Tuesday, December 13, 2011

Reasonableness of attorney’s fees: Fact question for jury or judge in a bench trial under Texas Supreme Court’s Arthur Andersen [not Anderson] decision

The reasonableness of attorney’s fees is ordinarily left to the trier of fact, and a reviewing court may not substitute its judgment for the jury’s. Smith v. Patrick W.Y. Tam Trust, 296 S.W.3d 545, 547 (Tex. 2009); Ragsdale v. Progressive Voters League, 801 S.W.2d 880, 881 (Tex. 1990) (per curiam).


Factors to be considered in determining the amount of attorney’sfees to be awarded include the following: (1) the time and labor required, novelty and difficulty of the questions presented, and the skill required; (2) the likelihood that acceptance of employment precluded other employment; (3) the fee customarily charged for similar services; (4) the amount involved and the results obtained; (5) the time limitations imposed by the client or the circumstances; (6) the nature and length of the professional relationship with the client; (7) the expertise, reputation, and ability of the lawyer performing the services; and (8) whether the fee is fixed or contingent. ArthurAndersen & Co. v. Perry Equip. Corp., 945 S.W.2d 812, 818 (Tex. 1997).
“A reasonable fee is one that is not excessive or extreme, but rather moderate or fair.” Garcia v. Gomez, 319 S.W.3d 638, 642 (Tex. 2010).

SOURCE: SAN ANTONIO COURT OF APPEALS - 04-10-00551-CV – 12/7/11 

Read more on the specific facts and issues in this case -- regarding legal fees - below:

At trial, counsel for both parties testified concerning attorney’s fees. Newton, a shareholder with Allen, Stein & Durbin, and lead counsel for Hidden Forest, testified that his fees through trial were $25,000 based upon his training, education, and experience, and considering the time and labor involved, novelty of question involved, the skill required to perform the services, and the fact that the fee arrangement with the client was a contingency fee. Itemized billing records for all of the attorneys and legal staff working on the case were admitted into evidence. Newton testified that he personally spent 75 hours on the case, his associate spent over twelve hours on the case, and his legal assistant spent almost 26 hours. Newton stated that shareholder attorneys in his firm charge $250.00 per hour, associate attorneys bill at a rate of $200.00 per hour, and legal assistants charge $125.00 per hour.

Counsel for Hern, Peter L. Kilpatrick, testified that the attorney’s fees sought by Hidden Forest were unreasonable and should amount to $0. The jury awarded Hidden Forest $728.00 in attorney’s fees for preparation and trial, $6,250.00 in attorney’s fees for appeal to the court of appeals, and $2,500 for appeal to the Supreme Court of Texas.
We recognize there was no evidence controverting Newton’s hourly rate; however, the trier of fact is not required to award attorney’s fees equal to those testified to at trial, even when that testimony is uncontradicted. See Hicks Oil & Butane Co. v. Garza, No. 04-05-00836-CV, 2006 WL 2263896, at *4 (Tex. App.—San Antonio Aug. 9, 2006, no pet.) (mem. op.) (affirming award of attorney’s fees that was substantially lower than amount unequivocally testified to at trial); Inwood N. Homeowners’ Ass’n, Inc. v. Wilkes, 813 S.W.2d 156, 157-58 (Tex. App.—Houston [14th Dist.] 1991, no writ) (affirming award of $500 in attorney’s fees to plaintiff who presented undisputed evidence of approximately $1,500 in attorney’s fees where small amount in controversy was an “attendant circumstance tending to cast suspicion on the uncontradicted evidence regarding the attorney’s fee”). Here, the jury was aware of the simplistic nature of Hidden Forest’s case, which merely sought to recover assessments that Hern admitted he had not paid. The amount Hidden Forest sought in attorney’s fees was more than 26 times the amount it recovered due to Hern’s failure to pay assessments. The jury could have rationally determined that 3.78 hours was a reasonable amount of time to expend in legal services for this case (dividing $728 awarded in attorney’s fees by Newton’s hourly rate of $250). See Travis Law Firm v. Woodson Wholesale, Inc., No. 14-07-00204-CV, 2008 WL 4647380, at *4-5 (Tex. App.—Houston [14th Dist.] Oct. 21, 2008, no pet.) (mem. op.) (holding testimony of $50,887.89 in attorney’s fees was contradicted by attendant circumstances, i.e., fee sought by firm was more than 84 times the principal amount firm recovered, and affirming award of $1,500 in attorney’s fees). Accordingly, we hold that the jury’s award of $728 in attorney’s fees for preparation and trial is not so against the overwhelming weight of the evidence as to be clearly wrong and unjust. We overrule Hidden Forest’s fourth issue.


Based on the foregoing reasons, we reverse the judgment of the trial court insofar as it relates to Hern’s counterclaim for breach of the restrictive covenants, and render judgment that Hern take nothing on his counterclaims. We affirm the award of attorney’s fees to Hidden Forest. 
SOURCE: SAN ANTONIO COURT OF APPEALS - 04-10-00551-CV – 12/7/11 

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