Dallas Fort Worth Insurance Lawyer Blog
A common question for insurance lawyers is whether or not a claimant can recover attorney fees if they file a lawsuit. This issue is discussed in a 2022 opinion from the Northern District of Texas, Dallas Division. The opinion is styled, Antonio Mantzuranis v. State Farm Lloyds.
This is a case by Mantzuranis against State Farm for damages resulting from a storm. State Farm paid the amount they believed owed on the claim but a trial resulted over the unpaid amount. A jury awarded $84,020.03, less $39,020.03 for “Money Already Paid,” leaving a net of $45,000. The Court ordered the parties to submit information regarding attorney fees. Mantzuranis concedes that his attorney’s fees claim is subject to reduction under Insurance Code, Section 542A.
Texas Insurance Code, Section 542A.003(b)(2) applies to actions against insurers, including breach of contract claims, and requires a potential plaintiff to provide to a potential defendant pre-suit notice of “the specific amount alleged to be owed by the insurer on the claim for damage to or loss of covered property.”
542A.007 provides a formula by which a claimant’s attorney’s fees award should be reduced based on the pre-suit notice. The attorney’s fees award is calculated by:
(A) dividing the amount to be awarded in the judgment to the claimant for the
claimant’s claim under the insurance policy for damage to or loss of covered
property [(the “Judgment”)] by the amount alleged to be owed on the claim for that damage or loss in a notice given under this chapter [(the “Notice Amount”)]; and
(B) multiplying the amount calculated under Paragraph (A) by the total amount of reasonable and necessary attorney’s fees supported at trial by sufficient evidence and determined by the trier of fact to have been incurred by the claimant in bringing the action [(the “Reasonable Attorney’s Fee”)].
Using the terms in the statute, if the Judgment is less than 20% of the Notice Amount, the claimant may not recover Reasonable Attorney’s Fees. If the Judgment is at least 80% of the Notice Amount, the claimant may recover its Reasonable Attorney’s Fees. If the Judgment is
between 20% and 80% of the Notice Amount, the claimant may recover Reasonable Attorney’s
Fees in proportion to that percentage.
Pursuant to Texas Civil Practices & Remedies Code, Section 38.001(8), a plaintiff may recover reasonable attorney’s fees for a breach of contract. Here, the Court must determine what reduction is required by Section 542A.
State Farm argues that the Judgment amount for Section 542A purposes is $45,000, the amount the jury wrote after deducting money already paid, in response to Question No. 2 in the verdict form. Mantzuranis argues that the Judgment is $84,020.03, the amount listed by the jury before deducting the money already paid. Mantzuranis argues that the jury’s deduction of the amount State Farm previously paid on the claim does not change the jury’s finding of the total loss.
The Court finds that the Judgment amount under Section 542A is $45,000. Section 542A refers to the “amount to be awarded in the judgment,” and the judgment here will be $45,000.
On March 29, 2021, Mantzuranis’ counsel sent to State Farm two separate letters to provide State Farm with the requisite notice. One letter, dated March 19, 2021, was referred to as “Texas Insurance Code Section 542A.003 Notice,” and it listed $155,498 as actual damages to
Mantzuranis’ property. The second letter, dated March 19, 2021, was referred to as “DTPA Notice and Demand Letter,” and it demanded payment of treble damages of $466,494 under the Texas Deceptive Trade Practices Act. State Farm argues that the DTPA Notice provides the Notice Amount, while Mantzuranis argues that the Section 542A Notice provides the Notice Amount.
The parties disagree on whether “damages” includes only actual damages or treble damages, and whether the DTPA Notice can be considered to prove the Notice Amount. State Farm argues that Section 542A uses only the word “damages” and thus does not limit the amount to be considered to actual damages. Further, State Farm also contends that the higher DTPA Notice damages amount should be used to avoid gamesmanship. Mantzuranis urges that the Notice Amount is the amount “owed on the claim” and is to be set out in a notice “given under this chapter,” which means the amount listed in the Notice identified under Section 542A. Mantzuranis further argues that the DTPA Notice is irrelevant, because it was given pursuant to the DTPA claim, and that claim was dismissed before trial.
The Court agrees with Mantzuranis. The Notice Amount is “the amount alleged to be owed on the claim for that damage or loss in a notice given under this chapter.” $155,498 is the amount set out in the notice given under Section 542A. Section 542A explicitly distinguishes notices under that chapter from notices under other laws. Accordingly, the Court finds that the Notice Amount is $155,498. The Judgment will be $45,000, which is 28.9% of the Notice Amount, and Mantzuranis may therefore recover only 28.9% of his Reasonable Attorney’s Fees.