Texas Legislature HB790: Equality in Billing

Lawrence E. Wilson

February 6, 2019

“I’ve got news for Mr. Santayana. We’re doomed to repeat the past no matter what. That’s what it is to be alive.” – Kurt Vonnegut

It’s that time of year again – the biannual madness known as the Texas Legislature. Every two years our elected state officials meet to consider changes in our laws, great and small. Here is one that will be examined this session.

A curious quirk in Texas law allows limited liability companies to avoid paying the legal fees of people that sue them in certain cases. Chapter 38.001 of the Civil Practice and Remedies Code provides:

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 materials; (4) freight or express overcharges; (5) lost or damaged freight or express; (6) killed or injured stock; (7) sworn account; or (8) an oral or written contract. [emphasis added]

Since 2014, the courts have interpreted this language to apply only to individuals and corporations. Attorney’s fees have not been recoverable from limited liability companies, limited partnerships and other non-corporate legal entitles. That seems unfair and might discourage plaintiffs from making otherwise meritorious claims only because the defendant is not an individual or corporation.

The legislature has considered changing this language each session but has yet to adopt an amendment. The 86th Texas Legislature is no different. Representative Sarah Davis of Harris County has introduced HB790 to amend the language so that a person could recover attorney’s fees from every “organization” as defined in the Texas Business Organizations Code. 

Thank you Representative Davis. Let’s hope your fellow lawmakers act to adopt the amendment, clean up this little mess (remember, don’t mess with Texas) and make all defendants equal.