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        IN THE UNITED STATES COURT OF APPEALS
                 FOR THE FIFTH CIRCUIT


                                    No. 13-20529                  United States Court of Appeals
                                                                           Fifth Circuit

                                                                         FILED
COX OPERATING, L.L.C.,                                               July 30, 2015
                                                                    Lyle W. Cayce
             Plaintiff - Appellee                                        Clerk

v.

ST. PAUL SURPLUS LINES INSURANCE COMPANY,

             Defendant - Appellant




                Appeals from the United States District Court
                     for the Southern District of Texas


Before JOLLY, HIGGINSON, and COSTA, Circuit Judges.
E. GRADY JOLLY, Circuit Judge:
      This appeal presents a dispute over insurance coverage and penalty
interest under the Texas Prompt Payment of Claims Act (the Act), Tex. Ins.
Code Ann. §§ 542.051–.061. The insured, Cox Operating, L.L.C., spent millions
of dollars cleaning up pollution and debris after Hurricane Katrina caused
extensive damage to the oil-and-gas facilities it operated. After reimbursing
Cox for over $1.4 million of its costs, Cox’s liability insurer, St. Paul Surplus
Lines Insurance Co., filed this suit in the district court, seeking a declaration
that the remainder of Cox’s costs were not “pollution clean-up costs” covered
by the policy. Cox counterclaimed, and, after a five-week jury trial, the district
court entered judgment awarding Cox, among other amounts, $9,465,103.22 in
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                                 No. 13-20529
damages for breach of the policy and $13,064,948.28 in penalty interest under
the Act for failure to promptly and properly respond to Cox’s claims.
      On appeal, St. Paul argues that the damages award must be reduced (1)
because it includes costs that Cox did not report to St. Paul within one year of
the clean-up work and thus are not covered by the policy; and (2) because it
includes costs that were already reimbursed by other insurers, a double
recovery. St. Paul further argues that the penalty-interest award must be
reduced, or eliminated, because the district court calculated the amount of
penalty interest after incorrectly determining the date on which interest began
to accrue. We find no error and AFFIRM.
                                       I.
      Cox operated oil-and-gas-production facilities located in Eloi Bay and
Quarantine Bay, off the coast of Louisiana. The facilities were owned by
certain working-interest owners. In August 2005, Hurricane Katrina severely
damaged the facilities, throwing wreckage into the bays and causing oil to
escape from the wells and from damaged equipment and pipes. Cox, complying
with various federal statutes and regulations, spent millions of dollars cleaning
up the oil contamination and removing wreckage from the bays. The working-
interest owners provided the clean-up funds to Cox; in return, Cox agreed to
repay the working-interest owners from any insurance recovery.               Cox
completed its clean-up work in September 2007.
      At the time of the hurricane, Cox and the working-interest owners had
two types of insurance relevant here. First, Cox had two insurance policies
issued by St. Paul—a primary commercial general liability policy and an
umbrella excess liability policy. The working-interest owners were additional
insureds on these policies. The primary policy provided $1 million in coverage
for “covered pollution clean-up costs that result from a sudden and accidental
pollution incident.” The excess policy provided an additional $20 million in
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                                  No. 13-20529
coverage for pollution clean-up costs that, as relevant here, “would have been
covered by [the primary policy], but aren’t only because its applicable limit of
coverage is used up.” Both policies defined “pollution clean-up costs” as follows:
      Pollution clean-up costs means any cost or expense that:
         • is for pollution work; and
         • is reported to us within one year of the ending date of that
            pollution work.
In turn, the policies defined “pollution work” as:
         • the testing for, monitoring, cleaning up, removing,
           containing, treating, detoxifying, or neutralizing of any
           pollutant; or
         • the responding to, or assessing, in any way the effects of any
           pollutant.
      Second, the working-interest owners had property-insurance policies on
the Eloi Bay and Quarantine Bay facilities. These policies were issued by other
insurers and, in the aggregate, provided $5 million of coverage for removal of
wreckage and debris (ROWD).
      On October 17, 2005, Cox notified St. Paul that it had a pollution clean-
up claim. On October 27, St. Paul hired Shuman Consulting Services, L.P., to
adjust the claim, and a Shuman representative made preliminary contacts
with Cox’s representative to discuss it. Between November 8, 2005, and March
13, 2006, however, no St. Paul or Shuman representative communicated with
any Cox representative to investigate the claim. Additionally, no St. Paul or
Shuman representative requested any invoices or other documents to
substantiate the claim until July 24, 2006.
      In the year following St. Paul’s request for documents, Cox submitted
various invoices and statements of the amount of its claim. St. Paul paid
$1,480,395 of the claim (the policy limit of $1 million under the primary policy
and $480,395 under the excess policy). On August 30, 2007, however, St. Paul
delivered a letter to Cox acknowledging that “Cox’s claim submissions to date

