82R13370 CAE-F

By: Creighton H.B. No. 274

A BILL TO BE ENTITLED

AN ACT

relating to attorney's fees, early dismissal, expedited trials, and the reform of certain remedies and procedures in civil actions.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Chapter 38, Civil Practice and Remedies Code, is amended by designating Sections 38.001 through 38.006 as Subchapter A, Chapter 38, Civil Practice and Remedies Code, and adding a heading to Subchapter A to read as follows:

SUBCHAPTER A. RECOVERY OF ATTORNEY'S FEES BY PREVAILING PARTY

SECTION 2. Sections 38.001, 38.002, and 38.006, Civil Practice and Remedies Code, are amended to read as follows:

Sec. 38.001. RECOVERY OF ATTORNEY'S FEES. The prevailing party with respect to a claim [A person] may recover reasonable attorney's fees from an individual, [or] corporation, or other legal entity [in addition to the amount of a valid claim and costs,] if the claim is for:

(1) rendered services;

(2) performed labor;

(3) furnished material;

(4) freight or express overcharges;

(5) lost or damaged freight or express;

(6) killed or injured stock;

(7) a sworn account; or

(8) an oral or written contract.

Sec. 38.002. PROCEDURE FOR RECOVERY OF ATTORNEY'S FEES. Attorney's [To recover attorney's] fees may be recovered under this subchapter if [chapter]:

(1) the person seeking to recover attorney's fees is [claimant must be] represented by an attorney;

(2) the claimant presents [must present] the claim to the opposing party or to a duly authorized agent of the opposing party; and

(3) payment for the just amount owed is [must] not [have been] tendered before the expiration of the 30th day after the claim is presented.

Sec. 38.006. EXCEPTIONS. This subchapter [chapter] does not apply to a contract issued by an insurer that is subject to the provisions of:

(1) Title 11, Insurance Code;

(2) Chapter 541, Insurance Code;

(3) the Unfair Claim Settlement Practices Act (Subchapter A, Chapter 542, Insurance Code); or

(4) Subchapter B, Chapter 542, Insurance Code.

SECTION 3. Chapter 38, Civil Practice and Remedies Code, is amended by adding Subchapter B to read as follows:

SUBCHAPTER B. ELECTION REGARDING LITIGATION COSTS

Sec. 38.011. DEFINITIONS. In this subchapter:

(1) "Abusive civil action" means a civil action that a reasonable person would conclude is an abuse of the civil justice process.

(2) "Claim" means a request for monetary damages filed in a civil action, other than a request for reimbursement of attorney's fees or other costs of litigation in a civil action, if the request is for:

(A) damages for alleged personal injury, property damage, breach of contract, or death, regardless of the legal theories or statutes on the basis of which recovery is sought; or

(B) damages other than for alleged personal injury, property damage, or death allegedly resulting from any tortious conduct, regardless of the legal theories or statutes on the basis of which recovery is sought.

(3) "Claimant" means a party who has asserted a claim, including a plaintiff, counterclaimant, cross-claimant, third-party plaintiff, or intervenor.

(4) "Defendant" means a party against whom a claim has been made, including a defendant, counterdefendant, cross-defendant, or third-party defendant.

(5) "Financial interest" means a financial interest held by an attorney under an agreement between the attorney and a claimant or defendant in which the amount or the payment of the fee for the attorney's legal services is contingent wholly or partly on the outcome of the civil action.

Sec. 38.012. APPLICABILITY. (a) This subchapter does not apply to:

(1) a class action;

(2) a shareholder's derivative action;

(3) an action brought under the Family Code;

(4) an action to collect workers' compensation benefits under Subtitle A, Title 5, Labor Code; or

(5) an action filed in a justice of the peace court.

(b) This subchapter does not apply to a civil action in which the amount in controversy, including all requests for damages, reimbursement of attorney's fees, and litigation costs, is less than $100,000 and the claimant has made an election to proceed under Chapter 29A.

Sec. 38.013. ELECTION. (a) A defendant may elect to apply the provisions of this subchapter to any civil action in which a claimant has asserted a claim against the defendant.

(b) An election under this section must identify each claimant against whom the election is made. An election may not be made before the 60th day after the date the defendant filed an answer to the claimant's civil action or within 60 days of the date of trial. The election must be:

(1) in writing;

(2) signed by the attorneys of record of the defendant;

(3) filed with the papers as part of the record; and

(4) served on all claimants against whom the election is made.

(c) A deadline under this subchapter may be amended or modified by agreement of the parties or by order of the court in a discovery control plan as provided by Rule 190, Texas Rules of Civil Procedure.

Sec. 38.014. REVOCATION OF ELECTION. (a) An election made under Section 38.013 may be revoked wholly or partly by agreement of the parties.

