We withdraw our prior opinion, Lyda Swinerton Builders, Inc. v. Oklahoma Surety Co. ,
This case involves several issues of Texas law relating to an insurer's duty to defend and the damages that an insured may recover when an insurer breaches that duty. The district court, after disposing of much of the case through a series of partial summary judgment rulings and conducting a bench trial on one remaining claim, issued a final judgment that largely (though not entirely) favored the insured. The insurer and the insured now cross-appeal from that judgment. We AFFIRM in part and REVERSE in part.
I. BACKGROUND
A. The Project and the Subcontract
Lyda Swinerton Builders, Inc. ("LSB") is a Texas-based general contractor. In November 2003, LSB was hired to build a ten-story office building in College Station, Texas. LSB, in turn, hired numerous subcontractors, among them A.D. Willis Company, Inc. ("Willis"). The subcontract agreement between LSB and Willis, which dates to April 2005, defined the scope of Willis' work as "ROOFING, ORNAMENTAL METAL, METAL WALL PANELS, and ROUGH CARPENTRY." The subcontract required Willis to maintain a general liability insurance policy designating LSB as an additional insured with respect to liabilities arising out of Willis' work under the subcontract. The subcontract also contained an indemnification provision, which read:
TO THE FULLEST EXTENT PERMITTED BY LAW, SUBCONTRACTOR AGREES TO DEFEND, HOLD HARMLESS AND UNCONDITIONALLY INDEMNIFY CONTRACTOR AND OWNER ... AND ALL PARTIES WHOM CONTRACTOR IS REQUIRED TO INDEMNIFY PURSUANT TO THE TERMS OF THE CONTRACT DOCUMENTS, AGAINST AND FOR ALL LIABILITY, COSTS, EXPENSES, CLAIMS, LIENS, CITATIONS, PENALTIES, FINES, ATTORNEYS' FEES, LOSSES, AND DAMAGES WHICH CONTRACTOR MAY AT ANY TIME
*441SUFFER OR SUSTAIN OR BECOME LIABLE FOR BY REASON OF ANY ACCIDENTS, DAMAGES, OR INJURIES EITHER TO THE PERSONS OR PROPERTY OR BOTH OF CONTRACTOR, OWNER OR SUBCONTRACTOR, OR OF THE WORKERS OF SUCH PARTIES, OR OF ANY OTHER PARTIES, OR TO THE PROPERTY OF ANY PARTY, IN ANY MANNER ARISING OUT OF OR RESULTING FROM SUBCONTRACTOR'S PERFORMANCE OR FAILURE TO PERFORM HEREUNDER, OR FAILURE OR DEFECTS IN MATERIALS OR GOODS SUPPLIED BY OR ON BEHALF OF SUBCONTRACTOR,INCLUDING, BUT NOT LIMITED TO, ANY NEGLIGENT ACT OR OMISSION OR CLAIM INVOLVING STRICT LIABILITY OR NEGLIGENCE PER SE OF CONTRACTOR OR OWNER, THEIR OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES, AGENTS, CONTRACTOR'S SURETY AND ALL PARTIES WHOM CONTRACTOR IS REQUIRED TO INDEMNIFY PURSUANT TO THE TERMS OF THE CONTRACT DOCUMENTS.
THE COVERAGE OF ANY INSURANCE POLICY REQUIRED HEREIN OR ACTUALLY CARRIED BY SUBCONTRACTOR SHALL NOT LIMIT THE EXTENT OF SUBCONTRACTOR'S LIABILITY UNDER THE FOREGOING INDEMNITY.
Before returning the signed subcontract to LSB, Willis' president made several handwritten changes to the document, including striking out the portion of the indemnification provision indicated above. LSB did not countersign the subcontract, and there is no evidence in the record that LSB noticed or objected to Willis' alterations.