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                                  No. 13-20529
exceed $15,000,000 and Cox continues to submit additional expenses,” and
stating that St. Paul believed that it had “paid all amounts that . . . are owed
under the ‘Pollution Clean Up Costs’ section of the Policy.” The letter also
included a copy of a complaint that St. Paul had filed in this case against Cox
seeking a declaration that St. Paul was not liable for the rest of Cox’s claim.
      Cox counterclaimed on behalf of itself and the working-interest owners,
alleging that St. Paul had breached the policy; that St. Paul had done so in bad
faith; and that, because St. Paul had failed to commence an investigation or
request documents within 30 days of receiving notice of its claim, St. Paul owed
penalty interest under the Texas Prompt Payment of Claims Act. In support
of the counterclaim, a Cox employee, Tim Morrison, summarized and compiled
all pollution clean-up costs that Cox had incurred, along with the relevant
invoices. Cox submitted the bulk of this information to St. Paul in February
2011, with additional costs and invoices before trial. These costs amounted to
$10,945,498.62, which, subtracting the amount that St. Paul had already paid
($1,480,395), was a total claim at trial of $9,465,103.62. Before trial in the St.
Paul proceeding, the ROWD insurers paid the working-interest owners the
aggregate debris-removal policy limit—$5 million.
      At trial, the jury found that St. Paul had breached the excess policy,
resulting in $9,465,103.22 in damages to Cox. Furthermore, the jury found
that St. Paul had received notice of Cox’s claim on October 17, 2005, but had
not, within 30 days of that date, “commence[d] an investigation of Cox[’s]
claim” or “request[ed] from Cox . . . all items, statements, and forms that St.
Paul reasonably believed, at that time, would be required from Cox.”
Accordingly, St. Paul had violated § 542.055(a) of the Act.
      The district court entered judgment on the jury’s findings, awarding Cox
$9,465,103.22 in damages for breach of the policy, $13,064,948.28 in penalty
interest under the Act, $2,864,167.31 in prejudgment interest, and costs and
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reasonable attorney’s fees. St. Paul moved for judgment as a matter of law.
The district court denied the motion and entered judgment. St. Paul filed this
appeal.
                                       II.
      “We review de novo the district court’s denial of a motion for judgment
as a matter of law, applying the same standard[] as the district court.”
Abraham v. Alpha Chi Omega, 

, 620 (5th Cir. 2013). “Under that
standard, a litigant cannot obtain judgment as a matter of law unless the facts
and inferences point so strongly and overwhelmingly in the movant’s favor that
reasonable jurors could not reach a contrary conclusion.” EEOC v. Boh Bros.
Constr. Co., 

, 451 (5th Cir. 2013) (en banc) (internal quotation
marks omitted).
                                      III.
      St. Paul argues that the district court erroneously awarded to Cox (1)
over $2 million of costs that Cox failed to report, in noncompliance with the
excess policy’s one-year reporting requirement; (2) over $2 million of costs that
had already been reimbursed by other insurers; and (3) millions of dollars in
excess penalty interest under the Texas Prompt Payment of Claims Act. We
consider each argument in turn.
                                       A.
      St. Paul first argues that the district court erroneously awarded
$2,089,610 of pollution clean-up costs that Cox failed timely to report to St.
Paul, in accordance with the excess policy’s one-year reporting requirement.
The district court held that this amount was properly included in the judgment
because the reporting requirement was merely a “condition precedent to
coverage,” which St. Paul waived when it denied Cox’s claim on August 30,
2007. In St. Paul’s view, however, the reporting requirement is not a condition
precedent but instead is “included in the policy’s definition of the scope of
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                                  No. 13-20529
covered costs,” such that, under Texas law, it cannot be waived. See, e.g., Minn.
Mut. Life Ins. Co. v. Morse, 

, 320 (Tex. 1972) (“[W]aiver and
estoppel cannot enlarge the risks covered by a policy . . . .”).
                                         1.
      In Texas, a condition precedent to insurance coverage—i.e., a provision
in an insurance policy that “avoid[s] coverage unless an insured does
something,” see PAJ, Inc. v. Hanover Ins. Co., 

, 635 (Tex.
2008)—is waived if the insurer denies liability within that time period allowed
under the policy for the insured to comply with the condition. Sanders v. Aetna
Life Ins. Co., 

, 44–45 (Tex. 1947); see also, e.g., N. River Ins. Co.
v. Pomerantz, 

, 313 (Tex. Civ. App.—Houston [14th Dist.] 1973,
writ ref’d n.r.e.) (“A denial of liability by the insurance company within the
period allowed for filing proof of loss, on grounds other than the failure to
submit proof of loss, constitutes a waiver of this requirement.”). “[C]ompliance
with a notice provision in an insurance policy,” like the reporting requirement
at issue here, “has often been characterized as a condition precedent to
coverage.” Coastal Ref. & Mktg. v. U.S. Fid. & Guar. Co., 

