209-CV


                                       CONCLUSION

       For the reasons stated above, we overrule Garcia’s issues on appeal and affirm the trial

court’s judgment.

                                                Sandee Bryan Marion, Chief Justice




                                             - 29 -
