Claim for Attorney's Fees treated as substantive and subject to choice of law

 
ATTORNEY’S FEE CLAIM A SUBSTANTIVE ISSUE – GOVERNED BY CONTRACTUAL CHOICE OF LAW

The recovery of attorneys' fees is a substantive, not a procedural, issue and will be governed by the law governing the substantive issues. Midwest Med. Supply Co. v. Wingert, 317 S.W.3d 530, 537 (Tex. App.-Dallas 2010, no pet.); Rapp Collins Worldwide, Inc. v. Mohr, 982 S.W.2d 478, 487-88 (Tex. App.-Dallas 1998, no pet.).

SOURCE: Dallas Court of Appeals 05-06-00966-CV – 5/10/11 (California law applies)

FAILURE TO FILE MOTION FOR JUDICIAL NOTICE OF OTHER STATE’S LAW LIKELY TO RESULT IN APPLICATION OF TEXAS LAW

Although the policies and procedures provide that the law of the state of Utah shall govern all other matters relating to or arising from the policies and procedures, neither party has argued either that contract law regarding the state of Utah should be applied or that Utah's law differs substantially from that of Texas. Accordingly, we will apply the contract-law principles of Texas. See Johnson v. Structured Asset Servs., LLC, 148 S.W.3d 711, 720 (Tex. App.-Dallas 2004, no pet.).

SOURCE: Dallas Court of Appeals 05-10-00776-CV – 5/5/11 

Can prevailing defendants get attorney's fees under the Texas Theft Liability Act (TTLA)?

Unlike other statutes that authorize recovery of attorney's fees as an exception to the American Rule, the Texas Theft Liability Act (TTLA) provides for an award of such fees to the prevailing party, which includes the party that successfully defends a statutory civil theft claim, not just the prevailing plaintiff. No showing of frivolousness is required. Dismissal with prejudice signifies success for fee purposes because it entails preclusive effect and thereby alters the relationship between the parties. 


THEFT LIABILITY ACT AND ATTORNEY FEE RECOVERY

Section 134.005(b) of the TTLA provides that "[e]ach person who prevails in a suit under this chapter shall be awarded court costs and reasonable and necessary attorney's fees." TEX. CIV. PRAC. & REM. CODE ANN. § 134.005(b). The award of fees to a prevailing party in a TTLA action is mandatory. Bocquet v. Herring, 972 S.W.2d 19, 20 (Tex. 1998) ("Statutes providing that a party `may recover,' `shall be awarded,' or `is entitled to' attorney fees are not discretionary.").

The TTLA statute does not contain a definition of "prevails" to assist in determining who qualifies as a prevailing party. Courts have looked to the term's "ordinary" meaning to determine its scope for both statutory and contractual claims. See, e.g., Epps v. Fowler, 351 S.W.3d 862, 866 (Tex. 2011) (construing written contract to give meaning to undefined term "prevailed" while noting that phrase "prevailing party" is given its ordinary meaning and has been explicated through statutory interpretation by many courts).

Courts have held that the phrase "prevailing party" in section 134.005(b) of the TTLA includes both a plaintiff successfully prosecuting a theft suit and a defendant successfully defending against one. Peoples v. Genco Fed. Credit Union, No. 10-09-00032-CV, 2010 WL 1797266, at *7 (Tex. App.-Waco May 5, 2010, no pet.) (mem. op.); Brown v. Kleerekoper, No. 01-11-00972-CV, 2013 WL 816393, *5 (Tex. App.-Houston [1st Dist.] March 5, 2013, pet. filed) (mem. op.). A prevailing defendant is entitled to attorney's fees "without any prerequisite that the claim is found to be groundless, frivolous, or brought in bad faith." Air Routing Int'l Corp. (Canada) v. Britannia Airways, Ltd., 150 S.W.3d 682, 686 (Tex. App.-Houston [14th Dist.] 2004, no pet.). Thus, Equicap's status defending against a TTLA claim does not prevent recovery of attorney's fees.

Prevailing on portion of but not entire suit

In Moak v. Huff, No. 04-11-00184-CV, 2012 WL 566140, at *11 (Tex. App.-San Antonio Feb. 15, 2012, no pet.) (mem. op.), the defendant lost on the plaintiff's DTPA claim but successfully defended against the plaintiff's TTLA claim. Id., 2012 WL 566140, at *1. The defendant then sought an award of attorney's fees under the TTLA. Id., 2012 WL 566140, at *9. The plaintiff resisted, arguing that a person does not "prevail in a suit" unless he is the "party in whose favor a judgment is rendered" and is "vindicated by the judgment." Id., 2012 WL 566140, at *10. The plaintiff maintained that the defendant had to prevail on the entire suit to recover attorney's fees under the TTLA. Id.

The court of appeals disagreed, holding that "a person who prevails in a TTLA cause of action is entitled to recover the reasonable fees necessarily incurred prosecuting or defending that cause of action, even if the party is unsuccessful on other claims and counterclaims litigated in the same suit." Id., 2012 WL 566140, at *11; see Brown, 2013 WL 816393, at *5 (holding that defendant who successfully defended theft-of-property claim under TTLA was entitled to attorney's fees even if defendant did not prevail on other causes of action). Thus, Equicap's failure to obtain judgment on its breach-of-contract claim does not affect its recovery of attorney's fees as the prevailing party on the TTLA claim.

A defendant "prevails" if the plaintiff's claim is dismissed with prejudice

A party prevails if he "successfully prosecutes the action or successfully defends against it. . . ." Johns v. Ram-Forwarding, Inc., 29 S.W.3d 635, 637-38 (Tex. App.-Houston [1st Dist.] 2000, no pet.). A defendant who has the claims against him resolved by voluntary dismissal without prejudice generally is not considered a prevailing party or entitled to an award of attorney's fees. Cricket Commc'ns, Inc. v. Trillium Indus., Inc., 235 S.W.3d 298, 311 (Tex. App.-Dallas 2007, no pet.); Travel Music of San Antonio, Inc. v. Douglas, No. 04-00-00757-CV, 2002 WL 1058527, at *3 (Tex. App.-San Antonio May 29, 2002, pet. denied) (mem. op., not designated for publication). This is because a dismissal without prejudice does not materially alter the plaintiff's legal relationship with the defendant; the plaintiff is free to reassert his claims and may prevail against the defendant at a later date. See Epps, 351 S.W.3d at 869.

The legal relationship between a plaintiff and defendant does change, however, when the plaintiff's claims are dismissed with prejudice. Epps, 351 S.W.3d at 866-69. When a plaintiff's claims are dismissed with prejudice, the doctrine of res judicata prohibits the plaintiff from re-asserting his claims against that defendant in a later suit. Epps, 351 S.W.3d at 867; see Mossler v. Shields, 818 S.W.2d 752, 754 (Tex. 1991) (holding that dismissal with prejudice functions as final determination on merits); see also Williams v. TDCJ-Inst. Div., 176 S.W.3d 590, 594 (Tex. App.-Tyler 2005, pet. denied) (holding that dismissal with prejudice has full res judicata and collateral estoppel effect).

Res judicata attaches to a dismissal with prejudice even though the plaintiff's claims have not been fully litigated at trial. See Epps, 351 S.W.3d at 868-69. Res judicata applies because "a dismissal or nonsuit with prejudice is `tantamount to a judgment on the merits,'" and the effect of res judicata in that instance "works a permanent, inalterable change in the parties' legal relationship to the defendant's benefit: the defendant can never again be sued by the plaintiff or its privies for claims arising out of the same subject matter." Id. at 868-69.

The TTLA claim asserted against Equicap was dismissed with prejudice, but the basis for dismissal was specified as want of prosecution: "Accordingly, it is ORDERED and DECREED . . . that all claims by the Estate . . . are DISMISSED with PREJUDICE, for want of prosecution." See TEX. R. CIV. P. 165a (permitting dismissal of plaintiff's claims for want of prosecution).