, 284–
85 (Tex. App.—Houston [14th Dist.] 2007, pet. denied); see also, e.g., Harwell
v. State Farm Mut. Auto. Ins. Co., 

, 173–74 (Tex. 1995).
Nonetheless, although notice provisions have “often” been characterized as
conditions precedent, they have not invariably been so characterized, as our
decision in Matador Petroleum Corp. v. St. Paul Surplus Lines Ins. Co., 

(5th Cir. 1999), demonstrates.
      At issue in Matador was a policy provision defining a “covered pollution
incident” as a “discharge, dispersal, release, or escape of pollutants that,”
among other things, “[i]s reported to the company within 30 days of its

–56. When the insured, Matador, failed to report
a pollution incident within the 30-day period, St. Paul denied its claim. 

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656. On appeal, Matador argued that, because the notice provision was a mere
“condition precedent to performance,” St. Paul waived it by accepting
deductibles relating to the pollution incident after becoming aware of the late
notice. This court disagreed, however, reasoning that the notice provision
defined “the risks covered under the insurance policy,” such that, to “hold[]
that coverage exists, despite Matador’s untimely notice, would materially
change the scope of coverage, would be contrary to the plain language of the
insurance policy, and would circumvent the objective intent of the parties to
the contract.” 

61 (internal quotation marks omitted). Accordingly, we
held that, under Texas law, the notice provision could not be waived. 

Matador, St. Paul emphasizes that the one-year reporting
requirement here appears in the excess policy’s definition of covered “pollution
clean-up costs.” See supra p. 3. Thus, reading Matador to stand for a bright-
line rule that a notice provision appearing in a policy’s “insuring language”
defines the scope of coverage and is therefore nonwaivable, St. Paul contends
that Cox’s compliance with the one-year reporting requirement could not be
waived.
      We think that St. Paul reads Matador too broadly.          We stressed in
Matador that the parties’ “objective intent”—and not just the location of the
notice provision in the policy—determined whether the provision could be

(internal quotation marks omitted); see also 

(“When interpreting a contract, our primary concern is to ascertain and to give
effect to the intentions of the parties as expressed in the instrument.” (internal
quotation marks omitted)). And indeed, had Matador’s rationale focused solely
on the notice provision’s location in the policy, its holding would have been
inconsistent with Texas law. See Criswell v. European Shopping Ctr., Ltd., 

, 948 (Tex. 1990) (“In order to determine whether a condition
precedent exists, the intention of the parties must be ascertained; and that can
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                                  No. 13-20529
be done only by looking at the entire contract.”); see also, e.g., SLT Dealer Grp.,
Ltd. v. Americredit Fin. Servs., 

, 830 (Tex. App.—Houston [1st
Dist.] 2011, no pet.) (holding that “[i]rrespective of the section subtitle
‘Condition Precedent,’” a provision was “not a condition”). Thus, although we
grant that the one-year reporting requirement’s placement in the policy’s
definition of covered “pollution clean-up costs” is relevant, the dispositive
question is whether, “consider[ing] the contract as a whole,” the parties
“objective[ly] inten[ded]” for that requirement to be a nonwaivable part of the
definition of the scope of coverage. 

, 661 (internal
quotation marks omitted).
                                        2.
      For several reasons, we conclude that the parties here did not so intend.
      First, St. Paul’s argument that the requirement here materially assists
in defining the scope of coverage, and therefore is not a condition precedent, is
inconsistent with the excess policy “as a whole.” 

56. As St. Paul
emphasizes, the policy in one provision (called “What This Agreement Covers”)
seems to treat the reporting requirement as definitional, providing that
“[p]ollution clean-up costs means any cost or expense that . . . is for pollution
work; and is reported to [St. Paul] within one year of the ending date of that
pollution work” (emphasis added). Yet in a later provision (called “When This
Agreement Covers”), the policy again sets out the reporting requirement, but
this time in conditional terms:
      Pollution clean-up costs liability. We’ll apply this agreement to
      claims or suits for covered pollution clean-up costs only when such
      costs are reported to us within one year of the ending date of the
      pollution work.
To give effect to the former as a definitional iteration of the reporting
requirement would render the latter, conditional iteration of the reporting
requirement meaningless: it makes no sense to say that the policy applies to
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                                  No. 13-20529
pollution clean-up costs “only when such costs are reported . . . within one year”
if costs have to be reported within one year to actually constitute “pollution
clean-up costs” at all. See, e.g., De Laurentis v. United Servs. Auto. Ass’n, 

, 721 (Tex. App.—Houston [14th Dist.] 2005, pet. denied) (“We must
give effect to all contractual provisions so that none will be rendered
meaningless.”). Thus, the policy, viewed “as a whole,” is at least ambiguous as
to whether the reporting requirement is actually a nonwaivable part of the
definition of the scope of coverage or whether it is intended to be read as a
waivable condition precedent—and “ambiguities in an insurance contract”
must be resolved “against the insurer and in favor of coverage.” 

