By Junell, Hunter of Nueces, Duncan, et al. H.B. No. 668
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to civil remedies for deceptive trade practices and
1-3 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) and (12) 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 SECTION 3. Section 17.46(b), Business & Commerce Code, is
5-9 amended to read as follows:
5-10 (b) Except as provided in Subsection (d) of this section,
5-11 the term "false, misleading, or deceptive acts or practices"
5-12 includes, but is not limited to, the following acts:
5-13 (1) passing off goods or services as those of another;
5-14 (2) causing confusion or misunderstanding as to the
5-15 source, sponsorship, approval, or certification of goods or
5-16 services;
5-17 (3) causing confusion or misunderstanding as to
5-18 affiliation, connection, or association with, or certification by,
5-19 another;
5-20 (4) using deceptive representations or designations of
5-21 geographic origin in connection with goods or services;
5-22 (5) representing that goods or services have
5-23 sponsorship, approval, characteristics, ingredients, uses,
5-24 benefits, or quantities which they do not have or that a person has
5-25 a sponsorship, approval, status, affiliation, or connection which
5-26 he does not;
5-27 (6) representing that goods are original or new if
6-1 they are deteriorated, reconditioned, reclaimed, used, or
6-2 secondhand;
6-3 (7) representing that goods or services are of a
6-4 particular standard, quality, or grade, or that goods are of a
6-5 particular style or model, if they are of another;
6-6 (8) disparaging the goods, services, or business of
6-7 another by false or misleading representation of facts;
6-8 (9) advertising goods or services with intent not to
6-9 sell them as advertised;
6-10 (10) advertising goods or services with intent not to
6-11 supply a reasonable expectable public demand, unless the
6-12 advertisements disclosed a limitation of quantity;
6-13 (11) making false or misleading statements of fact
6-14 concerning the reasons for, existence of, or amount of price
6-15 reductions;
6-16 (12) representing that an agreement confers or
6-17 involves rights, remedies, or obligations which it does not have or
6-18 involve, or which are prohibited by law;
6-19 (13) knowingly making false or misleading statements
6-20 of fact concerning the need for parts, replacement, or repair
6-21 service;
6-22 (14) misrepresenting the authority of a salesman,
6-23 representative or agent to negotiate the final terms of a consumer
6-24 transaction;
6-25 (15) basing a charge for the repair of any item in
6-26 whole or in part on a guaranty or warranty instead of on the value
6-27 of the actual repairs made or work to be performed on the item
7-1 without stating separately the charges for the work and the charge
7-2 for the warranty or guaranty, if any;
7-3 (16) disconnecting, turning back, or resetting the
7-4 odometer of any motor vehicle so as to reduce the number of miles
7-5 indicated on the odometer gauge;
7-6 (17) advertising of any sale by fraudulently
7-7 representing that a person is going out of business;
7-8 (18) using or employing a chain referral sales plan in
7-9 connection with the sale or offer to sell of goods, merchandise, or
7-10 anything of value, which uses the sales technique, plan,
7-11 arrangement, or agreement in which the buyer or prospective buyer
7-12 is offered the opportunity to purchase merchandise or goods and in
7-13 connection with the purchase receives the seller's promise or
7-14 representation that the buyer shall have the right to receive
7-15 compensation or consideration in any form for furnishing to the
7-16 seller the names of other prospective buyers if receipt of the
7-17 compensation or consideration is contingent upon the occurrence of
7-18 an event subsequent to the time the buyer purchases the merchandise
7-19 or goods;
7-20 (19) representing that a guarantee or warranty confers
7-21 or involves rights or remedies which it does not have or involve,
7-22 provided, however, that nothing in this subchapter shall be
7-23 construed to expand the implied warranty of merchantability as
7-24 defined in Sections 2.314 through 2.318 and Sections 2A.212 through
7-25 2A.216 of the Business & Commerce Code to involve obligations in
7-26 excess of those which are appropriate to the goods;
7-27 (20) selling or offering to sell, either directly or
8-1 associated with the sale of goods or services, a right of
8-2 participation in a multi-level distributorship. As used herein,
8-3 "multi-level distributorship" means a sales plan for the
8-4 distribution of goods or services in which promises of rebate or
8-5 payment are made to individuals, conditioned upon those individuals
8-6 recommending or securing additional individuals to assume positions
8-7 in the sales operation, and where the rebate or payment is not
8-8 exclusively conditioned on or in relation to proceeds from the
8-9 retail sales of goods;
8-10 (21) representing that work or services have been
8-11 performed on, or parts replaced in, goods when the work or services
8-12 were not performed or the parts replaced;
8-13 (22) filing suit founded upon a written contractual
8-14 obligation of and signed by the defendant to pay money arising out
8-15 of or based on a consumer transaction for goods, services, loans,
8-16 or extensions of credit intended primarily for personal, family,
8-17 household, or agricultural use in any county other than in the
8-18 county in which the defendant resides at the time of the
8-19 commencement of the action or in the county in which the defendant
8-20 in fact signed the contract; provided, however, that a violation of
8-21 this subsection shall not occur where it is shown by the person
8-22 filing such suit he neither knew or had reason to know that the
8-23 county in which such suit was filed was neither the county in which
8-24 the defendant resides at the commencement of the suit nor the
8-25 county in which the defendant in fact signed the contract;
8-26 (23) the failure to disclose information concerning
8-27 goods or services which was known at the time of the transaction if
9-1 such failure to disclose such information was intended to induce
9-2 the consumer into a transaction into which the consumer would not
9-3 have entered had the information been disclosed; <or>
9-4 (24) using the term "corporation," "incorporated," or
9-5 an abbreviation of either of those terms in the name of a business
9-6 entity that is not incorporated under the laws of this state or
9-7 another jurisdiction; or
9-8 (25) taking advantage of a disaster declared by the
9-9 governor under Chapter 418, Government Code, by:
9-10 (A) selling or leasing fuel, food, medicine, or
9-11 another necessity at an exorbitant or excessive price; or
9-12 (B) demanding an exorbitant or excessive price
9-13 in connection with the sale or lease of fuel, food, medicine, or
9-14 another necessity.
9-15 SECTION 4. Section 17.49, Business & Commerce Code, is
9-16 amended by adding Subsections (c), (d), (e), (f), and (g) to read
9-17 as follows:
9-18 (c) Nothing in this subchapter shall apply to a claim for
9-19 damages based on the rendering of a professional service, the
9-20 essence of which is the providing of advice, judgment, opinion, or
9-21 similar professional skill. This exemption does not apply to:
9-22 (1) an express misrepresentation of a material fact
9-23 that cannot be characterized as advice, judgment, or opinion;
9-24 (2) a failure to disclose information in violation of
9-25 Section 17.46(b)(23);
9-26 (3) an unconscionable action or course of action that
9-27 cannot be characterized as advice, judgment, or opinion; or
10-1 (4) breach of an express warranty that cannot be
10-2 characterized as advice, judgment, or opinion.
10-3 (d) Subsection (c) applies to a cause of action brought
10-4 against the person who provided the professional service and a
10-5 cause of action brought against any entity that could be found to
10-6 be vicariously liable for the person's conduct.
10-7 (e) Except as specifically provided by this subsection and
10-8 Section 17.50(h), nothing in this subchapter shall apply to a cause
10-9 of action for bodily injury or death or for the infliction of
10-10 mental anguish. A consumer may recover damages under this
10-11 subchapter for mental anguish if the trier of fact finds that the
10-12 conduct of the defendant was committed knowingly.
