No Texas Insurance Tort Recovery After Full Appraisal Payment Absent Independent Injury; “Excusable Neglect” Can Save a Late Notice of Appeal — Commentary on Wilhite v. Ark Royal (5th Cir. 2025)

No Texas Insurance Tort Recovery After Full Appraisal Payment Absent Independent Injury; “Excusable Neglect” Can Save a Late Notice of Appeal — Commentary on Wilhite v. Ark Royal (5th Cir. 2025)

Introduction

In Wilhite v. Ark Royal, the United States Court of Appeals for the Fifth Circuit affirmed summary judgment in favor of an insurer in a first-party homeowners property dispute. The case presents two principal holdings:

  • Jurisdiction: The panel upheld the district court’s grant of an extension to file a late notice of appeal under Federal Rule of Appellate Procedure 4(a)(5) based on “excusable neglect,” where counsel miscalculated the filing deadline.
  • Merits: The panel reaffirmed that, under Texas law, an insured cannot maintain extra-contractual insurance tort claims (common-law bad faith or Texas Insurance Code Chapter 541) once the insurer has paid the full appraisal award and applicable statutory interest, absent proof of an independent injury beyond the policy benefits. This follows the Texas Supreme Court’s decision in Ortiz v. State Farm Lloyds and the Fifth Circuit’s recent published decision in Mirelez v. State Farm Lloyds.

The parties are homeowner-insured Gregory Wilhite and his insurer, Ark Royal Insurance Company. After a burst pipe claim, Ark Royal paid amounts due under the policy and, following appraisal, paid the balance plus statutory interest. Wilhite nevertheless sued for breach of contract, Texas Prompt Payment of Claims Act (TPPCA) violations, common-law bad faith, and Texas Insurance Code Chapter 541 violations. He later conceded the contract and TPPCA claims were not viable, but pressed ahead on the tort claims. The district court granted summary judgment to Ark Royal on all counts. On appeal, Ark Royal challenged appellate jurisdiction (timeliness) and defended the merits. The Fifth Circuit rejected the jurisdictional challenge and affirmed on the merits.

Summary of the Opinion

The Fifth Circuit issued an unpublished per curiam decision affirming in full. On jurisdiction, the court held that the district court did not abuse its discretion in granting Wilhite an extension under Rule 4(a)(5) to file a notice of appeal after counsel miscalculated the deadline. Applying the equitable “excusable neglect” test from Pioneer Investment Services Co. v. Brunswick Associates, the court found that counsel’s inadvertent miscalculation of the appeal deadline is the kind of mistake that can be excused, particularly given the lack of prejudice, minimal delay, and good faith.

On the merits, the panel held that Texas law forecloses extra-contractual insurance tort claims where the insurer has paid the appraisal award and statutory interest, unless the insured proves an independent injury. Relying on the Fifth Circuit’s binding, published decision in Mirelez v. State Farm Lloyds and the Texas Supreme Court’s decision in Ortiz v. State Farm Lloyds, the court concluded Wilhite’s tort claims could not proceed because he had already received all policy benefits (through appraisal) and he presented no evidence of an independent injury. The panel also underscored the Fifth Circuit’s rule of orderliness and the federal court’s obligation in diversity to apply Texas Supreme Court law, rejecting Wilhite’s attempt to revisit statutory construction arguments that cannot overcome binding precedent.

