Candelaria Garcia v. State Farm Lloyds and Sylvia Garza
2016 Tex. App. LEXIS 13194
| Tex. App. | 2016Background
- Garcia submitted a hail/wind claim under her State Farm homeowner policy; State Farm’s adjuster estimated loss below deductible and denied payment; Garcia sued for breach of contract and extra-contractual claims.
- Parties agreed to contract appraisal; each selected an appraiser; the two appraisers agreed on an appraisal award setting actual cash value and replacement cost; State Farm paid the award (net depreciation and deductible).
- After payment, appellees moved for summary judgment arguing appraisal payment estopped Garcia from pursuing contract and related extra‑contractual claims; Garcia amended to ask the appraisal award be set aside and rejected State Farm’s tender.
- Trial court granted summary judgment for appellees on all claims; Garcia appealed contesting (1) summary judgment on her motion to set aside the award when that claim was not in the original motion, (2) whether the appraisal award was binding or should be set aside, (3) whether payment of the award precludes prompt‑payment penalties, and (4) whether extra‑contractual claims survive.
- The court treated appellees’ estoppel defense as the central ground, reviewed whether Garcia raised fact issues to set aside the award (authority, fraud/ mistake, compliance), and whether payment of the award extinguished contract and statutory claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether trial court could grant SJ on a claim (set aside award) not in original MSJ | Garcia: SJ was improper because appellees didn’t address her amended claim in their motion and their reply cannot supply new grounds | State Farm: original motion broadly attacked validity/effect of appraisal; issue of setting aside was encompassed and Garcia raised the argument in her response | Court: No reversible error; appellees’ motion and evidence encompassed the set‑aside issue and Garcia had opportunity to respond, so SJ proper |
| Whether appraisal award exceeded appraisers’ authority (set aside for lack of authority) | Garcia: appraisers omitted items previously found covered by adjusters, so they exceeded authority by excluding covered items | State Farm: appraisers determine amount of loss, may consider causation and pre‑existing damage; differences from pre‑appraisal estimates do not show excess of authority | Court: No fact issue; omissions without evidence of exceeding authority insufficient to set aside award |
| Whether award resulted from fraud, accident, or mistake (set aside) | Garcia: omissions could indicate fraud/mistake | State Farm: no evidence of fraud; choice among values is not mistake; award reflects appraisers’ intent | Court: Garcia presented only prior estimates; no affidavit or evidence showing award did not reflect appraisers’ intent; no fact issue on fraud/mistake |
| Whether payment of appraisal award estops plaintiff from breach and extra‑contractual claims, incl. Prompt Payment Act penalties | Garcia: she rejected payment; estoppel requires acceptance as full release; penalties for pre‑appraisal delay may still be recoverable | State Farm: payment of award in accordance with policy precludes breach and statutory penalties; acceptance not required for estoppel where award valid and paid | Court: Payment of the valid appraisal award precluded Garcia’s breach and statutory prompt‑payment claims and foreclosed extra‑contractual claims absent independent injury; rejection letter did not defeat estoppel |
Key Cases Cited
- Lehmann v. Har‑Con Corp., 39 S.W.3d 191 (Tex. 2001) (trial court may grant SJ only on grounds raised in movant’s motion)
- Diversicare Gen. Partner, Inc. v. Rubio, 185 S.W.3d 842 (Tex. 2005) (defendant carrying burden on affirmative defense must conclusively establish it)
- Frost Nat’l Bank v. Fernandez, 315 S.W.3d 494 (Tex. 2010) (de novo review of summary judgment)
- Providence Lloyds Ins. Co. v. Crystal City Indep. Sch. Dist., 877 S.W.2d 872 (Tex. App.—San Antonio 1994) (appraisal awards binding and enforceable; umpire may exercise independent judgment)
- State Farm v. Johnson, 290 S.W.3d 886 (Tex. 2009) (distinguishing when causation is a liability issue for courts versus a damages issue for appraisers)
- Barnes v. Western Alliance Ins. Co., 844 S.W.2d 264 (Tex. App.—Fort Worth 1992) (party seeking to avoid appraisal award bears burden to show grounds for setting it aside)
- Republic Underwriters Ins. Co. v. Mex‑Tex, Inc., 150 S.W.3d 423 (Tex. 2004) (insurer liable for penalties on unpaid portions when breach established; distinguishes appraisal contexts)
- Higginbotham v. State Farm Mut. Auto. Ins. Co., 103 F.3d 456 (5th Cir. 1997) (insurer’s wrongful denial may trigger Prompt Payment Act damages when insurer is later found liable)