10-13 (f) Nothing in this subchapter shall apply to a claim
10-14 arising out of a written contract if:
10-15 (1) the consideration paid or to be paid exceeds
10-16 $100,000;
10-17 (2) in seeking or acquiring the goods or services the
10-18 consumer is represented by legal counsel who is not directly or
10-19 indirectly identified, suggested, or selected by the defendant or
10-20 an agent of the defendant; and
10-21 (3) the contract does not involve a consumer's
10-22 residence.
10-23 (g) Nothing in this subchapter shall apply to a cause of
10-24 action arising from a transaction, a project, or a set of
10-25 transactions relating to the same project, involving total
10-26 consideration by the consumer of more than $500,000, other than a
10-27 cause of action involving a consumer's residence.
11-1 SECTION 5. Section 17.50, Business & Commerce Code, is
11-2 amended to read as follows:
11-3 Sec. 17.50. RELIEF FOR CONSUMERS. (a) A consumer may
11-4 maintain an action where any of the following constitute a
11-5 producing cause of economic <actual> damages:
11-6 (1) the use or employment by any person of a false,
11-7 misleading, or deceptive act or practice that is:
11-8 (A) specifically enumerated in a subdivision of
11-9 Subsection (b) of Section 17.46 of this subchapter; and
11-10 (B) relied on by a consumer to the consumer's
11-11 detriment;
11-12 (2) breach of an express or implied warranty;
11-13 (3) any unconscionable action or course of action by
11-14 any person; or
11-15 (4) the use or employment by any person of an act or
11-16 practice in violation of Article 21.21, <Texas> Insurance Code<, as
11-17 amended, or rules or regulations issued by the State Board of
11-18 Insurance under Article 21.21, Texas Insurance Code, as amended>.
11-19 (b) In a suit filed under this section, each consumer who
11-20 prevails may obtain:
11-21 (1) the amount of economic <actual> damages found by
11-22 the trier of fact. <In addition the court shall award two times
11-23 that portion of the actual damages that does not exceed $1,000.>
11-24 If the trier of fact finds that the conduct of the defendant was
11-25 committed knowingly, the trier of fact may award not more than
11-26 three times the amount of economic <actual> damages <in excess of
11-27 $1,000, provided that:>
12-1 <(A) the provisions of Chapters 33 and 41, Civil
12-2 Practice and Remedies Code, shall govern the determination of the
12-3 consumer's right under this subchapter to recover actual and other
12-4 damages, including exemplary damages, and the amount of those
12-5 damages that may be recovered by the consumer under this
12-6 subchapter, in an action seeking damages for (i) death;
12-7 (ii) personal injury other than mental anguish or distress
12-8 associated with a violation of this subchapter that does not
12-9 involve death or bodily injury; or (iii) damage to property other
12-10 than the goods acquired by the purchase or lease that is involved
12-11 in the consumer's action or claim if that damage arises out of an
12-12 occurrence that involves death or bodily injury; and>
12-13 <(B) only in an action under this subchapter
12-14 that is subject to Paragraph (A) of this subdivision, the
12-15 consumer's right to recover damages shall be subject to any defense
12-16 or defensive matter that could be considered by the trier of fact
12-17 in an action subject to Chapter 33, Civil Practice and Remedies
12-18 Code, in determining the percentage of responsibility attributable
12-19 to the consumer claimant under that chapter>;
12-20 (2) an order enjoining such acts or failure to act;
12-21 (3) orders necessary to restore to any party to the
12-22 suit any money or property, real or personal, which may have been
12-23 acquired in violation of this subchapter; and
12-24 (4) any other relief which the court deems proper,
12-25 including the appointment of a receiver or the revocation of a
12-26 license or certificate authorizing a person to engage in business
12-27 in this state if the judgment has not been satisfied within three
13-1 months of the date of the final judgment. The court may not revoke
13-2 or suspend a license to do business in this state or appoint a
13-3 receiver to take over the affairs of a person who has failed to
13-4 satisfy a judgment if the person is a licensee of or regulated by a
13-5 state agency which has statutory authority to revoke or suspend a
13-6 license or to appoint a receiver or trustee. Costs and fees of
13-7 such receivership or other relief shall be assessed against the
13-8 defendant.
13-9 (c) On a finding by the court that an action under this
13-10 section was groundless in fact or law or <and> brought in bad
13-11 faith, or brought for the purpose of harassment, the court shall
13-12 award to the defendant reasonable and necessary attorneys' fees and
13-13 court costs.
13-14 (d) Each consumer who prevails shall be awarded court costs
13-15 and reasonable and necessary attorneys' fees.
13-16 (e) In computing additional damages under Subsection (b),
13-17 attorneys' fees, costs, and prejudgment interest may not be
13-18 considered.
13-19 (f) A court may not award prejudgment interest applicable
13-20 to:
13-21 (1) damages for future loss under this subchapter; or
13-22 (2) additional damages under Subsection (b).
13-23 (g) Chapter 41, Civil Practice and Remedies Code, does not
13-24 apply to a cause of action brought under this subchapter.
13-25 (h) Notwithstanding any other provision of this subchapter,
13-26 if a claimant is granted the right to bring a cause of action under
13-27 this subchapter by another law, the claimant is not limited to
14-1 recovery of economic damages only, but may recover any actual
14-2 damages incurred by the claimant. For the purpose of the recovery
14-3 of damages for a cause of action described by this subsection only,
14-4 a reference in this subchapter to economic damages means actual
14-5 damages.
14-6 SECTION 6. Section 17.505, Business & Commerce Code, is
14-7 amended to read as follows:
14-8 Sec. 17.505. NOTICE; INSPECTION<: OFFER OF SETTLEMENT>.
14-9 (a) As a prerequisite to filing a suit seeking damages under
14-10 Subdivision (1) of Subsection (b) of Section 17.50 of this
14-11 subchapter against any person, a consumer shall give written notice
14-12 to the person at least 60 days before filing the suit advising the
14-13 person in reasonable detail of the consumer's specific complaint
14-14 and the amount of economic <actual> damages and expenses, including
14-15 attorneys' fees, if any, reasonably incurred by the consumer in
14-16 asserting the claim against the defendant. During the 60-day
14-17 period a written request to inspect, in a reasonable manner and at
14-18 a reasonable time and place, the goods that are the subject of the
14-19 consumer's action or claim may be presented to the consumer. If
14-20 the consumer <unreasonably> refuses to permit the inspection by the
14-21 person or the person's designated representative, the court shall
14-22 not award the two times economic <actual> damages not exceeding
14-23 $1,000, as provided in Subsection (b) of Section 17.50 of this
14-24 subchapter.
14-25 (b) If the giving of 60 days' written notice is rendered
14-26 impracticable by reason of the necessity of filing suit in order to
14-27 prevent the expiration of the statute of limitations or if the
15-1 consumer's claim is asserted by way of counterclaim, the notice
15-2 provided for in Subsection (a) of this section is not required, but
15-3 the tender provided for by <Subsection (c) of this section and by>
15-4 Subsection (d), Section 17.506 of this subchapter may be made
15-5 within 60 days after service <the filing> of the suit or
15-6 counterclaim.
