Recent Changes "Responsible Third Party" Rules In Texas

February 23, 2012

Fingers.jpgIn 2011, the Texas Legislature passed H. B. 274 that made two (2) significant changes to section 33.004 of the Texas Civil Practices and Remedies Code. These changes affect the ability of the parties to a lawsuit to name person or an entity as a "responsible third party." A responsible third party means any person who is alleged to have caused or contributed, in any way, to the harm for which the recovery of damages is sought, whether by negligent act or omission, by any defective or unreasonably dangerous product, by other conduct that violates an applicable legal standard, or by any combination of these. (See section 33.011(6) of the Texas Civil Practice and Remedies Code). These changes are applicable to all lawsuits filed on or after September 1, 2011.

The practice of designating a responsible third party allows a defendant to require a judge or jury to determine the percentage of responsibility, if any, to be assigned to the responsible third party when determining the liability of the parties for tort claims, such as products liability or negligence. This practice of allowing the designation of a responsible third party has given a strategic advantage to defendants who are sued in the state of Texas because it allowed the defendant's percentage of responsibility to be reduced by the percentage of responsibility assigned to the responsible third party. Under the original statute, in order to avoid the possible reduction of the defendant's percentage of responsibility through its designation of a responsible third party, the plaintiff had sixty (60) days after the designation to join the responsible third party as an actual defendant in the suit and could do so even if the statute of limitations had expired on the plaintiff's cause of action against that person.

In H. B. 274, the Texas Legislature eliminated this loophole that allowed a plaintiff to get around a statute of limitations defense for the designated responsible third party by timely joining that person even if the statute of limitations for the plaintiff's claims against that person had expired. Under the new law, if a defendant designates a person or entity as a responsible third party and the statute of limitations has run on the plaintiff's cause of action against that person, the plaintiff will no longer be able to avoid the statute of limitations by joining the responsible third party to the suit. This change does not affect the plaintiff's rights against any defendant already named in the suit but it eliminates the possibility that persons or entities will be joined as defendants to the lawsuit long after the statute of limitations has expired because of the prior loophole in the statute. This change may also force attorneys for plaintiffs to name more defendants in their original suits out of the concern that those parties could be named as responsible third parties at a later time.

The second change made by H.B. 274 to section 33.004 of the Texas Civil Practices and Remedies Code was to prevent a defendant from designating a person as responsible third party after the statute of limitations has expired, if the defendant "has failed to timely comply with its obligations, if any, to timely disclose that the person may be designated as a responsible third party under the Texas Rules of Civil Procedure." Unfortunately, the meaning of "failed to timely comply with its obligations to disclose" is not defined in the statute and it is unclear what the Texas Legislature meant by this language. Because of this, the language used in the amended statute will be subject to interpretation by Texas courts. This could mean that a defendant must name a person to be designated as a responsible third party as early as the date of the defendant's initial response to a request for disclosure from the plaintiff under Texas Rule of Civil Procedure 194 is due. Until the meaning of this change to the language of the statute has been interpreted by the courts, a prudent defendant should name any potential responsible third parties as soon as possible once that person or entity's identity and role has become known, especially in the situation where the statute of limitations is about to expire.

The Texas Legislature's amendment to the responsible third party statute appears to be more favorable to defendants because it closes the statute of limitations loophole described above. However, defendants will need to be careful to timely disclose responsible third parties during the discovery process. Plaintiffs will also need to be careful not to wait until the statute of limitations is about to expire before filing suit so that necessary discovery can be timely conducted to disclose the identity of any responsible third parties and join them to the suit before the plaintiff's claims against them are barred.

At the Law Office of Stephen O'Rear, P.C. we help people who have claims for personal injuries.