Friday, February 21, 2020

Making Attorney Misconduct Pay, Texas Supreme Court Shows the Way: A Critical Comment on Bethel v. Quilling (Tex. 2020) (rejecting criminal-conduct exception to "attorney immunity" in Texas)

Texas Supreme Court continues to exempt an entire industry (the legal profession) from civil liability; lets attorneys and law firms profit from lawsuits brought to hold them accountable for wrongdoing. 

Bethel v. QUILLING, SELANDER, LOWNDS, WINSLETT & MOSER, P.C., No. 18-0595 (Tex. Feb. 21, 2020) (Opinion by Justice John P. Devine) (holding that Rule 91a was properly applied to dismiss lawsuit on pleadings alleging that defendant attorneys and law firm committed fraud, trespass to chattel, and conversion, based on the affirmative defense of attorney immunity).

FROM LAW LICENCE TO LICENSE TO LIE AND CHEAT

The SCOTX previously blessed Texas attorneys’ invocation of the Texas Citizens Participation Act (TCPA) to quash lawsuits against them, and collect attorney’s fees from those who seek to hold them accountable for their misdeeds. See Youngkin v. Hines, 546 S.W.3d 675, 681 (Tex. 2018); also see Cantey Hanger, LLP v. Byrd, 467 S.W.3d 477, 481 (Tex. 2015) (holding, as a general rule, that Texas attorneys are immune from civil liability to non-clients for actions taken in connection with representing a client in litigation.).  

The Texas Supreme Court has now gone a step further in blessing wayward attorneys’ and law firms' utilization of Rule 91a to dismiss such civil suits.

TRCP 91a - THE "FRIVOLOUS SUIT" DISMISSAL RULE 

Rule 91a of the Texas Rules of Civil Procedure is a “tort reform” rule that authorizes a defendant to seek early dismissal of a lawsuit alleged to have no merit, and allows the defendant to stick the plaintiff with fees incurred in procuring the dismissal.

Traditionally, a dismissal on an affirmative defense required a motion for summary judgment by the defendant, for which the Texas Rules of Civil Procedure authorizes no fee recovery. Traditionally, the defendant had the burden to prove the affirmative defense, rather than the plaintiff, and had to do so with competent evidence under the summary judgment standard.   

All that is now history when a victim of attorney malfeasance sues the perpetrator. Thanks to the jurisprudential protectionism the Texas High Court has bestowed upon its most captive audience, Texas attorneys now have the right to terminate lawsuits against them by flashing their bar card—as it were. They can take advantage of the status-based civil immunity that the Texas Supreme Court has seen fit to grant them, and can even benefit from their crimes.  


Devine words:  
“Criminal conduct is not categorically excepted from the protections of attorney civil immunity when the conduct alleged is connected with representing a client in litigation”


RULE BY LAWYERS, FOR LAWYERS, AND TO FILL THE POCKETS OF LAWYERS 

How did the nine Republican jurists on the state court of last resort pull this off? 

They did so by engaging in a sophisticated form of legislating from the bench: Transforming the common-law doctrine of judicial proceedings privilege (no defamation liability for statements made in a judicial proceeding) into a broad-sweeping and categorical attorney immunity; - an immunity that shields Texas attorneys from civil liability to non-clients--i.e. the rest of society--and lets them lie, cheat, and engage in fraud so long as they lie, cheat, and engage in fraud to advance the interests of a client. So long as they do it while practicing their once-noble profession. The Supremes originally amended the doctrine by judicial fiat in Cantey Hanger, LLP v. Byrd, 467 S.W.3d 477, 481 (Tex. 2015), and now cite that case -- i.e. themselves -- as legal authority. 
  
But the Supremes did not stop at creating a blanket immunity for the industry they are supposed to regulate and hold to high professional and ethical standards. As seen in Bethel v. Quilling Texas attorneys who engage in illegal and unethical conduct in their work on behalf of clients can count on being rewarded. Thanks to the Texas Supreme Court immunity grant and rule 91a approval, the worst in the bar stand to profit some more from their malfeasance if they get sued. Indeed, they can now count themselves lucky to be sued because they will get an opportunity to run up attorney's fees and shift them to the victims of the misconduct who were brazen enough to fight back and take them to court.
    
Thanks to the common-law generosity of the SCOTX, Texas attorneys can now utilize Rule 91a to stick it to their victims; -- just in case the amended TCPA doesn’t do the trick.
  
It’s tort reform plus.


Bethel v. Quilling Dismissal Order based on Rule 91a
Bethel v. Quilling Dismissal Order (above) 
and Attorney Fee Award Order to the Defendants (below)


IN THE SUPREME COURT OF TEXAS

444444444444
NO. 18-0595
444444444444

CHERLYN BETHEL, INDIVIDUALLY AND AS THE REPRESENTATIVE OF THE ESTATE
OF RONALD J. BETHEL, DECEASED, PETITIONER,
v.
QUILLING, SELANDER, LOWNDS, WINSLETT & MOSER, P.C., AND JAMES H.
MOODY, III, RESPONDENTS

4444444444444444444444444444444444444444444444444444
ON PETITION FOR REVIEW FROM THE
COURT OF APPEALS FOR THE FIFTH DISTRICT OF TEXAS
4444444444444444444444444444444444444444444444444444

Argued November 7, 2019

JUSTICE DEVINE delivered the opinion of the Court.

This case presents two issues: first, whether an affirmative defense may be the basis of a
Rule 91a motion to dismiss; and second, whether the alleged destruction of evidence is an action
“taken in connection with representing a client in litigation,” thus entitling the respondent attorneys
to attorney immunity. We join the court of appeals in concluding that Rule 91a permits dismissal
based on an affirmative defense. See 581 S.W.3d 306, 310 (Tex. App.—Dallas 2018). We also
agree with the court of appeals that, on the facts of this case, the respondent attorneys are entitled
to attorney immunity. See id. at 311-13. Accordingly, we affirm.
I
Petitioner Cherlyn Bethel’s husband, Ronald, tragically died in a car accident while towing
a trailer. Bethel sued the trailer’s manufacturer, alleging that the trailer’s faulty brakes caused the
accident. Law firm Quilling, Selander, Lownds, Winslett & Moser, as well as attorney James
“Hamp” Moody (collectively, Quilling), represented the manufacturer in the lawsuit. Bethel alleges
that Quilling intentionally destroyed key evidence in the case by disassembling and testing the
trailer’s brakes before Bethel had the opportunity to either examine them or document their original
condition.
Bethel sued Quilling for, among other things, fraud, trespass to chattel, and conversion.1
Quilling moved to dismiss the case under Texas Rule of Civil Procedure 91a, arguing that it was
entitled to attorney immunity as to all of Bethel’s claims. The trial court granted Quilling’s motion
and dismissed the case. Bethel appealed, arguing that (1) affirmative defenses, such as attorney
immunity, cannot be the basis of a Rule 91a dismissal, and (2) attorney immunity did not protect
Quilling’s conduct.
The court of appeals affirmed. 581 S.W.3d 306. First, the court of appeals concluded that
attorney immunity could be the basis of a Rule 91a motion because the allegations in Bethel’s
pleadings established Quilling’s entitlement to the defense. Id. at 309–10. Second, the court of
appeals reasoned that Quilling’s actions, while possibly wrongful, were the “kinds of actions” that
are part of an attorney’s duties in representing a client in litigation. Id. at 311–13. Thus, the court

1 Bethel also sued the experts who conducted Quilling’s examination but later nonsuited them to perfect this appeal. 581 S.W.3d 306, 309.

PAGE 2

of appeals held that attorney immunity barred all of Bethel’s claims.2
II
Texas Rule of Civil Procedure 91a provides that a party “may move to dismiss a cause of
action on the grounds that it has no basis in law or fact.” TEX. R. CIV. P. 91a.1. “A cause of action
has no basis in law if the allegations, taken as true, together with inferences reasonably drawn from
them, do not entitle the claimant to the relief sought.” Id. “A cause of action has no basis in fact
if no reasonable person could believe the facts pleaded.” Id. In ruling on a Rule 91a motion, a court
“may not consider evidence . . . and must decide the motion based solely on the pleading of the
cause of action.” TEX. R. CIV. P. 91a.6. We review the merits of a Rule 91a motion de novo. City
of Dallas v. Sanchez, 494 S.W.3d 722, 724 (Tex. 2016) (per curiam).
Attorney immunity is an affirmative defense. Youngkin v. Hines, 546 S.W.3d 675, 681 (Tex.
2018). Bethel reasons that affirmative defenses are generally waived unless they are raised in the
defendant’s pleading. TEX. R. CIV. P. 94. Thus, Bethel contends, a court must look to the
defendant’s pleading to determine whether an affirmative defense is properly before the court.
However, Rule 91a.6 expressly limits the court’s consideration to “the pleading of the cause of
action,” together with a narrow class of exhibits. TEX. R. CIV. P. 91a.6. Because only a plaintiff’s
pleading is a “pleading of a cause of action,” Bethel argues that courts may not consider a
defendant’s pleading in making a Rule 91a determination. Bethel therefore concludes that an
affirmative defense can never be the basis of a Rule 91a motion.

2  The court of appeals also concluded that Bethel perhaps waived the Rule 91a argument, but the court addressed the merits of the argument anyway. 581 S.W.3d at 309. In this Court, the parties agree that Bethel did not waive the argument and urge the Court to reach the Rule 91a question on the merits.