.
      Second, unlike in Matador, the one-year reporting requirement is a cost-
reporting requirement, not an incident-reporting requirement. The specific
nature of the requirement was important in Matador, because Matador’s
reasoning rested in part on the distinction between “claims-made” policies,
under which notice provisions are “strictly interpret[ed],” and “occurrence”
policies, in which they are not. 

58–61. Because the notice provision in
Matador defined covered incidents as only those that are reported within 30
days of the incident’s beginning, the provision—like a notice provision in a
claims-made policy—served to cut off the insurer’s prospective liability at a
definite date. 

59–60; see Prodigy Commc’ns Corp. v. Agric. Excess &
Surplus Ins. Co., 

, 378–79 (Tex. 2009) (“[T]he main difference
between [‘claims-made’ and ‘occurrence’] policies is that a ‘claims-made’ policy
provides unlimited retroactive coverage and no prospective coverage, while an
‘occurrence’ policy provides unlimited prospective coverage and no retroactive
coverage.”). Thus, the Matador court concluded that “[t]he nature of St. Paul’s
and Matador’s bargain . . . resembles the nature of the bargain underlying a


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                                  No. 13-20529
‘claims-made’ policy,” so strict enforcement of the notice provision was

.
      Here, by contrast, the one-year reporting requirement does not restrict
St. Paul’s liability to an immediately ascertainable time frame. Instead, it
requires only that Cox report its pollution clean-up costs within one year “of
the ending date of that pollution work”—and as this case illustrates, pollution
clean-up work can drag on for years.            Accordingly, the cost-reporting
requirement here, unlike the incident-reporting requirement at issue in
Matador, does not necessarily demand the “strict[] interpret[ation]” afforded
to notice provisions in claims-made policies. 

at the edges of imagination would one conclude that the
parties could have intended the one-year reporting requirement to be
nonwaivable, given the consequences that would result. For instance, here,
the district court found that St. Paul waived the reporting requirement when,
while Cox’s pollution clean-up work was ongoing, it sent Cox the August 30,
2007 letter denying Cox’s claim and enclosing a copy of its declaratory-
judgment complaint. But according to St. Paul, this denial letter could not
have waived the reporting requirement. Thus, in St. Paul’s view, Cox was
required to continue reporting its pollution clean-up costs to St. Paul, even
though St. Paul had already stated that it believed it had “paid all amounts
that . . . are owed under” the policy—and indeed, even though St. Paul had
already instituted this lawsuit. Particularly in the light of the other infirmities
in St. Paul’s view of the reporting requirement, we cannot conclude that the
parties intended such a counterintuitive result. See, e.g., Reilly v. Rangers
Mgmt., Inc., 

, 530 (Tex. 1987) (“Courts will avoid when possible
and proper a construction which is unreasonable . . . .”).
                                  *     *      *


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                                   No. 13-20529
        Although insurers are, of course, as free to bargain for nonwaivable cost-
reporting requirements as they are to bargain for nonwaivable incident-
reporting requirements, see 

–61, we agree with the
district court that neither St. Paul nor Cox bargained for such a requirement
here.     Thus, since there is no dispute that, if the one-year reporting
requirement were indeed a waivable condition precedent, the district court
correctly held that St. Paul’s denial of Cox’s claim constituted a waiver, we
reject St. Paul’s argument that the judgment must be reduced by any costs not
reported in compliance with the requirement.
                                        B.
        St. Paul further argues that the district court erred by awarding
damages for costs that already had been reimbursed by the ROWD (removal-
of-wreckage-and-debris) insurers.
                                        1.
        Because Cox’s post-hurricane clean-up efforts required it to both clean
up oil contamination and remove wreckage that was strewn into the bays, its
efforts gave rise to claims under both the pollution coverage issued by St. Paul
and the ROWD coverage issued by other insurers.              Some of these efforts
apparently resulted in costs that arguably could be characterized as either
pollution clean-up costs or ROWD costs.
        By February 2007, Cox had submitted more than $10 million worth of
invoices to the ROWD insurers. The adjuster for the ROWD claims, Paul
Foreman, approved $5,425,943 worth of these invoices as being for ROWD
costs. The aggregate limit of the ROWD policies was $5 million, however, so
the ROWD insurers paid the working-interest owners only that amount.
        At trial, the jury found that the award of $9,465,103.22 against St. Paul
represented an amount “over and above” that which Cox had already
recovered. Disagreeing, St. Paul argued in its motion for judgment as a matter
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                                 No. 13-20529
of law, and repeats on appeal, that at least $2,179,580.27 of the damages
awarded against it were for costs that were submitted to the ROWD insurers
as ROWD costs and were included in the $5 million settlement from the ROWD
insurers. Citing Mid-Continent Ins. Co. v. Liberty Mut. Ins. Co., 