Analysis

Precedents Cited and Their Influence

  • Pioneer Investment Services Co. v. Brunswick Associates (U.S. 1993): The Supreme Court’s equitable standard for “excusable neglect” governs requests to extend appellate deadlines under FRAP 4(a)(5). Pioneer calls for a holistic assessment, considering prejudice, length and impact of delay, reason for delay (including control), and good faith. The Fifth Circuit applied this framework to uphold the district court’s extension.
  • Halicki v. Louisiana Casino Cruises, Inc. (5th Cir. 1998): Adopts Pioneer’s “excusable neglect” test for Rule 4(a)(5) and confirms the abuse-of-discretion standard of review for extension rulings.
  • Stotter v. University of Texas at San Antonio (5th Cir. 2007): Affords “more leeway” when a district court grants an extension and upholds excusable neglect where counsel entered the wrong year in a new digital calendar. Stotter is used to analogize counsel’s deadline miscalculation here.
  • United States ex rel. King v. University of Texas Health Science Center–Houston (5th Cir. 2013) (unpublished): Upholds excusable neglect where busy dockets led counsel to miscalculate the deadline. Supports treating calendaring mistakes as excusable under the right circumstances.
  • Sparks v. L.M. Berry & Co. (5th Cir. 1999) (unpublished): Upholds excusable neglect based on a combination of a busy trial practice, a sick child, and a miscount of days. Demonstrates the elasticity of the standard post-Pioneer.
  • United States v. Clark (5th Cir. 1995): Recognizes that Pioneer broadened the scope of excusable neglect beyond circumstances beyond the filer’s control.
  • Midwest Employers Casualty Co. v. Williams (5th Cir. 1998): Reversed a grant of extension where counsel intentionally allowed the notice-of-appeal deadline to lapse based on a misreading of Rule 6(e). The panel distinguishes Midwest because counsel in Wilhite miscalculated the appeal deadline itself and did not deliberately let it pass based on a misinterpretation of an ancillary rule.
  • Cowart v. Ingalls Shipbuilding (5th Cir. 1999) (unpublished): Emphasizes that factors beyond the reason for delay (such as prejudice and length of delay) matter under Pioneer; supports the panel’s holistic assessment here.
  • Bowles v. Russell (U.S. 2007) and Kinsley v. Lakeview Regional Medical Center (5th Cir. 2009): Confirm that a timely notice of appeal is jurisdictional. The panel begins with jurisdiction and evaluates the extension under FRAP 4(a)(5).
  • Mirelez v. State Farm Lloyds (5th Cir. 2025): Binding, published Fifth Circuit precedent on point. Holds that payment of the appraisal award and applicable interest precludes extra-contractual tort claims absent proof of an independent injury. Mirelez supplies the controlling rule dispositive of Wilhite’s tort claims.
  • Senechal v. Allstate Vehicle and Property Insurance Co. (5th Cir. 2025): Reaffirms Mirelez, again rejecting tort claims where the insurer paid the appraisal award and the insured showed no independent injury.
  • First Baptist Church Daisetta Tex. v. Church Mutual Insurance Co. (5th Cir. 2025) (unpublished) and Guiles v. GeoVera Advantage Insurance Services, Inc. (5th Cir. 2025) (unpublished): Additional Fifth Circuit applications of Mirelez. The panel cites these to show the burgeoning consistency of the rule.
  • Ortiz v. State Farm Lloyds (Tex. 2019): Texas Supreme Court decision underlying Mirelez. It explains that extra-contractual claims fail where the insured’s only “actual damages” are policy benefits that have already been paid, unless there is an independent injury.
  • City of San Antonio v. Hotels.com, L.P. (5th Cir. 2017): In diversity, federal courts apply state law as announced by the state’s highest court. The panel uses this to underscore that it must follow Ortiz.
  • United States v. Wilkerson (5th Cir. 2024), Mendez v. Poitevent (5th Cir. 2016), United States v. Berry (5th Cir. 2020): These decisions encapsulate the Fifth Circuit’s “rule of orderliness,” which binds later panels to earlier panel decisions absent an intervening change in law—foreclosing new statutory-interpretation arguments that contradict Mirelez.
  • Johnson v. Lumpkin (5th Cir. 2023): Reminds counsel of the ethical duty to disclose directly adverse controlling authority to the tribunal (Model Rule 3.3(a)(2); Texas Rule 3.03(a)(2)). The panel notes counsel failed to acknowledge Mirelez despite being counsel in that case.
  • Edwards v. City of Balch Springs (5th Cir. 2023) and Antero Resources Corp. v. C&R Downhole Drilling Inc. (5th Cir. 2023): Restate the de novo standard for summary judgment and the application of Texas substantive law in this diversity case.

Legal Reasoning

Jurisdiction first. The court carefully applies Federal Rule of Appellate Procedure 4(a)(1)(A) and 4(a)(5)(A). The notice of appeal was due 30 days after the May 30, 2024 judgment, which, because June 29 fell on a Saturday, extended to Monday, July 1 (see FRAP 26). Wilhite missed that deadline but moved for an extension on July 24—within the 30-day grace period provided by Rule 4(a)(5)(A). The district court granted the extension after finding excusable neglect. Reviewing for abuse of discretion and affording “more leeway” because the district court granted the extension (Stotter), the Fifth Circuit upheld the extension.