15-7 (c) A person against whom a suit is pending who does not
15-8 receive written notice, as required by Subsection (a), may file a
15-9 plea in abatement not later than the 30th day after the date the
15-10 person files an original answer in the court in which the suit is
15-11 pending. This subsection does not apply if Subsection (b) applies.
15-12 <Any person who receives the written notice provided by Subsection
15-13 (a) of this section may, within 60 days after the receipt of the
15-14 notice, tender to the consumer a written offer of settlement,
15-15 including an agreement to reimburse the consumer for the attorneys'
15-16 fees, if any, reasonably incurred by the consumer in asserting his
15-17 claim up to the date of the written notice. A person who does not
15-18 receive such a written notice due to the consumer's suit or
15-19 counterclaim being filed as provided for by Subsection (b) of this
15-20 section may, within 60 days after the filing of such suit or
15-21 counterclaim, tender to the consumer a written offer of settlement,
15-22 including an agreement to reimburse the consumer for the attorneys'
15-23 fees, if any, reasonably incurred by the consumer in asserting his
15-24 claim up to the date the suit or counterclaim was filed. Any offer
15-25 of settlement not accepted within 30 days of receipt by the
15-26 consumer shall be deemed to have been rejected by the consumer.>
15-27 (d) The court shall abate the suit if the court, after a
16-1 hearing, finds that the person is entitled to an abatement because
16-2 notice was not provided as required by this section. A suit is
16-3 automatically abated without the order of the court beginning on
16-4 the 11th day after the date a plea in abatement is filed under
16-5 Subsection (c) if the plea in abatement:
16-6 (1) is verified and alleges that the person against
16-7 whom the suit is pending did not receive the written notice as
16-8 required by Subsection (a); and
16-9 (2) is not controverted by an affidavit filed by the
16-10 consumer before the 11th day after the date on which the plea in
16-11 abatement is filed.
16-12 (e) An abatement under Subsection (d) continues until the
16-13 60th day after the date that written notice is served in compliance
16-14 with Subsection (a). <A settlement offer made in compliance with
16-15 Subsection (c) of this section, if rejected by the consumer, may be
16-16 filed with the court together with an affidavit certifying its
16-17 rejection. If the amount tendered in the settlement offer is the
16-18 same as or more than, or if the court finds that amount to be
16-19 substantially the same as, the actual damages found by the trier of
16-20 fact, the consumer may not recover an amount in excess of the
16-21 amount tendered in the settlement offer or the amount of actual
16-22 damages found by the trier of fact, whichever is less. Such
16-23 settlement offer shall not be admissible as evidence before a jury.>
16-24 <(e) The tender of an offer of settlement is not an
16-25 admission of engaging in an unlawful act or practice or of
16-26 liability under this Act. Evidence of a settlement offer may be
16-27 introduced only to determine the reasonableness of the settlement
17-1 offer as provided for by Subsection (d) of this section.>
17-2 SECTION 7. Subchapter E, Chapter 17, Business & Commerce
17-3 Code, is amended by adding Sections 17.5051 and 17.5052 to read as
17-4 follows:
17-5 Sec. 17.5051. MEDIATION. (a) A party may, not later than
17-6 the 90th day after the date of service of a pleading in which
17-7 relief under this subchapter is sought, file a motion to compel
17-8 mediation of the dispute in the manner provided by this section.
17-9 (b) The court shall, not later than the 30th day after the
17-10 date a motion under this section is filed, sign an order setting
17-11 the time and place of the mediation.
17-12 (c) If the parties do not agree on a mediator, the court
17-13 shall appoint the mediator.
17-14 (d) Mediation shall be held within 30 days after the date
17-15 the order is signed, unless the parties agree otherwise or the
17-16 court determines that additional time, not to exceed an additional
17-17 30 days, is warranted.
17-18 (e) Except as agreed to by all parties who have appeared in
17-19 the action, each party who has appeared shall participate in the
17-20 mediation and, except as provided by Subsection (f), shall share
17-21 the mediation fee.
17-22 (f) A party may not compel mediation under this section if
17-23 the amount of economic damages claimed is less than $15,000, unless
17-24 the party seeking to compel mediation agrees to pay the costs of
17-25 the mediation.
17-26 (g) Except as provided in this section, Section 154.023,
17-27 Civil Practice and Remedies Code, and Subchapters C and D, Chapter
18-1 154, Civil Practice and Remedies Code, apply to the appointment of
18-2 a mediator and to the mediation process provided by this section.
18-3 (h) This section does not apply to an action brought by the
18-4 attorney general under Section 17.47.
18-5 Sec. 17.5052. OFFERS OF SETTLEMENT. (a) A person who
18-6 receives notice under Section 17.505 may tender an offer of
18-7 settlement at any time during the period beginning on the date the
18-8 notice is received and ending on the 60th day after that date.
18-9 (b) If a mediation under Section 17.5051 is not conducted,
18-10 the person may tender an offer of settlement at any time during the
18-11 period beginning on the date an original answer is filed and ending
18-12 on the 90th day after that date.
18-13 (c) If a mediation under Section 17.5051 is conducted, a
18-14 person against whom a claim under this subchapter is pending may
18-15 tender an offer of settlement during the period beginning on the
18-16 day after the date that the mediation ends and ending on the 20th
18-17 day after that date.
18-18 (d) An offer of settlement tendered by a person against whom
18-19 a claim under this subchapter is pending must include an offer to
18-20 pay the following amounts of money, separately stated:
18-21 (1) an amount of money or other consideration, reduced
18-22 to its cash value, as settlement of the consumer's claim for
18-23 damages; and
18-24 (2) an amount of money to compensate the consumer for
18-25 the consumer's reasonable and necessary attorneys' fees incurred as
18-26 of the date of the offer.
18-27 (e) Unless both parts of an offer of settlement required
19-1 under Subsection (d) are accepted by the consumer not later than
19-2 the 30th day after the date the offer is made, the offer is
19-3 rejected.
19-4 (f) A settlement offer tendered by a person against whom a
19-5 claim under this subchapter is pending that complies with this
19-6 section and that has been rejected by the consumer may be filed
19-7 with the court with an affidavit certifying its rejection.
19-8 (g) If the court finds that the amount tendered in the
19-9 settlement offer for damages under Subsection (d)(1) is the same
19-10 as, substantially the same as, or more than the damages found by
19-11 the trier of fact, the consumer may not recover as damages any
19-12 amount in excess of the lesser of:
19-13 (1) the amount of damages tendered in the settlement
19-14 offer; or
19-15 (2) the amount of damages found by the trier of fact.
19-16 (h) If the court makes the finding described by Subsection
19-17 (g), the court shall determine reasonable and necessary attorneys'
19-18 fees to compensate the consumer for attorneys' fees incurred before
19-19 the date and time of the rejected settlement offer. If the court
19-20 finds that the amount tendered in the settlement offer to
19-21 compensate the consumer for attorneys' fees under Subsection (d)(2)
19-22 is the same as, substantially the same as, or more than the amount
19-23 of reasonable and necessary attorneys' fees incurred by the
19-24 consumer as of the date of the offer, the consumer may not recover
19-25 attorneys' fees greater than the amount of fees tendered in the
19-26 settlement offer.
19-27 (i) If the court finds that the offering party could not
20-1 perform the offer at the time the offer was made or that the
20-2 offering party substantially misrepresented the cash value of the
20-3 offer, Subsections (g) and (h) do not apply.
