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.