JIM MATTOX Attorney General

SupremeCourt Building P. 0. Box 12546 Aus!,“, TX. 76711. 2546 512,4752501 Telex 910/674-1367 TelecoDier 51214750266

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# The Attormy General of Texas

December 30, 1985

Honorable Frank Tf:jeda Chairman Comittee on Judic:i,al Affairs Texas House of Relmresentatives P. 0. Box 2910 Austin, Texas 78769 OpinionNo. JM-409

Re: Whether court costs and attorney fees may be excluded in detemining the "amount in controversy" in justice and county courts

Dear Repre8entatiT.e Tejeda:

The statuteswhich establish the arnountin controversyfor jurisdictionalpurposer in civil cases in county courtsand justice courts, articles 1949 and 2385, V.T.C.S., respectively, presently fix a minimum andmaximumsdollar amount in controversyand specify that the amount shall be nexclusive of interest." You ask whether the Texas Constitutionpermj.tsthe legislature to amend articles 1949 and 2385 to exclude court costs and attorney fees from the determinationof the amount in controversy.
County court:3which are created by the Texas Constitution and justice courts hare a jurisdictional amount in controversy which is set by articles 1949 and 2385 in accord with the Texas Constitution. ZTex. Const. art.V, 516 (countycourts); 819 (justicecourts). In contrast, the jur,isdictionalamount in controversy for statutory county courts depa?nds upon the language of the statuteswhich create the particular &urts. See Amigo-Rilicopters, Inc. v. Jones, 488 S.W.2d 473 (Tex. Civ. Apt- Houston 114th Dist.] 1972, no writ). Both section 16 and section 19 of article V specify certain minimum andmaximum jurisdictionalamounts that shallbe determined "exclusive of interest." As indicated, this language. articles 1949 and 2385 expressly echo

Ycu ask whether these articlesmay be amended to read "exclusive of interest,costs,and attorney fees."

As presently interpretedpursuant to theseprovisions, the jurisdictional amount i,ncontroversy in both types of courts does not include costs. Ccsts have traditionallybeen deemed to be no part of the amount in con:roversy in litigation and have not been considered in determining the jurisdiction of the courts. National Life and Accident InsuranceCo. v. Ralfin, 99 S.W.2d 997 (Tex.Civ. App. -.San Antonio 1936, *o-writ). For these reasons, the legislature may clearly codify existing law with regard to court costs by amending articles 1949 and 2385 to specify that court costs shall not be

p. 1871Honorable Frank Tejeda - Pzig;e 2 ,(JM-409)

considered in computing thf! amOunt in controversy.SeeV.T.C.S. art. 1 (legislaturemay codify or c:hange common law). -
The term "costs" doesnot ordinarily include attorney fees; there is 'nocommon-law right to 'recoverattorney fees from an opponent in

z. l:exasIndustries,Inc., 414 S.W.2d 914 -- 2d 870 (Tex. Civ. App. Co. v. Aztec Equipment Co., 582

- San Antonio 1979, no writ); Norman v. Safway Products, Inc., 404 S.W.2d 69 (Tex.Civ. App. - Dallas 1966,no writ). Attorney feesmay be recovered onlywhen a valid basis exists litigation as a part of c:osts. See Johnson v. Universal Life and Accident Insurance Co?, 94 S.W.2dT145 (Tex. 1936); see also New Amsterdam Casualty Cc iTZ 1967); Bakery Equipment ard.Service S.W.

for claiming attorney feelreither by statute or contract. See New Amsterdam Casualty Co. v. Texas Industries, Inc., supra. -- There is a divergence among the stat;, as to whether attorney fees which are recoverableas a matter of l.aw are to be used in computing the amount in controversy absent a statute which makes such fees expressly excluded from the jurisdict,ional amount. SeeAnnot., 167A.L.R. 1243, 1247 (1947). It is well settled in Texasthat when attorney fees are provided for by statute or contract, a demand for attorney fees in a petition constitutes a par<:of the amOunt in controversy in civil
cases in both county and justice courts, and is considered in determining such amount for jrn:isdictionalpurposes. Long v. Fox, 625 S.W.2d 376. 378 (Tex.Civ.Aoo. - SanAntonio 1981.writ ref'dn.r.e.)

.. (countycourt);seeNationsi Life andAccident InsuranceCo. v. Moore, 104 S.W.2d 897 (Tex. Civ. App. - Austin 1937, no writ) (statutory attorney fees in justice cc'urt); Jonesv. McKinney, 224 S.W. 720 (Tex. Civ. App. - Dallas 1920, no writ) (contractual attorney fees in justice court).

The courts in Texas have traditionally treated attorney fees as different in nature from c:asts. Contractual attorney fees have been considered a part of the amount in controversy as an element of damages. Similarly, statutzas which provide for attorney fees createa new cause of action or a ner part of a cause of action. A long line of cases has held that attorney fees constitute a part of the amount in controversy despite ritatutoryprovisions which indicate that attorney fees shall be taxe.das costs, but these cases do not state that the legislaturemay 'v,tconstitutionally exclude attorney fees from the jurisdictional z:.ount. See, e.g., United States Finance V. Quinn, 149 S.W.2d !.48(Tex.Civ. App. - Galveston 1941.writ civ F East Texaszitle Co. v. Par&&, 116 S.W.2d 497.(Tex.

