July 5, 2016
A recent decision from the Texas Court of Appeals in Houston closes the door to the recovery of attorney’s fees from limited liability companies under Chapter 38 of the Texas Civil Practice and Remedies Code, one of the few statutes authorizing the recovery of attorney’s fees in litigation disputes.

This holding will have a significant impact on plaintiffs and defendants currently in litigation, or contemplating litigation, in Texas. Indeed, the prospect of recovering attorney’s fees for plaintiffs, and the potential liability for the opposing side’s attorney’s fees for defendants, has played a central role in the decision-making process about whether, and how, to litigate breach of contract claims in Texas. Those considerations must now change if the dispute involves an LLC, partnership, association or legal entity that is not a corporation.

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