, 775 (Tex. 2007), for the proposition that, under Texas insurance law’s
“principle of indemnity,” “an insured may not recover more than once for the
same loss,” St. Paul therefore asserts that we must reduce the damages award
by that amount. For its part, Cox does not dispute that Texas law prohibits an
insured from recovering the same loss from more than one insurer. Instead,
pointing to the jury’s finding that the damage award involved no double
recovery, Cox argues that St. Paul has insufficiently demonstrated that this
finding should be displaced.
                                       2.
      We conclude that Cox has the better of this argument. To succeed in
displacing the jury’s no-double-recovery finding as a matter of law, St. Paul
must show that “the facts and inferences point so strongly and overwhelmingly
in [its] favor that reasonable jurors could not reach a contrary conclusion.” Boh

(internal quotation marks omitted). But as the district
court correctly observed, the double-recovery evidence here is, “[a]t best,
conflicting,” and therefore does “not show, as a matter of law, that Cox was (or
will be) compensated twice for the same claimed expenses.”
      Specifically, St. Paul’s double-recovery evidence consists of the testimony
of, and exhibits prepared by, its expert Cliff Smith. Smith compared the
invoices that were approved by the ROWD insurers with those that constituted
Cox’s final claim submission to St. Paul—the one prepared by Tim Morrison
and on which the jury based its damages award at trial, see supra p. 4. This
comparison revealed that the ROWD insurers had approved as ROWD costs
$2,605,523.27 worth of invoices that were also included in Cox’s final claim
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                                No. 13-20529
submission to St. Paul. Smith then subtracted from this figure the entire
amount of costs that the ROWD insurers had approved in excess of the
aggregate ROWD policy limits—$425,943.               The resulting figure of
$2,179,580.27 represents, St. Paul says, the “minimum overlap between the
specific costs for which Cox had been reimbursed under the ROWD claim and
Cox’s claim at trial” (some emphasis omitted).
      Cox’s evidence, however, calls into question the appropriateness of
Smith’s methodology. According to Cox, approved ROWD costs cannot be used
to represent the costs the ROWD insurers ultimately paid. This is so, Cox
explains, because the adjuster for the ROWD claims, Foreman, did not
conclusively disapprove of the remainder of the $10 million worth of invoices
that Cox submitted to the ROWD insurers in excess of those that he approved.
Instead, Foreman testified that, once he had approved more costs than could
be paid under the ROWD policy limits, there was no need to evaluate any
further, and the ROWD insurers simply reimbursed $5 million of randomly
selected costs. Furthermore, Foreman stated that he believed that Cox was
still incurring ROWD costs at the time he approved payment of the policy
limits.   Thus, because, as Foreman testified, “there[ was] no allocation
whatsoever” among submitted ROWD invoices, Cox argues that it is impossible
to identify any of the costs reimbursed by the ROWD insurers as being the
same as those awarded by the district court against St. Paul.
      Viewing Foreman’s testimony, as we must, “in the light most favorable
to the verdict,” Boh 

, a jury reasonably could have
concluded that none of the $9,465,103.22 damages award necessarily
represented costs that Cox already had recovered from the ROWD insurers.
Accordingly, the district court correctly rejected St. Paul’s argument that Cox
doubly recovered as a matter of law.


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                                      No. 13-20529
                                             C.
       Finally, St. Paul challenges the district court’s award of over $13 million
in penalty interest under the Texas Prompt Payment of Claims Act, asserting
that the district court incorrectly determined the date on which penalty begins
to accrue under that statute.
                                             1.
       In order “to promote the prompt payment of insurance claims,” see Tex.
Ins. Code § 542.054, the Act provides for a series of deadlines to which insurers
must adhere at each stage of the claims-handling process. First, § 542.055
provides:
       (a) Not later than . . . the 30th business day after the date an
       insurer receives notice of a claim, the insurer shall:
             (1) acknowledge receipt of the claim;
             (2) commence any investigation of the claim; and
             (3) request from the claimant all items, statements, and
             forms that the insurer reasonably believes, at that time, will
             be required from the claimant.
§ 542.055(a). 1 Next, § 542.056 requires “an insurer [to] notify a claimant in
writing of the acceptance or rejection of a claim not later than the 15th business
day after the date the insurer receives all items, statements, and forms
required by the insurer to secure final proof of loss.” § 542.056(a). Then, if the
insurer notified the claimant under § 542.056 that it was accepting the claim,
§ 542.057 provides that “the insurer shall pay the claim not later than the fifth
business day after the date notice is made.” § 542.057(a). Finally, § 542.058
provides an alternate payment deadline to the one set out in § 542.057: “if an
insurer, after receiving all items, statements, and forms reasonably requested
and required under Section 542.055, delays payment of the claim for . . . more


