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This is an introduction to litigation in Texas, designed to assist those with limited knowledge in determining whether or not they should engage an attorney to participate in a lawsuit.  For purposes of this article, the term “litigation” refers to the filing and prosecuting of a lawsuit, or the defense against one, in the county civil courts at law or the civil district courts of Texas.  This office handles only real estate and business cases in these courts, and therefore other areas - divorce law and criminal defense, for example - are not addressed.  Neither is litigation in the federal courts, which is a different system entirely, although many of the principles stated in this article also apply to the federal courthouse. 

The cost and complexity of litigation has doubled in the last 10 years, in no small measure due to the impact of computers and technology – i.e., what is capable of being done now is expected to be done.  Ironically, the result is more, not less paper. A prime culprit is the “Docket Control Order,” also called a “Scheduling Order,” which is generated by the clerk’s computer.  In times past these orders had only a few pertinent dates, such as the date by which discovery was to be completed, the date by which experts were to be designated, a trial date, and the like. Docket Control Orders have now expanded to include many more dates and obligations.  Meeting these dates and deadlines is the professional obligation of the attorney, not only to the client but also to the court, and therefore attorneys must be prudent when accepting a case, making sure not only that the case has merit but that the client has the financial means to pursue litigation at today’s level of expense.  

Contingency fee arrangements (where the attorney works on a percentage) are generally not available in real estate and business cases.  Accordingly, the client is required to post an initial retainer.  Many attorneys require an initial retainer of $10,000.  Larger firms may require $25,000.  This office’s minimum initial retainer is $5,000 plus $500 to cover costs. There is a reason for these retainers.  For attorneys, there are few situations more frustrating than being in a lawsuit governed by a complicated Docket Control Order while stuck with a client who cannot or will not pay the bills for the work that Order requires.  Although most suits settle before trial, the client must have the personal commitment and the financial means to see the process through to its bitter end, if necessary. 

In contemplating filing a lawsuit, one should keep in mind three cardinal rules, which usually shock clients when they learn them: (1) There is no such thing as a perfect case and yes, that includes yours; (2) no one ever gets exactly what they want in court and yes, that includes you; and (3) litigation always costs more than you think it will.   

Evaluating a Case

The first step is to evaluate your case. A good case consists of (1) facts that clearly show liability on the part of the defendant; and (2) monetary damages in a sufficient amount to make the process worthwhile.  Both factors must be present.  Good liability facts are not helpful if there is no real monetary loss; and large damages will not help a plaintiff who cannot show a clear road to holding the defendant legally liable for them (i.e., one or more established “causes of action” - fraud, for example - must apply).  Note that legal liability is not always the same as moral liability.  The justice system, like every human institution, is imperfect.  It is unable to right every wrong. 

There should be at least $15,000 in damages to make it worthwhile to file a suit in county or district court.  Clients with $5,000 and $10,000 cases should consider filing a small claims action in justice court where an attorney is not required. Otherwise, such cases are not cost-effective in this new, more expensive environment.  This office will not file suit on such cases but will prepare pleadings for the client to sign and pursue himself in justice court. 

It is vital that a person considering a lawsuit obtain a preliminary consultation with an attorney to go over the facts, review and analyze the documents, and evaluate the potential for the case to be effectively litigated.  At the initial meeting, the client should be prepared with copies of all relevant documents (law offices are not copycenters so this may require a trip to Kinko’s prior to the appointment). It is also a good idea to prepare a written summary and a timeline of pertinent events.  Finally, the client should be ready to demonstrate to the attorney that he or she can afford the litigation process.  If the client arrives prepared, most attorneys can evaluate a case in approximately an hour of billable time (Note that evaluation of a case is a valuable legal service and is not free).  Some offices, including this office, will evaluate cases online. 

As is the case with major medical decisions, a second opinion may also be a good idea.  Attorneys are glad to give them. 