A dismissal for failure to appear at trial or for want of prosecution should be without prejudice. See Att'y Gen. v. Rideaux, 838 S.W.2d 340, 342 (Tex. App.-Houston [1st Dist.] 1992, no writ) ("[A] trial court's authority to dismiss cases for want of prosecution does not confer upon it the authority to adjudicate and deny the merits of the dismissed claim."). An order dismissing a claim with prejudice when only dismissal without prejudice was appropriate can be challenged through a postjudgment motion. See El Paso Pipe & Supply v. Mountain States Leasing, Inc., 617 S.W.2d 189, 190 (Tex. 1981). While admittedly erroneous, a dismissal with prejudice that should have been without prejudice is not automatically void— it is merely voidable. Id.; Travelers Ins. Co. v. Joachim, 315 S.W.3d 860, 863-64 (Tex. 2010) (holding that erroneous order dismissing case with prejudice for want of prosecution "must be attacked directly in order to prevent the order from becoming final. . . ."). A plaintiff must affirmatively challenge the order to avoid it becoming a final judgment. Joachim, 315 S.W.3d at 863-64 (citing El Paso, 617 S.W.2d at 190). If the plaintiff fails to challenge the error, the order of dismissal with prejudice becomes "a final determination on the merits for purposes of res judicata." Id. at 866.

The Estate did not challenge the dismissal of its TTLA claim with prejudice. Accordingly, the dismissal is treated as a final determination on the merits and res judicata applies. Joachim, 315 S.W.3d at 864, 866; El Paso, 617 S.W.2d at 190; see Mossler, 818 S.W.2d at 754; see also Williams, 176 S.W.3d at 594.

Because res judicata applies to the Estate's TTLA claim against Equicap, the parties' legal relationship has changed in a manner that materially benefited Equicap and, as such, permits Equicap to qualify as a prevailing party under the TTLA statute. See Epps, 351 S.W.3d at 868 (stating that "we have no doubt that a defendant who is the beneficiary of a nonsuit with prejudice would be a prevailing party."); cf. Doolin's Harley-Davison, Inc. v. Young, No. 06-05-00101-CV, 2006 WL 27983, at *3 (Tex. App.-Texarkana Jan. 6, 2006, no pet.) (mem. op.) (holding that defendant was not prevailing party because matter was dismissed without prejudice and plaintiff retained right to refile case).

Accordingly, the trial court was required to award to Equicap its attorney's fees related to defending against the TTLA claim. TEX. CIV. PRAC. & REM. CODE ANN. § 134.005(b) (providing that prevailing party on TTLA claim "shall be awarded" attorney's fees); Brown, 2013 WL 816393, at *5. We sustain Equicap's first issue and hold that the trial court erred by denying Equicap's timely request for attorney's fees under the TTLA, given that the trial court ordered dismissal with prejudice.

Remand to determine attorney's fees

We have held that Equicap is entitled to an award of attorney's fees on the TTLA claim because it prevailed through dismissal of the Estate's claim with prejudice. When an award of attorney's fees to a prevailing party is mandated by statute, the factfinder can decide to award zero attorney's fees only if the evidence (1) failed to prove (a) that the attorney's services were provided or (b) the value of the services provided; or (2) affirmatively showed that (a) no attorney's services were needed or (b) that any services provided were of no value. Recognition Commc'ns, Inc. v. Am. Auto. Ass'n, Inc., 154 S.W.3d 878, 891 (Tex. App.-Dallas 2005, pet. denied); Citibank (S.D.), N.A. v. Tran, No. 05-11-01423-CV, 2013 WL 3205878, at *6 (Tex. App.-Dallas Aug. 26, 2013, pet. denied) (mem. op.).

If there is any evidence in support of the award of fees, the factfinder does not have discretion to award no fees. See Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 311-14 (Tex. 2006); see also Tran, 2013 WL 3205878, at *7 (holding that prevailing party could not be awarded zero attorney's fees by jury when attorney testified that he provided legal services and his testimony established that services had value); Glenn v. Pack, No. 02-09-00204-CV, 2011 WL 167254, at *7 (Tex. App.-Fort Worth Jan. 13, 2011, no pet.) (mem. op.) (holding that jury could not award zero attorney's fees on breach-of-contract counterclaim when attorney testified to some fee amount).

A prevailing party entitled to attorney's fees is required to "segregate fees between claims for which they are recoverable and claims for which they are not." Chapa, 212 S.W.3d at 311. Failure to segregate, though, does not result in the denial of any fee. Tran, 2013 WL 3205878, at *7 (holding that testimony of aggregate fee was some evidence of segregated fees and, therefore, supported remand); Glenn, 2011 WL 167254, at *7 ("[Party's] failure to segregate fees does not mean that he cannot recover any fees. . . ."). Rather, testimony of the full, unsegregated amount of the fee is treated as "some evidence" of the segregated fee amount, and remand is appropriate to determine the segregated fee amount due. Glenn, 2011 WL 167254, at *7; Wright v. McCusker, No. 04-99-00592-CV, 2000 WL 863099, at *2 (Tex. App.-San Antonio June 28, 2000, no pet.) (mem. op., not designated for publication).

Because the reasonableness of a fee award is a question of fact and Equicap produced some evidence of its fees, we remand for a new trial on attorney's fees.

Conclusion

Having sustained Equicap's first issue, we reverse the trial court's judgment denying attorney's fees and remand for a new trial on attorney's fees.

SOURCE: FIRST COURT OF APPEALS IN HOUSTON - No. 01-12-01133-CV - 7/1/2014

Prevailing party status for attorney fee award purposes

WHEN IS A PARTY A PREVAILING PARTY SO AS TO BE ENTITLED TO HAVE THE OPPONENT PAY HIS OR HER ATTORNEY'S FEES UNDER STATUTE OR CONTRACT? 

Under the American Rule, attorney's fees are recoverable only if authorized by statute or by contract. MBM Fin. Corp. v. Woodlands Operating Co., 292 S.W.3d 660, 669 (Tex. 2009). If authorized by contract, the parties may agree on the standard that will govern the attorney's fee award, even if that standard conflicts with Chapter 38 of the Texas Practice and Remedies Code. Intercontinental Grp. P'ship v. KB Home Lone Star L.P., 295 S.W.3d 650, 653 (Tex. 2009). If the contract provides that attorney's fees will be awarded to the prevailing party, the trial court must determine which party is "prevailing." To prevail, a party "must obtain actual and meaningful relief, something that materially alters the parties' legal relationship." Id. at 652 (citing Farrar v. Hobby, 506 U.S. 103, 111-12 (1992)). More simply, a party prevails when it "prevails upon the court to award it something, either monetary or equitable." Id. at 655.

Did the Defendant "win" (prevail) when the Plaintiff filed a nonsuit? 

In Epps v. Fowler, 351 S.W.3d 862, 869 (Tex. 2011), the Texas Supreme Court construed an attorney's fee provision in a standard real estate contract to determine whether a defendant is a prevailing party when the plaintiff properly nonsuits his claims. Guided by the Fifth Circuit's decision in Dean v. Riser, 240 F.3d 505 (5th Cir. 2001), the Court held that when a plaintiff nonsuits the claims in his lawsuit with prejudice, the defendant is considered the prevailing party because the plaintiff is barred by res judicata from re-asserting the same claims. Epps, 351 S.W.3d at 869.

When the plaintiff nonsuits his claims without prejudice, however, the Court refused to adopt such a per se approach. Id. at 869. The Court noted that a defendant would generally not be a prevailing party when the plaintiff nonsuits without prejudice because the nonsuit "works no such change in the parties' legal relationship; typically, the plaintiff remains free to re-file the same claims seeking the same relief." Id. The Court also observed, however, that "it is logical to conclude that the parties intended to award attorney's fees to compensate the defendant when the plaintiff knowingly pursues a baseless action," id. at 869, and to "`discourage the litigation of frivolous, unreasonable, or groundless claims' when a `calculating plaintiff . . . voluntarily withdraws his complaint' to escape a disfavorable judicial determination on the merits." Id. (quoting Riser, 240 F.3d at 510) (citations omitted). Accordingly, the Court held a defendant may be a prevailing party only "if the trial court determines, on the defendant's motion, that the nonsuit was taken to avoid an unfavorable ruling on the merits." Id. at 870.

