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Prosecuting and Defending Attorneys’ Fees in Texas

This article discusses the provisions and scope of attorneys' fees in Texas, including presentment, segregation, and prevailing party. It also explores the case of Al Hill v. Gregory Shamoun and the challenges of determining reasonable attorneys' fees.

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Prosecuting and Defending Attorneys’ Fees in Texas

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  1. Prosecuting and Defending Attorneys’ Fees in Texas John W. Bridger David A. Kirby May 2019 Strong Pipkin Bissell & Ledyard 4900 Woodway, Suite 1200 Houston, Texas 77056

  2. Contractual Provisions Trump Everything • Presentment • Scope of fees • Segregation • Prevailing party

  3. Texas Civil Practice and Remedies Code § 38.001 A person may recover reasonable attorneys’ fees from an individual or corporation, in addition to the amount of a valid claim and costs, if the claim is for: (1) rendered services; (2) performed labor; (3) furnished material; (4) freight or express overcharges; (5) lost or damaged freight or express; (6) killed or injured stock; (7) a sworn account; or (8) an oral or written contract.

  4. Texas Civil Practice and Remedies Code § 38.001 A person may recover reasonable attorneys’ fees from an individual or corporation, in addition to the amount of a valid claim and costs, if the claim is for:  (1) rendered services; (2) performed labor; (3) furnished material; (4) freight or express overcharges; (5) lost or damaged freight or express; (6) killed or injured stock; (7) a sworn account; or (8) an oral or written contract.

  5. Texas Civil Practice and Remedies Code § 38.001 A person may recover reasonable attorneys’ fees from an individual or corporation, in addition to the amount of a valid claim and costs, if the claim is for:  (1) rendered services; (2) performed labor; (3) furnished material; (4) freight or express overcharges; (5) lost or damaged freight or express; (6) killed or injured stock; (7) a sworn account; or (8) an oral or written contract.

  6. Al Hill v. Gregory Shamoun: SCOTX Reviews a $48K an Hour Legal Fee Al Hill Jr. v. Al Hill III has spawned more than 20 tortured lawsuits involving the heirs of oilman H.L. Hunt over the past decade. Last week, the Texas Supreme Court heard arguments by Al Hill Jr. challenging a $7.25 million fee award to Gregory Shamoun for his role in helping to resolve what’s become known as the “spider web of litigation.”

  7. Texas Civil Practice and Remedies Code § 38.001 A person may recover reasonable attorneys’ fees from an individual or corporation, in addition to the amount of a valid claim and costs, if the claim is for:  (1) rendered services; (2) performed labor; (3) furnished material; (4) freight or express overcharges; (5) lost or damaged freight or express; (6) killed or injured stock; (7) a sworn account; or (8) an oral or written contract.

  8. Texas Civil Practice and Remedies Code § 38.001 A person may recover reasonable attorneys’ fees from an individual or corporation, in addition to the amount of a valid claim and costs, if the claim is for:  (1) rendered services; (2) performed labor; (3) furnished material; (4) freight or express overcharges; (5) lost or damaged freight or express; (6) killed or injured stock; (7) a sworn account; or (8) an oral or written contract.

  9. Texas Civil Practice and Remedies Code § 38.001 A person may recover reasonable attorneys’ fees from an individual or corporation, in addition to the amount of a valid claim and costs, if the claim is for:  (1) rendered services; (2) performed labor; (3) furnished material; (4) freight or express overcharges; (5) lost or damaged freight or express; (6) killed or injured stock; (7) a sworn account; or (8) an oral or written contract.

  10. Texas Civil Practice and Remedies Code § 38.001 A person may recover reasonable attorneys’ fees from an individual or corporation, in addition to the amount of a valid claim and costs, if the claim is for:  (1) rendered services; (2) performed labor; (3) furnished material; (4) freight or express overcharges; (5) lost or damaged freight or express; (6) killed or injured stock; (7) a sworn account; or (8) an oral or written contract.

  11. Texas Civil Practice and Remedies Code § 38.002 To recover attorneys’ fees under this Chapter: (1) the claimant must be represented by an attorney; (2) the claimant must presentthe claim to the opposing party or to a duly authorized agent of the opposing party; and (3) payment for the just amount owed must not have been tendered before the expiration of the 30th day after the claim is presented.

  12. Texas Civil Practice and Remedies Code § 38.002 To recover attorneys’ fees under this Chapter: (1) the claimant must be represented by an attorney; (2) the claimant must presentthe claim to the opposing party or to a duly authorized agent of the opposing party; and (3) payment for the just amount owed must not have been tendered before the expiration of the 30th day after the claim is presented.

