H.B. No. 668
1-1 AN ACT
1-2 relating to civil remedies for deceptive, unfair, or discriminatory
1-3 practices and certain related consumer claims.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Sections 17.42, 17.43, and 17.44, Business &
1-6 Commerce Code, are amended to read as follows:
1-7 Sec. 17.42. WAIVERS: PUBLIC POLICY. (a) Any waiver by a
1-8 consumer of the provisions of this subchapter is contrary to public
1-9 policy and is unenforceable and void; provided, however, that a
1-10 waiver is valid and enforceable if:
1-11 (1) the waiver is in writing and is signed by the
1-12 consumer;
1-13 (2) <a defendant in an action or claim under this
1-14 subchapter pleads and proves:>
1-15 <(1)> the consumer is not in a significantly disparate
1-16 bargaining position; and
1-17 (3) <(2)> the consumer is represented by legal counsel
1-18 in seeking or acquiring the goods or services<, other than the
1-19 purchase or lease of a family residence occupied or to be occupied
1-20 as the consumer's residence, by a purchase or a lease for a
1-21 consideration paid or to be paid that exceeds $500,000; and>
1-22 <(3) the consumer waives all or part of this
1-23 subchapter, other than Section 17.555, by an express provision in a
1-24 written contract signed by both the consumer and the consumer's
2-1 legal counsel; and provided, however, that a business consumer with
2-2 assets of $5 million or more according to the most recent financial
2-3 statement of the business consumer prepared in accordance with
2-4 generally accepted accounting principles that has knowledge and
2-5 experience in financial and business matters that enable it to
2-6 evaluate the merits and risks of a transaction and that is not in a
2-7 significantly disparate bargaining position may by written contract
2-8 waive the provisions of this subchapter, other than Section
2-9 17.555>.
2-10 (b) A waiver under Subsection (a) is not effective if the
2-11 consumer's legal counsel was directly or indirectly identified,
2-12 suggested, or selected by a defendant or an agent of the defendant
2-13 <The existence or absence of a disparate bargaining position may
2-14 not be established as a matter of law solely by evidence of the
2-15 consumer's financial position relative to other parties to the
2-16 contract or by matters contained in a written contract relating to
2-17 the relative bargaining position of the parties>.
2-18 (c) A waiver under this section must be:
2-19 (1) conspicuous and in bold-face type of at least 10
2-20 points in size;
2-21 (2) identified by the heading "Waiver of Consumer
2-22 Rights," or words of similar meaning; and
2-23 (3) in substantially the following form:
2-24 "I waive my rights under the Deceptive Trade
2-25 Practices-Consumer Protection Act, Section 17.41 et
2-26 seq., Business & Commerce Code, a law that gives
2-27 consumers special rights and protections. After
3-1 consultation with an attorney of my own selection, I
3-2 voluntarily consent to this waiver."
3-3 (d) The waiver required by Subsection (c) may be modified to
3-4 waive only specified rights under this subchapter.
3-5 (e) The fact that a consumer has signed a waiver under this
3-6 section is not a defense to an action brought by the attorney
3-7 general under Section 17.47.
3-8 Sec. 17.43. CUMULATIVE REMEDIES. The provisions of this
3-9 subchapter are not exclusive. The remedies provided in this
3-10 subchapter are in addition to any other procedures or remedies
3-11 provided for in any other law; provided, however, that no recovery
3-12 shall be permitted under both this subchapter and another law of
3-13 both <actual> damages and penalties for the same act or practice.
3-14 A violation of a provision of law other than this subchapter is not
3-15 in and of itself a violation of this subchapter. An act or
3-16 practice that is a violation of a provision of law other than this
3-17 subchapter may be made the basis of an action under this subchapter
3-18 if the act or practice is proscribed by a provision of this
3-19 subchapter or is declared by such other law to be actionable under
3-20 this subchapter. The provisions of this subchapter do not in any
3-21 way preclude other political subdivisions of this state from
3-22 dealing with deceptive trade practices.
3-23 Sec. 17.44. Construction and Application. (a) This
3-24 subchapter shall be liberally construed and applied to promote its
3-25 underlying purposes, which are to protect consumers against false,
3-26 misleading, and deceptive business practices, unconscionable
3-27 actions, and breaches of warranty and to provide efficient and
4-1 economical procedures to secure such protection.
4-2 (b) Chapter 27, Property Code, prevails over this subchapter
4-3 to the extent of any conflict.
4-4 SECTION 2. Section 17.45, Business & Commerce Code, is
4-5 amended by amending Subdivisions (5) and (9) and adding
4-6 Subdivisions (11), (12), and (13) to read as follows:
4-7 (5) "Unconscionable action or course of action" means
4-8 an act or practice which, to a consumer's <person's> detriment,<:>
4-9 <(A)> takes advantage of the lack of knowledge,
4-10 ability, experience, or capacity of the consumer <a person> to a
4-11 grossly unfair degree<; or>
4-12 <(B) results in a gross disparity between the
4-13 value received and consideration paid, in a transaction involving
4-14 transfer of consideration>.
4-15 (9) "Knowingly" means actual awareness, at the time of
4-16 the act or practice complained of, of the falsity, deception, or
4-17 unfairness of the act or practice giving rise to the consumer's
4-18 claim or, in an action brought under Subdivision (2) of Subsection
4-19 (a) of Section 17.50, actual awareness of the act, <or> practice,
4-20 condition, defect, or failure constituting the breach of warranty,
4-21 but actual awareness may be inferred where objective manifestations
4-22 indicate that a person acted with actual awareness.
4-23 (11) "Economic damages" means compensatory damages
4-24 for pecuniary loss, including costs of repair and replacement. The
4-25 term does not include exemplary damages or damages for physical
4-26 pain and mental anguish, loss of consortium, disfigurement,
4-27 physical impairment, or loss of companionship and society.
5-1 (12) "Residence" means a building:
5-2 (A) that is a single-family house, duplex,
5-3 triplex, or quadruplex or a unit in a multiunit residential
5-4 structure in which title to the individual units is transferred to
5-5 the owners under a condominium or cooperative system; and
5-6 (B) that is occupied or to be occupied as the
5-7 consumer's residence.
5-8 (13) "Intentionally" means actual awareness of the
5-9 falsity, deception, or unfairness of the act or practice, or the
5-10 condition, defect, or failure constituting a breach of warranty
5-11 giving rise to the consumer's claim, coupled with the specific
5-12 intent that the consumer act in detrimental reliance on the falsity
5-13 or deception or in detrimental ignorance of the unfairness.
5-14 Intention may be inferred from objective manifestations that
5-15 indicate that the person acted intentionally or from facts showing
5-16 that a defendant acted with flagrant disregard of prudent and fair
5-17 business practices to the extent that the defendant should be
5-18 treated as having acted intentionally.