Representing Oneself as a Pro Se Litigant

Representing oneself as a pro se litigant is no longer practical for non-attorneys except in small claims cases in justice courts, which are permitted to hear cases up to $10,000 in value.  Justice courts are also handy because they are located in various neighborhood precincts scattered around the county.  For many, justice court may be the best option, but even there one sees more and more attorneys, and few things are more foolish than a pro se litigant attempting to go up against an attorney in a discovery dispute or at trial.  It goes without saying that representing oneself at the county court or district court levels is asking for real trouble.  The Rules of Civil Procedure, the Civil Practice & Remedies Code, and the Rules of Evidence are the core statutes governing most trial work.  These are complicated enough even for lawyers who work in the courts frequently. They can appear illogical, incomprehensible, and Byzantine to anyone else. 

Note also that corporations and limited liability companies are required to have an attorney in Texas. They are not permitted to represent themselves, either in filing suit or in answering a suit.

Obligations of the Client

A client cannot expect to meet with an attorney, pay a retainer, and then walk away and forget about the lawsuit, assuming that the attorney will take care of everything.  The client is an active and essential participant. The attorney-client relationship is based on trust, candor, participation, and communication. A client should tell the attorney everything relevant to the case and should provide all relevant documents. This office’s contract contains the following: This case will involve significant time, effort, and expense on the part of the Client. Client unconditionally makes this commitment. Client agrees to communicate frequently and appear as often as necessary at this office in furtherance of the case. The legal process can appear slow. It generally moves according to a scheduling order issued by the court which usually moves the case to trial in about 9 months. Patience and persistence are required.

In communications with the lawyer, the client should use email as much as possible in order to avoid telephone tag.  Check email daily.  In this office, email is our primary form of communication, so our clients must be comfortable with this. A client must also have a fax number. 

Plaintiffs who do not know the location of the person they want to sue should be prepared to incur the expense of a private detective.

Just as clients who do not participate are a problem, the client who attempts to micro-manage the lawsuit can be a nightmare for an attorney.  Reach an agreement with the attorney on general goals and strategy and then let him or her do their job.

Clients must of course pay their legal fees and never write their attorney a bad check.  It is not only an insult, it is a crime, and it fatally “poisons the well” of the attorney-client relationship.  Failure to pay fees is grounds for the attorney to withdraw from a case. Serious disagreements over case strategy or the client’s repeated failure to follow the attorney’s advice are also grounds for attorney withdrawal without refund.

The client must also understand that no guarantee can ever be made concerning the outcome of a case.  All cases involve risk.  No case is perfect.  There has never been a case filed that did not contain a weakness somewhere.  Accordingly, no outcome can be considered assured in the legal system.  The client should realize that the process is what it is.  The attorney is not responsible for how it works.  He or she is merely your advocate within the system. 

Jurisdiction

The term “jurisdiction” has three aspects: first, whether a particular court is enabled by law to handle certain subjects (“subject matter jurisdiction”); second, whether the damages in a case fall within certain monetary limits (“monetary jurisdiction”); and third, whether the court has jurisdiction over the parties and/or the property involved (“personal jurisdiction” and “in rem jurisdiction”).   All requirements must be satisfied in order to file a suit. 

County courts and district courts have subject matter jurisdiction over the full range of real estate and business matters. However, in counties other than Harris County, matters pertaining to title to real estate must be brought in district court.  Justice courts have original jurisdiction over possession of real property, so evictions (“forcible detainer” actions) must be brought there. 

County courts have monetary jurisdiction up to $100,000.  District courts can hear cases that exceed $500 in value, and there is no upper limit.  Often, but not always, litigation in the county court is cheaper and faster than in the district courts.
           
Venue

Venue refers to the county in which a lawsuit is brought.  You cannot simply file suit in any county you want.  Venue is proper in a particular county if (1) pursuant to Civ. Prac. & Rem. Code Sec. 15.002, all or a substantial part of the events or omissions giving rise to the claim occurred in that county; (2) pursuant to Civ. Prac. & Rem. Code Sec. 15.002, the defendant resides in that county or, if a corporation, does business there; or (3) pursuant to Civ. Prac. & Rem Code Sec. 15.011, the real property the subject of the suit lies in that county.  If you file a suit in the wrong county, the opposing party will likely make a special appearance in order to ask for a change of venue.  Failing to pay attention to proper venue results in wasted time and money.

