Carve Up Claims & Recover Fees for Your Client or Carrier – 91a Motion to Dismiss

Texas Rule of Civil Procedure 91a became effective March 1, 2013, and is similar to Federal Rule of Civil Procedure 12(b)(6); however, there are some key differences including, but not limited to, the requirement that the court awards the prevailing party its costs and attorneys’ fees. TEX. R. CIV. P. 91a.7. Initially, Texas litigators shied away from using Rule 91a for fear of having mandatory fees imposed against their clients or carrier for filing the motion to dismiss. A body of law is slowly developing which interprets and strictly construes Rule 91a. As the common law evolves, it emboldens the Texas Defense Bar to take advantage of this powerful tactical cost shifting tool.

Brief History & Purpose

The Rule was adopted following a directive from the Texas Legislature to the Texas Supreme Court in 2011 to adopt rules that would provide for dismissal of causes that have no basis in law or fact on motion and without evidence. TEX. GOV’T CODE §22.004(g). The purpose of the directive and subsequent Rule is to stem the flood of frivolous lawsuits.

91a: The Nuts & Bolts

Except in a case brought under the Family Code or a case governed by Chapter 14 of the Texas Civil Practice and Remedies Code [suit brought by an inmate involving inability to pay costs], a party may move to dismiss a cause of action on the grounds that it has no basis in law or fact. A cause of action has no basis in law if the allegations, taken as true, together with inferences reasonably drawn from them, do not entitle the claimant to the relief sought. A cause of action has no basis in fact if no reasonable person could believe the facts pleaded.
TEX. R. CIV. P. 91a.1.

A 91a Motion to Dismiss must be filed within sixty (60) days of service of the first pleading containing the challenged cause of action and at least twenty-one (21) days prior to hearing. Id. at 91a.3. In Texas, parties are free to amend up to the date of the pleading cut off in the scheduling order or docket control order. This affords numerous opportunities to file a Rule 91a Motion to Dismiss and potentially obtain fees and costs for your client or carrier if a cause of action alleged for the first time within the amended pleading has no basis in law or fact.

The motion itself must point out that it is being made pursuant to Rule 91a, identify each cause of action that is subject to the motion and the specific reasons that it has no basis in law or fact. Id. at 91a.2. The respondent must file its response no later than seven (7) days prior to hearing. Id. at 91a.4. The court must grant or deny the motion within forty-five (45) days after it is filed which is very important as the prevailing party is awarded fees. Id. at 91a.3. However, the court may not rule if three (3) or more days prior to hearing: a) the respondent chooses to non-suit the challenged cause of action; or, b) the movant files a withdrawal of the motion. If an amended pleading is filed three (3) or more days prior to the hearing in an effort to cure and/or circumvent the 91a Motion to Dismiss, the movant can: a) amend its motion to dismiss to attack the amended pleading which will reset the timeline to respond and rule; or b) file a withdrawal. Id. at 91a.5. If the movant fails to do either the court must rule on the pending 91a Motion to Dismiss. Id.

Pay Attention: The Court Must Rule 45 Days After Filing

A movant should take care to watch the filings and respective deadlines in this statutory framework. Failure to amend or withdraw in the aforementioned circumstance could result in a denial and an award of fees and costs to the respondent to the extent the pleading amendment rendered the pending motion to dismiss moot as Rule 91a requires a ruling within forty-five (45) days from the date of filing. In particular, it is very important to pay attention to the three day deadline prior to the submission or hearing date. The court cannot consider amendments or withdrawals filed less than three days prior to the hearing or submission setting. Id. Although the court is confined to these deadlines, there is a built- in exception which allows for an agreement of the parties to modify the Rule. Id. at 91a.5(c). The language is vague as to the effect of the agreement; however, in Texas, parties can generally agree to most aspects of litigation unless otherwise indicated by the court’s local rules or scheduling order. The court enforces these agreements pursuant to Rule 11 as binding contracts. TEX. R. CIV. P. 11

