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127 Cards in this Set

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Consumer Law & the 3 types of Qs on the Bar Exam
1) DTPA
2) Debt Collection and DTPA
3) Insurance Law and DTPA
In reading a Consumer Law Q:
1) see what law they ask you to discuss
2) Read any Qualification or instructions @ the end of the Q
Always remember to include
1) Discussion of Attorney Fees
2) Injunctive or other Equitable Relief

*** Testers want you to say something about if the Consumer is allowed this***
The Texas Deceptive Trade Practices Act: Generally
1) the act is to be liberally construed to protect consumers & generally may not be waived.
2) there are a few exceptions where there is waiver: (a) waiver in writing and signed by the consumer; (b) consumer is not in a significantly disparate bargaining position; (c) consumer is represented by legal counsel in seeking or acquiring goods or services.

Any waiver is void unless it meets ALL these requirements.
Consumer
This is the only type of party who may maintain a suit under the TX DTPA
1) Proper entity (includes almost everyone)
2) seeks or acquires
3) to purchase or lease
4) good or services
to "Seek"
The DTPA does not require the transfer of consideration. An entity is a consumer if it seeks to purchase goods.

Any purchase is acquisition or any good faith intent to purchase= to seek.
to "Acquire"
eventhough there is no contractual relationship btw an injured person, there may be suit under the DTPA. If the product is acquired for his/or her benefit, then is protected.

A purchaser acquires as does any intended benficiary butt if merely an incidental beneficiary you do not acquire.

Look for intent!!!!
Example of Seek and Acquire protected people
1) a t/ant may be a consumer with respect to services purchased by the l/lord
2) an e/ee may be a consumer w/ respect to goods purchased by e/er
3) a purchaser of property may be a consumer w/ respect to an inspection paid for the seller
4) a passenger riding a car is NOT a consumer w/ respect to THAT car
5) A friend who borrows goods are NOT Consumers w/ that good.
Purchase or Lease
to be a consumer under the DTPA, an entity must do more than seek and acquire. The goods or services must be sought or acquired by "purchase or lease".

Trully free services are not subject to the DTPA but purchase is broadly defined to include any consideration. Consumer does not have to be the one who paid.

Test- did the person claiming to be a consumer acquire the goods or service through a purchase?
Goods or Services
Goods- tangible chattels or REAL PROPERTY purchased or leased for use.
Services- work, labor, or service purchased or leased for use. Services includes insurance and excludes merely lending money.

Rule- merely lending money is not subject to the DTPA but if from the consumer's perspective to loan was an essential part of the transaction, it is subject to the act. (used to purchase a house)
Goods purchased for resale are purchased for use
Inventory is a good!
Exemptions to Who is a Consumers
1) Business Consumers
2) Statutory Exceptions

If they ask you about an exemption, they have to tell you something where the exemption almost applies but doesn't.
Business Consumers Rules (3)
1) Business consumers are covered by the act
2) Business consumers of $25 million in assets or more are excluded
3) Non-Business consumers are covered regardless of assets.
Business Consumer- When you see this- SPIT THIS OUT
"A Defendant was the burden to prove the business consumer exception as an affirmative defense."
Statutory Exemptions-
1) does not apply to newspapers that published ads w/out knowledge of the false, misleading or deceptive nature of the publication.
2) Professional Services Exemptions
Professional Services Exemption and Test to the Exemption Applicablity to Services
1) Ask- What is the essence of the service?
2) If it is for advice, judgment, or opinion, it is exempt!
3) The exemption is service specific not profession specific (it is not what you are but what you do)
Examples- Lawyers, doctors, architects, accountants, and engineers BUT there are exceptions to the exemptions
Exceptions to the Exemptions of liability under the DTPA
1) an express misrepresentation of material fact
2) failure to disclose information
3) An unconscionable action of action
4) Breach of an express warranty

Bottom Line- even a professional service is subject to the act for material misrep., unconscionably, failure to disc., and breach of warranty .
If 17.50 (b) or (h) apply (meaning PI claims Mental Anguish claims)
the exemption does not apply. In these cases you can apply to everything

Under 17.50 (b) - you can recover economic damages and damages for mental anguish arising from a PI.
What About 17.50 (h)
Under this statute- ALL damages arising from a PI are recoverable as ACTUAL DAMAGES if the claim is based on a tie-in statute.
Large Transaction- two types:
1) Written Contracts (the DTPa does not apply to written K if the K relates to a transaction, project or set of trasnactions relating to the same project involving consideration by the consumer or more than $100K)
2) Transactions over $500K- (DTPA NOT APPLY to CoA with total consideration over $500K.)
Large Transaction: Written Ks

Requirements so they DONT apply to DTPA
1) signed K
2) consumer must be represented by an attorney
3) exemption does not apply to a residence
Large Transactions: Over $500K

Requirements so they DONT apply to DTPA
1) No need for written K or Attorney
2) Look at the TOTAL COST of the project
3) Does not apply to a residence
Who May be sued?