PAGE 3

We disagree. We interpret rules of procedure according to our usual principles of statutory
interpretation. Ford Motor Co. v. Garcia, 363 S.W.3d 573, 579 (Tex. 2012). We therefore begin
with the text of the rule and construe it according to its plain meaning. Id. However, Texas Rule
of Civil Procedure 1 provides that the rules of procedure “shall be given a liberal construction” to
further the rules’ objective of “obtain[ing] a just, fair, equitable[,] and impartial adjudication” of
parties’ rights. TEX. R. CIV. P. 1. We thus apply our general canons of statutory interpretation in
light of this specific guiding rule. See, e.g., In re Bridgestone Ams. Tire Operations, LLC, 459
S.W.3d 565, 569 (Tex. 2015).
Bethel urges us to focus on the rule’s requirement that the court “must decide the motion
based solely on the pleading of the cause of action.” TEX. R. CIV. P. 91a.6 (emphasis added). As
Bethel sees it, this provision prohibits a court deciding a Rule 91a motion from considering anything
other than the plaintiff’s pleading. Of course, it is not possible to “decide the motion” without
considering the motion itself, in addition to the plaintiff’s pleading. Additionally, the rule provides
that the court may hold a hearing on the motion. TEX.R.CIV. P. 91a.6. Thus, the rule contemplates
that a court may consider at least the substance of the Rule 91a motion and arguments at the hearing,
in addition to the plaintiff’s pleadings, in deciding the motion. Bethel’s proffered interpretation
would render these aspects of the rule meaningless, preventing a court from considering even the
substance of a Rule 91a motion or a response in deciding whether to dismiss the case. See Silguero
v. CSL Plasma, Inc., 579 S.W.3d 53, 59 (Tex. 2019) (noting that in interpreting a statute, we avoid
“absurd or nonsensical results” (quotations omitted)). Bethel’s overly narrow interpretation of one
piece of the rule simply does not comport with the text of the rule as a whole. See id. (“The statutory

PAGE 4

words must be determined considering the context in which they are used, not in isolation.”).
Construing the rules of procedure liberally, as Rule 1 requires us to do, we conclude that
Rule 91a limits the scope of a court’s factual, but not legal, inquiry. We begin with the text of the
rule. Ford Motor Co., 363 S.W.3d at 579. Rule 91a provides that “the court may not consider
evidence in ruling on the motion and must decide the motion based solely on the pleading of the
cause of action.” TEX.R.CIV. P. 91a.6 (emphasis added). Thus, the rule contrasts “the pleading of
the cause of action” with “evidence,” not the defendant’s pleading. This dichotomy indicates that
the limitation is factual, rather than legal, in nature. Further, the rule provides that a court may
dismiss a claim as lacking a basis in law “if the allegations, taken as true, together with inferences
reasonably drawn from them, do not entitle the claimant to the relief sought.” TEX.R.CIV.P. 91a.1.
Again, the rule limits the scope of the court’s factual inquiry—the court must take the “allegations”
as true—but does not limit the scope of the court’s legal inquiry in the same way. Rather, the rule
provides that a claim lacks a basis in law if the facts alleged “do not entitle the claimant to the relief
sought.” Id. The rule does not limit the universe of legal theories by which the movant may show
that the claimant is not entitled to relief based on the facts as alleged.
This interpretation accounts for the parts of the rule that allow courts to consider the
substance of Rule 91a motions and hearings in addition to the plaintiff’s pleadings. See TEX.R.CIV.
P. 91a.6. Both motions and hearings are avenues by which the movant may present legal theories
as to why the claimant is not entitled to relief. Thus, the legal-factual distinction avoids violence

PAGE 5

to the text of the rule as a whole while preserving the rule’s intended limitation on factual inquiries.3
See Silguero, 579 S.W.3d at 59 (“In interpreting statutes, we must look to the plain language,
construing the text in light of the statute as a whole.”).
Finally, Rule 1 directs us to consider expedition and cost to the parties and the state in
construing rules of procedure. TEX. R. CIV. P. 1 (“To the end that this objective may be attained
with as great expedition and dispatch and at the least expense both to the litigants and to the state
as may be practicable, these rules shall be given a liberal construction.”). Our interpretation of Rule
91a serves these objectives by allowing courts to dismiss meritless cases before the parties engage
in costly discovery. Forcing parties to conduct discovery when the claimant’s allegations
conclusively establish the existence of an affirmative defense would be a significant waste of state
and private resources.
In sum, Rule 91a limits a court’s factual inquiry to the plaintiff’s pleadings but does not so
limit the court’s legal inquiry. In deciding a Rule 91a motion, a court may consider the defendant’s
pleadings if doing so is necessary to make the legal determination of whether an affirmative defense
is properly before the court. We therefore conclude that Rule 91a permits motions to dismiss based
on affirmative defenses “if the allegations, taken as true, together with inferences reasonably drawn
from them, do not entitle the claimant to the relief sought.” TEX.R.CIV. P. 91a.1. Of course, some
affirmative defenses will not be conclusively established by the facts in a plaintiff’s petition.

Bethel also argues that we should read Rule 91a narrowly because previous versions of the rule included a mandatory fee-shifting provision. However, the fee-shifting provision is no longer mandatory and does not affect our analysis. See TEX. R. CIV. P. 91a.7 (providing that a court “may award” costs and fees to the prevailing party).

PAGE 6

Because Rule 91a does not allow consideration of evidence, such defenses are not a proper basis for
a motion to dismiss.
In this case, the allegations in Bethel’s petition show that Bethel is not entitled to relief. In
its Rule 91a motion, Quilling simply argued that the facts—as Bethel pleaded them—entitled
Quilling to attorney immunity and thus dismissal under Rule 91a. The trial court did not need to
look outside Bethel’s pleadings to determine whether attorney immunity applied to the alleged facts.
See Youngkin, 546 S.W.3d at 681–83 (holding that a defendant was “entitled to dismissal” based on
attorney immunity, despite the defendant’s failure to support his defense with evidence, because “the
necessary facts [were] not in dispute”); Sabre Travel Int’l, Ltd. v. Deutsche Lufthansa AG, 567
S.W.3d 725, 736–41 (Tex. 2019) (considering a federal preemption affirmative defense in the
context of a Rule 91a motion); cf. AC Interests, L.P. v. Tex. Comm’n on Envtl. Quality, 543 S.W.3d
703, 706 (Tex. 2018) (noting that a Rule 91a motion is not the proper vehicle for dismissal based
on untimely service of process because the court has to look beyond the pleadings to determine
whether process was, in fact, untimely). Taking Bethel’s allegations as true, the trial court
determined that Bethel was not entitled to the relief sought because attorney immunity barred
Bethel’s claims.4
 That is enough for dismissal under Rule 91a.

4 Bethel further argues that, even if an affirmative defense is established on the face of a plaintiff’s pleading, dismissal is improper because there may be additional facts that negate the affirmative defense. However, Bethel has yet to articulate what kind of additional facts would negate attorney immunity in this case. If a plaintiff believes that there are additional facts that would negate an affirmative defense in a Rule 91a motion, the plaintiff may amend her pleadings accordingly. See TEX. R. CIV. P. 63 (allowing amendment in most circumstances); TEX. R. CIV. P. 91a.5(b) (contemplating amendment after a Rule 91a motion is filed).

PAGE 7

III
We next turn to the question of attorney immunity. In Cantey Hanger, LLP v. Byrd, we held
that, “as a general rule, attorneys are immune from civil liability to non-clients for actions taken in
connection with representing a client in litigation.” 467 S.W.3d 477, 481 (Tex. 2015) (quotations
omitted). The immunity inquiry “focuses on the kind of conduct at issue rather than the alleged
wrongfulness of said conduct.” Youngkin, 546 S.W.3d at 681 (emphasis in original). Under this
analysis, “a lawyer is no more susceptible to liability for a given action merely because it is alleged
to be fraudulent or otherwise wrongful.” Id. In this case, however, Bethel urges us to recognize an
exception where a third party alleges that an attorney engaged in criminal conduct during the course
of litigation.5
We recently declined to recognize fraud as an exception to the attorney-immunity doctrine.
In Cantey Hanger, 467 S.W.3d at 484–86, we concluded that a law firm was shielded by attorney
immunity for preparing documents ancillary to a divorce decree, even though the firm allegedly
acted fraudulently in drafting the documents. “An attorney is given latitude to pursue legal rights
that he deems necessary and proper precisely to avoid the inevitable conflict that would arise if he
were forced constantly to balance his own potential exposure against his client’s best interest.” Id.
at 483 (citations and quotations omitted). We recognized that a general fraud exception to attorney
immunity would “significantly undercut” this purpose. Id. Thus, we concluded that “[m]erely
labeling an attorney’s conduct ‘fraudulent’ does not and should not remove it from the scope of

5  Bethel’s briefing frames the issue differently, arguing that “[c]riminal conduct is not ‘an exception to the attorney-immunity doctrine’—it is simply not the type of civil wrong to which the doctrine applies.” However the issue is framed, though, Bethel is asking us to categorically exempt allegedly criminal conduct from attorney immunity.

PAGE 8

client representation or render it ‘foreign to the duties of an attorney.’” Id. Instead, our focus
remained on whether the attorney’s complained-of conduct fell within “the scope of an attorney’s
legal representation of his client.” Id. at 484.
The same reasoning applies here. Under Bethel’s proposed exception, a plaintiff could avoid
the attorney-immunity doctrine by merely alleging that an attorney’s conduct was “criminal.” This
would “significantly undercut” the protections of attorney immunity by allowing non-client plaintiffs
to sue opposing counsel so long as the plaintiffs alleged that the attorney’s actions were criminal in
nature. Id. at 483. We therefore conclude that criminal conduct is not categorically excepted from
the protections of attorney civil immunity when the conduct alleged is connected with representing
a client in litigation. Accord Troice v. Greenberg Traurig, L.L.P., 921 F.3d 501, 507 (5th Cir. 2019)
(making an Erie guess that, under Texas law, attorney immunity “can apply even to criminal acts
so long as the attorney was acting within the scope of representation”).
We have long recognized, however, that attorney immunity is not boundless. See Poole v.
Hous. & T.C. Ry. Co., 58 Tex. 134 (1882) (holding that attorney immunity did not protect actions
taken “for the purpose and with the intention of consummating [] fraud upon [the] appellant”). An
attorney is not immune from suit for participating in criminal or “independently fraudulent
activities” that fall outside the scope of the attorney’s representation of a client. Cantey Hanger, 467
S.W.3d at 483. For example, immunity does not apply when an attorney participates in a fraudulent
business scheme with her client or knowingly facilitates a fraudulent transfer to help her clients
avoid paying a judgment. Id. at 482. Immunity also does not apply when an attorney’s actions do
not involve “the provision of legal services”—for example, when an attorney assaults opposing
counsel. Id. Certainly, there is a wide range of criminal conduct that is not within the “scope of

