Dallas Fort Worth Insurance Lawyer Blog
As all insurance lawyers know, the Texas Insurance Code requires that prior to filing a lawsuit against an insurance company, that the insured give the insurance company a pre-suit notice. This issue is discussed in a 2022 opinion from the Northern District of Texas, Dallas Division. The opinion is styled, Nisha Hospitality LLC d/b/a Shady Oaks Motel v. Scottsdale Insurance Company.
A storm damaged Shady Oaks in October 2019. Scottsdale estimated the damage at $19,461.40 in terms of replacement cost value. On November 30, 2020, the public adjuster Shady Oaks hired (Pinnacle) sent Scottsdale its estimate of $87,270.91. Pinnacle sent this estimate twice more on subsequent dates. Counsel for Shady Oaks again sent the same demand for $87,270.91 on June 9, 2022, less than 61 days before filing suit.
Texas Insurance Code section 542A.003 requires that “not later than the 61st day before the date a claimant files an action . . . the claimant must give written notice to the person in accordance with this section as a prerequisite to filing the action.”
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.
That presuit notice can come from “an attorney or other representative,” but if so, it must “provide a copy of the notice to the claimant” and “include in the notice a statement that a copy of the notice was provided to the claimant.” And presuit notice is not required if it is “impracticable because . . . the claimant has a reasonable basis for believing there is insufficient time to give the presuit notice before the limitations period will expire . . . .”
(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.
That presuit notice can come from “an attorney or other representative,” but if so, it must “provide a copy of the notice to the claimant” and “include in the notice a statement that a copy of the notice was provided to the claimant.” And presuit notice is not required if it is “impracticable because . . . the claimant has a reasonable basis for believing there is insufficient time to give the presuit notice before the limitations period will expire . . . .”
The remedy for not sending a presuit notice with a specific monetary demand on the claim is that “the court may not award to the claimant any attorney’s fees incurred after the date” the defendant files the motion to exclude fees. Other violations of the law are remedied by abating the case if the plaintiff so requests.
Did the Pinnacle estimates amount to presuit notice? Shady Oaks says yes. Scottsdale says no based on it’s position that estimates by public adjusters do not meet the requirements of presuit notice in section 542A.003(b)(2). The Court agrees with Shady Oaks Motel that the adjuster’s estimate satisfies section 542A.003’s presuit notice requirement.
As addressed above, the notice must specify “the specific amount alleged to be owed by the insurer on the claim” under Section 542A.003(b)(2). Here, the Pinnacle estimate indicated the replacement cost should have been $87,270.91 (adding totals for other structures, the sign, building 1, and building 2). This is the only requirement Chapter 542A states will result in no further attorney’s fees if violated.
The question remains is if there is any impact from the fact that the presuit notice came from an adjuster and not the claimant. This certainly impacts the requirements in section 542A.003(d) that such a notice to copy the claimant and say it is copying the claimant. The Court has reviewed the documents Pinnacle sent Scottsdale on three occasions. None copied the claimant or contained a statement that they copied the claimant. But that violation of section 542A.003(d) doesn’t trigger the remedy of excluding attorney’s fees (which only is a remedy for violating the monetary demand in section 542.003(d)(2)). While there is no specific remedy for a violation of section 542A.003(d), the chapter also allows for abatement
as a remedy for an insurer not receiving “a presuit notice complying with Section 542A.003.” But abatement won’t work here because the abatement section hinges on the plaintiff filing a plea in abatement, and Shady Oaks Motel has not filed such a plea or requested an abatement when responding to the motion to exclude fees. As such, the Court finds abatement to not be an available remedy for Pinnacle failing to copy Shady Oaks and including a statement ssaying it was doing so. And neither is excluding fees because the presuit notice included the monetary amount demanded.
as a remedy for an insurer not receiving “a presuit notice complying with Section 542A.003.” But abatement won’t work here because the abatement section hinges on the plaintiff filing a plea in abatement, and Shady Oaks Motel has not filed such a plea or requested an abatement when responding to the motion to exclude fees. As such, the Court finds abatement to not be an available remedy for Pinnacle failing to copy Shady Oaks and including a statement ssaying it was doing so. And neither is excluding fees because the presuit notice included the monetary amount demanded.