Utica Lloyd's of Texas v. Mitchell, 138 F.3d 208 (5th Cir. 1998). · Go Syfert
Utica Lloyd's of Texas v. Mitchell, 138 F.3d 208 (5th Cir. 1998). Cases Citing This Book View Copy Cite
Quick Summary

A party may not rely on the Texas Declaratory Judgments Act to authorize attorney's fees in a diversity case because the statute is procedural rather than substantive law.

In a diversity action brought under the federal Declaratory Judgment Act, defendants sought attorney's fees pursuant to the Texas Declaratory Judgments Act. The court must determine if the federal statute provides independent authority for such an award or if state law permits it. Because the federal Declaratory Judgment Act does not itself provide statutory authority to award attorney's fees, any such award in a diversity case must be permitted by controlling substantive state law. Because the Texas Declaratory Judgments Act functions solely as a procedural mechanism for resolving substantive controversies rather than substantive law, it cannot be used to authorize attorney's fees in a federal diversity action.

109 citation events (100 in the last 25 years) across 18 distinct courts.
Treatment trajectory · 1998 → 2026 · click a year to view as-of
1998 2012 2026
Cited for
At page 210 Limitation of attorney's fees in diversity actions21 citing cases“a party may not rely on the texas dja to authorize attorney's fees in a diversity case because the statute is not substantive law.”8 citing courts quote it · passage not found verbatim in the opinion (81%)
  • Vigce LLC v. Level Eleven LLC, No. 3:23-cv-00094 (N.D. Tex. May 1, 2024).
    ([A] party may not rely on the Texas [Declaratory Judgment Act] to authorize attorney’s fees in a diversity case because the statute is not substantive law.)
  • Zavala v. State Farm Mut. Auto. Ins. Co., No. 5:23-cv-01372 (W.D. Tex. Jan. 3, 2024).
    ([A] party may not rely on the Texas DJA to authorize attorney’s fees in a diversity case because the statute is not substantive law.)
  • Barrow v. Onshore Quality Control Specialists, LLC, No. 1:22-cv-00670 (W.D. Tex. Nov. 10, 2022).
    (a party may not rely on the Texas DJA to authorize attorney’s fees in a diversity case because the statute is not substantive law)
  • Hello I am Elliot, Inc. v. Sine, No. 1:19-cv-06905, 2021 WL 1191971 (S.D.N.Y. Mar. 30, 2021).
    ([Section 2202] of the Federal [Declaratory Judgment Act] ‘does not by itself provide statutory authority to award attorney’s fees[.]’)
  • Affordable Builders of Am., Inc. v. Thomas, No. 2:22-cv-01381 (E.D. Cal. May 10, 2023).
    Thus, defendant cannot rely on the Act in seeking attorney’s fees in this diversity action. 2 See Utica Lloyd’s of Tex., 138 F.3d at 210. 3 C.
  • McGinnis ex rel. McGinnis v. Union Pac. R.R., 612 F. Supp. 2d 776 (S.D. Tex. 2009).published
    No. 71 at 24.) Liberty Mutual also argues, relying on Utica Lloyd’s of Texas v. Mitchell, 138 F.3d 208, 209 (5th Cir.1998), that UP is not entitled to attorney’s fees under Section 37.009.
  • Gemini Ins. v. S & J Diving, Inc., 464 F. Supp. 2d 641 (S.D. Tex. 2006).published 2 cites
    Co., 166 F.3d at 772 (citing Mitchell, 138 F.3d at 210).
  • Camacho v. Texas Workforce Comm'n, 445 F.3d 407 (5th Cir. 2006).published
    “a party may not rely on the Texas DJA to authorize attorney’s fees in a diversity case because the statute is not substantive law”
  • Am. Home Assurance Co. v. United Space All., LLC, 378 F.3d 482 (5th Cir. 2004).published
    AHAC also cites this court’s decisions in Utica Lloyds of Texas v. Mitchell, 138 F.3d 208, 210 (5th Cir.1998) and Travelers Indem.
  • Houston Cas. Co. v. Certain Underwriters at Lloyd's London, 51 F. Supp. 2d 789 (S.D. Tex. 1999).published 3 cites
    Furthermore, the “otherwise ... available” law must be substantive, see Utica, 138 F.3d at 210, and as discussed, the Texas Declaratory Judgment Act is not itself such a substantive provision.
Show 11 more citing cases
  • W. Heritage Ins v. Robertson, No. 17-70015 (5th Cir. Aug. 20, 1998).unpublished
    Id. at 210.
  • Atlas Biologicals v. Biowest, 50 F.4th 1307 (10th Cir. 2022).published