PAGE 9

client representation” and therefore “foreign to the duties of an attorney.” Id. at 483. Thus, while
we decline to recognize a per se criminal-conduct exception, an attorney’s allegedly criminal
conduct may fall outside the scope of attorney immunity. See Troice, 921 F.3d at 507 (“We
conclude that criminal conduct does not automatically negate immunity, but in the usual case it will
be outside the scope of representation.”). We also note that nothing in our attorney-immunity
jurisprudence affects an attorney’s potential criminal liability if the conduct constitutes a criminal
offense. And other remedies—such as sanctions, spoliation instructions, contempt, and disciplinary
proceedings—may be available even if immunity shields an attorney’s wrongful conduct. See
Cantey Hanger, 467 S.W.3d at 482.
With these principles in mind, and taking Bethel’s factual allegations as true, we conclude
that Quilling’s complained-of actions are the kind of actions that are “taken in connection with
representing a client in litigation.” Cantey Hanger, 467 S.W.3d at 481. Bethel’s petition alleges
that Quilling destroyed evidence in the underlying suit by: (1) disassembling the trailer’s brakes;
(2) failing to “establish any testing/inspection protocol at the time of the disassembly”; (3) failing
to document the disassembly on video; (4) changing the position of the brakes’ adjuster screws to
facilitate the disassembly; (5) actuating some of the brakes to test them; and (6) spilling oil on the
brakes during disassembly. Thus, at bottom, Bethel takes issue with the manner in which Quilling
examined and tested evidence during discovery in civil litigation while representing Bethel’s
opposing party. These are paradigmatic functions of an attorney representing a client in litigation.
Bethel nevertheless contends that Quilling’s conduct—criminal destruction of personal
property—is not the type of conduct that is part of client representation. This certainly could be true
in some circumstances. For instance, if an attorney destroyed a non-client’s property that was

PAGE 10

unrelated to litigation, then that conduct likely would not involve “the provision of legal services,”
and the attorney would not be entitled to immunity. See Cantey Hanger, 467 S.W.3d at 482.
Immunity also may not protect the intentional destruction of evidence—for instance, if Quilling had
simply taken a sledgehammer to the brakes. Such actions do not involve the provision of legal
services and therefore cannot fall within the scope of client representation. See id. Here, however,
Quilling acted in conjunction with its experts to examine and test key evidence in the underlying
suit. It may well be, as Bethel alleges, that Quilling’s actions resulted in the destruction of evidence.
But again, for civil-immunity purposes, our analysis looks to the type of conduct, not whether that
conduct was wrongful. Youngkin, 546 S.W.3d at 681. Because Quilling’s allegedly wrongful
conduct involved the provision of legal services—specifically, examining and testing relevant
evidence—that conduct is protected by attorney immunity.
Based on the facts alleged in Bethel’s petition, the courts below correctly concluded that
attorney immunity shields Quilling from civil suit by a third party, whom Quilling did not represent,
for conduct connected to Quilling’s representation of its client in litigation. Accordingly, the
judgment of the court of appeals is affirmed.
________________________________________
John P. Devine
Justice
OPINION DELIVERED: February 21, 2020
11

Fifth Circuit Erie Too: Civil Immunity for Criminal Conduct for Texas Attorneys 

18-0595 CHERLYN BETHEL, INDIVIDUALLY, AND AS THE REPRESENTATIVE OF THE ESTATE OF RONALD J. BETHEL, DECEASED v. QUILLING, SELANDER, LOWNDS, WINSLETT & MOSER, P.C., AND JAMES H. MOODY, III; from Dallas County; 5th Court of Appeals District (05-17-00850-CV, 581 SW3d 306, 05-30-18).
The Court affirms the court of appeals' judgment.  

581 S.W.3d 306 (2018)

Cherlyn BETHEL, Individually and as the representative of the Estate of Ronald J. Bethel, Deceased, Appellant
v.
QUILLING, SELANDER, LOWNDS, WINSLETT & MOSER, P.C., and James H. Moody, III, Appellees

No. 05-17-00850-CV.
Court of Appeals of Texas, Dallas.
Opinion Filed May 30, 2018.
   
On Appeal from the 116th Judicial District Court, Dallas County, Texas, Trial Court Cause No. DC-17-03487.
Affirmed.
Morgan McPheeters, Frederick Leighton Durham, Jessica Foster, Thad D. Spalding, Kelly, Durham & Pittard, LLP, Andrew Galen Counts, E. Todd Tracy, Stewart Donavan Matthews, The Tracy Law Firm, Dallas, TX, for Cherlyn Bethel, Individually and as the Representative of the Estate of Ronald J. Bethel, Deceased.
Marcie L. Schout, Quilling, Selander, Lownds, Winslett & Moser, P.C., Dallas, TX, for Quilling, Selander, Lownds, Winslett & Moser, P.D.
Before Justices Francis, Fillmore, and Whitehill.

308*308 MEMORANDUM OPINION

Opinion by Justice Francis. 

