House Bill 744 Seeks To Relieve Litigation Sticker Shock with Fee Recovery Expansion

January 27, 2017

The 85th Legislature of the State of Texas is presently in session. During this session, House Bill 744 was introduced. House Bill 744 stands to broaden the scope of recoverable attorney’s fees under Chapter 38 of the Civil Practice and Remedies Code (CPRC.)

Per Chapter 38.001 of the CPRC as presently enacted, the parties from whom attorney’s fees may be recovered pursuant to Chapter 38 is limited. As Chapter 38 presently reads:

A person may recover reasonable attorney’s fees from an individual or corporation, 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.

As currently written, Chapter 38.001 does not permit the recovery of attorney’s fees from LLPs, LLC, and other business entities besides corporations. To address this, House Bill 744 stands to add “other legal entit[ies]” to the list of individuals and entities from whom attorney’s fees can be recovered. As House Bill 744 presently reads:

A person may recover reasonable attorney’s fees from an individual, corporation, or other legal entity, in addition to the amount…

Though the proposed Chapter 38 expands the list of opponents from whom attorney’s fees are recoverable, as presently drafted, House Bill 744 does not authorize the recovery of attorney’s fees from “the state, an agency or institution of the state, or a political subdivision of the state.”

Expanding the scope of Chapter 38.001 would arguably make the courts more accessible to those plaintiffs who might not otherwise pursue their claims for fear of litigation sticker shock. The revised Chapter 38 would widely broaden the scope of opponents from whom attorney’s fees could be recovered when a movant successfully pursues a Chapter 38 claim. Importantly, the proposed Chapter 38 does not change the movant’s burden to properly present its claim to the opposing party, prevail on the claim for which attorney’s fees are recoverable under Chapter 38, and to recover damages pursuant to that claim. It is also worth noting that House Bill 744 is similar to a bill introduced last year that failed to pass. For now, it’s all eyes on Austin, and fingers crossed for lawyers and litigants.