Causes of Action

In order to have an effective suit, your case must meet all the required elements of one or more causes of action. Causes of action derive from common law (legal history and tradition) and from specific statutes.  In real estate and business cases, typical causes of action include:

breach of contract or agreement
                 breach of express or implied warranty
                 common law fraud
                 statutory fraud
                 conversion
                 Theft Liability Act
                 negligence
                 deceptive trade practices
                 residential construction and liability act
                 violation of applicable licensing laws (eg., real estate license act)
                 conspiracy
                 wrongful foreclosure
                 slander of title
                 suit to quiet title
                 trespass to try title
                 suit for specific performance
                 suit for declaratory judgment

These causes of action are common.  There are of course many more.  Injunctive relief (a temporary restraining order or temporary injunction) may also be requested. 
 
Phases of the Case

The litigation process can be broken down into predictable phases:

Initial Pleadings Phase

Original Petition or Original Answer
                 Application for Temporary Restraining Order (TRO)
                 Hearing to convert TRO to Temporary Injunction (TI)
                 Settlement negotiations
                 Ongoing conferences with client
                 Correspondence and conversations with opposing attorney
                 Correspondence with court and filing of pleadings and documents
                 Sending out initial written discovery
                             Requests for Disclosure
                             Interrogatories
                             Requests for Admission
                             Requests for Production
                 Review of discovery responses from opposing party

Continuing Discovery/Motions/Mediation Phase

Responding to written discovery from opposing party
                 Amending pleadings, if appropriate
                 Hearings on Special Exceptions and Motions to Compel Discovery, if appropriate
                 Half-day mediation
                 Ongoing conferences with client
                 Correspondence and conversations with opposing attorney
                 Correspondence with court and filing of pleadings and documents
                 Settlement negotiations, if appropriate
                 Depositions
                 Motion for Summary Judgment
                 Response to Motion for Summary Judgment
                 Counterclaim/Defense against counterclaim
                 Cross-action against co-party/Response to cross-action
                 Locate experts and obtain expert reports
                
Pre-Trial Phase

Ascertain compliance with Docket Control Order
                 Final amendment of pleadings
                 Additional motions, if appropriate
                 Supplementation of discovery responses
                 Designation of experts by the deadline
                 Business records affidavit, if applicable
                 Pre-trial order preparation
                 Conferences with client to prepare testimony
                 Conferences with witnesses to prepare testimony
                 Pre-trial research and preparation
                 Correspondence and conversations with opposing attorney
                 Correspondence with court and filing of pleadings and documents
                 Settlement negotiations, if appropriate

Trial Phase

Trial of the case by judge or jury
                 Entry of judgment

Post-Trial Phase

Motion for New Trial/Defense of Motion for New Trial
                 Request for Findings of Fact and Conclusions of Law
                 Post-judgment discovery
                 Abstraction, execution and collection upon judgment

The total time to trial is approximately 9 to 12 months.  The length of the docket varies from court to court.  Cases are usually heard in the order of oldest first.  They are set for a certain term of court (one week in county courts and two weeks in district court).  During this time, the attorney, the client, and the witnesses are all “on call,” which can be inconvenient and expensive (if, for instance, you must pay experts to sit around and wait).

Injunctions

Injunctions can be useful in preventing another party from taking certain action, such as foreclosure, that will cause irreparable harm to the applicant (See Rule 680, TRCP). A temporary restraining order (TRO) is a form of emergency, equitable relief that is good up to 14 days.  It is granted (if at all) after notice to both sides and a hearing in ancillary court. A temporary injunction (TI) requires a more thorough hearing - usually a “mini-trial,” at which the applicant must show a likelihood of prevailing upon the merits at trial. A TI remains in effect for the duration of the litigation.  Finally, a permanent injunction is granted as part of a judgment and is usually indefinite in duration.

Note that a bond is always required if a TRO or TI is granted.  The amount can be nominal or significant.  Bonds in the amount of $5,000, $10,000, or $20,000 are common, although the amount can be set much higher.  This is discretionary with the judge and is designed to protect the interests of the party against whom the injunctive relief is awarded.  An applicant for a TRO or TI needs to be prepared to post the cash (which is refundable if the applicant prevails in the case) within 24 hours of the hearing or use a bondsman to do so.  Bondsmen will require 10-20% of the bond amount as a non-refundable premium as well as collateral (e.g., a lien on real estate).  Do not ask your attorney to seek a TRO or TI unless you have substantial resources with which to post a bond.

