Randel v. Travelers Lloyds of TX Ins, 9 F.4th 264

A July 4 fire damaged Randy and Debra Randel’s home; they timely notified Travelers Lloyds and submitted claims for dwelling, personal property, and loss-of-use.
Travelers made several preappraisal payments (including a $126,720.86 dwelling payment, $53,270.49 personal property estimate, and loss-of-use payments totaling $24,446.33 initially) and inspected the property; the Randels disputed the insurer’s damage valuation.
The parties submitted dwelling and personal-property valuations to appraisal; the appraisal panel awarded substantially higher amounts ($317,030.70 dwelling ACV; $100,331.02 personal property ACV). Travelers paid the appraisal award and, after offsets, paid a total of $533,529.88 to the Randels.
The Randels had already sued in state court claiming breach of contract, bad faith, and violation of the Texas Prompt Payment of Claims Act; Travelers removed to federal court and moved for summary judgment.
The district court granted summary judgment to Travelers on all claims, ruling that payment/acceptance of the appraisal award barred the breach claim and that preappraisal payments defeated the prompt-payment claim; the Randels appealed.
On appeal the Fifth Circuit affirmed dismissal of the contract and loss-of-use claims but reversed and remanded the prompt-payment claim for dwelling and personal property under Texas law clarified by Hinojos v. State Farm Lloyds.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether payment and acceptance of an appraisal award bars a breach-of-contract claim for the covered loss	Randels: Travelers’ early denial/coverage position and litigation conduct mean the breach claim survives despite appraisal payment	Travelers: Payment and acceptance of the binding appraisal award resolves the damages element and bars the breach claim	Payment and acceptance of the appraisal award bars the breach claim for the dwelling (affirmed)
Whether timely preappraisal payments defeat liability under the Texas Prompt Payment of Claims Act for late payment of the full amount	Randels: Preappraisal payments did not "roughly correspond" to final award, so Payments were untimely under Hinojos and statutory interest/fees are recoverable	Travelers: Preappraisal payments were reasonable and timely (Mainali standard) and thus avoid statutory liability	Under Texas Supreme Court precedent in Hinojos, a preappraisal payment must "roughly correspond" to final amount; here the shortfall (~$185k) was substantial—remanded for prompt-payment claim (reversed in part)
Whether Travelers timely paid full loss-of-use benefits	Randels: (implicitly) loss-of-use payment was inadequate or untimely	Travelers: Made four payments and paid the full loss-of-use entitlement in a timely manner	Court affirmed that loss-of-use payments were timely and paid in full (no prompt-payment liability)

Hinojos v. State Farm Lloyds, 619 S.W.3d 651 (Tex. 2021) (preappraisal payment must "roughly correspond" to amount ultimately owed under Prompt Payment Act)
Barbara Techs. Corp. v. State Farm Lloyds, 589 S.W.3d 806 (Tex. 2019) (payment of appraisal award does not always end coverage litigation; insurer may still contest liability)
Ortiz v. State Farm Lloyds, 589 S.W.3d 127 (Tex. 2019) (insurer’s payment of appraisal award bars insured’s breach-of-contract claim for the covered loss)
Mainali Corp. v. Covington Specialty Ins. Co., 872 F.3d 255 (5th Cir. 2017) (earlier Fifth Circuit Erie guess applying a reasonableness standard to preappraisal payments)
In re Universal Underwriters of Tex. Ins. Co., 345 S.W.3d 404 (Tex. 2011) (analysis of insurer litigation conduct and waiver of appraisal)
Franco v. Slavonic Mut. Fire Ins. Ass'n, 154 S.W.3d 777 (Tex. App.—Houston [14th Dist.] 2004) (insured estopped from keeping breach claim after accepting appraisal payment)
Pathfinder Oil & Gas, Inc. v. Great W. Drilling, Ltd., 574 S.W.3d 882 (Tex. 2019) (damages are an element of a breach-of-contract claim)