5-19 SECTION 3. Section 17.46(b), Business & Commerce Code, is
5-20 amended to read as follows:
5-21 (b) Except as provided in Subsection (d) of this section,
5-22 the term "false, misleading, or deceptive acts or practices"
5-23 includes, but is not limited to, the following acts:
5-24 (1) passing off goods or services as those of another;
5-25 (2) causing confusion or misunderstanding as to the
5-26 source, sponsorship, approval, or certification of goods or
5-27 services;
6-1 (3) causing confusion or misunderstanding as to
6-2 affiliation, connection, or association with, or certification by,
6-3 another;
6-4 (4) using deceptive representations or designations of
6-5 geographic origin in connection with goods or services;
6-6 (5) representing that goods or services have
6-7 sponsorship, approval, characteristics, ingredients, uses,
6-8 benefits, or quantities which they do not have or that a person has
6-9 a sponsorship, approval, status, affiliation, or connection which
6-10 he does not;
6-11 (6) representing that goods are original or new if
6-12 they are deteriorated, reconditioned, reclaimed, used, or
6-13 secondhand;
6-14 (7) representing that goods or services are of a
6-15 particular standard, quality, or grade, or that goods are of a
6-16 particular style or model, if they are of another;
6-17 (8) disparaging the goods, services, or business of
6-18 another by false or misleading representation of facts;
6-19 (9) advertising goods or services with intent not to
6-20 sell them as advertised;
6-21 (10) advertising goods or services with intent not to
6-22 supply a reasonable expectable public demand, unless the
6-23 advertisements disclosed a limitation of quantity;
6-24 (11) making false or misleading statements of fact
6-25 concerning the reasons for, existence of, or amount of price
6-26 reductions;
6-27 (12) representing that an agreement confers or
7-1 involves rights, remedies, or obligations which it does not have or
7-2 involve, or which are prohibited by law;
7-3 (13) knowingly making false or misleading statements
7-4 of fact concerning the need for parts, replacement, or repair
7-5 service;
7-6 (14) misrepresenting the authority of a salesman,
7-7 representative or agent to negotiate the final terms of a consumer
7-8 transaction;
7-9 (15) basing a charge for the repair of any item in
7-10 whole or in part on a guaranty or warranty instead of on the value
7-11 of the actual repairs made or work to be performed on the item
7-12 without stating separately the charges for the work and the charge
7-13 for the warranty or guaranty, if any;
7-14 (16) disconnecting, turning back, or resetting the
7-15 odometer of any motor vehicle so as to reduce the number of miles
7-16 indicated on the odometer gauge;
7-17 (17) advertising of any sale by fraudulently
7-18 representing that a person is going out of business;
7-19 (18) using or employing a chain referral sales plan in
7-20 connection with the sale or offer to sell of goods, merchandise, or
7-21 anything of value, which uses the sales technique, plan,
7-22 arrangement, or agreement in which the buyer or prospective buyer
7-23 is offered the opportunity to purchase merchandise or goods and in
7-24 connection with the purchase receives the seller's promise or
7-25 representation that the buyer shall have the right to receive
7-26 compensation or consideration in any form for furnishing to the
7-27 seller the names of other prospective buyers if receipt of the
8-1 compensation or consideration is contingent upon the occurrence of
8-2 an event subsequent to the time the buyer purchases the merchandise
8-3 or goods;
8-4 (19) representing that a guarantee or warranty confers
8-5 or involves rights or remedies which it does not have or involve,
8-6 provided, however, that nothing in this subchapter shall be
8-7 construed to expand the implied warranty of merchantability as
8-8 defined in Sections 2.314 through 2.318 and Sections 2A.212 through
8-9 2A.216 of the Business & Commerce Code to involve obligations in
8-10 excess of those which are appropriate to the goods;
8-11 (20) selling or offering to sell, either directly or
8-12 associated with the sale of goods or services, a right of
8-13 participation in a multi-level distributorship. As used herein,
8-14 "multi-level distributorship" means a sales plan for the
8-15 distribution of goods or services in which promises of rebate or
8-16 payment are made to individuals, conditioned upon those individuals
8-17 recommending or securing additional individuals to assume positions
8-18 in the sales operation, and where the rebate or payment is not
8-19 exclusively conditioned on or in relation to proceeds from the
8-20 retail sales of goods;
8-21 (21) representing that work or services have been
8-22 performed on, or parts replaced in, goods when the work or services
8-23 were not performed or the parts replaced;
8-24 (22) filing suit founded upon a written contractual
8-25 obligation of and signed by the defendant to pay money arising out
8-26 of or based on a consumer transaction for goods, services, loans,
8-27 or extensions of credit intended primarily for personal, family,
9-1 household, or agricultural use in any county other than in the
9-2 county in which the defendant resides at the time of the
9-3 commencement of the action or in the county in which the defendant
9-4 in fact signed the contract; provided, however, that a violation of
9-5 this subsection shall not occur where it is shown by the person
9-6 filing such suit he neither knew or had reason to know that the
9-7 county in which such suit was filed was neither the county in which
9-8 the defendant resides at the commencement of the suit nor the
9-9 county in which the defendant in fact signed the contract;
9-10 (23) the failure to disclose information concerning
9-11 goods or services which was known at the time of the transaction if
9-12 such failure to disclose such information was intended to induce
9-13 the consumer into a transaction into which the consumer would not
9-14 have entered had the information been disclosed; <or>
9-15 (24) using the term "corporation," "incorporated," or
9-16 an abbreviation of either of those terms in the name of a business
9-17 entity that is not incorporated under the laws of this state or
9-18 another jurisdiction; or
9-19 (25) taking advantage of a disaster declared by the
9-20 governor under Chapter 418, Government Code, by:
9-21 (A) selling or leasing fuel, food, medicine, or
9-22 another necessity at an exorbitant or excessive price; or
9-23 (B) demanding an exorbitant or excessive price
9-24 in connection with the sale or lease of fuel, food, medicine, or
9-25 another necessity.
9-26 SECTION 4. Section 17.49, Business & Commerce Code, is
9-27 amended by adding Subsections (c), (d), (e), (f), and (g) to read
10-1 as follows:
10-2 (c) Nothing in this subchapter shall apply to a claim for
10-3 damages based on the rendering of a professional service, the
10-4 essence of which is the providing of advice, judgment, opinion, or
10-5 similar professional skill. This exemption does not apply to:
10-6 (1) an express misrepresentation of a material fact
10-7 that cannot be characterized as advice, judgment, or opinion;
10-8 (2) a failure to disclose information in violation of
10-9 Section 17.46(b)(23);
10-10 (3) an unconscionable action or course of action that
10-11 cannot be characterized as advice, judgment, or opinion; or
10-12 (4) breach of an express warranty that cannot be
10-13 characterized as advice, judgment, or opinion.
10-14 (d) Subsection (c) applies to a cause of action brought
10-15 against the person who provided the professional service and a
10-16 cause of action brought against any entity that could be found to
10-17 be vicariously liable for the person's conduct.
10-18 (e) Except as specifically provided by Subsections (b) and
10-19 (h), Section 17.50, nothing in this subchapter shall apply to a
10-20 cause of action for bodily injury or death or for the infliction of
10-21 mental anguish.
10-22 (f) Nothing in the subchapter shall apply to a claim arising
10-23 out of a written contract if:
10-24 (1) the contract relates to a transaction, a project,
10-25 or a set of transactions related to the same project involving
10-26 total consideration by the consumer of more than $100,000;
10-27 (2) in negotiating the contract the consumer is
11-1 represented by legal counsel who is not directly or indirectly
11-2 identified, suggested, or selected by the defendant or an agent of
11-3 the defendant; and
11-4 (3) the contract does not involve the consumer's
11-5 residence.
11-6 (g) Nothing in this subchapter shall apply to a cause of
11-7 action arising from a transaction, a project, or a set of
11-8 transactions relating to the same project, involving total
11-9 consideration by the consumer of more than $500,000, other than a
11-10 cause of action involving a consumer's residence.
11-11 SECTION 5. Section 17.50, Business & Commerce Code, is
11-12 amended to read as follows:
11-13 Sec. 17.50. RELIEF FOR CONSUMERS. (a) A consumer may
11-14 maintain an action where any of the following constitute a
11-15 producing cause of economic <actual> damages or damages for mental
11-16 anguish:
11-17 (1) the use or employment by any person of a false,
11-18 misleading, or deceptive act or practice that is:
11-19 (A) specifically enumerated in a subdivision of
11-20 Subsection (b) of Section 17.46 of this subchapter; and
11-21 (B) relied on by a consumer to the consumer's
11-22 detriment;
11-23 (2) breach of an express or implied warranty;
11-24 (3) any unconscionable action or course of action by
11-25 any person; or
11-26 (4) the use or employment by any person of an act or
11-27 practice in violation of Article 21.21, <Texas> Insurance Code<, as
12-1 amended, or rules or regulations issued by the State Board of
12-2 Insurance under Article 21.21, Texas Insurance Code, as amended>.
