An employee diverts company funds. A partner walks off with inventory. A contractor pockets money meant for the subcontractors. The Texas Theft Liability Act turns conduct like that into a civil claim, one that runs parallel to and independent of any criminal case. Codified at Chapter 134 of the Civil Practice and Remedies Code, the TTLA gives victims of theft a direct cause of action with attractive damages and mandatory fee shifting.
The TTLA’s value to plaintiffs is real. The act allows recovery of actual damages, additional statutory damages, and, most importantly, mandatory attorney’s fees to the prevailing party. The damages framework can make small theft cases economically viable that would not otherwise justify the cost of litigation.
The act’s risks to plaintiffs are also real. The mandatory fee shifting works both ways. Plaintiffs who fail to prove the elements of the underlying Penal Code offense face mandatory fee awards to the prevailing defendant. This is not a tool for ordinary commercial disputes. It requires actual theft as the Penal Code defines it.
What the TTLA incorporates
Chapter 134 does not define theft on its own. It incorporates by reference specific provisions of the Texas Penal Code:
Penal Code section 31.03, Theft. The most commonly invoked provision. Theft occurs when a person unlawfully appropriates property with intent to deprive the owner of the property. “Unlawful” appropriation includes appropriation without the owner’s effective consent or appropriation of property known to be stolen.
Penal Code section 31.04, Theft of service. Theft of service occurs when a person obtains services by deception, threat, or false token, or fails to make payment for service rendered.
Penal Code section 31.05, Theft of trade secrets. Theft of trade secrets is a distinct offense covering misappropriation of proprietary commercial information. Some trade secret cases can be pleaded under both the TTLA and the Texas Uniform Trade Secrets Act. See Trade Secret Misappropriation Under TUTSA.
Penal Code section 31.06, Theft by check. Theft accomplished through a check known to be without sufficient funds at the time of issuance.
For each incorporated offense, the plaintiff must prove the elements of the offense, but at the civil preponderance standard rather than the criminal beyond-reasonable-doubt standard. The mental state element (typically “intent” or “knowing”) still has to be proven, but with the lower civil burden.
The most common TTLA business cases
Employee theft. An employee converted company funds to personal use, took inventory for personal benefit, or otherwise misappropriated company property. These cases sit comfortably within Penal Code section 31.03. The mandatory fee shifting often makes them economically attractive even at modest dollar amounts.
Business partner misappropriation. A partner or co-owner diverted business funds, removed business assets, or otherwise took property belonging to the business or to the other owners. The intersection with breach of fiduciary duty claims is typical. See Partnership Theft and Misappropriation.
Vendor or contractor theft. A contractor took payment for services it never performed, or kept payments meant for subcontractors that were never paid through. Theft of service under section 31.04 covers some of these cases.
Trade secret theft. A former employee or business partner took proprietary information for use elsewhere. Cases can combine TTLA claims under section 31.05 with TUTSA claims under the Texas Uniform Trade Secrets Act.
Theft by check. Bad-check cases involving sufficient amounts to justify civil action.
In each context, the TTLA’s combination of additional damages and mandatory fee shifting can substantially increase recovery compared to ordinary contract or conversion theories.
The damages framework
The TTLA damages provisions at section 134.005:
Actual damages. The amount of the plaintiff’s loss caused by the theft. This is the underlying economic harm, the value of the stolen property, the diverted funds, or the unpaid services.
Additional damages of up to $1,000. Section 134.005(a)(1) allows additional damages capped at $1,000 per defendant. This is a statutory damages provision available without proof of specific harm beyond the underlying theft.
Court costs. Recoverable by the prevailing party.
Mandatory attorney’s fees. Section 134.005(b) requires the court to award reasonable and necessary attorney’s fees to the prevailing party. The fees are mandatory, not discretionary, and are awarded regardless of which side prevails.
The mandatory fee shifting is the most consequential provision. Plaintiffs with strong cases recover their fees as a matter of right. Plaintiffs with weak cases pay defendants’ fees as a matter of right. The two-way nature of the fee shifting is what makes the TTLA both attractive and dangerous.
Joint and several liability
Section 134.004 allows the trier of fact to apportion liability among multiple defendants but also provides for joint and several liability where appropriate. Conspirators and joint participants in the theft are typically liable jointly and severally for the damages caused.
This expands the recovery options. Where the principal thief is judgment-proof, accomplices and beneficiaries who participated in the theft become reachable through joint liability.
Pleading strategy
TTLA claims need careful pleading because of the underlying Penal Code element requirements:
Identify the specific Penal Code section. The pleading should identify which Penal Code offense is being invoked, 31.03, 31.04, 31.05, or 31.06. Generic theft allegations without identification of the underlying offense create pleading problems.