. - Texarkana 1938.writ dism'd w.o.i.1: Washinaton National InsuranceCo. v. Guadalupa& Funeral Home, ~-~' 109 S:W.2d 1002 (Tex.Civ. APP. - Beaumont 1937,no wFt);. Maryland Casualty Co., 105 S.W.2d 376 (Tex.Civ. App. .-Beaumont 1937,no writ); National Life h
.v . .APP. - Accident Insurance Co. v. 'Moore,104 S.W.2d 897 (Tex. Cf Austin 1937, no writ); NzItionalLife & Accident Insurance Co; v. Halfin, 99 S.W.2d 997 (Tz: Civ. App. - Callaway v. Gulf States L:.f'e Insurance Agency, 51 S.W.2d 1070 (Tex. Civ. App. - El Paso 1932,no writ); see also Provident Insurance Co.

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Honorable Frank Tejeda - Page 3 (JM-409)

v. Browning. 157 S.W.2d 971 (Tex.Civ.App. - Eastland 1941,nowrit); Reid v. Ramsey, 143 S.W.2ii793 (Tex.Civ. App. - Waco 1940,no writ); Eanes v. Haynes, 135 S.W.2d 190 (Tex. Civ. App. - Eastland 1939, no writ); M&night v. WashinglouNational InsuranceCo., 131 S.W.2d 1072 (Tex. Civ. App. - Dallrts 1939, no writ). This line of cases originated from the Commission of Appeals decision in Johnson v. Universal Life and Accide;: Insurance Co., w The Johnson case suggests that this rule is .the result of statutoryconstmction:

the [statute]doe!3 not change the right to recover attorney's fees, but only says that they shallbe taxed as part of ,the costs.

. . . . The amended act does not say that in ascertaining the anount in controversy, for jurisdictional purposes, the **attorney ’** **s** fees shallnot be considered. (Emphasisin original).

94 S.W.2d at 1146; see illsoJohnson v. Universal Life h Accident InsuranceCo., 96 S.Wmfc676 (Tex.Civ. App. - Eastland 1933,no writ). The various statutes which uresentlv authorize recoverv of attorney fees in specifiedcases do not expresslyrequire that theybe computedas part of the amount in controversy. Nevertheless,none of these cases required the courts to addressdirectly the constitutional issue raisedby your requelst.

The only languagein ~;ections 16 and 19 of articleV of the Texas Constitution which addreszrthe manner in which the amount in controversy is to be detemined states that it shall be determined "exclusive of interest";the provisiondoes not expresslyrequire that attorney fees be included in the amount in controversy. No other provisions of the Texas Constitution address the manner in which the amount in controversy is to be computed. As indicated,however, at the time the constitutional provision was initially drafted, costs were never computed as .?artof **the** amount in controversy while attorney fees **were** computed as part of the amount. There existed no need to expresslyaddress the inclusionor exclusionof these items in the amount orvalue in controversy. Although the express exclusionof interest from the computationneed not be interpreted as en implied prohibitionon a legislativeexclusionof costs and statutoryattorney fees from the computationof the amount in controversy,themeaning of the "amount in controvemy" which was in effect at the tine the provision was adopted sh,>uldcontrol. The amount in controversy excluded costsbut includedattorney fees.

At least one case in Texas has indicated that the rule is one that originateswith the t,onstitution itself. See De Busk v. Quest, 290 S.W.2d 569, 571 (Tex. Civ. App. - Amarill~956, writ dism'd). The court in De Busk v. Cu.estheld that attorney fees constitute a L-

p. 1873Eonorabla Frank Tejeda - Pqle 4 (Ji+409)

1

part of the amount in conl:roversy In civil suits in county courts as establishedby article V, mction 16 of the Texas Constitution. Id. The case also suggests that the amount in controversy established for civil suits in justice ccurts by article V, section 19 includes attorney fees. This is consistentwith the treatmentof attorney fees
as different in nature from costs.
Moreover, the jurisdiction of a court over the person, over the res, and over the subject 'matterin controversy are not affected by the amount in controversy. The amount In controversy is usually the controlling factor in determining jurisdiction among the various courts. The proposed amerkments could be viewed as expanding, as a practical matter, the jurf,sdictional amount of the county courts and justice courts. Accordinfly, constitutional limits on the legislature's power to change ~thf: jurisdiction in county courts and justice courtsare instructive.