Basis of Complaint- Privity?
A consumer may sue anyone who violates the act if the transaction is the basis of the consumer complaint. BUT the act complained of must occur in "connection with" the transaction. Privity of K is NOT NEEDED!!!
"In connection with"
An Important Judicial Rule. MUST SPIT OUT!!!
Applies to remote parties. Use "in connection with" when the question mentions remote parties. The manufacturer of the parts.
Immediate Parties v. Remote Party
Immediate Party are parties to the transaction.

Remote Parties are the manufacture of the parts.
Test for Remote Parties-
1) Did the misrepresentation reach the consumer?
2) If yes, then it equals "in connection with"
3) If no, then it does not equal "in connection with"
Claims under the Act
1) the laundry list
2) Unconscionability
3) Breach of Warranty
4) Chapter 541 (Insurance)
Claim under the Act:

Reliance and Cumulative
Reliance- required for laundry list (from a false, misleading, or deceptive act") Relied on BY A CONSUMER to THE CONSUMER'S DETRIMENT

Cumulative- You may have multiple claims but only a single recovery for the same damages
The Laundry List
The DTPA includes a list of 27 acts or practices that are deemed to be false, deceptive, or misleading under the Act. These are the most common claims & conduct may violate more than one section of the laundry list. (RELIANCE IS REQUIRED BY A CONSUMER)
Meaning- H buys widget for W, H relies on seller, widget catches fire, W can recover b/c H relied.
Laundry List
27 different acts and practices prima facie false, deceptive or misleading.

General Misrepresentation, Misrepresentation of legal rights, failure to disclose.
No Privity/ Knowledge/ Intent
Violations of the laundry list are actionable w.out regard to privity and may occur prior to, simultaneously with, or after a contract has been formed. It is also significant to note that knowledge or intent is not an element of the laundry list violation, unless required by the particular subdivision.
General Misrepresentations-
it is only necessary that the actor makes a representation of fact regarding goods and services that is inaccurate or false. Statements may be oral or written. Statements that constitute mere opinion, or puffing, are not actionable under the DTPA.

PER inapplicable- PER AND SOFs have nothing to do with the DTPA.
Misrepresentation regarding legal rights
Any misrepresentation of legal rights is actionable unless it is a general contract interpretation.
Failure to disclose
Must establish 4 requirements:
1) the def. knew info regarding goods and services;
2) the info. was not disclosed;
3) there was INTENT to induce the consumer to enter into the transaction; and
4) the consumer woulf not have entered into the transaction on the same terms has the info. been disclosed.
Unconscionably
"an act or practice, which to a consumer's detriment, takes advantage of the lack of knowledge, ability, experience, or capatcity of the consumer to a grossly unfair degree."

1) this is separate but cumulative claim
2) don't confuse it w/ common law or U.C.C.
3) Determine @ the time of the transaction
Unconscionable

Objective Standard
There is no need to show a culpable mental state (no need to show why or if you know)
Unconscionable

Grossly Unfair
Glaringly noticeable, flagrant, complete, unmitigated.
Breach of Warranty
The DTPA is noth an independent basis for a CoA and a vehicle through which to bring an otherwise existing claim. Any breach of warranty is actionable by a consumer under the DTPA.
1) the DTPA does NOT create any warranties. (the warranties must exist & must establish totally independent of the DTPA. A breach is actionable by the consumer through the act.)
The Warranties
1) may be created by statute or c/l (must look to the other state law to see if there is a warranty and whether there has been a breach)
2) Warranties may be disclaimed (limitation or disclaimer of a warranty is not effected by the fact that it is brought through the DTPA)

*Complete analyze the warranty claim as though there is not a DTPA. If there is a breach, go to the DTPA for Damages*
Examples of Warranty breaches and where to look
1) Express and Implied Warranties Under Chapter 2 of the Business and Commerce Code
2) Implied Warranty of suitability in Commercial Leaseholds
3) Implied Warranty of Good and Workmanlike Performance in Service Contracts
4) Implied Warranty of Good and Workmanlike Performance and Habitability in Sale of Home
5) Article 21.21 (Chapter 541)