12-3 (b) In a suit filed under this section, each consumer who
12-4 prevails may obtain:
12-5 (1) the amount of economic <actual> damages found by
12-6 the trier of fact. <In addition the court shall award two times
12-7 that portion of the actual damages that does not exceed $1,000.>
12-8 If the trier of fact finds that the conduct of the defendant was
12-9 committed knowingly, the consumer may also recover damages for
12-10 mental anguish, as found by the trier of fact, and the trier of
12-11 fact may award not more than three times the amount of economic
12-12 <actual> damages; or if the trier of fact finds the conduct was
12-13 committed intentionally, the consumer may recover damages for
12-14 mental anguish, as found by the trier of fact, and the trier of
12-15 fact may award not more than three times the amount of damages for
12-16 mental anguish and economic damages <in excess of $1,000, provided
12-17 that:>
12-18 <(A) the provisions of Chapters 33 and 41, Civil
12-19 Practice and Remedies Code, shall govern the determination of the
12-20 consumer's right under this subchapter to recover actual and other
12-21 damages, including exemplary damages, and the amount of those
12-22 damages that may be recovered by the consumer under this
12-23 subchapter, in an action seeking damages for (i) death;
12-24 (ii) personal injury other than mental anguish or distress
12-25 associated with a violation of this subchapter that does not
12-26 involve death or bodily injury; or (iii) damage to property other
12-27 than the goods acquired by the purchase or lease that is involved
13-1 in the consumer's action or claim if that damage arises out of an
13-2 occurrence that involves death or bodily injury; and>
13-3 <(B) only in an action under this subchapter
13-4 that is subject to Paragraph (A) of this subdivision, the
13-5 consumer's right to recover damages shall be subject to any defense
13-6 or defensive matter that could be considered by the trier of fact
13-7 in an action subject to Chapter 33, Civil Practice and Remedies
13-8 Code, in determining the percentage of responsibility attributable
13-9 to the consumer claimant under that chapter>;
13-10 (2) an order enjoining such acts or failure to act;
13-11 (3) orders necessary to restore to any party to the
13-12 suit any money or property, real or personal, which may have been
13-13 acquired in violation of this subchapter; and
13-14 (4) any other relief which the court deems proper,
13-15 including the appointment of a receiver or the revocation of a
13-16 license or certificate authorizing a person to engage in business
13-17 in this state if the judgment has not been satisfied within three
13-18 months of the date of the final judgment. The court may not revoke
13-19 or suspend a license to do business in this state or appoint a
13-20 receiver to take over the affairs of a person who has failed to
13-21 satisfy a judgment if the person is a licensee of or regulated by a
13-22 state agency which has statutory authority to revoke or suspend a
13-23 license or to appoint a receiver or trustee. Costs and fees of
13-24 such receivership or other relief shall be assessed against the
13-25 defendant.
13-26 (c) On a finding by the court that an action under this
13-27 section was groundless in fact or law or <and> brought in bad
14-1 faith, or brought for the purpose of harassment, the court shall
14-2 award to the defendant reasonable and necessary attorneys' fees and
14-3 court costs.
14-4 (d) Each consumer who prevails shall be awarded court costs
14-5 and reasonable and necessary attorneys' fees.
14-6 (e) In computing additional damages under Subsection (b),
14-7 attorneys' fees, costs, and prejudgment interest may not be
14-8 considered.
14-9 (f) A court may not award prejudgment interest applicable
14-10 to:
14-11 (1) damages for future loss under this subchapter; or
14-12 (2) additional damages under Subsection (b).
14-13 (g) Chapter 41, Civil Practice and Remedies Code, does not
14-14 apply to a cause of action brought under this subchapter.
14-15 (h) Notwithstanding any other provision of this subchapter,
14-16 if a claimant is granted the right to bring a cause of action under
14-17 this subchapter by another law, the claimant is not limited to
14-18 recovery of economic damages only, but may recover any actual
14-19 damages incurred by the claimant, without regard to whether the
14-20 conduct of the defendant was committed intentionally. For the
14-21 purpose of the recovery of damages for a cause of action described
14-22 by this subsection only, a reference in this subchapter to economic
14-23 damages means actual damages. In applying Subsection (b)(1) to an
14-24 award of damages under this subsection, the trier of fact is
14-25 authorized to award a total of not more than three times actual
14-26 damages, in accordance with that subsection.
14-27 SECTION 6. Section 17.505, Business & Commerce Code, is
15-1 amended to read as follows:
15-2 Sec. 17.505. NOTICE; INSPECTION<: OFFER OF SETTLEMENT>.
15-3 (a) As a prerequisite to filing a suit seeking damages under
15-4 Subdivision (1) of Subsection (b) of Section 17.50 of this
15-5 subchapter against any person, a consumer shall give written notice
15-6 to the person at least 60 days before filing the suit advising the
15-7 person in reasonable detail of the consumer's specific complaint
15-8 and the amount of economic <actual> damages, damages for mental
15-9 anguish, and expenses, including attorneys' fees, if any,
15-10 reasonably incurred by the consumer in asserting the claim against
15-11 the defendant. During the 60-day period a written request to
15-12 inspect, in a reasonable manner and at a reasonable time and place,
15-13 the goods that are the subject of the consumer's action or claim
15-14 may be presented to the consumer. <If the consumer unreasonably
15-15 refuses to permit the inspection, the court shall not award the two
15-16 times actual damages not exceeding $1,000, as provided in
15-17 Subsection (b) of Section 17.50 of this subchapter.>
15-18 (b) If the giving of 60 days' written notice is rendered
15-19 impracticable by reason of the necessity of filing suit in order to
15-20 prevent the expiration of the statute of limitations or if the
15-21 consumer's claim is asserted by way of counterclaim, the notice
15-22 provided for in Subsection (a) of this section is not required, but
15-23 the tender provided for by <Subsection (c) of this section and by>
15-24 Subsection (d), Section 17.506 of this subchapter may be made
15-25 within 60 days after service <the filing> of the suit or
15-26 counterclaim.
15-27 (c) A person against whom a suit is pending who does not
16-1 receive written notice, as required by Subsection (a), may file a
16-2 plea in abatement not later than the 30th day after the date the
16-3 person files an original answer in the court in which the suit is
16-4 pending. This subsection does not apply if Subsection (b) applies.
16-5 <Any person who receives the written notice provided by Subsection
16-6 (a) of this section may, within 60 days after the receipt of the
16-7 notice, tender to the consumer a written offer of settlement,
16-8 including an agreement to reimburse the consumer for the attorneys'
16-9 fees, if any, reasonably incurred by the consumer in asserting his
16-10 claim up to the date of the written notice. A person who does not
16-11 receive such a written notice due to the consumer's suit or
16-12 counterclaim being filed as provided for by Subsection (b) of this
16-13 section may, within 60 days after the filing of such suit or
16-14 counterclaim, tender to the consumer a written offer of settlement,
16-15 including an agreement to reimburse the consumer for the attorneys'
16-16 fees, if any, reasonably incurred by the consumer in asserting his
16-17 claim up to the date the suit or counterclaim was filed. Any offer
16-18 of settlement not accepted within 30 days of receipt by the
16-19 consumer shall be deemed to have been rejected by the consumer.>
16-20 (d) The court shall abate the suit if the court, after a
16-21 hearing, finds that the person is entitled to an abatement because
16-22 notice was not provided as required by this section. A suit is
16-23 automatically abated without the order of the court beginning on
16-24 the 11th day after the date a plea in abatement is filed under
16-25 Subsection (c) if the plea in abatement:
16-26 (1) is verified and alleges that the person against
16-27 whom the suit is pending did not receive the written notice as
17-1 required by Subsection (a); and
17-2 (2) is not controverted by an affidavit filed by the
17-3 consumer before the 11th day after the date on which the plea in
17-4 abatement is filed.
17-5 (e) An abatement under Subsection (d) continues until the
17-6 60th day after the date that written notice is served in compliance
17-7 with Subsection (a). <A settlement offer made in compliance with
17-8 Subsection (c) of this section, if rejected by the consumer, may be
17-9 filed with the court together with an affidavit certifying its
17-10 rejection. If the amount tendered in the settlement offer is the
17-11 same as or more than, or if the court finds that amount to be
17-12 substantially the same as, the actual damages found by the trier of
17-13 fact, the consumer may not recover an amount in excess of the
17-14 amount tendered in the settlement offer or the amount of actual
17-15 damages found by the trier of fact, whichever is less. Such
17-16 settlement offer shall not be admissible as evidence before a jury.>
17-17 <(e) The tender of an offer of settlement is not an
17-18 admission of engaging in an unlawful act or practice or of
17-19 liability under this Act. Evidence of a settlement offer may be
17-20 introduced only to determine the reasonableness of the settlement
17-21 offer as provided for by Subsection (d) of this section.>
17-22 SECTION 7. Subchapter E, Chapter 17, Business & Commerce
17-23 Code, is amended by adding Sections 17.5051 and 17.5052 to read as
17-24 follows:
17-25 Sec. 17.5051. MEDIATION. (a) A party may, not later than
17-26 the 90th day after the date of service of a pleading in which
17-27 relief under this subchapter is sought, file a motion to compel
18-1 mediation of the dispute in the manner provided by this section.
18-2 (b) The court shall, not later than the 30th day after the
18-3 date a motion under this section is filed, sign an order setting
18-4 the time and place of the mediation.
18-5 (c) If the parties do not agree on a mediator, the court
18-6 shall appoint the mediator.
18-7 (d) Mediation shall be held within 30 days after the date
18-8 the order is signed, unless the parties agree otherwise or the
18-9 court determines that additional time, not to exceed an additional
18-10 30 days, is warranted.
