1-1 By: Junell, et al. (Senate Sponsor - Bivins) H.B. No. 668
1-2 (In the Senate - Received from the House May 5, 1995;
1-3 May 8, 1995, read first time and referred to Committee on Economic
1-4 Development; May 12, 1995, reported adversely, with favorable
1-5 Committee Substitute by the following vote: Yeas 8, Nays 1;
1-6 May 12, 1995, sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR H.B. No. 668 By: Shapiro
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to civil remedies for deceptive trade practices and
1-11 certain related consumer claims.
1-12 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13 SECTION 1. Sections 17.42, 17.43, and 17.44, Business &
1-14 Commerce Code, are amended to read as follows:
1-15 Sec. 17.42. WAIVERS: PUBLIC POLICY. (a) Any waiver by a
1-16 consumer of the provisions of this subchapter is contrary to public
1-17 policy and is unenforceable and void; provided, however, that a
1-18 waiver is valid and enforceable if:
1-19 (1) the waiver is in writing and is signed by the
1-20 consumer;
1-21 (2) <a defendant in an action or claim under this
1-22 subchapter pleads and proves:>
1-23 <(1)> the consumer is not in a significantly disparate
1-24 bargaining position; and
1-25 (3) <(2)> the consumer is represented by legal counsel
1-26 in seeking or acquiring the goods or services<, other than the
1-27 purchase or lease of a family residence occupied or to be occupied
1-28 as the consumer's residence, by a purchase or a lease for a
1-29 consideration paid or to be paid that exceeds $500,000; and>
1-30 <(3) the consumer waives all or part of this
1-31 subchapter, other than Section 17.555, by an express provision in a
1-32 written contract signed by both the consumer and the consumer's
1-33 legal counsel; and provided, however, that a business consumer with
1-34 assets of $5 million or more according to the most recent financial
1-35 statement of the business consumer prepared in accordance with
1-36 generally accepted accounting principles that has knowledge and
1-37 experience in financial and business matters that enable it to
1-38 evaluate the merits and risks of a transaction and that is not in a
1-39 significantly disparate bargaining position may by written contract
1-40 waive the provisions of this subchapter, other than Section
1-41 17.555>.
1-42 (b) A waiver under Subsection (a) is not effective if the
1-43 consumer's legal counsel was directly or indirectly identified,
1-44 suggested, or selected by a defendant or an agent of the defendant
1-45 <The existence or absence of a disparate bargaining position may
1-46 not be established as a matter of law solely by evidence of the
1-47 consumer's financial position relative to other parties to the
1-48 contract or by matters contained in a written contract relating to
1-49 the relative bargaining position of the parties>.
1-50 (c) A waiver under this section must be:
1-51 (1) conspicuous and in bold-face type of at least 10
1-52 points in size;
1-53 (2) identified by the heading "Waiver of Consumer
1-54 Rights," or words of similar meaning; and
1-55 (3) in substantially the following form:
1-56 "I waive my rights under the Deceptive Trade Practices-Consumer
1-57 Protection Act, Section 17.41 et seq., Business & Commerce Code, a
1-58 law that gives consumers special rights and protections. After
1-59 consultation with an attorney of my own selection, I voluntarily
1-60 consent to this waiver."
1-61 (d) The waiver required by Subsection (c) may be modified to
1-62 waive only specified rights under this subchapter.
1-63 (e) The fact that a consumer has signed a waiver under this
1-64 section is not a defense to an action brought by the attorney
1-65 general under Section 17.47.
1-66 Sec. 17.43. CUMULATIVE REMEDIES. The provisions of this
1-67 subchapter are not exclusive. The remedies provided in this
1-68 subchapter are in addition to any other procedures or remedies
2-1 provided for in any other law; provided, however, that no recovery
2-2 shall be permitted under both this subchapter and another law of
2-3 both <actual> damages and penalties for the same act or practice.
2-4 A violation of a provision of law other than this subchapter is not
2-5 in and of itself a violation of this subchapter. An act or
2-6 practice that is a violation of a provision of law other than this
2-7 subchapter may be made the basis of an action under this subchapter
2-8 if the act or practice is proscribed by a provision of this
2-9 subchapter or is declared by such other law to be actionable under
2-10 this subchapter. The provisions of this subchapter do not in any
2-11 way preclude other political subdivisions of this state from
2-12 dealing with deceptive trade practices.
2-13 Sec. 17.44. Construction and Application. (a) This
2-14 subchapter shall be liberally construed and applied to promote its
2-15 underlying purposes, which are to protect consumers against false,
2-16 misleading, and deceptive business practices, unconscionable
2-17 actions, and breaches of warranty and to provide efficient and
2-18 economical procedures to secure such protection.
2-19 (b) Chapter 27, Property Code, prevails over this subchapter
2-20 to the extent of any conflict.
2-21 SECTION 2. Section 17.45, Business & Commerce Code, is
2-22 amended by amending Subdivisions (5) and (9) and adding
2-23 Subdivisions (11), (12), and (13) to read as follows:
2-24 (5) "Unconscionable action or course of action" means
2-25 an act or practice which, to a consumer's <person's> detriment,<:>
2-26 <(A)> takes advantage of the lack of knowledge,
2-27 ability, experience, or capacity of the consumer <a person> to a
2-28 grossly unfair degree<; or>
2-29 <(B) results in a gross disparity between the
2-30 value received and consideration paid, in a transaction involving
2-31 transfer of consideration>.
2-32 (9) "Knowingly" means actual awareness, at the time of
2-33 the act or practice complained of, of the falsity, deception, or
2-34 unfairness of the act or practice giving rise to the consumer's
2-35 claim or, in an action brought under Subdivision (2) of Subsection
2-36 (a) of Section 17.50, actual awareness of the act, <or> practice,
2-37 condition, defect, or failure constituting the breach of warranty,
2-38 but actual awareness may be inferred where objective manifestations
2-39 indicate that a person acted with actual awareness.
2-40 (11) "Economic damages" means compensatory damages
2-41 for pecuniary loss, including costs of repair and replacement. The
2-42 term does not include exemplary damages or damages for physical
2-43 pain and mental anguish, loss of consortium, disfigurement,
2-44 physical impairment, or loss of companionship and society.
2-45 (12) "Residence" means a building:
2-46 (A) that is a single-family house, duplex,
2-47 triplex, or quadruplex or a unit in a multiunit residential
2-48 structure in which title to the individual units is transferred to
2-49 the owners under a condominium or cooperative system; and
2-50 (B) that is occupied or to be occupied as the
2-51 consumer's residence.
2-52 (13) "Intentionally" means actual awareness of the
2-53 falsity, deception, or unfairness of the act or practice, or the
2-54 condition, defect, or failure constituting a breach of warranty
2-55 giving rise to the consumer's claim, coupled with the specific
2-56 intent that the consumer act in detrimental reliance on the falsity
2-57 or deception or in detrimental ignorance of the unfairness.
2-58 Intention may be inferred from objective manifestations that
2-59 indicate that the person acted intentionally or from facts showing
2-60 that a defendant acted with flagrant disregard of prudent and fair
2-61 business practices to the extent that the defendant should be
2-62 treated as having acted intentionally.