B. The OSC Policy
Willis subsequently obtained a commercial general liability insurance policy from Oklahoma Surety Company ("OSC") with a policy period of February 1, 2006 to February 1, 2007. The OSC Policy identified Willis as the "Named Insured" and as a "COMMERCIAL ROOFING CONTRACTOR." The policy provided that:
[OSC] will pay those sums that the insured becomes legally obligated to pay as damages because of "bodily injury" or "property damage" to which this insurance applies. [OSC] will have the right and duty to defend the insured against any "suit" seeking those damages. However, [OSC] will have no duty to defend the insured against any "suit" seeking damages for "bodily injury" or "property damage" to which this insurance does not apply. [OSC] may, at [its] discretion, investigate any "occurrence" and settle any claim or "suit" that may result.
The policy contained an endorsement naming "Lyda Builders & its parent & affiliated companies" as additional insureds, "but only with respect to liability directly attributable to [Willis'] performance of '[Willis'] work' for [LSB and LSB's parent and affiliates]." Elsewhere, the policy defined Willis' "work" as "[w]ork or operations performed by [Willis] or on [its] behalf" and "[m]aterials, parts or equipment furnished in connection with such work or operations." The endorsement also stated that it applied "only when [Willis] ha[s] agreed by written 'insured contract' to designate [LSB and its parents and affiliates] as an additional insured subject to all provisions and limitations of this policy." The term "insured contract" was defined to include "[t]hat part of any other contract or agreement pertaining to [Willis'] business ... under which [Willis] assume[s] the tort liability of another party to pay for 'bodily injury' or 'property damage'
*442to a third person or organization. Tort liability means a liability that would be imposed by law in the absence of any contract or agreement." The term "property damage" was defined as:
a. Physical injury to tangible property, including all resulting loss of use of that property. All such loss of use shall be deemed to occur at the time of the physical injury that caused it; or
b. Loss of use of tangible property that is not physically injured. All such loss of use shall be deemed to occur at the time of the 'occurrence' that caused it.
C. The Underlying State-Court Lawsuit
In January 2005, the owner of the College Station project assigned its interest in the contract with LSB to Adam Development Properties, L.P. ("ADP"). On February 12, 2008, ADP filed an original petition in Texas state court against LSB and LSB's parent company. That petition sought damages against LSB for breach of contract and alleged, in pertinent part, that:
• LSB entered into the contract for the project on or about November 17, 2003; the date of commencement of the project was December 1, 2003; and the projected deadline for substantial completion was January 28, 2005.
• "It has now been well over four years since commencement of the project, and approximately three years since the contractual deadline for substantial completion expired, and the project is still far from being substantially complete. Throughout the course of the project, LSB's performance of the Work under the contract documents has been marked by numerous material deficiencies. Without limitation, the portions of the Work affected by such deficiencies include the exterior granite façade, the curtain wall systems, the punch window systems, the precast panel connections, the roof, the dormers, the rotunda, the joint sealant, the drywall, the fire protection systems, the HVAC systems, and the electrical systems."
• "In addition, LSB has consistently failed to comply with its contractual obligations to adequately supervise work performed by subcontractors; to supply sufficient skilled workers and suitable materials necessary to complete the Work in accordance with the contract documents; to take adequate protective measures to prevent damage to the Work resulting from exposure to the elements; to timely provide monthly project reports and project schedules; to promptly pay monies owed to subcontractors; and to resolve, remove or discharge liens filed against the project by subcontractors."
• "In the months prior to February 1, 2008, many of LSB's subcontractors had already removed their crews, heavy equipment, machinery, and tools from the project jobsite. Since that date, LSB and the few remaining subcontractors still at the jobsite removed most of their heavy equipment, machinery, and tools ...."
• For these and other reasons, "on February 13, 2008, pursuant to the terms of the contract documents, ADP terminated the contract."
In April 2011, LSB filed third-party petitions against various companies, including Willis. On November 17, 2011, ADP filed its first amended petition, the factual allegations of which were essentially the same as those in the original petition. In addition to the breach of contract claim, *443the first amended petition added claims against LSB for negligence and misrepresentation. The negligence claim asserted that LSB breached its duty to "exercise ordinary care in connection with the project, including but not limited to the duty to exercise ordinary care in the supervision of its subcontractors," thereby "caus[ing] property damage separate and apart from its scope of work under the contract documents." The first amended petition referred to Willis as a third-party defendant, but did not expressly identify it as a subcontractor.