Texas Court’s Look To Federal Precedent

Before Rule 91a, Texas procedure did not have a counterpart to Rule 12(b)(6) of the Federal Rules of Civil Procedure. While not identical, Rule 91a is analogous to Federal Rule 12(b)(6) and Texas courts have relied on case law interpreting Rule 12(b)(6) as instructive in making decisions under Rule 91a. Generally, when deciding a Rule 91a Motion to Dismiss, “the trial court may not consider evidence in ruling on the motion and must decide the motion based solely on the pleading of the cause of action, together with any exhibits permitted by Rule 59.” Quoting (Wooley v. Schaffer, No. 14-13-00385-CV, 2014 Tex. App. LEXIS 8983 (Tex. App. Houston Aug. 14, 2014) citing (Tex. R. Civ. P. 91a.6)). Texas Rule of Civil Procedure 59 provides as follows:

Notes, accounts, bonds, mortgages, records, and all other written instruments, constituting, in whole or in part, the claim sued on, or the matter set up in defense, may be made a part of the pleadings by copies thereof, or the originals, being attached or filed and referred to as such, or by copying the same in the body of the pleading in aid and explanation of the allegations in the petition or answer made in reference to said instruments and shall be deemed a part thereof for all purposes. Such pleadings shall not be deemed defective because of the lack of any allegations which can be supplied from said exhibit. No other instrument of writing shall be made an exhibit in the pleading.
TEX. R. CIV. P. 59.

Furthermore, the First Court of Appeals recently held that the rule “expressly prohibits trial courts from considering” credibility of witnesses, whether or not the parties have had an opportunity to be heard in court, or been given an opportunity to replead. Dailey v. Thorpe, No. 01-13-00492-CV, 2014 Tex. App. LEXIS 9630 at *10 (Tex. App. Houston Aug. 28, 2014) (emphasis in original); TEX. R. CIV. P. 91a.5 (Rule 91a.5 requires a respondent to amend at least three days prior to hearing which obviates a motion for leave to amend and/or an opportunity to amend to avoid dismissal.). Texas Appellate Court’s - applying State law - are clearly construing Rule 91a as a facial plausibility standard akin to the Twombly and Iqbal standard. Wooley, 2014 Tex. App. LEXIS 8983 at *10 quoting ((Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L. Ed. 2d 929 (2007) (Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed. 2d 868 (2009)); see also, ((GoDaddy.com, LLC v. Hollie Toups, 429 S.W.3d 752 (Tex. App. – Beaumont, 2014, pet. denied) (Lopez-Welch v. State Farm Lloyds, 3:14-CV-2416-L, 2014 U.S. Dist. LEXIS 154741 (N.D. Tex. Oct. 31, 2014) (Plascencia v. State Farm Lloyds, No. 4:14-CV-524-A, 2014 U.S. Dist. LEXIS 135081 (N.D. Tex. Sept. 25, 2014) (Oldham v. Nationwide Ins. Co.of Am., 3:14-CV-575-B, 2014 U.S. Dist. LEXIS 107044; 2014 WL 3855238 (N.D. Tex. Aug. 5, 2014)).

Attorneys’ Fees

Except in an action by or against a governmental entity or a public official acting in his or her official capacity or under color of law, the court must award the prevailing party on the motion all costs and reasonable and necessary attorney fees incurred with respect to the challenged cause of action in the trial court. The court must consider evidence regarding costs and fees in determining award.
TEX. R. CIV. P. 91a.7.