The Epps Court provided some guidance to trial courts when determining whether a nonsuit was taken to avoid an unfavorable ruling on the merits. A trial court "should rely as far as possible on the existing records and affidavits, and resort to live testimony only in rare instances." Id. Looking to federal case law, the Court identified the following factors which could support such a determination, including: (1) the timing of a plaintiff's nonsuit when filed only after the defendant files a potentially dispositive motion such as a motion for summary judgment; (2) a plaintiff's unexcused failure to respond to requests for admission or other discovery that could support entry of an adverse judgment; (3) a plaintiff's failure to timely identify experts or other critical witnesses; and (4) the existence of other procedural obstacles, such as the plaintiff's inability to join necessary parties. Id. at 871.

Implied in each of these factors is that the plaintiff's nonsuit was necessary to avoid an unfavorable ruling because the plaintiff's claims were weak or without merit. Indeed, the Epps Court explained that the purpose of the rule was to discourage the plaintiff from pursuing weak claims that should be abandoned and not to penalize a plaintiff for nonsuiting when that is "precisely what should be done". Id. at 869 (citing Riser, 240 F.3d at 510). For instance, a plaintiff who nonsuits only after "discovery reveals previously unknown flaws in the plaintiff's claims" likely has not done so to avoid an unfavorable ruling on the merits. Rather, the decision "may well reflect a legitimate litigation strategy that `reveals nothing about the merits of a plaintiff's case [and thus] does not warrant a conclusion that a defendant in such a case has prevailed . . . .'" Id. at 868 (quoting Riser, 240 F.3d at 510). Accordingly, the Epps Court held that "evidence that the suit was not without merit when filed may indicate that the defendant has not prevailed and is therefore not entitled to attorney's fees." Id. at 871.

SOURCE: SAN ANTONIO COURT OF APPEALS - 04-13-00777-CV - 4/23/2014

CONTRACTUAL OR STATUTORY BASIS FOR ATTORNEY FEE CLAIM REQUIRED 

"As a general rule, litigants in Texas are responsible for their own attorney's fees and expenses in litigation." Ashford Partners, Ltd. v. ECO Res., Inc., 401 S.W.3d 35, 41 (Tex. 2012). "Under Texas law, a court may award attorney's fees only when authorized by statute or by the parties' contract." Peterson Grp., Inc. v. PLTQ Lotus Grp., L.P., 417 S.W.3d 46, 87 (Tex. App.-Houston [1st Dist.] 2013, pet. denied) (citing MBM Fin. Corp. v. Woodlands Operating Co., 292 S.W.3d 660, 669 (Tex. 2009)).

SOURCE: HOUSTON COURT OF APPEALS - 01-13-00855-CV – 12/30/2014

Attorneys Fees not recoverable as damages

 
Attorneys' Fees are not considered damages and not recoverable as such; contract or statute must authorize fee award

Texas law distinguishes between the recovery of attorneys' fees as actual damages and recovery of attorneys' fees incident to the recovery of other actual damages. Worldwide Asset Purchasing, L.L.C. v. Rent-a-Center East, Inc., 290 S.W.3d 554, 570 (Tex. App.-Dallas 2009, no pet.). A party may recover attorneys' fees only as provided by contract or statute. Id.; Burnside Air Conditioning & Heating, Inc. v. T.S. Young Corp., 113 S.W.3d 889, 898 (Tex. App.-Dallas 2003, no pet.). As a general rule, attorneys' fees are not recoverable as damages in and of themselves. See, e.g., Tana Oil & Gas Corp. v. McCall, 104 S.W.3d 80, 82 (Tex. 2003); Imagine Automotive Group, Inc. v. Boardwalk Motor Cars, L.L.C., 356 S.W.3d 716, 718 (Tex. App.-Dallas 2011, no pet.); Haden v. David J. Sacks, P.C., 332 S.W.3d 503, 521 (Tex. App.-Houston [1st Dist.] 2009, pet. denied); Worldwide Asset Purchasing, 290 S.W.3d at 570; see also Quest Communications Int'l, Inc. v. AT & T Corp., 114 S.W.3d 15, 35-36 (Tex. App.-Austin 2003) (damages measured by plaintiff's attorneys' fees recoverable only under certain exceptions not implicated here), rev'd in part on other grounds, 167 S.W.3d 324 (Tex. 2005) (per curiam).

A party relying on assertions of non-recoverable damages alone, such as attorneys' fees and expenses sustained in defending a lawsuit and prosecuting a counterclaim, has presented a legal barrier to any recovery. See Tana, 104 S.W.3d at 82 (damages described in terms of "value of time spent" and "costs incurred" in defending lawsuit were non-recoverable, even if party seeking such damages could have proven all other elements of claim for tortious interference); Eberts v. Businesspeople Personnel Servs., Inc., 620 S.W.2d 861, 863 (Tex. Civ. App.-Dallas 1981, no writ) ("[e]xpenses of litigation are not recoverable as damages unless expressly provided by statute or contract," and "[t]his rule applies to a litigant's loss of time"); Phillips v. Latham, 523 S.W.2d 19, 27 (Tex. Civ. App.-Dallas 1975, writ ref'd n.r.e.) ("the only time lost from work by either of the plaintiffs . . . was time lost because of the pendency of the lawsuit, such as that required for depositions and attendance at the two trials in this case. This loss is an expense of litigation. We know of no authority supporting recovery of actual damages for such a loss . . . ."); see also Haden v. David J. Sacks, P.C., 222 S.W.3d 580, 597 (Tex. App.-Houston [1st Dist.] 2007 (op. on reh'g), rev'd on other grounds, 266 S.W.3d 447 (Tex. 2008) (per curiam). This is true even if all other elements of the party's claim are proven. See Tana, 104 S.W.3d at 82; Consumer Portfolio Servs, Inc. v. Obregon, No. 13-09-00548-CV, 2010 WL 4361765, at *9 (Tex. App.-Corpus Christi Nov. 4, 2010, no pet.) (mem. op.).

SOURCE: DALLAS COURT OF APPEALS - 05-11-01718-CV - 1/30/2014.
CASE STYLE: Woodhaven Partners Ltd v. Shamoun & Norman LLP

Mootness exception: Attorney fee claim may survive even though underlying dispute becomes moot

WHEN THE MOOTNESS DOCTRINE DISPOSES OF THE DISPUTE THAT SPURRED THE LAWSUIT, BUT NOT OF THE PLAINTIFF'S CLAIM FOR ATTORNEY FEES 

A court cannot decide a case that becomes moot during the pendency of the litigation. Heckman v. Williamson Cnty., 369 S.W.3d 137, 162 (Tex. 2012). A case is moot if "there has ceased to exist a justiciable controversy between the parties." Id. In a declaratory judgment action, a justiciable controversy exists concerning the rights and status of the parties when the controversy will be resolved by the declaration sought. Robinson v. Alief Indep. Sch. Dist., 298 S.W.3d 321, 324 (Tex. App.-Houston [14th Dist.] 2009, pet. denied). But no justiciable controversy exists if the issues presented are no longer "live" or if the parties lack a legally cognizable interest in the outcome. Heckman, 369 S.W.3d at 162.

However, a "live" issue in controversy exists when there is a question about whether a party has a legally cognizable interest in recovering attorney's fees and costs. Camarena v. Tex. Emp't Comm'n, 754 S.W.2d 149, 151 (Tex. 1988); see also Allstate Ins. Co. v. Hallman, 159 S.W.3d 640, 643 (Tex. 2005) (holding that party's interest in obtaining attorney's fees "breathe[d] life" into appeal of declaratory judgment where underlying claims had become moot).

SOURCE: SOURCE: TYLER COURT OF APPEALS - 12-13-00231-CV - 1/15/2014 Pate v. Edwards (public employment dispute with declaratory judgment claim alleging violation of state constitutional rights and seeking injunctive relief).