    (concluding that a party could not rely on Texas’s declaratory judgment act to authorize attorney’s fees in a diversity case because the statute is not substantive law)
  • Schell v. OXY USA, No. 13-3297 (10th Cir. Feb. 10, 2016).published 2 cites
    See Utica Lloyd’s of Tex. v. Mitchell, 138 F.3d 208 , 210 (5th Cir. 1998) (“[Section] 2202 of the Federal 13 This question appears to have been presented to a panel of our court but we had no occasion to resolve it.
  • Philadelphia Indem. Ins. v. SSR Hosp., Inc., 459 F. App'x 308 (5th Cir. 2012).unpublished
    ([A] party may not rely on the Texas DJA to authorize attorney’s fees in a diversity case because the statute is not substantive law.)
  • Massachusetts Mut. Life Ins. v. Sanders, 787 F. Supp. 2d 628 (S.D. Tex. 2011).published
    The federal Declaratory Judgment Act “does not by itself provide statutory authority to award attorney’s fees that would not otherwise be available under [substantive] state law in a diversity action.” Mercantile Nat’l Bank v. Bradford Tru…
  • AG Acceptance Corp. v. Veigel, 564 F.3d 695 (5th Cir. 2009).published 3 cites
    (holding that “a party may not rely on the [TDJA] to authorize attorney’s fees in a diversity case because the statute is not substantive law)
  • Nevarez v. Residential Credit Solutions, Inc. (In re Nevarez), 488 B.R. 332 (Bankr. E.D. Tex. 2013).published
    (explaining that the Texas Declaratory Judgment Act functions solely as a procedural mechanism for resolving substantive controversies which are already within the jurisdiction of the courts)
  • Olander v. Compass Bank, 363 F.3d 560 (5th Cir. 2004).published
  • Kroger Texas L.P. v. Gator Harwood Partners, LLLP, No. 4:22-cv-00980 (N.D. Tex. Jan. 17, 2024).
  • Allstate Ins. v. Mader, 201 F. App'x 261 (5th Cir. 2006).unpublished
  • FCStone Merch. Servs., LLC v. SGR Energy, Inc., No. 4:20-cv-03693 (S.D. Tex. July 14, 2021).
[Section] 2202 of the Federal 13 This question appears to have been presented to a panel of our court but we had no occasion to resolve it. Specifically, in Kornfeld v. Kornfeld, 341 F. App’x 394 (10th Cir. 2009) (unpublishedno pin page on record · 2 citing cases listed
  • Schell v. OXY USA, No. 13-3297 (10th Cir. Feb. 10, 2016).published 2 cites
    ([Section] 2202 of the Federal 13 This question appears to have been presented to a panel of our court but we had no occasion to resolve it. Specifically, in Kornfeld v. Kornfeld, 341 F. App’x 394 (10th Cir. 2009) (unpu…)
  • Schell v. OXY USA Inc., 814 F.3d 1107 (10th Cir. 2016).published 2 cites
    ([Section] 2202 of the Federal 13 This question appears to have been presented to a panel of our court but we had no occasion to resolve it. Specifically, in Kornfeld v. Kornfeld, 341 F. App’x 394 (10th Cir. 2009) (unpu…)
At page 209 Analyzing the scope of the insurance policy's coverage1 citing case
  • McGinnis ex rel. McGinnis v. Union Pac. R.R., 612 F. Supp. 2d 776 (S.D. Tex. 2009).published
    No. 71 at 24.) Liberty Mutual also argues, relying on Utica Lloyd’s of Texas v. Mitchell, 138 F.3d 208, 209 (5th Cir.1998), that UP is not entitled to attorney’s fees under Section 37.009.
Other citing cases18 with no pin cite or quoted language on record
Show 8 more citing cases
Retrieving the full opinion text from the archive…
UTICA LLOYD’S OF TEXAS, Plaintiff-Appellee,
v.
Eric MITCHELL, D/B/A the Mitchell Company; Et Al., Defendants, Eric Mitchell, Individually and D/B/A the Mitchell Company, Anderson, Wormley Mitchell & Hunt, Inc., and Wormley, Mitchell & Associates, Inc., Defendants-Appellants
96-50431.
Court of Appeals for the Fifth Circuit.
Apr 15, 1998.
Published opinion
138 F.3d 208
1998 WL 145562
Scott Patrick Stolley, Thompson & Knight, Dallas, TX, Jeffrey Scott Boyd, Austin, TX, for Plaintiff-Appellee., Michael Klein, John Pike Powers, Marcy Hogan Greer, Fulbright & JaworsM, Austin, TX, for Defendants-Appellants.
Jones, Demoss, Parker.
Cited by 2 opinions  |  Published
4 passages pin-cited by 4 cases
Citer courts: Fourth Circuit (8) · W.D. Texas (2) · S.D. New York (1) · N.D. Texas (1)
EDITH H. JONES, Circuit Judge:

Utica Lloyd’s of Texas (“Utica”) brought this diversity suit under the Declaratory Judgment Act (the “Federal DJA”), 28 U.S.C. '§§ 2201-02, against Eric Mitchell, The Mitchell Company, Anderson, Wormley, Mitchell & Hunt, Inc. and Wormley, Mitchell & Associates, Inc. (collectively, the “Mitchell Defendants”) seeking construction- of a policy issued by Utica, and a determination whether, it had the duty to defend and indemnify the Mitchell Defendants in an underlying state court suit. Following an order by the federal district court determining that Utica had a duty to defend the Mitchell Defendants, the Mitchell Defendants sought attorney’s fees pursuant to the Texas version of the Uniform Declaratory Judgments Act (the “Texas DJA”), Tex. Crv. Prac. & Rem.Code § 37.001, et seq. 1 The district court denied the request for attorney’s fees, perceiving itself bound by our decision in Bituminous Casualty Corp. v. Vacuum Tanks, Inc., 975 F.2d 1130, 1133 (5th Cir.1992), which found that attorney’s fee awards against certain insurers should be denied in Texas declaratory judgment actions. We affirm, but for a different reason.

The district court in the instant case relied on a statement in Bituminous that Tex. Civ. Prac. & Rem.Code § 38.006 “exempts certain insurers from payment of attorney’s fees in declaratory judgment actions.” Bituminous, 975 F.2d at 1133. The court apparently interpreted Bituminous as a broad holding applying to any declaratory judgment arising under Texas law. Bituminous, however, involved-an award of attorney’s fees under § 38.001(8), which provides for such fees for claims on “an oral or written contract,” and never addressed the provision for attorney’s fees under § 87.009 of the Texas Declaratory Judgment Act, while the Mitchell Defendants in the instant case base their claim for fees solely on § 37.009. Furthermore, § 38.006 simply provides that Chapter 38 “does not[*210] apply to a contract issued by an insurer that is subject to” one of five provisions. [2] Accordingly, Bituminous limits only the availability of attorney’s fees sought under Chapter 38, and is not relevant to the issue before this court — -whether the Mitchell Defendants are entitled to attorney’s fees under § 37.009 in a federal declaratory judgment action arising under diversity.