       1Generally, § 542.055’s deadline is limited to 15 days, but it extends to the 30 days
referenced here “if the insurer is an eligible surplus lines insurer.” § 542.055(a). No party
disputes that St. Paul qualifies for the 30-day deadline.
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                                        No. 13-20529
than 60 days, the insurer shall pay damages and other items as provided by
Section 542.060.” § 542.058(a).
       As referenced in § 542.058, § 542.060 provides the enforcement
mechanism for the Act’s deadlines. Under that provision,
       [i]f an insurer that is liable for a claim under an insurance policy
       is not in compliance with this subchapter, the insurer is liable to
       pay . . . , in addition to the amount of the claim, interest on the
       amount of the claim at the rate of 18 percent a year as damages,
       together with reasonable attorney’s fees.
§ 542.060(a).
       Here, the jury found that Cox provided notice of its claim to St. Paul on
October 17, 2005, and that St. Paul failed to commence an investigation or
request from Cox needed items, statements, and forms within 30 days of that
date. Consequently, the jury found that St. Paul violated § 542.055 of the Act.
The district court held that this violation triggered the 18% interest penalty
set out in § 542.060. As for the precise date that interest began accruing, the
district court reasoned that when St. Paul violated § 542.055 by failing to
timely request information, it “signal[led]” to Cox that notice of the claim was
all the information it believed to be required. Thus, the district court concluded
that interest began accruing 60 days after Cox provided St. Paul with notice of
its claim, on December 16, 2007. See § 542.058(a). 2



       2 The district court determined that interest stopped accruing the date it rendered
judgment in favor of Cox, August 16, 2013. Penalty interest under the Act accrues until the
earlier of (1) the date judgment is rendered in favor of the insured, see, e.g., Great Am. Ins.
Co. v. AFS/IBEX Fin. Servs., Inc., 

, 809 (5th Cir. 2010); or (2) the date the
insurer takes the action it failed to take earlier, triggering the penalty. See State Farm Life
Ins. Co. v. Martinez, 

, 806–07 (Tex. 2007) (holding that the insurer’s
interpleader of policy proceeds, which “sufficed in place of payment,” “[h]alt[ed]” the accrual
of penalty interest after the insurer violated § 542.058(a)); see also Allison v. Fire Ins. Exch.,

, 263–64 (Tex. App.—Austin 2002, pet. granted, judgm’t vacated w.r.m.)
(similar). St. Paul raises no argument that the district court erred in determining the date
interest stopped accruing, and “arguments not raised . . . are waived.” Meadaa v. K.A.P.
Enters., L.L.C., 

, 883 n.21 (5th Cir. 2014). Consequently, we have no occasion to
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                                       No. 13-20529
       St. Paul disputes the district court’s determination only of the accrual
date. As St. Paul points out, it is only § 542.058, and not any of the Act’s other
deadlines, that explicitly provides that an insurer is liable for penalty interest
under § 542.060 for violating it.           See § 542.058(a) (“[I]f an insurer, after
receiving all items, statements, and forms reasonably requested and required
under Section 542.055, delays payment of the claim for . . . more than 60 days,
the insurer shall pay damages and other items as provided by Section
542.060.”) Given this statutory provision, and given that the Act’s ultimate
purpose is “to promote the prompt payment of insurance claims,” see Tex. Ins.
Code § 542.054 (emphasis added), St. Paul reasons that its violation of
§ 542.055 is immaterial to the proper calculation of the accrual date. Instead,
St. Paul argues that interest should not begin to accrue until 60 days after the
insurer “receive[s] sufficient information with which it could adjust the claim.” 3
And that date, St. Paul adds, should be determined on an invoice-by-invoice
basis (i.e., interest should accrue as to a particular cost 60 days after St. Paul
received the invoice supporting that cost); or, alternatively, based on the date
St. Paul received all information necessary to adjust Cox’s entire claim.
                                              2.
       The Texas Supreme Court has not yet explained whether, and when, an
insurer’s violation of § 542.055 triggers the accrual of penalty interest under
§ 542.060. We therefore must make an “Erie guess[,] determin[ing], in our best