PARTY MAY STILL SEEK ATTORNEY'S FEES  UNDER SOME CIRCUMSTANCES WHEN CLAIM BECOMES MOOT:  DJA AUTHORIZES SUCH FEES AND DOES NOT LIMIT THEM PREVAILING PLAINTIFFS 

The Uniform Declaratory Judgments Act authorizes an award of attorney's fees on an equitable basis. See TEX. CIV. PRAC. & REM. CODE ANN. § 37.009 (West 2008). Thus, in a declaratory judgment action, a party need not "substantially prevail" in the litigation to receive attorney's fees. Barshop v. Medina County Underground Water Conservation District 925 S.W.2d 618, 637-38 (Tex. 1996). Instead, a trial court may award just and equitable attorney's fees to a nonprevailing party. Texas A&M Univ.-Kingsville v. Lawson, 127 S.W.3d 866, 874-75 (Tex. App.-Austin 2004, pet. denied).

Even though Edwards's underlying constitutional claims are moot, her claim for attorney's fees is a separate controversy that persists. See Camarena, 754 S.W.2d at 151. Further, Edwards obtained a ruling in her favor before the case was rendered moot. The trial court awarded her a temporary restraining order and a temporary injunction. Because there is a question about whether Edwards has a legally cognizable interest in recovering attorney's fees and costs, her claim for attorney's fees is a live controversy and not moot. See id.

We overrule Pate's sole issue as to Edwards's claim for attorney's fees.

SOURCE: Pate v. Edwards, Tex: Court of Appeals (Tyler), 12th Dist. 2014

The American Rule applies in Texas courts (regarding award of attorney's fees in a lawsuit)

THE AMERICAN RULE GOVERNS RECOVERABILITY OF ATTORNEYS' FEES IN LITIGATION

Texas follows the American Rule, meaning that attorney’s fees can only be awarded as part of the judgment if a contract or statute provides for them

Whether a party may recover reasonable attorney's fees is a question of law for the trial court which we review de novo. Brent v. Field, 275 S.W.3d 611, 621 (Tex. App.-Amarillo 2008, no pet.) (citing Holland v. Wal-Mart Stores, Inc., 1 S.W.3d 91, 94, 95 (Tex. 1999)). 
  
It has long been the rule in Texas that attorney's fees paid to prosecute or defend a lawsuit cannot be recovered in that suit absent a statute or contract that allows for their recovery. See Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 310-11 (Tex. 2006) ("Absent a contract or statute, trial courts do not have inherent authority to require a losing party to pay the prevailing party's fees."); Wm. Cameron & Co. v. Am. Sur. Co. of N.Y., 55 S.W.2d 1032, 1035 (Tex. Comm'n App. 1932, judgm't adopted) ("It is settled law in this state that, unless provided for by statute or by contract between the parties, attorneys' fees incurred by a party to litigation are not recoverable against his adversary either in an action in tort or a suit upon a contract."); Sherrick v. Wyland, 14 Tex. Civ. App. 299, 37 S.W. 345, 345 (Tex. Civ. App. 1896) ("It has often been ruled, in this state and elsewhere, that fees of counsel, incurred in prosecuting a suit for or defending against a wrong, are not ordinarily recoverable as actual damages, because they are not considered proximate results of such wrong."). The rule is known as the American Rule. See Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep't of Health and Human Res., 532 U.S. 598, 602, 121 S. Ct. 1835, 149 L. Ed. 2d 855 (2001) ("[P]arties are ordinarily required to bear their own attorney's fees—the prevailing party is not entitled to collect from the loser.").

SOURCE:  WACO COURT OF APPEALS - 10-12-00241-CV – 8/8/2013  Pharia, LLC v Childers (Trial court erred in awarding attorney's fees; court of appeals reverses portion of the judgment that awarded the attorney's fees and renders a take-nothing judgment on that claim, but otherwise affirms). 

ATTORNEYS FEES NOT RECOVERABLE AS ACTUAL DAMAGES 

Texas has long followed the "American Rule," which prohibits an award of attorney's fees unless specifically provided by contract or statute. MBM Fin. Corp. v. The Woodlands Operating Co., 292 S.W.3d 660, 6693d (Tex. 2009).

Here, there is no contract between the parties, and Sherman does not seek attorney's fees under any statutory provision. Rather, he contends that because Wein filed a fraudulent lawsuit against him, causing him to expend money in attorney's fees and expenses, he is entitled to recover those fees and expenses as actual damages.

Attorney's fees, however, are ordinarily not recoverable as actual damages in and of themselves. See Tana Oil & Gas Corp. v. McCall, 104 S.W.3d 80, 81-82, 83 (Tex. 2003) (attorney plaintiffs who sought to recover damages based solely on value of time and costs incurred in defending claims had not suffered actual damages and were not entitled to only damages they claimed; plaintiffs should have pursued attorney's fees as sanctions under Rule 13 or Chapter 10); Worldwide Asset Purchasing, L.L.C. v. Rent-a-Center East, Inc., 290 S.W.3d 554, 570 (Tex. App.-Dallas 2009, no pet.) (attorney's fees not recoverable as actual damages); Haden v. David J. Sacks, P.C., 222 S.W.3d 580, 597 (Tex. App.-Houston [1st. Dist.] 2007) (same), rev'd on other grounds, 266 S.W.3d 447 (Tex. 2008); Quest Commc'ns Int'l, Inc. v. AT&T Corp., 114 S.W.3d 15, 35-36 (Tex. App.-Austin 2003) (damages measured by plaintiff's attorney's fees recoverable only under certain exceptions not implicated here), rev'd in part on other grounds, 167 S.W.324 (Tex. 2005) (per curiam).

Because Sherman neither sought nor proved any damages other than attorney's fees, there is no evidence to support the actual damage element of any of his asserted claims, and the district court did not err in granting summary judgment in Wein's favor. We overrule Sherman's cross-issue.

SOURCE: AUSTIN COURT OF APPEALS - 03-10-00499-CV – 8/23/2013  

Attorney fees available in breach-of-contract cases in Texas courts in addition to damages

ATTORNEY’S FEES ON BREACH-OF-CONTRACT CLAIM
   

As one of the exceptions to “the American Rule”, attorneys fees are available to successful plaintiffs in breach of contract cases under the Texas Civil Practice and Remedies Code even if the contract itself does not provide for recovery of legal fees arising from disputes under the contract. Trial court judges must award some, if requested and supported with evidence, although the amount is discretionary. Certain requirements must be met.  

   

STATUTORY AUTHORIZATION AS EXCEPTION TO THE AMERICAN RULE

A party may recover reasonable attorney's fees if its claim is for "an oral or written contract." TEX. CIV. PRAC. & REM. CODE ANN. § 38.001(8) (Vernon 2008).

ELEMENTS OF CLAIM FOR ATTY’S FEES UNDER CHAPTER 38 OF THE CPRC

To recover attorney's fees under section 38.001(8), a claimant must: (1) be represented by an attorney; (2) present the claim to the opposing party or to a duly authorized agent of the opposing party; and (3) show that payment was not tendered before the expiration of the 30th day after the claim was presented. Id. § 38.002(1)-(3) (Vernon 2008). Presentment of a claim is required to allow the debtor to pay the claim before incurring an obligation to pay attorney's fees. Panizo v. Young Men's Christian Ass'n of the Greater Houston Area, 938 S.W.2d 163, 168 (Tex. App.-Houston [1st Dist.] 1996, no writ).

AMOUNT TO BE REASONABLE

"Reasonable" attorney's fees are available to a prevailing party on a breach of contract claim. Tex. Civ. Prac. & Rem. Code Ann. § 38.001(8) (West 2008). Although the trial court has discretion to fix the amount of attorney's fees, it does not have discretion to deny attorney's fees entirely if they are proper. Hassell Constr. Co., Inc. v. Stature Comm. Co., Inc., 162 S.W.3d 664, 668 (Tex. App.-Houston [14th Dist.] 2005, no pet.).

CITE FOR FEE FACTORS CASE FROM THE TEXAS SUPREME COURT

Arthur Anderson & Co. v. Perry Equip. Corp., 945 S.W.2d 812, 818 (Tex. 1997) (listing eight factors a factfinder should consider when determining the reasonableness of attorney's facts).

A litigant is not required to present evidence on each of these factors. Acad. Corp. v. Interior Buildout & Turnkey Constr., Inc., 21 S.W.3d 732, 742 (Tex. App.-Houston [14th Dist.] 2000, no pet.).