2-63 SECTION 3. Section 17.46(b), Business & Commerce Code, is
2-64 amended to read as follows:
2-65 (b) Except as provided in Subsection (d) of this section,
2-66 the term "false, misleading, or deceptive acts or practices"
2-67 includes, but is not limited to, the following acts:
2-68 (1) passing off goods or services as those of another;
2-69 (2) causing confusion or misunderstanding as to the
2-70 source, sponsorship, approval, or certification of goods or
3-1 services;
3-2 (3) causing confusion or misunderstanding as to
3-3 affiliation, connection, or association with, or certification by,
3-4 another;
3-5 (4) using deceptive representations or designations of
3-6 geographic origin in connection with goods or services;
3-7 (5) representing that goods or services have
3-8 sponsorship, approval, characteristics, ingredients, uses,
3-9 benefits, or quantities which they do not have or that a person has
3-10 a sponsorship, approval, status, affiliation, or connection which
3-11 he does not;
3-12 (6) representing that goods are original or new if
3-13 they are deteriorated, reconditioned, reclaimed, used, or
3-14 secondhand;
3-15 (7) representing that goods or services are of a
3-16 particular standard, quality, or grade, or that goods are of a
3-17 particular style or model, if they are of another;
3-18 (8) disparaging the goods, services, or business of
3-19 another by false or misleading representation of facts;
3-20 (9) advertising goods or services with intent not to
3-21 sell them as advertised;
3-22 (10) advertising goods or services with intent not to
3-23 supply a reasonable expectable public demand, unless the
3-24 advertisements disclosed a limitation of quantity;
3-25 (11) making false or misleading statements of fact
3-26 concerning the reasons for, existence of, or amount of price
3-27 reductions;
3-28 (12) representing that an agreement confers or
3-29 involves rights, remedies, or obligations which it does not have or
3-30 involve, or which are prohibited by law;
3-31 (13) knowingly making false or misleading statements
3-32 of fact concerning the need for parts, replacement, or repair
3-33 service;
3-34 (14) misrepresenting the authority of a salesman,
3-35 representative or agent to negotiate the final terms of a consumer
3-36 transaction;
3-37 (15) basing a charge for the repair of any item in
3-38 whole or in part on a guaranty or warranty instead of on the value
3-39 of the actual repairs made or work to be performed on the item
3-40 without stating separately the charges for the work and the charge
3-41 for the warranty or guaranty, if any;
3-42 (16) disconnecting, turning back, or resetting the
3-43 odometer of any motor vehicle so as to reduce the number of miles
3-44 indicated on the odometer gauge;
3-45 (17) advertising of any sale by fraudulently
3-46 representing that a person is going out of business;
3-47 (18) using or employing a chain referral sales plan in
3-48 connection with the sale or offer to sell of goods, merchandise, or
3-49 anything of value, which uses the sales technique, plan,
3-50 arrangement, or agreement in which the buyer or prospective buyer
3-51 is offered the opportunity to purchase merchandise or goods and in
3-52 connection with the purchase receives the seller's promise or
3-53 representation that the buyer shall have the right to receive
3-54 compensation or consideration in any form for furnishing to the
3-55 seller the names of other prospective buyers if receipt of the
3-56 compensation or consideration is contingent upon the occurrence of
3-57 an event subsequent to the time the buyer purchases the merchandise
3-58 or goods;
3-59 (19) representing that a guarantee or warranty confers
3-60 or involves rights or remedies which it does not have or involve,
3-61 provided, however, that nothing in this subchapter shall be
3-62 construed to expand the implied warranty of merchantability as
3-63 defined in Sections 2.314 through 2.318 and Sections 2A.212 through
3-64 2A.216 of the Business & Commerce Code to involve obligations in
3-65 excess of those which are appropriate to the goods;
3-66 (20) selling or offering to sell, either directly or
3-67 associated with the sale of goods or services, a right of
3-68 participation in a multi-level distributorship. As used herein,
3-69 "multi-level distributorship" means a sales plan for the
3-70 distribution of goods or services in which promises of rebate or
4-1 payment are made to individuals, conditioned upon those individuals
4-2 recommending or securing additional individuals to assume positions
4-3 in the sales operation, and where the rebate or payment is not
4-4 exclusively conditioned on or in relation to proceeds from the
4-5 retail sales of goods;
4-6 (21) representing that work or services have been
4-7 performed on, or parts replaced in, goods when the work or services
4-8 were not performed or the parts replaced;
4-9 (22) filing suit founded upon a written contractual
4-10 obligation of and signed by the defendant to pay money arising out
4-11 of or based on a consumer transaction for goods, services, loans,
4-12 or extensions of credit intended primarily for personal, family,
4-13 household, or agricultural use in any county other than in the
4-14 county in which the defendant resides at the time of the
4-15 commencement of the action or in the county in which the defendant
4-16 in fact signed the contract; provided, however, that a violation of
4-17 this subsection shall not occur where it is shown by the person
4-18 filing such suit he neither knew or had reason to know that the
4-19 county in which such suit was filed was neither the county in which
4-20 the defendant resides at the commencement of the suit nor the
4-21 county in which the defendant in fact signed the contract;
4-22 (23) the failure to disclose information concerning
4-23 goods or services which was known at the time of the transaction if
4-24 such failure to disclose such information was intended to induce
4-25 the consumer into a transaction into which the consumer would not
4-26 have entered had the information been disclosed; <or>
4-27 (24) using the term "corporation," "incorporated," or
4-28 an abbreviation of either of those terms in the name of a business
4-29 entity that is not incorporated under the laws of this state or
4-30 another jurisdiction; or
4-31 (25) taking advantage of a disaster declared by the
4-32 governor under Chapter 418, Government Code, by:
4-33 (A) selling or leasing fuel, food, medicine, or
4-34 another necessity at an exorbitant or excessive price; or
4-35 (B) demanding an exorbitant or excessive price
4-36 in connection with the sale or lease of fuel, food, medicine, or
4-37 another necessity.
4-38 SECTION 4. Section 17.49, Business & Commerce Code, is
4-39 amended by adding Subsections (c), (d), (e), (f), and (g) to read
4-40 as follows:
4-41 (c) Nothing in this subchapter shall apply to a claim for
4-42 damages based on the rendering of a professional service, the
4-43 essence of which is the providing of advice, judgment, opinion, or
4-44 similar professional skill. This exemption does not apply to:
4-45 (1) an express misrepresentation of a material fact
4-46 that cannot be characterized as advice, judgment, or opinion;
4-47 (2) a failure to disclose information in violation of
4-48 Section 17.46(b)(23);
4-49 (3) an unconscionable action or course of action that
4-50 cannot be characterized as advice, judgment, or opinion; or
4-51 (4) breach of an express warranty that cannot be
4-52 characterized as advice, judgment, or opinion.
4-53 (d) Subsection (c) applies to a cause of action brought
4-54 against the person who provided the professional service and a
4-55 cause of action brought against any entity that could be found to
4-56 be vicariously liable for the person's conduct.
4-57 (e) Except as specifically provided by Subsections (b) and
4-58 (h), Section 17.50, nothing in this subchapter shall apply to a
4-59 cause of action for bodily injury or death or for the infliction of
4-60 mental anguish.
4-61 (f) Nothing in the subchapter shall apply to a claim arising
4-62 out of a written contract if:
4-63 (1) the contract relates to a transaction, a project,
4-64 or a set of transactions related to the same project involving
4-65 total consideration by the consumer of more than $100,000;
4-66 (2) in negotiating the contract the consumer is
4-67 represented by legal counsel who is not directly or indirectly
4-68 identified, suggested, or selected by the defendant or an agent of
4-69 the defendant; and
4-70 (3) the contract does not involve the consumer's
5-1 residence.
5-2 (g) Nothing in this subchapter shall apply to a cause of
5-3 action arising from a transaction, a project, or a set of
5-4 transactions relating to the same project, involving total
5-5 consideration by the consumer of more than $500,000, other than a
5-6 cause of action involving a consumer's residence.
5-7 SECTION 5. Section 17.50, Business & Commerce Code, is
5-8 amended to read as follows:
5-9 Sec. 17.50. RELIEF FOR CONSUMERS. (a) A consumer may
5-10 maintain an action where any of the following constitute a
5-11 producing cause of economic <actual> damages or damages for mental
5-12 anguish:
5-13 (1) the use or employment by any person of a false,
5-14 misleading, or deceptive act or practice that is:
5-15 (A) specifically enumerated in a subdivision of
5-16 Subsection (b) of Section 17.46 of this subchapter; and
5-17 (B) relied on by a consumer to the consumer's
5-18 detriment;
5-19 (2) breach of an express or implied warranty;
5-20 (3) any unconscionable action or course of action by
5-21 any person; or
5-22 (4) the use or employment by any person of an act or
5-23 practice in violation of Article 21.21, <Texas> Insurance Code<, as
5-24 amended, or rules or regulations issued by the State Board of
5-25 Insurance under Article 21.21, Texas Insurance Code, as amended>.