District judges preside over the ancillary court in rotating terms of two weeks.  Whether an injunction can be obtained depends on many factors, including the attitude of the judge presiding over ancillary court at the time.  The outcome of an application for an injunction is never guaranteed.  An application for an injunction adds a significant layer of complexity and expense to a lawsuit. 

Discovery

The term “discovery” refers to those mechanisms created under the Rules of Civil Procedure for obtaining information, documents, and tangible things about an opponent’s case (See Rule 190 et seq. TRCP).  Discovery can be divided generally into written discovery – requests for disclosure, interrogatories, requests for admission, and requests for production – and then depositions of parties, witnesses, and experts.  Discovery is necessary and it is expensive; however, no case can be effectively litigated in the modern age without doing thorough discovery. 

Generally, lawyers prefer to do written discovery first and then, as needed, take depositions.  It should be noted that this system is broken.  What tends to happen is that many lawyers (and most all of the big firms) that bill by the hour will object to and refuse to answer many of the interrogatories and production requests.  This is at best contrary to the spirit of the rules, at worst unethical.  The net effect of objecting to everything is to make a deposition inevitable, since the inquiring party needs the information to prepare for trial.  One or more depositions are time consuming and expensive for the client, but for certain lawyers who are billing by the hour, that is just fine.  So get ready . . . chances are you will be doing at least one deposition in your case.  Average cost? Between the court reporter and legal fees, about $1,200. 

Depositions are informal in the sense that they usually occur in a lawyer’s conference room, but they nonetheless constitute sworn testimony, given under oath, that may later be admitted at trial.  They are transcribed by a court reporter or videotaped. 

Clients occasionally question the need to do discovery (hoping to avoid the expense) but experienced attorneys know that it is always better to go to trial with foreknowledge of the opponent’s case.  Their own clients will be the first to blame them if they do not. 

Motions for Summary Judgment

A motion for summary judgment is an attempt to dispose of all or part of the case without proceeding to a full trial on the merits (See Rule 166a, TRCP).  Such a motion may be partial, ie., limited in scope to certain issues or certain parties, or it may affect the entire case.  Disposition by summary judgment is proper only when the movant establishes there are no genuine issues of material fact such that the movant is entitled to judgment as a matter of law.  In evaluating a motion for summary judgment, however, the reviewing court must “indulge every reasonable inference in favor of the non-movant and resolve any in its favor.”  Nixon v. Mr. Property Management, 690 S.W.2d 546, 548 (Tex. 1985).  Therefore, all evidence favorable to the non-movant will be taken as true and all doubts must be resolved in the non-movant’s favor.  The practical result is that summary judgments are difficult to obtain.  Judges are reluctant to grant them because doing so effectively deprives one of the parties of his day in court. 

Motions for summary judgment are useful, however, when you want to address just part of the dispute – possession of real property, for instance, leaving issues of title for trial.  Or an MSJ may be the best way to remove a party from a suit if that party was sued in an individual capacity rather than as the corporation or company in which he does business.  In any case, they are limited to lawyer arguments supported by documentary evidence and affidavits. Live witness testimony is not allowed.

One of the most basic criteria by which an attorney evaluates a case is whether or not it will survive a motion for summary judgment by the other side.

Mediation

Mediation is now standard in all cases, so expect it.  Most judges order it automatically (This is usually one of the deadlines on the Docket Control Order).  All judges will order it if either side requests it.  It may be for a half-day or a full day.  It is voluntary in the sense that neither side is obligated to accept any particular outcome.  Mediations can and sometimes do fail to result in a settlement between the parties.  All aspects of the mediation are confidential and (like all settlement discussions) cannot later be brought up in court. 

The cost of the mediator’s services is $400 to $600 per side for a half day. Clients must come to mediation prepared with a cashiers check or money order payable to the mediator.  This is collected before the mediation begins.  Your attorney’s fees will be in addition to this amount.

Clients should also come to mediation prepared to be reasonable.  No attorney wants a client who will not mediate or a client who will not mediate in good faith.  It is very seldom (if ever) that anyone in the legal system gets exactly what they want, so mediation is a fact of life - and it works.  Approximately 80% of cases settle at mediation.  Inducements for most people to settle include (1) the cost and aggravation of continued litigation; and (2) having certainty and control over the outcome of the litigation, rather than leaving it to a judge or a jury, who can sometimes return unpredictable and even whimsical verdicts.  There is an old joke about certain judges who rule according to “what they had for breakfast.”  Any experienced lawyer will have stories about times when he was shocked and dumbfounded by an unexpected verdict. 