Attorney fee segregation requirement not necessarily enforced by the court

  
Opposing party may waive complaint about failure to segregate recoverable from unrecoverable fees by failing to object in a timely fashion


Because an award of attorney's fees must be authorized by statute or contract, a party presenting more than one claim in a single cause must segregate attorney's fees between claims for which attorney's fees are or are not recoverable. See Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 310-11 (Tex. 2006).
  
However, if no one objects to the fact that the attorney's fees are not segregated as to specific claims, the objection is waived. Green Int'l, Inc. v. Solis, 951 S.W.2d 384, 389 (Tex. 1997) (citing Hruska v. First State Bank of Deanville, 747 S.W.2d 783, 785 (Tex. 1988)); Pitts & Collard, L.L.P. v. Schechter, —S.W.3d—, No. 01-08-00969-CV, 2011 WL 6938515, at *14 (Tex. App.-Houston [1st Dist.] Dec. 29, 2011, no pet. h.) (objection to request for attorney's fees "must be made before the trial court renders judgment"). Morton failed to object at the trial court that the Nguyens should be required to segregate their request for attorney's fees, and such failure waived this issue for appellate review. See Red Rock Props. 2005, Ltd. v. Chase Home Fin., L.L.C., No. 14-08-00352-CV, 2009 WL 1795037, at *6-7 (Tex. App.-Houston [14th Dist.] June 25, 2009, no pet.) (mem. op.) (objection that attorney's fees were not segregated was not preserved in trial court); Fortenberry v. Cavanaugh, No. 03-07-00310-CV, 2008 WL 4997568, at *11-12 (Tex. App.-Austin Nov. 26, 2008, pet. denied) (mem. op.) (same); see also TEX. R. APP. P. 33.1(a)(1). We overrule Morton's Issue 16.

SOURCE: FOURTEENTH COURT OF APPEALS - HOUSTON - No. 14-11-00126-CV - 5/17/12 (substituted opinion)

EXCEPTION TO SEGREGATION REQUIREMENT IN CASE OF MULTIPLE PARTIES REPRESENTED BY SAME ATTORNEY

"When a lawsuit involves multiple claims or parties, the proponent of attorney's fees must segregate recoverable fees from those incurred by parties or on claims for which fees are not recoverable." Clearview Props., L.P. v. Prop. Tex. SC One Corp., 287 S.W.3d 132, 143 (Tex. App.-Houston [14th Dist.] 2009, pet. denied) (citing Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 313 (Tex. 2006)). Attorney's fees that relate solely to a claim for which fees are unrecoverable must be segregated. Chapa, 212 S.W.3d at 313. The Supreme Court of Texas has held that attorney's fees are recoverable only as provided by contract or statute, and it "eliminated the exception for fees incurred solely on separate but arguably intertwined claims." Varner v. Cardenas, 218 S.W.3d 68, 69 (Tex. 2007) (citing Chapa, 212 S.W.3d at 313). But the Supreme Court did not require that all fees be segregated even when incurred by co-defendants jointly represented by the same counsel and when such fees are incurred as a result of the same discrete tasks and work.

SOURCE: HOUSTON COURT OF APPEALS - 01-13-00855-CV – 12/30/2014  

Can contract be enforced if it contains an illegal provision?

   
SEVERABILITY OF ILLEGAL CONTRACT PROVISION

Dallas Court of Appeals has this to say in case involving attorney fee contract:  

  

We have held “that where an otherwise legal contract contains an illegal provision that is not an essential feature of the agreement, thus being clearly severable from other valid provisions, the other provisions of the agreement will not be deemed to be invalid simply because of the presence of the illegal provision.” Rogers v. Wolfson, 763 S.W.2d 922, 925 (Tex. App.-Dallas 1989, writ denied); see also Zep Mfg. Co. v. Harthcock, 824 S.W.2d 654, 662 (Tex. App.-Dallas 1992, no writ) (“Where a contracting party agrees to perform separable acts, and one is void, the invalid provision may be severed from the valid provision and the valid provision enforced if the intent of the parties is not thereby frustrated.”); Mandril v. Kasishke, 620 S.W.2d 238, 247 (Tex. Civ. App.-Amarillo 1981, writ ref'd n.r.e.). 

SOURCE:  DALLAS COURT OF APPEALS - 05-10-00725-CV – 4/27/12
 

[Father of client in criminal case] does not challenge the trial court's finding of fact that he signed the fee agreement. In another unchallenged finding, the trial court found that the fee agreement is “a valid contract and enforceable.” We conclude that the fee agreement is clearly severable from the irrevocable assignment and is valid regardless of the validity of the irrevocable assignment.

[Parent of client in criminal case]  agreed “to be responsible for my sons Atty Fees as set out in this Contract and Irrevocable Assignment” signed the same date. The fee is set out in both the fee agreement and the irrevocable assignment. But [Parent's] agreement to be responsible for those fees is not contingent of the validity of the irrevocable assignment. The irrevocable assignment was merely a means of payment of or security for the attorney's fees under the fee agreement. It was not an essential feature of the agreement to pay TWLF for its services in representing [son] in the federal criminal prosecution. The fee agreement is clearly enforceable without the irrevocable assignment. Nothing is illegal about a contract to pay an attorney for his services or an agreement by a parent to be responsible for the fees for representing his child in a criminal proceeding. 

Just what is a retainer? – Apparently, it depends, as there are multiple usages

 

THE WORD “RETAINER” IS AMBIGUOUS EVEN AMONG THE LEGALLY SOPHISTICATED

The word “retainer” has a variety of meanings, including a client's authorization for the attorney to act in matter, a fee paid simply to have the attorney available when the client needs legal help, a lump-sum fee paid to engage the lawyer at the outset of the matter, and an advance payment for work to be performed in the future. Black's Law Dictionary 1341-42 (8th ed. 2004). Indeed,

Over the years, attorneys have used the term “retainer” in so many conflicting senses that it should be banished from the legal vocabulary. . . . If some primordial urge drives you to use the term “retainer,” at least explain what you mean in terms that both you and the client will understand.

Id. (quoting Mortimer D. Schwartz & Richard C. Wydick, Problems in Legal Ethics 100, 101 (2d ed. 1988)).

SOURCE:  DALLAS COURT OF APPEALS - 05-10-00725-CV – 4/27/12

How to get attorney's fees awarded: What kind of evidence; is fee segregation required?

   
PROVING LEGAL FEES and FEE SEGREGATION REQUIREMENT (per Dallas CoA)

As to attorney's fees, clear, direct, and uncontroverted evidence of attorney's fees is taken as true as a matter of law, especially when the opposing party has the means and opportunity to disprove the testimony. B&W Supply, Inc. v. Beckman, 305 S.W.3d 10, 20 (Tex. App.-Houston [1st Dist.] 2009, no pet.); see Ragsdale v. Progressive Voters League, 801 S.W.2d 880, 882 (Tex. 1990).
 
If a claimant is entitled to recover attorney's fees for some but not all of his claims, he bears the burden of segregating his fees between claims for which they are recoverable and claims for which they are not. Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 311 (Tex. 2006); A&L Eng'g & Consulting, Inc. v. Shiloh Apollo Plaza, Inc., 315 S.W.3d 928, 931 (Tex. App.-Dallas 2010, no pet.).
 
But a party is not required to segregate attorney's fees if “discrete legal services advance both a recoverable and unrecoverable claim,” thus causing the fees to become “so intertwined that they need not be segregated.” Chapa, 212 S.W.3d at 313-14. If legal fees are incurred to prosecute a claim for which fees are recoverable, the resulting fees are recoverable even if the services also support claims for which fees are not recoverable. Chapa, 212 S.W.3d at 313.

