Does a violation of the Texas Prompt Payment of Claims Act survive an appraisal that is promptly paid? This issue is addressed in an opinion from the San Antonio Court of Appeals. The case is styled, Barbara Technologies Corporation v. State Farm Lloyds.
Barbara Technologies had a policy of insurance with State Farm insuring property that was damaged in a hail storm on March 31, 2013. A claim was made on October 17, 2013 and on October 31, 2013, State Farm inspected the property. On November 4, State Farm sent a letter stating the property sustained damage of $3,153.57, but did not issue payment because the amount was less that the $5,000.00 deductible. On February 21, 2014, Barbara Technologies requested a re-inspection which was done and State Farm did not change it’s earlier statement.
On January 9, 2015, State Farm invoked the appraisal provision in the policy and on August 18, 2015, the appraisal panel issued an award setting damages at $195,345.63, which was immediately paid by State Farm.
After payment of the appraisal, all claims were dropped but for the two sections above.
Both sides filed motions for summary judgment on the Prompt Pay claim with State Farm saying the claim was over since the payment was made immediately after the appraisal was completed and with Barbara Technologies saying the Prompt Pay violation was still live.
The Court ruled in favor of State Farm.