Michael Knopp and Sandra Rybicki-Knopp v. State Farm Lloyd's

DISSENTING OPINION Filed October 30, 2024

In the
Court of Appeals
Fifth District of Texas at Dallas
No. 05-22-00749-CV

MICHAEL KNOPP AND SANDRA RYBICKI-KNOPP, Appellants
V.
STATE FARM LLOYD'S, Appellee

On Appeal from the 471st Judicial District Court
Collin County, Texas
Trial Court Cause No. 471-04386-2021

DISSENTING OPINION FROM DENIAL OF
EN BANC RECONSIDERATION
Opinion by Justice Carlyle
This case presents facts distinct from Ortiz v. State Farm Lloyds, 589 S.W.3d

127 (Tex. 2019) that may merit a different result than both that case and the panel

opinion here. At the least, they counsel further guidance from the en banc court or

further examination by the Supreme Court.

First, for nearly two years after the loss, the Knopps and State Farm attempted

to come to an agreeable resolution. The Knopps initiated the appraisal process, and

the parties’ chosen appraisers settled on a value significantly closer to what the

Knopps had claimed all along. Some seven months passed after the appraisal award,

during which State Farm refused on several occasions to pay the full appraisal award.
State Farm’s refusal to pay compelled the Knopps to file suit. Then, four months and

another State Farm rejection later, State Farm completely reversed course and

tendered the appraisal’s balance on the actual cash value amount, its calculation of

interest, and its calculation of fees.

In Ortiz, the Supreme Court was considering Ortiz’s argument that “by paying

him the proper amount only after the appraisal award was issued, State Farm used

the appraisal provision to ‘excuse [its] failure to comply with its other contractual

duties to timely pay its policyholders what they are entitled to under the policy.’” Id.

at 132. Ortiz sued after initial estimates but before State Farm invoked the appraisal

process. State Farm timely paid the appraisal award to Ortiz. Id. at 130. The Supreme

Court was careful to note that allowing a breach of contract claim past summary

judgment based solely on an appraisal coming back higher than the original estimate

would incentivize litigation rather than short-circuiting it “as intended” by the

appraisal process. Id. at 132–33 (cleaned up). This case is different.

When an insurer claims no error in the appraisal process but refuses to pay

and disputes the amount of the award, there is a coverage dispute. Litigation is the

remedy. Here, litigation appears to have gotten the Knopps in four months what they

were unable to achieve in over two years in dealing with State Farm on the estimate

and appraisal process. State Farm’s behavior has earned a closer look, particularly

as Texans continue to face spring storms exactly like the one in this case.

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Second, the Knopps have alleged damages outside the amounts they claim

under the policy: the difference in the cost to repair the roof from the time of the

award to the time the Knopps filed suit, and the time State Farm paid on the

appraisal. Cf. Ortiz, 589 S.W.3d at 133–34 (discussing independent injury damages

available for statutory violations). They allege inflation drove up the repair and

replacement cost. The Oritz court relied on the lack of damages independent from

the loss of benefits to affirm summary judgment on Ortiz’s bad faith claim. Id. at

134–35 (citing USAA Texas Lloyds v. Menchaca, 545 S.W.3d 479, 499–500 (Tex.

2018)). The panel here ignores the fact that the cost to repair the Knopps’ roof

increased due in part to State Farm’s significant delay in paying the appraisal award.

It characterizes these as damages “not separate from or different from benefits under

the contract,” but does not account for the fact that its opinion means State Farm will

avoid paying these additional damages.

Because this case presents circumstances unique from those the Supreme

Court has faced in the past and because the panel’s opinion creates incentives counter

to the Supreme Court’s expressed policy considerations, I respectfully dissent.

/Cory L. Carlyle/
220749df.p05 CORY L. CARLYLE
JUSTICE
Molberg, Partida-Kipness, Smith, and
Garcia J.J., join this dissenting opinion.

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