Enacted-Effective 9/1/11: HB 274 -- Civil trial issues

Caption: Relating to the reform of certain remedies and procedures in civil actions and family law matters.
Author: Creighton, and others
Bill History
Bill Text

The “loser pays” bill signed into law by Governor Perry may impact probate and guardianship practice in Texas.  The Legislature stripped many of the more controversial provisions from the final version of HB 274.  Earlier versions of the bill could have more significantly (and adversely) impacted Texas probate, guardianship and trust law practice.  The biggest problem for probate and guardianship lawyers in the final version is the potential for new Supreme Court rules that alter the way probate and guardianship actions are handled.

Under amendments to Section 22.004 of the Government Code, the Supreme Court must adopt rules that “apply to civil actions in district courts, county courts at law, and statutory probate courts in which the amount in controversy does not exceed $100,000.”  The rules “shall address the need for lowering discovery costs in these actions and the procedure for ensuring that these actions will be expedited in the civil justice system.”  While the Court is not permitted to adopt rules which conflict with the Family Code or the Property Code, there is no carve-out for conflicts with the Probate Code.  (The Property Code exception should apply in trust law cases since the Trust Code is part of the Property Code.)

The bill itself does not impose these new rules. Rather, it directs the Supreme Court to adopt rules.  Hopefully the Court will consider some if the unique aspects of probate and guardianship actions when making its rules. Still, there is a potential problem in these cases:

• Claims Practice.  The Probate Code already has an expedited way to handle claims against probate estates.  Most of those claims are under $100,000.  Will the rules provide a different way to handle these claims?  Will the rules be mandatory?

• Administrative Matters Not Involving an Amount in Controversy.  It seems clear that the new rulemaking authority was meant to address litigation seeking damages.  The statutory language is not limited, however.  There are other statutes addressing specialized procedures in litigation seeking damages, such as Chapter 42 of the Civil Practices and Remedies Code.  These statutes expressly limit their application to claims for monetary relief.  See, for example, Section 42.002(a) of the Civil Practices and Remedies Code. What happens if a party in an action to remove an independent executor under Section 149C of the Probate Code elects to follow a new procedure enabled by rules implemented under HB 274?

There are other provisions of HB 274 which may impact probate, guardianship and trust practice:

 

• The bill amends Section 51.014 of the Civil Practices and Remedies Code to make it easier to appeal interlocutory orders.

 

• The bill amends Section 42.001 of the Civil Practices and Remedies Code to add deposition costs to the list of litigation costs which the loser may be required to pay if a settlement offer is rejected under Section 42.003.

 

The bill becomes law September 1, 2011.