The first and only opinion interpreting 91a.7 was issued November 20, 2014. Drake v. Chase Bank, 2014 No. 02-13-00340-CV, 2014 Tex. App. Lexis 12572 (Tex. App. – Fort Worth Nov. 20, 2014). Drake involved a pro se plaintiff who brought claims against Chase Bank for irreparable harm to his credit and intentional infliction of emotional distress. Id. The trial court granted plaintiff indigent status during the proceedings. Id. at *4. The trial court granted defendant’s 91a Motion to Dismiss and awarded it $2,480 in costs and fees. Id. at *1. Plaintiff filed a motion to reconsider, which was denied, and the court awarded defendant its fees related to that motion as well in the amount of $1,545. Id. Applying a de novo standard of review, the Drake Court found that “…an award of attorneys’ fees to the prevailing party on a rule 91a motion to dismiss is mandatory, not discretionary. Moreover, the rule says nothing about exempting indigent parties from paying attorneys’ fees to a party who prevails under rule 91a.” Id. at *5. The court affirmed the trial courts award of fees as to the 91a motion as well as the motion to reconsider and pointed out that defendant incurred the additional fees in connection with its Rule 91a challenge and the causes of action subject to the same. Id. at *6. Specifically, the Drake Court cited Rule 91a.7 which mandates an “award of all costs and reasonable and necessary attorney fees incurred with respect to the challenged cause of action.” Id. (emphasis in original). Although it is the first case interpreting an award of attorneys’ fees pursuant to Rule 91a, it is consistent with precedent of strict construction regarding this statute. One may reasonably anticipate other appellate courts to follow this reasoning.

Practical Application

If the 91a Motion to Dismiss is questionable or being used tactically to pressure an early settlement, it is imperative that you stay on top of the deadlines and timely withdraw the motion as fees must be awarded to the other side in the event of denial. There are variables whereby a respondent may attempt to strategically circumvent a Rule 91a dismissal while simultaneously imposing the fees on your client and/or carrier. We have recently been involved in a very contentious case in which plaintiffs chose to file a pleading amendment and subsequently respond to the 91a Motion to Dismiss without referencing the recently filed amendment which became the live pleading. This game of cat and mouse would have gone on indefinitely had we chosen to amend our 91a Motion to Dismiss rather than allowing it to stand. Plaintiffs’ strategy of misdirection backfired. We filed a partial withdrawal of the 91a Motion to Dismiss limited to the defendants plaintiff had voluntarily non-suited with the pleading amendment together with a Reply to Plaintiffs’ Response. The Court was then free to, and in fact did, grant the 91a Motion to Dismiss within the forty-five day statutory deadline. An evidentiary hearing is set to award our remaining client its fees related to the dismissed causes of action which had no basis in law. The causes of action dismissed constituted the bulk of the defense costs over the one hundred and five (105) day period. Following an evidentiary hearing in early December, we anticipate the Court will issue an Order granting our client its fees and costs well in excess of $50,000. TEX. R. CIV. P. 91.a.7; Drake, 2014 Tex. App. Lexis 12572 * 5.

On another recent matter involving numerous defendants and causes of action, we developed a strategy to eliminate as many causes of action and parties as possible as of the initial answer deadline. Among the four dispositive motions filed with the original answer, was a Rule 91a Motion to Dismiss. A choice was made to limit the Rule 91a Motion to Dismiss to one cause of action and one defendant after much deliberation. All four dispositive motions were granted including the narrow Rule 91a Motion to Dismiss. The other three motions may have been more impactful on the case as a whole, but did not yield fees. The Rule 91a - although narrow in scope as to that particular matter - provided a tactical advantage, hammered home, it would be an uphill battle for plaintiff, and provided a benefit to the carrier and/or client of fee recovery at the outset of the case.

Conclusion

As you can see, a Motion to Dismiss pursuant to the rule should be carefully considered and brought only when the respondent’s suit or specific claim has no basis in law or fact. If the court denies the motion, the respondent must be awarded their fees related to the challenged cause of action. However, due to the scope of Rule 91a and the strict construction and enforcement of the same by the appellate courts to date; it has become a very effective tool to carve out frivolous claims upon filing, save litigation costs for our clients or carriers and recover fees through an early dismissal and/or partial dismissal.