Litigation ensued before Ms. Perry opted to submit the loss to an appraisal.

An appraisal occurred in accordance with the terms of the insurance policy and resulted in the issuance, on September 18, 2015, of an appraisal award valuing the loss at $14,988.76.

USAA advised Ms. Perry on October 12, 2015 that it would pay the award, and two days later it forwarded a second check to her in the amount of $9,335.26. The check reflected the appraisal amount less the prior $5,153 payment and Ms. Perry's deductible.

Thereafter, USAA moved for summary judgment, contending that because it complied with the policy requirements by paying the loss as appraised, it could not be found to be in breach of the policy, and Ms. Perry could not assert a claim under the Prompt Payment of Claims Act because it did not breach the insurance contract and Ms. Perry suffered no injury independent from the insurance contract.

The trial court granted USAA's motion and entered judgment in its favor.

Ms. Perry appealed, arguing that the trial court had erred when it denied her statutory claims.

The Appellate Court's Decision

The appellate court affirmed.

In its decision, the appellate court explained that, under the Prompt Payment of Claims Act, the full and timely payment of an appraisal award under the policy barred an insured from recovering penalties under that act as a matter of law.

This was so, the appellate court continued, because recovery on a prompt payment claim depended on the insured obtaining judgment establishing that the insurer was liable on the claim.

The appellate court then reasoned that:

- The claim submitted by Ms. Perry and unpaid by USAA approximated $33,000;

- The appraisal procedure valued her claim at $14,988.76; and

- Ms. Perry and USAA contractually agreed to abide by that valuation of the loss via the appraisal clause of the insurance policy.

Having paid that award, USAA, as a matter of law, could not be found liable for the $33,000 claim of Ms. Perry, according to the appellate court. It also could not be found liable for neglecting to timely pay the claim for which the parties contractually agreed it would be liable: the appraisal award. Thus, USAA did not violate the Prompt Payment Act and Ms. Perry suffered no independent injury relating to or compensable under the Prompt Payment Act.

Simply put, the appellate court concluded, the sum and substance of Ms. Perry's extra-contractual claims were founded on her belief that USAA failed to afford her the benefits of the policy, but it afforded her those benefits by paying the appraisal. Ms. Perry had “no basis for pursuing extra-contractual claims against USAA.”

The case is Perry v. United Services Automobile Ass'n, No. 07-18-00031-CV (Tex. Ct. App. Dec. 7, 2018).