Giving Notice And Attorney Fees

An insurance lawyer is frequently asked about whether or not attorney fees can be recovered by a successful claimant. The short answer is “yes.”  But only if you give proper notice.
This issue is discussed in a 2023 opinion from the Southern District of Texas, Houston Division.  The opinion is styled, Henry & Lydia Ansah v. Nationwide Property And Casualty Insurance Company.
The Ansah’s had property insurance through Nationwide.  It is alleged the Ansah’s suffered storm damages and filed a claim with Nationwide that ultimately ended up in a lawsuit.
Defendant pleaded that Plaintiffs did not provide adequate presuit notice as required by Texas Insurance Code sections 542A.003 and 542A.007(d).  Defendant filed its Motion to Preclude Attorney Fees.  Defendant argues that Plaintiffs cannot recover attorneys’ fees incurred in this case after the filing of Defendant’s Answer on July 7, 2023, because Plaintiffs did not provide adequate presuit notice at least 61 days before filing this action as required by Texas Insurance Code section 542A.007(d).  Plaintiffs responded, arguing that their Damages Estimate sent on July 30, 2022, satisfied § 542A. 007(d).
Texas Insurance Code section 542A.003(a) requires a covered insurance claimant to give presuit notice to an insurer.  Section 542A.003(b) requires that the notice must include “(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.”  Pursuant to section 542A.005(b)(1), upon timely motion by the defendant, “[t]he court shall abate the action if the court finds that the [defendant] . . . did not, for any reason, receive a presuit notice complying with Section 542A.003.”  In addition, section 542A.007(d) allows the defendant to seek preclusion of attorney’s fees if it timely pleads and proves that it was entitled to but did not receive a presuit notice “stating the specific amount alleged to be owed by the insurer under Section 542A.003(b)(2)” at least 61 days prior to suit.
Defendant timely pleaded that it was entitled to presuit notice and that it did not receive it.  It is undisputed that Plaintiffs sent the May 30, 2023, Demand Letter less than 61 days before they filed this action.  The only question is whether Plaintiffs’ Damages Estimate qualifies.  Texas Insurance Code section 542A.007(d) bars attorney’s fees absent a “presuit notice stating the specific amount alleged to be owed by the insurer” “on the claim for damage to or loss of covered property.”  According to Defendant the claims process was still ongoing when Plaintiffs sent their Damages Estimate, and Plaintiffs do not allege otherwise.  The court has previously held that a damage estimate sent prior to an insurer’s final coverage decision does not serve as presuit notice “since an insured’s legal claim generally arises when coverage is denied.
The July 30, 2022, Damages Estimate also does not appear to match the sums that Plaintiffs ultimately demanded.  Plaintiffs’ Damages Estimate lists a Replacement Cost Value of $102,954.66, and their Demand Letter requests $88,402.22 in Recoverable Cost Value, $56,185.98 in Recoverable Depreciation, and $78,936.05 in Actual Cash Value.  None of these amounts nor any combination thereof correspond to the $102,954.66 from Plaintiffs’ Damages Estimate.  The Damages Estimate therefore cannot satisfy section 542A.003(b)(2), which expressly requires presuit notice to state “the specific amount alleged to be owed”.
Because Plaintiffs never provided Defendant with a presuit notice stating “the specific amount alleged to be owed,” the court may not award to Plaintiffs any attorney’s fees.
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