20-4 (j) If Subsection (g) does not apply, the court shall award
20-5 as economic damages the amount found by the trier of fact, subject
20-6 to Sections 17.50 and 17.501. If Subsection (h) does not apply,
20-7 the court shall award attorneys' fees as provided by Section
20-8 17.50(d).
20-9 (k) An offer of settlement is not an admission of engaging
20-10 in an unlawful act or practice or liability under this subchapter.
20-11 Except as otherwise provided by this section, an offer or a
20-12 rejection of an offer may not be offered in evidence at trial for
20-13 any purpose.
20-14 SECTION 8. Subsection (d), Section 17.506, Business &
20-15 Commerce Code, is amended to read as follows:
20-16 (d) In an action brought under Section 17.50 of this
20-17 subchapter, it is a defense to a cause of action if the defendant
20-18 proves that he received notice from the consumer advising the
20-19 defendant of the nature of the consumer's specific complaint and of
20-20 the amount of economic <actual> damages and expenses, including
20-21 attorneys' fees, if any, reasonably incurred by the consumer in
20-22 asserting the claim against the defendant, and that within 30 days
20-23 after the day on which the defendant received the notice the
20-24 defendant tendered to the consumer:
20-25 (1) the amount of economic <actual> damages claimed;
20-26 and
20-27 (2) the expenses, including attorneys' fees, if any,
21-1 reasonably incurred by the consumer in asserting the claim against
21-2 the defendant.
21-3 SECTION 9. Section 17.56, Business & Commerce Code, is
21-4 amended to read as follows:
21-5 Sec. 17.56. VENUE. An action brought under this subchapter
21-6 may be brought:
21-7 (1) in any county in which venue is proper under
21-8 Chapter 15, Civil Practice and Remedies Code; or
21-9 (2) <which alleges a claim to relief under Section
21-10 17.50 of this subchapter may be commenced in the county in which
21-11 the person against whom the suit is brought resides, has his
21-12 principal place of business, or has a fixed and established place
21-13 of business at the time the suit is brought or in the county in
21-14 which the alleged act or practice occurred or> in a county in which
21-15 the defendant or an authorized agent of the defendant solicited the
21-16 transaction made the subject of the action at bar.
21-17 SECTION 10. Section 27.004, Property Code, is amended by
21-18 adding new Subsections (d) and (e) and relettering existing
21-19 Subsections (d), (e), (f), (g), (h), (i), (j), (k), (l), and (m) to
21-20 read as follows:
21-21 (d) The court shall abate a suit governed by this section if
21-22 Subsection (c) does not apply and the court, after a hearing, finds
21-23 that the contractor is entitled to an abatement because notice was
21-24 not provided as required by Subsection (a). A suit is automatically
21-25 abated without the order of the court beginning on the 11th day
21-26 after the date a plea in abatement is filed if the plea in
21-27 abatement:
22-1 (1) is verified and alleges that the person against
22-2 whom the suit is pending did not receive the written notice as
22-3 required by Subsection (a); and
22-4 (2) is not controverted by an affidavit filed by the
22-5 claimant before the 11th day after the date on which the plea in
22-6 abatement is filed.
22-7 (e) An abatement under Subsection (d) continues until the
22-8 60th day after the date that written notice is served in compliance
22-9 with Subsection (a).
22-10 (f) <(d)> If a claimant unreasonably rejects an offer made
22-11 as provided by this section or does not permit the contractor or
22-12 independent contractor a reasonable opportunity to repair the
22-13 defect pursuant to an accepted offer of settlement, the claimant
22-14 may not recover an amount in excess of the reasonable cost of the
22-15 repairs which are necessary to cure the construction defect and
22-16 which are the responsibility of the contractor and may recover only
22-17 the amount of reasonable and necessary attorney's fees and costs
22-18 incurred before the offer was rejected or considered rejected.
22-19 (g) <(e)> If a contractor fails to make a reasonable offer
22-20 under this section, or fails to make a reasonable attempt to
22-21 complete the repairs specified in an accepted offer made under this
22-22 section, or fails to complete, in a good and workmanlike manner,
22-23 the repairs specified in an accepted offer made under this section,
22-24 the limitations on damages and defenses to liability provided for
22-25 in this section shall not apply.
22-26 (h) <(f)> Except as provided by Subsection (f) <(d)>, in a
22-27 suit subject to this chapter the claimant may recover only the
23-1 following damages proximately caused by a construction defect:
23-2 (1) the reasonable cost of repairs necessary to cure
23-3 any construction defect that the contractor failed to cure;
23-4 (2) the reasonable expenses of temporary housing
23-5 reasonably necessary during the repair period;
23-6 (3) the reduction in market value, if any, to the
23-7 extent the reduction is due to structural failure; and
23-8 (4) reasonable and necessary attorney's fees.
23-9 (i) <(g)> The total damages awarded in a suit subject to
23-10 this chapter may not exceed the claimant's purchase price for the
23-11 residence.
23-12 (j) <(h)> An offer of settlement made under this section
23-13 that is not accepted before the 25th day after the date the offer
23-14 is received by the claimant is considered rejected.
23-15 (k) <(i)> An affidavit certifying rejection of a settlement
23-16 offer under this section may be filed with the court. The trier of
23-17 fact shall determine the reasonableness of a rejection of an offer
23-18 of settlement made under this section.
23-19 (l) <(j)> A contractor who makes or provides for repairs
23-20 under this section is entitled to take reasonable steps to document
23-21 the repair and to have it inspected.
23-22 (m) <(k)> Notwithstanding Subsections (a), (b), and (c), a
23-23 contractor who receives written notice of a construction defect
23-24 resulting from work performed by the contractor or an agent,
23-25 employee, or subcontractor of the contractor and creating an
23-26 imminent threat to the health or safety of the inhabitants of the
23-27 residence shall take reasonable steps to cure the defect as soon as
24-1 practicable. If the contractor fails to cure the defect in a
24-2 reasonable time, the owner of the residence may have the defect
24-3 cured and may recover from the contractor the reasonable cost of
24-4 the repairs plus attorney's fees and costs in addition to any other
24-5 damages recoverable under any law not inconsistent with the
24-6 provisions of this chapter.
24-7 (n) <(l)> This section does not preclude a contractor from
24-8 making a monetary settlement offer.
24-9 (o) <(m)> The inspection and repair provisions of this
24-10 chapter are in addition to any rights of inspection and settlement
24-11 provided by common law or by another statute, including Section
24-12 17.505, Business & Commerce Code.
24-13 SECTION 11. Section 4, Article 21.21, Insurance Code, is
24-14 amended to read as follows:
24-15 Sec. 4. UNFAIR METHODS OF COMPETITION AND UNFAIR OR
24-16 DECEPTIVE ACTS OR PRACTICES DEFINED. The following are hereby
24-17 defined as unfair methods of competition and unfair and deceptive
24-18 acts or practices in the business of insurance:
24-19 (1) Misrepresentations and False Advertising of Policy
24-20 Contracts. Making, issuing, circulating, or causing to be made,
24-21 issued or circulated, any estimate, illustration, circular or
24-22 statement misrepresenting the terms of any policy issued or to be
24-23 issued or the benefits or advantages promised thereby or the
24-24 dividends or share of the surplus to be received thereon, or making
24-25 any false or misleading statements as to the dividends or share of
24-26 surplus previously paid on similar policies, or making any
24-27 misleading representation or any misrepresentation as to the
25-1 financial condition of any insurer, or as to the legal reserve
25-2 system upon which any life insurer operates, or using any name or
25-3 title of any policy or class of policies misrepresenting the true
25-4 nature thereof, or making any misrepresentation to any policyholder
25-5 insured in any company for the purpose of inducing or tending to
25-6 induce such policyholder to lapse, forfeit, or surrender his
25-7 insurance;
25-8 (2) False Information and Advertising Generally.
