State Farm Mutual Automobile Association v. Veatrice Cook, 591 S.W.3d 677

Cook was injured by an uninsured driver and claimed $100,000 under her State Farm uninsured motorist (UM) policy; State Farm offered $15,255.
Cook sued the driver and State Farm; extra-contractual claims against State Farm were severed and abated pending a judgment establishing UM entitlement.
At trial State Farm stipulated the driver’s negligence and uninsured status; the jury awarded damages exceeding the policy limit and the court entered a $100,000 judgment against State Farm on April 12, 2018.
State Farm paid the judgment in full on April 25, 2018 (nine business days later).
State Farm moved for summary judgment on Cook’s bad-faith and prompt-payment claims; the trial court denied the motion and allowed a permissive appeal on two controlling legal questions.
The court of appeals affirmed that a pre-judgment bad-faith claim can proceed, but reversed as to the prompt-payment claim (holding payment after judgment was timely).

Issue	Plaintiff's Argument	Defendant's Argument	Held
Can an insured sustain a common-law or statutory bad-faith claim for withholding UM benefits until a judgment establishes the other driver’s liability?	Cook: Yes — insurer can be liable pre-judgment if liability is reasonably clear and investigation was unreasonable (relying on Hamburger and related federal decisions).	State Farm: No — Brainard means contractual duty (and thus reasonably clear liability) cannot arise until a judgment, so no bad-faith claim pre-judgment.	Held: Yes — insurer can be liable for bad faith pre-judgment if liability was reasonably clear or investigation was unreasonable; denial of summary judgment as to bad-faith claims affirmed.
Can an insured sustain a prompt-payment claim when insurer timely pays UM benefits after a judgment establishing liability?	Cook: (did not separately brief this issue)	State Farm: No — insurer’s liability arises on entry of judgment; prompt payment statute not violated where insurer pays promptly after judgment (here, nine business days).	Held: No — payment nine business days after judgment was timely; summary judgment for State Farm granted on prompt-payment claim.

Brainard v. Trinity Universal Ins. Co., 216 S.W.3d 809 (Tex. 2006) (UM insurer has no contractual duty to pay until judgment establishes liability/underinsured status)
Hamburger v. State Farm Mut. Auto. Ins. Co., 361 F.3d 875 (5th Cir. 2004) (insurer may be liable for bad faith pre-judgment when liability is reasonably clear)
Universe Life Ins. Co. v. Giles, 950 S.W.2d 48 (Tex. 1997) (bad-faith standard: insurer must attempt prompt, fair, equitable settlement when liability is reasonably clear)
Mid–Century Ins. Co. of Tex. v. Boyte, 80 S.W.3d 546 (Tex. 2002) (post-judgment bad-faith claims are barred because relationship becomes debtor-creditor)
Wellisch v. United Servs. Auto. Ass’n, 75 S.W.3d 53 (Tex. App.—San Antonio 2002, pet. denied) (insurer’s liability for UM/UIM arises on entry of judgment; prompt payment rules apply post-judgment)