Pre-Suit Demands: Insured’s counsel must check all the boxes, but detail may still be vague.

Originally published by Tara Mireur.

Perrett v. Allstate Insurance Company, 2018 WL 2864132 (S.D. Tex. June 11, 2018) is the first case that scrutinizes whether or not a pre-suit notice properly complies with the new requirements of § 542A.003 of the Texas Insurance Code and therefore gives some guidance to attorneys about how strictly courts will enforce each statutory requirement.

Section 542A.003 of the Texas Insurance Code provides that “not later than the 61^st day before the date a claimant files an action to which this chapter applies in which the claimant seeks damages from any person, the claimant must give written notice to the person in accordance with this section as a prerequisite to filing the action.”   The notice must include: 1) a statement of the acts or omissions giving rise to the claim; 2) the specific amount alleged to be owed by the insurer on the claim for damage to or loss of covered property; and 3) the amount of reasonable and necessary attorney’s fees incurred by the claimant, calculated by multiplying the number of hours actually worked by the claimant’s attorney, as of the date the notice is given and as reflected in contemporaneously kept time records, by an hourly rate that is customary for similar legal services.   If any attorney provides notice on behalf of an insurance claimant, the written notice must include “a statement that a copy of the notice was provided to the claimant.”  § 542A.003(b). Courts are required to abate the action if a party does not comply with these pre-suit notice requirements.

In Perrett, Perrett’s attorney sent Allstate a pre-suit notice letter which alleged that Allstate violated the Texas Insurance Code and the Deceptive Trade Practices Act. Allstate moved to abate the action and argued that the notice did not provide a statement of the act or omissions giving rise to the claims, did not include the amount of reasonable and necessary attorney’s fees, and did not provide a statement that the notice was provided to the claimant. The court found that Perrett sufficiently set forth the acts or omissions giving rise to the claims because Allstate had a solid basis from which to imply the facts, as the letter stated the particular statutory provisions allegedly violated as well as included an appraisal report to support the damage calculation. The court also found that the letter sufficiently stated that amount of reasonable and necessary attorney’s fees, specifically holding that calculations are not required to be included in the notice letter.  Id. at *2. The court, however, found that the pre-suit letter failed to satisfy § 542A.003(b) which requires that the notice be sent to the claimant and that the notice contain a statement that a copy was so provided. Because the pre-suit notice did not contain a specific statement that the notice was provided to Perrett, the court abated the case for sixty days after Allstate received the proper notice.

The holdings in Perrett give good instruction to attorneys as to the level of specificity that is required in the pre-suit notice under 542A.003.  The court was satisfied that the notice sufficiently stated the facts giving rise to the claim and the attorneys’ fees claimed, despite not specifically itemizing the method of calculating attorneys’ fees. However, the court was unwilling to overlook the fact that the notice did not state that the notice was provided to the claimant, despite evidence that Perrett’s counsel informed his client about the demand.  Because attorneys for Perrett did not comply with 542A.003(c), the case was abated.

Lesson: Perrett instructs that that the pre-suit notice letter need not provide a great deal of specificity; however, any omission from the statutory requirements may not be overlooked. Plaintiff’s attorneys should take heed to comply with all of the statutory requirements or risk abatement.

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