***No Implied Warranty for Professional Service***
Express and Implied Warranties under Chapter 2 of the Business and Commerce Code
Review all U.C.C. warranties. Any breach is actionable by a consumer under the DTPA

consumer may not assert implied warranty under the DTPA against remote manufacturer. Implied warranties against remote manufacturers are not "in connection with"
Implied Warranty of Suitability in Commercial Leaseholds
This warranty that the property is fit for its intended purpose & it may be waived.
Implied Warranty of Good and Workmanlike Performance in Service Contract
Considered primary consumer. In a K for repair or modification of tangible goods or real estate there is an implied warranty that work will be done competently MAY NOT BE WAIVED!
No implied warranty for professional service
Professionals do not make a warranty of good & workmanlike Performance
Implied Warranty of Good and Workmanlike Performance and Habitability in Sale of Home
2 different warranties. Good and Workmanlike may be waived. Habitability may not be waived.
article 21.21 (Chapter 541)
BIG. Insurance is a service. This is not a tie-in statute

Any violation of the insurance code is automatically a violation of the DTPA.
Defenses
There are very little in the way of Statutory Defenses & C/L defenses do not apply.
1) Negation of Producing Cause
2) Mediation/Arbitration
Defenses

Negation of Producing Cause
you may eliminate damages by negating causation
Defenses

Mediation/Arbitration
DTPA allows either party to compel mediation. Claims are "subject to" arbitration.
Pre Suit Notice

When Required
Unless filed as a counterclaim or to avoid limitations, must give 60 days written notice before filing. Must contain nature of complaint, amount of damage, amount of attorney fees.
Pre suit Notice

Class Action
May give notice for a class
Settlement
Defendant has 60 days from receipt (notice) or 90 days after answer to propose a settlement
Remedy for failure to give notice
abatement.
Contents of a Settlement
must include an offer to pay the following amounts of money, separately stated:
1) an amount of money reduced to cash value, as settlement for consumer damages
2) an amount of money to compensate consumer for the consumer's reasonable attorney's fees incurred as of the date of the offer.
Effect of Damages
1) if consumer rejects, it amy be filed with the court together with an affidavit certifying its rejection.
2) Damages- rejection of a reasonable settlement offer limits the consumer's recovery for damages. If reasonable offer (substantially the same), the consumer cannot recover only up to the lesser of these: (a) the amount of the settlement offer; (b) the amount found by the trier of fact. AND IT PRECLUDES ADDITIONAL DAMAGES
Attorney's Fees
Rejection of reasonable settlement offer limits a consumer's attorney's fees. If the offer of damages was reasonable, attorney's fees are also limited if the offer of attorney's fees was reasonable in settlement and when made.
Limitations- Discovery Rule
An action under the DTPA, you have two years from the date of the false, misleading action, or two years from which the consumer discovered the false action, or in exercise of due diligence, when the consumer SHOULD HAVE reasonably discovered the occurrence.
Generally the court looks at the date of the injury.
Remedies- Producing Cause
This will be on the Exam. "A producing cause is a substantial factor which brings about the injury and without which the injury would not have occurred". This is the lowest standard in TEXAS. This is not proximate cause.
Remedies- Producing Cause

"As Is"
You may negate producing cause. For example- "as is" coupled with no reliance. This is upheld and cannot sue under the DTPA. This is not a waiver but a contract clause.
Damages in General
The DTPA provides that each consumer who prevails may obtain Economic Damages and, in appropriate case, damages for mental anguish and additional damages of not more than three times the damages awarded. The GENERAL DAMAGE STANDARD IS ECONOMIC DAMAGE.
Economic Damages
"compensatory damages for pecuniary loss, including costs of repair and replacement. The term does NOT include exemplary damages or damages for physical plain and mental anguish, loss of consortium, disfigurement, physical impairment, or loss of companionship and society."
Economic Damages excludes these "soft damages"
Medical expenses, cost of repair and replace, lost income are all ED.
Mental Anguish- (THEY WANT YOU TO DISCUSS)
"If the trier of fact finds that the conduct of the defendant was committed KNOWINGLY, the consumer may also recover damages for mental anguish"
Mental Anguish- (THEY WANT YOU TO DISCUSS)