SOURCE: DALLAS COURT OF APPEALS - 05-10-00173-CV - 12/15/11

The Homebuyers' attorney stated his attorney's fees were $29,944.75, and he had deleted $5477.50 from his bills relating to the proceedings against Langford. The Homebuyers' attorney testified the remaining bills were for time spent on the Home-Sellers' case involving DTPA and fraud, and he was unable to separate those bills because they were so intertwined. The Homebuyers' attorney testified $24,467.25 would be a reasonable fee for the work he performed in this case. The Homebuyers' attorney was cross examined about both the time spent on the case and the segregation of fees. The Home-Sellers stipulated that the Homebuyers' attorney was qualified when he began his testimony regarding attorney's fees. The trial court heard all the evidence and awarded attorney's fees of $20,000. The record shows the attorney's fees associated with claims against Langford were segregated. Because the record shows the legal services advanced both the fraud and DTPA claims against the Home-Sellers, the fees were so intertwined that segregation was not necessary. See Chapa, 212 S.W.3d at 313. This record shows the Homebuyers presented competent evidence of out-of-pocket expenses, loss of fair market value, mental anguish damages, and attorney's fees. We therefore uphold the trial court's finding on these damages. See Fernandez, 15 S.W.3d at 651. We overrule the Home-Sellers' fourth issue.

We affirm the trial court's judgment.

SOURCE: FIFTH COURT OF APPEALS IN DALLAS, TX - 05-10-00173-CV - 12/15/11 (judgment in favor of buyers of vermin-infested home against sellers who did not make proper disclosure of termites affirmed; see prior post on this blog)

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).

ARTHUR ANDERSEN FEE-FACTORS  

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:

The American Rule (with respect to recovery of legal fees) given effect

   
Dallas Court of Appeals applies the American Rule in Trespass to Try Title Suit - rejects claim for recovery of legal fees under an equitable exception theory.   

The American Rule has been a part of Texas jurisprudence for over 100 years. See Akin, Gump, 299 S.W.3d at 120 (tracing the Rule's roots in Texas jurisprudence to 1896). Moreover, the supreme court has stated that “[a]bsent a contract or statute, trial courts do not have inherent authority to require a losing party to pay the prevailing party's fees.” Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 311 (Tex. 2006) (emphasis added). Texas's only equitable exception to the American Rule that we are aware of is the common-fund doctrine, see generally Allstate Ins. Co. v. Edminster, 224 S.W.3d 456, 457-58 (Tex. App.-Dallas 2007, no pet.) (applying common-fund doctrine), which Neumann acknowledges is not applicable to this case. Given the supreme court's faithful adherence to the American Rule, and its strong statement in Tony Gullo that trial courts lack the inherent authority to award attorney's fees contrary to the Rule, we decline to adopt a new equitable exception to the Rule. Cf. Martin v. Clinical Pathology Labs., Inc., 343 S.W.3d 885, 892 (Tex. App.-Dallas 2011, pet. filed) (stating that Texas Supreme Court rather than intermediate court of appeals was proper tribunal to consider exceptions to state's strong employment-at-will doctrine).

   

Texas has long followed the American Rule, under which attorney's fees paid to prosecute or defend a lawsuit cannot be recovered in that suit absent a statute or contract that allows for their recovery. Akin, Gump, Strauss, Hauer & Feld, L.L.P. v. Nat'l Dev. & Research Corp., 299 S.W.3d 106, 120 (Tex. 2009). There is a statutory scheme in place to govern trespass-to-try-title claims, see generally Tex. Prop. Code Ann. §§ 22.001-.045 (West. 2000), but it contains no provision authorizing a party to recover attorney's fees from the opposing side. We have held that the plaintiff in a trespass-to-try-title suit cannot recover attorney's fees. McAnally v. Friends of WCC, Inc., 113 S.W.3d 875, 881 (Tex. App.-Dallas 2003, no pet.); see also Barfield v. Holland, 844 S.W.2d 759, 771 (Tex. App.-Tyler 1992, writ denied) (trespass-to-try-title plaintiff could not recover attorney's fees by characterizing claim as one under Declaratory Judgments Act).

SOURCE: DALLAS COURT OF APPEALS - 05-10-00445-CV – 11/6/11

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

Breach of Restrictive Covenant: Are attorney's fees available?

  
Suit for Breach of Restrictive Covenant - Statutory Attorney's fees to prevailing party
  
In “an action based on breach of a restrictive covenant pertaining to real property, the court shall allow to a prevailing party who asserted the action reasonable attorney’s fees in addition to the party’s costs and claim.” Tex. Prop. Code Ann. § 5.006 (Vernon 2010).

In determining reasonable attorney’s fees, the court shall consider (1) the time and labor required; (2) the novelty and difficulty of the questions; (3) the expertise, reputation, and ability of the attorney; and (4) any other factor. Id. The award of attorney’s fees under section 5.006 is mandatory, and a court has no discretion to not award fees to a prevailing party. Ski Masters of Texas, LLC v. Heinemeyer, 269 S.W.3d 662, 674 (Tex. App.—San Antonio 2008, no pet.); Mitchell v. LaFlamme, 60 S.W.3d 123, 130 (Tex. App.—Houston [14th Dist.] 2000, no pet.).

SOURCE: Houston Court of Appeals - 01-09-01086-CV - 8/11/11

Reasonableness of attorney's fee must be proven

Court of Appeals may overturn fee award even if authorized by statute when the fee claimant did not support the amount of the fees sought with proper evidence of reasonableness through her attorney.
   ATTORNEY FEE EVIDENCE: SHOWING OF REASONABLENESS REQUIRED 

As a prerequisite to the recovery of attorney’s fees for any underlying cause of action, the party seeking fees must prove the reasonableness of the fees. Bocquet v. Herring, 972 S.W.2d 19, 21 (Tex. 1998).

Reasonableness of fees must be supported by competent evidence. Peeples v. Peeples, 562 S.W.2d 503 (Tex.Civ.App.--San Antonio 1978, no writ). Here, there were no findings of fact entered to support the award of attorney's fees and costs. We must therefore presume the trial court made all findings necessary to support its order. Holt Atherton Industries, Inc. v. Heine, 835 S.W.2d 80, 83 (Tex. 1992).

Factors considered by the court when determining the amount of reasonable fees include: (1) the time and labor required, novelty and difficulty of the question 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 experience, reputation, and ability of the lawyer performing the services; and (8) whether the fee is fixed or contingent. Arthur Anderson & Co. v. Perry Equip. Corp., 945 S.W.2d 812, 818 (Tex. 1997).

[Attorney in this case] did not testify, nor did she present an affidavit, itemized statements, exhibits, or any other offer of proof as to the reasonableness of her fees. The record is devoid of evidence relating to her experience, the time and labor involved, the difficulty of the task, her hourly rates, rates customarily charged for similar services, or her fee agreement with [ client ]. While a party need not offer proof of all the factors above, [ attorney ] did not offer proof under any of them. She referenced a “case ledger” presumably detailing her time spent preparing the motions and fees incurred. But it was not offered as an exhibit, was not introduced into evidence and does not appear in the record. We have only her request for fees of $518.10.

Under these facts, we are not persuaded [ party clainming fees ] provided more than a scintilla of evidence as to the reasonableness of the amount of fees requested. Finding legally insufficient evidence to support the award, we must conclude that the trial court abused its discretion. We sustain Issue Seven and reverse and render that [ fee claimant ] take nothing.

SOURCE: El Paso Court of Appeals - 08-10-00149-CV - 7/29/11

Challenging attorney's fee affidavit in a debt collection case

  
Beaumont Court of Appeals finds creditor's fee proof insufficient to support summary judgment where its counsel's affidavit lacked specificity as to hours and hourly rates and Defendant -- himself an attorney and as such qualified to testify on the matter -- filed a counter-affidavit challenging the reasonableness of the amount of fees sought by American Express and the lack of substantiation.   
 
ATTORNEYS FEES ON BREACH-OF-CONTRACT CLAIM VIA SUMMARY JUDGMENT
   
[ Credit card debt Defendant ] argues on appeal that the trial court erred in overruling his objections to Amex’s summary judgment proof "because said proof was conclusory." Specifically, [ Credit card debt Defendant ] argues the affidavit Amex submitted in support of its request for attorney’s fees is conclusory. [ Credit card debt Defendant ] argues that the affidavit is insufficient to support the award of fees because it "did not itemize the hours expended, or identify the attorney’s hourly rate."

[ Credit card debt Defendant ] further contends that the absence of an hourly rate and hours billed prevents the affidavit from being readily controvertible. Additionally [ Credit card debt Defendant ] contends that his own affidavit contradicted Amex’s affidavit in support of requested attorney’s fees.