25-9 Making, publishing, disseminating, circulating or placing before
25-10 the public, or causing, directly or indirectly, to be made,
25-11 published, disseminated, circulated, or placed before the public,
25-12 in a newspaper, magazine or other publication, or in the form of a
25-13 notice, circular, pamphlet, letter or poster, or over any radio or
25-14 television station, or in any other way, an advertisement,
25-15 announcement or statement containing any assertion, representation
25-16 or statement with respect to the business of insurance or with
25-17 respect to any person in the conduct of his insurance business,
25-18 which is untrue, deceptive or misleading;
25-19 (3) Defamation. Making, publishing, disseminating, or
25-20 circulating, directly or indirectly, or aiding, abetting or
25-21 encouraging the making, publishing, disseminating or circulating of
25-22 any oral or written statement or any pamphlet, circular, article or
25-23 literature which is false, or maliciously critical of or derogatory
25-24 to the financial condition of any insurer, and which is calculated
25-25 to injure any person engaged in the business of insurance;
25-26 (4) Boycott, Coercion and Intimidation. Entering into
25-27 any agreement to commit, or by any concerted action committing, any
26-1 act of boycott, coercion or intimidation resulting in or tending to
26-2 result in unreasonable restraint of, or monopoly in, the business
26-3 of insurance;
26-4 (5) False Financial Statements. (a) Filing with any
26-5 supervisory or other public official, or making, publishing,
26-6 disseminating, circulating or delivering to any person, or placing
26-7 before the public, or causing directly or indirectly, to be made,
26-8 published, disseminated, circulated, delivered to any person, or
26-9 placed before the public, any false statement of financial
26-10 condition of an insurer with intent to deceive;
26-11 (b) Making any false entry in any book, report
26-12 or statement of any insurer with intent to deceive any agent or
26-13 examiner lawfully appointed to examine into its condition or into
26-14 any of its affairs, or any public official to whom such insurer is
26-15 required by law to report, or who has authority by law to examine
26-16 into its condition or into any of its affairs, or, with like
26-17 intent, wilfully omitting to make a true entry of any material fact
26-18 pertaining to the business of such insurer in any book, report or
26-19 statement of such insurer;
26-20 (6) Stock Operations and Advisory Board Contracts.
26-21 Issuing or delivering or permitting agents, officers or employees
26-22 to issue or deliver, company stock or other capital stock, or
26-23 benefit certificates or shares in any corporation, or securities or
26-24 any special or advisory board contracts or other contracts of any
26-25 kind promising returns and profits as an inducement to insurance.
26-26 Provided, however, that nothing in this subsection shall be
26-27 construed as prohibiting the issuing or delivery of participating
27-1 insurance policies otherwise authorized by law.
27-2 (7) Unfair Discrimination. (a) Making or permitting
27-3 any unfair discrimination between individuals of the same class and
27-4 equal expectation of life in the rates charged for any contract of
27-5 life insurance or of life annuity or in the dividends or other
27-6 benefits payable thereon, or in any other of the terms and
27-7 conditions of such contract;
27-8 (b) Making or permitting any unfair
27-9 discrimination between individuals of the same class and of
27-10 essentially the same hazard in the amount of premium, policy fees,
27-11 or rates charged for any policy or contract of accident or health
27-12 insurance or in the benefits payable thereunder, or in any of the
27-13 terms or conditions of such contract, or in any other manner
27-14 whatever;
27-15 (c) Making or permitting any unfair
27-16 discrimination between individuals or risks of the same class and
27-17 of essentially the same hazards by refusing to renew, cancelling or
27-18 limiting the amount of coverage on a policy of insurance covered by
27-19 Subchapter C, Chapter 5, of this code because of the geographic
27-20 location of the risk unless:
27-21 (1) the refusal, cancellation or
27-22 limitation is for a business purpose that is not a mere pretext for
27-23 unfair discrimination; or
27-24 (2) the refusal, cancellation or
27-25 limitation is required by law or regulatory mandate.
27-26 (8) Rebates. (a) Except as otherwise expressly
27-27 provided by law, knowingly permitting or offering to make or making
28-1 any contract of life insurance, life annuity or accident and health
28-2 insurance, or agreement as to such contract other than as plainly
28-3 expressed in the contract issued thereon, or paying or allowing, or
28-4 giving or offering to pay, allow, or give, directly or indirectly,
28-5 as inducement to such insurance, or annuity, any rebate of premiums
28-6 payable on the contract, or any special favor or advantage in the
28-7 dividends or other benefits thereon, or any valuable consideration
28-8 or inducement whatever not specified in the contract; or giving, or
28-9 selling, or purchasing or offering to give, sell, or purchase as
28-10 inducement to such insurance or annuity or in connection therewith,
28-11 any stocks, bonds, or other securities of any insurance company or
28-12 other corporation, association, or partnership, or any dividends or
28-13 profits accrued thereon, or anything of value whatsoever not
28-14 specified in the contract;
28-15 (b) Nothing in clause 7 or paragraph (a) of
28-16 clause 8 of this subsection shall be construed as including within
28-17 the definition of discrimination or rebates any of the following
28-18 practices:
28-19 (i) in the case of any contract of life
28-20 insurance or life annuity, paying bonuses to policyholders or
28-21 otherwise abating their premiums in whole or in part out of surplus
28-22 accumulated from non-participating insurance, provided that any
28-23 such bonuses or abatement of premiums shall be fair and equitable
28-24 to policyholders and for the best interests of the company and its
28-25 policyholders;
28-26 (ii) in the case of life insurance
28-27 policies issued on the industrial debit plan, making allowance to
29-1 policyholders who have continuously for a specified period made
29-2 premium payments directly to an office of the insurer in an amount
29-3 which fairly represents the saving in collection expenses;
29-4 (iii) readjustment of the rate of premium
29-5 for a group insurance policy based on the loss or expense
29-6 experience thereunder, at the end of the first or any subsequent
29-7 policy year of insurance thereunder, which may be made retroactive
29-8 only for such policy year.
29-9 (9) Deceptive Name, Word, Symbol, Device, or Slogan.
29-10 Using, displaying, publishing, circulating, distributing, or
29-11 causing to be used, displayed, published, circulated, or
29-12 distributed in any letter, pamphlet, circular, contract, policy,
29-13 evidence of coverage, article, poster, or other document,
29-14 literature, or public media of:
29-15 (a) a name as the corporate or business name of
29-16 a person or entity engaged in an insurance or insurance related
29-17 business in this state that is the same as, or deceptively similar
29-18 to, the name adopted and used by an insurance entity, health
29-19 maintenance organization, third party administrator, or group
29-20 hospital service company authorized to do business under the laws
29-21 of this state; or
29-22 (b) a word, symbol, device, slogan, or any
29-23 combination of these items, whether registered or not registered,
29-24 that is the same as or deceptively similar to one adopted and used
29-25 by an insurance entity, health maintenance organization, third
29-26 party administrator, or group hospital service company to
29-27 distinguish such entities, products, or service from other
30-1 entities, and includes the title, designation, character names, and
30-2 distinctive features of broadcast or other advertising.
