Dallas Fort Worth Insurance Lawyer Blog
Here is a case regarding ‘Notice” under Texas Insurance Code, section 542A.007(d). It is a 2025 opinion styled, Devindra Investments, Inc. v. Wesco Insurance Company. It is from the Northern District of Texas, Amarillo Division.
Before the Court is Defendant Wesco Insurance Company’s amended Opposed Motion to Limit Plaintiff’s Recovery of Attorneys’ Fees. Pursuant to § 542A.007(d) of the Texas Insurance Code, Defendant moves the Court to preclude Plaintiff Devindra Investments, Inc. from recovering any attorney’s fees incurred after July 25, 2024. The sole issue is raised by Plaintiff’s timely presentation of adequate notice to an independent adjuster retained by a third-party claims administrator on Defendant’s behalf, but not to Defendant directly. After considering the arguments of the parties and applicable law, the Court finds the Motion should be GRANTED IN PART by limitation of Plaintiff’s recovery of attorney’s fees and DENIED IN PART by precluding fees incurred after July 26, 2024.
Chapter 542A of the Texas Insurance Code applies to first party insurance claims made under Texas law and resulting from forces of nature such as hailstorms. That chapter requires that a claimant provide presuit notice to any person from whom the claimant seeks damages, and it establishes various criteria such notice must meet.
The Court is not aware of, and the parties have not pointed to, any case law interpreting this chapter of the Texas Insurance Code in a context where presuit notice was provided to an independent adjuster hired by a third-party claims administrator, rather than directly to the insurer.
Defendant argues that the statute requires the Plaintiff to give presuit notice directly to the insurer because the insurer is “the person” from whom the Plaintiff seeks damages. Defendant further argues that service of notice “upon an independent adjuster or other agent of the insurer” is not contemplated by the statute, because the legislature specifically referred to agents of the insurer in other sections of the same chapter.
Plaintiff responds that, in this case, “the independent adjuster is the functional equivalent of a claims employee of an insurer.” Comparing the question to that of whether communications with the adjuster are covered by the attorney-client privilege, Plaintiff alleges that Mr. Young was responsible for performing a key job for Defendant, that he had a continuous and close relationship with Defendant, and that Mr. Young was the first recipient of information about the insurance claim that forms the foundation of this lawsuit. Plaintiff also asserts that the Texas Insurance Code does not generally distinguish between in-house adjusters employed by an insurer and independent adjusters working for third-party claims administrators retained by the insurer.
The Court finds this issue is best resolved by looking to the legislative intent of the statute and to the plain meaning of the words chosen to implement that intent. The purpose of provisions requiring presuit notice in Texas law is generally “to discourage litigation and encourage settlements of consumer complaints.”
To achieve that purpose, Texas law requires claimants to wait to file suit for at least sixty days after providing certain information to an insurer. Section 542A establishes two possible consequences if a plaintiff does not wait for the required time. One is that, if presuit notice was inadequate in any way, proceedings may be abated. The other is that, if presuit notice does not set forth the specific amount alleged to be owed by the insurer, the recovery of attorney’s fees may be limited. In a case where both abatement and limitation of fees are on the table, the choice is left to the defendant, who must move for one or the other in accordance with certain procedural requirements.
The requirement that a plaintiff provide notice and then wait a specified time before filing suit is set out in a different section from either of those establishing remedies for defendants. A plaintiff’s obligation to give timely, adequate notice is imposed as a straightforward duty and as a prerequisite to filing suit. Neither section establishing a defendant’s remedies frames its applicability in terms of a plaintiff’s discharge of this duty. Instead, each section, by its own terms, is triggered by the violation of a defendant’s right to receive the mandatory notice.
Plaintiff was obligated to provide presuit notice to Defendant no later than March 9, 2024, the sixty-first day before Plaintiff filed suit in this court. Though Plaintiff provided notice to the independent adjuster Mr. Young on December 28, 2023, the record before the Court does not clearly establish that, in this case, that was sufficient to discharge Plaintiff’s obligation. Defendant pleaded and proved by affidavit that it was not given the presuit notice to which it was entitled. Plaintiff has not provided any evidence that Defendant was given or did receive the presuit notice to which it was entitled, other than an email from Mr. Young stating he would provide the notice to Crawford & Company’s legal department. The record is devoid of any evidence as to what happened, if anything, once Crawford and Company’s legal department presumably received the notice from Mr. Young. This is especially significant considering the extensive delays the Court has granted the parties so that discovery on the matter could be conducted. Accordingly, the Court finds that Defendant has met the requirements imposed by Texas law, and Defendant’s motion should therefore be granted.