Le et al v. State Farm Lloyds

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
TRANG LE, ET AL.,
Plaintiffs,
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v. 	CIVIL ACTION NO. 4:25-cv-4208
STATE FARM LLOYDS,
Defendant.
MEMORANDUM, RECOMMENDATION, AND ORDER
Pending before the Court is Defendant State Farm Lloyds’ (“State
Farm”) Motion to Limit Plaintiffs’ Claim for Attorneys’ Fees (ECF No. 2),
Motion to Abate (ECF No. 6), and Plaintiffs Trang and Khanh Le’s (“Plaintiffs”)
Motion to Remand (ECF No. 7).1 	Based on a review of the motions and
applicable law, the Court RECOMMENDS Plaintiffs’ Motion to Remand (ECF
No. 7) be DENIED and State Farm’s Motion to Limit Plaintiffs’ Claim for
Attorneys’ Fees (ECF No. 2) be GRANTED. The Court FURTHER GRANTS
State Farm’s Motion to Abate (ECF No. 6).
1 On September 18, 2025, this case was referred to the Undersigned for all purposes
pursuant to 28 U.S.C. § 636(b)(1)(A) and (B) and Federal Rule of Civil Procedure 72. (ECF
No. 8).
United States District Court
Southern District of Texas
ENTERED
November 19, 2025
Nathan Ochsner, Clerk
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I. 	Background
Plaintiffs allege they are named insureds under a homeowners insurance
policy (“the Policy”) issued by State Farm, which insures, among other things,
against losses from storm damage. (Plaintiffs’ Original Petition (ECF No. 1-3
at 8)).2 Around February 18, 2021, a winter storm with freezing temperatures
caused water pipes to burst at Plaintiffs’ property (“the Property”), resulting
in flooding and water damage. 	(Id.). 	Plaintiffs submitted a policy claim to
State Farm for the damage their property sustained due to the storm. 	(Id. at
8–9). Plaintiffs hired a contractor to repair the Property and asked State Farm
to cover the cost of repairs. 	(Id. at 9). 	Plaintiffs allege State Farm failed to
settle Plaintiffs’ claim, refused to compensate Plaintiffs according to the terms
of the Policy, and did not conduct a reasonable investigation of the claim. (Id.).
To date, Plaintiffs have not received full payment for their claim. (Id.).
On July 3, 2025, Plaintiffs filed an Original Petition against State Farm
and State Farm Lloyds Incorporated in the Harris County Civil Court at Law
No. 4 of Harris County, Texas. 	(Id. at 20, 22). 	Plaintiffs assert claims for (1)
violations of the Texas Insurance Code, (2) Prompt Payment of Claim under
the Texas Insurance Code, (3) breach of contract, (4) breach of duty of good
2 Plaintiffs’ Original Petition is attached to State Farm’s Notice of Removal (ECF No.
1-3), State Farm’s Amended Notice of Removal (ECF No. 11-2), and Plaintiffs’ Motion to
Remand (ECF No. 7-4). For ease of reference, the Court cites to ECF No. 1-3.
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faith 	and 	fair 	dealing, 	and 	(5) 	violations 	of 	the 	Texas 	Deceptive 	Trade
Practices-Consumer Protection Act (“DTPA”). (Id. at 10–12).
As to damages, Plaintiffs seek “only monetary relief of $250,000 or less,
excluding interest, statutory or punitive damages and penalties, and attorney’s
fees” pursuant to TEX. R. C IV. P. 47(c)(1); “statutory interest at the rate of 18%
per annum and reasonable attorneys’ fees” pursuant to T EX. INS. C ODE §
542.060; exemplary damages; punitive damages under Chapter 41 of the TEX.
C IV. P RAC. & R EM. C ODE; treble damages under § 17.50(b)(1) of the DTPA; and
attorneys’ fees pursuant to various Texas statutes. (Id. at 12–13).
State Farm and State Farm Lloyds Inc. were served with a copy of the
citation and Plaintiffs’ Original Petition on July 18, 2025. (ECF No. 1 at 1; see
also ECF No. 1-3 at 24, 26). 	On August 8, in state court, State Farm filed its
“Original Answer, Special Exceptions and Jury Demand, Subject to its Plea in
Abatement,” and State Farm Lloyds Inc. filed its “Original Answer and
Verified Denial.”3 	(ECF No. 1 at 1–2; see also ECF No. 1-3 at 28–29, 34–42).
About two weeks later, Plaintiffs filed a Non-Suit as to the non-diverse
defendant, State Farm Lloyds Inc., which was granted on August 28, 2025.
(ECF No. 1 at 1). 	State Farm timely removed the case to federal court on
3 State Farm Lloyds Inc.’s “Original Answer and Verified Denial” is attached at ECF
No. 1-3 at 28–29. State Farm’s “Original Answer, Special Exceptions and Jury Demand to
Plaintiffs’ Original Petition Subject to its Plea in Abatement” is attached at ECF No. 1-3 at
34–42.
