Dallas Fort Worth Insurance Lawyer Blog
Many insurance claims are hard to justify a lawsuit unless the insured can make a claim for attorney fees. Most insurance claims do allow for recovery of attorney fees. The caveat is that the claim for attorney fees has to be presented properly. This includes notice prior to a lawsuit being filed.
Here is another recent (January 2023) case discussing attorney fees. The opinion is from the Northern District of Texas, Dallas Division. It is styled, Ghulam Sarwar d/b/a AR2S MGMT Inc. and AR2S MGMT Inc. v. General Star Indemnity Company.
This is a lawsuit arising out of a hail damage claim. General Star (Defendant) filed a motion to exclude Plaintiffs claim for attorney fees based on the assertion that the required pre-suit notice made via email was insufficient and untimely. Plaintiff counters that notice was sufficient, if not timely, was not timely due to concerns that the statute of limitations was running.
Pursuant to Texas Insurance Code, Section 542A.003(c), pre-suit notice can be furnished by the claimant or his attorney or other representative, and under those circumstances, the attorney or representative shall “provide a copy of the notice to the claimant” and “include in the notice a statement that a copy of the notice was provided to the claimant.” But, pursuant to Section 542A.oo3(d), pre-suit notice is not required when “the claimant has reasonable basis for believing there is insufficient time to give pre-suit notice before the limitations period will expire” or the claim is asserted as a counterclaim.
Pursuant to Section 542A.007(d), if the claimant fails to provide sufficient notice under section 542.003(b), then 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 party entitled to notice, but which did not receive such notice, must file a pleading with the court within 30 days after the date the defendant files an original answer to preclude attorney’s fees.
The court will first address whether the May 2021 email provided General Star adequate pre-suit notice. General Star contends that the Paradise Claims email does not meet any of the statute’s elements. For the first element, General Star argues that the May 2021 email contains no details of the acts or omissions allegedly giving rise to the claim. Sarwar argues that referencing the “Texas Handling practices” in the May 2021 email is sufficient pre-suit notice. The court agrees with General Star that the email fails to satisfy the statute’s first element.
Section 542A.003(b) requires a “statement of the acts or omissions giving rise to the claim.” The May 2021 email provides the following:
We are following up on this file. We requested on site, the inspection photos taken prior to binding coverage. I requested these photos from Mr. Hoyt because as I exited my car on site, Mr. Hoyt immediately attempted to place the date of loss on a storm that was outside of your policy period. I explained to Mr. Hoyt that if that is General Star’s position, then they would have to substantiate the condition of the building prior to binding coverage. I also advised Mr. Hoyt that if the building was in questionable condition, it is the carrier’s responsibility to provide exclusions of coverage for those questionable conditions upon binding the policy. From what I can see on the policy, no such exclusions exists and none of the requested photos have been provided to prove the condition of the property prior to the date of loss. Additionally, we have received no updates from your company on the status of this file which I believe is in violation of the Texas Claims Handling practices, which General Star is subject to. We have also not received your engineer’s report. Please find attached, the estimate for the damages on site. Please reach out to me so we can discuss.
The email does not include the acts or omissions that give rise to the claim. Notice letters with specific factual allegations supporting the causes of action, or at least enough information to imply those facts, satisfy the notice requirement.” Instead of detailing how [the insurer] allegedly breached the insurance contract and the duty of good faith, the May 2021 email does not provide any information about Sarwar’s claims. The email at best implies that there is an insurance dispute, but does not provide any information about the dispute, the policy, or how General Star was acting in bad faith by denying the claim that would facilitate a settlement negociation. Therefore, Sarwar did not provide adequate pre-suit notice under section 542A.003(b). Consequently, to recover attorney’s fees, Sarwar must show that pre-suit notice was impracticable.
For the excuse of filing the lawsuit without a proper notice to apply, the plaintiff must offer some reason independent from simply stating that the impending expiration of the limitations period made notice impracticable.
Sarwar contends that he filed this action on April 27, 2022, to avoid the expiring statute of limitations, and he argues that he should not be punished for negotiating with General Star to avoid litigation. In turn, General Star argues that Sarwar’s claim, if any, accrued on December 14, 2020, not on the date of loss, April 28, 2020. Thus, General Star argues that Sarwar filed his complaint well within the statute of limitations, and he had opportunity to send pre-suit notice to General Star.
Here, Sarwar filed this action on April 27, 2022, nearly nine months before the limitations period would have expired. Therefore, it was not impracticable for Sarwar to provide pre-suit notice to General Star.