Texas Supreme Court Hears Case Over Whether Attorneys’ Fees from Out‑of‑State Litigation Can Be Contract Damages The Supreme Court of Texas heard argument on whether attorneys’ fees incurred in separate New Mexico litigation can be recovered as damages for breach of a Texas settlement agreement; petitioners called the fees foreseeable direct damages, respondents urged application of the American rule and Chapter 38 limits.

The Texas Supreme Court is deliberating a pivotal case that could redefine how attorneys’ fees from out-of-state litigation are treated as contract damages in settlement agreements.

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