address whether St. Paul “cured” its deadline violation so as to stop the accrual of interest
sometime before the date of judgment.
       3 It is not immediately obvious how St. Paul gets from its premise—that § 542.058 is

the only deadline in the Act that triggers the accrual of statutory interest—to its conclusion
that interest should not accrue until the insurer fails to pay a claim within 60 days of
receiving “sufficient information with which it could adjust the claim.” See § 542.058(a)
(requiring insurers to pay claims within 60 days of “receiving all items, statements, and forms
reasonably requested and required under Section 542.055” (emphasis added)). Because we
disagree that § 542.058 is the only deadline in the Act that triggers statutory interest,
however, see infra pp. 17–19, this ostensible flaw in St. Paul’s argument is beside the point.
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                                 No. 13-20529
judgment, how that court would resolve the issue.”           Six Flags, Inc. v.
Westchester Surplus Lines Ins. Co., 

, 954 (5th Cir. 2009) (internal
quotation marks omitted). In doing so, we will “follow the same rules of
[statutory] construction that a Texas court would apply—and under Texas law
the starting point of our analysis is the plain language of the statute.” Wright
v. Ford Motor Co., 

, 269 (5th Cir. 2007). In our view, the plain
language of the Act is fatal to St. Paul’s argument.
      As we have said, St. Paul’s argument essentially is that the failure to
comply with only one of the several statutory deadlines—the 60-day payment
deadline under § 542.058—triggers the accrual of interest under § 542.060.
But § 542.060 explicitly provides that an insurer who violates any of the
deadlines in the Act is liable for the interest penalty on the amount of the
claim. See Tex. Ins. Code § 542.060(a) (“If an insurer that is liable for a claim
under an insurance policy is not in compliance with this subchapter . . . . ”
(emphasis added)). Unsurprisingly, given the plain language of § 542.060, St.
Paul identifies no cases endorsing its theory that only a violation of the
§ 542.058 deadline gives rise to penalty interest. And indeed, courts have
repeatedly stated otherwise—that “[t]he language of [§ 542.060] clearly and
unambiguously dictates its application to the insurer that fails to comply with
any of the requirements set forth in [the Act].” Mid-Century Ins. Co. v. Barclay,

, 811–12 (Tex. App.—Austin 1994, writ denied); see also
Lexington Ins. Co. v. N. Am. Interpipe, Inc., No. H-08-3589, 2011 U.S. Dist.
LEXIS 5090, at *13 n.18 (S.D. Tex. 2011); U.S. Fire Ins. Co. v. Lynd Co., 

, 222 (Tex. App.—San Antonio 2012, pet. denied); Protective Life
Ins. Co. v. Russell, 

, 286 (Tex. App.—Tyler 2003, pet. denied).
      To be sure, it is a “disturbing inconsistency” that, of the Act’s deadlines,
“only [§] 542.058 includes express language tying a violation of its prompt
payment requirement to statutory interest under [§] 542.060(a).” Devonshire
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                                  No. 13-20529
Real Estate & Asset Mgmt., LP v. Am. Ins. Co., CIVIL ACTION NO. 3:12-CV-
2199-B, 

, at *59–60 (N.D. Tex. Sept. 26, 2014).
But to conclude from this particular phrase that only a violation of § 542.058
gives rise to penalty interest under § 542.060 would “take[] th[e] expressio
unius est exclusio alterius canon too far.” Elonis v. United States, 

, 2008 (2015); see Mid-Century Ins. Co. v. Kidd, 

, 274 (Tex.
1999) (“The doctrine of expressio unius est exclusio alterius is . . . not an
absolute rule.”). First, as we have explained, the argument that no deadline
other than § 542.058 triggers penalty interest under § 542.060 is foreclosed by
the text of § 542.060 itself, which penalizes insurers “not in compliance with
this subchapter,” not just those not in compliance with § 542.058. § 542.060(a)
(emphasis added). Moreover, a reading of the Act under which insurers are
liable for penalty interest only if they violate § 542.058, but not if they violate
the other statutory deadlines, would “effectively . . . render[]” the other
deadlines “toothless,” Devonshire, 

, at *61, thus
flouting the “elementary rule of construction” that “effect must be given to
every sentence, clause, and word of a statute so that no part thereof be
rendered . . . inoperative.” City of San Antonio v. City of Boerne, 

, 29 (Tex. 2002) (internal quotation marks omitted). Finally, § 542.054
provides that the Act “shall be liberally construed to promote the prompt
payment of insurance claims.” Yet the construction urged by St. Paul is hardly
“liberal”; instead, it would seem to transform all but one of the Act’s deadlines
from commands backed by the threat of penalty interest to suggestions backed
by nothing at all.
      Notwithstanding § 542.058’s specific reference to penalty interest, then,
we think the text of the Act as a whole is clear: a violation of any of the Act’s
deadlines—including St. Paul’s violation of § 542.055 here—triggers the
accrual of statutory interest under § 542.060.
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                                    No. 13-20529
                                            3.
      Aside from its statutory argument, St. Paul also asserts that the Texas
Supreme Court’s decision in Lamar Homes, Inc. v. Mid-Continent Cas. Co., 

(Tex. 2007), casts doubt on the district court’s interest calculation. In
Lamar Homes, this court certified to the Texas Supreme Court the question
whether the Act applies to an insurer’s breach of the duty to defend. 

