Insurance lawyers know and understand that before suing an insurance company for denying a claim, the insurance company must be given the statutory presuit notice of the intent to file a lawsuit. This was recently illustrated in a December 23, 2019, opinion from the Northern District of Texas, Dallas Division. The opinion is styled, Gateway Plaza Condo v. The Travelers Indemnity Company Of America.
Travelers had denied Gateway’s claim for storm damage. There was significant disagreement about the respective parties’ conduct in the early stages of the dispute.
Gateway alleges the property was damaged by a severe storm on June 2, 2017. Gateway contends it cannot recall when Travelers was notified of the loss. Gateway suggests that Travelers retained an inspector, JNT Developers, to survey the property on August 16, 2017. Gateway alleges Travelers denied the claim but does not know exactly when the claim was denied. The evidence indicates that Travelers sent Gateway a letter on October 6, 2017, stating Gateway’s policy does not cover damage to the roof. Gateway asserts that Travelers must have denied the claim earlier because the letter references the parties’ “recent conversations about the claim.”
In contrast to Gateway’s assertions, Travelers submitted an affidavit stating that Gateway filed its claim on October 2, 2017, and reported damage to the property on or about September 25, 2017. Travelers further attests that it did not retain any individual to inspect the property before these dates. The affidavit states that Travelers first came across JNT’s report when Gateway showed it to Travelers during an inspection of the property on October 6, 2017. Travelers then sent a Gateway a letter dated October 6, 2017, denying the claim.
Later developments are undisputed. Gateway retained a public adjuster by January 2018, a second adjuster by March 2019, and an attorney on April 26, 2019. The attorney requested various documents from Gateway regarding the claim on May 3, 2019, notified Travelers that Gateway will be filing suit on June 3, 2019, and then filed this action in state court on June 3, 2019. Travelers then removed the case to this Federal Court on July 10, 2019.
Section 542A of the Texas Insurance Code became effective on September 1, 2017, and provides the notice requirements to be given to an insurer prior to filing a lawsuit. Specifically, a plaintiff must provide the notice at least 61 days before filing a lawsuit unless it is “impracticable” because: “(1) the plaintiff has a reasonable basis for believing there is insufficient time to give the presuit notice before the limitations period will expire; or (2) the action is a counterclaim.”
If, within 30 days of filing “an original answer in the court in which the action is pending,” the defendant “pleads and proves” “that the defendant was entitled to but was not given a presuit notice …, the court may not award to the plaintiff any attorney’s fees incurred after the date the defendant files the pleading with the court.” Here, Gateway admits it did not provide Travelers with presuit notice, but argues that notice was not required under Section 542A.003(d)(1) because it “had a reasonable basis for believing that there was not enough time for a 60-day presuit notice.” This Court disagrees.
The statute of limitations under Texas law for claims under the Texas Insurance Code and claims for bad faith is two years from the date that the coverage under the Policy was denied. Here, the evidence is uncontroverted that Gateway reported its claim on October 2, 2017. Thus, it is inconceivable that Travelers could have denied the claim before Gateway first filed its claim in October 2017. Since the statute of limitations would expire in October 2019, Gateway did not have a reasonable basis for believing that there was insufficient time to give presuit notice when Gateway filed the lawsuit on June 3, 2019.