By Lucio S.B. No. 31 74R2593 DLF-D A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to the assessment of attorney's fees and costs for certain 1-3 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 and costs in a manner that a greater amount 1-15 would be assessed than that provided by this chapter. 1-16 Sec. 10.003. ASSESSMENT OF ATTORNEY'S FEES AND COSTS FOR 1-17 FRIVOLOUS SUIT OR DEFENSE. (a) Except as provided by Sections 1-18 10.007 and 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) 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) A party may make a motion under this section at any time 2-5 while proceedings are pending before the trial court. 2-6 Sec. 10.004. FACTORS IN ASSESSING ATTORNEY'S FEES AND COSTS. 2-7 In determining whether to assess attorney's fees and costs against 2-8 a litigant who brings or defends an action and the amount to be 2-9 assessed, the court shall consider: 2-10 (1) any effort by the litigant to determine the 2-11 validity of the action before bringing it; 2-12 (2) any effort by the litigant after the commencement 2-13 of the action to reduce the number of claims or defenses asserted 2-14 or to dismiss claims or defenses found invalid; 2-15 (3) the availability to the litigant of facts to 2-16 determine the validity of the action or defense; 2-17 (4) the relative financial position of the parties; 2-18 (5) whether the litigant brought or defended the 2-19 action in bad faith; 2-20 (6) whether facts relating to the validity of the 2-21 action or defense were reasonably in conflict; 2-22 (7) the extent to which the litigant prevailed 2-23 compared with the number of claims in controversy and the amount of 2-24 the judgment; 2-25 (8) whether the litigant asserted a claim or defense 2-26 in a good faith attempt to establish a new theory of law; 2-27 (9) the amount or conditions of any offer of judgment 3-1 or settlement compared to the amount or conditions of any judgment; 3-2 (10) whether the litigant made a reasonable effort to 3-3 determine whether a party sued or joined to the action owed the 3-4 litigant a legally defined duty; and 3-5 (11) any effort by the litigant to reduce the number 3-6 of parties in the action. 3-7 Sec. 10.005. STATEMENT OF REASONS FOR AWARD. A court that 3-8 assesses attorney's fees and costs under this chapter shall state 3-9 the reasons for the assessment in writing. 3-10 Sec. 10.006. METHOD OF ASSESSMENT. (a) Attorney's fees and 3-11 costs assessed under this chapter are in addition to any other fees 3-12 or costs assessed by the court. 3-13 (b) A court may assess attorney's fees and costs under this 3-14 chapter directly against a litigant or the court may include the 3-15 fees and costs as a part of its judgment. 3-16 (c) A court may allocate attorney's fees and costs assessed 3-17 under this chapter among more than one litigant. 3-18 Sec. 10.007. EXCEPTION FOR DISMISSAL OR NONSUIT. A court 3-19 may not assess attorney's fees or costs under this chapter against 3-20 a litigant for bringing an action if the litigant dismisses the 3-21 action, or takes a nonsuit, within a reasonable time after the 3-22 litigant knew or reasonably should have known that it would not 3-23 prevail on the action. 3-24 Sec. 10.008. EXCEPTION FOR PARTY APPEARING WITHOUT ATTORNEY. 3-25 (a) A court may not assess attorney's fees or costs under this 3-26 chapter against a party who is not represented by an attorney 3-27 unless the court finds that the party clearly knew or reasonably 4-1 should have known that action or part of an action brought or 4-2 defended by the party was frivolous, groundless in fact or in law, 4-3 or vexatious. 4-4 (b) This section does not apply to a party who is an 4-5 attorney. 4-6 Sec. 10.009. APPROVAL OF CERTAIN STIPULATIONS. A court may 4-7 approve a written stipulation filed with the court or an oral 4-8 stipulation in open court agreeing to: 4-9 (1) no award of attorney's fees or costs as provided 4-10 by this chapter; or 4-11 (2) an award of attorney's fees or costs in a manner 4-12 different from that provided by this chapter. 4-13 Sec. 10.010. MANDATORY APPELLATE REVIEW. On timely filing 4-14 of an appeal or other submission to a court with appellate 4-15 jurisdiction, including a court of appeals or the supreme court, as 4-16 appropriate, the court with appellate jurisdiction shall review: 4-17 (1) the determination of a court to award or deny 4-18 attorney's fees and costs under this chapter; or 4-19 (2) the determination of an appellate court to uphold 4-20 or reverse an award or denial of attorney's fees and costs under 4-21 this chapter. 4-22 Sec. 10.011. CONFLICT WITH TEXAS RULES OF CIVIL PROCEDURE. 4-23 (a) To the extent that this chapter conflicts with the Texas Rules 4-24 of Civil Procedure, this chapter controls. 4-25 (b) Notwithstanding Section 22.004, Government Code, the 4-26 supreme court may not amend or adopt rules in conflict with this 4-27 chapter. 5-1 (c) The district courts and statutory county courts in a 5-2 county may not adopt local rules in conflict with this chapter. 5-3 SECTION 2. This Act takes effect September 1, 1995, and 5-4 applies only to an action commenced on or after that date. An 5-5 action commenced before the effective date of this Act is governed 5-6 by the law in effect at the time the action was commenced, and that 5-7 law is continued in effect for that purpose. 5-8 SECTION 3. The importance of this legislation and the 5-9 crowded condition of the calendars in both houses create an 5-10 emergency and an imperative public necessity that the 5-11 constitutional rule requiring bills to be read on three several 5-12 days in each house be suspended, and this rule is hereby suspended.