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September 5, 2025, pursuant to 28 U.S.C. § 1441(b), alleging federal diversity
jurisdiction 	under 	28 	U.S.C. 	§ 	1332(a). 	(Id. 	at 	2–3). 	State 	Farm
contemporaneously filed a Motion to Limit Plaintiffs’ Claim for Attorneys’
Fees, requesting that Plaintiffs be precluded from recovering attorneys’ fees
because Plaintiffs allegedly failed to provide State Farm with pre-suit notice
as required by the Texas Insurance Code.4 (ECF No. 2). Plaintiffs did not file
a response. 	Shortly thereafter, State Farm filed their Motion to Abate,
requesting abatement of the action until Plaintiffs complied with the statutory
notice requirements, or in the alternative, dismissal of Plaintiffs’ statutory
claims for failure to comply with the pre-suit notice requirements. 	(ECF No.
6). Again, Plaintiffs did not respond.
On September 10, Plaintiffs filed their Motion to Remand the case to
state court, asserting State Farm has not met its burden to establish the
amount in controversy exceeds $75,000. 	(ECF No. 7). 	State Farm filed a
response in opposition with a brief in support. (ECF Nos. 12–13).5
4 See TEX . I NS . CODE § 542A.003 (listing notice requirements); TEX . I NS . CODE
§ 542A.007 (prescribing award of attorney’s fees and limitations).
5 On September 24, 2025, in response to this Court’s Order for Conference and
Disclosure of Interested Parties (ECF No. 4), State Farm filed an Amended Notice of Removal
to clarify the citizenship of the parties. (ECF No. 11). State Farm filed an Affidavit of Brant
Kaufmann, an officer of State Farm, who attested to the citizenship of each of State Farm’s
underwriters. (ECF No. 11-3). The parties do not dispute they are completely diverse.
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II. 	Legal Standard
“‘Federal courts are courts of limited jurisdiction,’ possessing ‘only the
power authorized by Constitution and statute.’” Gunn v. Minton, 568 U.S. 251,
256 (2013) (quoting Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S.
375, 377 (1994)). Any civil action brought in a state court of which the district
courts 	have 	original 	jurisdiction 	(e.g., 	federal 	question 	or 	diversity
jurisdiction), may be removed by the defendant to the district court for the
district and division embracing the place where such action is pending. 	28
U.S.C. § 1441(a); Halmekangas v. State Farm Fire & Cas. Co., 603 F.3d 290,
294 (5th Cir. 2010) (“Where . . . the plaintiff files an action in state court with
no federal question or complete diversity, the original jurisdiction necessary
for removal under § 1441 does not exist.”). Diversity jurisdiction exists where
the amount in controversy exceeds $75,000, exclusive of interest and costs, and
there is complete diversity of citizenship between the parties. 	28 U.S.C. §
1332(a).
The 	party 	removing 	the 	case 	bears 	the 	burden 	of 	establishing
jurisdiction. 	Shearer v. Sw. Serv. Life Ins. Co., 516 F.3d 276, 278 (5th Cir.
2008). 	Defendant “bear[s] the burden of establishing the basis for removal,
and operative facts and pleadings are evaluated at the time of removal.” In re
Deepwater Horizon, 745 F.3d 157, 162–63 (5th Cir. 2014); Louisiana v. Am.
Nat. Prop. Cas. Co., 746 F.3d 633, 635 (5th Cir. 2014) (“Jurisdictional facts are
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determined 	at 	the 	time 	of 	removal, 	not 	by 	subsequent 	events.”). 	“Any
ambiguities are construed against removal because the removal statute should
be strictly construed in favor of remand.” Manguno v. Prudential Prop. & Cas.
Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002); Acuna v. Brown & Root Inc., 200
F.3d 	335, 	339 	(5th 	Cir. 	2000) 	(“[D]oubts 	regarding 	whether 	removal
jurisdiction is proper should be resolved against federal jurisdiction.” (citing
Willy v. Coastal Corp., 855 F.2d 1160, 1164 (5th Cir. 1988))).
III. 	Discussion
The Court will first address Plaintiffs’ Motion to Remand (ECF No. 7)
before turning to State Farm’s pending motions. See Good River Farms, LP v.
TXI Operations, LP, No. 1:17-cv-1117, 2018 WL 1770494, at *1 (W.D. Tex. Apr.
12, 2018) (“Because [Plaintiff’s] motion to remand concerns the Court’s subject
matter jurisdiction over this action, the Court will address the motion to
remand before turning to the motions to dismiss.”)
A. Motion to Remand based on Amount in Controversy
In its Notice of Removal, State Farm alleges removal is proper on
diversity jurisdiction grounds under 28 U.S.C. § 1332(a). 	(ECF Nos. 1, 11).
Because the parties do not dispute diversity of citizenship, see supra Part I note
4, and the Court is satisfied that complete diversity exists, the only issue is
whether the amount in controversy is satisfied.
