Weiser-Brown Operating Co. v. St. Paul Surplus Lines Insurance
2015 U.S. App. LEXIS 16490
| 5th Cir. | 2015Background
- Weiser-Brown and St. Paul dispute over costs for preventing/controlling oil well Viking No. 1; jury found St. Paul breached the insurance contract and awarded $2,290,457.03 to Weiser-Brown.
- The district court awarded 18% annual interest under the Texas Prompt-Payment of Claims Statute, § 542.060, calculating from the statutory violation date of November 21, 2009 (under § 542.056(a)).
- Weiser-Brown asserted bad-faith claims under Texas Insurance Code § 541; St. Paul moved for and the district court granted judgment as a matter of law on those claims.
- The prompt-payment issue was tried to the court; the district court found St. Paul violated § 542.056(a) by failing to accept/reject within 15 days after receiving all items required to secure final proof of loss.
- The final judgment ordered $1,232,328.14 in interest under the Prompt-Payment Statute; St. Paul appealed and Weiser-Brown cross-appealed on the bad-faith ruling.
- The court analyzes statutory deadlines, the meaning of ‘final proof of loss,’ and whether information requested by the insurer was enough to trigger the 15-day deadline.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 542.056 was violated by missing information timing | Weiser-Brown | St. Paul | Yes; the 15-day deadline began when substantial information was received, triggering § 542.056(a). |
| What is the accrual date for the 18% interest if § 542.056 is violated | Weiser-Brown | St. Paul | Accrual date fixed at the violation date (Nov. 21, 2009); district court’s calculation affirmed. |
| Whether the district court properly granted JMOL on bad-faith claim under § 541 | Weiser-Brown | St. Paul | Yes; the evidence showed a bona fide coverage dispute, not a lack of reasonable basis to deny. |
Key Cases Cited
- GuideOne Lloyds Ins. Co. v. First Baptist Church of Bedford, 268 S.W.3d 822 (Tex. App.—Fort Worth 2008) (final proof of loss focuses on evidence that loss occurred, not extent of loss)
- Lamar Homes, Inc. v. Mid-Continent Cas. Co., 242 S.W.3d 1 (Tex. 2007) (Prompt-Payment Statute applicable to defense claims; outlines accrual concepts)
- Cox Operating, L.L.C. v. St. Paul Surplus Lines Ins. Co., 795 F.3d 496 (5th Cir. 2015) (addresses accrual of statutory interest under prompt-payment after violation)
- Colonial Cnty. Mut. Ins. Co. v. Valdez, 30 S.W.3d 516 (Tex. App.—Corpus Christi 2000) (illustrates what documents may be irrelevant to proving loss for § 542.056)
- Lee v. Caitlin Specialty Ins. Co., 766 F. Supp. 2d 812 (S.D. Tex. 2011) (evidence timing and sufficiency of information under § 542.056 in a roof-damage context)