Cherlyn Bethel, individually and as the representative of the Estate of Ronald J. Bethel, sued opposing counsel for conduct involving an expert inspection of a trailer brake assembly that is the focus of a separate wrongful death action. Appellees Quilling, Selander, Lownds, Winslett & Moser, P.C., and James H. Moody, III, filed a motion to dismiss under Texas Rule of Civil Procedure 91a, asserting the affirmative defense of attorney immunity. The trial court granted the motion, dismissed Bethel's suit, and awarded attorney's fees to appellees. In two issues, Bethel challenges the ruling on appeal. We affirm.
Bethel's petition in this suit alleged the following: Bethel's husband, Ron, died following an accident that Bethel contends was caused by defective brakes in the trailer he was towing. Bethel sued the manufacturer of the trailer, and appellees represent the manufacturer in the wrongful death suit. According to Bethel, during the course of that litigation, appellees or their experts, with appellees' "knowledge and at their direction and supervision," disassembled the brakes and destroyed their condition. Bethel filed this lawsuit against appellees and their experts, alleging fraud, tortious interference with a contract, spoliation of evidence, "conspiracy to deny [Bethel] the pursuit of justice," trespass to chattel, conversion, negligence, and gross negligence. She sought damages for the destruction of the evidence.
Appellees filed a motion to dismiss the lawsuit, arguing there was no basis in law or fact because the claims were barred by attorney immunity. Bethel responded to the motion, arguing appellees' conduct constituted 309*309 criminal destruction of property, and Texas law is unresolved as to whether the attorney immunity doctrine applies to criminal conduct. In addition, Bethel amended her petition to add nine paragraphs addressing whether the attorney immunity doctrine applied.
The trial court granted the motion, dismissed Bethel's claims with prejudice, and awarded appellees $7,480 in attorney's fees as well as contingent appellate attorney's fees. After Bethel nonsuited her claims against the engineers and their firms, she appealed the trial court's order dismissing her claims against appellees.
Under rule 91a, a party may move to dismiss a cause of action on the grounds it has no basis in law or fact. TEX. R. CIV. P. 91a.1. "A cause of action has no basis in law if the allegations, taken as true, together with the inferences reasonably drawn from them, do not entitle the claimant to the relief sought." Id. In ruling on a 91a motion, the trial court may not consider evidence and must decide the motion "solely on the pleading of the cause of action, together with any pleading exhibits permitted by Rule 59." TEX. R. CIV. P. 91a.6; Highland Capital Mgmt., LP v. Looper Reed & McGraw, P.C., No. 05-15-00055-CV, 2016 WL 164528, at *4 (Tex. App.-Dallas Jan. 14, 2016, pet. denied) (mem. op.). Whether a cause of action has any basis in law is a legal question we review de novo. See City of Dallas v. Sanchez, 494 S.W.3d 722, 724 (Tex. 2016) (per curiam). We base our review on the allegations in the live petition and any attachments, and we accept as true the factual allegations. Wooley v. Schaffer, 447 S.W.3d 71, 76 (Tex. App.-Houston [14th] 2014, pet. denied).
In her first issue, Bethel asserts the plain language of rule 91a limits the scope of a court's review to the plaintiff's pleading. Because an affirmative defense is not part of a plaintiff's pleading, she argues, it cannot serve as a basis for dismissal. Consequently, she concludes, the trial court erred by granting appellees' motion on the basis of the affirmative defense of attorney immunity.
Initially, we note that Bethel did not present this particular issue to the trial court in her response to the motion to dismiss; rather, her response argued only that appellees' conduct constituted a crime for which attorney immunity should not apply. Preservation of error reflects important prudential considerations recognizing that the judicial process benefits greatly when trial courts have the opportunity to first consider and rule on error. Burbage v. Burbage, 447 S.W.3d 249, 258 (Tex. 2014). Affording courts this opportunity conserves judicial resources and promotes fairness by ensuring that a party does not neglect a complaint at trial and raise it for the first time on appeal. Id. Because Bethel did not present this issue to the trial court below, we conclude it is waived.
But even assuming this issue is properly before us,[1] Bethel acknowledges this Court, as well as others, have upheld rule 91a dismissals on the basis of affirmative defenses. See Highland Capital, 2016 WL 164528, at *4-6 (attorney immunity); Galan Family Tr. v. State, No. 03-15-00816-CV, 2017 WL 744250, at *3 (Tex. App.-Austin Feb. 24, 2017, pet. denied) (mem. op.) (statute of limitations); Guzder v. Haynes & Boone, LLP, No. 01-13-00985-CV, 2015 WL 3423731, at *7 (Tex. App.- 310*310 Houston [1st Dist.] May 28, 2015, no pet.) (mem. op.) (attorney immunity); GoDaddy.com, LLC v. Toups, 429 S.W.3d 752, 754-55 (Tex. App.-Beaumont 2014, pet. denied) (immunity from suit under the Communications Decency Act). Nevertheless, she argues these cases apply a "mistaken interpretation" of the rule and urges us to follow Bedford Internet Office Space, LLC v. Texas Insurance Group, Inc., 537 S.W.3d 717 (Tex. App.-Fort Worth 2017, pet. filed). There, the Fort Worth court concluded the plain language of the rule required trial courts to "wear blinders to any pleadings except the pleading of the cause of action'" and determined the court erred by dismissing claims on the basis of the statute of limitations, which would require the court to look beyond the plaintiff's pleadings and review the defendant's pleadings. 537 S.W.3d at 720. We decline Bethel's invitation for two reasons.
First, as stated above, this Court previously applied rule 91a to the affirmative defense of attorney immunity. See Highland Capital, 2016 WL 164528, at *4-6. In Highland Capital, we considered the plaintiff's pleadings and concluded that, meritorious or not, the type of conduct alleged fell squarely within the scope of the law firm's representation of its client. 2016 WL 164528, at *4. We therefore concluded the trial court did not err in granting the law firm's rule 91a motion to dismiss the non-client's claims for theft, breach of the duty of confidentiality, conversion, tortious interference with contract, and civil conspiracy to commit theft, extortion, slander, and disparagement based on attorney immunity. Id.
Second, the rationale underpinning Bethel's argument and the Bedford Internet case is that rule 91a limits a court's consideration to the plaintiff's pleading of the cause of action. Even if we were to assume the correctness of this argument, Bethel's live pleading included nine paragraphs on why attorney immunity does not shield appellees from her suit. In particular, she alleged she owned the trailer and its component parts; appellees knew she owned them and that they were critical to her claim against the manufacturer; appellees did not obtain her consent to conduct destructive testing; she did not consent to such testing; and appellees "intentionally and knowingly directed the destructive disassembly, testing, and examination of the trailer brakes." She alleged appellees were "seasoned veterans" who were familiar with the standards governing forensic engineering and product liability litigation and were aware "with reasonable certainty" that the disassembly, testing, and examination of the trailer brakes would damage or destroy the brakes. Finally, Bethel alleged appellees' acts and omissions constituted criminal tampering with evidence, given they were aware she had filed a civil lawsuit against the trailer's manufacturer and they altered or destroyed the brakes with the intent to impair the "verity, legibility, or availability of the trailer brakes as evidence" in the suit. Because these allegations are contained in Bethel's live pleading, the trial court would not have needed to look beyond Bethel's petition to consider the issue of attorney immunity. We overrule the first issue.
In her second issue, Bethel argues appellees cannot establish attorney immunity solely from the facts alleged on the face of her petition. She contends Texas law does not shield an attorney from the consequence of "illegal conduct." More specifically, she acknowledges that appellees' investigation of the trailer brakes would ordinarily fall within an attorney's role in representing his client, but appellees' actions "went far beyond obtaining, retaining, reviewing, or analyzing evidence." She argues appellees conducted 311*311 destructive testing they knew was reasonably certain to cause this result and proceeded even though they knew they had no consent from her and destroyed property owned by her. She equates appellees' actions with conduct that is clearly "foreign to the duties of an attorney," such as assaulting opposing counsel in trial. We cannot agree.
We begin with the Supreme Court's decision in Cantey Hanger, LLP v. Byrd, 467 S.W.3d 477 (Tex. 2015), which controls our analysis of attorney immunity. See Youngkin v. Hines, 546 S.W.3d 675, 681-82 (Tex. 2018). In Cantey Hanger, the Texas Supreme Court explained the attorney immunity defense is intended to ensure "loyal, faithful, and aggressive representation by attorney's employed as advocates." Cantey Hanger, 467 S.W.3d at 481 (quoting Mitchell v. Chapman, 10 S.W.3d 810, 812 (Tex. App.-Dallas 2000, pet. denied)). An attorney is immune from liability to non-clients for conduct within the scope of his representation of his clients. Youngkin, 546 S.W.3d at 681-82Cantey Hanger, 467 S.W.3d at 481. In other words, an attorney may be liable to non-clients only for conduct outside the scope of his representation of his client or for conduct foreign to the duties of a lawyer. Youngkin, 546 S.W.3d at 681-82Cantey Hanger, 467 S.W.3d at 482.
In determining the immunity issue, the inquiry focuses on the kind of conduct at issue rather than the alleged wrongfulness of said conduct. Youngkin, 546 S.W.3d at 681-82Cantey Hanger, 467 S.W.3d at 482. Even conduct that is "wrongful in the context of the underlying suit" is not actionable if it is "part of the discharge of the lawyer's duties in representing his or her client." Cantey Hanger, 467 S.W.3d at 481. Thus, a plaintiff's characterization of a firm's conduct as fraudulent or otherwise wrong is immaterial to our evaluation of the immunity defense. Youngkin, 546 S.W.3d at 681-82; If an attorney proves his conduct is "part of the discharge of the duties to his client," immunity applies. Cantey Hanger, 467 S.W.3d at 484Highland Capital, 2016 WL 164528, at *3.
At the same time, attorneys "are not protected from liability to non-clients for their actions when they do not qualify as `the kind of conduct in which an attorney engages when discharging his duties to his client.'" Cantey Hanger, 467 S.W.3d at 482 (quoting Dixon Fin. Servs. v. Greenberg, Peden, Siegmyer & Oshman, P.C., No. 01-06-00696-CV, 2008 WL 746548, at *9 (Tex. App.-Houston [1st] Mar. 20, 2008, pet. denied)) (mem. op. on reh'g). Examples of attorney conduct that would not be protected include participating in a fraudulent business scheme with a client, knowingly assisting a client with a fraudulent transfer to avoid paying a judgment, theft of goods or services on a client's behalf, and assaulting opposing counsel during trial. Youngkin, 546 S.W.3d at 682-83Cantey Hanger, 467 S.W.3d at 482-83.
Here, Bethel's third amended petition alleged appellees permitted or conducted the destruction of key components of the trailer's brakes by permitting, directing, or taking the following action or inaction:
a. Disassembly of the brakes, which was destructive in nature and by itself. Essentially everything about the brakes has changed because of the inspection.
b. Failed to establish any testing/inspection protocol at the time of the disassembly.
c. Failed to video document the brake disassembly being done, despite the fact that video cameras were present (videos of the brake operation were done by [engineer] Kelly Adamson).
312*312 d. Manipulation of the adjuster screw for each brake to facilitate drum removal. The original condition and position of the adjuster screws now cannot be known.
Bethel alleged appellees (1) failed to notify her or her counsel of their intent to do a destructive examination and did not have an agreed-upon protocol; (2) intended to cause the disassembly and destruction of the brakes; and (3) altered or destroyed the trailer brakes with the intent to "impair the verity, legibility, or availability" of the trailer brakes as evidence in the pending action against the manufacturer. Bethel asserted that because she was not given notice of the inspection, she did not have an agent present.
Bethel's allegations focus on how the inspection was conducted and contend appellees' actions were criminal. She asserts that "intentionally destroying property belonging to another and willfully concealing from Texas courts evidence crucial to resolving claims" fall outside the immunity doctrine. But merely labeling an attorney's conduct wrongful does not and should not remove it from the scope of representation or render it `foreign to the duties of a lawyer. Id. As the court said in Cantey Hanger, other mechanisms are in place to discourage and remedy such conduct, such as sanctions, contempt, and attorney disciplinary proceedings. Id. at 482.
Focusing on the type of conduct alleged here — and not the nature of the conduct — we conclude these alleged acts do not constitute conduct "foreign to the duties of an attorney" in representing a client. The complained-of actions involve the investigation of the trailer brakes, and more specifically the scheduling of the inspection, the planning of and participation in the expert inspection, and the testing and examination of those brakes, in a wrongful death action. These are the types of action taken to facilitate the rendition of legal services to a client in such a case. This case simply does not rise to the level of those examples of misconduct cited in Cantey Hanger that fall outside the immunity doctrine. See Cantey Hanger, 467 S.W.3d at 482.
We find support for our conclusion in this Court's previous opinion in Highland Capital. There, the plaintiff also argued the law firm's actions were criminal. Highland sued opposing counsel alleging the client-employee stole documents containing confidential and privileged information and the law firm then tried to "extort Highland" through a "series of criminal acts" with respect to the documents. Highland Capital, 2016 WL 164528, at *1. Highland alleged the law firm reviewed, copied, and analyzed information it knew to be stolen and proprietary in furtherance of its scheme to extort, slander, and disparage Highland; threatened to disclose the information and disparage Highland if a monetary sum was not paid; refused to return or stop using the information after receiving written notice of the nature of the stolen materials; lied to Highland's counsel about the scope of the theft and stolen material in the firm's possession; and knowingly and actively facilitated the employee's wrongful disclosure of the information and then lied to Highland and the court regarding the extent to counsel's involvement. Id. Highland characterized the law firm's actions as "criminal, tortious, and malicious." Id. at *6.
This Court, however, looked at the actions taken by the law firm — acquiring documents from a client that were the subject of litigation against the client; reviewing, copying, retaining and analyzing the documents; making demands on the client's behalf; advising a client on a course of action; and threatening to disclose the documents if demands were not met — and 313*313 concluded they were the "kinds of actions" that were part of an attorney's duties in representing a client in "hard-fought litigation." Id.
As in Highland Capital, we conclude the type of conduct alleged by Bethel falls within the scope of appellees' representation of the manufacturer of the trailer. Accepting Bethel's factual allegations as true, appellees' conduct "involves acts or omissions undertaken as part of the discharge of the attorney's duties as counsel to an opposing party." See id. We therefore conclude the trial court did not err by granting appellees' rule 91a motion to dismiss Bethel's claims. We overrule the second issue.
We affirm the trial court's order.


[1] Courts may not consider issues that were not raised in the courts below, but parties are free to construct new arguments in support of issues properly before the court. Miller v. JSC Lake Highlands Ops., LP, 536 S.W.3d 510, 513 n.5 (Tex. 2017). Thus, to the extent Bethel's assertion is an argument as opposed to an issue, we address it.


LEGAL CITATION FOR DALLAS COURT OF APPEALS ATTORNEY IMMUNITY RULING:  Bethel v. Quilling, Selander, Lownds, Winslett & Moser P.C., No. 05-17-00850-CV, 2018 WL 2434410 (Tex. App.-Dallas May 30, 2018, pet. granted) (mem. op.)