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1. Applicable Law
“There 	is 	a 	framework 	for 	resolving 	disputes 	over 	the 	amount 	in
controversy. 	If the plaintiff’s state court petition specifies a dollar amount of
damages, that amount controls if made in good faith.” 	Guijarro v. Enter.
Holdings, Inc., 39 F.4th 309, 314 (5th Cir. 2022). 	Under the removal statute,
subsection 1446(c) “sets a general rule that ‘the sum demanded in good faith
in the initial pleading’ is ‘the amount in controversy.’” 	Durbois v. Deutsche
Bank Nat’l Tr. Co., 37 F.4th 1053, 1056 (5th Cir. 2022). 	It then provides two
exceptions to that general rule: “(i) the plaintiff’s operative state-court pleading
at the time of removal seeks nonmonetary relief; or (ii) that pleading seeks a
money judgment, and the State ‘does not permit demand for a specific sum or
permits recovery of damages in excess of the amount demanded.’” Id. (quoting
§ 1446(c)(2)(A)). In Texas, a state court Petition must contain a statement the
party seeks damages within predefined ranges. 	Kaiser v. State Farm Mut.
Auto. Ins. Co., No. 21-cv-1099, 2022 WL 2719631, at *2 (W.D. Tex. Jan. 21,
2022), 	report 	and 	recommendation 	adopted, 	No. 	1:21-cv-1099, 	2022 	WL
2761369 (W.D. Tex. Feb. 17, 2022) (citing TEX. R. C IV. P. 47(c)). “When seeking
non-monetary and monetary relief, the lowest damages pleading amount
under the Texas Rule 47 is $250,000.00.” Id.
Therefore, “[i]f the petition is silent (as is often the case in [Texas] state
courts in our jurisdiction), the defendant must prove by a preponderance of the
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evidence that the amount in controversy exceeds $75,000.” Guijarro, 39 F.4th
at 314) (citation omitted); see also Theriot v. Transamerica Life Ins. Co., 354 F.
Supp. 3d 713, 718 (E.D. Tex. 2017) (“In situations such as this one, where the
petition 	alleges 	only 	a 	range 	of 	damages 	and 	not 	a 	specific 	amount 	in
controversy, 	removal 	is 	proper 	if 	the 	removing 	party 	establishes 	by 	a
preponderance 	of 	the 	evidence 	that 	the 	amount 	in 	controversy 	exceeds
$75,000.00.”) 	The defendant may satisfy this burden by: “(1) showing it is
facially apparent from the petition that the damages for the causes of action
asserted are more likely than not to exceed $75,000; or (2) setting forth
summary 	judgment-type 	evidence 	showing 	that 	the 	facts 	in 	controversy
support a finding of damages in excess of $75,000.” Kaiser, 2022 WL 2719631,
at *3. If the defendant can “show by a preponderance of the evidence that the
amount in controversy exceeds the jurisdictional threshold, the plaintiff can
defeat diversity jurisdiction only by showing to a legal certainty that the
amount in controversy does not exceed the sum or value of $75,000, exclusive
of interest and costs.” 	McCauley v. Kroger Co., No. 3:19-cv-2673, 2020 WL
208816, at *2 (N.D. Tex. Jan. 14, 2020).
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2. Analysis
a. Whether it is “facially” apparent that the claims are
likely to exceed $75,000
Plaintiffs do not state a specific amount of damages in their Original
Petition. 	Instead, they seek relief of “$250,000 or less, excluding interest,
statutory or punitive damages and penalties, and attorney’s fees” per Texas
Rule of Civil Procedure (“Rule”) 47(c)(1). (ECF No. 1-3 at 12; ECF No. 11-2 at
12). 	They also plead that they are entitled to statutory interest under the
Texas Insurance Code, exemplary damages under Texas law, treble damages
under the DTPA, and attorneys’ fees under the Texas Civil Practices and
Remedies Code.6 (ECF No. 1-3 at 12–13; ECF No. 11-2 at 12–13). But because
these 	amounts 	are 	unspecified 	in 	Plaintiffs’ 	Petition, 	it 	is 	not 	“facially
apparent” that the claims exceed the jurisdictional amount. 	See Alcala v.
Allstate Vehicle & Prop. Ins. Co., No. 1:22-cv-95, 2022 WL 4239223, at *3 (S.D.
Tex. Aug. 30, 2022), report and recommendation adopted, No. 1:22-cv-095, 2022
WL 4239353 (S.D. Tex. Sept. 14, 2022) (finding that it was not facially apparent
the amount in controversy was met where complaint stated that it sought “only
6 Although attorneys’ fees are included in the amount in controversy when assessing
the jurisdictional amount if they are provided for by contract or state statute, see Theriot, 354
F. Supp. 3d at 719 (noting an award of reasonable attorneys’ fees is authorized under Texas
Civil Practice & Remedies Code § 38.001 and under § 541 of the Texas Insurance Code and
the DTPA), State Farm moved to limit Plaintiffs’ claim for attorneys’ fees because Plaintiffs
failed to provide pre-suit notice (ECF No. 2), and Plaintiffs do not dispute this in their Motion
to Remand (ECF No. 7 at 4). But at any rate, as explained below, the calculation of attorneys’
fees is not determinative as to whether the action meets the jurisdictional amount.
