By Seidlits, Craddick H.B. No. 1015
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the assessment of attorney's fees, costs, and damages
1-3 for certain frivolous lawsuits and defenses.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Subtitle A, Title 2, Civil Practice and Remedies
1-6 Code, is amended by adding Chapter 10 to read as follows:
1-7 CHAPTER 10. CERTAIN FRIVOLOUS LAWSUITS AND DEFENSES
1-8 Sec. 10.001. DEFINITION. In this chapter, "litigant" means:
1-9 (1) a party that brings or defends an action or part
1-10 of an action; or
1-11 (2) an attorney representing that party.
1-12 Sec. 10.002. APPLICABILITY. This chapter applies to any
1-13 civil action unless other applicable law provides for an assessment
1-14 of attorney's fees, costs, or damages in an amount greater than
1-15 that which would be assessed pursuant to the provisions of this
1-16 chapter.
1-17 Sec. 10.003. ASSESSMENT OF ATTORNEY'S FEES, COSTS, AND
1-18 DAMAGES FOR FRIVOLOUS SUIT OR DEFENSE. (a) Except as provided by
1-19 Section 10.008, on the motion of any party or its own motion, a
1-20 court shall assess reasonable attorney's fees and costs against a
1-21 litigant who brings or defends an action or a part of an action in
1-22 a manner that the court finds:
1-23 (1) is frivolous, groundless in fact or in law, or
1-24 vexatious;
2-1 (2) is for delay or harassment; or
2-2 (3) unnecessarily expands the action because of
2-3 improper conduct by the litigant, including abuse of discovery
2-4 procedures.
2-5 (b) If the court makes the finding required by Subsection
2-6 (a), the court may also award additional damages for inconvenience,
2-7 harassment, and any out-of-pocket expense incurred.
2-8 (c) A party may make a motion under this section at any time
2-9 while proceedings are pending before the trial court.
2-10 (d) Attorney's fees, costs, or damages under this chapter
2-11 may not be awarded for the filing of a general denial under Rule
2-12 92, Texas Rules of Civil Procedure.
2-13 (e) Attorney's fees, costs, or damages under this chapter
2-14 may not be awarded if the court determines that a litigant has
2-15 asserted a claim or defense in good faith to establish a new theory
2-16 of law.
2-17 Sec. 10.004. FACTORS IN ASSESSING ATTORNEY'S FEES, COSTS,
2-18 AND DAMAGES. In determining whether to assess attorney's fees,
2-19 costs, or damages under Section 10.003 against a litigant who
2-20 brings or defends an action and the amount to be assessed, the
2-21 court shall consider:
2-22 (1) any effort by the litigant to determine the
2-23 validity of the action before bringing it;
2-24 (2) any effort by the litigant after the commencement
2-25 of the action to reduce the number of claims or defenses asserted
2-26 or to dismiss claims or defenses found invalid;
2-27 (3) the availability to the litigant of facts to
3-1 determine the validity of the action or defense;
3-2 (4) whether the litigant brought or defended the
3-3 action in bad faith;
3-4 (5) whether facts relating to the validity of the
3-5 action or defense were reasonably in conflict;
3-6 (6) the extent to which the litigant prevailed
3-7 compared with the number of claims in controversy and the amount of
3-8 the judgment;
3-9 (7) whether the litigant asserted a claim or defense
3-10 in a good faith attempt to establish a new theory of law;
3-11 (8) the amount or conditions of any offer of judgment
3-12 or settlement compared to the amount or conditions of any judgment;
3-13 (9) whether the litigant made a reasonable effort to
3-14 determine whether a party sued or joined to the action owed the
3-15 litigant a legally defined duty; and
3-16 (10) any effort by the litigant to reduce the number
3-17 of parties in the action.
3-18 Sec. 10.005. NOTICE AND HEARING; NOTICE REQUIREMENTS. (a)
3-19 A court may not assess attorney's fees, costs, or damages unless
3-20 the court gives the litigant against whom the award of attorney's
3-21 fees, costs, or damages would be made:
3-22 (1) notice;
3-23 (2) a reasonable opportunity to respond; and
3-24 (3) a hearing.
3-25 (b) Notice under this chapter must be given in accordance
3-26 with the Texas Rules of Civil Procedure.
3-27 Sec. 10.006. STATEMENT OF REASONS FOR AWARD. A court that
4-1 assesses attorney's fees, costs, or damages under this chapter
4-2 shall state the reasons for the assessment in writing.
4-3 Sec. 10.007. METHOD OF ASSESSMENT. (a) Attorney's fees,
4-4 costs, or damages assessed under this chapter are in addition to
4-5 any other fees, costs, or damages assessed by the court.
4-6 (b) A court may assess attorney's fees, costs, or damages
4-7 under this chapter directly against a litigant or the court may
4-8 include the fees, costs, or damages as a part of its judgment.
4-9 (c) A court may allocate attorney's fees, costs, or damages
4-10 assessed under this chapter among more than one litigant.
4-11 Sec. 10.008. EXCEPTION FOR PARTY APPEARING WITHOUT ATTORNEY.
4-12 (a) A court may not assess attorney's fees, costs, or damages
4-13 under this chapter against a party who is not represented by an
4-14 attorney unless the court finds that the party clearly knew or
4-15 reasonably should have known that action or part of an action
4-16 brought or defended by the party was frivolous, groundless in fact
4-17 or in law, or vexatious.
4-18 (b) This section does not apply to a party who is an
4-19 attorney.
4-20 Sec. 10.009. APPROVAL OF CERTAIN STIPULATIONS. (a) A court
4-21 may approve a written stipulation filed with the court or an oral
4-22 stipulation in open court agreeing to:
4-23 (1) no award of attorney's fees, costs, or damages as
4-24 provided by this chapter; or
4-25 (2) an award of attorney's fees, costs, or damages in
4-26 a manner different from that provided by this chapter.
4-27 (b) Once filed, the stipulation may not be withdrawn and
5-1 remains effective throughout the pendency of the litigation, unless
5-2 the court determines that the stipulation:
5-3 (1) was obtained by fraud; or
5-4 (2) is void on another ground that would void a
5-5 contract, other than the requirement for consideration necessary
5-6 for the formation of a contract.
5-7 Sec. 10.010. MANDATORY APPELLATE REVIEW. On timely filing
5-8 of an appeal or other submission to a court with appellate
5-9 jurisdiction, including a court of appeals or the supreme court, as
5-10 appropriate, the court with appellate jurisdiction shall review:
5-11 (1) the determination of a court to award or deny
5-12 attorney's fees, costs, or damages under this chapter; or
5-13 (2) the determination of an appellate court to uphold
5-14 or reverse an award or denial of attorney's fees, costs, or damages
5-15 under this chapter.
5-16 SECTION 2. This Act takes effect September 1, 1995, and
5-17 applies only to an action commenced on or after that date. An
5-18 action commenced before the effective date of this Act is governed
5-19 by the law in effect at the time the action was commenced, and that
5-20 law is continued in effect for that purpose.
5-21 SECTION 3. The importance of this legislation and the
5-22 crowded condition of the calendars in both houses create an
5-23 emergency and an imperative public necessity that the
5-24 constitutional rule requiring bills to be read on three several
5-25 days in each house be suspended, and this rule is hereby suspended.