RELATED LEGAL ETHICS ARTICLE: 

Steinberg, Marc I. and Weissler, Logan, The Litigation Privilege as a Shelter for Miscreant Legal Counsel (2018). Oregon Law Review, Vol. 97, No. 1, 2018; SMU Dedman School of Law Legal Studies Research Paper No. 390. Available at SSRN: https://ssrn.com/abstract=3194765


Saturday, February 8, 2020

SCOTX issues opinion on enforceability of liquidated damages clause in service contract

Atrium Med. Ctr., LP v. Houston Red C LLC, No. 18-0228 (Tex. Feb. 2, 2020)
(Opinion by Justice Jane Nenninger Bland)

Atrium Medical Center, LP v. Houston Red C LLC, No. 18-0228 (Tex. 2020)


IN THE SUPREME COURT OF TEXAS
══════════
No. 18-0228
══════════
ATRIUM MEDICAL CENTER, LP AND TEXAS HEALTHCARE ALLIANCE LLC ,
PETITIONERS,
v.
HOUSTON RED C LLC D/B/A IMAGEFIRST HEALTHCARE LAUNDRY SPECIALISTS,
RESPONDENT
══════════════════════════════════════════
ON PETITION FOR REVIEW FROM THE
COURT OF APPEALS FOR THE FOURTEENTH DISTRICT OF TEXAS
══════════════════════════════════════════
Argued November 5, 2019

JUSTICE BLAND delivered the opinion of the Court.

In this contract dispute, we determine whether a liquidated damages provision is
enforceable. The breaching party seeks to avoid the provision on the ground that it is a penalty.
The trial court enforced the provision, ruling that it was not a penalty because it reasonably
estimated the harm that would result from a breach, and actual damages were difficult to predict
when the contract was made.1 On those grounds, the court of appeals affirmed..

Because a provision not designed to be a penalty can nevertheless operate as one, our
precedent requires a third step: courts must examine whether, at the time of the breach, an
unbridgeable discrepancy exists between actual and liquidated damages.3 Because the breaching
party in this case did not prove an “unbridgeable discrepancy” or otherwise demonstrate that the
provision operated as a penalty, we affirm the judgment of the court of appeals.

* * *
We hold that, at the time the parties’ agreement was made, (1) the harm that would result
from a breach was difficult to estimate and (2) the liquidated damages provision reasonably
forecast just compensation. We further hold that the breaching party failed to demonstrate an
“unbridgeable discrepancy” between liquidated and actual damages, measured at the time of the
breach, to invalidate an otherwise valid contract provision. Accordingly, we affirm the judgment
of the court of appeals.


Tex. 2019-02-07 Opinion Release: Atrium Medical Center LP v. Houston Red C LLC, Regular Cause No. 18-0228 by Bland (enforceability of liquidated damages clause) (14 pages 43 footnotes)


OPINION OF THE HOUSTON COURT OF APPEALS BELOW


546 S.W.3d 305 (2017)

ATRIUM MEDICAL CENTER, LP, and Texas Healthcare Alliance, LLC, Appellants
v.
HOUSTON RED C LLC d/b/a ImageFirst Healthcare Laundry Specialists, Appellee.

No. 14-16-00277-CV.
Court of Appeals of Texas, Houston (14th Dist.).
Majority Opinion and Concurring Opinions filed December 21, 2017.
Rehearing Denied January 30, 2018.
On Appeal from the 190th District Court, Harris County, Texas, Trial Court Cause No. 2013-04227A.
Affirmed in part and Reversed and Remanded in part.
Hiren Patel, HOUSTON, TX, for Appellants.
H. Ronald Welsh, Meghan Flanery, Jared Gregory LeBlanc, HOUSTON, TX, for Appellee.
Panel consists of Chief Justice Frost, Justice Donovan, and Justice Wise

309 OPINION

John Donovan, Justice.
Appellants Atrium Medical Center, L.P., and Texas Healthcare Alliance, LLC, appeal a judgment in favor of appellee Houston Red C LLC d/b/a ImageFirst Healthcare Laundry Specialists, finding that appellants breached a laundry service agreement and are jointly and severally liable for damages, costs, interest and attorney's fees. Following a bench trial, the trial court entered amended findings of fact and conclusions of law supporting the judgment for appellee. In four issues on appeal, appellants assert the trial court erred in finding breach of contract, enforcing a liquidated damages clause, applying prejudgment interest, and granting an unsegregated, contested attorney's fee application. We affirm in part and reverse and remand in part.

I. Background

Atrium owns and operates a sixty-bed, long-term acute care hospital in Stafford, Texas. THA is the general partner, part owner, and day-to-day manager of Atrium. ImageFirst is a rental and laundry service company.
In November 2012, Atrium and appellee executed a five-year (260 week) laundry services agreement. The contract provides, in relevant part, the following:
The length of this agreement is for sixty (60) months from the date of the first delivery and therefore for the same time period unless cancelled by either party, in writing, at least ninety (90) days prior to any termination date. The terms of this contract shall apply to all subsequent increases or additions to such service. There will be a minimum weekly billing of 60% of this agreement value or 60% of the current invoice amount, whichever is greater. Customer may discontinue service at any time provided customer pay Company a cancellation charge of 40% of the agreement value or the current invoice amount, whichever is greater, multiplied by the number of weeks remaining under this agreement. The customer agrees that this cancellation charge is not punitive, but a reimbursement to Company for related investments to service the customer. Customer agrees to pay attorneys fees and cost necessary to collect monies due. The price in effect may be changed annually. A finance charge of 1½% per month, which is equal to 18% per year will be added to all balances not paid within terms of Net 10 EOM. If credit terms are allowed, customer agrees to pay balance due to Company within ten (10) days after the end of the month that said invoices are dated.
In 2013, Atrium was in financial crisis, stemming from an alleged abuse of power, fraud, and embezzlement by Sohail Siddiqui, M.D., the former manager of THA. In April 2013, Atrium failed to pay appellee's invoices. Appellee continued to deliver linens without payment for several months.
Atrium's new chief executive officer, Ahmad Zaid, testified that he tried to work out a payment plan with appellee to ensure no interruption in the delivery of linens to the hospital; however, appellee responded that it would no longer deliver linens without a payment towards Atrium's past due balance. Appellee continued to deliver linens uninterrupted.
On or about September 11, 2013, Zaid allegedly verbally informed appellee that it would no longer use appellee's linens or services, exercising the cancellation provision of the contract. The last day appellee delivered linens to Atrium was on September 2, 2013. Appellee's last invoice to Atrium was on September 6, 2013, for 310*310 $8,066.79. At the time Atrium's CEO verbally cancelled the contract, 9 months/38-weeks had elapsed under the 60-month/ 260 week contract, and Atrium had not paid $165,587.33 of the total charges invoiced by appellee.
In November 2013, appellee filed a petition in intervention in appellants' pending lawsuit against Siddiqui in the 190th Judicial District Court of Harris County. In its second amended petition in intervention, appellee asserted claims against appellants, Siddiqui, and several other individual owners[1] for breach of contract, quantum meruit, conversion, suit on sworn account, unjust enrichment, and money had and received. Appellee claimed more than $1 million dollars in damages. After nonsuiting the individual defendants, a bench trial between Atrium, THA, and ImageFirst was held in February 2016.
In March 2016, the trial court awarded a final judgment in favor of appellee on its breach of contract claim, finding Atrium and THA were jointly and severally liable for breach of contract and damages. The court determined that appellee was entitled to damages under the terms of the contract, including the liquidated damages provision which the trial court found was not a penalty. The trial court found appellee suffered actual damages "for those amounts due and owing as of September 2013 and for damages calculated under the liquidated damages provision." The trial court awarded the following damages:
• Actual damages: $881,918.28
• Contractual pre-judgment interest: $375,021.20
• Attorney's fees (trial): $110,000.00
• Attorney's fees (appellate): $70,000.00
Total: $1,436,939.48
The trial court further found that appellee was entitled to recover from appellants post-judgment interest accruing at 5% simple interest and all costs of court.
On June 3, 2016, the trial court entered amended findings of fact and conclusions of law in support of the judgment.

II. ISSUES AND STANDARDS OF REVIEW

A. Issues

Appellants challenge the trial court's judgment, claiming in their first issue that the record does not contain legally or factually sufficient evidence to support a finding that appellee should prevail on its breach of contract claim. Alternatively, appellants contend in its second issue, with multiple subparts, that we should reverse and reform the judgment by denying appellee recovery under the contract's liquidated damages clause. In their third issue, appellants maintain that we should reverse and modify the judgment by limiting the contractual prejudgment interest solely to amounts actually invoiced by appellee. Finally, appellants argue in their fourth issue that we should reverse and modify the judgment by reducing the attorney's fees award to account for fees required to be segregated.