18-11 (e) Except as agreed to by all parties who have appeared in
18-12 the action, each party who has appeared shall participate in the
18-13 mediation and, except as provided by Subsection (f), shall share
18-14 the mediation fee.
18-15 (f) A party may not compel mediation under this section if
18-16 the amount of economic damages claimed is less than $15,000, unless
18-17 the party seeking to compel mediation agrees to pay the costs of
18-18 the mediation.
18-19 (g) Except as provided in this section, Section 154.023,
18-20 Civil Practice and Remedies Code, and Subchapters C and D, Chapter
18-21 154, Civil Practice and Remedies Code, apply to the appointment of
18-22 a mediator and to the mediation process provided by this section.
18-23 (h) This section does not apply to an action brought by the
18-24 attorney general under Section 17.47.
18-25 Sec. 17.5052. OFFERS OF SETTLEMENT. (a) A person who
18-26 receives notice under Section 17.505 may tender an offer of
18-27 settlement at any time during the period beginning on the date the
19-1 notice is received and ending on the 60th day after that date.
19-2 (b) If a mediation under Section 17.5051 is not conducted,
19-3 the person may tender an offer of settlement at any time during the
19-4 period beginning on the date an original answer is filed and ending
19-5 on the 90th day after that date.
19-6 (c) If a mediation under Section 17.5051 is conducted, a
19-7 person against whom a claim under this subchapter is pending may
19-8 tender an offer of settlement during the period beginning on the
19-9 day after the date that the mediation ends and ending on the 20th
19-10 day after that date.
19-11 (d) An offer of settlement tendered by a person against whom
19-12 a claim under this subchapter is pending must include an offer to
19-13 pay the following amounts of money, separately stated:
19-14 (1) an amount of money or other consideration, reduced
19-15 to its cash value, as settlement of the consumer's claim for
19-16 damages; and
19-17 (2) an amount of money to compensate the consumer for
19-18 the consumer's reasonable and necessary attorneys' fees incurred as
19-19 of the date of the offer.
19-20 (e) Unless both parts of an offer of settlement required
19-21 under Subsection (d) are accepted by the consumer not later than
19-22 the 30th day after the date the offer is made, the offer is
19-23 rejected.
19-24 (f) A settlement offer tendered by a person against whom a
19-25 claim under this subchapter is pending that complies with this
19-26 section and that has been rejected by the consumer may be filed
19-27 with the court with an affidavit certifying its rejection.
20-1 (g) If the court finds that the amount tendered in the
20-2 settlement offer for damages under Subsection (d)(1) is the same
20-3 as, substantially the same as, or more than the damages found by
20-4 the trier of fact, the consumer may not recover as damages any
20-5 amount in excess of the lesser of:
20-6 (1) the amount of damages tendered in the settlement
20-7 offer; or
20-8 (2) the amount of damages found by the trier of fact.
20-9 (h) If the court makes the finding described by Subsection
20-10 (g), the court shall determine reasonable and necessary attorneys'
20-11 fees to compensate the consumer for attorneys' fees incurred before
20-12 the date and time of the rejected settlement offer. If the court
20-13 finds that the amount tendered in the settlement offer to
20-14 compensate the consumer for attorneys' fees under Subsection (d)(2)
20-15 is the same as, substantially the same as, or more than the amount
20-16 of reasonable and necessary attorneys' fees incurred by the
20-17 consumer as of the date of the offer, the consumer may not recover
20-18 attorneys' fees greater than the amount of fees tendered in the
20-19 settlement offer.
20-20 (i) If the court finds that the offering party could not
20-21 perform the offer at the time the offer was made or that the
20-22 offering party substantially misrepresented the cash value of the
20-23 offer, Subsections (g) and (h) do not apply.
20-24 (j) If Subsection (g) does not apply, the court shall award
20-25 as damages the amount of economic damages and damages for mental
20-26 anguish found by the trier of fact, subject to Sections 17.50 and
20-27 17.501. If Subsection (h) does not apply, the court shall award
21-1 attorneys' fees as provided by Section 17.50(d).
21-2 (k) An offer of settlement is not an admission of engaging
21-3 in an unlawful act or practice or liability under this subchapter.
21-4 Except as otherwise provided by this section, an offer or a
21-5 rejection of an offer may not be offered in evidence at trial for
21-6 any purpose.
21-7 SECTION 8. Subsection (d), Section 17.506, Business &
21-8 Commerce Code, is amended to read as follows:
21-9 (d) In an action brought under Section 17.50 of this
21-10 subchapter, it is a defense to a cause of action if the defendant
21-11 proves that he received notice from the consumer advising the
21-12 defendant of the nature of the consumer's specific complaint and of
21-13 the amount of economic <actual> damages, damages for mental
21-14 anguish, and expenses, including attorneys' fees, if any,
21-15 reasonably incurred by the consumer in asserting the claim against
21-16 the defendant, and that within 30 days after the day on which the
21-17 defendant received the notice the defendant tendered to the
21-18 consumer:
21-19 (1) the amount of economic <actual> damages and
21-20 damages for mental anguish claimed; and
21-21 (2) the expenses, including attorneys' fees, if any,
21-22 reasonably incurred by the consumer in asserting the claim against
21-23 the defendant.
21-24 SECTION 9. Section 17.56, Business & Commerce Code, is
21-25 amended to read as follows:
21-26 Sec. 17.56. VENUE. An action brought under this subchapter
21-27 may be brought:
22-1 (1) in any county in which venue is proper under
22-2 Chapter 15, Civil Practice and Remedies Code; or
22-3 (2) <which alleges a claim to relief under Section
22-4 17.50 of this subchapter may be commenced in the county in which
22-5 the person against whom the suit is brought resides, has his
22-6 principal place of business, or has a fixed and established place
22-7 of business at the time the suit is brought or in the county in
22-8 which the alleged act or practice occurred or> in a county in which
22-9 the defendant or an authorized agent of the defendant solicited the
22-10 transaction made the subject of the action at bar.
22-11 SECTION 10. Section 27.004, Property Code, is amended by
22-12 adding new Subsections (d) and (e) and relettering existing
22-13 Subsections (d), (e), (f), (g), (h), (i), (j), (k), (l), and (m) to
22-14 read as follows:
22-15 (d) The court shall abate a suit governed by this section if
22-16 Subsection (c) does not apply and the court, after a hearing, finds
22-17 that the contractor is entitled to an abatement because notice was
22-18 not provided as required by Subsection (a). A suit is automatically
22-19 abated without the order of the court beginning on the 11th day
22-20 after the date a plea in abatement is filed if the plea in
22-21 abatement:
22-22 (1) is verified and alleges that the person against
22-23 whom the suit is pending did not receive the written notice as
22-24 required by Subsection (a); and
22-25 (2) is not controverted by an affidavit filed by the
22-26 claimant before the 11th day after the date on which the plea in
22-27 abatement is filed.
23-1 (e) An abatement under Subsection (d) continues until the
23-2 60th day after the date that written notice is served in compliance
23-3 with Subsection (a).
23-4 (f) <(d)> If a claimant unreasonably rejects an offer made
23-5 as provided by this section or does not permit the contractor or
23-6 independent contractor a reasonable opportunity to repair the
23-7 defect pursuant to an accepted offer of settlement, the claimant
23-8 may not recover an amount in excess of the reasonable cost of the
23-9 repairs which are necessary to cure the construction defect and
23-10 which are the responsibility of the contractor and may recover only
23-11 the amount of reasonable and necessary attorney's fees and costs
23-12 incurred before the offer was rejected or considered rejected.
23-13 (g) <(e)> If a contractor fails to make a reasonable offer
23-14 under this section, or fails to make a reasonable attempt to
23-15 complete the repairs specified in an accepted offer made under this
23-16 section, or fails to complete, in a good and workmanlike manner,
23-17 the repairs specified in an accepted offer made under this section,
23-18 the limitations on damages and defenses to liability provided for
23-19 in this section shall not apply.
23-20 (h) <(f)> Except as provided by Subsection (f) <(d)>, in a
23-21 suit subject to this chapter the claimant may recover only the
23-22 following damages proximately caused by a construction defect:
23-23 (1) the reasonable cost of repairs necessary to cure
23-24 any construction defect that the contractor failed to cure;
23-25 (2) the reasonable expenses of temporary housing
23-26 reasonably necessary during the repair period;
23-27 (3) the reduction in market value, if any, to the
24-1 extent the reduction is due to structural failure; and
24-2 (4) reasonable and necessary attorney's fees.
24-3 (i) <(g)> The total damages awarded in a suit subject to
24-4 this chapter may not exceed the claimant's purchase price for the
24-5 residence.
