By Janek                                               H.B. No. 744
       74R1858 DLF-D
                                 A BILL TO BE ENTITLED
    1-1                                AN ACT
    1-2  relating to tort reform.
    1-3        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-4                  ARTICLE 1.  STATUTES OF LIMITATION
    1-5        SECTION 1.01.  Section 16.001, Civil Practice and Remedies
    1-6  Code, is amended by adding Subsection (e) to read as follows:
    1-7        (e)  This section does not apply to a suit governed by
    1-8  Section 16.0035.
    1-9        SECTION 1.02.  Section 16.003, Civil Practice and Remedies
   1-10  Code, is amended by adding Subsection (c) to read as follows:
   1-11        (c)  This section does not apply to a suit governed by
   1-12  Section 16.0035.
   1-13        SECTION 1.03.  Subchapter A, Chapter 16, Civil Practice and
   1-14  Remedies Code, is amended by adding Section 16.0035 to read as
   1-15  follows:
   1-16        Sec. 16.0035.  CERTAIN SUITS BROUGHT BY OR ON BEHALF OF
   1-17  MINORS.  (a)  A suit for personal injury or injury resulting in
   1-18  death brought by or on behalf of a person younger than 18 years of
   1-19  age must be brought not later than the later of:
   1-20              (1)  the person's 10th birthday; or
   1-21              (2)  two years after the day the cause of action
   1-22  accrues.
   1-23        (b)  For a cause of action for injury resulting in death, the
   1-24  cause of action accrues on the death of the injured person.
    2-1                      ARTICLE 2.  ATTORNEY'S FEES
    2-2        SECTION 2.01.  Chapter 38, Civil Practice and Remedies Code,
    2-3  is amended by amending Sections 38.001, 38.002, and 38.003, and
    2-4  adding Sections 38.0015 and 38.0035 to read as follows:
    2-5        Sec. 38.001.  DEFINITIONS.  In this chapter:
    2-6              (1)  "Claimant" means a party, including a plaintiff,
    2-7  counterclaimant, cross-claimant, or third-party claimant, seeking
    2-8  recovery of damages or other relief.
    2-9              (2)  "Respondent" means a party, including a
   2-10  counterdefendant, cross-defendant, or third-party defendant, from
   2-11  whom a claimant seeks damages or other relief.
   2-12        Sec. 38.0015.  RECOVERY OF ATTORNEY'S FEES.  (a)  A claimant
   2-13  <person> may recover reasonable attorney's fees from a respondent
   2-14  who is an individual or corporation, in addition to the amount of a
   2-15  valid claim and costs, if final judgment is rendered in favor of
   2-16  the claimant and the claim is for:
   2-17              (1)  rendered services;
   2-18              (2)  performed labor;
   2-19              (3)  furnished material;
   2-20              (4)  freight or express overcharges;
   2-21              (5)  lost or damaged freight or express;
   2-22              (6)  killed or injured stock;
   2-23              (7)  a sworn account; or
   2-24              (8)  an oral or written contract.
   2-25        (b)  A respondent may recover reasonable attorney's fees from
   2-26  a claimant if final judgment is rendered in favor of the respondent
   2-27  and the claim alleged that the claimant was injured by a negligent
    3-1  act or omission of the respondent.
    3-2        (c)  Subsection (b) does not apply to the extent another law
    3-3  authorizes the recovery of attorney's fees by the respondent for a
    3-4  claim for which final judgment is rendered against a claimant
    3-5  unless that law references this chapter.
    3-6        Sec. 38.002.  PROCEDURE FOR RECOVERY OF ATTORNEY'S FEES.  (a)
    3-7  For a claimant to <To> recover attorney's fees under this chapter:
    3-8              (1)  the claimant must be represented by an attorney;
    3-9              (2)  the claimant must present the claim to the
   3-10  opposing party or to a duly authorized agent of the opposing party;
   3-11  and
   3-12              (3)  payment for the just amount owed must not have
   3-13  been tendered before the expiration of the 30th day after the claim
   3-14  is presented.
   3-15        (b)  For a respondent to recover attorney's fees under this
   3-16  chapter, the respondent must be represented by an attorney.
   3-17        Sec. 38.003.  PRESUMPTION.  It is presumed that the usual and
   3-18  customary attorney's fees for a claim of the type described in
   3-19  Section 38.0015 <38.001> are reasonable.  The presumption may be
   3-20  rebutted.
   3-21        Sec. 38.0035.  RECOVERY OF ATTORNEY'S FEES FROM MULTIPLE
   3-22  RESPONDENTS IN CERTAIN ACTIONS.  (a)  This section applies only to
   3-23  a claim for which the respondent is found:
   3-24              (1)  liable for attorney's fees under any law of this
   3-25  state; and
   3-26              (2)  to have a percentage of responsibility, as
   3-27  determined under Chapter 33, of less than 100 percent.
    4-1        (b)  The trier of fact may reduce the attorney's fees awarded
    4-2  against a respondent to the percentage of the fees that is equal to
    4-3  the respondent's percentage of responsibility.
