The Dallas Court of Appeals recently held that a plaintiff cannot avoid attorney’s fees by simply dismissing its claim prior to a decision on the merits. In this case, the plaintiff asserted several claims against the defendant, including a claim for violation of the Texas Theft Liability Act (Theft Act). Four days after the defendant filed a traditional motion for summary judgment on the plaintiff’s Theft Act claim, the plaintiff filed an amended pleading that omitted its Theft Act claim, effectively dismissing the claim with prejudice. In its response to the defendant’s motion for summary judgment, the plaintiff argued that the defendant’s request for attorney’s fees was moot because the Theft Act claim had been dismissed. The defendant disagreed and sought to recover its attorney’s fees as the “prevailing party” on plaintiff’s Theft Act claim pursuant to section 134.005 of the Texas Civil Practice & Remedies Code. The trial court agreed with the defendant and awarded the defendant its attorney’s fees as the prevailing party.
The plaintiff appealed and argued that the defendant was not entitled to its attorney’s fees because it was not a “person who prevailed” under the Theft Act. In an opinion by Justice Robert Fillmore, the court of appeals held that a party can be prevailing party if it dismisses its claim in order “to avoid an unfavorable ruling on the merits.” Here, the Court noted that the plaintiff all but acknowledged dismissing the claim to avoid an unfavorable ruling because “by nonsuiting that claim, [the plaintiff] basically cried Uncle.” Accordingly, the court of appeals’ affirmed the trial court’s judgment awarding the defendant attorney’s fees as a prevailing party. The Court’s opinion in BPP Sub I LP v. Di Tucci can be found here.