2011S0443-3 03/09/11
By: Huffman S.B. No. 13
A BILL TO BE ENTITLED
AN ACT
relating to the reform of certain remedies and procedures in civil
actions.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Title 7, Civil Practice and Remedies Code, is
amended by adding Chapter 174 to read as follows:
CHAPTER 174. EARLY DISMISSAL OF ACTIONS
Sec. 174.001. It is the policy of this state that all civil
actions shall be disposed of fairly, promptly, and with the least
possible expense to the litigants and to the state.
Sec. 174.002. ADOPTION OF RULES BY THE SUPREME COURT.
(a) The supreme court shall adopt rules to provide for the fair and
early dismissal of nonmeritorious cases.
(b) The supreme court shall adopt rules under this chapter
on or before December 31, 2011.
SECTION 2. Title 7, Civil Practice and Remedies Code, is
amended by adding Chapter 175 to read as follows:
Sec. 175.001. ADOPTION OF RULES BY SUPREME COURT. (a) The
supreme court shall adopt rules by which a plaintiff in a civil
action may elect a procedure for the prompt, efficient, and
cost-effective resolution of civil actions in which the damages are
at least $10,000 but not more than $100,000.
(b) In this section, "damages" means all claims under common
law, statutory, and equitable causes of action for actual damages,
including economic and noneconomic damages, and all forms of
additional damages including without limitation knowing damages,
punitive damages, trebling of damages of any kind, penalties,
prejudgment interest, postjudgment interest, attorney's fees,
litigation costs, costs of court, and all other damages of any kind
or character.
(c) The rules promulgated by the supreme court shall not
apply to a class action, a civil action primarily governed by the
Family Code, a workers' compensation case, or an action governed by
Chapter 74.
(d) The supreme court shall adopt rules under this section
to be in effect by January 1, 2012.
SECTION 3. 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 4. 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 5. Sections 38.001 and 38.002, Civil Practice and
Remedies Code, are amended to read as follows:
Sec. 38.001. RECOVERY OF ATTORNEY'S FEES. The prevailing
party [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; or
(9) defamation.
Sec. 38.002. PROCEDURE FOR RECOVERY OF ATTORNEY'S FEES.
For [To recover] attorney's fees to be recovered under this
subchapter [chapter]:
(1) the person seeking to recover attorney's fees
[claimant] must be represented by an attorney;
(2) the claimant 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 must not have been
tendered before the expiration of the 30th day after the claim is
presented.
SECTION 6. Subdivisions (1), (5), and (6), Section 42.001,
Civil Practice and Remedies Code, are amended to read as follows:
(1) "Claim" means a request, including a counterclaim,
cross-claim, or third-party claim, to recover monetary damages or
to obtain other relief. The term does not include a request to
recover litigation costs.
(5) "Litigation costs" means money actually spent and
obligations actually incurred that are directly related to the
action [case] in which a settlement offer is made. The term
includes:
(A) court costs;
(B) reasonable deposition costs;
(C) reasonable fees for not more than two
[testifying] expert witnesses; and
(D) [(C)] reasonable attorney's fees.
(6) "Settlement offer" means an offer to settle or
compromise a claim made in compliance with Section 42.003 [this
chapter].
SECTION 7. Chapter 42, Civil Practice and Remedies Code, is
amended by amending Sections 42.003, 42.004, and 42.005 and adding
Section 42.006 to read as follows:
Sec. 42.003. MAKING SETTLEMENT OFFER. (a) A defendant may
serve on a claimant a settlement offer to settle all claims in the
action between that defendant and claimant.
(b) A settlement offer must:
(1) be in writing;
(2) state that it is made under this chapter;
(3) state the terms by which the claims may be settled;
(4) state a deadline by which the settlement offer
must be accepted; and
(5) be served on all parties to whom the settlement
offer is made.
(c) A defendant may not make a settlement offer under this
section before the 60th day after the date the defendant files a
responsive pleading or otherwise appears in the action.
(d) A defendant may not make a settlement offer under this
section after the 14th day before the date set for trial.
(e) The parties are not required to file a settlement offer
with the court.
Sec. 42.004. AWARDING LITIGATION COSTS. (a) A defendant
who makes a settlement offer to a claimant seeking monetary relief
shall recover litigation costs from the claimant if:
(1) the settlement offer is rejected;
(2) the court signs a judgment on the claim;
(3) the amount of monetary relief awarded to the
claimant in the judgment is more favorable to the defendant who made
the settlement offer than the settlement offer; and
(4) the difference between the amount of monetary
relief awarded to the claimant in the judgment and the amount of the
settlement offer is equal to or greater than 10 percent of the
amount of the settlement offer.
(b) A defendant who makes a settlement offer to a claimant
seeking nonmonetary relief, other than injunctive relief, may
recover litigation costs from the claimant if:
(1) the settlement offer is rejected;
(2) the court signs a judgment on the claim; and
(3) the judgment is more favorable to the defendant
who made the settlement offer than the settlement offer.
