your honor in a please the court good morning my name is josh davis and i represent the grid on us the case before the court would be fairly direct given the jury's finding that state farm breached the contract owes money for the covered claim under him botham the state farm lloyds and then later performance auto plex the mid century both of those cases hold that once that finding is made five hundred and forty two dollars fees and statutory penalty interest naturally flow from that finding but in this particular case state farm makes the argument as it did in shaab as a case previously decided by this court ringback that somehow the agri donnel as complaint fails and would prohibit the arguer donal's from obtaining their fees and statutory penalty interest charges obviously was a decision decided against one dollar of my own clients on appeal the case not particularly analogous in many ways given the procedural presentation of charges there was a motion let me filed excess of demand was presented to the jury the court would have presented fees to the jury but for the motion let me none of that is present in this case the parties by agreement  stipulated to submit the question of fees and statutory penalty interest post verdict along with any question of excessive demand and of course the underlying district court that opinion what we've referred to as the nd opinion following this court's decision and chop is but what supersedes all of that prior sort of lead up concerning this question are three core opinions from the texas supreme court that we now have that bear heavily on the question before the court in each case the ip petitioners alvarez in ortiz were represented by this firm concerning identical petitions to the agard on those that is the language contained within the petitions that asserted the core claims under five hundred and forty two dollars are exact that is there is no word that would even be different for the names of the parties with respect to their rights to proceed with fees and steps story penalty interest under five hundred and forty two dollars and in all three cases following state farm's argument as it made in chavez this is the supreme court rejected those arguments outright and while or initially discussed that opinion that holding in a footnote state farm subsequently made additional arguments in laws us and alvarez and those opinions double down on the holding itself and that holding those three holdings and the what is your position as to what is necessary to put a plausible claim for this eighteen percent penalty and where is that in your complaint that number one you're on i would point directly to the tech supreme court opinions that clearly state that the pleadings before them which is identical to the one before your honor is substantively sufficient to assert five hundred and forty two claims and damages so that's number one ok but i'm saying the federal there's an argument i'm not necessarily bring with it but there is an argument that the federal procedure might be more difficult to meet so if there was a federal law that said if you're suing understands you have to listen t hat would govern regardless of what texas s what i'm asking you is that isn't our law our law as plausibility why do you hear complaints makes it plausible that you're entitle to this eighteen percent well in the complaint we say that state farm owes damages under the policy which creates the basis for five hundred and forty two dollars claim on liability that is the claim was not paid when it should have been made under the prompt  act and so i def eyes for for the court and for the parties the substance of the liability portion of five hundred and forty two dollars and then obviously the petition itself contains the damages concerning the sufficiency of the pleading no where in fact and we point out in the record it's replete with all the evidence the court would need to know state farm was on notice that we were seeking five hundred and forty two dollars damages in our disclosures they took my deposition with respect to attorney's fees in the demand itself and certainly in their motion for summary judgment in which they cited to the claim for five hundred and forty two dollars and so the idea that somehow the plaintiffs the arguer dominoes petition was insufficient to put state farm on notice of the claim is fanciful given the record evidence that demonstrates they clearly were as they were conducting discovery on it contend that at some point the viagra donal's fail to plead what state farm clearly know knew they were pleading based on the record i just don't understand it says statutory interest of eighteen percent in the conclusion point blank he says i were seeking statutory inter interest of eighteen percent effective it doesn't say the name of the statute right there i don't think that's  consequence i don't understand what we're doing here your honor and the perhaps the only question yeah and i think that if the if the court looks at the district court's st opinion that is the opinion that the district court reached prior to this court's per curry him opinion in charge as you will see that the district court takes issue with what the district court deemed as insufficient descriptive language concerning the complaint but then relied upon rule fifty four dollars and sort of the forgivable nature of that rule to complaints of this kind  clearly sought and in and the party demonstrates that entitle me to that substantive right and sort of the catch all benefit us in this necessary why is there forgiveness necessary i mean it's probably a good idea to add the statute  bit you do now when you feel that these claims but why is there forgiveness it says what the claim was and then it says need statutory interest and there's no magic words that you have to say you don't even out only to the extent that the court may have some unfriendly questions or any question after that i want to get into the other piece of this which is whether there is any texas president that suggests anything other than that this eighteen percent is strict liability that require some other violation of the texas insurance