30-3 Where two persons or entities are using a name, word, symbol,
30-4 device, slogan, or any combination of these items that are the same
30-5 or deceptively similar and are likely to cause confusion or a
30-6 mistake, the user who can demonstrate the first continuous actual
30-7 use of such name, word, symbol, device, slogan, or combination of
30-8 these items shall not have committed an unfair method of
30-9 competition or deceptive act or practice.
30-10 (10) Unfair Settlement Practices. (a) Engaging in
30-11 any of the following unfair settlement practices with respect to a
30-12 claim by an insured or beneficiary:
30-13 (i) misrepresenting to a claimant a
30-14 material fact or policy provision relating to coverage at issue;
30-15 (ii) failing to attempt in good faith to
30-16 effectuate a prompt, fair, and equitable settlement of a claim with
30-17 respect to which the insurer's liability has become reasonably
30-18 clear;
30-19 (iii) failing to attempt, in good faith,
30-20 to effectuate a prompt, fair, and equitable settlement under one
30-21 portion of a policy of a claim with respect to which the insurer's
30-22 liability has become reasonably clear in order to influence the
30-23 claimant to settle an additional claim under another portion of the
30-24 coverage, provided that this prohibition does not apply if payment
30-25 under one portion of the coverage constitutes evidence of liability
30-26 under another portion of the policy;
30-27 (iv) failing to provide promptly to a
31-1 policyholder a reasonable explanation of the basis in the policy,
31-2 in relation to the facts or applicable law, for the insurer's
31-3 denial of a claim or for the offer of a compromise settlement of a
31-4 claim;
31-5 (v) failing within a reasonable time to:
31-6 (A) affirm or deny coverage of a
31-7 claim to a policyholder; or
31-8 (B) submit a reservation of rights
31-9 to a policyholder;
31-10 (vi) refusing, failing, or unreasonably
31-11 delaying an offer of settlement under applicable first-party
31-12 coverage on the basis that other coverage may be available or that
31-13 third parties are responsible for the damages suffered, except as
31-14 may be specifically provided in the policy;
31-15 (vii) undertaking to enforce a full and
31-16 final release of a claim from a policyholder when only a partial
31-17 payment has been made, provided that this prohibition does not
31-18 apply to a compromise settlement of a doubtful or disputed claim;
31-19 (viii) refusing to pay a claim without
31-20 conducting a reasonable investigation with respect to the claim;
31-21 (ix) with respect to a Texas personal auto
31-22 policy, delaying or refusing settlement of a claim solely because
31-23 there is other insurance of a different type available to satisfy
31-24 all or any part of the loss forming the basis of that claim; or
31-25 (x) requiring a claimant, as a condition
31-26 of settling a claim, to produce the claimant's federal income tax
31-27 returns for examination or investigation by the person unless:
32-1 (A) the claimant is ordered to
32-2 produce those tax returns by a court;
32-3 (B) the claim involves a fire loss;
32-4 or
32-5 (C) the claim involves lost profits
32-6 or income.
32-7 (b) Paragraph (a) of this clause does not
32-8 provide a cause of action to a third party asserting one or more
32-9 claims against an insured covered under a liability insurance
32-10 policy.
32-11 (11) Misrepresentation of Insurance Policy.
32-12 Misrepresenting an insurance policy by:
32-13 (a) making an untrue statement of material fact;
32-14 (b) failing to state a material fact that is
32-15 necessary to make other statements made not misleading, considering
32-16 the circumstances under which the statements were made;
32-17 (c) making a statement in such manner as to
32-18 mislead a reasonably prudent person to a false conclusion of a
32-19 material fact;
32-20 (d) making a material misstatement of law; or
32-21 (e) failing to disclose any matter required by
32-22 law to be disclosed, including a failure to make disclosure in
32-23 accordance with another provision of this code.
32-24 SECTION 12. Article 21.21, Insurance Code, is amended by
32-25 adding Section 11A to read as follows:
32-26 Sec. 11A. DOUBLE RECOVERY PROHIBITED. A person may not
32-27 recover damages and penalties for the same act or practice under
33-1 both this Article and under another law.
33-2 SECTION 13. Section 16, Article 21.21, Insurance Code, is
33-3 amended to read as follows:
33-4 Sec. 16. RELIEF AVAILABLE TO INJURED PARTIES. (a) Any
33-5 person who has sustained actual damages caused by <as a result of>
33-6 another's engaging in an act or practice declared in Section 4 of
33-7 this Article <or in rules or regulations lawfully adopted by the
33-8 Board under this Article> to be unfair methods of competition or
33-9 unfair or deceptive acts or practices in the business of insurance
33-10 or in any practice specifically enumerated in a subdivision of
33-11 <defined by> Section 17.46(b), <17.46 of the> Business & Commerce
33-12 Code, <as amended,> as an unlawful deceptive trade practice may
33-13 maintain an action against the person or persons engaging in such
33-14 acts or practices. To maintain an action for a deceptive act or
33-15 practice enumerated in Section 17.46(b), Business & Commerce Code,
33-16 a person must show that the person has relied on the act or
33-17 practice to the person's detriment.
33-18 (b) In a suit filed under this section, any plaintiff who
33-19 prevails may obtain:
33-20 (1) the amount of actual damages plus court costs and
33-21 reasonable and necessary attorneys' fees. If the trier of fact
33-22 finds that the defendant knowingly committed the acts complained
33-23 of, the trier of fact may award not more than three <court shall
33-24 award, in addition, two> times the amount of actual damages; or
33-25 (2) an order enjoining such acts or failure to act; or
33-26 (3) any other relief which the court deems proper.
33-27 (c) On a finding by the court that an action under this
34-1 section was groundless and brought in bad faith or brought for the
34-2 purpose of harassment, the court shall award to the defendant
34-3 reasonable and necessary attorneys' fees and court costs.
34-4 (d) All actions under this Article must be commenced within
34-5 two years after the date on which the unfair method of competition
34-6 or unfair or deceptive act or practice occurred or within two years
34-7 after the person bringing the action discovered or, in the exercise
34-8 of reasonable diligence, should have discovered the occurrence of
34-9 the unfair method of competition or unfair or deceptive act or
34-10 practice. The period of limitation provided in this section may be
34-11 extended for a period of 180 days if the person bringing the action
34-12 proves that the failure to timely commence the action was caused by
34-13 the defendant's engaging in conduct solely calculated to induce the
34-14 plaintiff to refrain from or postpone the commencement of the
34-15 action.
34-16 (e) As a prerequisite to filing a suit seeking damages under
34-17 this section against any person, the person seeking damages shall
34-18 give written notice to the other person at least 60 <30> days
34-19 before filing suit. The notice must advise the person of the
34-20 specific complaint and the amount of actual damages and expenses,
34-21 including any attorneys' fees reasonably incurred in asserting the
34-22 claim against the defendant.
34-23 (f) If giving 60 <30> days' written notice is impracticable
34-24 because the suit must be filed in order to prevent the expiration
34-25 of the statute of limitations or because the claim is asserted as a
34-26 counterclaim, the notice provided for in Subsection (e) of this
34-27 section is not required<, and the tender of a written offer of
35-1 settlement provided for by Subsection (g) of this section may be
35-2 made not later than the 30th day after the date of filing of the
35-3 suit or counterclaim>.