5-26 (b) In a suit filed under this section, each consumer who
5-27 prevails may obtain:
5-28 (1) the amount of economic <actual> damages found by
5-29 the trier of fact. <In addition the court shall award two times
5-30 that portion of the actual damages that does not exceed $1,000.>
5-31 If the trier of fact finds that the conduct of the defendant was
5-32 committed knowingly, the consumer may also recover damages for
5-33 mental anguish, as found by the trier of fact, and the trier of
5-34 fact may award not more than three times the amount of economic
5-35 <actual> damages; or if the trier of fact finds the conduct was
5-36 committed intentionally, the consumer may recover damages for
5-37 mental anguish, as found by the trier of fact, and the trier of
5-38 fact may award not more than three times the amount of damages for
5-39 mental anguish and economic damages <in excess of $1,000, provided
5-40 that:>
5-41 <(A) the provisions of Chapters 33 and 41, Civil
5-42 Practice and Remedies Code, shall govern the determination of the
5-43 consumer's right under this subchapter to recover actual and other
5-44 damages, including exemplary damages, and the amount of those
5-45 damages that may be recovered by the consumer under this
5-46 subchapter, in an action seeking damages for (i) death;
5-47 (ii) personal injury other than mental anguish or distress
5-48 associated with a violation of this subchapter that does not
5-49 involve death or bodily injury; or (iii) damage to property other
5-50 than the goods acquired by the purchase or lease that is involved
5-51 in the consumer's action or claim if that damage arises out of an
5-52 occurrence that involves death or bodily injury; and>
5-53 <(B) only in an action under this subchapter
5-54 that is subject to Paragraph (A) of this subdivision, the
5-55 consumer's right to recover damages shall be subject to any defense
5-56 or defensive matter that could be considered by the trier of fact
5-57 in an action subject to Chapter 33, Civil Practice and Remedies
5-58 Code, in determining the percentage of responsibility attributable
5-59 to the consumer claimant under that chapter>;
5-60 (2) an order enjoining such acts or failure to act;
5-61 (3) orders necessary to restore to any party to the
5-62 suit any money or property, real or personal, which may have been
5-63 acquired in violation of this subchapter; and
5-64 (4) any other relief which the court deems proper,
5-65 including the appointment of a receiver or the revocation of a
5-66 license or certificate authorizing a person to engage in business
5-67 in this state if the judgment has not been satisfied within three
5-68 months of the date of the final judgment. The court may not revoke
5-69 or suspend a license to do business in this state or appoint a
5-70 receiver to take over the affairs of a person who has failed to
6-1 satisfy a judgment if the person is a licensee of or regulated by a
6-2 state agency which has statutory authority to revoke or suspend a
6-3 license or to appoint a receiver or trustee. Costs and fees of
6-4 such receivership or other relief shall be assessed against the
6-5 defendant.
6-6 (c) On a finding by the court that an action under this
6-7 section was groundless in fact or law or <and> brought in bad
6-8 faith, or brought for the purpose of harassment, the court shall
6-9 award to the defendant reasonable and necessary attorneys' fees and
6-10 court costs.
6-11 (d) Each consumer who prevails shall be awarded court costs
6-12 and reasonable and necessary attorneys' fees.
6-13 (e) In computing additional damages under Subsection (b),
6-14 attorneys' fees, costs, and prejudgment interest may not be
6-15 considered.
6-16 (f) A court may not award prejudgment interest applicable
6-17 to:
6-18 (1) damages for future loss under this subchapter; or
6-19 (2) additional damages under Subsection (b).
6-20 (g) Chapter 41, Civil Practice and Remedies Code, does not
6-21 apply to a cause of action brought under this subchapter.
6-22 (h) Notwithstanding any other provision of this subchapter,
6-23 if a claimant is granted the right to bring a cause of action under
6-24 this subchapter by another law, the claimant is not limited to
6-25 recovery of economic damages only, but may recover any actual
6-26 damages incurred by the claimant, without regard to whether the
6-27 conduct of the defendant was committed intentionally. For the
6-28 purpose of the recovery of damages for a cause of action described
6-29 by this subsection only, a reference in this subchapter to economic
6-30 damages means actual damages. In applying Subsection (b)(1) to an
6-31 award of damages under this subsection, the trier of fact is
6-32 authorized to award a total of not more than three times actual
6-33 damages, in accordance with that subsection.
6-34 SECTION 6. Section 17.505, Business & Commerce Code, is
6-35 amended to read as follows:
6-36 Sec. 17.505. NOTICE; INSPECTION<: OFFER OF SETTLEMENT>.
6-37 (a) As a prerequisite to filing a suit seeking damages under
6-38 Subdivision (1) of Subsection (b) of Section 17.50 of this
6-39 subchapter against any person, a consumer shall give written notice
6-40 to the person at least 60 days before filing the suit advising the
6-41 person in reasonable detail of the consumer's specific complaint
6-42 and the amount of economic <actual> damages, damages for mental
6-43 anguish, and expenses, including attorneys' fees, if any,
6-44 reasonably incurred by the consumer in asserting the claim against
6-45 the defendant. During the 60-day period a written request to
6-46 inspect, in a reasonable manner and at a reasonable time and place,
6-47 the goods that are the subject of the consumer's action or claim
6-48 may be presented to the consumer. <If the consumer unreasonably
6-49 refuses to permit the inspection, the court shall not award the two
6-50 times actual damages not exceeding $1,000, as provided in
6-51 Subsection (b) of Section 17.50 of this subchapter.>
6-52 (b) If the giving of 60 days' written notice is rendered
6-53 impracticable by reason of the necessity of filing suit in order to
6-54 prevent the expiration of the statute of limitations or if the
6-55 consumer's claim is asserted by way of counterclaim, the notice
6-56 provided for in Subsection (a) of this section is not required, but
6-57 the tender provided for by <Subsection (c) of this section and by>
6-58 Subsection (d), Section 17.506 of this subchapter may be made
6-59 within 60 days after service <the filing> of the suit or
6-60 counterclaim.
6-61 (c) A person against whom a suit is pending who does not
6-62 receive written notice, as required by Subsection (a), may file a
6-63 plea in abatement not later than the 30th day after the date the
6-64 person files an original answer in the court in which the suit is
6-65 pending. This subsection does not apply if Subsection (b) applies.
6-66 <Any person who receives the written notice provided by Subsection
6-67 (a) of this section may, within 60 days after the receipt of the
6-68 notice, tender to the consumer a written offer of settlement,
6-69 including an agreement to reimburse the consumer for the attorneys'
6-70 fees, if any, reasonably incurred by the consumer in asserting his
7-1 claim up to the date of the written notice. A person who does not
7-2 receive such a written notice due to the consumer's suit or
7-3 counterclaim being filed as provided for by Subsection (b) of this
7-4 section may, within 60 days after the filing of such suit or
7-5 counterclaim, tender to the consumer a written offer of settlement,
7-6 including an agreement to reimburse the consumer for the attorneys'
7-7 fees, if any, reasonably incurred by the consumer in asserting his
7-8 claim up to the date the suit or counterclaim was filed. Any offer
7-9 of settlement not accepted within 30 days of receipt by the
7-10 consumer shall be deemed to have been rejected by the consumer.>
7-11 (d) The court shall abate the suit if the court, after a
7-12 hearing, finds that the person is entitled to an abatement because
7-13 notice was not provided as required by this section. A suit is
7-14 automatically abated without the order of the court beginning on
7-15 the 11th day after the date a plea in abatement is filed under
7-16 Subsection (c) if the plea in abatement:
7-17 (1) is verified and alleges that the person against
7-18 whom the suit is pending did not receive the written notice as
7-19 required by Subsection (a); and
7-20 (2) is not controverted by an affidavit filed by the
7-21 consumer before the 11th day after the date on which the plea in
7-22 abatement is filed.
7-23 (e) An abatement under Subsection (d) continues until the
7-24 60th day after the date that written notice is served in compliance
7-25 with Subsection (a). <A settlement offer made in compliance with
7-26 Subsection (c) of this section, if rejected by the consumer, may be
7-27 filed with the court together with an affidavit certifying its
7-28 rejection. If the amount tendered in the settlement offer is the
7-29 same as or more than, or if the court finds that amount to be
7-30 substantially the same as, the actual damages found by the trier of
7-31 fact, the consumer may not recover an amount in excess of the
7-32 amount tendered in the settlement offer or the amount of actual
7-33 damages found by the trier of fact, whichever is less. Such
7-34 settlement offer shall not be admissible as evidence before a jury.>
7-35 <(e) The tender of an offer of settlement is not an
7-36 admission of engaging in an unlawful act or practice or of
7-37 liability under this Act. Evidence of a settlement offer may be
7-38 introduced only to determine the reasonableness of the settlement
7-39 offer as provided for by Subsection (d) of this section.>
7-40 SECTION 7. Subchapter E, Chapter 17, Business & Commerce
7-41 Code, is amended by adding Sections 17.5051 and 17.5052 to read as
7-42 follows:
7-43 Sec. 17.5051. MEDIATION. (a) A party may, not later than
7-44 the 90th day after the date of service of a pleading in which
7-45 relief under this subchapter is sought, file a motion to compel
7-46 mediation of the dispute in the manner provided by this section.