code that you you know you willfully you know you knew you owe the minute in a or all this other long long list that used to be the it was a to recover an eighteen percent no your honor and in fact i direct the court to the barber tex opinions clear language on page fourteen of that opinion in which this court's decision in higginbotham v sta farm and then performs on a place was cited cited approvingly for that for that very proposition that is it's essentially a per se liability once you've proven the carrier wrongfully denied the claim and withheld benefits and  i think that one thing i would point out to that point is state farm and other carriers have for years been attempting to create sort of a good faith basis defense to strict liability under five  and has been pushing this idea that somehow if they had a good faith reason to to initially deny the claim that somehow they would get out of that stance toward penalty interests but every single court that's considered that has fundamentally rejected that that attempts to create that defense given the clear intent of the statute to benefit the consumers that is to benefit the insureds when they've had their claim wrongfully denied because it is supposed to be punitive it is supposed to harm the carrier and disincentive eyes of the carrier from my hands that it is incentive pay claims you know time and the interesting thing you a chance to respond but because this i mean again i get a lot of insurance cases as a lawyer in this state district judge so this is an area i know well and for better or for worse depending on admittedly the actual damages that we're litigating he's not nearly as serious as what typically i would suspect comes before the court and so for charges for example if i were to look at it as forgivingly as as as i can i would think that the panel just knowing that the case concerned about seven thousand dollars in actual damages you know approached it from that  it i think that there's no given like i said at the beginning of my argument the the clear outlook ability of the decisions to specifically they argued on those complaint petition me please the court hearing all the friendly question through my opponent i'm going to jump right into some of the questions that you might have asked him in and let you know state farm's position on those issues one key points the judge pains raise is that state court pleading rules in federal court pleading rules are not the same importantly in or t s firm never argued in the court of appeals or the supreme court that the pleading wasn't sufficient the supreme court itself looked at the pleading saw the problem and added that but no that said yeah there's a question about whether it's sufficient or not but we're going to say in this case it was sufficient because state farm had notice of what he was alleging state farm moved for summary judgment specifically and forty two dollars grounds federal court pleadings require something more to see her pleading say fear notice could you look at the pleading and figure it out federal court pleadings require is this court is set and the supreme court has said that you have to say both your notice of the claims and the grounds upon which the claim rests and here that's what's missing is the grounds of congress the claim rest sure it says knowledge you claim when you convince your investigation of the claim when you exception or deny the claim and when you pay the claim and what would be required under federal pleading guidelines to effectively i'm sure  be nice if if the average on who's had done what they did in there when they attempted to amend their petition in the name the statute in the name which provision of the statue but even short of that short of naming the statue or it didn't seeing which part of the statute  so that's what they're claiming and then they later say that eighteen percent so those are the pieces what cases do we have that says if you had all cite the statute you're at your it's not to confrontation that you have to cite the there's mechanisms you know the federal equivalent of the special exception and you can get that result but that doesn't mean that they did it lead it and you all know that because of they that eighty percent to me is that thing every single case in this case the choppers are the only cases that i'm aware of where there is not in the three supreme court cases mr davis they don't allege that they allege the statute in what grounds for the statue automatic statute in fact i couldn't find any opinion from the supreme court or this court that talks about it you automatically get it even if you don't leave it and look like an arm but i don't think we talk about causes about action we would talk about claims and that th later in the case that their notice was not written initially when they reported the claim different handled the claim and when i believe they're now saying that the line started to run but they're saying later we sent a demand letter company just your and that was written so that  even if this this nd the st notice is oral you denied it the nd notice was written you still the night it and what i think this goes to your honor is at a minimum there is a fact question about law we believe that as a matter of law i've written notice that comes way after the time when we're adjusting the climate is not what intended by the statute but at a minimum there is a fact if you are mad which is why circling back to the original the poor little unsure he didn't know any better incinerate knows right then they go get a lawyer and a lawyer sends a written notice nd never trigger that eighteen percent i think that's very inconsistent with the purpose of the eighteen percent and with how all of these others the chapters thirty whatever we say here is going to apply whether you had i mean we're not going to say well you have a lawyer then the last different than if you don't i mean all i'm saying is just looking looking at it objectively that's inconsistent with it's inconsistent with the chapter thirty eight approach and all the other rules that i know about there are times when the statute specifies something but when it