(b) A revocation under this section must identify the claimants and defendants for whom the revocation is made. A revocation may be made at any time before an award is made under Section 38.016 based on the election. The revocation must be:

(1) in writing;

(2) signed by the attorneys of record of all parties to whom the revocation applies; and

(3) filed as part of the record.

Sec. 38.015. DISMISSAL OR NONSUIT OF ACTION. If a claimant against whom an election is made under Section 38.013 nonsuits or voluntarily dismisses with prejudice the civil action for which the election is made not later than the 15th day after the date the claimant was served with the election, the election does not apply to the nonsuited or dismissed civil action.

Sec. 38.016. AWARD OF LITIGATION COSTS. (a) If an election is made under this subchapter, the prevailing party may recover the prevailing party's litigation costs.

(b) The determination of which party is the prevailing party is a question of law for the court.

(c) Litigation costs under this subchapter are costs directly related to the civil action between the claimant and the defendant. Litigation costs include:

(1) reasonable and necessary attorney's fees;

(2) reasonable and necessary travel expenses;

(3) reasonable fees for not more than two testifying expert witnesses; and

(4) court costs.

(d) A fee agreement that results in a fee that is fixed or contingent on results obtained or uncertainty of collection before the legal services have been rendered may not be considered in the determination of the amount of reasonable and necessary attorney's fees.

Sec. 38.017. LIABILITY OF ATTORNEY. (a) This section applies to a civil action if:

(1) a party is entitled to recover litigation costs under Section 38.016;

(2) the election under Section 38.013 states that the party making the election will seek litigation costs under this section; and

(3) an attorney of record for the party against whom litigation costs are recoverable has a financial interest in the civil action.

(b) If the trier of fact determines that a civil action is an abusive civil action, an attorney of record for the party against whom litigation costs are recoverable is liable to the prevailing party, jointly and severally, for the amount of the litigation costs awarded.

(c) The determination of whether an attorney has a financial interest in a civil action is a question of law for the court. An attorney is not an attorney of record for the purposes of this section if the attorney withdraws as attorney of record and relinquishes any financial interest in the civil action more than 60 days before trial.

(d) The determination of whether a civil action is an abusive civil action is a question of fact. In a case in which the determination of whether a civil action is an abusive civil action is submitted to a jury, the charge to the jury must ask whether the civil action prosecuted by the claimant was an abusive civil action. The following instruction must be included in the charge: "You are instructed that an abusive civil action is a civil action that a reasonable person would conclude is an abuse of the civil justice process."

Sec. 38.018. APPLICABILITY OF OTHER LAW. (a) Except as provided by Subsection (b), if an election is made under this subchapter, this subchapter controls over any other law to the extent the other law requires, authorizes, prohibits, or otherwise governs the award of attorney's fees or other costs of litigation in connection with the civil action.

(b) This subchapter does not govern the recovery of litigation costs incurred in connection with a claim asserted under:

(1) Subchapter E, Chapter 17, Business & Commerce Code; or

(2) Chapter 541, Insurance Code.

SECTION 4. Section 51.014, Civil Practice and Remedies Code, is amended by amending Subsections (d) and (e) and adding Subsections (f) and (g) to read as follows:

(d) A person may appeal from an interlocutory order of a district court, county court at law, or county court that is [may issue a written order for interlocutory appeal in a civil action] not otherwise appealable [under this section] if:

(1) [the parties agree that] the order to be appealed involves a controlling question of law as to which there is a substantial ground for difference of opinion;

(2) an immediate appeal from the order may materially advance the ultimate termination of the litigation; and

(3) the court of appeals accepts the interlocutory appeal as provided by Subsection (f) [the parties agree to the order].

(e) An appeal under Subsection (d) does not stay proceedings in the trial court unless the parties agree to a stay or [and] the trial court or appellate court[, the court of appeals, or a judge of the court of appeals] orders a stay of the proceedings pending appeal.

(f) An appellate court may, in its discretion, accept an appeal permitted by Subsection (d) if the appealing party, not later than the 15th day after the date the trial court signs the order to be appealed, files in the court of appeals an application for interlocutory appeal. The application must state the reasons why an appeal is warranted under Subsection (d). If the court of appeals accepts the appeal, the appeal is governed by the procedures set forth in the Texas Rules of Appellate Procedure for pursuing an accelerated appeal. The date the court of appeals enters the order accepting the appeal starts the time for filing the notice of appeal.

(g) If a party pursues an appeal under this section, the trial court must state whether the trial court believes that an appeal is warranted under Subsection (d).