Applying Pioneer, the panel examined all relevant circumstances:

  • Reason for delay: Counsel miscalculated the deadline due to a busy schedule, believing it was July 5 instead of July 1. While less compelling than circumstances beyond control, Pioneer expressly contemplates inadvertence, mistake, and carelessness as potentially excusable.
  • Prejudice: Ark Royal did not show prejudice from the short delay.
  • Length and impact of delay: Minimal, with no adverse impact identified.
  • Good faith: The motion for extension was timely under Rule 4(a)(5)(A); the court declined to infer bad faith from a filing made squarely within the rule’s timeframe.

The panel distinguished Midwest Employers, where counsel intentionally allowed the deadline to lapse based on a misreading of an ancillary rule. Here, the error involved miscalculating the appeal deadline itself—akin to the calendar error in Stotter—making it the sort of inadvertent mistake Pioneer allows district courts to excuse. Given the deferential standard of review and the minimal delay, the district court did not abuse its discretion.

On the merits, the issue was whether Texas law permits extra-contractual tort recovery after an insurer pays the full appraisal award plus statutory interest. The court’s answer: no, absent evidence of an independent injury.

The panel treated the question as controlled by Mirelez (Fifth Circuit, published) and Ortiz (Texas Supreme Court). In Ortiz, the Texas Supreme Court made clear that when the only “actual damages” sought are policy benefits that have already been paid (for example, via appraisal), extra-contractual claims under Chapter 541 or common-law bad faith are unavailable unless the insured proves an independent injury. Mirelez faithfully applied Ortiz in a case factually indistinguishable from Wilhite’s: appraisal invoked, insurer pays full appraisal amount plus interest, insured sues for extra-contractual liability, and the insured fails to show independent injury. Hence, extra-contractual claims fail as a matter of law.

Wilhite sought to avoid Mirelez by arguing Chapter 541 provides cumulative remedies permitting recovery in tort even though policy benefits have been paid, and by pressing a statutory construction argument he claimed Mirelez did not address. The court rejected this in two steps:

  • Rule of orderliness: A later panel cannot depart from an earlier published panel decision simply because a new argument is advanced now. Mirelez binds the panel, absent intervening change in law.
  • Erie obligation: Even apart from Mirelez, the Texas Supreme Court’s pronouncements (Ortiz) govern Texas law in diversity cases. The Fifth Circuit cannot accept an interpretation of Chapter 541 contrary to Ortiz’s “quite explicit” holding. Thus, even if Wilhite’s statutory reading were fresh or facially plausible, federal courts must follow Ortiz.

Finally, the panel noted a professional responsibility point: counsel’s opening brief did not acknowledge Mirelez, decided three weeks earlier, despite counsel being the same lawyer in Mirelez. The court reminded counsel of the duty to disclose directly adverse controlling authority, underscoring that appellate advocacy must fairly present controlling law—even when it cuts against the client’s position.

Impact

This decision’s practical effects are immediate in two domains—Texas first-party insurance litigation and federal appellate practice in the Fifth Circuit.