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monetary relief of $250,000 or less, excluding interest, statutory or punitive
damages and penalties, and attorney’s fees and costs.”). Since the Petition does
not specify the amount of damages or fees at issue, it follows State Farm may
meet its burden by submitting “summary judgment-type” evidence to ascertain
the amount in controversy. Manguno, 276 F.3d at 723.
b. Whether 	summary 	judgment-type 	evidence 	sets
forth 	the 	facts 	in 	controversy 	that 	support 	a
finding of the requisite amount
Both the parties have set forth facts that are informative of whether the
requisite amount is met. In the Motion to Remand, Plaintiffs explain that they
hired the contractor for remedial services in March 2021, and the contractor
charged $46,296.22 for its services. 	(ECF No. 7 at 2). 	State Farm paid
$22,798.43 towards the bill, leaving a balance of $23,497.79 unpaid. (Id.). On
April 21, 2025, the contractor obtained a summary judgment in state court
against Plaintiffs for $23,497.79, “plus interest at the rate of (18%) per annum
beginning and including may [sic] 24, 2021.”7 (Id.; see also ECF No. 7-3 at 2).
State Farm admits this amount ($23,497.79) forms the basis for Plaintiffs’
lawsuit. (ECF No. 1 at 3 n.9 (Notice of Removal); ECF No. 13 at 4–5 (Brief in
Support of State Farm’s Response in Opposition to Plaintiffs’ Motion to
7 Plaintiffs were unrepresented and they did not appear at the state court hearing on
the contractor’s motion for summary judgment. (ECF No. 7 at 2 n.1). A copy of the judgment
is attached to Plaintiffs’ Motion to Remand. (ECF No. 7-3).
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Remand)). 	Plaintiffs argue that in their Original Petition they invoked the
lowest damages tier under Rule 47(c), “$250,000 or less,” but in clarifying this
“ambiguous” amount, “[t]he actual damages sought are $23,497.79, which is
the amount awarded in the Judgment in favor of [the contractor].” 	(ECF No.
7 at 4). 	They further argue that “[e]ven if treble damages were awarded, the
total amount would be $70,493.37.” 	(Id.). 	Additionally, Plaintiffs argue the
18% interest pursuant to their Prompt Payment Claim is excluded from being
calculated towards the amount in controversy under section 1332(a), and they
have attached a stipulation to their Motion to Remand, stating that they will
not accept more than $70,493.37 at the conclusion of the suit. (Id.). Plaintiffs
also 	do 	not 	dispute 	State 	Farm’s 	Motion 	to 	Limit 	Plaintiffs’ 	Claim 	for
Attorneys’ Fees (ECF No. 2), and therefore, “attorneys’ fees cannot be included
in the amount in controversy.” 	(Id.). 	Based on these calculations, Plaintiffs
submit the amount in controversy does not exceed $75,000. (Id. at 5).
In opposition to remand, State Farm acknowledges Plaintiffs’ facts in
controversy, attaches supporting documentation largely from the state court
proceedings, and argues the jurisdictional amount is met because at the time
of removal (1) the actual damages amount to $23,497.79,8 (2) treble damages
8 As a slight scrivener’s error, Defendant at times calculates actual damages as
$23,479.79 (see, e.g., ECF No. 13 at 5); however, the parties agree that, based on the
contractor’s services and subsequent summary judgment, $23,497.79 represents Plaintiffs’
actual damages.
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would increase these damages to $70,493.37, and (3) 18% statutory interest
under the Texas Insurance Code is included in this calculation and would
amount to $18,134.28 (based on the date of the contractor’s claim to the date
of 	removal). 	(ECF 	No. 	13 	at 	4–13). 	Moreover, 	Plaintiffs’ 	post-removal
stipulation does not divest the district court of jurisdiction. 	(Id. at 10–13).
State Farm therefore argues that even before considering attorneys’ fees,
exemplary damages, and punitive damages, the amount in controversy at the
time 	of 	removal 	adds 	up 	to 	approximately 	$87,000 	and 	exceeds 	the
jurisdictional 	threshold. 	(Id. 	at 	13). 	The 	Court 	must 	consider 	which
calculation is correct.
In this case, State Farm has shown by a preponderance of the evidence
that the amount in controversy exceeds the jurisdictional threshold for several
reasons. “The Court will consider: (1) actual damages; (2) statutory penalties;
and (3) attorney’s fees, in analyzing whether the amount in controversy
exceeds $75,000.00.” 	Alcala, 2022 WL 4239223, at *4. 	The Court notes that
the “amount in controversy is not proof of the amount the plaintiff will recover
but an estimate of the amount that will be put at issue in the course of the
litigation.” Id. (citing Durbois, 37 F.4th at 1057).
