Back to all articles

Does Menchaca apply to Appraisal Cases?

Maybe not. In Ortiz v. State Farm Lloyds, No. 04-17-00252, 2017 WL 5162315 (Tex. App.—San Antonio November 8, 2017, pet. filed), the court considered Ortiz’s motion for reconsideration of summary judgment as to his breach of contract claim granted in favor of State Farm based on a valid, timely paid appraisal award. Ortiz argued that the Texas Supreme Court’s opinion in USAA Tex. Lloyds Co. v. Menchaca, No. 14-0721, 2017 WL 1311752 (Tex. Apr. 7, 2017), required reconsideration of the court’s prior affirmance of the trial court’s summary judgment. The Ortiz court disagreed. Not only did Menchaca not involve payment of an appraisal, Ortiz failed to identify which Menchaca rule he relied upon. The Ortiz court concluded that nothing in the five rules set forth in Menchaca provided a basis for reversing the summary judgment granted in favor of State Farm.

Ortiz recently filed his Petition for Review with the Texas Supreme Court seeking change in appraisal law based on Menchaca to allow Texas Insurance Code claims to be pursued despite timely payment of an appraisal award. Ortiz argues current appraisal law which holds a timely paid appraisal award results in a contractual bar to extra-contractual claims effectively converting appraisal into “a forced arbitration regime” benefiting only the carriers. Further, Ortiz urges the Court to recognize this unjust result shifts the cost burden to the insured who must then use the delayed payment of policy benefits to pay associated costs rather than needed repairs to their property.

The Texas Supreme Court recently denied review in a similar case, Richardson East Baptist Church v. Philadelphia Indemnity Ins. Co. and James Greenhaw, No. 05-14-01491-CV (Tex. App.—Dallas Mar. 30, 2016, pet. denied). In Richardson East, the plaintiff sought review arguing the “entitled to benefits” rule provided for the award of attorney’s fees and extracontractual damages following payment of an appraisal award which constituted actual damages. Although both parties and amicus curiae submitted briefs on the merits, review was ultimately denied. Possibly Ortiz will provide an avenue for the Supreme Court to clarify whether Menchaca applies to appraisal award cases.

Featured Attorney

Recent Articles

Contact us today to schedule your consultation.

Get Started