35-4 (g) A person against whom a suit is pending who does not
35-5 receive written notice, as required by Subsection (e) of this
35-6 section, may file a plea in abatement not later than the 30th day
35-7 after the date the person files an original answer in the court in
35-8 which the suit is pending. This subsection does not apply if
35-9 Subsection (f) of this section applies <A person who receives the
35-10 written notice provided by Subsection (e) of this section may
35-11 tender, not later than the 30th day after the date of receipt of
35-12 the notice, to the person seeking damages, a written offer of
35-13 settlement, including an agreement to reimburse the person for any
35-14 attorneys' fees reasonably incurred in asserting the claim to the
35-15 date of the written notice. A person who does not receive a
35-16 written notice because the suit or counterclaim is filed as
35-17 provided for by Subsection (f) of this section may tender, not
35-18 later than the 30th day after the date of filing of the suit or
35-19 counterclaim, a written offer of settlement, including an agreement
35-20 to reimburse the person for any attorneys' fees reasonably incurred
35-21 in asserting the claim to the date the suit or counterclaim was
35-22 filed. An offer of settlement is rejected if it is not accepted on
35-23 or before the 30th day after the date of receipt by the person
35-24 seeking damages>.
35-25 (h) The court shall abate the suit if the court, after a
35-26 hearing, finds that the person is entitled to an abatement because
35-27 notice was not provided as required by this section. A suit is
36-1 automatically abated without the order of the court beginning on
36-2 the 11th day after the date a plea in abatement is filed under
36-3 Subsection (g) if the plea in abatement:
36-4 (1) is verified and alleges that the person against
36-5 whom the suit is pending did not receive the written notice as
36-6 required by Subsection (e); and
36-7 (2) is not controverted by an affidavit filed by the
36-8 claimant before the 11th day after the date on which the plea in
36-9 abatement is filed <A rejected settlement offer made in compliance
36-10 with Subsection (g) of this section may be filed with the court
36-11 with an affidavit certifying its rejection. If the court finds
36-12 that the amount tendered in the settlement offer is the same or
36-13 substantially the same as the actual damages found by the trier of
36-14 fact, the plaintiff may not recover an amount that exceeds the
36-15 lesser of:>
36-16 <(1) the amount tendered in the settlement offer; or>
36-17 <(2) the amount of actual damages found by the trier
36-18 of fact>.
36-19 (i) An abatement under Subsection (h) continues until the
36-20 60th day after the date that written notice is served in compliance
36-21 with Subsection (e) <The tender of an offer of settlement is not an
36-22 admission of engaging in an unlawful act or practice or of
36-23 liability under this Article. Evidence of a settlement offer may
36-24 be introduced only to determine the reasonableness of the
36-25 settlement offer as provided for by Subsection (h) of this
36-26 section>.
36-27 SECTION 14. Article 21.21, Insurance Code, is amended by
37-1 adding Sections 16A and 16B to read as follows:
37-2 Sec. 16A. OFFERS OF SETTLEMENT. (a) A person who receives
37-3 notice under Section 16(e) of this article may tender an offer of
37-4 settlement at any time during the period beginning on the date
37-5 notice is received and ending on the 60th day after that date.
37-6 (b) If a mediation under Section 16B of this article is not
37-7 conducted, the person may tender an offer of settlement at any time
37-8 during the period beginning on the date an original answer is filed
37-9 and ending on the 90th day after that date.
37-10 (c) If a mediation under Section 16B of this article is
37-11 conducted, a person against whom a claim under Section 16 of this
37-12 article is pending may tender an offer of settlement during the
37-13 period beginning on the day after the date that the mediation ends
37-14 and ending on the 20th day after that date.
37-15 (d) An offer of settlement tendered by a person against whom
37-16 a claim under Section 16 of this article is pending must include an
37-17 offer to pay the following amounts of money, separately stated:
37-18 (1) an amount of money or other consideration, reduced
37-19 to its cash value, as settlement of the claim for damages; and
37-20 (2) an amount of money to compensate the claimant for
37-21 the claimant's reasonable and necessary attorneys' fees incurred as
37-22 of the date of the offer.
37-23 (e) Unless both parts of an offer of settlement required
37-24 under Subsection (d) of this section are accepted by the claimant
37-25 not later than the 30th day after the date the offer is made, the
37-26 offer is rejected.
37-27 (f) A settlement offer tendered by a person against whom a
38-1 claim under Section 16 of this article is pending that complies
38-2 with this section and that has been rejected by the claimant may be
38-3 filed with the court with an affidavit certifying its rejection.
38-4 (g) If the court finds that the amount tendered in the
38-5 settlement offer for damages under Subsection (d)(1) of this
38-6 section is the same as, substantially the same as, or more than the
38-7 damages found by the trier of fact, the claimant may not recover as
38-8 damages any amount in excess of the lesser of:
38-9 (1) the amount of damages tendered in the settlement
38-10 offer; or
38-11 (2) the amount of damages found by the trier of fact.
38-12 (h) If the court makes the finding described by Subsection
38-13 (g) of this section, the court shall determine reasonable and
38-14 necessary attorneys' fees to compensate the claimant for attorneys'
38-15 fees incurred before the date and time of the rejected settlement
38-16 offer. If the court finds that the amount tendered in the
38-17 settlement offer to compensate the claimant for attorneys' fees
38-18 under Subsection (d)(2) of this section is the same as,
38-19 substantially the same as, or more than the amount of reasonable
38-20 and necessary attorneys' fees incurred by the claimant as of the
38-21 date of the offer, the claimant may not recover attorneys' fees
38-22 greater than the amount of fees tendered in the settlement offer.
38-23 (i) If the court finds that the offering party could not
38-24 perform the offer at the time the offer was made or that the
38-25 offering party substantially misrepresented the cash value of the
38-26 offer, Subsections (g) and (h) of this section do not apply.
38-27 (j) If Subsection (g) of this section does not apply, the
39-1 court shall award damages as required by Section 16(b) of this
39-2 article. If Subsection (h) of this section does not apply, the
39-3 court shall award attorneys' fees as required by Section 16(b) of
39-4 this article.
39-5 (k) An offer of settlement is not an admission of engaging
39-6 in an act or practice declared in Section 4 of this article to be
39-7 an unfair method of competition or an unfair or deceptive act or
39-8 practice in the business of insurance.
39-9 Sec. 16B. MEDIATION. (a) A party may, not later than the
39-10 90th day after the date of service of a pleading in which relief
39-11 under Section 16 of this article is sought, file a motion to compel
39-12 mediation of the dispute in the manner provided by this section.
39-13 (b) The court shall, not later than the 30th day after the
39-14 date a motion under this section is filed, sign an order setting
39-15 the time and place of the mediation.
39-16 (c) If the parties do not agree on a mediator, the court
39-17 shall appoint the mediator.
39-18 (d) Mediation shall be held within 30 days after the date
39-19 the order is signed, unless the parties agree otherwise or the
39-20 court determines that additional time, not to exceed an additional
39-21 30 days, is warranted.
39-22 (e) Except as agreed to by all parties who have appeared in
39-23 the action, each party who has appeared shall participate in the
39-24 mediation and, except as provided by Subsection (f), shall share
39-25 the mediation fee.
39-26 (f) A party may not compel mediation under this section if
39-27 the amount of actual damages claimed is less than $15,000, unless
40-1 the party seeking to compel mediation agrees to pay the costs of
40-2 the mediation.