First, Rule 47(c) provides that a plaintiff’s complaint must include a
statement that the party seeks:
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(1) only monetary relief of $250,000 or less, excluding interest, statutory
or punitive damages and penalties, and attorney fees and costs;
(2) monetary relief of $250,000 or less and non-monetary relief;
(3) monetary relief over $250,000 but not more than $1,000,000;
(4) monetary relief over $1,000,000; or
(5) only non-monetary relief . . . .
Here, Plaintiffs merely complied with the state court pleading requirements,
as Texas law does not permit Plaintiffs to request an amount of damages other
than one of the categories set forth in Rule 47(c). 	Guzman v. Allstate Vehicle
& Prop. Ins. Co., 19-cv-334, 2002 WL 1321821, at *1 (S.D. Tex. Feb. 26, 2020,
report and recommendation adopted, 2020 WL 1321818 (S.D. Tex. Mar. 19,
2020) (“The Texas Rules of Civil Procedure do not allow plaintiffs to request a
specific amount of damages beyond one of the ranges set forth in Rule 47.”). As
pleaded, Plaintiffs’ demand for damages in their Petition, therefore, does not
control the amount in controversy determination.
Second, both parties have submitted evidence that Plaintiffs allege
actual damages in the amount of $23,497.79. (ECF No. 7-3; ECF No. 13-2). In
addition to actual damages, Plaintiffs seek exemplary damages, punitive
damages, and treble damages. (ECF No. 1-3 at 12–13). “[W]hen ascertaining
the amount in controversy under an insurance policy, the amount may include
the policy limits, potential attorneys’ fees, penalties, statutory damages, and
punitive damages, but not interest or costs.” Cantu v. Allstate Vehicle & Prop.
Ins. Co., No. 7:21-cv-202, 2021 WL 2778027, at *3 (S.D. Tex. July 2, 2021)
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(citing St. Paul Reinsurance Co. v. Greenberg, 134 F.3d 1250, 1253 & nn.6–7
(5th Cir. 1998)); 2400 Thomas Ass’n, Inc. v. Fireman’s Fund Ins. Co., No. 3:11-
cv-3527, 2012 WL 13024100, at *3 (N.D. Tex. Sept. 10, 2012) (explaining items
to be considered in ascertaining the amount in controversy when the insurer
could be liable for those sums under state law are inter alia penalties, statutory
damages, and punitive damages—just not interests or costs). 	Thus, applying
treble damages under the DTPA to the actual damages brings the total to
70,493.37.9 (ECF No. 7 at 4); see also Middlebrook v. SLM Fin. Corp., No. 5:15-
cv-237, 2015 WL 2401435, at *4 (W.D. Tex. May 20, 2015) (“Because Plaintiff
has alleged that Defendant violated the DTPA knowingly and intentionally,
she is entitled to up to three times the economic and mental anguish damages.”
(citing TEX. B US. & C OM. C ODE § 17.50(b)(1) (permitting up to three times the
economic damages and mental anguish when the conduct was committed
knowingly and intentionally))); 2400 Thomas Ass’n, 2012 WL 13024100, at *3
(explaining that the Texas Insurance Code permits a plaintiff to recover
statutory damages of three times the amount of actual damages, not three
9 $23,497.79 x 3 = $70,493.37; see also 2400 Thomas Ass’n, 2012 WL 13024100, at *3
(applying treble damages pursuant to the Texas Insurance Code to actual damages stemming
from amount plaintiff paid to repair a broiler and that insurer did not pay).
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times the amount of actual damages “plus” the actual damages) (citation
omitted).10
Third, Plaintiffs also seek statutory interest under section 542.060 of the
Texas Insurance Code at a rate of 18% per annum, which “will be the amount
of the claim at 18 percent interest calculated from the due date of [the]
payment until the date of judgment.” 2400 Thomas Ass’n, 2012 WL 13024100,
at *3 (citing Watson v. Provident Life & Acc. Ins. Co., No. 3:08-cv-2065, 2009
WL 1437823, at *5 (N.D. Tex. May 22, 2009)). 	The Court must include this
statutory interest in the amount in controversy calculation, as it is a penalty
rather than prohibited interest under 28 U.S.C. § 1332. 	2400 Thomas Ass’n,
2012 WL 13024100, at *3 (citing St. Paul Reinsurance Co., 134 F.3d at 1255);
see also, e.g., Watson, 2009 WL 1437823, at *5. Plaintiffs allege they hired the
contractor in March 2021, and the adverse summary judgment record indicates
the principal amount owed began accruing interest in May 2021. 	(ECF No. 7
at 2; ECF No. 7-3 at 2). 	Plaintiffs also allege they sued State Farm in state
court in July 2025 “stemming from Defendant’s failure to fully pay for [the
10 Although Plaintiffs also seek exemplary damages, “a plaintiff may not recover both
exemplary damages and statutory treble damages on the finding of actual damages resulting
from the same acts or course of conduct, because that would amount to a double recovery of
punitive damages.” 2400 Thomas Assn, 2012 WL 13024100, at *3 (N.D. Tex. Sept. 10, 2012)
(citing St. Paul Surplus Lines Ins. Co. v. Dal–Worth Tank Co., 917 S.W.2d 29, 55 (Tex. App.—
Amarillo 1995, rev’d in part on other grounds, 974 S.W.2d 51 (Tex. 1998)) (citing Birchfield
v. Texarkana Mem’l Hosp., 747 S.W.2d 361, 367 (Tex. 1987))). 	Plaintiffs’ request for
exemplary damages thus does not increase the amount in controversy in this case, as that
amount already includes treble damages under state law.
