Texas High Court Modifies Standards For Attorneys' Fees In Tort, Contract Actions

By William V. Dorsaneo III  

In Tony Gullo Motors I, L.P. v. Chapa, the Texas Supreme Court modified the standards for the recoverability of attorney's fees in cases involving tort and contract theories of liability. No longer can parties rely on the argument that the causes of action in a suit are dependent upon the same set of facts and thus the fees allocated towards each of them are inseparable.

In this Emerging Issues Analysis, William V. Dorsaneo III, Chief Justice John and Lena Hickman Distinguished Faculty Fellow and Professor of Law at Southern Methodist University's Dedman School of Law in Dallas, writes:

"In December 2006, the Texas Supreme Court modified the standards for the recoverability of attorney's fees by recasting the 'intertwined claims' exception frequently used by claimants in cases involving claims that will support recovery of fees and claims that will not do so. In the same opinion, the Court clarified the operation of the 'one satisfaction' or 'one recovery' rule and the relationship between statutory and constitutional limits on the recoverability of exemplary damages [Tony Gullo Motors I, L.P. v. Chapa (212 S.W.3d 299 [Tex. 2006])]. . . .

"In Gullo, the Court made significant changes in Texas law concerning the recovery of attorney's fees in cases involving multiple theories of liability. These changes require the presentation of specific evidence segregating recoverable fees from fees that are not recoverable. In Texas, the ability of a prevailing party to recover attorney's fees depends on the type of claim."

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