75R9631 PB-F By Uher H.B. No. 2160 Substitute the following for H.B. No. 2160: By Bosse C.S.H.B. No. 2160 A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to the abuse of judicial process by an insurance premium 1-3 finance company. 1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-5 SECTION 1. Chapter 24, Insurance Code, is amended by adding 1-6 Article 24.23 to read as follows: 1-7 Art. 24.23. ABUSE OF JUDICIAL PROCESS 1-8 Sec. 1. LACK OF VENUE. (a) A premium finance company 1-9 violates this code if the company brings an action against a person 1-10 in a court of this state without a reasonable basis for venue in 1-11 that court. A violation under this subsection is subject to 1-12 sanctions under Article 1.10(7) of this code. 1-13 (b) In addition to the sanctions imposed under Subsection 1-14 (a) of this section, the premium finance company is liable to the 1-15 person against whom the action is brought for: 1-16 (1) all costs associated with defending the action, 1-17 including: 1-18 (A) the value of the time of the person 1-19 defending the action; 1-20 (B) attorney's fees; and 1-21 (C) other related costs incurred by the person 1-22 defending the action; and 1-23 (2) exemplary damages equal to three times the amount 1-24 found as costs under Subdivision (1) of this subsection. 2-1 (c) Chapter 41, Civil Practice and Remedies Code, does not 2-2 apply to exemplary damages awarded under Subsection (b) of this 2-3 section. 2-4 Sec. 2. NO CREDIBLE EVIDENCE. (a) A premium finance 2-5 company violates this code if the company brings an action against 2-6 a person in a court of this state in which the court determines 2-7 that: 2-8 (1) there is no credible evidence to support the truth 2-9 of the operative facts that are legally required to support the 2-10 alleged liability; and 2-11 (2) the action is not warranted by a good faith 2-12 argument for the extension, modification, or reversal of existing 2-13 law. 2-14 (b) A violation under Subsection (a) of this section is 2-15 subject to sanctions under Article 1.10(7) of this code. 2-16 (c) In addition to the sanctions imposed under Subsection 2-17 (b) of this section, the premium finance company is liable to the 2-18 person against whom the action is brought for: 2-19 (1) all costs associated with defending the action, 2-20 including: 2-21 (A) the value of the time of the person 2-22 defending the action; 2-23 (B) attorney's fees; and 2-24 (C) other related costs incurred by the person 2-25 defending the action; and 2-26 (2) exemplary damages equal to the greater of: 2-27 (A) three times the amount found as costs under 3-1 Subdivision (1) of this subsection; or 3-2 (B) the amount for which the premium finance 3-3 company sued. 3-4 (d) Chapter 41, Civil Practice and Remedies Code, does not 3-5 apply to exemplary damages awarded under Subsection (c) of this 3-6 section. 3-7 SECTION 2. (a) A premium finance company that brought an 3-8 action before and that is pending on the effective date of this Act 3-9 that violates Section 1, Article 24.23, Insurance Code, as added 3-10 by this Act, shall dismiss that action not later than the 10th day 3-11 after the effective date of this Act. 3-12 (b) A premium finance company violates the Insurance Code if 3-13 the company violates Subsection (a) of this section. A violation 3-14 under this subsection is subject to sanctions under Article 3-15 1.10(7), Insurance Code. 3-16 (c) In addition to the sanctions imposed under Subsection 3-17 (b) of this section, a premium finance company that violates 3-18 Subsection (a) of this section is subject to Section 1(b), Article 3-19 24.23, Insurance Code, as added by this Act. 3-20 SECTION 3. The importance of this legislation and the 3-21 crowded condition of the calendars in both houses create an 3-22 emergency and an imperative public necessity that the 3-23 constitutional rule requiring bills to be read on three several 3-24 days in each house be suspended, and this rule is hereby suspended, 3-25 and that this Act take effect and be in force from and after its 3-26 passage, and it is so enacted.