B. Standard or review

Because this was a bench trial, the trial judge issued findings of fact and conclusions of law. We review the trial court's conclusions of law de novo. BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex. 2002)Johnston v. McKinney, 9 S.W.3d 271, 277 (Tex. App.-Houston [14th Dist.] 1999, pet. denied). Incorrect conclusions of law will not require a reversal if the controlling facts support a correct legal theory. Id. The 311*311 findings of fact in a bench trial have the same force and dignity as a jury verdict, and we review them for legal and factual sufficiency of the evidence under the same standards we apply in reviewing a jury's findings. West v. Triple B. Servs., LLP, 264 S.W.3d 440, 445 (Tex. App.-Houston [14th Dist.] 2008, no pet.) (citing Ortiz v. Jones, 917 S.W.2d 770, 772 (Tex. 1996)).
When conducting a legal-sufficiency review, we consider the evidence in the light most favorable to the challenged finding and indulge every reasonable inference that would support it. City of Keller v. Wilson, 168 S.W.3d 802, 823 (Tex. 2005). We must credit favorable evidence if a reasonable factfinder could and disregard contrary evidence unless a reasonable fact-finder could not. See id. at 827. We must determine whether the evidence at trial would enable a reasonable and fair-minded factfinder to find the facts at issue. See id. The factfinder is the only judge of witness credibility and the weight to give to testimony. See id. at 819. Because findings of fact in a bench trial have the same force and dignity as a jury verdict, we review them for legal sufficiency of the evidence under the same standards we apply in reviewing the jury's findings. See Anderson v. City of Seven Points, 806 S.W.2d 791, 794 (Tex. 1991).
When reviewing a challenge to the factual sufficiency of the evidence, we examine the entire record, considering both the evidence in favor of, and contrary to, the challenged finding. Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986). After considering and weighing all the evidence, we set aside the fact finding only if it is so contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust. Pool v. Ford Motor Co., 715 S.W.2d 629, 635 (Tex. 1986). The trier of fact is the sole judge of the credibility of the witnesses and the weight to be given to their testimony. GTE Mobilnet of S. Tex. v. Pascouet, 61 S.W.3d 599, 615-16 (Tex. App.-Houston [14th Dist.] 2001, pet. denied). We may not substitute our own judgment for that of the trier of fact, even if we would reach a different answer on the evidence. Maritime Overseas Corp. v. Ellis, 971 S.W.2d 402, 407 (Tex. 1998). The amount of evidence necessary to affirm a judgment is far less than that necessary to reverse a judgment. Pascouet, 61 S.W.3d at 616.

III. ANALYSIS

A. Breach of Contract

In issue one, appellants request we reverse and render a take-nothing judgment, arguing that appellee breached the service agreement before Atrium by overcharging Atrium for the quantities of linens delivered from February 2013, and thereafter. Appellants argue that Atrium did not start falling behind on its payments until April 2013. Appellants contend that appellee's breaches occurred first and were material, and thus, Atrium was discharged of its obligations to further perform under the contract. According to appellants, appellee cannot prevail for breach of contract as a matter of law.
To prevail on a breach of contract claim, a party must establish the following elements: (1) a valid contract existed between the plaintiff and the defendant; (2) the plaintiff tendered performance or was excused from doing so; (3) the defendant breached the terms of the contract; and (4) the plaintiff sustained damages as a result of the defendant's breach. West v. Triple B Servs., LLP, 264 S.W.3d 440, 446 (Tex. App.-Houston [14th Dist.] 2008, no pet.) A breach occurs when a party fails or refuses to do something he has promised to do. Id. (citing Townewest Homeowners Ass'n, Inc. v. Warner Commc'n Inc., 312*312 826 S.W.2d 638, 640 (Tex. App.-Houston [14th Dist.] 1992, no writ)). When one party to a contract commits a material breach of that contract, the other party is excused from further performance under the contract. See id. (citing Hernandez v. Gulf Group Lloyds, 875 S.W.2d 691, 692 (Tex. 1994)).
The trial court did not err in finding that appellants are liable for breach of contract. In amended findings of fact and conclusions of law, the trial court found appellee had established a valid contract; that "ImageFirst fully performed its obligations under the Contract;" that verbal and premature cancellation was "a material breach of contract," and that appellee sustained damages as a result of Atrium's breach. The evidence of record supports the trial court's findings. The trial testimony revealed that both parties performed initially as contemplated by the contract—appellee picked-up and delivered linens to Atrium three times a week, providing Atrium with 120% of the inventory they requested, and only billing Atrium for 100%. Due to growing needs by Atrium, however, Atrium required a more frequent delivery and pick-up schedule, e.g., every other day. Eventually, Atrium required appellee to pick-up and delivery every single day. Due to the increased schedule, the parties, by agreement, eliminated the "free" 20% of linen. Atrium accepted the increased services and paid invoices that included the adjusted fee through mid-April 2013. Appellants did not plead as an affirmative defense "prior material breach," and the trial court denied appellants' post-trial motion for leave to file an amended answer. Under these circumstances, appellants contention that appellee did not perform under the contract has no merit. The evidence of record is sufficient to support the trial court's findings; thus, appellants' first issue is overruled.

B. Liquidated Damages

In their second issue, appellants argue, alternatively, appellee should not recover for liquidated damages.

1. Appellants' material breach triggered liquidated damages clause

Appellants assert the record does not contain legally or factually sufficient evidence to support the liquidated damages clause was triggered. Further, appellants contend that appellee's repudiation of the contract bars enforcement of the liquidated damages clause.
In its findings of fact and conclusions of law, the trial court found that after Atrium already owed appellee over $165,587.33, appellants materially breached and triggered the liquidated damages clause as follows:
33. By failing to pay ImageFirst for the laundry services that ImageFirst provided from April 2013 through September 2013, Atrium committed a material breach of the Contract.
34. By verbally and prematurely canceling the Contract without any written notice as the Contract requires, Atrium committed a material breach of the Contract, entitling ImageFirst to the amounts provided in the Liquidated Damages Clause.
38. As a result of Atrium's breach of canceling the Contract with 51-months/ 222-weeks remaining under the Contract, ImageFirst is entitled to recover under the Contract's Liquidated Damages Provision. ImageFirst's last invoice of $8,066.79 to Atrium is greater than the original Contract amount of $2,616.66. Therefore, ImageFirst is entitled to recover 40% of the last invoice, multiplied by the 222-weeks remaining under the Contract, totaling $716,330.95.
313*313 As set forth above, supra at III.A., the trial court determined appellee "fully performed its obligations under the Contract."
The trial court further found that appellee "did not repudiate the Contract." The evidence demonstrated that Atrium stopped making payments to appellee in mid-April 2013; nevertheless, appellee continued services to Atrium until September 2013, when Atrium's CEO verbally terminated the contract. As such, the trial court's finding that appellee was entitled to amounts provided in the liquidated damages clause is supported by sufficient evidence.

2. Liquidated damages provision provides reasonable forecast of appellee's expectation damages

Appellants maintain that even if the liquidated damages clause is triggered it should be governed by the parties' agreement to establish reliance damages, claiming the liquidated damages clause serves as a reimbursement to appellee for related investments to service Atrium. Appellants also claim the reasonableness of the liquidated damages clause should be evaluated by comparison to appellee's reliance damages.
In its findings of fact and conclusions of law, the trial court made findings regarding damages as follows:
6. At the time the parties entered into the Contract, the damages ImageFirst would suffer if Atrium breached the Contract were incapable or difficult of estimation at the time the parties signed the Contract because:
a. The parties knew that the volume of the laundry services would fluctuate over time as the census changed and given the needs of the individual patients;
b. The parties could not predict how long linens would last, so ImageFirst's costs could not be determined;
c. The parties could not determine the frequency of deliveries that would be required to service Atrium's account, so ImageFirst's costs could not be determined;
d. The parties could not determine Atrium's rate of loss of ImageFirst's linens, so ImageFirst's costs could not be determined;
e. The parties could not determine the amount ImageFirst's general overhead expenses and resources would be expended to service Atrium's account, so ImageFirst's costs could not be determined.
7. Because ImageFirst's damages in the event of Atrium's breach could not be calculated or estimated at the time the Contract was signed, the Contract provided that if Atrium prematurely canceled the Contract, Atrium would pay ImageFirst "40% of the agreement value or the current invoice amount, whichever is greater, multiplied by the number of weeks remaining under the agreement" (the "Liquidated Damages Provision").
8. ImageFirst arrived at the 40% number in the Liquidated Damages Provision because it was a conservative historical estimate of the net profits, and a reasonable rate of return on the infrastructure investments, over the life of laundry service agreements similar to the Contract.
9. Considering the average revenue ImageFirst receives for the weekly rental of its linens during the linens' lifespan, the average customer's rate of loss and ImageFirst's overhead expenses throughout the performance of a contract like the Contract with Atrium, "40% of the agreement values of the 314*314 current invoice amount, whichever is greater" is a reasonable forecast of ImageFirst's just compensation under the Contract.
10. The Liquidated Damages Provision is a reasonable forecast of ImageFirst's just compensation over the life of the Contract even though the Liquidated Damages Provision's damages calculation is based only on the most recent one-week invoice as of the date of cancellation instead of being based on an average of all weekly invoices under the Contract through the date of cancellation or even a larger sample size of invoices issued under the Contract.
11. At the time the parties entered into the Contract, ImageFirst had access to damages data and information compiled by ImageFirst's franchisor based on information gathered by all franchisees over an extended period of time. But access to this data and information was not sufficient as of the effective date of the Contract to estimate ImageFirst's damages in the event of breach.
The evidence of record demonstrated that the 40% cancellation charge was a reasonable estimate of appellee's lost profits over the life of the contract. Appellants' interpretation of the cancellation charge, contemplating only reimbursement for appellee's investments, is an attempt to change the cancellation charge into a limitation of liability provision. See Arthur's Garage, Inc. v. Racal-Chubb Sec. Sys., Inc., 997 S.W.2d 803, 810 (Tex. App.-Dallas 1999, no pet.) ("a contractual provision setting an upper limit to the amount recoverable is considered a limitation of liability provision."). Here, the trial court correctly rejected this contention as the cancellation charge has no upper limit and is specifically tied to the 40% of the last invoice over the remaining term.