Amex submitted the affidavit of its counsel of record in support of its request for attorney’s fees. Counsel averred that he was attorney of record for Amex in the underlying suit and that the statements set forth therein were based on his personal knowledge. Counsel further stated that he was familiar with the fees charged by attorneys for work of the type performed in this case and stated the following in support of Amex’s request for $2,100 in attorney’s fees:

Prior counsel and I have represented Plaintiff in its pursuit of collection [of] the indebtedness which is the subject of this cause. Prior counsel and I have reviewed the documentation provided by Plaintiff regarding the indebtedness, prepared pleadings, performed necessary and appropriate research, prepared appropriate discovery requests, and prepared a Motion for Summary Judgment and appropriate supporting affidavit(s).

All the work done in this cause has been necessary. It is my opinion that Plaintiff is entitled to recover its attorney fees in accordance with the terms of the Agreement and Texas law, in the sum of $2,100.00 in view of the work performed to date in order to collect the judgment.

In this affidavit filed with his response motion, [ Credit card debt Defendant ] stated:


. . I am a licensed attorney in the State of Texas. I am familiar with the usual and customary rates charged by attorneys in Texas. I have reviewed the attorney’s fee affidavit attached to Plaintiff’s motion for summary judgment. The affidavit does not contain the hourly rate being charged by the attorney’s billing nor does it contain the number of hours billed. In addition, the affidavit does not discuss any of the Arthur Anderson factors. As such, the attorneys’ fees are not readily controverted.
In reviewing the facts supplied by Plaintiff to recover attorney’s fees, it is my opinion that the fees sought are unnecessary and not reasonable. The entire lawsuit could have been avoided had Plaintiff supplied the necessary information previously requested. It is my expert opinion that the attorney fees Plaintiff’s attorney claims are not necessary or reasonable.
    
The reasonableness of attorney’s fees is generally a question of fact. Smith v. Patrick W.Y. Tam Trust, 296 S.W.3d 545, 547 (Tex. 2009); Tesoro Petroleum Corp. v. Coastal Ref. & Mktg., Inc., 754 S.W.2d 764, 767 (Tex. App.—Houston [1st Dist.] 1988, writ denied).

However, an attorney’s affidavit may be sufficient to conclusively establish the reasonableness of attorney’s fees for purposes of summary judgment. Basin Credit Consultants, Inc. v. Obregon, 2 S.W.3d 372, 373 (Tex. App.—San Antonio 1999, pet. denied). "[A]n affidavit filed by the movant’s attorney that sets forth his qualifications, his opinion regarding reasonable attorney’s fees, and the basis for his opinion will be sufficient to support summary judgment, if uncontroverted." In re Estate of Tyner, 292 S.W.3d 179, 184 (Tex. App.—Tyler 2009, no pet.) (citing Basin Credit Consultants, 2 S.W.3d at 373).

To establish that attorney’s fees are reasonable as a matter of law, uncontroverted testimony of an interested witness must (1) be capable of ready contradiction if untrue; (2) be clear, direct, and positive, and (3) be free of circumstances tending to discredit or impeach the testimony. Rosenblatt v. Freedom Life Ins. Co. of Am., 240 S.W.3d 315, 321 (Tex. App.—Houston [1st Dist.] 2007, no pet.) (citing Ragsdale v. Progressive Voters League, 801 S.W.2d 880, 882 (Tex. 1990)).

We conclude the affidavit submitted by Amex fails to satisfy its summary judgment burden. See Tex. R. Civ. P. 166a(c). Though counsel for Amex states that allwork performed on the case was necessary, on its face, the affidavit filed by Amex does not state an opinion that the requested fees were reasonable or otherwise provide basic objective criteria to substantiate the amount of attorney’s fees requested. It is unclear from Amex’s supporting affidavit whether the requested fees were based on an hourly rate for the work performed or based on a percentage of the judgment. [ Credit card debt Defendant ] ’s affidavit challenges the sufficiency of Amex’s supporting affidavit and states his opinion that the requested fees are not reasonable. We note that an affidavit that merely criticizes the fees sought by the movant as unreasonable without setting forth the affiant’s qualifications or the basis of his opinion will not be sufficient to defeat conclusive summary judgment evidence of reasonable fees. See Basin Credit Consultants, 2 S.W.3d at 373. However, the evidence presented by Amex is not conclusive evidence of reasonable fees.

Additionally, while [ Credit card debt Defendant's ] affidavit appears conclusory, it controverts the evidence presented by Amex on attorney’s fees. Under these circumstances, we find the trial court erred in granting summary judgment on attorney’s fees. See Rosenblatt, 240 S.W.3d at 320-21; see also Gen. Elec. Supply Co. v. Gulf Electroquip, Inc., 857 S.W.2d 591, 601-02 (Tex. App.—Houston [1st Dist.] 1993, writ denied) (holding summary judgment on attorney’s fees is improper when conflicting affidavits from opposing attorneys are presented).

We sustain issue three in part. We sever the issue of attorney’s fees from the judgment, reverse the award of attorney’s fees, and remand for further proceedings on attorney’s fees. We affirm the remainder of the trial court’s judgment. See id. at 602.
  
SOURCE: Beaumont Court of Appeals - 09-10-00166-CV - 7/14/11 (Summary judgment for American Express Centurion Bank in credit card debt suit affirmed except for award of attorney's fees) 
  
RELATED LEGAL TERMS: reasonableness of attorney's fees, evidence of reasonableness of legal fees, proving up attorney's fees claim based on breach of contract, expert fee testimony, successful appeal of reasonableness of attorney's fees, sufficiency of evidence to support award of legal fees on breach of contract claim   