  13. Texas Civil Practice and Remedies Code § 38.002 To recover attorneys’ fees under this Chapter: (1) the claimant must be represented by an attorney; (2) the claimant must presentthe claim to the opposing party or to a duly authorized agent of the opposing party; and (3) payment for the just amount owed must not have been tendered before the expiration of the 30th day after the claim is presented.

  14. Texas Civil Practice and Remedies Code § 38.002 To recover attorneys’ fees under this Chapter: (1) the claimant must be represented by an attorney; (2) the claimant must presentthe claim to the opposing party or to a duly authorized agent of the opposing party; and (3) payment for the just amount owed must not have been tendered before the expiration of the 30th day after the claim is presented.

  15. Presentment • Claimant must plead and prove presentment • Condition precedent • Requires specific denial • No particular form of presentment required • Pleadings are not presentment • Elements of presentment: notice, amount, and time • Timing of presentment • When fees begin to accrue

  16. Tender • Unconditional • Timing • Effect

  17. Presentment / Excessive Demand • Debtor must plead and prove the affirmative defense • Debtor must obtain a finding of fact on excessiveness • Factors determining excessiveness • Demand exceeding award is not necessarily excessive

  18. Presentment / Excessive Demand: Factors • The applicable insurance policy limits • The difference between the amount demanded and the amount sought at trial • The difference between the amount demanded and the amount ultimately awarded at trial • Bad faith or other unreasonable conduct by the plaintiff • Whether litigation was caused by the defendant’s failure to tender a reasonable payment • Any clear indication tender was, or would have been, refused by the plaintiff, or that negotiation would have been futile • Any dispute, at the time of the demand, as to the meaning or applicability of the policy • Any circumstance justifying the original demand at the time it was made

  19. Prevailing Party • Ordinary meaning: receive some relief or direct benefit altering the parties’ relationship • Only one party prevails, it is not a theory by theory determination • No net recovery due to offset from counterclaim v. settlement • Amount recovered less than tendered or sought at trial does not matter, since still prevailing party • Amount at issue small enough for JP court is not a defense to fee award

  20. Prevailing Party: Contractual Provisions • Generally, the contract controls, not statutes or case law • Prevailing party undefined: main action or main issue determinative • No relief to breaching party, unless excused • Scope of provision: broad v. narrow • Exclusive remedy and limitation of liability provisions do not preclude recovering attorneys’ fees

  21. Prevailing Party • Attorneys’ fees typically are not damages supporting status as prevailing party • Defendant as prevailing party in contract and certain statutory • standard for prevailing defendant • Epps criteria for prevailing defendant based on non-suit without prejudice • If awarded trial fees, must be awarded appellate fees • Only successful appeal results in appellate attorneys’ fees • Appellate courts can consider record and own knowledge to assess appellate fees awards

  22. Proof

  23. Proof: Rohrmoos Venture • (a) applying lodestar “where it can be employed” • (b) identifying the five factor to be used “Sufficient evidence includes, at a minimum, evidence of: • (1) particular services performed • (2) who performed those services • (3) approximately when the services were performed • (4) the reasonable amount of time required to perform the services • (5) the reasonable hourly rate for each person performing such services”

  24. Proof: Rohrmoos Venture • (c) limiting Garcia and Kinsel, both of which found minimal evidence supported an attorneys’ fees award, to their facts and to no evidence challenge • (d) rejecting the minimalistic approach permitted by cases such as Jeff Kaiser PC • (e) requiring what federal courts refer to as “good billing judgment” to eliminate hours that are: • excessive • redundant • duplicative • inadequately documented • otherwise unnecessary

  25. Proof: RohrmoosVenture • (f) finding lodestar driven fees to be presumptively (or, later, strongly presumptively) reasonable • (g) once lodestar is proven, shifting burden of proof to the fee opponent to reduce the fee below lodestar

  26. Proof: RohrmoosVenture • (h) recognizing courts can still enhance fees up or down, but not based on Arthur Andersen “considerations” subsumed in the base lodestar calculation • the time and labor required • the novelty and difficulty of the questions involved • the skill required to perform the legal service properly • the fee customarily charged in the locality for similar legal services • the amount involved • the experience, reputation, and ability of the lawyer or lawyers performing the services • whether the fee is fixed or contingent on results obtained • the uncertainty of collection before the legal services have been rendered • results obtained