Jury Trial vs. Trial to the Judge

Jury trials are more suitable in cases where one desires to “inflame the passions” of the jurors in order to get a bigger verdict.  This is more likely to happen in personal injury cases than real estate or business cases.  In the latter, technical questions of contract law and the like are usually best left for a judge to decide.  The judge has the training and expertise, and he likely hears similar cases often. 

This office no longer conducts jury trials because of the significant time demand that jury trials impose on a smaller law office (average duration - one week, during which time the rest of the attorney’s practice is in limbo).  If you are certain that you desire a jury trial, do not engage this office to represent you.

Collection on a Judgment

For plaintiffs, getting a judgment is just the first step.  Even if a judgment is obtained, the client should understand that collecting on a judgment against an individual can be difficult in Texas because of our homestead laws (which protect the home along with basic assets) and the constitutional prohibition against garnishing wages. If there is no insurance coverage, collection can be a problem. Similarly, execution against a corporation may be problematic if all assets have been moved out of the corporate name, or if the assets are located in other jurisdictions.  Some attorneys say they could “paper the walls of their offices” with judgments obtained but never collected.  That is just the way it is in Texas. 

Execution on a judgment is most likely to be successful when the defendant has cash in the bank, investment real estate, or a business with substantial inventory or receivables.  If none of these is present, the plaintiff’s best option is to file an abstract of judgment in the real property records and hope that the defendant will attempt to sell property through a title company during the ten years that the judgment remains on file. 

Legal Fees - Hourly Billing vs. Flat Fees

Most lawyers bill for litigation services on an hourly basis.  Hourly fees for reputable attorneys range from $150 per hour to $800 per hour or more for prestigious partners in downtown firms.  This office bills at $200 for office time, $250 per hour for court time, and $100 per hour for travel time, plus expenses.  A lawyer’s experience, reputation, and whether or not he or she is board certified are factors in setting fees.  Costs such as filing fees, court reporter expenses, and the like are never included in legal fees.  Lawyers will sometimes require that fees for major events (eg., depositions or retaining an expert) be paid in advance.  All legal retainers and fees, once paid, are entirely non-refundable. 

This office will occasionally consider working on a flat-fee basis (excluding costs), usually divided into three installments, depending on the case. There is no hourly accounting when flat fees are used.  Therefore, there is no refund if the case settles early or “on the courthouse steps.”  Specific fee quotes are usually given at the initial interview when the case is evaluated.  As stated above, most cases settle before trial, many at mediation, and legal fees can therefore be contained at a reasonable level.  However, without a crystal ball, it is difficult to determine in advance when or if a settlement will occur.  If there is no settlement, litigation without frills through trial in the county courts can easily cost $15,000 to $25,000.  Finally, although your attorney may request recovery of attorney’s fees and costs, this is generally discretionary with the court and can never be guaranteed. Most cases result in a judgment ordering each side to bear its own fees and costs, so it is prudent to assume from the outset that these expenditures will be a “cost of doing business.”

Conclusion

A lawsuit is a business enterprise, and a tough and demanding one at that.  It should never be taken personally, although clients have a difficult time understanding this. One function of the attorney is to help the client keep a cool head and evaluate the case rationally. Legal fees and costs expended to pursue a suit represent one form of business investment.  One could also, for instance, put that same money into the stock market, real estate, or into a gambling trip to Las Vegas.  As best as possible, a client needs to estimate the rate of return on his investment of time, effort, and money, all of which have value. Putting the money to work in a lawsuit represents an “opportunity cost” in economic terms (i.e., those funds are not available for other uses).  

Clients who say these sorts of businesslike calculations are beside the point, that their suit is all about “the principle” of the matter, are invariably the first to tire of the process and quit, occasionally leaving their attorneys with egg on their faces.  Generally, attorneys do not like to quit and do not like to lose.  Clients need to have both the fortitude and the finances to support their attorney’s efforts to thoroughly litigate and win the case.