Barbara Techs. Corp. v. State Farm Lloyds, 566 S.W.3d 294

Barbara Technologies held a commercial-property policy with State Farm; property suffered hail/wind damage on March 31, 2013. Claim reported Oct. 17, 2013; initial inspection Oct. 31, 2013. State Farm estimated covered damage at $3,153.57 but did not pay because the deductible was $5,000.00.
Barbara requested re-inspection in Feb. 2014; State Farm re-inspected in March 2014 and declined to change its position.
Barbara sued on July 14, 2014, asserting, among other things, a claim under the Texas Prompt Payment of Claims Act (TPPCA), Tex. Ins. Code ch. 542, which permits statutory interest and attorney’s fees if an insurer delays payment more than 60 days.
On Jan. 9, 2015, State Farm invoked the policy’s appraisal provision. An appraisal award issued Aug. 18, 2015, setting loss at $195,345.63. State Farm paid the award (less depreciation and deductible) on Aug. 25, 2015; Barbara accepted payment and narrowed the suit to only the TPPCA claim.
Barbara moved for summary judgment seeking TPPCA penalties; State Farm cross-moved, arguing timely payment of the appraisal award precluded TPPCA liability. The trial court granted State Farm’s motion and denied Barbara’s. Barbara appealed.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether insurer’s invocation of appraisal and payment of an appraisal award bars a TPPCA claim	Barbara: insurer is strictly liable for TPPCA penalties because it did not pay within 60 days after notice of loss	State Farm: timely payment of the binding appraisal award satisfies the insurer’s obligations and precludes TPPCA penalties	Court: Payment of the appraisal award bars recovery under chapter 542; summary judgment for State Farm affirmed

Valence Operating Co. v. Dorsett, 164 S.W.3d 656 (Tex. 2005) (standard and review principles for summary judgment)
Garcia v. State Farm Lloyds, 514 S.W.3d 257 (Tex. App.—San Antonio 2016) (holding timely payment of an appraisal award precludes TPPCA penalties)