(c) A court may include in litigation costs awarded to a
defendant under this section only those litigation costs incurred
by the defendant who made a settlement offer after the rejection of
the earliest settlement offer that entitles the defendant to the
award of litigation costs under this section.
(d) If a court awards litigation costs against a claimant
under this section, the court may not award the claimant the
post-settlement offer portion of any litigation costs to which the
claimant would otherwise be entitled under Chapter 38 or other
applicable law.
(e) An award of litigation costs by the court under this
section is reviewable under a de novo standard. [If a settlement
offer is made and rejected and the judgment to be rendered will be
significantly less favorable to the rejecting party than was the
settlement offer, the offering party shall recover litigation costs
from the rejecting party.
[(b) A judgment will be significantly less favorable to the
rejecting party than is the settlement offer if:
[(1) the rejecting party is a claimant and the award
will be less than 80 percent of the rejected offer; or
[(2) the rejecting party is a defendant and the award
will be more than 120 percent of the rejected offer.
[(c) The litigation costs that may be recovered by the
offering party under this section are limited to those litigation
costs incurred by the offering party after the date the rejecting
party rejected the settlement offer.
[(d) The litigation costs that may be awarded under this
chapter may not be greater than an amount computed by:
[(1) determining the sum of:
[(A) 50 percent of the economic damages to be
awarded to the claimant in the judgment;
[(B) 100 percent of the noneconomic damages to be
awarded to the claimant in the judgment; and
[(C) 100 percent of the exemplary or additional
damages to be awarded to the claimant in the judgment; and
[(2) subtracting from the amount determined under
Subdivision (1) the amount of any statutory or contractual liens in
connection with the occurrences or incidents giving rise to the
claim.
[(e) If a claimant or defendant is entitled to recover fees
and costs under another law, that claimant or defendant may not
recover litigation costs in addition to the fees and costs
recoverable under the other law.
[(f) If a claimant or defendant is entitled to recover fees
and costs under another law, the court must not include fees and
costs incurred by that claimant or defendant after the date of
rejection of the settlement offer when calculating the amount of
the judgment to be rendered under Subsection (a).
[(g) If litigation costs are to be awarded against a
claimant, those litigation costs shall be awarded to the defendant
in the judgment as an offset against the claimant's recovery from
that defendant.]
Sec. 42.005. SUPREME COURT [TO MAKE] RULES. [(a)] The
supreme court may amend or adopt rules that are not inconsistent
with this chapter [shall promulgate rules implementing this
chapter. The rules must be limited to settlement offers made under
this chapter. The rules must be in effect on January 1, 2004.
[(b) The rules promulgated by the supreme court must
provide:
[(1) the date by which a defendant or defendants must
file the declaration required by Section 42.002(c);
[(2) the date before which a party may not make a
settlement offer;
[(3) the date after which a party may not make a
settlement offer; and
[(4) procedures for:
[(A) making an initial settlement offer;
[(B) making successive settlement offers;
[(C) withdrawing a settlement offer;
[(D) accepting a settlement offer;
[(E) rejecting a settlement offer; and
[(F) modifying the deadline for making,
withdrawing, accepting, or rejecting a settlement offer.
[(c) The rules promulgated by the supreme court must address
actions in which there are multiple parties and must provide that if
the offering party joins another party or designates a responsible
third party after making the settlement offer, the party to whom the
settlement offer was made may declare the offer void.
[(d) The rules promulgated by the supreme court may:
[(1) designate other actions to which the settlement
procedure of this chapter does not apply; and
[(2) address other matters considered necessary by the
supreme court to the implementation of this chapter].
Sec. 42.006. ADMISSIBILITY OF EVIDENCE. (a) This chapter
does not affect the admissibility or inadmissibility of evidence as
provided in the Texas Rules of Evidence.
(b) The provisions of this chapter may not be made known to
the jury through any means, including voir dire, introduction into
evidence, instruction, or argument.
SECTION 8. (a) The Texas Supreme Court shall conduct a
study to determine the most effective method to implement a system
in which the prevailing party in a civil action may recover its
attorney's fees, court costs, and other litigation costs from
adverse parties. The system should allow a defendant to determine
if the fee-shifting system would apply to a lawsuit and should
discourage the filing of frivolous lawsuits.
(b) Not later than December 1, 2012, the Texas Supreme Court
shall prepare a report of the findings of the study and provide a
copy of the report to the governor, the lieutenant governor, and
each member of the legislature.
SECTION 9. The change in law made by this Act applies only
to an action filed on or after the effective date of this Act. An
action filed before the effective date of this Act, including an
action to which a party is joined or designated after the effective
date of this Act, is governed by the law in effect immediately
before the change in law made by 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 declared to be severable.
SECTION 11. This Act takes effect September 1, 2011.