Federal courts follow the American Rule in the absence of fee-shifting congressional legislation. See. Alyeska Pipeline Serv. Co. v. Wilderness Soc’y, 421 U.S. 240, 247, 95 S.Ct. 1612, 1616, 44 L.Ed.2d 141 (1975). Section 2202 of the Federal DJA provides that “[f]urther necessary or proper relief based on a declaratory judgment or decree may be granted ... against any adverse party whose rights have been determined by such judgment.” As this court has noted, however, § 2202 of the Federal DJA “does not by itself provide statutory authority to award attorney’s fees that would not otherwise be available under state law in a diversity action.” Mercantile Nat’l Bank v. Bradford Trust Co., 850 F.2d 215, 218 (5th Cir.1988). Furthermore, the “otherwise ... available” state law in a diversity case must be substantive, for Mercantile explicitly stated that an award of attorney’s fees in a federal declaratory judgment action “is confined to two situations: (i) where, under the restrictive American rule, attorney’s fees are allowed; and (ii) where controlling substantive law permits recovery.” Id. at 216 (emphasis added).

The Mitchell defendants rely on the § 37.009 of the Texas DJA to authorize recovery of attorney’s fees. Although the Texas DJA expressly provides for attorney’s fees, it functions solely as a procedural mechanism for resolving substantive (‘controversies which aré already within the jurisdiction of the courts.” Housing Authority v. Valdez, 841 S.W.2d 860, 864 (Tex.App.—Corpus Christi 1992, writ denied). Unlike substantive law, however, Texas procedure does not govern this diversity action. See Gasperini v. Center for Humanities, Inc., 518 U.S. 415, -, 116 S.Ct. 2211, 2219, 135 L.Ed.2d 659 (1996) (observing that “[ujnder the Erie doctrine, federal courts sitting in diversity apply state substantive law and federal procedural law”).

This court specifically noted in Self-Insurance Institute of America, Inc. v. Korioth, 53 F.3d 694 (5th Cir.1995) that although “a party may recover fees in a federal declaratory judgment action where ‘controlling substantive law [1] permits such recovery,” “[t]he Texas DJA is neither substantive nor controlling.” Id. at 697 (internal citation omitted). Though jurisdiction in Korioth arose through a federal question claim rather than diversity, the decision’s language clearly indicates, and we now hold, that a party may not rely on the Texas DJA to authorize attorney’s fees in a diversity case because the statute is not substantive law.

The Mitchell Defendants have failed to show they are entitled to attorney’s fees under an applicable fee-shifting statute. Accordingly, the judgment of the district court denying the Mitchell Defendants an award of attorney’s fees is AFFIRMED.

1

. Chapter 37 of the Texas Civil Practice and Remedies Code contains the Texas version of the Uniform Declaratory Judgment Act. Section 37.009 provides that "[i]n any proceeding under this chapter, the court may award costs and reasonable and necessary attorney’s fees as are equitable and just.” Tex Civ. Prac. & Rem.Code § 37.009.

2

. The five statutory provisions listed are:

(1) Article 3.62, Insurance Code;
(2) Section T, Chapter 387, Acts of the 55th
Legislature, Regular Session, 1957 (Article
3.62-1, Vernon’s Texas Insurance Code);
(3) Chapter 9, Insurance Code;
(4) Article 21.21, Insurance Code; or
(5) the Unfair Claim Settlement Practices Act
(Article 21.21-2, Insurance Code).
Tex. Civ. Prac. & Rem.Code § 38.006.
The parties do not dispute that Utica is an insurer subject to Article 21.21 of the Insurance Code and included within § 36.006(4). Thus, even if the Mitchell Defendants had sought attorney’s fees pursuant to § 38.001, § 38.006 expressly excludes them from an award of attorney’s fees under Chapter 38.