On October 31, 2012, ADP filed a second amended petition. That petition was very similar to the previous petitions. This time, however, ADP identified Willis (and others) as "Third-Party Defendants" and incorporated specific references to them throughout the pleading. In particular, the second amended petition alleged:
• "Throughout the course of the project, [LSB]'s performance of the work under the contract documents (and the work of the Third-Party ... Defendants, for which [LSB] is responsible) was marked by numerous material deficiencies. These deficiencies were a product of [LSB]'s (and the Third-Party ... Defendants', for which [LSB] is responsible) negligence. This negligence caused loss of use of the building and property damage separate and apart from [LSB]'s scope of work under the contract documents. Without limitation, the portions of the work damaged and affected by such deficiencies include the exterior granite façade, the curtain wall systems, the punch window systems, the precast panel connections, the roof, the dormers, the rotunda, the joint sealant, the drywall, the fire protection systems, the HVAC systems, and the electrical systems."
• With respect to the negligence claim against LSB, the second amended petition again alleged that LSB breached its "duty to exercise ordinary care in the supervision of its subcontractors" and added that LSB's "negligence (and the negligence of the Third-Party ... Defendants, for which [LSB] is responsible) proximately caused property damage separate and apart from [LSB]'s scope of work under the contract documents."
D. LSB's Requests for Defense
In a letter dated August 18, 2011, LSB requested that OSC provide it with "defense and indemnification as an additional insured" under the OSC Policy in connection with ADP's original petition. OSC denied that request in October 2011. LSB requested that OSC provide it with a defense against the first amended petition on July 6, 2012 and against the second amended petition on November 21, 2012. OSC denied both of those requests as well. LSB also requested defense and indemnification from various other insurance companies, some of which had issued policies directly to LSB and others of which had issued policies to LSB's subcontractors. Like OSC, many of these insurers denied LSB's requests.
E. The Federal Suit
In June 2012, one of the insurers that had denied LSB's request for defense filed a declaratory judgment action in federal district court, naming ADP, LSB, and another party as defendants. LSB thereafter filed a third-party complaint in the same action against OSC and seven other insurers. In its second amended third-party complaint, LSB sought damages and declaratory relief against OSC and the other insurers for: breach of contract based on *444their failure to defend LSB in the state court lawsuit; violations of Chapter 541 of the Texas Insurance Code; and violations of Texas' Prompt Payment of Claims Act ("PPCA").
The state and federal lawsuits proceeded simultaneously for a time, but by some point in 2013, all the claims had been settled, save for those between LSB and OSC. In June 2014, the district court granted partial summary judgment in LSB's favor, finding that OSC owed a duty to defend LSB against ADP's second amended petition. In June 2015, the district court decided several additional motions for partial summary judgment, ruling that: OSC owed a duty to defend LSB under ADP's original petition; OSC breached its duty to defend LSB and was therefore liable to LSB for damages, including defense fees and costs; and OSC violated the PPCA by breaching its duty to defend, thereby entitling LSB to recover damages for that violation as well. The court denied OSC's motion for partial summary judgment, which asserted, among other things, that OSC did not have a duty to defend LSB due to an insurance law concept known as the "anti-stacking rule." After conducting a bench trial on LSB's claim for violations of Chapter 541 of the Texas Insurance Code, the district court ruled that LSB had not met its burden of proving that it had "suffered injury separate and apart from the denial of benefits it was owed under the OSC Policy." Concluding that this circuit's precedent precluded LSB from recovering extra-contractual damages in the absence of such "independent injury," the district court rendered judgment in favor of OSC on that claim.
On September 25, 2015, the district court entered a final judgment and ordered OSC to pay LSB:
• $655,600.27 for breaching the duty to defend and violating the PPCA;
• a statutory penalty of 18 percent per annum under the PPCA, with $296,209.69 having accrued through August 20, 2015, and $323.32 accruing each day thereafter "until the date of payment of this judgment"; and
• reasonable attorney's fees and costs.