7-47 (b) The court shall, not later than the 30th day after the
7-48 date a motion under this section is filed, sign an order setting
7-49 the time and place of the mediation.
7-50 (c) If the parties do not agree on a mediator, the court
7-51 shall appoint the mediator.
7-52 (d) Mediation shall be held within 30 days after the date
7-53 the order is signed, unless the parties agree otherwise or the
7-54 court determines that additional time, not to exceed an additional
7-55 30 days, is warranted.
7-56 (e) Except as agreed to by all parties who have appeared in
7-57 the action, each party who has appeared shall participate in the
7-58 mediation and, except as provided by Subsection (f), shall share
7-59 the mediation fee.
7-60 (f) A party may not compel mediation under this section if
7-61 the amount of economic damages claimed is less than $15,000, unless
7-62 the party seeking to compel mediation agrees to pay the costs of
7-63 the mediation.
7-64 (g) Except as provided in this section, Section 154.023,
7-65 Civil Practice and Remedies Code, and Subchapters C and D, Chapter
7-66 154, Civil Practice and Remedies Code, apply to the appointment of
7-67 a mediator and to the mediation process provided by this section.
7-68 (h) This section does not apply to an action brought by the
7-69 attorney general under Section 17.47.
7-70 Sec. 17.5052. OFFERS OF SETTLEMENT. (a) A person who
8-1 receives notice under Section 17.505 may tender an offer of
8-2 settlement at any time during the period beginning on the date the
8-3 notice is received and ending on the 60th day after that date.
8-4 (b) If a mediation under Section 17.5051 is not conducted,
8-5 the person may tender an offer of settlement at any time during the
8-6 period beginning on the date an original answer is filed and ending
8-7 on the 90th day after that date.
8-8 (c) If a mediation under Section 17.5051 is conducted, a
8-9 person against whom a claim under this subchapter is pending may
8-10 tender an offer of settlement during the period beginning on the
8-11 day after the date that the mediation ends and ending on the 20th
8-12 day after that date.
8-13 (d) An offer of settlement tendered by a person against whom
8-14 a claim under this subchapter is pending must include an offer to
8-15 pay the following amounts of money, separately stated:
8-16 (1) an amount of money or other consideration, reduced
8-17 to its cash value, as settlement of the consumer's claim for
8-18 damages; and
8-19 (2) an amount of money to compensate the consumer for
8-20 the consumer's reasonable and necessary attorneys' fees incurred as
8-21 of the date of the offer.
8-22 (e) Unless both parts of an offer of settlement required
8-23 under Subsection (d) are accepted by the consumer not later than
8-24 the 30th day after the date the offer is made, the offer is
8-25 rejected.
8-26 (f) A settlement offer tendered by a person against whom a
8-27 claim under this subchapter is pending that complies with this
8-28 section and that has been rejected by the consumer may be filed
8-29 with the court with an affidavit certifying its rejection.
8-30 (g) If the court finds that the amount tendered in the
8-31 settlement offer for damages under Subsection (d)(1) is the same
8-32 as, substantially the same as, or more than the damages found by
8-33 the trier of fact, the consumer may not recover as damages any
8-34 amount in excess of the lesser of:
8-35 (1) the amount of damages tendered in the settlement
8-36 offer; or
8-37 (2) the amount of damages found by the trier of fact.
8-38 (h) If the court makes the finding described by Subsection
8-39 (g), the court shall determine reasonable and necessary attorneys'
8-40 fees to compensate the consumer for attorneys' fees incurred before
8-41 the date and time of the rejected settlement offer. If the court
8-42 finds that the amount tendered in the settlement offer to
8-43 compensate the consumer for attorneys' fees under Subsection (d)(2)
8-44 is the same as, substantially the same as, or more than the amount
8-45 of reasonable and necessary attorneys' fees incurred by the
8-46 consumer as of the date of the offer, the consumer may not recover
8-47 attorneys' fees greater than the amount of fees tendered in the
8-48 settlement offer.
8-49 (i) If the court finds that the offering party could not
8-50 perform the offer at the time the offer was made or that the
8-51 offering party substantially misrepresented the cash value of the
8-52 offer, Subsections (g) and (h) do not apply.
8-53 (j) If Subsection (g) does not apply, the court shall award
8-54 as damages the amount of economic damages and damages for mental
8-55 anguish found by the trier of fact, subject to Sections 17.50 and
8-56 17.501. If Subsection (h) does not apply, the court shall award
8-57 attorneys' fees as provided by Section 17.50(d).
8-58 (k) An offer of settlement is not an admission of engaging
8-59 in an unlawful act or practice or liability under this subchapter.
8-60 Except as otherwise provided by this section, an offer or a
8-61 rejection of an offer may not be offered in evidence at trial for
8-62 any purpose.
8-63 SECTION 8. Subsection (d), Section 17.506, Business &
8-64 Commerce Code, is amended to read as follows:
8-65 (d) In an action brought under Section 17.50 of this
8-66 subchapter, it is a defense to a cause of action if the defendant
8-67 proves that he received notice from the consumer advising the
8-68 defendant of the nature of the consumer's specific complaint and of
8-69 the amount of economic <actual> damages, damages for mental
8-70 anguish, and expenses, including attorneys' fees, if any,
9-1 reasonably incurred by the consumer in asserting the claim against
9-2 the defendant, and that within 30 days after the day on which the
9-3 defendant received the notice the defendant tendered to the
9-4 consumer:
9-5 (1) the amount of economic <actual> damages and
9-6 damages for mental anguish claimed; and
9-7 (2) the expenses, including attorneys' fees, if any,
9-8 reasonably incurred by the consumer in asserting the claim against
9-9 the defendant.
9-10 SECTION 9. Section 17.56, Business & Commerce Code, is
9-11 amended to read as follows:
9-12 Sec. 17.56. VENUE. An action brought under this subchapter
9-13 may be brought:
9-14 (1) in any county in which venue is proper under
9-15 Chapter 15, Civil Practice and Remedies Code; or
9-16 (2) <which alleges a claim to relief under Section
9-17 17.50 of this subchapter may be commenced in the county in which
9-18 the person against whom the suit is brought resides, has his
9-19 principal place of business, or has a fixed and established place
9-20 of business at the time the suit is brought or in the county in
9-21 which the alleged act or practice occurred or> in a county in which
9-22 the defendant or an authorized agent of the defendant solicited the
9-23 transaction made the subject of the action at bar.
9-24 SECTION 10. Section 27.004, Property Code, is amended by
9-25 adding new Subsections (d) and (e) and relettering existing
9-26 Subsections (d), (e), (f), (g), (h), (i), (j), (k), (l), and (m) to
9-27 read as follows:
9-28 (d) The court shall abate a suit governed by this section if
9-29 Subsection (c) does not apply and the court, after a hearing, finds
9-30 that the contractor is entitled to an abatement because notice was
9-31 not provided as required by Subsection (a). A suit is automatically
9-32 abated without the order of the court beginning on the 11th day
9-33 after the date a plea in abatement is filed if the plea in
9-34 abatement:
9-35 (1) is verified and alleges that the person against
9-36 whom the suit is pending did not receive the written notice as
9-37 required by Subsection (a); and
9-38 (2) is not controverted by an affidavit filed by the
9-39 claimant before the 11th day after the date on which the plea in
9-40 abatement is filed.
9-41 (e) An abatement under Subsection (d) continues until the
9-42 60th day after the date that written notice is served in compliance
9-43 with Subsection (a).
9-44 (f) <(d)> If a claimant unreasonably rejects an offer made
9-45 as provided by this section or does not permit the contractor or
9-46 independent contractor a reasonable opportunity to repair the
9-47 defect pursuant to an accepted offer of settlement, the claimant
9-48 may not recover an amount in excess of the reasonable cost of the
9-49 repairs which are necessary to cure the construction defect and
9-50 which are the responsibility of the contractor and may recover only
9-51 the amount of reasonable and necessary attorney's fees and costs
9-52 incurred before the offer was rejected or considered rejected.
