OPINION
National Security Fire & Casualty Company, Action Claim Service, Inc., and Aaron Timmins., (collectively “appellants”) bring this appeal from a judgment entered in accordance with the jury’s verdict in favor of Ozier Hurst, National’s insured. For the reasons stated below, we reverse and render.
Background
Dissatisfied with the initial estimate and payment, homeowner Ozier Hurst sued his insurer, National Security Fire & Casualty Company, the adjusting firm, Action Claim Services, Inc., and the independent adjuster, Aaron Timmins, for contractual and extra-contractual claims arising from wind-related damages sustained by his home during Hurricane Ike. Six hundred and seventy days after the hurricane, Hurst submitted a damage claim to National. National then assigned the claim to Action, who in turn dispatched Timmins to assess the damage done to Hurst’s house. In accordance with Timmins’ appraisal, National paid Hurst $3,524.56 (accounting for the $1,000 policy deductible), which Hurst accepted. Although Hurst cashed the check, he did not use any of the money to repair his property, nor did he request re-inspection or inspection of additional property. Hurst proceeded to file suit on September 7,2010.
Hurst counsel' invoked the Policy’s appraisal clause
The MDL Court appointed Judge Mark Davidson as umpire and on September 25, 2014, he issued Hurst an award of $7,166.36. On October 25, 2014, National issued a check to Hurst and his counsel for $3,641.80 representing the difference between the amount of the umpire’s award and the amount originally paid to Hurst for his claim. Hurst did not move to set aside the award. Hurst never returned nor cashed National’s check but continued pursuing the underlying litigation.
-Trial was held and the jury found • in favor of Hurst. The jury found National liable for breach of contract and awarded $3,641.80 as damages. The jury determined September 25," 2014, as the date National secured final proof of loss. The jury found National, Action, and Timmins engaged in an unfair or deceptive act or practice that caused damages to Hurst by failing to attempt in good faith to effectuate a prompt,- fair, and equitable settlement of a claim when the liability under the insurance policy had become reasonably clear.
The trial court denied all post-trial motions and in accordance with -the jury’s verdict signed a Final Judgment awarding Hurst $55,993.60 from National, $22,731.22 from Action, $22,731.22 from Timmins, prejudgment interest, post judgment interest, 18%. penalty interest,, court costs, $75,000.00 in attorney’s fees for trial, $50,000.00 in conditional appellate fees, and $35,000.00 in conditional fees for an appeal to the Texas Supreme Court. The trial court allowed the motion for new trial to be overruled by operation of law., National now appeals on behalf of itself,. Action, and Timmins.
Analysis and Discussion
We first address appellants’ argument that the trial court erred in failing to grant a directed verdict. They contend the full and timely payment of the appraisal award precludes as a matter of law any award for
Standard of Review
A motion to disregard the jury’s findings and direct a verdict should be granted when the evidence is conclusive and one party is entitled to recover as a matter of law, Mancorp, Inc. v. Culpepper,
Appraisal Clauses
Appraisal clauses appear in almost every homeowner, property, or automobile insurance policy in Texas, and they are generally enforceable absent illegality or waiver. State Farm Lloyds v. Johnson,
Every reasonable presumption will be indulged to sustain an appraisal award. Franco v. Slavonic Mut. Fire Ins. Ass’n,
If the appraisal award is not set aside, this contractual process settles the issue of damages, and settlement of the full amount owed estops the insured from bringing a breach of contract claim against the insurer. Franco,
Breach of Contract
National contends Hurst’s breach of contract claim was estopped by the appraisal award. Hurst argues that because he did not accept National’s tendered payment—he neither executed the release nor cashed the check—his breach of contract claim was not estopped.
“Under Texas law, when an insurer makes timely payment of a binding and enforceable appraisal award, and the insured accepts the payment, the insured is ‘estopped by the appraisal award from maintaining a breach of contract claim against [the insurer].” ’ Blum’s Furniture Co. v. Certain Underwriters at Lloyds London,
Generally, tender of the full amount owed pursuant'to the conditions of an appraisal clause is all that is required to estop the insured from raising a breach of contract claim. See Brownlow v. United Servs. Auto. Ass’n, No. 13-03-758-CV,
We find Barry v. Allstate Tex. Lloyds, which both appellants and Hurst reference in their briefs, instructive. No. 4:14-CV-00870,
Unlike the plaintiff in Barry, Hurst never objected to the release, though he did not accept the payment. Like Barry, the tender here was for the entire “set” amount, of loss under the policy in accordance with the appraisal award. That award is a result of Hurst’s invocation of the insurance policy’s extra-judicial means of resolving the amount of loss, in which Hurst participated. National tendered the full amount of loss as determined by the appraisal process. The release of the extra-contractual claims did not render that tender less than the- “set” amount.
In addition to damages for breach of contract, the trial court awarded pre
Extra-contractual Claims
The jury also found against appellants on Hurst’s claims for violation of the prompt payment provisions of section 542 of the Insurance Code, common-law bad faith, and unfair settlement practices in violation of section 541.151 of the Insurance Code.