24-6 (j) <(h)> An offer of settlement made under this section
24-7 that is not accepted before the 25th day after the date the offer
24-8 is received by the claimant is considered rejected.
24-9 (k) <(i)> An affidavit certifying rejection of a settlement
24-10 offer under this section may be filed with the court. The trier of
24-11 fact shall determine the reasonableness of a rejection of an offer
24-12 of settlement made under this section.
24-13 (l) <(j)> A contractor who makes or provides for repairs
24-14 under this section is entitled to take reasonable steps to document
24-15 the repair and to have it inspected.
24-16 (m) <(k)> Notwithstanding Subsections (a), (b), and (c), a
24-17 contractor who receives written notice of a construction defect
24-18 resulting from work performed by the contractor or an agent,
24-19 employee, or subcontractor of the contractor and creating an
24-20 imminent threat to the health or safety of the inhabitants of the
24-21 residence shall take reasonable steps to cure the defect as soon as
24-22 practicable. If the contractor fails to cure the defect in a
24-23 reasonable time, the owner of the residence may have the defect
24-24 cured and may recover from the contractor the reasonable cost of
24-25 the repairs plus attorney's fees and costs in addition to any other
24-26 damages recoverable under any law not inconsistent with the
24-27 provisions of this chapter.
25-1 (n) <(l)> This section does not preclude a contractor from
25-2 making a monetary settlement offer.
25-3 (o) <(m)> The inspection and repair provisions of this
25-4 chapter are in addition to any rights of inspection and settlement
25-5 provided by common law or by another statute, including Section
25-6 17.505, Business & Commerce Code.
25-7 SECTION 11. Section 4, Article 21.21, Insurance Code, is
25-8 amended to read as follows:
25-9 Sec. 4. UNFAIR METHODS OF COMPETITION AND UNFAIR OR
25-10 DECEPTIVE ACTS OR PRACTICES DEFINED. The following are hereby
25-11 defined as unfair methods of competition and unfair and deceptive
25-12 acts or practices in the business of insurance:
25-13 (1) Misrepresentations and False Advertising of Policy
25-14 Contracts. Making, issuing, circulating, or causing to be made,
25-15 issued or circulated, any estimate, illustration, circular or
25-16 statement misrepresenting the terms of any policy issued or to be
25-17 issued or the benefits or advantages promised thereby or the
25-18 dividends or share of the surplus to be received thereon, or making
25-19 any false or misleading statements as to the dividends or share of
25-20 surplus previously paid on similar policies, or making any
25-21 misleading representation or any misrepresentation as to the
25-22 financial condition of any insurer, or as to the legal reserve
25-23 system upon which any life insurer operates, or using any name or
25-24 title of any policy or class of policies misrepresenting the true
25-25 nature thereof, or making any misrepresentation to any policyholder
25-26 insured in any company for the purpose of inducing or tending to
25-27 induce such policyholder to lapse, forfeit, or surrender his
26-1 insurance;
26-2 (2) False Information and Advertising Generally.
26-3 Making, publishing, disseminating, circulating or placing before
26-4 the public, or causing, directly or indirectly, to be made,
26-5 published, disseminated, circulated, or placed before the public,
26-6 in a newspaper, magazine or other publication, or in the form of a
26-7 notice, circular, pamphlet, letter or poster, or over any radio or
26-8 television station, or in any other way, an advertisement,
26-9 announcement or statement containing any assertion, representation
26-10 or statement with respect to the business of insurance or with
26-11 respect to any person in the conduct of his insurance business,
26-12 which is untrue, deceptive or misleading;
26-13 (3) Defamation. Making, publishing, disseminating, or
26-14 circulating, directly or indirectly, or aiding, abetting or
26-15 encouraging the making, publishing, disseminating or circulating of
26-16 any oral or written statement or any pamphlet, circular, article or
26-17 literature which is false, or maliciously critical of or derogatory
26-18 to the financial condition of any insurer, and which is calculated
26-19 to injure any person engaged in the business of insurance;
26-20 (4) Boycott, Coercion and Intimidation. Entering into
26-21 any agreement to commit, or by any concerted action committing, any
26-22 act of boycott, coercion or intimidation resulting in or tending to
26-23 result in unreasonable restraint of, or monopoly in, the business
26-24 of insurance;
26-25 (5) False Financial Statements. (a) Filing with any
26-26 supervisory or other public official, or making, publishing,
26-27 disseminating, circulating or delivering to any person, or placing
27-1 before the public, or causing directly or indirectly, to be made,
27-2 published, disseminated, circulated, delivered to any person, or
27-3 placed before the public, any false statement of financial
27-4 condition of an insurer with intent to deceive;
27-5 (b) Making any false entry in any book, report
27-6 or statement of any insurer with intent to deceive any agent or
27-7 examiner lawfully appointed to examine into its condition or into
27-8 any of its affairs, or any public official to whom such insurer is
27-9 required by law to report, or who has authority by law to examine
27-10 into its condition or into any of its affairs, or, with like
27-11 intent, wilfully omitting to make a true entry of any material fact
27-12 pertaining to the business of such insurer in any book, report or
27-13 statement of such insurer;
27-14 (6) Stock Operations and Advisory Board Contracts.
27-15 Issuing or delivering or permitting agents, officers or employees
27-16 to issue or deliver, company stock or other capital stock, or
27-17 benefit certificates or shares in any corporation, or securities or
27-18 any special or advisory board contracts or other contracts of any
27-19 kind promising returns and profits as an inducement to insurance.
27-20 Provided, however, that nothing in this subsection shall be
27-21 construed as prohibiting the issuing or delivery of participating
27-22 insurance policies otherwise authorized by law.
27-23 (7) Unfair Discrimination. (a) Making or permitting
27-24 any unfair discrimination between individuals of the same class and
27-25 equal expectation of life in the rates charged for any contract of
27-26 life insurance or of life annuity or in the dividends or other
27-27 benefits payable thereon, or in any other of the terms and
28-1 conditions of such contract;
28-2 (b) <Making or permitting any unfair
28-3 discrimination between individuals of the same class and of
28-4 essentially the same hazard in the amount of premium, policy fees,
28-5 or rates charged for any policy or contract of accident or health
28-6 insurance or in the benefits payable thereunder, or in any of the
28-7 terms or conditions of such contract, or in any other manner
28-8 whatever;>
28-9 <(c)> Making or permitting any unfair
28-10 discrimination between individuals or risks of the same class and
28-11 of essentially the same hazards by refusing to renew, cancelling or
28-12 limiting the amount of coverage on a policy of insurance covered by
28-13 Subchapter C, Chapter 5, of this code because of the geographic
28-14 location of the risk unless:
28-15 (1) the refusal, cancellation or
28-16 limitation is for a business purpose that is not a mere pretext for
28-17 unfair discrimination; or
28-18 (2) the refusal, cancellation or
28-19 limitation is required by law or regulatory mandate.
28-20 (8) Rebates. (a) Except as otherwise expressly
28-21 provided by law, knowingly permitting or offering to make or making
28-22 any contract of life insurance, life annuity or accident and health
28-23 insurance, or agreement as to such contract other than as plainly
28-24 expressed in the contract issued thereon, or paying or allowing, or
28-25 giving or offering to pay, allow, or give, directly or indirectly,
28-26 as inducement to such insurance, or annuity, any rebate of premiums
28-27 payable on the contract, or any special favor or advantage in the
29-1 dividends or other benefits thereon, or any valuable consideration
29-2 or inducement whatever not specified in the contract; or giving, or
29-3 selling, or purchasing or offering to give, sell, or purchase as
29-4 inducement to such insurance or annuity or in connection therewith,
29-5 any stocks, bonds, or other securities of any insurance company or
29-6 other corporation, association, or partnership, or any dividends or
29-7 profits accrued thereon, or anything of value whatsoever not
29-8 specified in the contract;
29-9 (b) Nothing in clause 7 or paragraph (a) of
29-10 clause 8 of this subsection shall be construed as including within
29-11 the definition of discrimination or rebates any of the following
29-12 practices:
29-13 (i) in the case of any contract of life
29-14 insurance or life annuity, paying bonuses to policyholders or
29-15 otherwise abating their premiums in whole or in part out of surplus
29-16 accumulated from non-participating insurance, provided that any
29-17 such bonuses or abatement of premiums shall be fair and equitable
29-18 to policyholders and for the best interests of the company and its
29-19 policyholders;
29-20 (ii) in the case of life insurance
29-21 policies issued on the industrial debit plan, making allowance to
29-22 policyholders who have continuously for a specified period made
29-23 premium payments directly to an office of the insurer in an amount
29-24 which fairly represents the saving in collection expenses;
29-25 (iii) readjustment of the rate of premium
29-26 for a group insurance policy based on the loss or expense
29-27 experience thereunder, at the end of the first or any subsequent
30-1 policy year of insurance thereunder, which may be made retroactive
30-2 only for such policy year.