9-53 (g) <(e)> If a contractor fails to make a reasonable offer
9-54 under this section, or fails to make a reasonable attempt to
9-55 complete the repairs specified in an accepted offer made under this
9-56 section, or fails to complete, in a good and workmanlike manner,
9-57 the repairs specified in an accepted offer made under this section,
9-58 the limitations on damages and defenses to liability provided for
9-59 in this section shall not apply.
9-60 (h) <(f)> Except as provided by Subsection (f) <(d)>, in a
9-61 suit subject to this chapter the claimant may recover only the
9-62 following damages proximately caused by a construction defect:
9-63 (1) the reasonable cost of repairs necessary to cure
9-64 any construction defect that the contractor failed to cure;
9-65 (2) the reasonable expenses of temporary housing
9-66 reasonably necessary during the repair period;
9-67 (3) the reduction in market value, if any, to the
9-68 extent the reduction is due to structural failure; and
9-69 (4) reasonable and necessary attorney's fees.
9-70 (i) <(g)> The total damages awarded in a suit subject to
10-1 this chapter may not exceed the claimant's purchase price for the
10-2 residence.
10-3 (j) <(h)> An offer of settlement made under this section
10-4 that is not accepted before the 25th day after the date the offer
10-5 is received by the claimant is considered rejected.
10-6 (k) <(i)> An affidavit certifying rejection of a settlement
10-7 offer under this section may be filed with the court. The trier of
10-8 fact shall determine the reasonableness of a rejection of an offer
10-9 of settlement made under this section.
10-10 (l) <(j)> A contractor who makes or provides for repairs
10-11 under this section is entitled to take reasonable steps to document
10-12 the repair and to have it inspected.
10-13 (m) <(k)> Notwithstanding Subsections (a), (b), and (c), a
10-14 contractor who receives written notice of a construction defect
10-15 resulting from work performed by the contractor or an agent,
10-16 employee, or subcontractor of the contractor and creating an
10-17 imminent threat to the health or safety of the inhabitants of the
10-18 residence shall take reasonable steps to cure the defect as soon as
10-19 practicable. If the contractor fails to cure the defect in a
10-20 reasonable time, the owner of the residence may have the defect
10-21 cured and may recover from the contractor the reasonable cost of
10-22 the repairs plus attorney's fees and costs in addition to any other
10-23 damages recoverable under any law not inconsistent with the
10-24 provisions of this chapter.
10-25 (n) <(l)> This section does not preclude a contractor from
10-26 making a monetary settlement offer.
10-27 (o) <(m)> The inspection and repair provisions of this
10-28 chapter are in addition to any rights of inspection and settlement
10-29 provided by common law or by another statute, including Section
10-30 17.505, Business & Commerce Code.
10-31 SECTION 11. Section 4, Article 21.21, Insurance Code, is
10-32 amended to read as follows:
10-33 Sec. 4. UNFAIR METHODS OF COMPETITION AND UNFAIR OR
10-34 DECEPTIVE ACTS OR PRACTICES DEFINED. The following are hereby
10-35 defined as unfair methods of competition and unfair and deceptive
10-36 acts or practices in the business of insurance:
10-37 (1) Misrepresentations and False Advertising of Policy
10-38 Contracts. Making, issuing, circulating, or causing to be made,
10-39 issued or circulated, any estimate, illustration, circular or
10-40 statement misrepresenting the terms of any policy issued or to be
10-41 issued or the benefits or advantages promised thereby or the
10-42 dividends or share of the surplus to be received thereon, or making
10-43 any false or misleading statements as to the dividends or share of
10-44 surplus previously paid on similar policies, or making any
10-45 misleading representation or any misrepresentation as to the
10-46 financial condition of any insurer, or as to the legal reserve
10-47 system upon which any life insurer operates, or using any name or
10-48 title of any policy or class of policies misrepresenting the true
10-49 nature thereof, or making any misrepresentation to any policyholder
10-50 insured in any company for the purpose of inducing or tending to
10-51 induce such policyholder to lapse, forfeit, or surrender his
10-52 insurance;
10-53 (2) False Information and Advertising Generally.
10-54 Making, publishing, disseminating, circulating or placing before
10-55 the public, or causing, directly or indirectly, to be made,
10-56 published, disseminated, circulated, or placed before the public,
10-57 in a newspaper, magazine or other publication, or in the form of a
10-58 notice, circular, pamphlet, letter or poster, or over any radio or
10-59 television station, or in any other way, an advertisement,
10-60 announcement or statement containing any assertion, representation
10-61 or statement with respect to the business of insurance or with
10-62 respect to any person in the conduct of his insurance business,
10-63 which is untrue, deceptive or misleading;
10-64 (3) Defamation. Making, publishing, disseminating, or
10-65 circulating, directly or indirectly, or aiding, abetting or
10-66 encouraging the making, publishing, disseminating or circulating of
10-67 any oral or written statement or any pamphlet, circular, article or
10-68 literature which is false, or maliciously critical of or derogatory
10-69 to the financial condition of any insurer, and which is calculated
10-70 to injure any person engaged in the business of insurance;
11-1 (4) Boycott, Coercion and Intimidation. Entering into
11-2 any agreement to commit, or by any concerted action committing, any
11-3 act of boycott, coercion or intimidation resulting in or tending to
11-4 result in unreasonable restraint of, or monopoly in, the business
11-5 of insurance;
11-6 (5) False Financial Statements. (a) Filing with any
11-7 supervisory or other public official, or making, publishing,
11-8 disseminating, circulating or delivering to any person, or placing
11-9 before the public, or causing directly or indirectly, to be made,
11-10 published, disseminated, circulated, delivered to any person, or
11-11 placed before the public, any false statement of financial
11-12 condition of an insurer with intent to deceive;
11-13 (b) Making any false entry in any book, report
11-14 or statement of any insurer with intent to deceive any agent or
11-15 examiner lawfully appointed to examine into its condition or into
11-16 any of its affairs, or any public official to whom such insurer is
11-17 required by law to report, or who has authority by law to examine
11-18 into its condition or into any of its affairs, or, with like
11-19 intent, wilfully omitting to make a true entry of any material fact
11-20 pertaining to the business of such insurer in any book, report or
11-21 statement of such insurer;
11-22 (6) Stock Operations and Advisory Board Contracts.
11-23 Issuing or delivering or permitting agents, officers or employees
11-24 to issue or deliver, company stock or other capital stock, or
11-25 benefit certificates or shares in any corporation, or securities or
11-26 any special or advisory board contracts or other contracts of any
11-27 kind promising returns and profits as an inducement to insurance.
11-28 Provided, however, that nothing in this subsection shall be
11-29 construed as prohibiting the issuing or delivery of participating
11-30 insurance policies otherwise authorized by law.
11-31 (7) Unfair Discrimination. (a) Making or permitting
11-32 any unfair discrimination between individuals of the same class and
11-33 equal expectation of life in the rates charged for any contract of
11-34 life insurance or of life annuity or in the dividends or other
11-35 benefits payable thereon, or in any other of the terms and
11-36 conditions of such contract;
11-37 (b) Making or permitting any unfair
11-38 discrimination between individuals of the same class and of
11-39 essentially the same hazard in the amount of premium, policy fees,
11-40 or rates charged for any policy or contract of accident or health
11-41 insurance or in the benefits payable thereunder, or in any of the
11-42 terms or conditions of such contract, or in any other manner
11-43 whatever;
11-44 (c) Making or permitting any unfair
11-45 discrimination between individuals or risks of the same class and
11-46 of essentially the same hazards by refusing to renew, cancelling or
11-47 limiting the amount of coverage on a policy of insurance covered by
11-48 Subchapter C, Chapter 5, of this code because of the geographic
11-49 location of the risk unless:
11-50 (1) the refusal, cancellation or
11-51 limitation is for a business purpose that is not a mere pretext for
11-52 unfair discrimination; or
11-53 (2) the refusal, cancellation or
11-54 limitation is required by law or regulatory mandate.
