Claim Denied (Attorney Fees)

Insurance lawyers who handle claims being denied are usually asked whether not their attorney fees can be recovered.  The answer is usually a “Yes” but their are requirements to be met in order to recover those attorney fees.  One of those requirements include giving a pre-suit notice letter in proper form.

In cases where the loss has resulted from an act of nature such as hail storms, tornadoes, hurricanes, freezes, etc. there is a further loop that must be followed involving the timing of the pre-suit notice letter.

Here is a 2023, opinion from the Eastern District of Texas, Tyler Division, that is worth reading.  It is styled, Curt Adkisson v. Safeco Insurance Company Of Indiana.

The case involves loss from a winter storm on February 19, 2021.  The claim was denied and this lawsuit was filed under Texas Insurance Code, Section 542A.

The insurance company lawyers filed papers with the Court stating that the Plaintiff failed to properly comply with the pre-suit notice requirement and as a result is not entitled to the vast majority of their attorney fees.

The Court as follows.

Defendant asserts that the statute requires 61-day notice between pre-suit notice and filing suit, but Plaintiff filed suit 4 days after sending pre-suit notice.  More specifically, Defendant submits that Plaintiff emailed pre-suit notice on February 16, 2023 and filed suit in state court on February 20, 2023.  As a result of Plaintiff’s failure to provide proper pre-suit notice, Defendant contends that Plaintiff cannot recover attorney’s fees incurred after the date it filed the motion to limit fees.

In response, Plaintiff does not dispute that pre-suit notice was sent on February 16, 2023, and that suit was filed on February 20, 2023.  Plaintiff submits, however, that an exception to the
pre-suit notice rule applies pursuant to Section 542.003(d).  Plaintiff asserts that the
impending expiration of the applicable statute of limitations rendered it impracticable for Plaintiff to then wait 61 days before filing suit. Plaintiff argues that he had a reasonable basis to believe there was insufficient time to provide proper pre-suit notice before the expiration of the limitations period.

In its reply, Defendant argues that Plaintiff is not entitled to the narrow exception provided in Section 542A.003(d) because he failed to offer any proof that providing sufficient notice was
impracticable or explain why he waited nearly 23 months after denial of the claim to send pre-suit notice.  Defendant submits that the cause of action accrued on March 24, 2021 when it denied Plaintiff’s claim, yet Plaintiff waited until February 16, 2023 to send pre-suit notice.

The presuit notice requires among other things, “(1) a statement of the acts or omissions giving rise to the claim; (2) the specific amount alleged to be owed by the insurer on the claim for damage to or loss of covered property; and (3) the amount of reasonable and necessary attorney’s fees incurred by the claimant, calculated by multiplying the number of hours actually worked by the claimant’s attorney, as of the date the notice is given and as reflected
in contemporaneously kept time records, by an hourly rate that is customary for similar legal
services.”  his pre-suit notice “is not required if giving notice is impracticable because the claimant has a reasonable basis for believing there is insufficient time to give the pre-suit notice before the limitations period will expire.”

Here, Plaintiff does not dispute that he did not provide the required pre-suit notice.  Instead,
Plaintiff asserts that he did not have time to provide notice 61 days before filing suit because he
was reaching the expiration of the statute of limitations.  Plaintiff provides no further facts or
explanation concerning the delay between the denial of the insurance claim and the submission of pre-trial notice.

Establishing that it is impracticable to provide proper pre-suit notice is not an easy threshold to satisfy and ought to be reserved for those instances in which presuit notice genuinely cannot be provided.  To avail himself of the exception to providing proper notice, a plaintiff must plead and offer some proof as to why the pre-suit notice duty must be excepted – reason independent from simply stating that the impending expiration of the limitations period made the notice impracticable.

Plaintiff submits a conclusory statement that he did not send timely pre-suit notice because of the impending statute of limitations deadline to file suit, but he provides no reason for failing to submit the requisite pre-suit notice 61 days before the expiration of the statute of limitations.  Plaintiff has not demonstrated that the exception provided in Section 542A.003(d)(1) applies.  The Court should not extend the exception of the pre-suit notice to any plaintiff that waits until the statute of limitations run before filing suit.

Once a defendant pleads and proves that it did not receive proper pre-suit notice as required by the Texas Insurance Code, the court may not award to the claimant any attorney’s fees incurred after the date the defendant files the pleading with the court.  As a result of Plaintiff’s failure to provide proper pre-suit notice, the Court cannot award Plaintiff attorney’s fees incurred after March 27, 2023—the date on which Defendant filed its pleading asserting that Plaintiff failed to properly submit pre-suit notice.

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