Motion for Leave to Designate Responsible Third Party in Texas

What Is a Motion for Leave to Designate Responsible Third Party?

Background

Chapter 33 of the Civil Practice and Remedies Code sets out the Texas proportionate responsibility law. (In re CVR Energy, Inc. (2016) 500 S.W.3d 67, 73 quoting Tex. Civ. Prac. & Rem. Code Ann. § 33.001 –33.017 [West 2015.]) These statutes allow a tort defendant to designate as a responsible third party a person who “is alleged to have caused in any way the harm for which the plaintiff seeks damages.” (See Jay Miller & Sundown, Inc. v. Camp Dresser & McKee Inc. (2012) 381 S.W.3d 635, 638–39 [referring to predecessor to Subsection 33.004.])

“Chapter 33 applies to ‘any cause of action based on tort in which a defendant, settling person, or responsible third party is found responsible for a percentage of the harm for which relief is sought.’” (In re Smith (2012) 366 S.W.3d 282, 285 citing Tex. Civ. Prac. & Rem. Code Ann. § 33.002(a)(1) [West 2008].)

How to Structure the Motion

“[A] ‘responsible third party’ is ‘any person who is alleged to have caused or contributed to causing in any way the harm for which recovery of damages is sought[.]’” (In re Mobile Mini, Inc. (2020) 596 S.W.3d 781, 784 citing Tex. Civ. Prac. & Rem. Code § 33.011(6).)

If a "responsible third party" is joined under section 33.004, the trier of fact determines the percentage of responsibility for each claimant, each defendant, each settling person, and each responsible third party. (In re Arthur Andersen LLP (2003) 121 S.W.3d 471, 477 citing Tex. Civ. Prac. Rem. Code Ann. § 33.003 [Vernon 1997].)

A “responsible third party” is defined as any person to whom all of the following apply:

the court in which the action was filed could exercise jurisdiction over the person;
the person could have been, but was not, sued by the claimant; and
the person is or may be liable to the plaintiff for all or a part of the damages claimed against the named defendant or defendants.

(In re Arthur Andersen LLP (2003) 121 S.W.3d 471, 477-78.)

“Section 33.004(g)(1) ... unequivocally states that a court ‘shall’ grant a motion for leave to designate a responsible third party unless an objecting party establishes the defendant failed to plead sufficient facts to satisfy the pleading requirements of the Texas Rules of Civil Procedure.” (In re Bustamante, (2016) 510 S.W.3d 732, 737 citing Tex. Civ. Prac. & Rem. Code Ann. § 33.004(g)(1).) “The use of the word ‘shall’ in a statute ‘imposes a duty.’” (Id., citing Tex. Gov't Code Ann. § 311.016(3) [West 2013]; see also Helena Chem. Co. v. Wilkins (2001) 47 S.W.3d 486, 493 [noting ‘must’ and ‘shall’ generally recognized as ‘mandatory, creating a duty or obligation.’])

“The person named in the motion is designated as a responsible third party without further action by the court when the court grants a motion for leave to designate.” (In re Echols (2018) 569 S.W.3d 776, 779 citing § 33.004(h).)

Timing of Motion

Section 33.004 authorizes a tort defendant to seek leave of court to designate a person as a responsible third party by filing a motion for leave “on or before the 60th day before the trial[.]” (Id. §§ 33.002, .004(a).)

Limitations on Defendant's Filing

“There are limitations to a defendant's ability to designate responsible third parties under Subsection 33.004.” (In re CVR Energy Inc. (2016) 500 S.W.3d 67, 73.) “These limitations add ‘procedural safeguard [s]’ that prevent a defendant from undercutting ‘the plaintiff's case by belatedly pointing its finger at a time-barred responsible third-party against whom the plaintiff has no possibility of recovery.’” (Id., quoting Withers v. Schneider Nat'l Carriers, Inc. (2014) 13 F.Supp.3d 686, 689.)

“The first statutory limitation is that a defendant may not designate a responsible third party within 60 days of trial unless the court finds good cause.” (In re CVR Energy, supra, citing Tex. Civ. Prac. & Rem. Code Ann. § 33.004(a).) The second “is that a defendant may be precluded from designating a responsible third party if it had an obligation to disclose the person earlier but did not do so and the statute of limitations has run on the plaintiff's claim against the late-disclosed party....” (Id.)