In answering yes, the Lamar Homes court disapproved of lower-court decisions
that had “characterized the prompt-payment statute as ‘unworkable’ in the
context of the insured’s claim under a defense benefit” because “a defense claim
. . . typically has no finite value at the time the insurer denies it.” 

Concluding that the Act presents no special difficulty with regard to a claim
for defense benefits, the court explained that the actual loss suffered by the
insured is quantified when the insured retains counsel and receives
“statements for legal services.”      

explained that “when the
insurer, who owes a defense to its insured, fails to pay within the statutory
deadline, the insured matures its right to reasonable attorney’s fees and the
eighteen percent interest rate specified by the statute.” 

542.060).
      Latching onto the Lamar Homes court’s reference to “the last piece of
information needed to put a value on the insured’s loss,” St. Paul asserts that
Lamar Homes articulated an “accrual rule” under which interest under the Act
does not accrue on particular costs at least until the insured submits the
invoices supporting the costs and the insurer then fails to pay within the
statutory deadline.     Taken in context, however, the Lamar Homes court’s
reference to “the last piece of information needed to put a value on the insured’s
loss” was in reference to a distinct type of claim that “has no finite value at the
time the insurer denies it,” not a broad holding that, contrary to the statutory
text, an insurer is liable for penalty interest only if it fails to pay after receiving
the information needed to adjust the claim. 

the court’s description
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                                 No. 13-20529
of how interest would accrue when an insurer fails to pay a defense-benefit
claim within the § 542.058 deadline presupposes that the insurer met the
deadlines imposed by the other sections of the statute. 

the insurer “wrongfully rejects its defense obligation”). And indeed, reading
Lamar Homes to say that only an insurer’s failure to pay can trigger penalty-
interest liability is inconsistent with the language of the opinion itself, which
elsewhere states explicitly that “[t]he prompt-payment statute provides that
an insurer . . . who does not promptly respond to, or pay, the claim as the
statute requires, is liable” for statutory interest. 

(emphasis added).
Thus, Lamar Homes provides no support for St. Paul’s proposed accrual rule.
                                 *     *      *
      In sum, the Texas Prompt Payment of Claims Act (1) imposes on insurers
a series of claims-handling deadlines, §§ 542.055–.058; and (2) enforces those
deadlines by requiring insurers who fail to comply with them (and who
ultimately are liable on the claim) to pay statutory interest. § 542.060(a). One
of the Act’s deadlines is set out in § 542.055(a), which requires an insurer,
among other things, to commence an investigation within 30 days of receiving
notice of an insured’s claim. The question presented in this appeal is whether
an insurer who admittedly fails to comply with § 542.055(a) may incur penalty
interest under § 542.060; or whether, as St. Paul has argued, regardless of an
insurer’s noncompliance with the § 542.055(a) deadline, penalty interest under
the Act will accrue only when an insurer fails to pay a claim within 60 days of
receiving sufficient information upon which it could adjust the claim.
      As we have explained, the plain language of the Act provides that a
violation of any of the Act’s deadlines—including St. Paul’s violation of the
§ 542.055(a) deadline here—begins the accrual of statutory interest under
§ 542.060. Thus, we cannot accept St. Paul’s argument that, notwithstanding
an insurer’s violation of § 542.055(a), interest cannot begin to accrue until 60
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                                        No. 13-20529
days after the insurer receives sufficient information which would allow the
insurer to adjust the claim. Because this argument is the only argument that
either party has raised against the district court’s determination of the
interest-accrual period, we find no reversible error in the district court’s award
of penalty interest to Cox. 4
                                              IV.
       For these reasons, the district court’s judgment is, in all respects,
                                                                                 AFFIRMED.




       4 As we have noted, the district court did not begin the accrual of interest on the date
of St. Paul’s violation of § 542.055. Instead, combining §§ 542.055 and 542.058, the district
court held that interest began accruing 30 days later, i.e., 60 days after the notice of claim.
See supra p. 15. Cox has not cross-appealed to seek accrual from the date of the § 542.055
violation, however. Thus, although we have concluded that a violation of any of the Act’s
deadlines begins the accrual of statutory interest, we affirm the district court’s application of
a shorter accrual period here.
                                              21