Pre-Suit Notice In Insurance Cases

Prior to filing a lawsuit, if the lawsuit is filed making claims for violations of the Texas Deceptive Trade Practices Act, or the Texas Insurance Code, Chapters 541 or 542A, it is required that at least a 61 day pre-suit notice be given if the claimant wishes to recover all that is legally allowed under those laws.

A 2020 case from the Western District of Texas, San Antonio Division, makes this clear.  The opinion is styled, PMG International, LTD. v. Travelers Indemnity Company of America.

This lawsuit results from an insurance dispute between PMG and Travelers related to storm damage to one of PMG’s properties insured by Travelers.  PMG sued Travelers alleging breach of contract and various violations of the Texas Insurance Code after the claim was denied.

By filing a motion, Travelers asks the Court for an order precluding PMG’s recovery of attorney’s fees pursuant to Section 542A.007 of the Insurance Code due to PMG’s failure to serve Travelers with a pre-suit demand.  Section 542A.007 governs the award of attorney’s fees to a claimant in an action under the Texas Insurance Code and provides a limit on recovery of fees where a defendant was entitled to but not given pre-suit notice at least 61 days before the action is filed.

This section of the insurance code reads:

If a defendant in an action to which this chapter applies pleads and proves that the defendant was entitled to but was not given a presuit notice stating the specific amount alleged to be owed by the insurer under Section 542A.003(b)(2) at least 61 days before the date the action was filed by the claimant, the court may not award to the claimant any attorney’s fees incurred after the date the defendant files the pleading with the court. A pleading under this subsection must be filed not later than the 30th day after the date the defendant files an original answer in the court in which the action is pending.

This 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’s fees incurred by the claimant.  Pre-suit notice is not required if giving notice is impracticable because (1) the claimant has a reasonable basis for believing there is insufficient time to give the pre-suit notice before limitations will expire; or (2) the action is asserted as a counterclaim.  The 60-day notice requirement is to “discourage litigation and encourage settlements of consumer complaints” by allowing the insurer the opportunity to make a settlement offer prior to filing of the suit.

Accordingly, to prevail on a motion under section 542A.007(d) to deny or limit an award of attorneys’ fees to a plaintiff, a defendant must “plead and prove” that it was entitled to but was not given pre-suit notice at least 61days before the date the action was filed as required by section 542A.003.  Travelers has done so by timely filing its motion with supporting evidence within 30 days of the date it filed its answer.

The record reflects that Travelers filed its answer on January 21, 2020 in state court, invoking Section 542A.007(d)’s limitation on attorney’s fees.  Travelers filed its motion on February 14, 2020, less than 30 days later.  Travelers’s motion and the exhibits attached thereto establish that Travelers issued its denial letter to PMG with regard to the insurance claim underlying this suit on December 6, 2017.  It is undisputed that PMG did not serve Travelers with a pre-suit demand as required by Section 542A.003 before filing suit on December 12, 2019 under various provisions of the Texas Insurance Code.

PMG has not filed a response to Travelers’s motion that might have provided the Court with an explanation as to the reason for the lack of pre-suit notice or an argument as to the impracticability of providing such notice.  According to this Court’s Local Rules, PMG’s response to Travelers’s motion was due within 14 days of the motion’s filing, on or before February 28, 2020.  Pursuant to Local Rule CV-7(e), if there is no response filed within the time period prescribed by the rules, the court may grant the motion as unopposed.

Travelers has therefore pleaded and proved its entitlement to pre-suit notice and PMG’s failure to provide such notice.  Due to PMG’s lack of response to Travelers’s motion, PMG has advanced no basis for why it did not timely provide Travelers with pre-suit notice as required by the Texas Insurance Code.  PMG therefore should be precluded from recovering attorney’s fees incurred after February 14, 2020, the date Travelers filed its motion.

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