11-55 (8) Rebates. (a) Except as otherwise expressly
11-56 provided by law, knowingly permitting or offering to make or making
11-57 any contract of life insurance, life annuity or accident and health
11-58 insurance, or agreement as to such contract other than as plainly
11-59 expressed in the contract issued thereon, or paying or allowing, or
11-60 giving or offering to pay, allow, or give, directly or indirectly,
11-61 as inducement to such insurance, or annuity, any rebate of premiums
11-62 payable on the contract, or any special favor or advantage in the
11-63 dividends or other benefits thereon, or any valuable consideration
11-64 or inducement whatever not specified in the contract; or giving, or
11-65 selling, or purchasing or offering to give, sell, or purchase as
11-66 inducement to such insurance or annuity or in connection therewith,
11-67 any stocks, bonds, or other securities of any insurance company or
11-68 other corporation, association, or partnership, or any dividends or
11-69 profits accrued thereon, or anything of value whatsoever not
11-70 specified in the contract;
12-1 (b) Nothing in clause 7 or paragraph (a) of
12-2 clause 8 of this subsection shall be construed as including within
12-3 the definition of discrimination or rebates any of the following
12-4 practices:
12-5 (i) in the case of any contract of life
12-6 insurance or life annuity, paying bonuses to policyholders or
12-7 otherwise abating their premiums in whole or in part out of surplus
12-8 accumulated from non-participating insurance, provided that any
12-9 such bonuses or abatement of premiums shall be fair and equitable
12-10 to policyholders and for the best interests of the company and its
12-11 policyholders;
12-12 (ii) in the case of life insurance
12-13 policies issued on the industrial debit plan, making allowance to
12-14 policyholders who have continuously for a specified period made
12-15 premium payments directly to an office of the insurer in an amount
12-16 which fairly represents the saving in collection expenses;
12-17 (iii) readjustment of the rate of premium
12-18 for a group insurance policy based on the loss or expense
12-19 experience thereunder, at the end of the first or any subsequent
12-20 policy year of insurance thereunder, which may be made retroactive
12-21 only for such policy year.
12-22 (9) Deceptive Name, Word, Symbol, Device, or Slogan.
12-23 Using, displaying, publishing, circulating, distributing, or
12-24 causing to be used, displayed, published, circulated, or
12-25 distributed in any letter, pamphlet, circular, contract, policy,
12-26 evidence of coverage, article, poster, or other document,
12-27 literature, or public media of:
12-28 (a) a name as the corporate or business name of
12-29 a person or entity engaged in an insurance or insurance related
12-30 business in this state that is the same as, or deceptively similar
12-31 to, the name adopted and used by an insurance entity, health
12-32 maintenance organization, third party administrator, or group
12-33 hospital service company authorized to do business under the laws
12-34 of this state; or
12-35 (b) a word, symbol, device, slogan, or any
12-36 combination of these items, whether registered or not registered,
12-37 that is the same as or deceptively similar to one adopted and used
12-38 by an insurance entity, health maintenance organization, third
12-39 party administrator, or group hospital service company to
12-40 distinguish such entities, products, or service from other
12-41 entities, and includes the title, designation, character names, and
12-42 distinctive features of broadcast or other advertising.
12-43 Where two persons or entities are using a name, word, symbol,
12-44 device, slogan, or any combination of these items that are the same
12-45 or deceptively similar and are likely to cause confusion or a
12-46 mistake, the user who can demonstrate the first continuous actual
12-47 use of such name, word, symbol, device, slogan, or combination of
12-48 these items shall not have committed an unfair method of
12-49 competition or deceptive act or practice.
12-50 (10) Unfair Settlement Practices. (a) Engaging in
12-51 any of the following unfair settlement practices with respect to a
12-52 claim by an insured or beneficiary:
12-53 (i) misrepresenting to a claimant a
12-54 material fact or policy provision relating to coverage at issue;
12-55 (ii) failing to attempt in good faith to
12-56 effectuate a prompt, fair, and equitable settlement of a claim with
12-57 respect to which the insurer's liability has become reasonably
12-58 clear;
12-59 (iii) failing to attempt, in good faith,
12-60 to effectuate a prompt, fair, and equitable settlement under one
12-61 portion of a policy of a claim with respect to which the insurer's
12-62 liability has become reasonably clear in order to influence the
12-63 claimant to settle an additional claim under another portion of the
12-64 coverage, provided that this prohibition does not apply if payment
12-65 under one portion of the coverage constitutes evidence of liability
12-66 under another portion of the policy;
12-67 (iv) failing to provide promptly to a
12-68 policyholder a reasonable explanation of the basis in the policy,
12-69 in relation to the facts or applicable law, for the insurer's
12-70 denial of a claim or for the offer of a compromise settlement of a
13-1 claim;
13-2 (v) failing within a reasonable time to:
13-3 (A) affirm or deny coverage of a
13-4 claim to a policyholder; or
13-5 (B) submit a reservation of rights
13-6 to a policyholder;
13-7 (vi) refusing, failing, or unreasonably
13-8 delaying an offer of settlement under applicable first-party
13-9 coverage on the basis that other coverage may be available or that
13-10 third parties are responsible for the damages suffered, except as
13-11 may be specifically provided in the policy;
13-12 (vii) undertaking to enforce a full and
13-13 final release of a claim from a policyholder when only a partial
13-14 payment has been made, provided that this prohibition does not
13-15 apply to a compromise settlement of a doubtful or disputed claim;
13-16 (viii) refusing to pay a claim without
13-17 conducting a reasonable investigation with respect to the claim;
13-18 (ix) with respect to a Texas personal auto
13-19 policy, delaying or refusing settlement of a claim solely because
13-20 there is other insurance of a different type available to satisfy
13-21 all or any part of the loss forming the basis of that claim; or
13-22 (x) requiring a claimant, as a condition
13-23 of settling a claim, to produce the claimant's federal income tax
13-24 returns for examination or investigation by the person unless:
13-25 (A) the claimant is ordered to
13-26 produce those tax returns by a court;
13-27 (B) the claim involves a fire loss;
13-28 or
13-29 (C) the claim involves lost profits
13-30 or income.
13-31 (b) Paragraph (a) of this clause does not
13-32 provide a cause of action to a third party asserting one or more
13-33 claims against an insured covered under a liability insurance
13-34 policy.
13-35 (11) Misrepresentation of Insurance Policy.
13-36 Misrepresenting an insurance policy by:
13-37 (a) making an untrue statement of material fact;
13-38 (b) failing to state a material fact that is
13-39 necessary to make other statements made not misleading, considering
13-40 the circumstances under which the statements were made;
13-41 (c) making a statement in such manner as to
13-42 mislead a reasonably prudent person to a false conclusion of a
13-43 material fact;
13-44 (d) making a material misstatement of law; or
13-45 (e) failing to disclose any matter required by
13-46 law to be disclosed, including a failure to make disclosure in
13-47 accordance with another provision of this code.
13-48 SECTION 12. Article 21.21, Insurance Code, is amended by
13-49 adding Section 11A to read as follows:
13-50 Sec. 11A. DOUBLE RECOVERY PROHIBITED. A person may not
13-51 recover damages and penalties for the same act or practice under
13-52 both this Article and under another law.
13-53 SECTION 13. Section 16, Article 21.21, Insurance Code, is
13-54 amended to read as follows:
13-55 Sec. 16. RELIEF AVAILABLE TO INJURED PARTIES. (a) Any
13-56 person who has sustained actual damages caused by <as a result of>
13-57 another's engaging in an act or practice declared in Section 4 of
13-58 this Article <or in rules or regulations lawfully adopted by the
13-59 Board under this Article> to be unfair methods of competition or
13-60 unfair or deceptive acts or practices in the business of insurance
13-61 or in any practice specifically enumerated in a subdivision of
13-62 <defined by> Section 17.46(b), <17.46 of the> Business & Commerce
13-63 Code, <as amended,> as an unlawful deceptive trade practice may
13-64 maintain an action against the person or persons engaging in such
13-65 acts or practices. To maintain an action for a deceptive act or
13-66 practice enumerated in Section 17.46(b), Business & Commerce Code,
13-67 a person must show that the person has relied on the act or
13-68 practice to the person's detriment.
13-69 (b) In a suit filed under this section, any plaintiff who
13-70 prevails may obtain:
14-1 (1) the amount of actual damages plus court costs and
14-2 reasonable and necessary attorneys' fees. If the trier of fact
14-3 finds that the defendant knowingly committed the acts complained
14-4 of, the trier of fact may award not more than three <court shall
14-5 award, in addition, two> times the amount of actual damages; or
14-6 (2) an order enjoining such acts or failure to act; or
14-7 (3) any other relief which the court deems proper.
14-8 (c) On a finding by the court that an action under this
14-9 section was groundless and brought in bad faith or brought for the
14-10 purpose of harassment, the court shall award to the defendant
14-11 reasonable and necessary attorneys' fees and court costs.
