Background
After a Fourth of July fire damaged Randy and Debra Randel’s home, Travelers Lloyds of Texas paid amounts for dwelling damage, personal property, and loss of use. When the parties disagreed over additional damage, the Randels invoked the policy’s appraisal provision. The appraisal awarded substantially more for dwelling and personal-property losses, and Travelers paid the award within five business days, along with an additional payment intended to cover any potentially owed statutory interest.
The Randels nevertheless pursued contract, bad-faith, and Texas Prompt Payment of Claims Act claims. In an earlier appeal, the Fifth Circuit affirmed dismissal of the contract and bad-faith claims but remanded the prompt-payment claim concerning dwelling and personal-property coverage. On remand, the district court struck the Randels’ late summary-judgment response—a ruling they did not appeal—and entered judgment for Travelers because uncontroverted evidence showed that the Randels had not supplied all reasonably requested documentation, so the statutory payment period never began.
The Court’s Holding
The Fifth Circuit affirmed summary judgment for Travelers. It held that the Randels forfeited any challenge to the district court’s prompt-payment analysis both by failing to timely oppose summary judgment below and by failing to address the dispositive documentation issue in their opening appellate brief. Arguments first offered in their reply brief came too late.
The court also held that the district court correctly refused to reconsider the bad-faith claims. The prior mandate remanded only the prompt-payment claim, and the Randels had not challenged dismissal of their bad-faith claims in the first appeal. Both the mandate rule and the rule barring litigation on remand of issues that could have been raised in the first appeal foreclosed revival of those claims.
Finally, the court denied the Randels’ request to certify a question to the Supreme Court of Texas. The proposed question concerned already-extinguished bad-faith claims, and existing Texas authority clearly provides that payment of an appraisal award forecloses common-law and statutory bad-faith liability based solely on policy benefits already paid, absent an independent injury.
Key Takeaways
- An insured forfeits appellate review of grounds not timely presented in opposition to summary judgment and not addressed in the opening appellate brief.
- A limited appellate mandate permits the district court to address only the claims remanded and does not revive claims abandoned during the first appeal.
- Certification was unwarranted because the proposed Texas-law question concerned claims no longer in the case and was already answered by controlling state precedent.
Why It Matters
The decision underscores that preservation rules can dispose of an insurance appeal without a merits ruling on the insured’s underlying statutory theory. Parties must timely oppose summary judgment and directly confront the district court’s dispositive reasoning in their opening appellate briefs.
It also reinforces the finality of appraisal payments under Texas insurance law: when the insurer has paid the appraisal award and the insured alleges no independent injury, claims for policy benefits generally cannot be repackaged as common-law or statutory bad-faith damages.