  27. Proof: RohrmoosVenture • (i) introducing contemporaneous billing records is strongly encouraged, but not mandated • (j) rejecting broad descriptions of categories of work as insufficient without more • reviewed millions of pages of documents • attended 40 plus depositions • filed five motions to compel • responded to extensive motion for summary judgment

  28. Proof: RohrmoosVenture • This decision now begs several questions for further development • (1) under what circumstances can lodestar not be employed • (2) other than contemporaneous billing records, what, if any, other documents or testimony will suffice and under what circumstances will these other forms of proof suffice • prior cases having allowed spreadsheets summaries (likely no longer sufficient) • fee reconstruction • forensic review of the file • (3) with this new, bright line standard, will courts now be more willing to render for insufficient proof, instead of the near universal remand to resolve almost all attorneys’ fees deficiencies

  29. Proof • Reasonable hourly rate • Contingency fees not necessarily precluded as unreasonable • proving a contingency fee • jury getting close to lodestar • if damages reduced, offer remittur • Fees not paid, in whole or in part, or paid by third party still recoverable • discounted rates

  30. Proof: Contemporaneous Billing Records • Strongly recommended, not mandatory • Clerical task time prohibited • Must allocate specific time to specific tasks • block billing not prohibited • Redacting • Reconstruction • Editing

  31. Proof: Objections to Attorneys’ Fees • Be specific, documented, and proven by example • Vagueness, redaction, block billing, should be tied to precluding cross-examination on a substantive ground • Consider satisfying defendant’s arguably valid objections

  32. Segregating Fees • Historical Sterling exception for intertwined facts • Chapa modifies Sterling, mandating task by task segregation

  33. Segregating Fees • Segregating for counterclaims, cross-claims, and affirmative defenses • Segregating by defendant • Contractual provisions impacting segregation • Segregating by estimating a percentage attributable to unrecoverable claims • Appellate fees should be segregated • Unsegregated fees result in remand, not rendition

  34. Segregating Fees: Practice Points • Entry-by-entry segregation • Discounted fees • Estimate only if you have to • Also keep track of your unrecoverable time • Start putting together objectionable time entries early • Consider NOT pleading the unrecoverable action • Hard line approach to segregation • paragraphs in petition • pages in depositions • interrogatory by interrogatory • Appellate fees • Offer to remit • Seek new trial

  35. Uncontroverted, Non-Conclusory Fees • Uncontroverted fees should be awarded as a matter of law • Even minimal testimony may suffice and avoid exclusion as conclusory • Opposing party’s objections and motion to strike inadequate to controvert if not sustained or granted

  36. Controverted Fees • Controverting testimony requires an expert • Controverting testimony cannot be general or conclusory • Controverted attorneys’ fees upheld if in range of evidence • Cross-examination may constitute sufficient controversion • trial fees • appellate fees require separate cross-examination

  37. Other Proof Considerations • Recovering for preparing fee application or affidavit • Supplementing fee application or affidavit • Default judgment attorneys’ fees award requires proper proof as are unliquidated damages • Appellate fees: detailed analysis should be provided or required • Possible objections to attorneys’ fee evidence • Motions for summary judgment v. motions to award attorneys’ fees

  38. List of Possible Objections to Attorneys’ Fees Evidence(Pages 100-102)

  39. Miscellaneous • No pre-judgment interest on fees, unless fees have already been paid • No bonding on appeal for attorneys’ fees • Dangers of severing attorneys’ fees from the underlying action authorizing them • One satisfaction rule: fraud, punitive damages, and attorneys’ fees • Post-judgment interest on conditional appellate fees begins to accrue on date of appellate decision made final

  40. Miscellaneous • Defendant’s rights to attorneys’ fees survives plaintiff’s non-suit • Award of appellate attorneys’ fees must be conditioned on success at the appellate level • Where damages reduced on appeal should remand for reconsideration of attorneys’ fees • You prevail, but deem your attorneys’ fees award to be inadequate (or none are awarded at all), you must file your own notice of appeal per TRAP 25.1(c) • Attorneys’ fees awards are not subsumed in appellate issue attacking grounds for awarding them

  41. Miscellaneous: Discovery Issues • Disclosure: attorneys’ fees not economic damages requiring disclosure under Rule 194(d) • Late production/disclosure does not necessarily result in exclusion of attorneys’ fees proof and witness • Usually cannot get opposing parties’ billing records in discovery • Disclosure: minimal designation is sufficient under Rule 194.2(f)(3)

  42. A Few Thoughts on Strategy • Forum • Judge v. jury • Retained expert v. trial counsel • Discovery • Affidavit v. live testimony (or both) • What to ask for

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