A jury in Tarrant County state court set aside an appraisal award and found a homeowners' insurer to be in breach of its insurance policy and in bad faith, even though the insurer promptly paid the net amount owing on the appraisal award. Norman and Toylaan Jones v. State Farm Lloyds Ins. Co., 2017 WL 5661174 (17th Judicial District, Tarrant County, Texas, Nov. 6, 2017) (Trial Court Order).

The homeowners' insurer paid the undisputed amount of property damage from a storm in October of 2014. The policyholders were unsatisfied with the estimated amount of damages, and one of the parties invoked appraisal. Thereafter, an appraisal award was issued which was slightly more than the amount already accepted as damages. The insurer issued a supplemental payment for the net amount owing under the appraisal award which was less than $3,000. The insureds filed suit and claimed that the appraisal award was the result of collusion. In a 10 to 2 verdict, the jury found that the appraisal award should be set aside because (1) it was not an honest assessment of the damages, (2) the award was made without authority, or (3) the award was not in compliance with the requirements of the policy. The jury then proceeded to answer questions that the insurer was in breach of contract and in violation of the Texas Insurance Code including the codified equivalent of common law "bad faith." The jury awarded actual damages and attorneys' fees and found the violation to be "knowing," allowing for the award of punitive damages. The jury also awarded attorneys' fees through trial.

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