Attorney's fees in a contract dispute: Who can recover fees under CPRC Chapter 38?

   
Attorney's fees not available for successful defense of breach-of-contract claim under Chaper 38 of the Civil Practice and Remedies Code or in case where the Plaintiff does not recover damages. Prevailing defendant may recover fees if the contract authorizes fees to the prevailing party regardless of whether that party is the plaintiff or the defendant.

CHAPTER 38 FEES ONLY AVAILABE IF CONTRACT DAMAGES ARE RECOVERED

Chapter 38 of the Texas Civil Practice and Remedies Code allows recovery of attorneys’ fees in breach of contract cases in addition to the amount of a valid claim. Tex. Civ. Prac. & Rem. Code Ann. § 38.001(8) (West 2008). In order to recover fees, a party must (1) prevail on the breach of contract claim, and (2) recover damages. MBM Fin. Corp. v. Woodlands Operating Co., 292 S.W.3d 660, 666 (Tex. 2009); Mustang Pipeline Co., 134 S.W.3d at 201; Green Int’l, Inc. v. Solis, 951 S.W.2d 384, 390 (Tex. 1997). The requirement of damages is implied from the statute’s language, “in addition to the amount of a valid claim,” the claimant must recover some amount on that claim. MBM Fin. Corp., 292 S.W.3d at 666.

  

SOURCE: TEXARKANA COURT OF APPEALS - 06-10-00091-CV – 11/2/11

   

FEE SEGREGATION REQUIREMENT

  

Generally, a party seeking attorneys’ fees must show that the fees were incurred on a claim that allows recovery of such fees and must segregate fees incurred among different claims or separate parties. See Stewart Title Guar. Co. v. Aiello, 941 S.W.2d 68, 73 (Tex. 1997); Stewart Title Guar. Co. v. Sterling, 822 S.W.2d 1, 10 (Tex. 1991), modified on other grounds by Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 313–14 (Tex. 2006). When, however, the claims are “dependent upon the same set of facts or circumstances and thus are ‘intertwined to the point of being inseparable,’ the party suing for attorneys’ fees may recover the entire amount covering all claims.” Sterling, 822 S.W.2d at 11 (citing Gill Sav. Ass’n v. Chair King, Inc., 783 S.W.2d 674, 680 (Tex. App.—Houston [14th Dist.] 1989), aff’d in part & modified in part on other grounds, 797 S.W.2d 31 (Tex. 1990)).

   

SOURCE: TEXARKANA COURT OF APPEALS - 06-10-00091-CV – 11/2/11