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by Alexander Masotto

As a question of first impression, The United States District Court for the Northern District of Texas analyzed whether issuing pre-suit notice to a third-party adjuster satisfies Section 542A.003(a) of the Texas Insurance Code. Section 542A.003(a) states:

In addition to any other notice required by law or the applicable insurance policy, not later than the 61st day before the date a claimant files an action to which this chapter applies in which the claimant seeks damages from any person, the claimant must give written notice to the person in accordance with this section as a prerequisite to filing the action.

Section 542A.001(5) defines a “Person” as a corporation, association, partnership or other legal entity or individual.

In Devindra Investments v. Wesco Ins. Co., No. 2:24-CV-097-Z-BR, 2025 WL 553071 (N.D. Tex. Feb. 19, 2025), the insured submitted an insurance claim under its commercial property policy for alleged damage due to a hailstorm. In response, the insurer retained a third-party adjuster to assist with the claim investigation. A dispute arose, the insured retained counsel, and insured’s counsel issued a presuit notice letter to the third-party adjuster only.

After the insured filed suit, the insurer moved to strike the insured’s claim for attorneys’ fees under Section 542A.007(d). Based on the statute above, the insurer argued that notice needs to be directly provided to the insurer (“the person”) because the insured is seeking damages from the same. The insurer added that Section 542A.003(a) does not mention service to any type of independent adjuster or agent, while other sections do (i.e. Section 542A.006).

In response, the insured contended that the adjuster is “the functional equivalent of a claims employee,” handled the majority of communications with the insured, and had a “continuous and close relationship” with the insurer. Further, Plaintiff asserted that the Texas Insurance Code fails to distinguish between in-house and third-party / independent adjusters retained during a claim. However, the insured only pointed to an email from the third-party adjuster stating he would provide the notice to his legal department as evidence that the insurer was given and/or received that same notice.

Acknowledging the complexity of the present issue, the Court noted that: “The difficulty of this case stems from the fact that [the insured] attempted to discharge its duty under the statute, but [the insurer] appears not to have enjoyed the correlated right.”

Despite the difficulties, the Court properly looked to the legislative intent of the Texas Insurance Code, the plain meaning of the language, and held that serving presuit notice on the third-party adjuster did not adequately put the insurer on notice under Section 542A.003(a). Accordingly, the Court granted the insurer’s motion.

Moving forward, it is crucial that insurers continue to carefully discern when and to whom presuit notice is provided. Although not mentioned in Devindra Investments, insurers should also continue to check whether the underlying policy contains specific notice requirements in the event that a claim dispute ensues.