POLICYHOLDER WHO FAILED TO GIVE PRE-SUIT NOTICE PRECLUDED FROM RECOVERING ATTORNEY FEES
A federal District Court judge in Austin recently held that a property owner who sued its property insurer for Insurance Code violations was not entitled to recover attorney fees because the property owner failed to give the 60-day pre-suit notice required by the Insurance Code. Satija v. Evanston Ins. Co., No. A-22-CV-00408-RP, 2022 WL 2438171 (W.D. Tex. July 5, 2022).
Texas Insurance Code Chapter 542 requires policyholders to give their insurers 60 days’ notice before filing suit and provides two possible remedies for violations: abatement of the suit for 60 days after the required notice is given (§542A.005), and a prohibition against recovering attorney fees (§542A.007). Here, instead of seeking the 60-day abatement, the insurer sought and obtained an order prohibiting the policyholder from recovering any attorney fees incurred after the date of the insurer’s motion.
Editor’s Note: The 60-day abatement has proven to be a relatively ineffective method of enforcing the notice requirement but considering an award of attorney fees can be a significant part of any final judgment, more insurers should consider this method of enforcement.