SECTION 5. Subtitle B, Title 2, Civil Practice and Remedies Code, is amended by adding Chapters 29 and 29A to read as follows:

CHAPTER 29. EARLY DISMISSAL OF ACTIONS

Sec. 29.001. POLICY. It is the policy of this state that all civil actions be disposed of fairly, promptly, and with the least possible expense to the litigants and to the state.

Sec. 29.002. ADOPTION OF RULES BY SUPREME COURT. (a) The supreme court shall adopt rules to provide for the fair and early dismissal of non-meritorious cases.

(b) The supreme court shall model the rules after Rules 9 and 12, Federal Rules of Civil Procedure, to the extent possible.

(c) The supreme court shall adopt rules under this chapter not later than December 31, 2011. This subsection expires September 1, 2012.

CHAPTER 29A. EXPEDITED CIVIL ACTIONS

Sec. 29A.001. DEFINITIONS. In this chapter:

(1) "Claim" means a request, including a counterclaim, cross-claim, or third-party claim, to recover monetary damages.

(2) "Claimant" means a party, including a plaintiff, counterclaimant, cross-claimant, third-party plaintiff, or intervenor, seeking recovery of damages and, in an action for recovery of damages for injury to another person, damage to property of another person, death of another person, or harm to another person, includes both the other person and the party seeking recovery of damages.

(3) "Damages" means all claims under common law or statutory and equitable causes of action for actual damages, including economic and noneconomic damages, and additional damages, including knowing damages, punitive damages, treble damages, penalties, prejudgment interest, postjudgment interest, attorney's fees, litigation costs, costs of court, and all other damages of any kind.

(4) "Defendant" means a party, including a counterdefendant, cross-defendant, or third-party defendant, from whom a claimant seeks damages.

Sec. 29A.002. APPLICABILITY. (a) This chapter applies to any party who is a claimant or defendant, including:

(1) a county;

(2) a municipality;

(3) a public school district;

(4) a public junior college district;

(5) a charitable organization;

(6) a nonprofit organization;

(7) a hospital district;

(8) a hospital authority;

(9) any other political subdivision of the state; and

(10) the State of Texas.

(b) This chapter does not apply to any civil action primarily governed by the Family Code.

(c) In an action to which this chapter applies, the provisions of this chapter prevail over all other law to the extent of any conflict.

(d) This chapter does not waive sovereign immunity or governmental immunity of any claimant or defendant.

Sec. 29A.003. CLAIMANT TO MAKE ELECTION. (a) This chapter applies only in a civil action in which:

(1) the total amount of damages the claimant seeks to recover for all claims is not less than $10,000 and not more than $100,000; and

(2) the claimant files and serves a written election under this chapter.

(b) An election must be made at the time the electing claimant first files a claim in the action.

(c) Notwithstanding Subsection (b), and on the agreement of all parties, a claimant may make an election not later than the 60th day after the date the last defendant has filed an answer.

(d) An election made by a claimant under this section is binding on all parties to the expedited civil action unless a defendant files a claim more than 60 days before trial and in that claim makes a good faith claim that the recovery of monetary damages might be in excess of $100,000.

Sec. 29A.004. RULES. (a) The supreme court shall adopt rules to implement this chapter. The rules shall promote the prompt, efficient, and cost-effective resolution of an expedited civil action, including the discovery between the parties.

(b) The supreme court shall adopt rules as required by this section not later than January 1, 2012. This subsection expires September 1, 2012.

Sec. 29A.005. CONFLICT OF LAWS. In the event of a conflict between this chapter and Chapter 74, Chapter 74 prevails.

SECTION 6. Section 22.225(d), Government Code, is amended to read as follows:

(d) A petition for review is allowed to the supreme court for an appeal from an interlocutory order described by Section 51.014(a)(3), (6), or (11) or (d), Civil Practice and Remedies Code.

SECTION 7. Subchapter C, Chapter 311, Government Code, is amended by adding Section 311.035 to read as follows:

Sec. 311.035. NO IMPLIED CAUSE OF ACTION. A statute may not be construed to create a cause of action unless a cause of action is created by clear and unambiguous language in the statute.

SECTION 8. Subchapter B, Chapter 312, Government Code, is amended by adding Section 312.017 to read as follows:

Sec. 312.017. NO IMPLIED CAUSE OF ACTION. A statute may not be construed to create a cause of action unless a cause of action is created by clear and unambiguous language in the statute.

SECTION 9. This Act applies only to a civil action filed on or after the effective date of this Act. An action filed before the effective date of this Act, including an action filed before that date on which a party is joined or designated after that date, is governed by the law in effect immediately before the effective date of this Act, and that law is continued in effect for that purpose.

SECTION 10. If any provision of this Act or its application to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of this Act that can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable.

SECTION 11. This Act takes effect September 1, 2011.