By Corte H.B. No. 24
75R655 DLF-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to computation of damages and attorney's fees awarded in
1-3 certain civil actions.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Subtitle C, Title 2, Civil Practice and Remedies
1-6 Code, is amended by adding Chapter 42 to read as follows:
1-7 CHAPTER 42. EVIDENCE OF COLLATERAL BENEFITS ADMISSIBLE AT TRIAL
1-8 Sec. 42.001. DEFINITIONS. In this chapter:
1-9 (1) "Claimant" means a party seeking to recover
1-10 damages, including a plaintiff, counterclaimant, cross-claimant, or
1-11 third-party plaintiff. In an action in which a party seeks
1-12 recovery of damages for injury to or death of another person, the
1-13 term includes both that other person and the person seeking
1-14 recovery of damages.
1-15 (2) "Collateral benefits" means an amount that is:
1-16 (A) paid as a result of medical expenses or
1-17 disability resulting from personal injury or death; and
1-18 (B) paid under:
1-19 (i) a state or federal program providing
1-20 benefits for medical expenses or disability;
1-21 (ii) a health benefit plan, or disability
1-22 or accident insurance;
1-23 (iii) an insurance policy that provides
1-24 coverage for medical expenses as a supplement to liability
2-1 insurance;
2-2 (iv) an employer program that provides
2-3 benefits for disability; or
2-4 (v) workers' compensation benefits.
2-5 (3) "Health benefit plan" means:
2-6 (A) an individual, group, blanket, or franchise
2-7 insurance policy, insurance agreement, or group hospital service
2-8 contract that provides benefits for medical or surgical expense
2-9 incurred as a result of an accident or sickness; or
2-10 (B) an evidence of coverage or group subscriber
2-11 contract issued by a health maintenance organization.
2-12 Sec. 42.002. APPLICABILITY. This chapter applies only to an
2-13 action in which a claimant seeks damages for medical expenses or
2-14 disability arising out of personal injury or death.
2-15 Sec. 42.003. EVIDENCE OF COLLATERAL BENEFITS ADMISSIBLE.
2-16 For purposes of determining the amount of damages sustained by a
2-17 claimant, a party may introduce evidence of collateral benefits
2-18 paid to or for the benefit of a claimant, or reasonably expected to
2-19 be paid to the claimant.
2-20 Sec. 42.004. REDUCTION IN AWARD. The trier of fact shall
2-21 reduce the amount of damages for medical expenses or disability
2-22 awarded to a claimant by the amount of collateral benefits paid to
2-23 or for the benefit of the claimant, or reasonably expected to be
2-24 paid to the claimant, for the medical expenses or disability.
2-25 SECTION 2. Section 2, Article 1.05, Title 79, Revised
2-26 Statutes (Article 5069-1.05, Vernon's Texas Civil Statutes), is
2-27 amended to read as follows:
3-1 Sec. 2. Except as provided in Section 1 of this article, all
3-2 judgments, together with taxable court costs, of the courts of this
3-3 state earn interest, compounded annually, at the rate published by
3-4 the consumer credit commissioner in the Texas Register. The
3-5 consumer credit commissioner shall compute on the 15th day of each
3-6 month the judgment interest rate by taking the auction rate quoted
3-7 on a discount basis for 52-week treasury bills issued by the United
3-8 States government as published by the Federal Reserve Board on the
3-9 most recent date preceding the date of computation. The interest
3-10 rate so computed shall be the judgment rate[, except that if the
3-11 rate so computed is less than 10 percent, the judgment interest
3-12 rate shall be 10 percent, and if it be more than 20 percent, the
3-13 judgment interest rate shall be 20 percent]. The rate established
3-14 on that computation date shall be the interest rate on judgments
3-15 for the next calendar month.
3-16 SECTION 3. Section 6, Article 1.05, Title 79, Revised
3-17 Statutes (Article 5069-1.05, Vernon's Texas Civil Statutes), is
3-18 amended by amending Subsection (a) and adding Subsections (h) and
3-19 (i) to read as follows:
3-20 (a) Judgments in wrongful death, personal injury, and
3-21 property damage cases must include prejudgment interest on past
3-22 economic damages. Except as provided by Subsections (b), (c), and
3-23 (d) of this section, prejudgment interest accrues on the amount of
3-24 the past economic damages contained in the judgment during the
3-25 period beginning on the 180th day after the date the defendant
3-26 receives written notice of a claim or on the day the suit is
3-27 filed, whichever occurs first, and ending on the day preceding the
4-1 date judgment is rendered.
4-2 (h) A court may award prejudgment interest under this
4-3 section on past economic damages only and may not award prejudgment
4-4 interest on future damages.
4-5 (i) In this section, "economic damages" means compensatory
4-6 damages for pecuniary loss. The term does not include exemplary
4-7 damages or damages for physical pain and mental anguish, loss of
4-8 consortium, disfigurement, physical impairment, or loss of
4-9 companionship and society.
4-10 SECTION 4. Section 33.012(b), Civil Practice and Remedies
4-11 Code, is amended to read as follows:
4-12 (b) If the claimant has settled with one or more persons,
4-13 the court shall further reduce the amount of damages to be
4-14 recovered by the claimant with respect to a cause of action by a
4-15 credit equal to one of the following, as elected in accordance with
4-16 Section 33.014:
4-17 (1) the sum of the dollar amounts of all settlements;
4-18 or
4-19 (2) a percentage equal to the sum of the settling
4-20 persons' percentages of responsibility [a dollar amount equal to
4-21 the sum of the following percentages of damages found by the trier
4-22 of fact:]
4-23 [(A) 5 percent of those damages up to $200,000;]
4-24 [(B) 10 percent of those damages from $200,001
4-25 to $400,000;]
4-26 [(C) 15 percent of those damages from $400,001
4-27 to $500,000; and]
5-1 [(D) 20 percent of those damages greater than
5-2 $500,000].