Plead the elements of the offense. Each element of the underlying Penal Code offense should be pleaded with sufficient factual detail to put the defendant on notice. The mental state element, “intent to deprive” or “knowing”, typically requires specific factual allegations.
Distinguish from ordinary commercial disputes. A breach of contract is not theft just because money was not paid as promised. The TTLA requires unlawful appropriation, not just non-payment. Cases that look like contract disputes should be analyzed carefully before adding TTLA claims.
Combine with related theories. TTLA claims are usually pleaded alongside breach of fiduciary duty, conversion, fraud, and contract claims as alternative theories of recovery.
Defenses
Common defenses:
No theft as defined by the Penal Code. The conduct was a breach of contract, a business dispute, or other non-theft misconduct that does not meet Penal Code requirements. This is the most common defense in business TTLA cases.
No criminal intent. The mental state element was not present. The defendant’s conduct may have been wrongful but not accompanied by the intent the Penal Code requires.
Consent. The plaintiff actually consented to the appropriation, even if later disputed.
Authority. The defendant had actual or apparent authority to take the property or funds.
Statute of limitations. TTLA claims typically have a two-year limitations period under Texas Civil Practice and Remedies Code section 16.003(a), though some authority supports a four-year period in particular contexts.
The most important defense issue in many TTLA cases is whether the conduct is theft or just contract breach. Defendants who can recharacterize the dispute as a contract dispute defeat both the TTLA claim and (through mandatory fee shifting) recover fees from the plaintiff.
When the TTLA case connects to other claims
TTLA claims typically appear alongside:
- Breach of fiduciary duty in employee theft and partner misappropriation cases. See Fiduciary Duty Litigation.
- Conversion as a parallel tort claim covering the same conduct without the Penal Code element requirements.
- Fraud when the theft involved deception. See Fraud and Fraudulent Inducement.
- Civil conspiracy when multiple parties participated. See Civil Conspiracy Under Texas Law.
- Trade secret misappropriation in section 31.05 cases.
- Fraudulent transfer when the thief has moved stolen assets beyond reach. See our Dallas Fraudulent Transfer practice.
Theft, or just a contract dispute in disguise
We screen for actual theft before anything else, because filing a TTLA claim that turns out to be a contract claim hands the defendant mandatory fees. From there we plead the specific Penal Code provision and build the mental state element through discovery, since intent is almost always the contested ground. On prevailing claims we press the mandatory fees hard, as they can dwarf the underlying damages in lower-dollar cases. And we defend the mirror image of all of this, recovering fees for clients dragged into misfiled TTLA suits.
The fee statute drives every TTLA case. It runs to the prevailing party, plaintiff or defendant, so the decision to plead a theft claim, or to fight one, turns on whether the conduct truly meets a Penal Code offense rather than ordinary non-payment. Get that call right and the fees fund the case. Get it wrong and they finance the other side.
Frequently Asked Questions
What is the Texas Theft Liability Act?
It is a civil cause of action for theft, codified at Chapter 134 of the Texas Civil Practice and Remedies Code and defined by specific provisions of the Texas Penal Code. The TTLA lets victims recover actual damages plus additional statutory damages and mandatory attorney's fees, in an action separate from any criminal prosecution. It shows up regularly in business cases involving employee theft, partner misappropriation, and similar misconduct.
What kinds of theft are covered by the TTLA?
Only the theft offenses the Penal Code defines, incorporated by reference: theft under section 31.03, theft of services under 31.04, theft of trade secrets under 31.05, and theft by check under 31.06. The plaintiff has to prove the elements of the underlying offense as a matter of civil proof. Misappropriation that falls short of those elements may be actionable on other theories, but not under the TTLA.
What damages are available under the Texas Theft Liability Act?
Four things: actual damages caused by the theft, additional damages of up to $1,000 if the defendant is liable, court costs, and reasonable and necessary attorney's fees, which are mandatory to the prevailing party, including a prevailing defendant. That two-way fee shifting is the act's most distinctive feature. The TTLA also allows joint and several liability among multiple defendants who participated in the same theft.
Can a TTLA claim be brought against a former employee for theft from the company?
Yes, and these are among the most common TTLA cases. When an employee misappropriates company funds, equipment, or proprietary information in a way that meets the elements of Penal Code section 31.03 or another covered offense, the employer can pursue a TTLA claim alongside or instead of other theories. The TTLA's mandatory fee shifting and the availability of additional damages make it a powerful tool against employee theft.
Does a TTLA defendant have to be convicted of the underlying theft offense?
No. The TTLA is a civil action that does not require any criminal prosecution or conviction. The plaintiff must prove the elements of the underlying Penal Code offense by a preponderance of the evidence, the standard civil burden, rather than the criminal beyond-reasonable-doubt standard. A defendant can be civilly liable under the TTLA even when criminal authorities did not pursue charges or pursued them unsuccessfully.