Texas Settlement Demand Letter (DTPA / Stowers / CPRC § 38.001)

TEXAS SETTLEMENT DEMAND LETTER

CONFIDENTIAL SETTLEMENT COMMUNICATION – TEX. R. EVID. 408
SENT VIA CERTIFIED MAIL, RRR, AND EMAIL

1. HEADER

Date: [__/__/____]

TO:
[DEFENDANT / CARRIER / ADJUSTER]
[________________________________]
[________________________________] (City, State ZIP)
Claim No.: [____________]

FROM:
[ATTORNEY NAME], Texas State Bar No. [____________]
[FIRM NAME]
[________________________________]
[____________], Texas [__________]
Phone: [____________] | Email: [________________________________]

RE: [CLIENT NAME] v. [DEFENDANT] – Formal Settlement Demand [and, if applicable, DTPA § 17.505 / Insurance Code § 542.055 Pre-Suit Notice]

2. NATURE OF DEMAND

This letter constitutes a formal settlement demand on behalf of [CLIENT NAME] ("Claimant"). Depending on context, this letter also serves one or more of the following statutory purposes (check applicable):

☐ DTPA Pre-Suit Notice under Tex. Bus. & Com. Code § 17.505(a) – 60 days' advance written notice of consumer's specific complaint and economic damages, mental anguish damages, and attorney's fees as a prerequisite to filing suit under the Texas Deceptive Trade Practices Act.

☐ Stowers Demand – a demand to settle within applicable policy limits under G.A. Stowers Furniture Co. v. American Indemnity Co., 15 S.W.2d 544 (Tex. Comm'n App. 1929), establishing the predicate for extra-contractual liability of the liability carrier for negligent failure to settle.

☐ Chapter 541/542 Notice under Tex. Ins. Code §§ 541.154 and 542A.003 – 61-day pre-suit notice of unfair claim-handling and prompt-pay violations, identifying specific acts and damages.

☐ CPRC § 38.002 Presentment – formal presentment of a contract claim to preserve attorney's fees under Tex. Civ. Prac. & Rem. Code § 38.001.

3. FACTS

3.1 Parties.
Claimant is a [____________] residing/doing business in [____________] County, Texas.
Defendant is a [____________] with its principal place of business at [________________________________].

3.2 Incident.
On [__/__/____], the following occurred: [detailed narrative of facts, including dates, places, witnesses, documents, and causal chain]. [________________________________]

3.3 Liability.
Defendant is liable to Claimant under the following theories, each of which is supported by Texas law:

(a) Negligence – duty, breach, proximate cause, and damages. Under Tex. Civ. Prac. & Rem. Code § 33.003, proportionate responsibility applies; any defendant found more than 50% responsible is jointly and severally liable (§ 33.013(b)).

(b) Gross Negligence – supporting exemplary damages under Ch. 41 subject to caps in § 41.008.

(c) DTPA Violations – specifically § 17.46(b) "laundry list" items [____________], § 17.50(a)(1)–(4) causation, and if knowing/intentional, treble damages under § 17.50(b)(1).

(d) Breach of Contract / Warranty – Tex. Bus. & Com. Code §§ 2.313–2.315.

(e) Insurance Code Claims (if applicable) – Chapter 541 (unfair claim practices) and Chapter 542A (prompt payment of property insurance claims; 5% per annum interest penalty plus attorney's fees under § 542A.007).

(f) Other: [________________________________].

4. DAMAGES

Pursuant to Tex. Bus. & Com. Code § 17.505(a) (if DTPA applicable) and Texas common law, Claimant itemizes the following damages:

5. SETTLEMENT OFFER

In the interest of avoiding litigation, Claimant offers to resolve all claims against [DEFENDANT] for $[____________] (the "Demand Amount"), subject to:

(a) A mutual release of all claims known and unknown arising from the subject incident;
(b) Payment in full within 30 days of acceptance (or 60 days if under DTPA § 17.505);
(c) Confidentiality [mutual / unilateral] at Claimant's election;
(d) No admission of liability;
(e) Indemnification against any asserted liens (Medicare/Medicaid set-aside, hospital, ERISA, workers' compensation subrogation);
(f) Other terms: [________________________________].

This offer expires at 5:00 p.m. CT on [__/__/____].

6. STATUTORY CURE / OFFER-TO-SETTLE REGIME

6.1 DTPA § 17.505(d). [Defendant] has 60 days from receipt of this notice to tender a written offer of settlement, which may include economic damages, damages for mental anguish, expenses, and attorney's fees. Under § 17.5052, a rejected settlement offer equal to or greater than the ultimate damages award will limit Claimant's recovery.

6.2 Chapter 542A (Property Insurance). If this matter involves a first-party property insurance claim, insurer has 60 days from receipt to investigate and tender a written offer. Failure to comply triggers additional damages under § 542A.007.

6.3 Stowers Predicate. If this is directed to a liability insurer, this letter constitutes a proper Stowers demand: (a) claim is within policy limits; (b) liability is reasonably clear; (c) settlement is demanded within policy limits; (d) offer is unconditional and releases the insured in full. Failure to accept exposes the insurer to liability for the entire judgment, including amounts exceeding policy limits. G.A. Stowers, supra; Phillips v. Bramlett, 288 S.W.3d 876 (Tex. 2009).

7. LITIGATION PLAN IF REJECTED

If the Demand Amount is not timely accepted, Claimant will file suit in the [____________] District Court of [____________] County, Texas (venue per CPRC § 15.002) seeking the full measure of damages identified above, plus treble damages, exemplary damages, pre- and post-judgment interest, attorney's fees, and costs. Discovery will include depositions of [______________], production of [______________], and expert testimony from [______________].

8. RESERVATION OF RIGHTS; RULE 408

This letter is a confidential settlement communication made in compromise negotiations and is inadmissible under Tex. R. Evid. 408, except for purposes permitted thereby (including proof of statutory notice, presentment, and bad faith). Nothing in this letter constitutes a waiver of any claim, right, or remedy.

9. SIGNATURE

Respectfully,

_______________________________________
[ATTORNEY NAME], Texas State Bar No. [____________]
Attorney for Claimant

Enclosures: Medical records index; photographs; expert reports; economic loss calculation

Sources and References

• Tex. Bus. & Com. Code § 17.505 – DTPA notice – https://statutes.capitol.texas.gov/Docs/BC/htm/BC.17.htm
• Tex. Bus. & Com. Code § 17.50 – DTPA damages
• Tex. Ins. Code Ch. 542A – Prompt payment property claims
• Tex. Civ. Prac. & Rem. Code Ch. 41 – Exemplary damages
• G.A. Stowers Furniture Co. v. American Indemnity Co., 15 S.W.2d 544 (Tex. Comm'n App. 1929)
• Phillips v. Bramlett, 288 S.W.3d 876 (Tex. 2009)
• Haygood v. De Escabedo, 356 S.W.3d 390 (Tex. 2011)