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“‘There is no logic to the law’ excluding other entities from liability for attorney’s fees ... ‘but that is exactly what Texas has done.’”
at *25 (Tex. App.—Dallas Apr. 21, 2017, pet. denied) (mem. op.); Alta Mesa Holdings, 488 S.W.3d at 455. For example, the court in Alta Mesa Holdings noted that LLCs and corpora- tions are governed by separate titles within the Business Organizations Code. Alta Mesa Holdings, 488 S.W.3d at 454.
Moreover, the court in First Cash reasoned that the use of the broadly de ned term “per- son” a mere six words prior to the phrase “in- dividual or corporation” demonstrates that “[t]he Legislature clearly knew how to make attorney’s fees available to all legal entities, but intentionally chose not to make them avail- able from all legal entities.” First Cash, 538 S.W.3d at 199 (emphasis in original).
is narrow construction of the term “cor- poration” in § 38.001 arguably con icts with the statute’s mandate that it “be liberally con- strued to promote its underlying purpose,” which the Texas Supreme Court has instruct- ed is to “encourage contracting parties to pay their just debts and discourage ... vexatious, time-consuming and unnecessary litigation.” Ventling v. Johnson, 466 S.W.3d 143, 155 (Tex. 2015). If anything, excluding other business entities from liability for attorney’s fees un- der § 38.001 gives those entities an advantage over corporations in litigation. If a corpora-
tion and an LLC sue and countersue each other for breach of contract, the LLC would be entitled to attorney’s fees under § 38.001 if it prevails, whereas the corporation would not be so entitled if it prevails.
As one federal court has commented, “[t] here is no logic to the law” excluding other entities from liability for attorney’s fees under § 38.001, “but that is exactly what Texas has done.” Taylors Int’l Servs., Inc. v. Cuero Oil- eld Hous., LLC, No. A-16-CA-512-SS, 2016 WL 8674349, at *1 (W.D. Tex. Oct. 31, 2016) (order). Accordingly, until the legislature amends § 38.001, when evaluating poten- tial exposure and recovery
in lawsuits involving the types of claims enu- merated in § 38.001, attorneys must re- member that the only business entity from which a plainti can recover attorney’s
fees under § 38.001 is an actual corpora- tion.
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