3. Cancellation charge is enforceable and calls for just compensation

Moreover, appellants contend that even if the parties had agreed to estimate expectation damages, the liquidated damages clause is unenforceable because its formula does not offer a reasonable forecast. Appellants argue that appellee's expectation damages were not incapable or difficult to estimate. Appellants also assert that enforcing the liquidated damages clause would act as an unenforceable penalty.
In FPL Energy, LLC v. TXU Portfolio Mgmt. Co., LP, the Texas Supreme Court discussed the enforceability of liquidated damages:
The basic principle underlying contract damages is compensation for losses sustained and no more; thus, we will not enforce punitive contractual damages provisions. See Stewart v. Basey, 150 Tex. 666, 245 S.W.2d 484, 486 (1952). In Phillips v. Phillips, we acknowledged this principle and restated the two indispensable findings a court must make to enforce contractual damages provisions: (1) "the harm caused by the breach is incapable or difficult of estimation," and (2) "the amount of liquidated damages called for is a reasonable forecast of just compensation." 820 S.W.2d 785, 788 (Tex. 1991) (citing Rio Grande Valley Sugar Growers, Inc. v. Campesi, 592 S.W.2d 340, 342 n. 2 (Tex. 1979)). We evaluate both prongs of this test from the perspective of the parties at the time of contracting.
426 S.W.3d 59, 69-70 (Tex. 2014). "While the question may require a court to resolve certain factual issues first, ultimately the enforceability of a liquidated damages provision presents a question of law for the court to decide." Id., at 70. The party asserting that a liquidated-damages clause is a penalty provision bears the burden of 315*315 pleading and proof. Garden Ridge, LP v. Advance Intern., Inc., 403 S.W.3d 432, 437-38 (Tex. App.-Houston [14th Dist.] 2013, pet. denied) (citing Phillips, 820 S.W.2d at 789; Tex. R. Civ. P. 94).
In this case, the trial court analyzed both Phillips prongs, finding difficulty in estimating damages and the reasonableness of damage forecast. See Phillips v. Phillips, 820 S.W.2d 785, 788 (Tex. 1991). In its findings of fact and conclusions of law, the trial court observed that at the time the parties entered into the contract, the damages appellee would suffer if Atrium breached the contract were incapable or difficult of estimation because: (a) the parties knew the volume of laundry services would fluctuate over time as the census changed and given the needs of individual patients; (b) the parties could not predict how long linens would last; (c) the parties could not determine the frequency of deliveries that would be required to service Atrium's account; (d) the parties could not determine Atrium's rate of loss of appellee's linens; and (e) the parties could not determine the amount of appellee's general overhead expenses and resources that would be expended to service Atrium's account. Thus, the trial court correctly found appellee's costs could not be determined.
Additionally, the trial court found that because appellee's damages could not be calculated at the time the contract was signed, the contract provided that if Atrium prematurely canceled the contract, Atrium would pay appellee "40% of the agreement value or the current invoice amount, whichever is greater, multiplied by the number of weeks remaining under the agreement." As set forth in the trial court's findings of fact and conclusions of law, appellee derived 40% because it was a conservative historical estimate of the net profits, and a reasonable rate of return on infrastructure investments, over the life of laundry service agreements similar to the contract.
The trial court further found that appellee arrived at the 40% number because it was a conservative historical estimate of the net profits, and a reasonable rate of return on the infrastructure investments, over the life of laundry service agreements similar to the contract between Atrium and appellee. On this basis, the trial court found that the provision is a reasonable forecast of appellee's just compensation over the life of the contract even though the provision's damages calculation is based only on the most recent one-week invoice as of the date of cancellation instead of being based on an average of all weekly invoices under the contract through the date of cancellation or even a larger sample size invoices issued under the contract.
In its conclusions of law, the trial court determined: the contract is valid and enforceable; the contract is not illusory; and based on the clear and unambiguous language of the contract, the parties' intent at the time of formation was for the liquidated damages provision to serve as a reasonable forecast of appellee's expectation damages in the event of breach, not as a reasonable forecast of appellee's reliance damages in the event of breach. It further determined that the liquidated damages provision was not a penalty. The liquidated damages provision is enforceable because at the time the contract was signed, damages resulting from material breach were very difficult, if not impossible to determine, and the amount of damages was a reasonable estimate of the harm that would be incurred. See Murphy v. Cintas Corp., 923 S.W.2d 663, 666 (Tex. App.-Tyler 1996, writ denied) (upholding liquidated damages provision for 50% of the weekly fees for the remainder of the 60-month 316*316 term, noting "[t]o forecast the actual damages to Cintas as a result of Murphy's termination of the contract sixty months in advance would be fraught with uncertainty."); Oetting v. Flake Uniform & Linen Serv., Inc., 553 S.W.2d 793, 797-98 (Tex. Civ. App.-Fort Worth 1977, no writ) (focusing on anticipated profit margin, court held that 85% cancellation charge reasonable). Here, the evidence of record demonstrated 40% was a reasonable forecast.
Appellants failed to prove the liquidated damages provision is an unenforceable penalty. Garden Ridge, LP, 403 S.W.3d at 437-38. For the above reasons, appellants' second issue is overruled.

C. Pre-judgment Interest

In their third issue, appellants maintain the court should reverse and modify the judgment by limiting the contractual prejudgment interest solely to amounts actually invoiced by ImageFirst. Appellants maintain that contractual finance charges are limited to "past-due invoices issued by ImageFirst." Thus, appellants argue that appellee is not entitled to recover the finance charge on liquidated damages that were never invoiced.
In its finding of fact and conclusions of law, the trial court found that pursuant to the contract's finance charge provision, the $716,330.95 appellee is entitled to under the liquidated damages provision has been accruing interest at 1½% per month or 18% per year from October 12, 2013, to February 16, 2016. Contrary to appellants' contention, the contract expressly provides for contractual interest on the cancellation of the contract. "A finance charge of 1½% per month, which is equal to 18% per year will be added to all balances not paid within terms of Net 10 EOM."
The terms of the contract do not require amounts to be invoiced to become due or to incur the contractual finance charge. Here, the latest date of the termination and cancellation charge became due was September 11, 2013. Under the contract, if the cancellation charge was not paid by October 10, it accrued interest of 1½% per month. As such, the evidence of record is sufficient to support the trial court's findings. Thus, appellants' third issue is overruled.

D. Attorney's Fees

In their fourth issue, appellants assert the court should reverse and modify the judgment by reducing the attorney's fees award to account for fees required to be segregated.[2]
In support of an application for $110,000 in attorney's fees, H. Ronald Welsh, counsel for appellee submitted an affidavit and fourteen pages of Welsh LeBlanc LLP's billing report. In Welsh's affidavit, he maintains that a ten percent (10%) reduction of fees properly and fully segregates the fees incurred for the quantum meruit and conversion causes of action from those fees incurred from breach of contract.
Atrium opposed the fee application and submitted a controverting attorney's fees declaration by Helen Patel, directly addressing the segregation issue and establishing $11,473.50 should be excluded from recovery because it relates to time entries in pursuit of appellee's claims against individual defendants. Patel criticizes Welsh's "10% reduction of attorney's fees" because it does not take into account the significant 317*317 amount of time appellee's counsel spent solely on Siddiqui litigation (e.g., attended depositions of individuals with no knowledge or connection to appellee's claims against appellants and played no part in this lawsuit's trial; reviewed motions and correspondence and attended hearings on issues having no bearing on appellee's claims against appellants; propounded discovery on the individual defendants and conducted follow-up work on that discovery; opposed for a substantial period of time appellants' attempts to sever appellee's claims from the Siddiqui litigation; engaged in correspondence with counsel for the individual defendants; and prepared dismissal document for the individual defendants). Patel's affidavit is unrebutted evidence.
We review a trial court's award of attorney's fees under an abuse of discretion standard. See Ridge Oil Co., Inc. v. Guinn Invs., Inc., 148 S.W.3d 143, 163 (Tex. 2004). A party may not recover attorney's fees unless authorized by statute or contract. Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 310-11 (Tex. 2006). Texas Civil Practice and Remedies Code section 38.001(8) provides for the recovery of attorney's fees in a suit on a contract. To recover attorney's fees under section 38.001, a party must prevail on the underlying claim and recover damages. Intercontinental Grp. P'ship v. KB Home Lone Star L.P., 295 S.W.3d 650, 653 (Tex. 2009). Under section 38.001, the trial court has no discretion to deny attorney's fees when presented with evidence of the same. Bocquet v. Herring, 972 S.W.2d 19, 20 (Tex. 1998). Notwithstanding, a party seeking attorney's fees must segregate based on claims and parties. See Chapa, 212 S.W.3d at 313-14. Determinations addressing the need to segregate attorney's fees is a question of law. CA Partners v. Spears, 274 S.W.3d 51, 81 (Tex. App.-Houston [14th Dist.] 2008, pet. denied.).
Here, appellee prevailed on its breach of contract claim and recovered damages for that claim; thus, appellee is entitled to recover some amount of attorney's fees under Chapter 38. See KB Home, 295 S.W.3d at 653. The trial court's findings of fact and conclusions of law do not discuss fee segregation. Instead, without any explanation, the trial court awarded the full measure of appellee's attorney's fees, $110,000. This was an error and, as stated in Chapa "an unsegregated damages award require[s] a remand." 212 S.W.3d at 314. As such, appellants' fourth issue is sustained.

IV. CONCLUSION

Appellants' issues one, two, and three are overruled. Appellants' issue four is sustained. Thus, the trial court's judgment is affirmed in part, reversed in part, and remanded for reconsideration of attorney's fees.
(Frost, C.J., concurring).

CONCURRING OPINION

Kem Thompson Frost, Chief Justice
The majority rejects the appellants' main argument under their first issue based on a conclusion that the parties deleted an obligation in their agreement by means of an oral modification. The better course would be to conclude that the agreement never imposed the obligation in question, so there was no need to modify the agreement.

No Merit in the Appellants' First Issue

In their first issue, appellants Atrium Medical Center, LP and Texas Healthcare Alliance, LLC (collectively the "Atrium Parties") assert that appellee Houston Red C LLC d/b/a ImageFIRST Healthcare 318*318 Laundry Specialists ("ImageFIRST") cannot recover on its breach-of-contract claim as a matter of law because the undisputed trial evidence shows that before Atrium Medical Center, LP breached its November 2012 agreement with ImageFIRST (the "Agreement"), ImageFIRST breached the Agreement by failing to provide a particular service. The service that the Agreement allegedly required was ImageFIRST's giving Atrium access to 120% of the amount of linens invoiced to Atrium on a weekly basis (the "120% Service"). The Atrium Parties' first issue lacks merit for three reasons.