    4-4                     ARTICLE 3.  EXEMPLARY DAMAGES
    4-5        SECTION 3.01.  Section 41.003(a), Civil Practice and Remedies
    4-6  Code, is amended to read as follows:
    4-7        (a)  Exemplary damages may be awarded only if the claimant
    4-8  proves that the personal injury, property damage, death, or other
    4-9  harm with respect to which the claimant seeks the award <recovery>
   4-10  of exemplary damages results from:
   4-11              (1)  fraud;
   4-12              (2)  malice; or
   4-13              (3)  gross negligence.
   4-14        SECTION 3.02.  Chapter 41, Civil Practice and Remedies Code,
   4-15  is amended by adding Section 41.0035 to read as follows:
   4-16        Sec. 41.0035.  BIFURCATION OF TRIAL.  (a)  A court shall
   4-17  conduct, in two stages as provided by this section, the trial of a
   4-18  claim for both:
   4-19              (1)  damages for the claimant's personal injury,
   4-20  property damage, death, or other harm; and
   4-21              (2)  exemplary damages arising from the personal
   4-22  injury, property damage, death, or other harm.
   4-23        (b)  The purpose of the first stage of the trial is to allow
   4-24  the trier of fact to determine the claimant's damages for the
   4-25  claimant's personal injury, property damage, death, or other harm.
   4-26        (c)  The court may admit in the first stage of the trial only
   4-27  evidence that is relevant to proof of the claim for personal
    5-1  injury, property damage, death, or other harm.  The court may not
    5-2  admit evidence relevant only to the financial condition of the
    5-3  defendant.
    5-4        (d)  If the trier of fact determines that the claimant is not
    5-5  entitled to an award of damages for the claimant's personal injury,
    5-6  property damage, death, or other harm, the court may not proceed to
    5-7  the second stage of the trial, and the claimant is not entitled to
    5-8  recover exemplary damages.
    5-9        (e)  If the trier of fact determines that the claimant is
   5-10  entitled to an award of damages for the claimant's personal injury,
   5-11  property damage, death, or other harm, the court shall render the
   5-12  award on behalf of the claimant and shall proceed to the second
   5-13  stage of the trial.
   5-14        (f)  The purpose of the second stage of the trial is to allow
   5-15  the trier of fact to determine the exemplary damages relating to
   5-16  the claimant's personal injury, property damage, death, or other
   5-17  harm that the claimant is entitled to recover.
   5-18        (g)  The court may admit in the second stage of the trial
   5-19  only evidence that is relevant to proof of the claim for exemplary
   5-20  damages.
   5-21        SECTION 3.03.  Section 41.004(b), Civil Practice and Remedies
   5-22  Code, is amended to read as follows:
   5-23        (b)  Exemplary damages may not be awarded if the <to a>
   5-24  claimant <who> elects to have his recovery multiplied under another
   5-25  statute.
   5-26        SECTION 3.04.  Sections 41.005 and 41.007, Civil Practice and
   5-27  Remedies Code, are amended to read as follows:
    6-1        Sec. 41.005.  MULTIPLE DEFENDANTS <AWARD SPECIFIC TO
    6-2  DEFENDANT>.  In any action in which there are two or more
    6-3  defendants against whom<,> an award of exemplary damages is made,
    6-4  the trier of fact shall assign a percentage of responsibility for
    6-5  the exemplary damages to each of the defendants.  Each <must be
    6-6  specific as to a defendant, and each> defendant is liable only for
    6-7  the percentage of the exemplary damages awarded by the trier of
    6-8  fact that is equal to that defendant's percentage of responsibility
    6-9  for the exemplary damages <amount of the award made against that
   6-10  defendant>.
   6-11        Sec. 41.007.  LIMITATION ON AMOUNT OF RECOVERY.  Except as
   6-12  provided by Section 41.008, exemplary damages awarded against a
   6-13  defendant may not exceed two <four> times the amount of actual
   6-14  damages or $200,000, whichever is greater.
   6-15        SECTION 3.05.  Chapter 41, Civil Practice and Remedies Code,
   6-16  is amended by adding Section 41.010 to read as follows:
   6-17        Sec. 41.010.  PAYMENT OF AWARD TO GENERAL REVENUE FUND; USE
   6-18  OF MONEY.  (a)  Exemplary damages awarded against a defendant under
   6-19  this chapter shall be paid to the comptroller, who shall credit the
   6-20  amount to the general revenue fund.
   6-21        (b)  The comptroller shall deposit to the credit of a
   6-22  separate account exemplary damages collected under this section if
   6-23  the damages were awarded:
   6-24              (1)  against a person who holds a license or
   6-25  certificate issued by this state; and
   6-26              (2)  as a result of conduct arising in the course and
   6-27  scope of the person's activities under the license or certificate.
    7-1        (c)  The legislature may appropriate money in the separate
    7-2  account only to the agency of the state that issued the license or
    7-3  certificate to the person who paid the damages.