doesn't i don't think that's right that you can say well we're forever saved from the eighteen percent because we accepted an oral notice and didn't pay the claim then when they sent us a written notice we can ignore it and keep not yeah i met my own my only response your mom honor is just to in statute until you've filed in written notice and they're not saying my question was more specific if there is never writing i think you have a really good point but i don't see that mcmillan says if you  we disagree with whether it complies with the purpose of the statute which is to allow estate yankel the claim in a timely manner but the reality is and this happens all the time you know you have it insured makes a claim good on the phone you all deny  that a lawyer climbs in an insurance help or comes in or maybe the person spouse comes in and write you a letter and maybe raise a something and you change your mind and pay then eighteen percent would not come into play so the writing gives you another chance i would think you'd like that rather than resisting that because it gives you another chance that you didn't in your view have even though you clearly knew about the plan because you denied it so to me even if you know i don't think the case also supports your argument but even if we were just looking at this as a policy the policy is we want to be sure insurance companies know there is a claim and deny it and then the starts running and so that's the written notice well you got it so the fact you get a nd chance i don't understand why that is somehow a bad thing so maybe you can answer that oh sure if you're  not saying that's a bad thing we're seeing that under b argument that the statutory interest is automatic and that was an argument that a similar one of the made in barber technologies is that you get it from the beginning from the point where you had all the information available and so seeing that you can just keep doing additional thinking keep doing it national thing but then we have to pay the interest act the beginning the claims st reported is the point that we would have trouble with and i don't think you're i think you're right you that year i agree with that however i don't think that's at all inconsistent with the purpose of the statute it is just inconsistent with what the and the plaintiff's lawyers in this case and others have been arguing in so if that's the clarification the court make that would be helpful already been back and forth and the carrier has already acted with respect and with awareness in documents mason concerning the notice it has about the claim being made and denial  a written denial and there was one in this case reflects that knows that there is no dispute about state farm's awareness of the claim and it has made a determination that it doesn't have to pay that was wrong under the statute the eighteen percent penalty begins to run but i think that the question of notice is exactly what we say in our reply which is we use alternative grounds it requires some  and judge royce never believed it was which is why judge white's in pretrial because i was trial counsel and sued so i get to speak about this in a way that the record will reflect exactly what i say here judge  the parties and the court laid out the schedule for trial and it absolutely included a discussion of five four forty two not having this dismissed and if you look at the motion for summary judgment that's in the record from state farm they actually don't move for  state farm writing plaintiffs have specifically alleged causes of action based upon chapters five hundred and forty one thousand five hundred and forty two of the texas insurance code negligence negligent misrepresentation and then their motion goes down to argue and forty one dollars dispositive relief negligence negligent misrepresentation dispositive relief the relief was granted now we didn't bring up on appeal the granting of the five hundred and forty one dollars because it seemed at this point we've already got enough to talk about but clearly state farm in the motion demonstrates it's knowledge that we're seeking five hundred and forty two damages because it says so because we specifically play it and it didn't seek dispositive relief at that time counsel references our motion for leave i filed a motion for leave to amend the complaint following the district court's ruling in chobits down in brownsville arm scuse me mccalla when when we tried chavez and the motion for lemony that state farm had filed was granted i you know in the months that followed you know i said go ahead and see if i can get leave to clarify this issue so we don't have to come up again on appeal concerning the issues that are so essentially messy unnecessarily so with respect to how the insurance code applies to when a carrier wrongfully denies the claim so i fall for a leap to do that and judge judge royce was not sitting in san antonio at that time it was decided by another district court judge permanently assigned to the western district in in and that judge denied a motion for leave but that doesn't somehow mean that we have not adequately asserted by forty two and it certainly doesn't turn state farm's motion for summary judgment into some kind of relief on five  two judge royce never never contemplated that it was always and by agreement by the way so the question that i believe judge had of why what was a question submitted to the jury as to when interest would begin to run or notice those questions were not submitted but they were not submitted by agreement because the parties were going to brief these issues post verdict by agreement and so sorry  and they should get the full benefit of winning it is that they are entitled to from the taxes insurance code under five hundred and forty two the case should be remanded so we can decide the damages questions appropriately thank you thank you we appreciate both parties  both lawyers arguing today this was very helpful to the case thank you very much this case is submitted thank you thank your honour's by this conclude the argument or this week and the court will stand a jar pursuant to the usual order thank you thank you