40-3 (g) Except as provided in this section, Section 154.023,
40-4 Civil Practice and Remedies Code, and Subchapters C and D, Chapter
40-5 154, Civil Practice and Remedies Code, apply to the appointment of
40-6 a mediator and to the mediation process provided by this section.
40-7 SECTION 15. Section 17(a), Article 21.21, Insurance Code, is
40-8 amended to read as follows:
40-9 (a) If a member of the insurance buying public has been
40-10 damaged by an unlawful method, act, or practice defined in Section
40-11 4 of this Article <or by the rules and regulations lawfully adopted
40-12 by the Board under this Article or by any practice defined by
40-13 Section 17.46 of the Business & Commerce Code, as amended,> as an
40-14 unlawful deceptive trade practice, the Board may request the
40-15 Attorney General to bring a class action, or the individual damaged
40-16 may bring an action on behalf of himself and others similarly
40-17 situated, to recover damages and relief as provided in this
40-18 section.
40-19 SECTION 16. Section 33.002, Civil Practice and Remedies
40-20 Code, is amended by amending Subsection (b) and adding Subsection
40-21 (c) to read as follows:
40-22 (b) This chapter does not apply to<:>
40-23 <(1)> an action to collect workers' compensation
40-24 benefits under the workers' compensation laws of this state,
40-25 Subtitle A, Title 5, Labor Code, <(Article 8306 et seq., Vernon's
40-26 Texas Civil Statutes)> or actions against an employer for exemplary
40-27 damages arising out of the death of an employee.
41-1 (c) This chapter applies to<;>
41-2 <(2)> an action brought under the Deceptive Trade
41-3 Practices-Consumer Protection Act (Subchapter E, Chapter 17,
41-4 Business & Commerce Code) <except as specifically provided in
41-5 Section 17.50 of that Act; or>
41-6 <(3) an action brought under Chapter 21, Insurance
41-7 Code>.
41-8 SECTION 17. Article 11.05, Title 79, Revised Statutes
41-9 (Article 5069-11.05, Vernon's Texas Civil Statutes), is amended to
41-10 read as follows:
41-11 Art. 11.05. Fraudulent, deceptive, or misleading
41-12 representations. No debt collector may collect or attempt to
41-13 collect debts or obtain information concerning a consumer by any
41-14 fraudulent, deceptive, or misleading representations which employ
41-15 the following practices:
41-16 (a) using any name while engaged in the collection of
41-17 debts other than the true business or professional name or the true
41-18 personal or legal name of the debt collector or, if engaged in the
41-19 collection of a credit card debt, the name appearing on the face of
41-20 the credit card; or failing to maintain a list of all business or
41-21 professional names known to be used or formerly used by individual
41-22 persons collecting debts or attempting to collect debts for the
41-23 debt collector;
41-24 (b) falsely representing that the debt collector has
41-25 information in his possession or something of value for the
41-26 consumer in order to solicit or discover information about the
41-27 consumer;
42-1 (c) failing to clearly disclose, in any communication
42-2 with the debtor, the name of the person to whom the debt has been
42-3 assigned or is owed at the time of making any demand for money
42-4 (provided, however, this subsection shall not apply to persons
42-5 servicing or collecting real estate first lien mortgage loans) or
42-6 credit card debts;
42-7 (d) failing to clearly disclose, in any communication
42-8 with the debtor, that the debt collector is attempting to collect a
42-9 debt, unless such communication is for the purpose of discovering
42-10 the whereabouts of the debtor;
42-11 (e) using any written communication which fails to
42-12 clearly indicate the name of the debt collector and the debt
42-13 collector's street address or post office box and telephone number,
42-14 when the written notice refers to an alleged delinquent debt; (the
42-15 foregoing shall not require disclosure of names and addresses of
42-16 employees of debt collectors);
42-17 (f) using any written communication which demands a
42-18 response to a place other than the debt collector's or creditor's
42-19 street address or post office box; (the foregoing shall not require
42-20 response to the address of an employee of a debt collector);
42-21 (g) misrepresenting the character, extent, or amount
42-22 of a debt against a consumer, or misrepresenting its status in any
42-23 judicial or governmental proceedings;
42-24 (h) falsely representing that any debt collector is
42-25 vouched for, bonded by, affiliated with, or an instrumentality,
42-26 agent, or official of this state or any agency of federal, state,
42-27 or local government;
43-1 (i) using, distributing, or selling any written
43-2 communication which simulates or falsely represents to be a
43-3 document authorized, issued, or approved by a court, an official, a
43-4 governmental agency, or any other legally constituted or authorized
43-5 governmental authority, or which creates a false impression about
43-6 its source, authorization, or approval; or using any seal or
43-7 insignia or design which simulates that of any governmental agency;
43-8 (j) representing that a debt may be increased by the
43-9 addition of attorney's fees, investigation fees, service fees, or
43-10 other charges when there is no written contract or statute
43-11 authorizing such additional fees or charges;
43-12 (k) representing that a debt will definitely be
43-13 increased by the addition of attorney's fees, investigation fees,
43-14 service fees, or other charges when the award of such fee or charge
43-15 is discretionary by a court of law;
43-16 (l) falsely representing the status or true nature of
43-17 the services rendered by the debt collector or his business;
43-18 (m) using any written communication which violates or
43-19 fails to conform to the United States postal laws and regulations;
43-20 (n) using any communication which purports to be from
43-21 any attorney or law firm, when in fact it is not;
43-22 (o) representing that a debt is being collected by an
43-23 attorney when it is not; <or>
43-24 (p) representing that a debt is being collected by an
43-25 independent, bona fide organization engaged in the business of
43-26 collecting past due accounts when the debt is being collected by a
43-27 subterfuge organization under the control and direction of the
44-1 person to whom the debt is owed; however, nothing herein shall
44-2 prohibit a creditor from owning or operating its own bona fide debt
44-3 collection agency; or
44-4 (q) all changes made to this Act by any act of the
44-5 74th Legislature shall apply to any civil action pending on or
44-6 after the effective date of the enactment of these changes.
44-7 SECTION 18. Article 11.10, Title 79, Revised Statutes
44-8 (Article 5069-11.10, Vernon's Texas Civil Statutes), is amended by
44-9 amending Subsection (c) and adding Subsection (d) to read as
44-10 follows:
44-11 (c) A person who successfully maintains an action under this
44-12 article for violation of Article 11.02(c) or 11.07A of this Act
44-13 shall be awarded at least $100 for each violation of this Act.
44-14 (d) All changes made to this Act by any act of the 74th
44-15 Legislature shall apply to any civil action pending on or after the
44-16 effective date of the enactment of these changes.
44-17 SECTION 19. This Act takes effect September 1, 1995, and
44-18 applies to all causes of action that accrue on or after that date.
44-19 This Act applies to all causes of action that accrued before the
44-20 effective date of this Act and upon which suit is filed on or after
44-21 September 1, 1996. A cause of action that accrued before the
44-22 effective date of this Act and upon which suit is filed prior to
44-23 September 1, 1996, is governed by the law in effect immediately
44-24 prior to the effective date of this Act, and that law is continued
44-25 in effect for that purpose.
44-26 SECTION 20. The importance of this legislation and the
44-27 crowded condition of the calendars in both houses create an
45-1 emergency and an imperative public necessity that the
45-2 constitutional rule requiring bills to be read on three several
45-3 days in each house be suspended, and this rule is hereby suspended.