Why Menchaca Changes Nothing For Appraisal Law

Law360, New York (June 6, 2017, 1:47 PM EDT) -- On April 7, 2017, the Supreme Court of Texas issued an opinion that some argue changed the landscape of Texas law regarding extracontractual liability in first-party insurance cases. In USAA Texas Lloyds Co. v. Menchaca, the court sought to clarify precedent by “announcing five rules that address the relationship between contract claims under an insurance policy and tort claims under the Insurance Code.”[1]

In the wake of Menchaca, some policyholder attorneys immediately claimed that the decision negates the well-established rule regarding an insurer’s potential liability after the payment of an appraisal award. Courts across Texas have been nearly uniform in holding...

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