The 2011 amendments to the Texas Responsible third party law, while probably well intentioned have created a situation that is clearly at odds with the original intent of the responsible third party statute. Originally the idea behind the statute was to allow defendants the opportunity to have the jury apportion fault to parties who could not be made a party to the lawsuit. Usually these were instances where either the responsible third party could not be located or the Court lacked jurisdiction over the party. Also there are times when a party’s whereabouts are known and the Court has jurisdiction over the party, but there is very little incentive for the Defendant to bring that party in as a co party. These would be situations where the party is essentially judgment proof because the party lacks financial resources or insurance.
Over the years, the responsible third parties have morphed into essentially an unrepresented defendant that is effectively an empty chair for the defendant to point the finger. This is especially a problem when a Defendant designates a responsible third party after the applicable statute of limitations has run. Prior to 2011, if a Defendant designated a responsible third party after the Statute of Limitations had run, the Plaintiff was allowed to bring suit against that party so long as he did so within thirty days of the designation. “Under this scenario, all culpable parties were before the court, defending themselves, and accountable to the plaintiff for their percentage of responsibility,” thereby achieving “a carefully constructed scheme balancing the interests of both defendants and claimants.”
In 2011, the Texas Supreme Court ruled that the statute of limitations laws in Texas trumped the plaintiff’s ability to join a time barred responsible third party. The Court was deeply divided on the issue. The dissenting justices noted the strategic advantages that a Defendant gains by designating a responsible third party for purpose of shifting liability. If a plaintiff is not allowed to join a time barred responsible third party, it is forced to prove the liability of the defendant while simultaneously defending against an empty chair. This would disrupt the balance that the original responsible third party law had sought to maintain.
After the Court’s ruling, the legislature sought to address this issue and implemented a system that allows a for Defendants to designate responsible third party after the statute of limitations, so long as it has complied with its obligations to timely disclose that person as a responsible third party under the TRCP. The Texas Rules of Civil Procedure require that a Defendant must respond to a request from the Plaintiff to disclose the names of all possible responsible third party. Once the Plaintiff has sent the request and the Defendant has responded, the Defendant is under a duty to timely supplement these responses.
Although the new amendment may seem fair to everyone on its face, from a practical perspective it has made the situation worse. Defendants aren’t required to elaborate as to why the party is a possible responsible third party. Thus a wise Defendant will always disclose as many possible responsible third party as possible even if it has no evidence or reason to believe that the party has any culpability. Plaintiff is then put in a binned when the statute is about to run and it must decide whether or not to bring suit against the party listed as possible responsible third party or risk Defendant designated the responsible third party after the statute has run and risk having to defend an empty chair.
For instance, let’s say that a property owner hires a contractor to build an office building. The contractor hires an architect, structural engineer, electrician, a plumber, mechanical engineer, a roofer, and a framer. The building is complete and almost immediately upon taking position the owner notices that there is problems with leaks. The owner continual tries to repair the building and but after about a year and half there is a significant leak in the building that causes significant damage. The owner conducts an independent investigation and after about a month of due diligence the owner determines that the contractor, the plumber, and one of the other subcontractors are at fault and the owner brings suit. In this hypothetical let’s say that the owner filed suit about 22 months after the owner took possession. In construction defect cases like these the statute of limitations isn’t always so clear. Under this scenario it is possible that the statute of limitations begins to run when the owner took possession of the building.
The Contractor names all of the subcontractors as possible responsible third parties. But does not provide a reason. The owner can’t figure out what the other contractors possibly did wrong, so the owner declines to bring them into the suit. Three months later, the contractor designates all of the subcontractors as responsible third parties. Now the Plaintiff has too show liability against the Defendants but also must defend against the empty chair of the responsible third party.
Let’s say on the other hand that the Plaintiff decides to bring them into the litigation, even though he believes that the contractor and the other defendants are truly the culpable parties. Although this scenario is probably better for the Owner, there are obviously problems with expanding the scope of the litigation like this is the exact opposite of what the responsible third party were intended.