On February 23, 2016, the district court entered an amended final judgment that included an award of pre-judgment interest to LSB. OSC then filed a motion to alter, amend, or correct the amended final judgment, which the district court denied.
This appeal followed.
II. DISCUSSION
OSC appeals several of the district court's summary judgment rulings and two of its damages rulings. LSB cross-appeals from the district court's ruling denying its claim under Chapter 541 of the Texas Insurance Code.
A. OSC's Appeal of the Summary Judgment Rulings
OSC challenges the district court's grant of summary judgment in favor of LSB on OSC's duty to defend, OSC's breach of that duty, and OSC's liability under the PPCA. OSC also appeals the denial of its partial motion for summary judgment based on the anti-stacking rule. We review grants and denials of summary judgment de novo . United States v. Corpus ,
*4451. OSC's Duty to Defend
Under Texas law, the duty to defend obligates an insurer to "defend the insured in any lawsuit that 'alleges and seeks damages for an event potentially covered by the policy.' " Colony Ins. Co. v. Peachtree Constr., Ltd. ,
a. LSB's Status as an "Additional Insured"
To decide whether OSC had a duty to defend LSB against ADP's lawsuit, we must first determine whether LSB qualified as an "additional insured" under the OSC Policy. See ACE Am. Ins. Co. v. Freeport Welding & Fabricating, Inc. ,
As mentioned above, the OSC Policy obligates OSC to defend Willis and any "additional insured" against any suit seeking damages for "property damage" covered by the policy. According to the endorsement, LSB is an "additional insured," provided that Willis has "agreed by written 'insured contract' to designate" LSB as such. The district court concluded that the subcontract between LSB and Willis satisfied this requirement. We agree.
OSC maintains that the subcontract cannot be a "written 'insured contract' " because LSB did not countersign it. However, the OSC Policy does not expressly state that the contract must be signed by all the parties to it, and we do not view the word "written" as imposing that requirement. See Millis Dev. & Constr., Inc. v. Am. First Lloyd's Ins. Co. ,
b. The Eight-Corners Rule
Since LSB qualifies as an additional insured under the OSC Policy, we turn to whether the allegations in ADP's lawsuit were sufficient to trigger OSC's duty to defend LSB. Texas law uses the "eight-corners" or "complaint-allegation" rule to determine whether a liability insurer has a duty to defend an insured against a third-party lawsuit. Laney Chiropractic & Sports Therapy, P.A. v. Nationwide Mut. Ins. Co. ,
The eight-corners rule is "very favorable to insureds." Gore Design Completions, Ltd. v. Hartford Fire Ins. Co. ,
Where the complaint does not state facts sufficient to clearly bring the case within or without the coverage, the general rule is that the insurer is obligated to defend if there is, potentially, a case under the complaint within the coverage of the policy. Stated differently, in case of doubt as to whether or not the allegations of a *447complaint against the insured state a cause of action within the coverage of a liability policy sufficient to compel the insurer to defend the action, such doubt will be resolved in the insured's favor.
Nat'l Union Fire Ins. Co. v. Merchs. Fast Motor Lines, Inc.,
Applying the eight-corners rule, we conclude that OSC had a duty to defend LSB against ADP's original petition, as well as the first and second amended petitions.
