Must Give Proper Warning To Insurance Company Before Suing

Insurance lawyers know that they must give proper warning to an insurance company before suing the insurance company.  Failure to do so puts a stop to a subsequent lawsuit.
This is illustrated in a 2023 opinion from the Southern District of Texas, McAllen Division.  The opinion is styled, Laura Navarro v. State Farm Lloyds.
Navarro filed a claim with State Farm for hail and windstorm damage.  Unhappy with State Farm’s response, Navarro sent a notice letter to State Farm pursuant to Texas Insurance Code, Section 542A.003.  Among other things, the letter states that:  (1) Navarro suffered damages caused by State Farm’s adjustment and investigation of Navarro’s claim: (2) the unpaid policy benefits were $21,157.31; and (3) the attorney fees were $8,000.
Navarro sued State Farm for breach of contract, violations of the Insurance Code, and bad faith.  State Farm filed a verified plea in abatement arguing that Navarro’s notice letter did not properly state the amount owed or the attorney fees, as is required by Section 542A.003(b).
Insurance Code Section 542A.003(a), under which Navarro brings suit, requires that “not later than the 61st day before the date a claimant files an action to which this chapter applies in which claimant seeks damages from any person, the claimant must give written notice to the person in accordance with this section as a prerequisite to filing the action.  The notice must provide: (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 fees incurred by the claimant.  Precision is required when providing notice of the specific amount alleged to be owed.  Section 542A.003(b)(2)’s directive does mot permit a claimant to equivocate, or suggest an estimate, or offer a placeholder sum that might be changed after further investigation takes place.
According to Section 542A.005(b)(1), the court must abate an action if it finds that the notice did not comply with the requirements of section 542A.005(e)(1).  Abatement continues until the sixtieth day after the date compliant notice is given.
Although Navarro’s letter states that “the unpaid policy benefits to date are $21,157.31” and “the attorney fees to date are $8,000.00” the letter is otherwise equivocal.  For example, the letter states that it is likely that the damages sought at trial “will be well more than the damages identified above because our investigation is not complete.”  It explains that Navarro “cannot and will not resolve this dispute for the amount of damages and fess listed above because the figure does not necessarily include all of the damages to which Navarro is entitled.”  The letter then points to numerous other damages, such as consequential damages, interest, and treble damages, that “need to be taken into account.”  On attorney fees, the letter states “even if a settlement offer were extended today that included the attorney fees on an hourly basis  as set out in this notice, it would fall short of making Navarro whole.”  The letter does not comply with the requirements of section 542A.003.
The Abatement was granted.
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