Response

A party opposing a motion for leave to designate a responsible third party, bares the burden of establishing two elements:

that relators did not plead sufficient facts concerning third-party's responsibility to satisfy the general pleading requirements of the rules of civil procedure, and
that relators still failed to plead sufficient facts after having been granted leave to replead.

(In re Smith (2012) 366 S.W.3d 282, 286 citing Tex. Civ. Prac. & Rem.Code Ann. § 33.004(g).)

Mandamus as Remedy for Wrongful Denial

“[A] trial court’s improper decision applying section 33.004 to determine responsible third parties ‘may not be adequately addressed by appeal.’” (In re Oncor Elec. Delivery Co., LLC (2011) 355 S.W.3d 304, 306.)

The Supreme Court has noted that ‘a majority of our intermediate appellate courts have held that when a timely filed motion to designate a responsible third party is erroneously denied, no adequate remedy by appeal ordinarily exists.’” (In re Echols (2018) 569 S.W.3d 776, 782 citing In re Coppola (2017) 535 S.W.3d 506, 509.) The court in In re Coppola concluded, “[a]ccordingly, we hold that, ordinarily, a relator need only establish a trial court’s abuse of discretion to demonstrate entitlement to mandamus relief with regard to a trial court’s denial of a timely-filed section 33.004(a)motion.” (Id. at 510.)

The Court’s Decision

Under section 33.004 of the civil practice and remedies code, a trial judge may not deny a motion for leave to designate a responsible third party without first giving the movant leave to replead the facts concerning the alleged responsibility of the alleged responsible third party. (In re Smith (2012) 366 S.W.3d 282, 285.) In In re Oncor, the trial judge denied a motion for leave to designate a responsible third party without giving the movant an opportunity to replead. (Id., citing In re Oncor Electric Delivery Co. LLC (2011) 355 S.W.3d 304.) The court held that this was an abuse of discretion that could not be adequately addressed by appeal. (In re Smith, id.)

Concerning fraud and third parties, “for the third parties to be liable for fraud, they need not have made representations directly to the Plaintiffs.” (In re Arthur Andersen LLP (2003) 121 S.W.3d 471, 481.) “Texas case law has held that each party to a fraudulent scheme is responsible for the acts of the other participants done in furtherance of the scheme and liable for fraud.” (Id., citing Skrepnek v. Shearson Lehman Bros., Inc. (1994) 889 S.W.2d 578, 580; Corpus Christi Teachers Credit Union v. Hernandez (1991) 814 S.W.2d 195, 202.) “Further, a party who benefits from a fraudulent transaction may be a principal in the fraud and liable as such.” (First State Bank of Miami v. Fatheree (1993) 847 S.W.2d 391, 396 citing Corpus Christi Teachers, 814 S.W.2d at 202). “In fact, a party has been liable for the fraudulent misrepresentations of a third party by mere silent acquiescence when he benefitted from the fraud.” (See Bransom v. Standard Hardware, Inc. (1994) 874 S.W.2d 919, 924; Corpus Christi Teachers, 814 S.W.2d at 202.) “Therefore, although the third parties may not have misrepresented anything to the Plaintiffs, they may be liable for fraud because they allegedly participated in the fraudulent transactions and reaped the benefits.” (In re Arthur Andersen, id.)

Documents for Motion for Leave to Designate Responsible Third Party in Texas

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Tatyana Hellinger and Richard Hellinger VS. Vestex Development, LLC, Shaun Vest, KSM Development LLC, Mark Kaiser, and Ragnar Trucking LLC, document preview

Defendant Serco Construction Group LTD's Motion for Leave to Designate Res…

5 pages

CAUSE NO. 22-10-13326 TATYANA HELLINGER and RICHARD IN THE DISTRICT COURT OF HELLINGER, Plaintiffs, MONTGOMERY COUNTY, TEXAS VESTEX DEVELOPMENT, LLC, SHAUN VEST, KSM DEVELOPMENT LLC, MARK KAISER, SERCO CONSTRUCTION GROUP, LTD., RAGNAR TRUCKING LLC, and HOUSTON SPACE TRANSPORT, LLC Defendants …

Case Name Tatyana Hellinger and Richard Hellinger VS. Vestex Development, LLC, Shaun…