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contractor’s] remedial services.” 	(ECF No. 7 at 2). 	Therefore, even under
conservative estimates, should Plaintiffs prevail, the Court determines that
their claim will have accrued at least four years of interest, at $4,230 in
interest each year, for a total of $16,918 in interest.11 This brings the amount
in controversy to approximately $87,412.12 Thus, the damages Plaintiffs seek
exceed the jurisdictional threshold.
State Farm has therefore shown by a preponderance of the evidence that
the amount in controversy exceeded $75,000 at the time Plaintiffs filed the
current action. 	See also Bustos v. State Farm Lloyds, No. 4:19-cv-4812, 2020
WL 2771997 (S.D. Tex. May 8, 2020), report and recommendation adopted, No.
4:19-cv-4812, 2020 WL 2771190 (S.D. Tex. May 27, 2020) (finding the amount
in controversy requirement was met by calculating treble damages where the
plaintiff sought $27,89.92 in actual damages, treble damages, attorneys’ fees,
and exemplary damages); Abascal v. United Prop. & Cas. Ins. Co., No. 4:18-cv-
3930, 2019 WL 3229174 (S.D. Tex. July 18, 2019) (finding the amount in
controversy requirement was met by calculating treble damages where the
plaintiff sought $19,303.41 in economic damages, treble damages, attorneys’
fees, and other damages); Horton v. Allstate Vehicle & Prop. Ins. Co., No. 5-19-
cv-140, 2019 WL 1552494 (W.D. Tex. Apr. 9, 2019), report and recommendation
11 $23,497.79 x 0.18 = $4,229.60. $4,229.60 x 4 = $16,918.41.
12 $70,493.37 + $16,918.41 = $87,411.78.
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adopted, No. 19-cv-140, 2019 WL 2563837 (W.D. Tex. May 1, 2019) (finding the
amount in controversy requirement was met by calculating treble damages
where the plaintiff sought $19,764.34 in economic damages, treble damages,
attorneys’ fees, and other damages).
c. Plaintiffs’ post-removal stipulation does not affect
the amount in controversy at the time of removal
State Farm has met its burden; thus, to obtain remand, Plaintiffs must
prove to a legal certainty that their claims do not exceed $75,000 or that they
are legally bound to accept less than $75,000. 	Metz v. Amguard Ins. Co., No.
1:21-cv-74, 2021 WL 6773101, at *3 (E.D. Tex. Aug. 4, 2021), at *5 (collecting
cases). 	Plaintiffs, however, do not cite a state statute that limits its recovery
to an amount below $75,000, and Plaintiffs did not stipulate to the amount in
controversy in their Petition.
The Court also considers whether Plaintiffs’ post-removal stipulation
limiting damages to $70,493.37 requires remand. 	(ECF Nos. 7-1, 7-2). 	The
Fifth Circuit has recognized that a state court plaintiff’s stipulating to recovery
of damages less than $75,000 is binding, thereby defeating diversity removal.
See Durbois, 37 F.4th at 1060–61 (determining that a stipulation in the
plaintiff’s state-court petition that his damages were “an amount less than
$74,500” was “legally binding”). 	However, the federal court “must assess the
jurisdictional facts as of the time that the complaint is filed, bearing in mind
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that subsequent events cannot serve to ‘deprive the Court of jurisdiction once
it has attached.’” 	Davis v. Meta Platforms, Inc., No. 4:22-cv-1001, 2023 WL
4670491, at *6 (E.D. Tex. July 20, 2023) (citing St. Paul Reinsurance Co., 134
F.3d at 1253–54 (5th Cir. 1998)). It follows that a “binding stipulation limiting
damages to an amount below $75,000, which is filed with a state-court petition,
precludes federal diversity jurisdiction;” a “post-removal stipulation, on the
other hand, is deemed ‘suspect and . . . [is] a practice cited with disapproval by
the Fifth Circuit.’” 	Bustos, 2020 WL 2771997, at *3 (emphasis in original)
(citing Wilson v. Hibu, Inc., No. 3:13-cv-2012, 2013 WL 5803816, at *6 (N.D.
Tex. Oct. 28, 2013)). 	Plaintiffs filed a post-removal stipulation agreeing to
neither seek nor accept damages more than $70,493.37. 	(ECF Nos. 7-1, 7-2).
Plaintiffs’ 	post-removal 	stipulation 	does 	not 	preclude 	federal 	jurisdiction
because the amount in controversy unambiguously met the jurisdictional
threshold at time of removal.13 	See Lopez v. Allstate Indem. Co., No. 7:22-cv-
23, 2022 WL 1403493, at *3 (S.D. Tex. May 4, 2022) (“Plaintiff argues that he
has offered to file a binding stipulation limiting recovery to under $75,000.00.