1. Prompt Payment ■
Section 542.058 of the Insurance Code provides that an insurer shall pay-damages, with interest, and attorney’s fees if an insurer delays payment of a claim for longer than 60 days. Tex. Ins. Code § 542.058. As this court has recognized, full and timely payment- of an appraisal award under the policy precludes an award of penalties under the Insurance Code’s prompt payment provisions as a matter of law. In re Slavonic Mut. Fire Ins. Ass’n,
The record reflects, and the jury found, the appraisal award was determined on September 25, 2014. It is undisputed that National issued a check in payment of the appraisal award on October 25, 2014—well within the timeliness requirements of' section 542.058. See Bernstien v. Safeco Ins. Co., of Ill., No. 05-13-01533-CV,
2. Bad Faith and Unfair Settlement Practices
The jury found National breached its common-law duty of good faith and fair dealing. The jury also found Chapter 541 of the Insurance Code and the DTPA were violated by National, Action and Timmins “failing to attempt in good faith to effectuate a prompt, fair, and equitable settlement of ... a claim with respect to which the insurer’s liability , has become reasonably clear,” and by Action and Timmins “refusing to pay á claim without conducting a reasonable investigation with respect to the claim.” Under Texas l'aw, an individual damaged by “unfair method[s] of competition or unfair or deceptive act[s]-or practice^] in the business of insurance” may bring a cause of action under the Insurance Code. Tex. Ins. Code § 541.151. “The prohibited conduct includes ‘failing to attempt in good faith to effectuate a prompt, fair, and equitable settlement of a claim with respect to-which the insurer’s liability has become reasonably clear.’” Performance Autoplex II Ltd. v. Mid-Continent Cas. Co.,
“Texas law holds that extra-contractual tort claims pursuant to the Insurance Code and the DTPA require the same predicate for recovery as a bad faith claim under a good faith and fair dealing violation.” Broxterman v. State Farm Lloyds, No. 4:14-CV-661,
It is undisputed that Hurst had a right to receive benefits under the insurance policy, and we have held that he received those benefits in the form of National’s initial payment and subsequent tender of the appraisal award. In order to recover any damages beyond policy benefits, the statutory violation or bad faith must cause an injury that is independent from the loss of benefits. USAA Tex. Lloyds Co. v. Menchaca, No. 14-0721, — S.W.3d —, — — —,
Hurst’s claims against appellants for bad faith and unfair settlement practices are based upon the initial investigation and resulting estimate. National never denied coverage of Hurst’s property under the policy, the claim was promptly investigated, payment was tendered, and Hurst accepted that payment. According to Hurst’s own testimony, his only quarrel with the initial payment was that it was too low. Hurst subsequently filed suit and eventually invoked the appraisal clause. National participated in the appraisal process and, following the umpire’s award, timely tendered the full amount of the loss.
Hurst has received the benefits to which he- was entitled under the policy and has not alleged any act so extreme as to cause independent injury. See Menchaca, — S.W.3d at — — —,
Conclusion
As noted above, the binding appraisal process is an extra-judicial means designed to avoid litigation on the issue of damages. We conclude that an insured cannot defeat an otherwise valid and binding appraisal award simply by refusing to accept the insurer’s payment of the award or by asserting extra-contractual claims that are derivative of the policy claim. To hold otherwise would obviate the very purpose of the binding appraisal process.
Accordingly, the trial court erred in denying the motion for directed verdict. We therefore reverse the judgment of the trial court and render judgment that Hurst’s take nothing on his claims.
Notes
. The clause at issue in this case provides:
7. Appraisal. If you and we'fail to agree on the actual cash value, amount of loss, or the cost of repair, either can make a written demand for appraisal. Each will then select a competent independent appraiser and notify the other, of the appraiser’s identity within 20 days of receipt of .the written demand, The two appraisers will choose an umpire. If they cannot agree upon an umpire within 15 days, you or we may request that the choice be made by a judge of adistrict court of a judicial district where the loss occurred. The two appraisers will then set the amount of' loss, stating separately the actual cash value and loss to each item. If the appraisers fail to agree, they will submit their difference to the umpire. An itemized decision agreed to by any two of these three and filed with us will set the amount of the loss. Such award shall be binding on you and us.
Each party will pay its own appraiser and bear the other expenses of the appraisal and umpire equally.
. The jury apportioned responsibility as follows: National—60 percent; Action—20 percent; and Timmins—20 percent.
. The jury apportioned responsibility as follows: Action—60 percent; and Timmins—40 percent.
. We reject Hurst's initial argument that Action and Timmins are not properly before this court. This court granted appellants’ motion for leave to file an amended notice of appeal náming Action and Timmins as appellants.
. Wé note that National did not seek a release with the initial payment of Hurst's claim.
. In this case the release was limited to claims arising from Hurricane Ike in 2008. Clearly, conditioning payment of an appraisal award on a release for claims that did not arise from the same event would present a’ different issue—one which we are not called upon to decide here.
. Hurst argues that the release of the extra-contractual claims is unsupported by consideration, and therefore unenforceable, given that National was already obligated to pay the appraisal award under the terms of the policy. But Hurst did not accept the tender of the award or sign the accompanying release, and we conclude below that Hurst's extra-contractual claims fail for other reasons. We therefore need not address whether the release of the extra-contractual claims would have been enforceable had Hurst accepted the tender.
. Referring to Stoker's explanation that the court was not excluding "the possibility that in denying the claim, the insurer may commit some act, so extreme, that would cause injury independent of the policy claim.”