Article V, section 1 of the Texas Constitution specifies the courts that are to exercise the state's judicialpower. These courts include constitutional county courts and justice courts. The last paragraph of section 1 states:

The Legislaturemay establish such other courts as it may deem necessary and prescribe the jurisdiction and orga1:lratlon thereof, and may conform the jurisdiction of the district and other inferior courts the?&. (Emphasisadded).
Section 1 authorizes the legislature to create additional courts and to "conform the jurisdictionof the district and other inferiorcourts thereto"; the provision does, not authorisa the legislaturetowithdraw jurisdiction which is granted constitutionally to a court. Lord v. Clayton, 352 S.W.Zd 718 Tex. 1961); Reasonover v. Reasonover, 58 S.W.2d 817 (Tex. 1933). Pha Texas Constitution contains provisions which specifically authorize certain changes in the jurisdiction of county courtsand justice c.c'urts.

Artfclc V, section 16 fixes the minimum and maximum amount in controversy for various types of suits in county court. Article V, section 22 provides:

The Legislatu!:eshall have power, by local or ganeral law, to &crease, diminish or change the civil and crimin;? jurisdiction of Couaty Courts; and in cases of any such change of jurisdiction, the Legislature shall also conform the jurisdiction of the other courts to such change. (Emphasisadded).
Section 22 has been const:nledliberally by the courts to allow the legislature to change the jurisdiction of the county courts. See -

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Honorable Frank Tejeda - Pa,ge5 (x-l-409)

Gulf,W.T. & P. Railway Co.-". Fromma, 84 S.W. 1054, 1056 (Tex. 1905); Stavely v. Stavely, 94 S.W.2d 545, 546 (Tex. Civ. App. - Eastland 1936, writ dism'd w.0.j.); see also King v. State, 255 S.W.2d 879 (Tax. Grim. App. 1953) (withdrawalof criminal jurisdiction);Rogers
v. Graves, 221 S.W.2d 399 (Tex. Civ. App. - Waco 1949, writ ref'd) (withdrawalof civil jurisdiction);cf. Statev. Gillette'sEstate, 10 S.W.2d 984 (Tax. 1928) (sc:ction22does not authorize withdrawal of probate jurisdiction from the county court; for changes in probate jurisdiction, see art. V, 58). However, the cases do not hold that the legislaturemay change the jurisdictionalamountwhich is fixedby the constitution. If the Legislaturecould change the jurisdictional amount in constitutionalcounty courts and justice courts therewould be little need for suchan amount tobe set in the constitution.

In one case, Campsey 'T,Brumley, 55 S.W.2d 810 (Tex. 1932), 'the Commission of Appeals statledin dicta that article V. section 22 authorized the legislatureto enact a statutewhich conferredoriginal jurisdiction on a particular county court in civil cases, where the amount in controversywas less than the minimum amount fixed in the constitution. The court dLd not address the constitutional issue of whether this statute amount,edto the legal equivalent of changing the jurisdictional amount which is fixed by the Texas Constitution. Nevertheless, regardless of whether the exclusion of attorney fees from the computationof the amount In controversyis the equivalentof changing the constitutionallyfixed amount in controversy,we conclude that the term "amount in :ontroversy"encompasses attorney fees but not costs.
Article V, section 19 provides for civil jurisdiction in justice courtsas follows:

Justices of the peace shall have

. . . exclusive jurisdiction in civil matters of all cases where the amount in controversy is two hundred dollars or less, exclusive of interest, unless exclusive original jurisdiction is given to the District or Coun:y Courts, and concurrent jurisdictionwith the County Courtswhen thematter in controversy excec:dstwo hundred dollars and does not exceed five hundred dollars, exclusive of interest, unless exclusive jurisdiction is given to the County Courts, and, as provided by law, when the matter' in controversy exceeds five hundred dollars, concurrentjurisdictionwith both the County Court,3and the District Courts in an amount not to excisedone thousand dollars exclusive of interest,unless exclusive jurisdictionis given to theCounty Courts or theDistrict Courts; and such other jurisdiction, criminal and civil,
as may be providtz: by law, under such regulations

p. 1875Honorable Frank Tejeda - Page 6 (JM-409)

as may be pre+ibed by law.

. . . (Emphasis added). Subject to certain limits, section 19 authorizes the legislature to give justice courts addit:lonaljurisdiction. Nevertheless, the constitutional ConstNction cf the term "amount in controversy"applied to articleV, section 16 should also be applied to this section. See De Buskv. Quest, 290 S.W.:!d at 571. Accordingly,the Taxas ConstiG tion prohibits the legislt.turefrom amending article 2385 to exclude attorney fees from the ccmputation of the amount in controversy in civil cases In justice cou~:ts.

SUMMARY

The legislatcre may amand articles 1949 and 2385, V.T.C.S., t:oexclude court costs from the computationof the amount in controversy in county courts and just:lcecourts, respectively, without violating the Texa,s Constitution. Because attorney fees differ in nitt:ure from court costs, the legislaturemay not ccnstitutionallyenact amendments to exclude attorney :ieesfrom the computation of the amount in controversy without corollary constitutionalamendments. 

# gzMATTOX Attorney General of Texas

JACKHIGHTOWER First AssistantAttorneyGelera

MARY KELLER ExecutiveAssistantAttornqy General

ROBERT GRAY SpecialAssistantAttorney General

RICK GILPIN Chairman,Opinion Committee
Preparedby JenniferRiggs AssistantAttorney.General

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