*448OSC maintains that the original and first amended petitions failed to sufficiently allege "property damage." We disagree. The petitions' factual allegations, which refer to numerous deficiencies in the work performed on the project, plainly fit within the policy's broad definition of "property damage." Although OSC suggests that the original petition did not allege "property damage" because it sought to recover only for breach of contract, under the eight-corners rule, "[i]t is not the cause of action alleged that determines coverage but the facts giving rise to the alleged actionable conduct." Adamo v. State Farm Lloyds Co. ,
OSC also argues that the original and first amended petitions did not allege that Willis specifically caused any of the property damage. It is true that those petitions did not expressly refer to Willis, but they did indicate that property damage resulted from the actions of "subcontractors" and specifically mentioned deficiencies in and around the building's roof. Reading those allegations in conjunction with the OSC Policy, which expressly identified Willis as a "commercial roofing contractor," it requires no more than a logical inference to conclude that at least some of the alleged property damage was potentially attributable to Willis. See Global Sun Pools, Inc. v. Burlington Ins. Co., No. 05-03-00765-CV, , at *2 (Tex. App.-Dallas Apr. 26, 2004, no pet.) ;
The allegations in all three petitions were also sufficient to support the inference that "property damage" potentially occurred during the policy period. The original petition alleged that the project commenced on December 1, 2003, that some amount of work was done on the project thereafter, and that the project was effectively abandoned by February 13, 2008. One could reasonably conclude from these allegations that ADP potentially sought to recover for "property damage" that occurred sometime during the policy period of February 1, 2006 to February 1, 2007. Clearly, none of the allegations negated that possibility. See GEICO Gen. Ins. Co. v. Austin Power Inc. ,
Because our application of the eight-corners rule relied solely on the policy and the petitions, we need not consider OSC's objection to the use of extrinsic evidence. See generally Ooida Risk ,
c. The Anti-Stacking Rule
In the insurance context, the term "stacking" refers to "taking policy limits from multiple, but not overlapping, policies potentially covering the same lawsuit and adding those limits together."
*449N. Am. Specialty Ins. Co. v. Royal Surplus Lines Ins. Co. ,
OSC argues that Garcia 's anti-stacking rule precludes LSB's claims in this case. Specifically, OSC asserts that another insurer, CNA, issued general liability policies to Willis providing coverage from February 1, 2007 through February 1, 2013. OSC characterizes the property damage underlying ADP's lawsuit as an indivisible injury that extended across the periods of coverage provided by the OSC Policy and the policies issued by CNA. Moreover, OSC asserts that LSB selected CNA to provide a "complete defense" against the state court suit. From this, OSC concludes that allowing LSB to recover defense costs from it would be permitting it to "stack" the OSC Policy and one or more of the CNA policies.
It is not clear that the Texas Supreme Court would extend Garcia , which involved an insurer's duty to indemnify, to the present situation, which involves a claim based on an insurer's duty to defend.
d. Conclusion
Because there are no genuine issues of material fact and LSB is entitled to judgment as a matter of law, we affirm the district court's grant of summary judgment in LSB's favor on the duty to defend and OSC's breach of that duty. We also affirm the district court's denial of OSC's motion for partial summary judgment based on the anti-stacking rule.
*4502. OSC's Liability under the Prompt Payment of Claims Act
Under the PPCA, an insurer that is "liable for a claim under an insurance policy" and fails to promptly respond to, or pay, the claim in accordance with the statute becomes liable to the policy holder or beneficiary for the amount of the claim, as well as an 18 percent per annum statutory penalty and reasonable attorney's fees. TEX. INS. CODE §§ 542.051 -.061. To recover under the PPCA, an insured must establish that: "(1) a claim was made under an insurance policy, (2) the insurer is liable for the claim, and (3) the insurer failed to follow one or more sections of the prompt-payment statute with respect to the claim." United Nat. Ins. Co. v. AMJ Investments, LLC ,
The sole basis for OSC's challenge to the district court's grant of summary judgment in favor of LSB under the PPCA is its assertion that LSB failed to establish that OSC either had a duty to defend LSB or that OSC breached that duty. Having just rejected those assertions, we affirm. See Admiral Ins. Co. v. Petron Energy, Inc. ,
B. LSB's Cross-Appeal
LSB seeks reversal of the district court's ruling denying its claim for extra-contractual damages under Chapter 541 of the Texas Insurance Code. On appeal from a decision rendered after a bench trial, a district court's findings of fact are reviewed for clear error, while its conclusions of law and rulings on mixed questions of law and fact are reviewed de novo . Dickerson v. Lexington Ins. Co. ,
Chapter 541 prohibits insurers from engaging in various "unfair methods of competition" and "unfair or deceptive acts or practices." TEX. INS. CODE §§ 541.051 -.061. A person "who sustains actual damages ... caused by" such conduct may recover "the amount of actual damages, plus court costs and reasonable and necessary attorney's fees," with treble damages available if the insurer is found to have committed the prohibited acts "knowingly."