30-3 (9) Deceptive Name, Word, Symbol, Device, or Slogan.
30-4 Using, displaying, publishing, circulating, distributing, or
30-5 causing to be used, displayed, published, circulated, or
30-6 distributed in any letter, pamphlet, circular, contract, policy,
30-7 evidence of coverage, article, poster, or other document,
30-8 literature, or public media of:
30-9 (a) a name as the corporate or business name of
30-10 a person or entity engaged in an insurance or insurance related
30-11 business in this state that is the same as, or deceptively similar
30-12 to, the name adopted and used by an insurance entity, health
30-13 maintenance organization, third party administrator, or group
30-14 hospital service company authorized to do business under the laws
30-15 of this state; or
30-16 (b) a word, symbol, device, slogan, or any
30-17 combination of these items, whether registered or not registered,
30-18 that is the same as or deceptively similar to one adopted and used
30-19 by an insurance entity, health maintenance organization, third
30-20 party administrator, or group hospital service company to
30-21 distinguish such entities, products, or service from other
30-22 entities, and includes the title, designation, character names, and
30-23 distinctive features of broadcast or other advertising.
30-24 Where two persons or entities are using a name, word, symbol,
30-25 device, slogan, or any combination of these items that are the same
30-26 or deceptively similar and are likely to cause confusion or a
30-27 mistake, the user who can demonstrate the first continuous actual
31-1 use of such name, word, symbol, device, slogan, or combination of
31-2 these items shall not have committed an unfair method of
31-3 competition or deceptive act or practice.
31-4 (10) Unfair Settlement Practices. (a) Engaging in
31-5 any of the following unfair settlement practices with respect to a
31-6 claim by an insured or beneficiary:
31-7 (i) misrepresenting to a claimant a
31-8 material fact or policy provision relating to coverage at issue;
31-9 (ii) failing to attempt in good faith to
31-10 effectuate a prompt, fair, and equitable settlement of a claim with
31-11 respect to which the insurer's liability has become reasonably
31-12 clear;
31-13 (iii) failing to attempt, in good faith,
31-14 to effectuate a prompt, fair, and equitable settlement under one
31-15 portion of a policy of a claim with respect to which the insurer's
31-16 liability has become reasonably clear in order to influence the
31-17 claimant to settle an additional claim under another portion of the
31-18 coverage, provided that this prohibition does not apply if payment
31-19 under one portion of the coverage constitutes evidence of liability
31-20 under another portion of the policy;
31-21 (iv) failing to provide promptly to a
31-22 policyholder a reasonable explanation of the basis in the policy,
31-23 in relation to the facts or applicable law, for the insurer's
31-24 denial of a claim or for the offer of a compromise settlement of a
31-25 claim;
31-26 (v) failing within a reasonable time to:
31-27 (A) affirm or deny coverage of a
32-1 claim to a policyholder; or
32-2 (B) submit a reservation of rights
32-3 to a policyholder;
32-4 (vi) refusing, failing, or unreasonably
32-5 delaying an offer of settlement under applicable first-party
32-6 coverage on the basis that other coverage may be available or that
32-7 third parties are responsible for the damages suffered, except as
32-8 may be specifically provided in the policy;
32-9 (vii) undertaking to enforce a full and
32-10 final release of a claim from a policyholder when only a partial
32-11 payment has been made, provided that this prohibition does not
32-12 apply to a compromise settlement of a doubtful or disputed claim;
32-13 (viii) refusing to pay a claim without
32-14 conducting a reasonable investigation with respect to the claim;
32-15 (ix) with respect to a Texas personal auto
32-16 policy, delaying or refusing settlement of a claim solely because
32-17 there is other insurance of a different type available to satisfy
32-18 all or any part of the loss forming the basis of that claim; or
32-19 (x) requiring a claimant, as a condition
32-20 of settling a claim, to produce the claimant's federal income tax
32-21 returns for examination or investigation by the person unless:
32-22 (A) the claimant is ordered to
32-23 produce those tax returns by a court;
32-24 (B) the claim involves a fire loss;
32-25 or
32-26 (C) the claim involves lost profits
32-27 or income.
33-1 (b) Paragraph (a) of this clause does not
33-2 provide a cause of action to a third party asserting one or more
33-3 claims against an insured covered under a liability insurance
33-4 policy.
33-5 (11) Misrepresentation of Insurance Policy.
33-6 Misrepresenting an insurance policy by:
33-7 (a) making an untrue statement of material fact;
33-8 (b) failing to state a material fact that is
33-9 necessary to make other statements made not misleading, considering
33-10 the circumstances under which the statements were made;
33-11 (c) making a statement in such manner as to
33-12 mislead a reasonably prudent person to a false conclusion of a
33-13 material fact;
33-14 (d) making a material misstatement of law; or
33-15 (e) failing to disclose any matter required by
33-16 law to be disclosed, including a failure to make disclosure in
33-17 accordance with another provision of this code.
33-18 SECTION 12. Article 21.21, Insurance Code, is amended by
33-19 adding Section 11A to read as follows:
33-20 Sec. 11A. DOUBLE RECOVERY PROHIBITED. A person may not
33-21 recover damages and penalties for the same act or practice under
33-22 both this Article and under another law.
33-23 SECTION 13. Section 16, Article 21.21, Insurance Code, is
33-24 amended to read as follows:
33-25 Sec. 16. RELIEF AVAILABLE TO INJURED PARTIES. (a) Any
33-26 person who has sustained actual damages caused by <as a result of>
33-27 another's engaging in an act or practice declared in Section 4 of
34-1 this Article <or in rules or regulations lawfully adopted by the
34-2 Board under this Article> to be unfair methods of competition or
34-3 unfair or deceptive acts or practices in the business of insurance
34-4 or in any practice specifically enumerated in a subdivision of
34-5 <defined by> Section 17.46(b), <17.46 of the> Business & Commerce
34-6 Code, <as amended,> as an unlawful deceptive trade practice may
34-7 maintain an action against the person or persons engaging in such
34-8 acts or practices. To maintain an action for a deceptive act or
34-9 practice enumerated in Section 17.46(b), Business & Commerce Code,
34-10 a person must show that the person has relied on the act or
34-11 practice to the person's detriment.
34-12 (b) In a suit filed under this section, any plaintiff who
34-13 prevails may obtain:
34-14 (1) the amount of actual damages plus court costs and
34-15 reasonable and necessary attorneys' fees. If the trier of fact
34-16 finds that the defendant knowingly committed the acts complained
34-17 of, the trier of fact may award not more than three <court shall
34-18 award, in addition, two> times the amount of actual damages; or
34-19 (2) an order enjoining such acts or failure to act; or
34-20 (3) any other relief which the court deems proper.
34-21 (c) On a finding by the court that an action under this
34-22 section was groundless and brought in bad faith or brought for the
34-23 purpose of harassment, the court shall award to the defendant
34-24 reasonable and necessary attorneys' fees and court costs.
34-25 (d) All actions under this Article must be commenced within
34-26 two years after the date on which the unfair method of competition
34-27 or unfair or deceptive act or practice occurred or within two years
35-1 after the person bringing the action discovered or, in the exercise
35-2 of reasonable diligence, should have discovered the occurrence of
35-3 the unfair method of competition or unfair or deceptive act or
35-4 practice. The period of limitation provided in this section may be
35-5 extended for a period of 180 days if the person bringing the action
35-6 proves that the failure to timely commence the action was caused by
35-7 the defendant's engaging in conduct solely calculated to induce the
35-8 plaintiff to refrain from or postpone the commencement of the
35-9 action.
35-10 (e) As a prerequisite to filing a suit seeking damages under
35-11 this section against any person, the person seeking damages shall
35-12 give written notice to the other person at least 60 <30> days
35-13 before filing suit. The notice must advise the person of the
35-14 specific complaint and the amount of actual damages and expenses,
35-15 including any attorneys' fees reasonably incurred in asserting the
35-16 claim against the defendant.
