Texas Causes of Action & Affirmative Defenses

Texas Causes of Action & Affirmative Defenses

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Tuesday, June 14, 2011

When are attorney's fees available in Texas?

TEXAS FOLLOWS THE "AMERICAN RULE" ON ATTORNEY FEES

Attorney's fees are recoverable only when provided for by statute or by the parties' agreement. Doss v. Homecomings Fin. Network, Inc., 210 S.W.3d 706, 711 (Tex. App.-Corpus Christi 2007, pet. denied) (citing Dallas Cent. Appraisal Dist. v. Seven Inv. Co., 835 S.W.2d 75, 77 (Tex. 1992)).

SOURCE: Houston Court of Appeals - 01-09-00816-CV - 5/28/11

Fees under Chapter 38 of the CPRC

An award of attorney's fees in a breach of contract claim is appropriate only if a party prevails and recovers damages. See TEX. CIV. PRAC. & REM. CODE ANN. § 38.001(8) (West 2008) (allowing recovery of attorney's fees in valid claims involving oral or written contracts); State Farm Life Ins. Co. v. Beaston, 907 S.W.2d 430, 437 (Tex. 1995). SOURCE: Corpus Christi Court of Appeals - 13-09-00355-CV - 6/9/11

Fees under Chapter 37 of the CPRC UDJA FEES - Uniform Declaratory Judgment Act ("UDJA").

Reasonable and necessary attorney's fees may be awarded in any proceeding utilizing the UDJA if they are equitable and just. Id. at 711-12; see TEX. CIV. PRAC. & REM. CODE ANN. § 37.009 (Vernon 2008) ("In any proceeding under this chapter, the court may award costs and reasonable and necessary attorney's fees as are equitable and just.").[2] "The UDJA is a procedural device for deciding cases already within a court's subject matter jurisdiction." Doss, 210 S.W.3d at 712 (citing TEX. CIV. PRAC. & REM. CODE ANN. §§ 37.001—.011 (Vernon 2008) and State v. Morales, 869 S.W.2d 941, 947 (Tex. 1994)). "A litigant's request for declaratory relief cannot confer jurisdiction on the court, nor can it change the basic character of a suit." Id. (citing Morales, 869 S.W.2d at 947). The UDJA provides: A person interested under a deed, will, written contract, or other writings constituting a contract or whose rights, status, or other legal relations are affected by a statute, municipal ordinance, contract, or franchise may have determined any question of construction or validity arising under the instrument, statute, ordinance, contract, or franchise and obtain a declaration of rights, status, or other legal relations thereunder. TEX. CIV. PRAC. & REM. CODE ANN. § 37.004.

Appellate review of fee awards

We review a trial court's award of attorney's fees for an abuse of discretion. Bocquet v. Herring, 972 S.W.2d 19, 21 (Tex. 1998); see also Gilbert v. City of El Paso, 327 S.W.3d 332, 336 (Tex. App.-El Paso 2010, no pet.) ("An award of attorney's fees under the UDJA is within the trial court's discretion."). A trial court abuses its discretion when it acts without regard for any guiding rules or principles. Owens-Corning Fiberglas Corp. v. Malone, 972 S.W.2d 35, 43 (Tex. 1998). In Tony Gullo Motors I, L.P. v. Chapa, the Texas Supreme Court held that parties claiming attorney's fees must "segregate fees between claims for which they are recoverable and claims for which they are not" and are "required to show that attorney's fees were incurred while suing the defendant sought to be charged with the fees on a claim which allows recovery of such fees." 212 S.W.3d 299, 311 (Tex. 2006) (quoting Stewart Title Guar. Co. v. Sterling, 822 S.W.2d 1, 10 (Tex. 1991)). "Intertwined facts" do not make fees for unrecoverable claims recoverable. Id. at 313-14. "[I]t is only when discrete legal services advance both a recoverable and unrecoverable claim that they are so intertwined that they need not be segregated." Id. Thus, "[i]f any attorney's fees relate solely to a claim for which such fees are unrecoverable, the claimant must segregate recoverable from unrecoverable fees." 7979 Airport Garage, L.L.C. v. Dollar Rent A Car Sys., Inc., 245 S.W.3d 488, 506 (Tex. App.-Houston [14th Dist.] 2007, pet. denied) (citing Chapa, 212 S.W.3d at 313-14). The supreme court in Chapa further stated,
There may, of course, be some disputes about fees that a trial or appellate court should decide as a matter of law. For example, to prevail on a contract claim a party must overcome any and all affirmative defenses (such as limitations, res judicata, or prior material breach), and the opposing party who raises them should not be allowed to suggest to the jury that overcoming those defenses was unnecessary. But when, as here, it cannot be denied that at least some of the attorney's fees are attributable only to claims for which fees are not recoverable, segregation of fees ought to be required. . . .
Chapa, 212 S.W.3d at 314 (emphasis added).
Attorneys are not required to keep separate time records when drafting parts of a petition or completing other tasks that relate to claims for which attorney's fees are unrecoverable. 7979 Airport Garage, 245 S.W.3d at 506 (citing Chapa, 212 S.W.3d at 313-14). Rather, an attorney may testify, for example, "that a given percentage of the drafting time would have been necessary even if the claim for which attorney's fees are nonrecoverable had not been asserted." Id. The party seeking to recover attorney's fees bears the burden of demonstrating that segregation is not required. See Hong Kong Dev., Inc. v. Nguyen, 229 S.W.3d 415, 455 (Tex. App.-Houston [1st Dist.] 2007, no pet.). [2] We also note that attorney's fees are recoverable for claims arising out of an oral or written contract. See TEX. CIV. PRAC. & REM. CODE ANN. § 38.001(8) (Vernon 2008) ("A person may recover reasonable attorney's fees from an individual or corporation, in addition to the amount of a valid claim and costs, if the claim is for . . . an oral or written contract.").

SOURCE: Houston Court of Appeals - 01-09-00816-CV - 5/28/11