LSB claimed that OSC violated the Insurance Code by knowingly misrepresenting the OSC Policy's coverage so as to avoid defending LSB in the state-court suit, and that this violation caused LSB to incur defense costs as extra-contractual damages. See TEX. INS. CODE §§ 541.060(a)(1), 541.061. After holding the bench trial, the district court found that LSB had "adduced no evidence that it suffered injury separate and apart from the denial of benefits it was owed under the OSC Policy." Concluding that this circuit's caselaw required LSB to establish such an independent injury in order to obtain extra-contractual damages under the Insurance Code, the district court rendered judgment for OSC on the claim.
In Vail v. Texas Farm Bureau Mutual Insurance Co. ,
In Parkans International LLC v. Zurich Insurance Co. ,
At the time of the district court's ruling, the Texas Supreme Court had not spoken on the independent injury requirement for extra-contractual claims since Great American . Consequently, the district court, while expressing reservations about the confused state of the law in this area, followed Great American as binding precedent.
During the course of this appeal, the Texas Supreme Court issued an opinion in USAA Texas Lloyds Co. v. Menchaca . In Menchaca , the court "distill[ed] from [its previous] decisions five distinct but interrelated *452rules that govern the relationship between contractual and extra-contractual claims in the insurance context."
The "entitled-to-benefits" rule provides that "an insured who establishes a right to receive benefits under an insurance policy can recover those benefits as 'actual damages' under the [Insurance Code] if the insurer's statutory violation causes the loss of the benefits."
Stoker and Castañeda stand for the general rule that an insured cannot recover policy benefits as damages for an insurer's extra-contractual violation if the policy does not provide the insured a right to those benefits. Vail announced a corollary rule: an insured who establishes a right to benefits under the policy can recover those benefits as actual damages resulting from a statutory violation.
By reaffirming Vail , Menchaca compels reexamination of significant aspects of Great American 's reasoning. Yet despite the Texas Supreme Court expressly stating that our court was wrong to conclude that Vail had been overruled,
The first is that, if an insurer's statutory violation causes an injury independent of the insured's right to recover policy benefits, the insured may recover damages for that injury even if the policy does not entitle the insured to receive benefits. ... The second aspect of the independent-injury rule is that an insurer's statutory violation does not permit the insured to recover any damages beyond policy benefits unless the violation causes an injury that is independent from the loss of the benefits.
As the phrase "beyond policy benefits" suggests, the independent-injury rule does not restrict the damages an insured can recover under the entitled-to-benefits rule. Rather, the independent-injury rule limits the recovery of other damages that "flow" or "stem" from a mere denial of policy benefits.
*453As previously mentioned, the Insurance Code provides for the trebling of "actual damages" if the insurer "knowingly committed the act complained of." TEX. INS. CODE § 541.152(b) ("[O]n a finding by the trier of fact that the defendant knowingly committed the act complained of, the trier of fact may award an amount not to exceed three times the amount of actual damages."). Because the entitled-to-benefits rule allows an insured to recover policy benefits "as 'actual damages' under the statute," Menchaca ,
In this case, LSB was entitled to a defense from OSC as a benefit of the OSC Policy. Consequently, if LSB establishes that OSC's alleged misrepresentations caused it to be deprived of that benefit, LSB can recover the resulting defense costs it incurred as actual damages under Chapter 541-without limitation from the independent-injury rule. Furthermore, if LSB proves that OSC committed the statutory violation "knowingly," it may recover treble that amount.
Accordingly, we reverse the district court's judgment with respect to LSB's Chapter 541 claim and remand for further proceedings in light of this opinion and Menchaca .
C. OSC's Appeal of the Damages Rulings
OSC challenges two aspects of the district court's damages determinations.
1. Defense Costs
OSC argues that LSB is not entitled to the vast majority of the $655,600.27 it received as damages for OSC's breach of its duty to defend.