    7-4        (d)  The comptroller may combine money that the legislature
    7-5  may appropriate to a single agency under Subsection (c) in a single
    7-6  account.
    7-7      ARTICLE 4.  ACTIONS UNDER THE DECEPTIVE TRADE PRACTICES ACT
    7-8        SECTION 4.01.  Section 17.50, Business & Commerce Code, is
    7-9  amended by amending Subsections (b) and (d) and adding Subsection
   7-10  (e) to read as follows:
   7-11        (b)  In a suit filed under this section, each consumer who
   7-12  prevails may obtain:
   7-13              (1)  the amount of actual damages found by the trier of
   7-14  fact.  In addition the court shall award exemplary damages in an
   7-15  amount equal to two times that portion of the actual damages that
   7-16  does not exceed $1,000.  If the trier of fact finds that the
   7-17  conduct of the defendant was committed knowingly, the trier of fact
   7-18  may also award exemplary damages in an amount equal to not more
   7-19  than two <three> times the amount of actual damages in excess of
   7-20  $1,000, provided that:
   7-21                    (A)  the provisions of Chapters 33 and 41, Civil
   7-22  Practice and Remedies Code, shall govern the determination of the
   7-23  consumer's right under this subchapter to recover actual and other
   7-24  damages, including exemplary damages, and the amount of those
   7-25  damages that may be recovered by the consumer under this
   7-26  subchapter, in an action seeking damages for (i) death; (ii)
   7-27  personal injury other than mental anguish or distress associated
    8-1  with a violation of this subchapter that does not involve death or
    8-2  bodily injury; or (iii) damage to property other than the goods
    8-3  acquired by the purchase or lease that is involved in the
    8-4  consumer's action or claim if that damage arises out of an
    8-5  occurrence that involves death or bodily injury; and
    8-6                    (B)  only in an action under this subchapter that
    8-7  is subject to Paragraph (A) of this subdivision, the consumer's
    8-8  right to recover damages shall be subject to any defense or
    8-9  defensive matter that could be considered by the trier of fact in
   8-10  an action subject to Chapter 33, Civil Practice and Remedies Code,
   8-11  in determining the percentage of responsibility attributable to the
   8-12  consumer claimant under that chapter;
   8-13              (2)  an order enjoining such acts or failure to act;
   8-14              (3)  orders necessary to restore to any party to the
   8-15  suit any money or property, real or personal, which may have been
   8-16  acquired in violation of this subchapter; and
   8-17              (4)  any other relief which the court deems proper,
   8-18  including the appointment of a receiver or the revocation of a
   8-19  license or certificate authorizing a person to engage in business
   8-20  in this state if the judgment has not been satisfied within three
   8-21  months of the date of the final judgment.  The court may not revoke
   8-22  or suspend a license to do business in this state or appoint a
   8-23  receiver to take over the affairs of a person who has failed to
   8-24  satisfy a judgment if the person is a licensee of or regulated by a
   8-25  state agency which has statutory authority to revoke or suspend a
   8-26  license or to appoint a receiver or trustee.  Costs and fees of
   8-27  such receivership or other relief shall be assessed against the
    9-1  defendant.
    9-2        (d)  Each consumer who prevails shall be awarded court costs
    9-3  and reasonable and necessary attorneys' fees. An award of
    9-4  attorneys' fees under this subsection is subject to Section
    9-5  38.0035, Civil Practice and Remedies Code.
    9-6        (e)  In an action described by Subparagraph (b)(1)(A), if
    9-7  final judgment is rendered in favor of the defendant, the court
    9-8  shall award to the defendant reasonable and necessary attorney's
    9-9  fees as provided by Chapter 38, Civil Practice and Remedies Code.
   9-10         ARTICLE 5.  EFFECTIVE DATE; TRANSITION AND EMERGENCY
   9-11        SECTION 5.01.  (a)  This Act takes effect September 1, 1995.
   9-12        (b)  Except as provided by Section 5.02 of this Act, this Act
   9-13  applies only to a cause of action that accrues on or after the
   9-14  effective date of this Act.  An action that accrued before the
   9-15  effective date of this Act is governed by the law applicable to the
   9-16  action immediately before the effective date of this Act, and that
   9-17  law is continued in effect for that purpose.
   9-18        SECTION 5.02.  Notwithstanding Section 16.0035, Civil
   9-19  Practice and Remedies Code, as added by this Act, a suit for
   9-20  personal injury or injury resulting in death brought by or on
   9-21  behalf of a person who is younger than 18 years of age on the
   9-22  effective date of this Act may be brought not later than two years
   9-23  after the effective date of this Act.
   9-24        SECTION 5.03.  The importance of this legislation and the
   9-25  crowded condition of the calendars in both houses create an
   9-26  emergency and an imperative public necessity that the
   9-27  constitutional rule requiring bills to be read on three several
   10-1  days in each house be suspended, and this rule is hereby suspended.