Insurance lawyers want to help their clients as much as possible in any given case. The United States District Court, Western Division Texas, San Antonio Division, issued an opinion regarding recovery of attorney fees in an insurance case. The opinion is a 2018, opinion styled, Jesus Agredano and Margaret Agredano v. State Farm Lloyd’s.
This case will be discussed in three blogs with each blog discussing the Courts ruling regarding attorney fees in insurance cases. This is the second one.
The Agredanos prevailed at trial on their breach of contract claim against State Farm. The remaining question was whether or not they were entitled to seek and recover attorney’s fees.
Texas law is clear that attorney’s fees are recoverable as a cost of collection only if authorized by statute or contract. Neither party contends that the contract at issue in this case provided for the recovery of attorney’s fees. Therefore, the Agredanos can only recover attorney’s fees if a statute authorizes collecting those attorney’s fees.
The Agredanos argue they are entitled to recover fees under Texas Insurance Code, Section 542.060 which provides for attorney fees and an 18% penalty. In this case, the Agredanos met the requirements for recovery under Section 542.060. However, the Agredanos neither pleaded actual damages under Section 542.060 nor did they specifically request damages under Section 542.060.
The Agredanos only indirect reference to Section 542.060 was a request for the 18% penalty. The Agredanos argue that the 18% interest only applies to one section of the Insurance Code, that being Section 542.060.
The Court ruled that this reference was too general. The Court stated: “… merely requesting 18% statutory interest in a petition’s conclusion (a very odd place to seek relief on grounds not addressed elsewhere in the petition), with no specific reference to which statute justifies that interest, is insufficient either to state a claim or to request specific statutory relief.”
The result of this ruling prohibited recovery of attorney fees under Section 542.060.