5-3 SECTION 5. Chapter 38, Civil Practice and Remedies Code, is
5-4 amended to read as follows:
5-5 CHAPTER 38. ATTORNEY'S FEES
5-6 SUBCHAPTER A. DETERMINATION OF AMOUNT OF ATTORNEY'S FEES
5-7 Sec. 38.001. APPLICABILITY. This subchapter applies in any
5-8 action in which attorney's fees may be awarded under law.
5-9 Sec. 38.002. AMOUNT OF ATTORNEY'S FEES. (a)
5-10 Notwithstanding any other law, in determining the amount of
5-11 attorney's fees to be awarded under law, a court shall:
5-12 (1) assign an hourly rate to be paid to the attorney;
5-13 and
5-14 (2) compute the fees to be paid to the attorney on the
5-15 basis of the hourly rate multiplied by the number of hours worked
5-16 by the attorney.
5-17 (b) In assigning the attorney's hourly rate, the court shall
5-18 consider:
5-19 (1) the novelty and difficulty of the questions
5-20 involved;
5-21 (2) the skill required to perform the legal services
5-22 properly;
5-23 (3) the fee customarily charged in the locality for
5-24 similar legal services; and
5-25 (4) the experience and ability of the attorney
5-26 performing the services.
5-27 Sec. 38.003. EFFECT OF CONTRACT. This section applies
6-1 without regard to the contract between the attorney and the
6-2 attorney's client. If the amount of attorney's fees awarded in
6-3 accordance with this subchapter is less than the amount the client
6-4 owes the attorney under the contract, the client is obligated to
6-5 pay the remaining amount according to the contract.
6-6 (Sections 38.004-38.020 reserved for expansion
6-7 SUBCHAPTER B. RECOVERY OF ATTORNEY'S FEES IN CERTAIN CASES
6-8 Sec. 38.021 [38.001]. RECOVERY OF ATTORNEY'S FEES. A person
6-9 may recover reasonable attorney's fees from an individual or
6-10 corporation, in addition to the amount of a valid claim and costs,
6-11 if the claim is for:
6-12 (1) rendered services;
6-13 (2) performed labor;
6-14 (3) furnished material;
6-15 (4) freight or express overcharges;
6-16 (5) lost or damaged freight or express;
6-17 (6) killed or injured stock;
6-18 (7) a sworn account; or
6-19 (8) an oral or written contract.
6-20 Sec. 38.022 [38.002]. PROCEDURE FOR RECOVERY OF ATTORNEY'S
6-21 FEES. To recover attorney's fees under this subchapter [chapter]:
6-22 (1) the claimant must be represented by an attorney;
6-23 (2) the claimant must present the claim to the
6-24 opposing party or to a duly authorized agent of the opposing party;
6-25 and
6-26 (3) payment for the just amount owed must not have
6-27 been tendered before the expiration of the 30th day after the claim
7-1 is presented.
7-2 Sec. 38.023 [38.003]. PRESUMPTION. Subject to Subchapter A,
7-3 it [It] is presumed that the usual and customary attorney's fees
7-4 for a claim of the type described in Section 38.021 [38.001] are
7-5 reasonable. The presumption may be rebutted.
7-6 Sec. 38.024 [38.004]. JUDICIAL NOTICE. The court may take
7-7 judicial notice of the usual and customary attorney's fees and of
7-8 the contents of the case file without receiving further evidence
7-9 in:
7-10 (1) a proceeding before the court; or
7-11 (2) a jury case in which the amount of attorney's fees
7-12 is submitted to the court by agreement.
7-13 Sec. 38.025 [38.005]. LIBERAL CONSTRUCTION. This subchapter
7-14 [chapter] shall be liberally construed to promote its underlying
7-15 purposes.
7-16 Sec. 38.026 [38.006]. EXCEPTIONS. This subchapter [chapter]
7-17 does not apply to a contract issued by an insurer that is subject
7-18 to the provisions of:
7-19 (1) Article 3.62, Insurance Code;
7-20 (2) Section 1, Chapter 387, Acts of the 55th
7-21 Legislature, Regular Session, 1957 (Article 3.62-1, Vernon's Texas
7-22 Insurance Code);
7-23 (3) Chapter 9, Insurance Code;
7-24 (4) Article 21.21, Insurance Code; or
7-25 (5) the Unfair Claim Settlement Practices Act (Article
7-26 21.21-2, Insurance Code).
7-27 SECTION 6. This Act takes effect September 1, 1997, and
8-1 applies only to a cause of action that accrues on or after that
8-2 date. A cause of action that accrues before the effective date of
8-3 this Act is governed by the law applicable to the cause of action
8-4 immediately before the effective date of this Act, and that law is
8-5 continued in effect for that purpose.
8-6 SECTION 7. The importance of this legislation and the
8-7 crowded condition of the calendars in both houses create an
8-8 emergency and an imperative public necessity that the
8-9 constitutional rule requiring bills to be read on three several
8-10 days in each house be suspended, and this rule is hereby suspended.