However, it is well-established that ‘[e]vents occurring subsequent to the
13 A post-removal stipulation may be considered in determining the amount in
controversy only when it is ambiguous whether the amount in controversy met the
jurisdictional threshold at the time of removal. 	Gebbia v. Wal-Mart Stores, Inc., 233 F.3d
880, 883 (5th Cir. 2000) (citations omitted). Here, there was no such ambiguity because the
parties agree that the $23,497.79—stemming from the contractor’s remedial services and
summary judgment—forms the basis for Plaintiffs’ lawsuit. As explained above, the amount
in controversy exceeded $75,000 at the time of removal.
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institution of suit which reduce the amount recoverable below the statutory
limit do not oust jurisdiction.’”). 	Thus, the Court denies Plaintiffs’ Motion to
Remand. (ECF No. 7).
B. Motion to Limit Plaintiffs’ Claim for Attorney Fees
On the same day State Farm removed the case, it filed its Motion to Limit
Plaintiffs’ Claim for Attorneys’ Fees. 	(ECF No. 2). 	State Farm argues that,
under 	the 	Texas 	Insurance 	Code, 	Plaintiffs 	should 	be 	precluded 	from
recovering any attorneys’ fees incurred after August 8, 2025—the date State
Farm filed its Original Answer challenging Plaintiffs’ entitlement to attorneys’
fees due to lack of notice. 	(Id. at 1). 	Plaintiffs do not dispute that they failed
to provide the required notice prior to filing their lawsuit. (ECF No. 7 at 4).
1. Applicable Law
Under the Texas Insurance Code, an insured who prevails on a claim is
entitled to recover attorney’s fees, provided that certain conditions are met.
See T EX. INS. C ODE § 542A.007 (awarding attorney’s fees). According to Section
542A.003, “not later than the 61st day before the date a claimant files an action
. . . seek[ing] damages from any person, the claimant must give written notice
. . . as a prerequisite to filing the action.” 	§ 542A.003(a). 	The notice must
provide: “(1) a statement of the acts or omissions giving rise to the claim; (2)
the specific amount alleged to be owed by the insurer on the claim for damage
to or loss of covered property; and (3) the amount of reasonable and necessary
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attorney’s fees incurred by the claimant . . . .” 	§ 542A.003(b). 	Section
542A.007(d) provides:
If a defendant in an action to which this chapter applies pleads
and proves that the defendant was entitled to but was not given
a presuit notice stating the specific amount alleged to be owed by
the insurer under Section 542A.003(b)(2) at least 61 days before
the date the action was filed by the claimant, the court may not
award to the claimant any attorney’s fees incurred after the
date the defendant files the pleading with the court. A
pleading under this subsection must be filed not later than the
30th day after the date the defendant files an original answer in
the court in which the action is pending.
T EX. INS. C ODE § 542A.007(d) (emphasis added).
2. Analysis
In this case, on August 8, 2025, State Farm filed its Original Answer in
state court challenging Plaintiffs’ entitlement to attorneys’ fees for failure to
provide pre-suit notice. 	(ECF No. 1-3 at 28–42; ECF No. 2 at 1). 	State Farm
then filed the instant motion on September 5, which was within the 30-day
deadline provided by subsection 542A.007(d). (ECF No. 2 at 1–2). In Plaintiffs’
Motion to Remand, they do not dispute that they did not provide pre-suit notice
to State Farm before filing their lawsuit. 	(ECF No. 7 at 4). 	State Farm has
therefore “plead” and “proved” that it “was entitled to but was not given a
presuit notice . . . under Section 542A.003(b)(2).” § 542A.007(d). As such, the
Court “may not award to [Plaintiffs] any attorney’s fees incurred after the date
[State Farm] file[d] the pleading with the court”—on August 8, 2025. 	See
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Ansah v. Nationwide Prop. & Cas. Ins. Co., No. 23-cv-2488, 2023 WL 6049519,
at *3 (S.D. Tex. Sept. 15, 2023) (granting defendant’s motion to deny plaintiff’s
claim for attorneys’ fees pursuant to § 542A.007(d) because plaintiffs never
provided a presuit notice, which applied to attorneys’ fees incurred starting on
the date defendant filed its answer in state court). Plaintiffs’ failure to provide
pre-suit notice therefore precludes them from recovering attorneys’ fees. Thus,
the Court grants State Farm’s Motion to Limit Plaintiffs’ Claim for Attorneys’
Fees. (ECF No. 2).
C. Motion to Abate
On September 8, 2025, State Farm filed its verified Motion to Abate
Plaintiffs’ claims because Plaintiffs failed to provide pre-suit notice. (ECF No.