  • Texas first-party insurance litigation:
    • Appraisal as a litigation endgame: Where an insurer pays the full appraisal award and applicable statutory interest, the insured’s path to extra-contractual tort recovery is generally foreclosed unless there is evidence of an “independent injury” separate from the policy benefits. This tightens settlement calculus: payment after appraisal, plus interest, will ordinarily extinguish bad-faith and Chapter 541 claims.
    • Independent-injury bar set high: The decision confirms that independent injury is a separate, consequential harm not merely derivative of the policy-benefit underpayment. Without concrete proof of such injury, extra-contractual theories cannot survive summary judgment.
    • TPPCA strategy: Barbara Technologies (not cited here) teaches that TPPCA claims may persist after appraisal in some settings. But where the insurer pays statutory interest (and any other TPPCA remedies at issue), as Ark Royal did, TPPCA claims may be moot or concededly non-viable, as occurred here.
    • Consistency and predictability: By citing Mirelez, Senechal, and other recent applications, the panel signals a stable line of Fifth Circuit authority that district courts will follow in Texas property cases.
  • Federal appellate practice:
    • Excusable neglect retains elasticity: Counsel’s calendaring error—miscalculating the appeal deadline itself—can be excusable neglect, especially when the delay is short, there is no prejudice, and the motion is filed within Rule 4(a)(5)’s 30-day grace period. District courts have meaningful discretion, and grants of extensions receive “more leeway” on review.
    • Know the line: Midwest Employers remains a cautionary tale—intentional reliance on a misreading of ancillary rules and an intentional decision to let the deadline pass may not constitute excusable neglect. Simple deadline miscalculation is different and potentially excusable.
    • Ethical duty to disclose adverse authority: The panel’s reminder about Model Rule 3.3/Texas Rule 3.03 underscores that failing to cite directly adverse, controlling cases (like Mirelez) risks credibility and may invite sanctions or judicial admonitions.

Complex Concepts Simplified

  • Appraisal clause and award: Many Texas homeowners policies allow either party to demand appraisal when they disagree on the amount of loss. Appraisal determines the dollar amount of covered damage but not coverage or liability. Once an insurer pays the appraisal award (subject to policy terms) plus any applicable interest, the policy-benefit dispute is typically resolved.
  • Independent injury: Extra-contractual insurance claims (common-law bad faith, Insurance Code Chapter 541) require “actual damages.” If the only damages are unpaid policy benefits and those have been paid (e.g., after appraisal), the insured must show a separate harm—financial or otherwise—caused by the insurer’s wrongful conduct that is independent of the right to policy benefits. Without such evidence, extra-contractual claims fail as a matter of law.
  • Texas Prompt Payment of Claims Act (TPPCA): The TPPCA imposes deadlines on insurers to acknowledge, investigate, and pay claims. If an insurer violates those deadlines, the statute provides an interest penalty and attorneys’ fees. Payment of statutory interest may satisfy the TPPCA remedy; here, Wilhite conceded his TPPCA claim was not viable after Ark Royal paid interest.
  • Excusable neglect under FRAP 4(a)(5): A district court may extend the time to file a notice of appeal upon a timely motion showing “excusable neglect or good cause.” Excusable neglect is an equitable standard considering prejudice, delay, reason for delay, and good faith. Calendar mistakes can qualify, especially when promptly addressed, and when the opposing party is not prejudiced.
  • Rule of orderliness: In the Fifth Circuit, a published decision by one panel binds later panels unless an intervening change in law occurs (e.g., Supreme Court decision, en banc Fifth Circuit decision, or statutory amendment). New arguments alone do not permit departure from earlier decisions.
  • Erie obligation in diversity: Federal courts must apply state substantive law as articulated by the state’s highest court. If the Texas Supreme Court has spoken (Ortiz), the Fifth Circuit must follow it even if a party advances a contrary interpretation of a Texas statute.

Conclusion

Wilhite v. Ark Royal consolidates two clear directives for Texas insurance and Fifth Circuit appellate practice. First, once an insurer pays the full appraisal award plus statutory interest, extra-contractual tort claims under Texas law cannot proceed absent a demonstrable independent injury. This result is compelled by the Texas Supreme Court’s Ortiz decision and the Fifth Circuit’s published Mirelez decision, and the panel’s reliance on Senechal and related cases confirms the trajectory. Second, the decision reinforces that “excusable neglect” under FRAP 4(a)(5) remains flexible: a miscalculated deadline can be forgiven when the delay is short, there is no prejudice, and the request is timely—particularly given the deference afforded to district courts that grant extensions.

Two practical lessons emerge. For insureds and their counsel in Texas first-party property disputes, once appraisal is paid and interest is satisfied, extra-contractual theories will require concrete proof of an independent injury to survive summary judgment. For appellate practitioners, maintain robust calendaring safeguards but know that district courts retain equitable discretion to rescue a late notice of appeal where Pioneer’s factors are met. Finally, the court’s ethical reminder about disclosing adverse controlling authority underscores a non-negotiable tenet of effective appellate advocacy: candor to the tribunal.

Case Details

Year: 2025
Court: Court of Appeals for the Fifth Circuit

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