Knowingly- this is the legal standard.
Means:
(1) know, or
(2) should have known

at the time of the practice complained of.
May be inferred where objective manifestations indicate that the person acted with actual awareness.
Mental Anguish- Standard of Proof
"substantial disruption in...daily routine" or "high degree of mental pain and distress" that is "more than mere, worry, anxiety, vexation, embarrassment, or anger"
VERY HIGH standard of proof even if you meet the legal standard.
Additional Damages

When Recoverable
If there is a culpable mental state (knowingly) you may recover up to 3x damages (of actual damages)=treble damages

Meaning- you receive 1x actual damages and then
UP TO 2x in punitive damages,

If knowingly AND intentionally, then you get up to 3 x of actual (economic), and mental anguish
Consumer prevails- jury awards "economic damages"
If jury finds "knowingly" then jury awards additional damages=up to 2x economic damages, then may add for "mental anguish"

If jury find "intentionally", jury may award economic, mental anguish. Then 2x the amount of ED + MA for additional damages.
Attorney's Fees-
If win, consumer gets att'y fees. If suit is "groundless or brought in bad faith, or brought for the purpose of harassment, defendant gets att'y fees"
Consumer's Attorney's Fees- when awarded?
"Each consumer who prevails shall be awarded court costs and reasonable and necessary attorneys' fees"
MANDATORY, Amount Discretionary.
Consumer's Attorney's Fees-

Amount
dollar amount based on work done NOT on the agreed amount between the client and the attorney.
Defendant's Attorney's Fees

In general
finding that the consumer's suit was
1) groundless
2) brought in bad faith
3) brought for the purpose of harassment

Court awards for reasonable and necessary attorney's fees.
Defendant's Attorney's Fees

Groundless
No basis in law or fact
Defendant's Attorney's Fees

Bad Faith
Malice, ill-will, or spite
Defendant's Attorney's Fees

Harassment
Sole purpose SOLE, SOLE, SOLE, purpose of harassment.
Defendant's Attorney's Fees

Amount of Fees
dollar amount for the work done. not on contingency or flat fee contracted between the defendant and the attorney.
Actual Damages
1) standard for everything else not jsut the DTPA
2) Actual damages, however, may still be recovered in cases brought through the so called "tie-in statute"
3) It is all damages recoverable under C/L
Tie-In Statutes
The legislature has chosen to incorporate its provisions into many other statutes dealing with consumer-related issues. This is accomplished by making a violation of those statutes a violation of the DTPA, actionable under the provisions of the DTPA. If there is a violation of a tie-in statute, consumer recovers actual damages & up to 3x if knowingly.
Actual Damages and the Standard of Recovery under the tie-in statutes
Actual damages have been defined to include any damages recoverable at common law. (under c/l actual damages include mental anguish as well as pain and suffering). So to recover treble under a tie-in you know need to show knowingly (not intentionally!)
Federal Debt Collection
The federal law that regulates debt collection is known as the Federal Debt Collection Practices Act ("FDCPA").
Debt Collector
any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who REGULARLY collects or attempts to collect ,directly or indirectly, debts owed or due or asserted to be owed or due another. The term debts includes only CONSUMER DEBTS.

The federal law applies to ony 3rd party debt collectors (someone collecting someone else's debt- consumer debts)
Debt Collection and the Attorney
An attorney who regularly collects debts is a debt-collector (they will have to tell you on the test).
Debt collector not using own name
There is one exception to the "3rd party" debt collection rule. If you collect you own debt but under a different name, you are then subjects to the federal law.
Prohibited Use with debtor
1) Time and Place- before 8am, after 9 PM
2) Represented by Attorney- If there is an attorney, the consumer cannot be communicated unless the attorney consents.
3) Place of employment- once the collector knows the employer prohibits communication at work ,he must stop.
4) Communication with 3rd parties- No. Cant, but a collector may communicate...
5) Location information- exception to 3rd party communication. Trying to find the consumer.
6) Validation of Debts- in the intial communication or w/in 5 days, must tell the consumer that he has 30 days to dispute debt.
Validation of Debts-
1) Notice must reach least sophisticated consumer- look at the context of the notice, the notice must not be overshadowed
2) disputed debts-if the consumer disputes, you must stop collection attempts until debt is verified
Prohibited Conduct
1) harassment or abuse- non exclusive anything goes
2) false or misleading Representations- anything that could be found, non-exclusive. and any person can be sued for these violations.
3) unfair or Unconscionable Practices- broad catch all.
Liability
FDCPA may be enforced...
(private action or administratively)
1) Private enforcement- (one year limitation)- Liability- actual damages
Additional Liability-
in the case of any action by an individual to court may award additional damages not exceeding $1000K (punitive damages)
Class action
In the case of a class action, the court may award actual damages for all class members without regard to a minimum individual recovery, not to exceed $500K or 1% of the net worth of the defendant debt collector.
Attorney's Fees-
Same as DTPA. Defendant gets for bad faith AND harassment.
Relation to State and Federal Laws
Both State and Federal Law regulate Debt collection. Read what they ask.

