By: Lucio, et al. S.B. No. 31
A BILL TO BE ENTITLED
AN ACT
1-1 relating to the assessment of attorney's fees, costs, and damages
1-2 for certain frivolous lawsuits and defenses.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Subtitle A, Title 2, Civil Practice and Remedies
1-5 Code, is amended by adding Chapter 10 to read as follows:
1-6 CHAPTER 10. CERTAIN FRIVOLOUS LAWSUITS AND DEFENSES
1-7 Sec. 10.001. DEFINITION. In this chapter, "litigant" means:
1-8 (1) a party that brings or defends an action or part
1-9 of an action; or
1-10 (2) an attorney representing that party.
1-11 Sec. 10.002. APPLICABILITY. This chapter applies to any
1-12 civil action unless other applicable law provides for an assessment
1-13 of attorney's fees, costs, or damages in an amount greater than
1-14 that which would be assessed pursuant to the provisions of this
1-15 chapter.
1-16 Sec. 10.003. ASSESSMENT OF ATTORNEY'S FEES, COSTS, AND
1-17 DAMAGES FOR FRIVOLOUS SUIT OR DEFENSE. (a) Except as provided by
1-18 Section 10.008, on the motion of any party or its own motion, a
1-19 court shall assess reasonable attorney's fees and costs against a
1-20 litigant who brings or defends an action or a part of an action in
1-21 a manner that the court finds:
1-22 (1) is frivolous, groundless in fact or in law, or
1-23 vexatious;
1-24 (2) is for delay or harassment; or
2-1 (3) unnecessarily expands the action because of
2-2 improper conduct by the litigant, including abuse of discovery
2-3 procedures.
2-4 (b) If the court makes the finding required by Subsection
2-5 (a), the court may also award additional damages for inconvenience,
2-6 harassment, and any out-of-pocket expense incurred.
2-7 (c) A party may make a motion under this section at any time
2-8 while proceedings are pending before the trial court.
2-9 (d) Attorney's fees, costs, or damages under this chapter
2-10 may not be awarded for the filing of a general denial under Rule
2-11 92, Texas Rules of Civil Procedure.
2-12 (e) Attorney's fees, costs, or damages under this chapter
2-13 may not be awarded if the court determines that a litigant has
2-14 asserted a claim or defense in good faith to establish a new theory
2-15 of law.
2-16 Sec. 10.004. FACTORS IN ASSESSING ATTORNEY'S FEES, COSTS,
2-17 AND DAMAGES. In determining whether to assess attorney's fees,
2-18 costs, or damages under Section 10.003 against a litigant who
2-19 brings or defends an action and the amount to be assessed, the
2-20 court shall consider:
2-21 (1) any effort by the litigant to determine the
2-22 validity of the action before bringing it;
2-23 (2) any effort by the litigant after the commencement
2-24 of the action to reduce the number of claims or defenses asserted
2-25 or to dismiss claims or defenses found invalid;
2-26 (3) the availability to the litigant of facts to
2-27 determine the validity of the action or defense;
3-1 (4) whether the litigant brought or defended the
3-2 action in bad faith;
3-3 (5) whether facts relating to the validity of the
3-4 action or defense were reasonably in conflict;
3-5 (6) the extent to which the litigant prevailed
3-6 compared with the number of claims in controversy and the amount of
3-7 the judgment;
3-8 (7) whether the litigant asserted a claim or defense
3-9 in a good faith attempt to establish a new theory of law;
3-10 (8) the amount or conditions of any offer of judgment
3-11 or settlement compared to the amount or conditions of any judgment;
3-12 (9) whether the litigant made a reasonable effort to
3-13 determine whether a party sued or joined to the action owed the
3-14 litigant a legally defined duty; and
3-15 (10) any effort by the litigant to reduce the number
3-16 of parties in the action.
3-17 Sec. 10.005. NOTICE AND HEARING REQUIREMENTS. (a) A court
3-18 may not assess attorney's fees, costs, or damages unless the court
3-19 gives the litigant against whom the award of attorney's fees,
3-20 costs, or damages would be made:
3-21 (1) notice;
3-22 (2) a reasonable opportunity to respond; and
3-23 (3) a hearing.
3-24 (b) Notice under this chapter must be given in accordance
3-25 with the Texas Rules of Civil Procedure.
3-26 Sec. 10.006. STATEMENT OF REASONS FOR AWARD. A court that
3-27 assesses attorney's fees, costs, or damages under this chapter
4-1 shall state the reasons for the assessment in writing.
4-2 Sec. 10.007. METHOD OF ASSESSMENT. (a) Attorney's fees,
4-3 costs, or damages assessed under this chapter are in addition to
4-4 any other fees, costs, or damages assessed by the court.
4-5 (b) A court may assess attorney's fees, costs, or damages
4-6 under this chapter directly against a litigant or the court may
4-7 include the fees, costs, or damages as a part of its judgment.
4-8 (c) A court may allocate attorney's fees, costs, or damages
4-9 assessed under this chapter among more than one litigant.
4-10 Sec. 10.008. EXCEPTION FOR PARTY APPEARING WITHOUT ATTORNEY.
4-11 (a) A court may not assess attorney's fees, costs, or damages
4-12 under this chapter against a party who is not represented by an
4-13 attorney unless the court finds that the party clearly knew or
4-14 reasonably should have known that action or part of an action
4-15 brought or defended by the party was frivolous, groundless in fact
4-16 or in law, or vexatious.
4-17 (b) This section does not apply to a party who is an
4-18 attorney.
4-19 Sec. 10.009. APPROVAL OF CERTAIN STIPULATIONS. (a) A court
4-20 may approve a written stipulation filed with the court or an oral
4-21 stipulation in open court agreeing to:
4-22 (1) no award of attorney's fees, costs, or damages as
4-23 provided by this chapter; or
4-24 (2) an award of attorney's fees, costs, or damages in
4-25 a manner different from that provided by this chapter.
4-26 (b) Once filed, the stipulation may not be withdrawn and
4-27 remains effective throughout the pendency of the litigation, unless
5-1 the court determines that the stipulation:
5-2 (1) was obtained by fraud; or
5-3 (2) is void on another ground that would void a
5-4 contract, other than the requirement for consideration necessary
5-5 for the formation of a contract.
5-6 Sec. 10.010. MANDATORY APPELLATE REVIEW. On timely filing
5-7 of an appeal or other submission to a court with appellate
5-8 jurisdiction, including a court of appeals or the supreme court, as
5-9 appropriate, the court with appellate jurisdiction shall review:
5-10 (1) the determination of a court to award or deny
5-11 attorney's fees, costs, or damages under this chapter; or
5-12 (2) the determination of an appellate court to uphold
5-13 or reverse an award or denial of attorney's fees, costs, or damages
5-14 under this chapter.
5-15 SECTION 2. This Act takes effect September 1, 1995, and
5-16 applies only to an action commenced on or after that date. An
5-17 action commenced before the effective date of this Act is governed
5-18 by the law in effect at the time the action was commenced, and that
5-19 law is continued in effect for that purpose.
5-20 SECTION 3. The importance of this legislation and the
5-21 crowded condition of the calendars in both houses create an
5-22 emergency and an imperative public necessity that the
5-23 constitutional rule requiring bills to be read on three several
5-24 days in each house be suspended, and this rule is hereby suspended.