Of the $655,600.27 in defense costs awarded to LSB, $500,000 is attributable to a deductible that LSB paid to another insurer. The record supports LSB's claim that this payment was maintained in an escrow account and was used to pay for defense fees and costs incurred in the state court suit. "Texas law recognizes that attorneys' fees and expenses incurred by an insured in an underlying lawsuit are damages produced by the insurer's breach of its duty to defend." Evanston Ins. Co. v. Legacy of Life, Inc. ,
*454The district court also awarded $131,992.67 to LSB for unreimbursed defense fees it spent on an independent counsel and $22,070.10 for webhosting costs incurred by the independent counsel. OSC asserts that these expenditures were unnecessary, in part because LSB had other paid counsel available. "It is well settled that once an insurer has breached its duty to defend, the insured is free to proceed as he sees fit; he may engage his own counsel and either settle or litigate, at his option." Rhodes v. Chicago Ins. Co., a Div. of Interstate Nat. Corp. ,
Because there is no basis for finding that the district court erred in awarding these damages, we affirm.
2. The PPCA Statutory Penalty
As mentioned above, an insurer that fails to comply with the PPCA's requirements is liable for "the amount of the claim" itself, as well as "interest on the amount of the claim at the rate of 18 percent a year as damages, together with reasonable attorney's fees." TEX. INS. CODE § 542.060(a).
The PPCA itself does not expressly state when the 18 percent penalty stops accruing, but this court has held that it "only accrues until the date judgment is rendered in the trial court." Great Am. Ins. Co. v. AFS/IBEX Fin. Servs., Inc. ,
Because the PPCA is a Texas statute, the "date judgment was rendered in the trial court" must be assessed in light of Texas law. See Acker v. Texas Water Comm'n ,
But when a judgment is partially reversed on appeal, the trial court's judgment becomes a nullity as to those claims on which the reversal is based. See Bramlett v. Phillips ,
III. CONCLUSION
For the reasons given above, we AFFIRM the district court's judgment in part and REVERSE in part. This case is REMANDED for further proceedings consistent with this opinion.
Notes
The district court awarded LSB damages based on defense costs it incurred when each of the three petitions was the live pleading. Because OSC's liability depends on whether it had a duty to defend LSB at the time those costs were incurred, we must apply the eight-corners rule to all three petitions. See Rhodes v. Chicago Ins. Co. ,
Although unpublished, this court cited and relied upon Global Sun Pools in Gore Design ,
Indeed, the only case OSC cites that applied anti-stacking principles to the duty to defend involved a policy that subjected the duty to defend to an eroding coverage provision. N. Am. Specialty Ins. Co. v. Royal Surplus Lines Ins. Co. ,
However, an insured can recover actual damages for emotional distress if those damages are "caused by" the insurer's Insurance Code violation and "are separate from and ... differ from benefits under the [policy]." Menchaca ,
In the recent Texas cases OSC relies upon, the courts applied the independent-injury rule to bar the recovery of extra-contractual damages where there was no proof of damages independent of the policy benefits. See State Farm Lloyds v. Webb , No. 9-15-408-CV,
OSC does not challenge the $1,537.50 awarded to LSB for fees paid to a mediator. OSC also argues that LSB is not entitled to $93,013.77 in damages that the district court did not award. Since LSB does not seek those damages in its cross-appeal, we do not address that argument.
The provision was amended effective September 1, 2017. This opinion references the version in effect at the time of the district court's judgment. The amended version does not appear to be materially different from the previous version insofar as this appeal is concerned.
The court in Great American did not examine the PPCA in any detail-it simply relied on language in Mex-Tex . The court in Mex-Tex , in turn, does not appear to have even considered the issue of when the penalty's accrual period ends; its passing statement that the insured was entitled to the statutory penalty "to the date of judgment" seems to have been a reference to an uncontested aspect of the trial court's judgment. See Mex-Tex ,
The district court cited Nautilus Insurance Co. v. International House of Pancakes, Inc. , 4:03-CV-2182,