The Texas Supreme Court’s recently adopted Rules for Dismissals and Expedited Actions go into effect on March 1, 2013. The Rules establish expedited proceedings for civil lawsuits seeking $100,000 or less in damages, including interest and attorneys’ fees. The new expedited rules, however, do not apply to claims governed by the Texas Property Code, Tax Code, Family Code or to statutory health care liability claims. The Property Code exception would exclude association–against-owner litigation based upon the Property Code, such as covenant enforcement or collections. The new expedited procedures will apply to association disputes with non-owners, such as third party vendors. The expedited rules should also apply to some potential lawsuits against an association board of directors. For example, only post January 1, 1994 restricted condominiums are subject to the statutory fiduciary requirement found in Section 82.103 of the Texas Uniform Condominium Act (“TUCA”). Thus, only Section 82.103 TUCA fiduciary claims would be excluded from the new expedited procedure.
The Rules amend Texas Rules of Civil Procedure 47 and 190, and create Rule of Civil Procedure 169. Specific pleading requirements are imposed, and discovery and trial time is limited. The result is quicker and less expensive justice. Parties are not required to mediate unless a contractual mediation requirement applies, and the court must set the case for trial within 90 days after discovery ends.
The Rules also create a method to allow early dismissal of a baseless lawsuit. This is found in new Texas Rule of Civil Procedure 91a. There is no Property Code exception found in Rule 91a. Only Family Code and inmate statutory claims are excluded from Rule 91a. Therefore, the new procedure to challenge baseless lawsuits applies to all homeowner association lawsuits.
Under Rule 91a, a motion to dismiss a baseless lawsuit must be ruled upon by the court within 45 days. The offending claim may be dropped or the motion to dismiss may be withdrawn up to 7 days prior to the hearing on the motion. If neither the lawsuit nor the motion is dropped, the court must award all costs and attorneys’ fees to the prevailing party, to be paid by the losing party (unless the action involves governmental entities or public officials in their official capacity).
The new rules are subject to modification, as the period for public comment is open until February 1, 2013.