14-12 (d) All actions under this Article must be commenced within
14-13 two years after the date on which the unfair method of competition
14-14 or unfair or deceptive act or practice occurred or within two years
14-15 after the person bringing the action discovered or, in the exercise
14-16 of reasonable diligence, should have discovered the occurrence of
14-17 the unfair method of competition or unfair or deceptive act or
14-18 practice. The period of limitation provided in this section may be
14-19 extended for a period of 180 days if the person bringing the action
14-20 proves that the failure to timely commence the action was caused by
14-21 the defendant's engaging in conduct solely calculated to induce the
14-22 plaintiff to refrain from or postpone the commencement of the
14-23 action.
14-24 (e) As a prerequisite to filing a suit seeking damages under
14-25 this section against any person, the person seeking damages shall
14-26 give written notice to the other person at least 60 <30> days
14-27 before filing suit. The notice must advise the person of the
14-28 specific complaint and the amount of actual damages and expenses,
14-29 including any attorneys' fees reasonably incurred in asserting the
14-30 claim against the defendant.
14-31 (f) If giving 60 <30> days' written notice is impracticable
14-32 because the suit must be filed in order to prevent the expiration
14-33 of the statute of limitations or because the claim is asserted as a
14-34 counterclaim, the notice provided for in Subsection (e) of this
14-35 section is not required<, and the tender of a written offer of
14-36 settlement provided for by Subsection (g) of this section may be
14-37 made not later than the 30th day after the date of filing of the
14-38 suit or counterclaim>.
14-39 (g) A person against whom a suit is pending who does not
14-40 receive written notice, as required by Subsection (e) of this
14-41 section, may file a plea in abatement not later than the 30th day
14-42 after the date the person files an original answer in the court in
14-43 which the suit is pending. This subsection does not apply if
14-44 Subsection (f) of this section applies <A person who receives the
14-45 written notice provided by Subsection (e) of this section may
14-46 tender, not later than the 30th day after the date of receipt of
14-47 the notice, to the person seeking damages, a written offer of
14-48 settlement, including an agreement to reimburse the person for any
14-49 attorneys' fees reasonably incurred in asserting the claim to the
14-50 date of the written notice. A person who does not receive a
14-51 written notice because the suit or counterclaim is filed as
14-52 provided for by Subsection (f) of this section may tender, not
14-53 later than the 30th day after the date of filing of the suit or
14-54 counterclaim, a written offer of settlement, including an agreement
14-55 to reimburse the person for any attorneys' fees reasonably incurred
14-56 in asserting the claim to the date the suit or counterclaim was
14-57 filed. An offer of settlement is rejected if it is not accepted on
14-58 or before the 30th day after the date of receipt by the person
14-59 seeking damages>.
14-60 (h) The court shall abate the suit if the court, after a
14-61 hearing, finds that the person is entitled to an abatement because
14-62 notice was not provided as required by this section. A suit is
14-63 automatically abated without the order of the court beginning on
14-64 the 11th day after the date a plea in abatement is filed under
14-65 Subsection (g) if the plea in abatement:
14-66 (1) is verified and alleges that the person against
14-67 whom the suit is pending did not receive the written notice as
14-68 required by Subsection (e); and
14-69 (2) is not controverted by an affidavit filed by the
14-70 claimant before the 11th day after the date on which the plea in
15-1 abatement is filed <A rejected settlement offer made in compliance
15-2 with Subsection (g) of this section may be filed with the court
15-3 with an affidavit certifying its rejection. If the court finds
15-4 that the amount tendered in the settlement offer is the same or
15-5 substantially the same as the actual damages found by the trier of
15-6 fact, the plaintiff may not recover an amount that exceeds the
15-7 lesser of:>
15-8 <(1) the amount tendered in the settlement offer; or>
15-9 <(2) the amount of actual damages found by the trier
15-10 of fact>.
15-11 (i) An abatement under Subsection (h) continues until the
15-12 60th day after the date that written notice is served in compliance
15-13 with Subsection (e) <The tender of an offer of settlement is not an
15-14 admission of engaging in an unlawful act or practice or of
15-15 liability under this Article. Evidence of a settlement offer may
15-16 be introduced only to determine the reasonableness of the
15-17 settlement offer as provided for by Subsection (h) of this
15-18 section>.
15-19 SECTION 14. Article 21.21, Insurance Code, is amended by
15-20 adding Sections 16A and 16B to read as follows:
15-21 Sec. 16A. OFFERS OF SETTLEMENT. (a) A person who receives
15-22 notice under Section 16(e) of this article may tender an offer of
15-23 settlement at any time during the period beginning on the date
15-24 notice is received and ending on the 60th day after that date.
15-25 (b) If a mediation under Section 16B of this article is not
15-26 conducted, the person may tender an offer of settlement at any time
15-27 during the period beginning on the date an original answer is filed
15-28 and ending on the 90th day after that date.
15-29 (c) If a mediation under Section 16B of this article is
15-30 conducted, a person against whom a claim under Section 16 of this
15-31 article is pending may tender an offer of settlement during the
15-32 period beginning on the day after the date that the mediation ends
15-33 and ending on the 20th day after that date.
15-34 (d) An offer of settlement tendered by a person against whom
15-35 a claim under Section 16 of this article is pending must include an
15-36 offer to pay the following amounts of money, separately stated:
15-37 (1) an amount of money or other consideration, reduced
15-38 to its cash value, as settlement of the claim for damages; and
15-39 (2) an amount of money to compensate the claimant for
15-40 the claimant's reasonable and necessary attorneys' fees incurred as
15-41 of the date of the offer.
15-42 (e) Unless both parts of an offer of settlement required
15-43 under Subsection (d) of this section are accepted by the claimant
15-44 not later than the 30th day after the date the offer is made, the
15-45 offer is rejected.
15-46 (f) A settlement offer tendered by a person against whom a
15-47 claim under Section 16 of this article is pending that complies
15-48 with this section and that has been rejected by the claimant may be
15-49 filed with the court with an affidavit certifying its rejection.
15-50 (g) If the court finds that the amount tendered in the
15-51 settlement offer for damages under Subsection (d)(1) of this
15-52 section is the same as, substantially the same as, or more than the
15-53 damages found by the trier of fact, the claimant may not recover as
15-54 damages any amount in excess of the lesser of:
15-55 (1) the amount of damages tendered in the settlement
15-56 offer; or
15-57 (2) the amount of damages found by the trier of fact.
15-58 (h) If the court makes the finding described by Subsection
15-59 (g) of this section, the court shall determine reasonable and
15-60 necessary attorneys' fees to compensate the claimant for attorneys'
15-61 fees incurred before the date and time of the rejected settlement
15-62 offer. If the court finds that the amount tendered in the
15-63 settlement offer to compensate the claimant for attorneys' fees
15-64 under Subsection (d)(2) of this section is the same as,
15-65 substantially the same as, or more than the amount of reasonable
15-66 and necessary attorneys' fees incurred by the claimant as of the
15-67 date of the offer, the claimant may not recover attorneys' fees
15-68 greater than the amount of fees tendered in the settlement offer.
15-69 (i) If the court finds that the offering party could not
15-70 perform the offer at the time the offer was made or that the
16-1 offering party substantially misrepresented the cash value of the
16-2 offer, Subsections (g) and (h) of this section do not apply.
16-3 (j) If Subsection (g) of this section does not apply, the
16-4 court shall award damages as required by Section 16(b) of this
16-5 article. If Subsection (h) of this section does not apply, the
16-6 court shall award attorneys' fees as required by Section 16(b) of
16-7 this article.
16-8 (k) An offer of settlement is not an admission of engaging
16-9 in an act or practice declared in Section 4 of this article to be
16-10 an unfair method of competition or an unfair or deceptive act or
16-11 practice in the business of insurance.
16-12 Sec. 16B. MEDIATION. (a) A party may, not later than the
16-13 90th day after the date of service of a pleading in which relief
16-14 under Section 16 of this article is sought, file a motion to compel
16-15 mediation of the dispute in the manner provided by this section.
16-16 (b) The court shall, not later than the 30th day after the
16-17 date a motion under this section is filed, sign an order setting
16-18 the time and place of the mediation.
16-19 (c) If the parties do not agree on a mediator, the court
16-20 shall appoint the mediator.