35-17 (f) If giving 60 <30> days' written notice is impracticable
35-18 because the suit must be filed in order to prevent the expiration
35-19 of the statute of limitations or because the claim is asserted as a
35-20 counterclaim, the notice provided for in Subsection (e) of this
35-21 section is not required<, and the tender of a written offer of
35-22 settlement provided for by Subsection (g) of this section may be
35-23 made not later than the 30th day after the date of filing of the
35-24 suit or counterclaim>.
35-25 (g) A person against whom a suit is pending who does not
35-26 receive written notice, as required by Subsection (e) of this
35-27 section, may file a plea in abatement not later than the 30th day
36-1 after the date the person files an original answer in the court in
36-2 which the suit is pending. This subsection does not apply if
36-3 Subsection (f) of this section applies <A person who receives the
36-4 written notice provided by Subsection (e) of this section may
36-5 tender, not later than the 30th day after the date of receipt of
36-6 the notice, to the person seeking damages, a written offer of
36-7 settlement, including an agreement to reimburse the person for any
36-8 attorneys' fees reasonably incurred in asserting the claim to the
36-9 date of the written notice. A person who does not receive a
36-10 written notice because the suit or counterclaim is filed as
36-11 provided for by Subsection (f) of this section may tender, not
36-12 later than the 30th day after the date of filing of the suit or
36-13 counterclaim, a written offer of settlement, including an agreement
36-14 to reimburse the person for any attorneys' fees reasonably incurred
36-15 in asserting the claim to the date the suit or counterclaim was
36-16 filed. An offer of settlement is rejected if it is not accepted on
36-17 or before the 30th day after the date of receipt by the person
36-18 seeking damages>.
36-19 (h) The court shall abate the suit if the court, after a
36-20 hearing, finds that the person is entitled to an abatement because
36-21 notice was not provided as required by this section. A suit is
36-22 automatically abated without the order of the court beginning on
36-23 the 11th day after the date a plea in abatement is filed under
36-24 Subsection (g) if the plea in abatement:
36-25 (1) is verified and alleges that the person against
36-26 whom the suit is pending did not receive the written notice as
36-27 required by Subsection (e); and
37-1 (2) is not controverted by an affidavit filed by the
37-2 claimant before the 11th day after the date on which the plea in
37-3 abatement is filed <A rejected settlement offer made in compliance
37-4 with Subsection (g) of this section may be filed with the court
37-5 with an affidavit certifying its rejection. If the court finds
37-6 that the amount tendered in the settlement offer is the same or
37-7 substantially the same as the actual damages found by the trier of
37-8 fact, the plaintiff may not recover an amount that exceeds the
37-9 lesser of:>
37-10 <(1) the amount tendered in the settlement offer; or>
37-11 <(2) the amount of actual damages found by the trier
37-12 of fact>.
37-13 (i) An abatement under Subsection (h) continues until the
37-14 60th day after the date that written notice is served in compliance
37-15 with Subsection (e) <The tender of an offer of settlement is not an
37-16 admission of engaging in an unlawful act or practice or of
37-17 liability under this Article. Evidence of a settlement offer may
37-18 be introduced only to determine the reasonableness of the
37-19 settlement offer as provided for by Subsection (h) of this
37-20 section>.
37-21 SECTION 14. Article 21.21, Insurance Code, is amended by
37-22 adding Sections 16A and 16B to read as follows:
37-23 Sec. 16A. OFFERS OF SETTLEMENT. (a) A person who receives
37-24 notice under Section 16(e) of this article may tender an offer of
37-25 settlement at any time during the period beginning on the date
37-26 notice is received and ending on the 60th day after that date.
37-27 (b) If a mediation under Section 16B of this article is not
38-1 conducted, the person may tender an offer of settlement at any time
38-2 during the period beginning on the date an original answer is filed
38-3 and ending on the 90th day after that date.
38-4 (c) If a mediation under Section 16B of this article is
38-5 conducted, a person against whom a claim under Section 16 of this
38-6 article is pending may tender an offer of settlement during the
38-7 period beginning on the day after the date that the mediation ends
38-8 and ending on the 20th day after that date.
38-9 (d) An offer of settlement tendered by a person against whom
38-10 a claim under Section 16 of this article is pending must include an
38-11 offer to pay the following amounts of money, separately stated:
38-12 (1) an amount of money or other consideration, reduced
38-13 to its cash value, as settlement of the claim for damages; and
38-14 (2) an amount of money to compensate the claimant for
38-15 the claimant's reasonable and necessary attorneys' fees incurred as
38-16 of the date of the offer.
38-17 (e) Unless both parts of an offer of settlement required
38-18 under Subsection (d) of this section are accepted by the claimant
38-19 not later than the 30th day after the date the offer is made, the
38-20 offer is rejected.
38-21 (f) A settlement offer tendered by a person against whom a
38-22 claim under Section 16 of this article is pending that complies
38-23 with this section and that has been rejected by the claimant may be
38-24 filed with the court with an affidavit certifying its rejection.
38-25 (g) If the court finds that the amount tendered in the
38-26 settlement offer for damages under Subsection (d)(1) of this
38-27 section is the same as, substantially the same as, or more than the
39-1 damages found by the trier of fact, the claimant may not recover as
39-2 damages any amount in excess of the lesser of:
39-3 (1) the amount of damages tendered in the settlement
39-4 offer; or
39-5 (2) the amount of damages found by the trier of fact.
39-6 (h) If the court makes the finding described by Subsection
39-7 (g) of this section, the court shall determine reasonable and
39-8 necessary attorneys' fees to compensate the claimant for attorneys'
39-9 fees incurred before the date and time of the rejected settlement
39-10 offer. If the court finds that the amount tendered in the
39-11 settlement offer to compensate the claimant for attorneys' fees
39-12 under Subsection (d)(2) of this section is the same as,
39-13 substantially the same as, or more than the amount of reasonable
39-14 and necessary attorneys' fees incurred by the claimant as of the
39-15 date of the offer, the claimant may not recover attorneys' fees
39-16 greater than the amount of fees tendered in the settlement offer.
39-17 (i) If the court finds that the offering party could not
39-18 perform the offer at the time the offer was made or that the
39-19 offering party substantially misrepresented the cash value of the
39-20 offer, Subsections (g) and (h) of this section do not apply.
39-21 (j) If Subsection (g) of this section does not apply, the
39-22 court shall award damages as required by Section 16(b) of this
39-23 article. If Subsection (h) of this section does not apply, the
39-24 court shall award attorneys' fees as required by Section 16(b) of
39-25 this article.
39-26 (k) An offer of settlement is not an admission of engaging
39-27 in an act or practice declared in Section 4 of this article to be
40-1 an unfair method of competition or an unfair or deceptive act or
40-2 practice in the business of insurance.
40-3 Sec. 16B. MEDIATION. (a) A party may, not later than the
40-4 90th day after the date of service of a pleading in which relief
40-5 under Section 16 of this article is sought, file a motion to compel
40-6 mediation of the dispute in the manner provided by this section.
40-7 (b) The court shall, not later than the 30th day after the
40-8 date a motion under this section is filed, sign an order setting
40-9 the time and place of the mediation.
40-10 (c) If the parties do not agree on a mediator, the court
40-11 shall appoint the mediator.
40-12 (d) Mediation shall be held within 30 days after the date
40-13 the order is signed, unless the parties agree otherwise or the
40-14 court determines that additional time, not to exceed an additional
40-15 30 days, is warranted.
40-16 (e) Except as agreed to by all parties who have appeared in
40-17 the action, each party who has appeared shall participate in the
40-18 mediation and, except as provided by Subsection (f), shall share
40-19 the mediation fee.
40-20 (f) A party may not compel mediation under this section if
40-21 the amount of actual damages claimed is less than $15,000, unless
40-22 the party seeking to compel mediation agrees to pay the costs of
40-23 the mediation.
40-24 (g) Except as provided in this section, Section 154.023,
40-25 Civil Practice and Remedies Code, and Subchapters C and D, Chapter
40-26 154, Civil Practice and Remedies Code, apply to the appointment of
40-27 a mediator and to the mediation process provided by this section.
41-1 SECTION 15. Section 17(a), Article 21.21, Insurance Code, is
41-2 amended to read as follows:
41-3 (a) If a member of the insurance buying public has been
41-4 damaged by an unlawful method, act, or practice defined in Section
41-5 4 of this Article <or by the rules and regulations lawfully adopted
41-6 by the Board under this Article or by any practice defined by
41-7 Section 17.46 of the Business & Commerce Code, as amended,> as an
41-8 unlawful deceptive trade practice, the Board may request the
41-9 Attorney General to bring a class action, or the individual damaged
41-10 may bring an action on behalf of himself and others similarly
41-11 situated, to recover damages and relief as provided in this
41-12 section.
