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.