16-21 (d) Mediation shall be held within 30 days after the date
16-22 the order is signed, unless the parties agree otherwise or the
16-23 court determines that additional time, not to exceed an additional
16-24 30 days, is warranted.
16-25 (e) Except as agreed to by all parties who have appeared in
16-26 the action, each party who has appeared shall participate in the
16-27 mediation and, except as provided by Subsection (f), shall share
16-28 the mediation fee.
16-29 (f) A party may not compel mediation under this section if
16-30 the amount of actual damages claimed is less than $15,000, unless
16-31 the party seeking to compel mediation agrees to pay the costs of
16-32 the mediation.
16-33 (g) Except as provided in this section, Section 154.023,
16-34 Civil Practice and Remedies Code, and Subchapters C and D, Chapter
16-35 154, Civil Practice and Remedies Code, apply to the appointment of
16-36 a mediator and to the mediation process provided by this section.
16-37 SECTION 15. Section 17(a), Article 21.21, Insurance Code, is
16-38 amended to read as follows:
16-39 (a) If a member of the insurance buying public has been
16-40 damaged by an unlawful method, act, or practice defined in Section
16-41 4 of this Article <or by the rules and regulations lawfully adopted
16-42 by the Board under this Article or by any practice defined by
16-43 Section 17.46 of the Business & Commerce Code, as amended,> as an
16-44 unlawful deceptive trade practice, the Board may request the
16-45 Attorney General to bring a class action, or the individual damaged
16-46 may bring an action on behalf of himself and others similarly
16-47 situated, to recover damages and relief as provided in this
16-48 section.
16-49 SECTION 16. Section 33.002, Civil Practice and Remedies
16-50 Code, is amended by amending Subsection (b) and adding Subsection
16-51 (c) to read as follows:
16-52 (b) This chapter does not apply to<:>
16-53 <(1)> an action to collect workers' compensation
16-54 benefits under the workers' compensation laws of this state,
16-55 Subtitle A, Title 5, Labor Code, <(Article 8306 et seq., Vernon's
16-56 Texas Civil Statutes)> or actions against an employer for exemplary
16-57 damages arising out of the death of an employee.
16-58 (c) This chapter applies to<;>
16-59 <(2)> an action brought under the Deceptive Trade
16-60 Practices-Consumer Protection Act (Subchapter E, Chapter 17,
16-61 Business & Commerce Code) <except as specifically provided in
16-62 Section 17.50 of that Act; or>
16-63 <(3) an action brought under Chapter 21, Insurance
16-64 Code>.
16-65 SECTION 17. Article 11.05, Title 79, Revised Statutes
16-66 (Article 5069-11.05, Vernon's Texas Civil Statutes), is amended to
16-67 read as follows:
16-68 Art. 11.05. Fraudulent, deceptive, or misleading
16-69 representations. No debt collector may collect or attempt to
16-70 collect debts or obtain information concerning a consumer by any
17-1 fraudulent, deceptive, or misleading representations which employ
17-2 the following practices:
17-3 (a) using any name while engaged in the collection of
17-4 debts other than the true business or professional name or the true
17-5 personal or legal name of the debt collector or, if engaged in the
17-6 collection of a credit card debt, the name appearing on the face of
17-7 the credit card; or failing to maintain a list of all business or
17-8 professional names known to be used or formerly used by individual
17-9 persons collecting debts or attempting to collect debts for the
17-10 debt collector;
17-11 (b) falsely representing that the debt collector has
17-12 information in his possession or something of value for the
17-13 consumer in order to solicit or discover information about the
17-14 consumer;
17-15 (c) failing to clearly disclose, in any communication
17-16 with the debtor, the name of the person to whom the debt has been
17-17 assigned or is owed at the time of making any demand for money
17-18 (provided, however, this subsection shall not apply to persons
17-19 servicing or collecting real estate first lien mortgage loans) or
17-20 credit card debts;
17-21 (d) failing to clearly disclose, in any communication
17-22 with the debtor, that the debt collector is attempting to collect a
17-23 debt, unless such communication is for the purpose of discovering
17-24 the whereabouts of the debtor;
17-25 (e) using any written communication which fails to
17-26 clearly indicate the name of the debt collector and the debt
17-27 collector's street address or post office box and telephone number,
17-28 when the written notice refers to an alleged delinquent debt; (the
17-29 foregoing shall not require disclosure of names and addresses of
17-30 employees of debt collectors);
17-31 (f) using any written communication which demands a
17-32 response to a place other than the debt collector's or creditor's
17-33 street address or post office box; (the foregoing shall not require
17-34 response to the address of an employee of a debt collector);
17-35 (g) misrepresenting the character, extent, or amount
17-36 of a debt against a consumer, or misrepresenting its status in any
17-37 judicial or governmental proceedings;
17-38 (h) falsely representing that any debt collector is
17-39 vouched for, bonded by, affiliated with, or an instrumentality,
17-40 agent, or official of this state or any agency of federal, state,
17-41 or local government;
17-42 (i) using, distributing, or selling any written
17-43 communication which simulates or falsely represents to be a
17-44 document authorized, issued, or approved by a court, an official, a
17-45 governmental agency, or any other legally constituted or authorized
17-46 governmental authority, or which creates a false impression about
17-47 its source, authorization, or approval; or using any seal or
17-48 insignia or design which simulates that of any governmental agency;
17-49 (j) representing that a debt may be increased by the
17-50 addition of attorney's fees, investigation fees, service fees, or
17-51 other charges when there is no written contract or statute
17-52 authorizing such additional fees or charges;
17-53 (k) representing that a debt will definitely be
17-54 increased by the addition of attorney's fees, investigation fees,
17-55 service fees, or other charges when the award of such fee or charge
17-56 is discretionary by a court of law;
17-57 (l) falsely representing the status or true nature of
17-58 the services rendered by the debt collector or his business;
17-59 (m) using any written communication which violates or
17-60 fails to conform to the United States postal laws and regulations;
17-61 (n) using any communication which purports to be from
17-62 any attorney or law firm, when in fact it is not;
17-63 (o) representing that a debt is being collected by an
17-64 attorney when it is not; <or>
17-65 (p) representing that a debt is being collected by an
17-66 independent, bona fide organization engaged in the business of
17-67 collecting past due accounts when the debt is being collected by a
17-68 subterfuge organization under the control and direction of the
17-69 person to whom the debt is owed; however, nothing herein shall
17-70 prohibit a creditor from owning or operating its own bona fide debt
18-1 collection agency; or
18-2 (q) all changes made to this Act by any act of the
18-3 74th Legislature shall apply to any civil action pending on or
18-4 after the effective date of the enactment of these changes.
18-5 SECTION 18. Article 11.10, Title 79, Revised Statutes
18-6 (Article 5069-11.10, Vernon's Texas Civil Statutes), is amended by
18-7 amending Subsection (c) and adding Subsection (d) to read as
18-8 follows:
18-9 (c) A person who successfully maintains an action under this
18-10 article for violation of Article 11.02(c) or 11.07A of this Act
18-11 shall be awarded at least $100 for each violation of this Act.
18-12 (d) All changes made to this Act by any act of the 74th
18-13 Legislature shall apply to any civil action pending on or after the
18-14 effective date of the enactment of these changes.
18-15 SECTION 19. (a) This Act takes effect September 1, 1995.
18-16 (b) This Act applies to all causes of action that accrue on
18-17 or after the effective date of this Act. This Act applies to all
18-18 causes of action that accrued before the effective date of this Act
18-19 and upon which suit is filed on or after September 1, 1996. Except
18-20 as provided by Subsection (c) of this section, a cause of action
18-21 that accrued before the effective date of this Act and upon which
18-22 suit is filed prior to September 1, 1996, is governed by the law in
18-23 effect immediately prior to the effective date of this Act, and
18-24 that law is continued in effect for that purpose.
18-25 (c) Section 17.56, Business & Commerce Code, as amended by
18-26 this Act, applies to a cause of action that accrued before the
18-27 effective date of this Act and upon which suit is filed on or after
18-28 September 1, 1995.
18-29 SECTION 20. The importance of this legislation and the
18-30 crowded condition of the calendars in both houses create an
18-31 emergency and an imperative public necessity that the
18-32 constitutional rule requiring bills to be read on three several
18-33 days in each house be suspended, and this rule is hereby suspended.
18-34 * * * * *
18-35 * * * * *