1. The Atrium Parties waived the prior-material-breach defense.

Under their first issue, the Atrium Parties assert that ImageFIRST cannot recover on its breach-of-contract claim as a matter of law because the trial evidence conclusively proves that ImageFIRST materially breached the Agreement before Atrium breached the Agreement. The alleged material breach is the failure to provide the 120% Service starting in February 2013. This contention is an affirmative defense that the Atrium Parties were required to plead.[1] Because the Atrium Parties did not plead it, they waived it unless the parties tried the defense by consent.[2]
On appeal, the Atrium Parties assert that the parties did just that. The majority does not address this argument. If issues not raised by the pleadings are tried by express or implied consent of the parties, these issues shall be treated as if they had been raised by the pleadings.[3] To determine whether the issue was tried by consent, we examine the record not for evidence of the issue, but rather for evidence of trial of the issue.[4] Under this court's precedent, one of the essential elements of ImageFIRST's breach-of-contract claim is that ImageFIRST tendered performance or was excused from doing so.[5] The Atrium Parties cite trial evidence as to ImageFIRST's failure to provide the 120% Service after February 1, 2013, but the Atrium Parties also rely on this evidence to show that, as a matter of law, ImageFIRST did not prove the performance element of its breach-of-contract claim. Because the evidence on which the Atrium Parties rely is germane to issues other than the prior-material-breach defense, this evidence does not show trial of the defense.[6] The record does not contain evidence showing trial of the prior-material-breach defense.[7] This defense was not tried by express or implied consent of the parties.[8] Therefore, the Atrium Parties 319*319 waived this defense, and they may not obtain a reversal of the trial court's judgment based on this defense.[9]

2. The trial evidence does not conclusively prove that ImageFIRST breached the Agreement by failing to give Atrium the 120% Service.

The Atrium Parties also argue that the trial evidence proves as a matter of law that ImageFIRST breached the Agreement starting on February 1, 2013, by failing to provide the 120% Service to Atrium. Evidence at trial showed that, starting on February 1, 2013, ImageFIRST made deliveries more frequently than the three deliveries per week that ImageFIRST had been making. Evidence also showed that when ImageFIRST stopped the three-deliveries-per-week schedule, ImageFIRST also stopped providing the 120% Service. The Atrium Parties cite the trial testimony of Ryan Steen, ImageFIRST's President, on this point, and suggest that Steen conceded that ImageFIRST breached the Agreement starting on February 1, 2013. Though Steen may have agreed that ImageFIRST abandoned the three-deliveries-per-week schedule and stopped providing the 120% Service on February 1, 2013, Steen did not give testimony that rises to the level of a judicial admission that ImageFIRST breached the Agreement by engaging in this conduct.[10]
A crucial premise of the Atrium Parties' argument is that the Agreement requires ImageFIRST to provide the 120% Service throughout its term and even if ImageFIRST was making more than three deliveries per week. In the Agreement, Atrium and ImageFIRST agreed that "[t]he terms of this contract shall apply to all subsequent increases or additions to such service." The parties also agreed that "[n]o modification of this agreement will be binding unless in writing and signed by [ImageFIRST]." The record contains no evidence of any written modification of the Agreement. If ImageFIRST agreed to provide the 120% Service throughout the Agreement's term and even if ImageFIRST was making more than three deliveries per week, then it would appear that ImageFIRST was breaching the Agreement starting on February 1, 2013.[11]
The provision of the Agreement that addresses the 120% Service provides as follows: "I further understand the three times per week delivery system with 40% of my total inventory being available for use at each delivery (120% total available weekly) and will be billed for 100% weekly."[12] The "I" appears to refer to Atrium's agent. The Atrium Parties assert that, under this provision, ImageFIRST agreed to provide the 120% Service throughout the Agreement's term and regardless of how many deliveries per week ImageFIRST was making. In this provision, the parties discuss the 120% Service only in the context of the "three times per week delivery system," which was discontinued at Atrium's 320*320 request on January 31, 2013. In the Agreement, the parties anticipated that there might be "subsequent increases or additions" to ImageFIRST's services under the Agreement. Although the parties agreed to various terms in the first page of the Agreement, the parties did not agree that ImageFIRST would provide the 120% Service regardless of how many deliveries per week ImageFIRST was making. Under the Agreement's unambiguous language, the parties were free to increase the number of deliveries to more than three times per week, and ImageFIRST agreed to provide the 120% Service only when it was making three deliveries per week.[13] Thus, though the trial evidence showed that ImageFIRST stopped providing the 120% Service on February 1, 2013, this evidence did not show that ImageFIRST breached the Agreement. The trial evidence does not prove as a matter of law that ImageFIRST breached the Agreement starting on February 1, 2013, by failing to provide the 120% Service to Atrium.

3. The trial evidence is legally and factually sufficient to support the trial court's finding that ImageFIRST fully performed its obligations under the Agreement.

Under this court's precedent, one of the essential elements of ImageFIRST's breach-of-contract claim is that ImageFIRST tendered performance or was excused from doing so.[14] The trial court found that ImageFIRST fully performed its obligations under the Agreement. On appeal the Atrium Parties argue that the trial evidence is legally and factually insufficient to support this finding.
When reviewing the legal sufficiency of the evidence, we consider the evidence in the light most favorable to the challenged finding and indulge every reasonable inference that would support it.[15] We must credit favorable evidence if a reasonable factfinder could and disregard contrary evidence unless a reasonable factfinder could not.[16] We must determine whether the evidence at trial would enable reasonable and fair-minded people to find the facts at issue.[17] The factfinder is the only judge of witness credibility and the weight to give to testimony.[18]
When reviewing a challenge to the factual sufficiency of the evidence, we examine the entire record, considering both the evidence in favor of, and contrary to, the challenged finding.[19] After considering and weighing all the evidence, we set aside the fact finding only if it is so contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust.[20] The trier of fact is the sole judge of the credibility of the witnesses and the weight to be given to their testimony.[21] We may not substitute our own judgment for that of the trier of fact, even if we would reach a different 321*321 answer on the evidence.[22] The amount of evidence necessary to affirm a judgment is far less than that necessary to reverse a judgment.[23]
The Atrium Parties base their sufficiency challenges on the evidence showing that ImageFIRST did not provide the 120% Service starting on February 1, 2013. Yet, the evidence shows that beginning on that date, ImageFIRST made more than three deliveries per week, and, in this scenario, the Agreement does not require ImageFIRST to provide the 120% Service. Under the applicable standards of review, the trial evidence is legally and factually sufficient to support the trial court's finding that ImageFIRST fully performed its obligations under the Agreement.

Flaws in the Majority's Analysis

Though the majority concludes that the Atrium Parties' arguments under their first issue lack merit, the majority applies a different analysis. Contrary to the unambiguous language of the Agreement, the majority indicates that the Agreement required ImageFIRST to provide the 120% Service throughout the Agreement's term and even if ImageFIRST was making more than three deliveries per week. The majority concludes that this requirement does not conflict with the trial court's finding that ImageFIRST fully performed its obligations under the Agreement because the parties agreed to modify the Agreement to eliminate this requirement. There is no allegation or evidence of any written modification, so any such modification of the Agreement would have been an oral modification. But, if the Agreement contained such a requirement, then the parties agreed that this requirement "shall apply to all subsequent increases or additions to such service" and that "[n]o modification of this agreement will be binding unless in writing and signed by [ImageFIRST]."[24]
Though ImageFIRST argues on appeal that the parties agreed to such an oral modification, the only evidence that ImageFIRST cites is testimony by Steen that ImageFIRST had to provide the 120% Service under a three-delivery-per-week schedule but that this changed when the parties negotiated a "different delivery schedule." This evidence seems to show an agreement to increase the frequency of the deliveries under the Agreement rather than an oral agreement to modify the Agreement. There does not appear to be legally sufficient evidence to show that the parties agreed to an oral modification of the Agreement. Even if there were evidence showing an oral modification, the parties agreed that oral modifications of the Agreement would not be binding, and under recent Texas precedent, courts generally enforce such agreements.[25] The trial evidence does not raise a fact issue as to any potential exception to the general enforceability of the parties' ban on oral modifications.[26] So, the better course would 322*322 be to reject the Atrium Parties' arguments based on the absence of a contractual obligation to provide the 120% Service under an increased delivery schedule, rather than to rely on an oral-modification theory.
For the reasons stated above, though I join the court's judgment, I respectfully decline to join the majority opinion.
[1] Robert Scott Poston, Starskey Bomer, and David Dale.
[2] Appellee filed a petition in intervention in an existing lawsuit initiated by appellants against Siddiqui. In its second amended petition, appellee alleged claims against appellants and several individual doctors. Eventually appellee nonsuited the individual defendants.
[1] See Tex. R. Civ. P. 94; In re Marriage of Moore, No. 14-15-00859-CV, 2017 WL 3089962, at *2 (Tex. App.-Houston [14th Dist.] Jul. 20, 2017, pet. filed) (mem. op.).
[2] See In re Marriage of Moore, 2017 WL 3089962, at *2.
[3] See Tex. R. Civ. P. 67, 301; In re Marriage of Moore, 2017 WL 3089962, at *2.
[4] See In re Marriage of Moore, 2017 WL 3089962, at *2.
[6] See In re Marriage of Moore, 2017 WL 3089962, at *2.
[7] See id.
[8] See id. After trial, the Atrium Parties moved the trial court for leave to amend their pleadings as to the prior-material-breach defense on the ground that this issue had been tried by consent. The Atrium Parties do not assert on appeal that the trial court erred in denying this motion, and, in any event, the record reflects that this defense was not tried by express or implied consent of the parties.
[9] See id.
[11] ImageFIRST's oral-modification argument and the majority's reliance on this argument are discussed later in this opinion.
[12] An agent of Atrium and an agent of ImageFIRST signed at the bottom of each page, and at least one of the agents appears to have signed the second page on December 16, 2012, more than a month after an agent of Atrium signed the first page. Nonetheless, the parties agree that the two pages in Plaintiff's Exhibit 1 constitute the Agreement, and it is presumed that these two pages are the Agreement for the purposes of this opinion.
[16] See id. at 827.
[17] See id.
[18] See id. at 819.
[20] Id.
[24] The Atrium Parties have not asserted in the trial court or on appeal that the statute of frauds would bar enforcement of any alleged oral modification. See Tex. Bus. & Com. Code Ann. § 26.01(b)(6) (West, Westlaw through 2017 1st C. S.).