6). State Farm argues “this case should be abated until the 60th day following
Plaintiffs providing proper notice to Defendant.” 	(Id. at 2). 	Alternatively,
State Farm “moves to dismiss Plaintiffs’ statutory causes of action for failure
to comply with the pre-suit notice provisions of Section 542A of the Texas
Insurance Code.” (Id. at 4). Plaintiffs have not responded to the motion.
1. Applicable Law
The procedures for filing such a plea are set forth in the Texas Insurance
Code. 	Under subsection 542A.005(a), a person against whom an action is
pending “may file a plea in abatement not later than the 30th day after the
date the person files an original answer in the court in which the action is
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pending if the person,” inter alia, “did not receive a pre-suit notice complying
with Section 542A.003.”14 The notice requirement is to “discourage litigation
and 	encourage 	settlements 	of 	consumer 	complaints,” 	by 	allowing 	the
defendant-insurer a right and opportunity to make a settlement offer. Perrett
v. Allstate Ins. Co., 354 F. Supp. 3d 755, 757 (S.D. Tex. 2018) (citation
modified). 	The court shall abate the action if the court finds that the person
filing the plea in abatement “did not, for any reason, receive a presuit notice
complying with Section 542A.003.” § 542A.005(b). An action is “automatically
abated without a court order beginning on the 11th day after the date a plea in
abatement is filed” if the plea is verified and alleges that the person against
whom the action is pending did not receive a presuit notice and “is not
controverted by an affidavit filed by the claimant before the 11th day after the
date the plea in abatement is filed.” 	§ 542A.005(c) (emphasis added). 	“An
abatement under this section continues until . . . the 60th day after the date a
14 Subsection 542A.005(a) requires a party to file a plea in abatement within 30 days
of filing an original answer. State Farm filed its Original Answer in state court on August 8,
2025, and then after removal, filed the instant motion to abate on September 8. The 30-day
deadline fell on Sunday, September 7. However, under either the Texas or federal rules, the
deadline is extended to the next business day, Monday, September 8. T EX . R. CIV. P. 4; FED .
R. CIV. P. 6(a)(1)(C) (providing that when a deadline falls on a weekend or holiday, it is
extended to the next business day); see McRay v. Peachey, No. 06-cv-2794, 2009 WL 249772,
at *5 (E.D. La. Feb. 2, 2009), aff’d sub nom., 367 F. App’x 566 (5th Cir. 2010) (“Although Erie
commands application of substantive state law to the merits of the underlying case, Fed. R.
Civ. P. 6 is to be applied to determine timeliness of a motion filed in the federal court.
‘Computation of time . . . is a procedural question and thus governed by federal law. Pursuant
to federal law, time calculations in civil actions are governed by Rule 6 . . . .’”).
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notice complying with Section 542A.003 is given.” § 542A.005(e). “If a plaintiff
does not comply with the notice requirement, ‘abatement of the action for the
statutory notice period is more consistent with the purpose of notice than
dismissal.’” Perrett, 354 F. Supp. 3d at 757 (quoting Hines v. Hash, 843 S.W.2d
464, 469 (Tex. 1992)).
2. Analysis
Because Plaintiffs do not dispute they never sent written notice to State
Farm (ECF No. 7 at 4), no such notice is included in the record. 	State Farm
filed a verified motion for abatement on September 8. (ECF No. 6). Plaintiffs
did not challenge the verified plea in abatement within the required 11-day
period; accordingly, the abatement went into effect without a court order as of
September 19, 2025. See § 542A.005(c). As a result, the automatic abatement
remains in effect until Plaintiffs provide proper notice in compliance with
section 542A.003, at which point the abatement will continue until 60 days
thereafter. 	See Perrett, 354 F. Supp. 3d at 758 (granting motion and abating
case until 60 days after defendant received proper written notice).
For the reasons set forth above, the Court grants State Farm’s Motion to
Abate (ECF No. 6), and orders Plaintiffs’ compliance with the statutory pre-
suit notice requirement.
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IV. 	Conclusion
Based on the foregoing, the Court RECOMMENDS Plaintiffs’ Motion to
Remand (ECF No. 7) be DENIED and State Farm’s Motion to Limit Plaintiffs’
Claim for Attorneys’ Fees (ECF No. 2) be GRANTED. The Court FURTHER
GRANTS State Farm’s and Motion to Abate (ECF No. 6).
It is therefore ORDERED that this action is ABATED and will remain
in abatement until sixty (60) days after the date Plaintiffs provide State Farm
with proper pre-suit notice as required under § 542A.003. 	The parties are
further ORDERED to file a joint status report regarding the status of the
completion of this requirement no later than thirty (30) days from the date of
this Order.
The Clerk shall send copies of this Memorandum and Recommendation
to the respective parties who have fourteen days from the receipt thereof to file
written objections thereto pursuant to Federal Rule of Civil Procedure 72(b)
and General Order 2002-13. Failure to file written objections within the time
period mentioned shall bar an aggrieved party from attacking the factual
findings and legal conclusions on appeal.
SIGNED in Houston, Texas on November 19, 2025.
Richard W. Bennett
United States Magistrate Judge
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