619 S.W.3d 651
Tex.2021Background
- Petitioner Louis Hinojos received a partial, timely insurance payment from State Farm for a first-party property claim; State Farm later agreed to pay a higher amount following appraisal or further adjustment.
- The central statutory framework is the Texas Prompt Payment of Claims Act (TPPCA), Tex. Ins. Code ch. 542, which imposes penalties when an insurer "delays payment of a claim."
- The legal dispute asks whether a timely partial payment that is later supplemented constitutes a "delay[] payment of the claim" under §542.058(a), exposing the insurer to TPPCA penalties.
- The Texas Supreme Court majority held the insurer could be liable even after an initial timely partial payment; Justice Blacklock filed a dissent rejecting that interpretation.
- Justice Blacklock argues prior decisions the majority relies on (Barbara Tech, Ortiz, Alvarez, and Mex-Tex) do not squarely resolve whether a timely partial payment itself avoids prompt-pay liability when a later supplemental payment is made.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a timely partial payment followed later by a higher payment constitutes a "delay[] payment of the claim" under §542.058(a) | Hinojos: later supplemental payment shows insurer delayed payment and triggers TPPCA penalties | State Farm: the initial timely payment satisfied statutory deadlines; later supplementation does not retroactively create a "delay" | Majority: insurer can be liable under TPPCA despite an initial timely partial payment; Dissent (Blacklock): a timely payment of part of a claim is not a "delay" and should discharge prompt-pay duty |
Key Cases Cited
- Barbara Technologies Corp. v. State Farm Lloyds, 589 S.W.3d 806 (Tex. 2019) (held payment of an appraisal award does not as a matter of law bar TPPCA claims)
- Ortiz v. State Farm Lloyds, 589 S.W.3d 127 (Tex. 2019) (summarized Barbara Tech and affirmed that appraisal-initiated payments do not automatically defeat TPPCA claims)
- Alvarez v. State Farm Lloyds, 601 S.W.3d 781 (Tex. 2020) (per curiam) (involved partial payment within TPPCA deadline; appraisal/payment of award did not resolve TPPCA liability)
- Republic Underwriters Ins. Co. v. Mex-Tex, Inc., 150 S.W.3d 423 (Tex. 2004) (interpreted "claim" in predecessor statute and limited TPPCA damages to the amount owed when the prompt-pay clock ran)
- Breshears v. State Farm Lloyds, 155 S.W.3d 340 (Tex. App.—Corpus Christi–Edinburg 2004, pet. denied) (held initial timely payment satisfied prompt-pay statute despite later appraisal-based supplementation)
- Canadian Helicopters Ltd. v. Wittig, 876 S.W.2d 304 (Tex. 1994) (principle that courts are not bound by unstated or implied holdings on issues not squarely addressed)