may violate both.
State Debt Collection
In TX, C/L and statute govern wrongful debt collection. Texas is one of the few states that recognizes a tort for "wrongful debt collection". this tort, however, has been largely replaced by enactment of the Texas Debt Collection Act in 1973.

Tie-In Statute- the debt collection action is a tie in statute
Definition of the Debt Collector
the Same as the FDCPA. Anyone including an attorney collecting a consumer debt is a debt collector.
Debt Collectors- Prohibited Conduct
IS EXCLUSIVE!!!
1) clogging mailbox, inbox
2) causing phone to ring continuously
3) repeated telephone calls
4) harassing of phone calls (not emails)
TDCA- Threats or Coercion
1) threat of arrest
2) threat to take action prohibited by law
3) threat of wage garnishment
4) threat to take exempt property
TDCA- Harassment and Abuse
Using Profanity and annoying phone calls
TDCA- Unfair or Unconscionable Conduct
Broadest in Fed, but here, limited to attempting to collect amounts not authorized
TDCA- Fraudulent, Deceptive, or Misleading Representations-
MOST OFTEN.
Misleading or deceptive name, deceiving the consumer to get information, misrepresenting what can happen to consumer, misrepresenting that you are an attorney
TDCA- Use of Independent Debt Collector
Creditor has no liability unless it had knowledge of collector's activities
TDCA- Enforcement
1) criminal- misdemeanor fined not less than $100 and not more than $500 for each violation
2) Civil Remedies
TDCA- Enforcement

Civil Remedies
1) Actual Damages
2) may sue for- (a) injunction relief or restrain a violation under the TDCA, or (b) actual damages.
TDCA-

Attorney's Fees
Same as DTPA.

Defendant Attorney Fees if bad faith or harrassment.
TDCA-

Minimum Recovery
Generally no punitive damages, $100 penalty in very limited cases.
TDCA-

Remedies Under other laws
A violation of the TDCA is a DTPs under the Texas Deceptive Trade Practices Act, and is actionable under that law- it is a tie-in statute.
TIE-IN STATUTES

Definition
The texas DTPA permits a claim to be brought by a consumer through it based on other state statutes. These statutes that cross-reference the DTPA are generally referred to as "Tie-in statute" because they permit their provisions to be tied-into the more beneficial remedies available under the DTPA

There are 31 tie-ins.
Recognize that it is a tie-in and know the consequences.
Tie-in

Benefits (Major)
If the DTPA is brought through a tie-in statute, you get actual damages & up to 3x actual if you show knowingly.
Tie-ins always have 3 claims
1) Tie-in itself
2) DTPA by itself
3) DTPA Tie-in claim
List of Common Tie ins 1-15
1) Business Opportunity Act
2) Contest and Giveaway Act
3) Debt Collection Act
4) Health Spa Act
5) Home Solicitation Act
6) Credit Service Organizations
7) Removal of unauthorized vehicle from parking Facility
8) Rental-Purchase Agreements
9) Representation as attorney
10) Manufactured Housing Standards Act
11) Motor Vehicle Commission
12) Timeshare act
13) Unfair Claims Settlement Practices Act
14) Regulation of Telephone Solicitaiton
15)
This list- Recognition
1) if the examiners ask you about statute you don't know it is a tie-in statute.
2) all statutes stop and prevent action in particular area.
Insurance-
Insurance Law deals with a special form of contract, wherein one party, called the insurer, assumes the risk from another party, called the insured. In an insurance contract, the insurer distributes this risk among a substantial number of people, other insureds.
What to do in insurance Qs
They will tell you if it is an insurance law Q or use words like "insure" or "insurance code" DO NOT ASSUME it is an insurance Q.
Chapter 541 (Article 21.21)