41-13 SECTION 16. Subchapter B, Chapter 21, Insurance Code, is
41-14 amended by adding Article 21.21-8 to read as follows:
41-15 Art. 21.21-8. UNFAIR DISCRIMINATION
41-16 Sec. 1. Scope. This article shall apply to any person
41-17 engaged in the business of insurance. "Person" shall mean any
41-18 individual, corporation, association, partnership, reciprocal
41-19 exchange, interinsurer, Lloyds insurer, fraternal benefit society,
41-20 county mutual, farm mutual, and any other legal entity engaged in
41-21 the business of insurance, including agents, brokers, adjusters,
41-22 and life insurance counselors.
41-23 Sec. 2. No person shall engage in any unfair discrimination
41-24 by making or permitting any unfair discrimination between
41-25 individuals of the same class and of essentially the same hazard in
41-26 the amount of premium, policy fees, or rates charged for any policy
41-27 or contract of insurance or in the benefits payable thereunder, or
42-1 in any of the terms or conditions of such contract, or in any other
42-2 manner whatever.
42-3 Sec. 3. (a) A person who has sustained economic damages as
42-4 a result of another's engaging in unfair discrimination, as defined
42-5 in Section 2 of this article, may maintain an action against the
42-6 person or persons engaging in such acts or practices in a district
42-7 court in Travis County, Texas, and not elsewhere.
42-8 (b) In a suit filed under this article, any plaintiff who
42-9 prevails may obtain:
42-10 (1) the amount of economic damages plus court costs
42-11 and attorneys' fees. Court costs may include any reasonable and
42-12 necessary expert witness fees. If the trier of fact finds that the
42-13 defendant knowingly committed any acts prohibited by this article,
42-14 the court may award a civil penalty in an amount of not more than
42-15 $25,000 per claimant; and
42-16 (2) an order enjoining such acts or failure to act.
42-17 (c) All actions under this article must be commenced within
42-18 12 months after the date on which the plaintiff was denied
42-19 insurance or the unfair act occurred.
42-20 (d) On a finding by the court that an action under this
42-21 section was groundless and brought in bad faith or brought for the
42-22 purpose of harassment, the court shall award the defendant
42-23 reasonable and necessary attorneys' fees.
42-24 SECTION 17. Section 33.002, Civil Practice and Remedies
42-25 Code, is amended by adding Subsection (h) to read as follows:
42-26 (h) This chapter applies to an action brought under the
42-27 Deceptive Trade Practices-Consumer Protection Act (Subchapter E,
43-1 Chapter 17, Business & Commerce Code).
43-2 SECTION 18. Article 11.05, Title 79, Revised Statutes
43-3 (Article 5069-11.05, Vernon's Texas Civil Statutes), is amended to
43-4 read as follows:
43-5 Art. 11.05. Fraudulent, deceptive, or misleading
43-6 representations. No debt collector may collect or attempt to
43-7 collect debts or obtain information concerning a consumer by any
43-8 fraudulent, deceptive, or misleading representations which employ
43-9 the following practices:
43-10 (a) using any name while engaged in the collection of
43-11 debts other than the true business or professional name or the true
43-12 personal or legal name of the debt collector or, if engaged in the
43-13 collection of a credit card debt, the name appearing on the face of
43-14 the credit card; or failing to maintain a list of all business or
43-15 professional names known to be used or formerly used by individual
43-16 persons collecting debts or attempting to collect debts for the
43-17 debt collector;
43-18 (b) falsely representing that the debt collector has
43-19 information in his possession or something of value for the
43-20 consumer in order to solicit or discover information about the
43-21 consumer;
43-22 (c) failing to clearly disclose, in any communication
43-23 with the debtor, the name of the person to whom the debt has been
43-24 assigned or is owed at the time of making any demand for money
43-25 (provided, however, this subsection shall not apply to persons
43-26 servicing or collecting real estate first lien mortgage loans or
43-27 credit card debts);
44-1 (d) failing to clearly disclose, in any communication
44-2 with the debtor, that the debt collector is attempting to collect a
44-3 debt, unless such communication is for the purpose of discovering
44-4 the whereabouts of the debtor;
44-5 (e) using any written communication which fails to
44-6 clearly indicate the name of the debt collector and the debt
44-7 collector's street address or post office box and telephone number,
44-8 when the written notice refers to an alleged delinquent debt; (the
44-9 foregoing shall not require disclosure of names and addresses of
44-10 employees of debt collectors);
44-11 (f) using any written communication which demands a
44-12 response to a place other than the debt collector's or creditor's
44-13 street address or post office box; (the foregoing shall not require
44-14 response to the address of an employee of a debt collector);
44-15 (g) misrepresenting the character, extent, or amount
44-16 of a debt against a consumer, or misrepresenting its status in any
44-17 judicial or governmental proceedings;
44-18 (h) falsely representing that any debt collector is
44-19 vouched for, bonded by, affiliated with, or an instrumentality,
44-20 agent, or official of this state or any agency of federal, state,
44-21 or local government;
44-22 (i) using, distributing, or selling any written
44-23 communication which simulates or falsely represents to be a
44-24 document authorized, issued, or approved by a court, an official, a
44-25 governmental agency, or any other legally constituted or authorized
44-26 governmental authority, or which creates a false impression about
44-27 its source, authorization, or approval; or using any seal or
45-1 insignia or design which simulates that of any governmental agency;
45-2 (j) representing that a debt may be increased by the
45-3 addition of attorney's fees, investigation fees, service fees, or
45-4 other charges when there is no written contract or statute
45-5 authorizing such additional fees or charges;
45-6 (k) representing that a debt will definitely be
45-7 increased by the addition of attorney's fees, investigation fees,
45-8 service fees, or other charges when the award of such fee or charge
45-9 is discretionary by a court of law;
45-10 (l) falsely representing the status or true nature of
45-11 the services rendered by the debt collector or his business;
45-12 (m) using any written communication which violates or
45-13 fails to conform to the United States postal laws and regulations;
45-14 (n) using any communication which purports to be from
45-15 any attorney or law firm, when in fact it is not;
45-16 (o) representing that a debt is being collected by an
45-17 attorney when it is not; or
45-18 (p) representing that a debt is being collected by an
45-19 independent, bona fide organization engaged in the business of
45-20 collecting past due accounts when the debt is being collected by a
45-21 subterfuge organization under the control and direction of the
45-22 person to whom the debt is owed; however, nothing herein shall
45-23 prohibit a creditor from owning or operating its own bona fide debt
45-24 collection agency.
45-25 SECTION 19. Article 11.10, Title 79, Revised Statutes
45-26 (Article 5069-11.10, Vernon's Texas Civil Statutes), is amended by
45-27 amending Subsection (c) to read as follows:
46-1 (c) A person who successfully maintains an action under this
46-2 article for violation of Article 11.02(c) or 11.07A of this Act
46-3 shall be awarded at least $100 for each violation of this Act.
46-4 SECTION 20. (a) This Act takes effect September 1, 1995.
46-5 (b) This Act applies to all causes of action that accrue on
46-6 or after the effective date of this Act. This Act applies to all
46-7 causes of action that accrued before the effective date of this Act
46-8 and upon which suit is filed on or after September 1, 1996. Except
46-9 as provided by Subsection (c) of this section, a cause of action
46-10 that accrued before the effective date of this Act and upon which
46-11 suit is filed prior to September 1, 1996, is governed by the law in
46-12 effect immediately prior to the effective date of this Act, and
46-13 that law is continued in effect for that purpose.
46-14 (c) Section 17.56, Business & Commerce Code, as amended by
46-15 this Act, applies to a cause of action that accrued before the
46-16 effective date of this Act and upon which suit is filed on or after
46-17 September 1, 1995.
46-18 SECTION 21. Notwithstanding Section 20, the purpose of the
46-19 amendments to Article 11.05, Title 79, Revised Statutes (Article
46-20 5069-11.05, Vernon's Texas Civil Statutes), and Article 11.10(c),
46-21 Title 79, Revised Statutes (Article 5069-11.10, Vernon's Texas
46-22 Civil Statutes), is to clarify existing law, and those amendments
46-23 apply to all civil actions commenced on or after May 30, 1995, or
46-24 pending on that date.
46-25 SECTION 22. The importance of this legislation and the
46-26 crowded condition of the calendars in both houses create an
46-27 emergency and an imperative public necessity that the
47-1 constitutional rule requiring bills to be read on three several
47-2 days in each house be suspended, and this rule is hereby suspended.