Articles Posted in Litigation

News.jpgSometimes you may be involved in a dispute with another party where the amount in controversy does not justify paying a lawyer to assist you and you are forced to bring the action yourself. In order to bring a lawsuit against another party, you have to personally serve them with a citation for your suit. But what do you do if you can’t locate the defendant for personal service on them? Service by publication may be your only option in such instance.

Service by publication is authorized for use in actions against a defendant whose residence is unknown, against unknown heirs of a decedent, against stockholders of a defunct corporation, against unknown owners or claimants of interests in real property, or for delinquent ad valorem taxes. Also, a court may also authorize service by publication under Rule 106 of the Texas Rules of Civil Procedure if justified under the circumstances.

The party serving by publication must conduct a reasonable search for the defendant before resorting to service by publication. A diligent search requires that the party make such inquiries that someone who really wanted to find the person would make. Reasonable inquiry is measured by the quality of the search rather than the quantity of the search. A lack of diligence makes service by publication ineffective.

Limitations.jpgIf you have been injured or you owe someone a debt, there is a certain of time in which a suit must be brought to recover damages for you injury or to hold you liable for the debt. This time period is known as the statute of limitations. Many of the applicable statute of limitations in Texas are codified in Section 16.001, et. seq. of the Texas Civil Practices and Remedies Code (TCPRC).

The most common statute of limitations are the two year statute, section 16.003,TCPRC, applicable to personal injury actions and the four year statute, section 16.004, TCPRC, applicable to suits on contracts or debts.

In addressing the statute of limitations the most important thing that must be determined is when did the cause of action accrue. Accrual refers to the date when the limitations period begins to run, that is, when the person is legally entitled to bring a suit. For some causes of action the accrual date is defined by statute. For example in medical negligence cases the cause of action accrues on the date the breach of duty occurred or the date of last treatment. (Section 74.251, TCPRC) or in wrongful death cases the cause of action accrues when the person dies. (Section 16.003(b), TCPRC).

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.

court-lawyer.jpgOver the past decade the Texas legislature has passed numerous laws that affect the rights of Texans to recover damages when they have been injured by the negligent acts of other individuals or business entities. These laws are commonly known as “Tort Reform“. One of the Tort Reform laws passed in Texas allows for the recovery of litigation costs even when the responsible party has been sued by the person whom they have injured. This right to recover litigation costs is contained in Chapter 42 of the Texas Civil Practice and Remedies Code. Before the passage of this statute, unlike suits involving contracts, neither party to a personal injury suit could recover their litigation costs. Under certain circumstances, this law gives either the injured person or the wrongdoer the right to recover their litigation costs when the defendant has attempted to settle the suit before going to trial.

The settlement offer procedure provided in Chapter 42 applies only to suits where monetary damages are requested. Chapter 42 does not apply to a class actions, shareholder’s derivative actions, an action by or against a governmental unit; family law cases, claims for workers’ compensation benefits or an action filed in a justice of the peace court.

Chapter 42 does not come into effect unless a defendant in the suit files a declaration that the settlement procedure provided by Chapter 42 is available in the litigation. If there is more than one defendant, the settlement procedure is available only to the defendant that filed the declaration and to the parties that make or receive offers of settlement in relation to that defendant.

Chapter 42 does not limit or affect the ability of any person to make an offer to settle or compromise a suit that does not comply with its provisions or an offer to settle or compromise a suit to which Chapter 42 does not apply. However, an offer to settle or compromise that is not made under Chapter 42 or an offer to settle or compromise made in an action to which Chapter 42 does not apply does not entitle the offering party to recover litigation costs under Chapter 42.

To make a settlement offer under Chapter 42, the offer must:

  • be in writing;
  • state that it is made pursuant to Chapter 42;
  • state the terms by which the claims may be settled;
  • state a deadline by which the settlement offer must be accepted; and
  • be served on all parties to whom the settlement offer is made.

If a settlement offer is made and rejected and the judgment entered in the suit is significantly less favorable to the rejecting party than was the settlement offer, the offering party can recover their litigation costs from the rejecting party. A judgment is significantly less favorable to the rejecting party than was the settlement offer if:

  • the rejecting party is the plaintiff and the judgment is for less than 80 percent of the rejected offer; or
  • the rejecting party is a defendant and the judgment is for more than 120 percent of the rejected offer.

“Litigation costs” means money actually spent and obligations actually incurred that are directly related to the case in which the settlement offer is made. Litigation costs includes court costs, fees for not more than two testifying expert witnesses and attorney’s fees. The litigation costs that may be recovered by the offering party are limited to those litigation costs that were incurred by the offering party after the date the rejecting party rejected the settlement offer.
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