UDJA Fees when the case becomes moot

Statutory Legal Fees under the Texas version of the UDJA Attorneys' fees under the Declaratory Judgments Act [UDJA or DJA], chapter 37 of the Texas Civil Practice and Remedies Code. The Act provides, “In any proceeding under this chapter, the court may award costs and reasonable and necessary attorney's fees as are equitable and just.” Tex. Civ. Prac. & Rem. Code Ann. § 37.009 (West 2008). A party to a declaratory-judgment action need not prevail in order to recover an award of attorneys' fees. Martin v. Cadle Co., 133 S.W.3d 897, 906-07 (Tex. App.-Dallas 2004, pet. denied); accord City of Temple v. Taylor, 268 S.W.3d 852, 858 (Tex. App.-Austin 2008, pet. denied). Mootness Doctrine “A case becomes moot if a controversy ceases to exist or the parties lack a legally cognizable interest in the outcome.” Allstate Ins. Co. v. Hallman, 159 S.W.3d 640, 642 (Tex. 2005). “A case is not rendered moot simply because some of the issues become moot . . . .” In re Kellogg Brown & Root, Inc., 166 S.W.3d 732, 737 (Tex. 2005) (orig. proceeding). “The mootness doctrine implicates subject matter jurisdiction.” City of Dallas v. Woodfield, 305 S.W.3d 412, 416 (Tex. App.-Dallas 2010, no pet.). “[W]hen a case becomes moot the only proper judgment is one dismissing the cause.” Polk v. Davidson, 196 S.W.2d 632, 633 (Tex. 1946); see also Woodfield, 305 S.W.3d at 416 (“If a case is moot, the appellate court is required to vacate any judgment or order in the trial court and dismiss the case.”). Texas Supreme Court authorities on fees and mootness The Texas Supreme Court has decided three cases that address the question of whether an outstanding claim for attorneys' fees will prevent the dismissal of an otherwise moot case. The first is Camarena v. Texas Employment Commission, 754 S.W.2d 149 (Tex. 1988). Camarena and others sued the Commission, seeking a declaratory judgment that a statute excluding most agricultural workers from the Texas Unemployment Compensation Act was unconstitutional. Id. at 150. The trial court granted Camarena the declaration he sought, but it denied his request for attorneys' fees based on sovereign immunity. Id. The legislature amended the statute to give farm workers phased- in unemployment coverage, and the trial court rendered an amended judgment holding the new statute constitutional. Id. The Commission appealed, contending that the case had become moot, and Camarena cross-appealed the denial of attorneys' fees. Id. The court of appeals held that the case was moot and that immunity barred Camarena's claim for fees. Id. at 150-51. The Texas Supreme Court, however, held that the claim for attorneys' fees was a live claim that prevented the case from becoming moot. Id. at 151. It further held that the fee claim was not barred because chapter 106 of the civil practice and remedies code waived sovereign immunity. Id. at 151-52. Thus, Camarena supports the proposition that a claim for attorneys' fees can prevent a case from becoming moot. Next, the supreme court decided Speer v. Presbyterian Children's Home & Service Agency, 847 S.W.2d 227 (Tex. 1993), a case heavily relied on by the Hansens in this appeal. In Speer, Speer sued the Agency under the Texas Commission on Human Rights Act for refusing to hire her as an adoption worker because of her religion. Id. at 228. She sought only declaratory and injunctive relief. Id. The trial court ruled for the Agency, this Court affirmed, and Speer appealed to the Texas Supreme Court. Id. While the case was pending in the supreme court, the Agency ceased offering adoption services and abolished the position for which Speer had applied. Id. The supreme court held that the case was therefore moot and had to be dismissed. Id. at 230. The court distinguished Camarena, holding that because Speer's declaratory and injunction claims had become moot, she could never be a prevailing party under the Texas Commission on Human Rights Act and therefore could never recover her attorneys' fees and costs. Id. at 229-30. The El Paso Court of Appeals subsequently elaborated on the distinction between Camarena and Speer. Citing Camarena, the court of appeals held that a claim for attorneys' fees can keep a declaratory-judgment case alive despite substantive mootness because a party does not have to prevail in order to recover its attorneys' fees under the Declaratory Judgments Act. Labrado v. Cnty. of El Paso, 132 S.W.3d 581, 589-91 (Tex. App.-El Paso 2004, no pet.). Speer was distinguishable because Speer sued under the Texas Commission on Human Rights Act, which required her to prevail in order to recover her attorneys' fees. Id. at 590. Because the mootness of her substantive TCHRA claim meant she could never prevail, a claim for fees could not keep her claim alive. Id. at 590-91. Finally, in the Allstate Insurance Co. case, the supreme court reaffirmed that a dispute over attorneys' fees under the Declaratory Judgments Act is a “live controversy” even if the substance of the case becomes moot during its pendency. Allstate Ins. Co. v. Hallman, 159 S.W.3d 640, 642 (Tex. 2005). In that case, Hallman was sued for property damage. Id. at 641. Her liability insurer, Allstate, provided her with a defense under a reservation of rights but commenced a declaratory- judgment action against Hallman contesting coverage of the property-damage claim. Id. The trial court granted summary judgment for Allstate and denied both sides their attorneys' fees, but this Court reversed, held that the claim was covered, and remanded for consideration of Hallman's claim for attorneys' fees. Id. at 642. While the case was on further appeal to the Texas Supreme Court, Hallman won the underlying property-damage case, and Allstate disclaimed any intention of seeking to recoup from Hallman its costs of defending the underlying case. Id. The supreme court cited Camarena and held that Hallman's continuing claim for attorneys' fees kept the case from becoming moot. Id. at 643 (“Hallman's remaining interest in obtaining attorney's fees 'breathes life' into this appeal and prevents it from being moot.”). Accordingly, the court proceeded to decide the merits of the coverage question because of the live attorneys' fees issue. Id. at 643-45. Thus, Allstate Insurance Co. confirms that a claim for attorneys' fees under the Declaratory Judgments Act will keep a case alive even if the request for substantive declaratory relief becomes moot. SOURCE: Dallas Court of Appeals - 05-09-01001-CV - 6/13/11 We conclude that Camarena and Allstate Insurance Co. stand for the proposition that a case under the Declaratory Judgments Act remains a live controversy, even if all requests for substantive declaratory relief become moot during the action's pendency, as long as a claim for attorneys' fees under the Act remains pending. See Tex. Dep't of Transp. v. Tex. Weekly Advocate, No. 03-09- 00159-CV, 2010 WL 323075, at *3 (Tex. App.-Austin Jan. 29, 2010, no pet.) (mem. op.) (“An appeal from the grant or denial of attorney's fees, at least with respect to a UDJA claim, is usually a separate controversy and can persist even when the underlying controversy is moot.”) (emphasis added) (citing Allstate Insurance Co. and Camarena in support). Thus, Chase's and Cramer's claims for attorneys' fees under the Declaratory Judgments Act kept this case from becoming moot even though the Hansens dropped their objection to the sale of the house and the house was actually sold. Speer does not apply to cases under the Declaratory Judgments Act, and the Hansens' reliance on Speer is thus misplaced. In support of their mootness argument, the Hansens also rely on cases such as MBM Financial Corp. v. Woodlands Operating Co., L.P., 292 S.W.3d 660 (Tex. 2009), and City of Carrollton v. RIHR Inc., 308 S.W.3d 444 (Tex. App.-Dallas 2010, pet. denied). These cases are not on point. In each case, the appellate court concluded that a party could not use the Declaratory Judgments Act as a vehicle for recovering attorneys' fees when the declaratory-judgment claims merely duplicated other claims already before the trial court. See MBM Fin. Corp., 292 S.W.3d at 669-71; RIHR Inc., 308 S.W.3d at 454-55. The instant case, by contrast, was an action solely for declaratory judgment, so Chase's declaratory-judgment claims were not duplicative of any other claims. Accordingly, MBM Financial Corp. and similar cases are distinguishable. The Hansens also rely on two other cases that predate Allstate Insurance Co. These cases are not persuasive. In Ware v. Miller, the Amarillo Court of Appeals held that a plaintiff's claim for declaratory judgment “was rendered moot” during its pendency, and it therefore vacated the trial court's judgment (which awarded the plaintiff his attorneys' fees) and dismissed the appeal. 134 S.W.3d 381, 384-85 (Tex. App.-Amarillo 2003, pet. denied). It appears that the Ware court did not consider the possibility that the plaintiff's claim for fees under the Declaratory Judgments Act might have prevented the case from becoming moot. See id. In Kenneth Leventhal & Co. v. Reeves, Reeves sued the defendants for breach of contract and declaratory judgment, and he obtained a judgment awarding him no relief except for attorneys' fees. 978 S.W.2d 253, 256-57 (Tex. App.-Houston [14th Dist.] 1998, no pet.). The court of appeals reversed and rendered a take- nothing judgment against Reeves, holding that the judgment for fees could not be sustained under the Declaratory Judgments Act for two reasons. Id. at 258-60. First, Reeves's claim for declaratory judgment was duplicative of his claim for breach of contract, and so it could not enable him to recover fees that were otherwise not recoverable. Id. at 258-59. We agree with this reasoning. Second, the court concluded that Reeves's claim for declaratory relief had become moot during its pendency and therefore would not support an award of attorneys' fees to either side. Id. at 259-60. This reasoning is contrary to Allstate Insurance Co., which is binding on us, and so we decline to follow Reeves. Neither side cited our recent opinion in City of Richardson v. Gordon, 316 S.W.3d 758 (Tex. App.-Dallas 2010, no pet.). In Gordon, we addressed a fact-specific issue concerning attorneys' fees in relation to the Declaratory Judgments Act and governmental immunity. We conclude that Gordon is limited to its facts and should not be construed beyond its application to the discrete facts of that case. SOURCE: Dallas Court of Appeals - 05-09-01001-CV - 6/13/11

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

No attorney's fees on fraud claim

Can a plaintiff be awarded attorney's fees when he or she obtains a judgment for fraud? Attorneys’ fees are not recoverable for prosecuting a fraud or negligent-misrepresentation claim. See Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d at 304 (citing New Amsterdam Cas. Co. v. Tex. Indus., 414 S.W.2d 914, 915 (Tex. 1967)); see also Tex. Civ. Prac. & Rem. Code Ann. § 38.001 (West 2008) (setting forth claims for which attorneys’ fees are recoverable). SOURCE: Houston Court of Appeals (Beaumont caselaw b/c of transfer) - 14-08-00329-CV - 5/26/11