Misrepresentation and Discrimination
Objective and Scope
1) Objective- Protects against unfair and deceptive acts or practices in the business of insurance.
2) Scope- Compare DTPA- (a) major difference from DTPA; (b) applies to any person not just a consumer; (c) protects insurance company from anti-competitive acts)
The insurance Code protects against
1) misrepresentations and false advertising of policy contracts
2) defamation (of competitors)
3) unfair discrimination (people of same insurance, risk or class)
4) Deceptive name, word, symbol, device, or slogan (trading off another's name or slogan)
5) Unfair Settlement Practices (more below)
6) Misrepresentation of Insurance Policy (of terms or existence)
#5- Unfair settlement practices
Failing to attempt in good faith to effectuate a prompt, fair, and equitable settlement after liability is reasonably clear.
Relief available to injured persons
Ch 541 establishes a private CoA for a violation of the article's provisions. A claim may be filed by any person who has sustained actual damage cause by another's engaging in an act or practice declared in Ch 541 to be unfair methods of competition or unfair or deceptive acts or practices in the business of insurance. Such persons may maintain an action against any person or persons engaging in such acts or practices. Very similar to the DTPA, when in doubt guess that it is the same
Insurance Code and the DTPA
1) any person may use the laundry list in an insurance action under the DTPA.
Ch.541 makes a violation of the "laudry list" action under Ch 541.
3) the DTPA makes a violation of the CH. 541 actionable under the DTPA.
In what realms are the Insurance Code and the DTPA the Same
1) Actual Damages (but broader type that DTPA)
2) Additional Damages (3x rule)
3) Plaintiff's Attorney's Fees
4) Defendant's Attorney's Fees
5) Limitation (2 year req)
6) Notice
7) Remedy for Failure to Notice
8) Settlement (when offered)
9) Settlement (contents)
10)Settlement (effect of)
11) Settlement (Attorney's Fees)
differences between Insurance Code and the DTPA- Meditation
Either side can file a motion to compel mediation. The motion must be filed within 90 days after service of a pleading seeking relief under Chapter 541. Both sides must share the costs of the mediation, unless the amount of economic damages sought is less than $15K. In that case, the party requesting mediation must pay the costs. Meditation generally must be held within 30 days of the request.
differences between Insurance Code and the DTPA- Class Actions
If a member of the insurance buying public has been damaged by an unlawful method, act, or practice defined under Ch 541, and individual may bring an action on behalf of himself and others similarly situated.
Differences overall between the DTPA and the Ch 541
1) consumer v. Person
2) actual damages v. economic damages
Unfair Claim Settlement Practices Act
this is a situation where the insurance company is not settling with the client when you should. This is a tie-in statute.
UCSA- Violation of the DTPA
An insurer commits a prohibited practice under this article commits a deceptive trade practice under the DTPA.
UCSA- Violation under the DTPA
CH 542
Actual Violations-
1) Prompt Payment of Claims (Attorney Statute)
2) Notice of Claim (insurer must respond not later than 15th day after receipt of notice of a claim or the 30th day if the insurer is an eligible surplus lines insurer.
3) Acceptance or rejection of claims- (must w/in 15 days)
4) Unable to accept or reject (can extend for 45 days)
5) Failure to accept or reject (subject to penalty)
6) Payment of Claims (must be paid w.in 5 day or be subject to a penalty)
UCSA- Violation under the DTPA
CH 542
Actual Violations-

Damages-
1) liquidated damages for claimant
2) liable to the holder of claim, beneficiary of claim,
3) in addition to the amount of the claim
4) 18% per annum of the amount of the claim
5) reasonable attorney fees
Common Law Duty of Good Faith
CH 542
An insurer has a duty to exercise good faith & fair dealing w/respect to the insured (tort duty)

Def- good faith and fair dealing to-"attempt in good faith to effectuate a property, fair, and equitable settlement of a claim with respect to which the insurer's liability has become reasonably clear"
Bona Fide Dispute (CH 542)
If there is a bona fide dispute about coverage, the insurer's denial of a claim will not be in bad faith.
Third Party Claims- Stower's Doctrine
(CH 542)
The duty of good faith extends to the duty to settle a rightful claim .
The rule- the Stowers Doctrine
The TX Supreme Court has held that in cases as that presented where the insurer's relationship with the insured imposes an obligation to settle the claim within the policy limit or be liable for any additional damages imposed upon the insured.

If claimant offers to settle for policy limits, when liability is reasonable clear. Insurer has a duty to settle.
Extent to Stowers Liability
A Stowers Plaintiff may recover as damages all amounts rendered against the insured in excess of the insured's policy limits, including post judgment interest on the judgment amount. An insurer's wrongful refusal to defend the insured subjects the insurer to potential liability for extra-contractual and statutory damages including both punitive and treble damages.