Shin v. Allstate TX Lloyd's

Case: 19-20698 Document: 00515866568 Page: 1 Date Filed: 05/18/2021
United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
Fifth Circuit
FILED
May 18, 2021
No. 19-20698
Lyle W. Cayce
Clerk
Hyewon Shin,
Plaintiff—Appellant,
versus
Allstate Texas Lloyd's,
Defendant—Appellee.
Appeal from the United States District Court
for the Southern District of Texas
No. 4:18-cv-01784
Before Wiener, Engelhardt, and Oldham, Circuit Judges.
Per Curiam:*
In this matter, Plaintiff-Appellant Hyewon Shin asserted a claim for
penalties under the Texas Prompt Payment of Claims Act (“TPPCA”), Tex.
Ins. Code, §§ 542.058 and 542.060. The district court granted summary
judgment in favor of Defendant-Appellee Allstate Texas Lloyd’s
(“Allstate”), concluding that Allstate’s pre-appraisal payment to Shin was
*
Pursuant to 5th Circuit Rule 47.5, the court has determined that this
opinion should not be published and is not precedent except under the limited
circumstances set forth in 5th Circuit Rule 47.5.4.
Case: 19-20698 Document: 00515866568 Page: 2 Date Filed: 05/18/2021
No. 19-20698
both timely and reasonable as a matter of law notwithstanding that the final
appraisal amount ($25,944.94) was 5.6 times greater than the pre-appraisal
payment of $4,616.63.
This appeal followed. On July 22, 2020, however, it was placed in
abeyance pending the issuance of a ruling by the Texas Supreme Court in
Hinojos v. State Farm Lloyds, et al., No. 19-0280. On March 19, 2021, the
Texas Supreme Court rendered its opinion. Reversing the court of appeals’
ruling in favor of the insurer, the Texas Supreme Court stated, in pertinent
part:
Chapter 542 [of the Texas Insurance Code] does not provide
that a partial payment of a valid claim discharges liability for
statutory interest. Accordingly, we hold that an insurer’s
acceptance and partial payment of the claim within the
statutory deadline does not preclude liability for interest on
amounts owed but unpaid when the statutory deadline expires.
Our holding accords with our past decisions in [Republic
Underwriters Ins. Co. v. Mex-Tex, Inc., 150 S.W.3d 423 (Tex.
2004), Barbara Techs. Corp. v. State Farm Lloyds, 589 S.W.3d
806 (Tex. 2019), and Alvarez v. State Farm Lloyds, 601 S.W.3d
781 (Tex. 2020)], as well as the statute’s stated purpose of
“promot[ing] the prompt payment of insurance claims.”
[TEX. INS. CODE § 542.054]. By requiring insurers to
promptly satisfy claims that they owe in their entirety, the
[Texas] Legislature incentivizes insurers to resolve disputes
and invoke the appraisal process sooner rather than later.
Although the statute says nothing about reasonableness, a
reasonable payment should roughly correspond to the amount
owed on the claim. When it does not, a partial payment
mitigates the damage resulting from a Chapter 542 violation.
Interest accrues only on the unpaid portion of a claim.
Hinojos v. State Farm Lloyds, 619 S.W.3d 651, 658 (Tex. 2021) (internal
footnote omitted).
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Case: 19-20698 Document: 00515866568 Page: 3 Date Filed: 05/18/2021
No. 19-20698
Given the Texas Supreme Court’s ruling in Hinojos, we now Vacate
the judgment of the district court and Remand this matter for further
proceedings consistent with this opinion and Hinojos.
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