Opinion
No. 05-19-01294-CV
03-24-2021
JAMES D. ANDERTON, INDIVIDUALLY AND AS TRUSTEE OF THE JIMMIE W. ANDERTON AND FRANCES E. ANDERTON REVOCABLE LIVING TRUST AGREEMENT, Appellants v. JENNIFER GREEN, Appellee
On Appeal from the 354th Judicial District Court Hunt County, Texas
Trial Court Cause No. 79011
MEMORANDUM OPINION
Before Justices Molberg, Reichek, and Nowell
Opinion by Justice Nowell
Before us is the parties' third appeal to this Court since their legal disputes began in 2013. The appeals, taken together, present a family controversy about the ownership and subsequent disbursement of funds from certain financial accounts and guardianship proceedings. See Anderton v. Green, 555 S.W.3d 361 (Tex. App.—Dallas 2018, no pet.); see also Estate of Buchanan, No. 05-19-01473-CV, 2020 WL 6791524, at *1 (Tex. App.—Dallas Nov. 19, 2020, no pet.) (mem. op.).
James D. Anderton is the trustee of a trust created by his parents, Jimmie W. Anderton and Frances E. Anderton Buchanan. As the Trustee, he sued his niece, Jennifer Green, alleging she converted $750,000 in annuity benefits she received when Frances, her grandmother, died. Jennifer filed numerous counterclaims and also pleaded claims against James. As discussed below, the parties' claims involved Frances's mental capacity and James's actions during a specific time period.
For clarity, we use first names for the Anderton family. We will refer to appellant James D. Anderton individually as "James" and to his late father as "Jimmie." We will refer to appellant James D. Anderton, Trustee of the Jimmie W. Anderton and Frances E. Anderton Revocable Living Trust Agreement as "Trustee."
Following a bench trial, the trial court rendered judgment for Jennifer. James and the Trustee appealed, and this Court affirmed the judgment in all respects except for the award of attorney's fees to Jennifer. Anderton, 555 S.W.3d at 365, 375. We reversed the portion of the trial court's judgment awarding attorney's fees to Jennifer and remanded the cause for further proceedings on that issue. Id.
On remand, the parties filed briefing and the trial court heard argument about Jennifer's attorney's fees. In its Final Judgment on Jennifer Green's Attorney's Fees, the trial court stated Jennifer was defending herself in a declaratory judgment action as of January 28, 2015; Jennifer's reasonable, necessary, equitable, and just attorney's fees attributable to the declaratory causes of action through trial were $149,780.00; and Jennifer's reasonable, necessary, equitable, and just attorneys' fees attributable to appeal were $46,646.00. Accordingly, the trial court ordered that Jennifer recover those amounts from appellants. In this appeal, appellants raise three issues arguing the trial court erred by concluding Jennifer began defending herself in a declaratory judgment action on January 28, 2015, and the trial court erred by awarding $149,780 for attorney's fees through trial and $46,646 in appellate attorney's fees. We reverse the trial court's judgment in part, modify the trial court's judgment, and affirm the remaining portions of the trial court's judgment. I. Factual Background
Most of the factual background is taken from our prior opinion in which we considered the sufficiency of the evidence to support the trial court's declarations regarding Frances's loss of mental capacity. See Anderton, 555 at 366-70. Additional facts underlying the parties' disputes are set forth in our prior opinions. See id.; see also Estate of Buchanan, 2020 WL 6791524. --------
In 1991, Jimmie and Frances signed a "Revocable Living Trust Agreement" (the "Trust"). After Jimmie died in 2003, James became the Trust's sole trustee, and, in that capacity, the plaintiff in this lawsuit. Frances remarried after Jimmie's death and maintained separate finances from her new husband.
Jennifer, Frances's granddaughter, lived with Frances and Jimmie when she was a child. In addition to establishing the Trust to benefit her sons, Frances named Jennifer as the beneficiary of several annuities. Jennifer was also listed as a joint owner on some of Frances's bank accounts beginning in 2003, and was the only beneficiary on other accounts as of 2007.
By 2012, Frances suffered from dementia and became convinced that "Jennifer Green," whose name appeared on her bank statements, was stealing money from her. Frances's husband tried and failed to convince Frances that "Jennifer Green" was her granddaughter. Frances's agitation over the accounts continued and culminated in the events of October 2012, which became the basis of this lawsuit.
On Monday, October 15, 2012, Frances's husband and James took Frances to three banks to remove Jennifer's name from Frances's accounts. The following day, her husband drove Frances to her lawyer's office where Frances revoked prior powers of attorney granted to Jennifer and signed a new power of attorney in favor of James. On Wednesday, October 17, Jennifer visited Frances and learned the accounts had been changed. Jennifer immediately drove Frances to one of the banks. Frances did not recall making the changes to her accounts or going to the bank two days earlier. Jennifer and Frances also visited the other banks on Wednesday or Thursday that week. Two days later, on Friday, October 19, 2012, James filed an application for guardianship of Frances. During the original trial of this matter, James maintained Frances was capable and competent to undertake banking transactions on Monday and Tuesday, but not on Wednesday and Thursday and, by Friday, she needed a guardian. Frances died on November 26, 2012.
On January 13, 2013, the Trustee sued Jennifer alleging conversion of "$750,000 in annuity benefits" that belonged to the Trust after Frances changed the beneficiary from Jennifer to the Trust on October 15, 2012. On October 9, 2014, appellants filed a separate lawsuit against the banks, insurance companies, and financial services companies that permitted Jennifer to withdraw funds from Frances's accounts. The petition alleges Frances made the Trust the beneficiary of these accounts on October 15, 2012, but, because the institutions failed to change the beneficiary as requested, "Jennifer Green, the prior beneficiary, was able to remove all funds from the accounts." Appellants sought a declaratory judgment "as to the rights and legal relations in respect to the accounts made the subject of this suit, including a declaration by this Court that [appellants] are the primary beneficiary of the accounts." The lawsuit against the banks, insurance companies, and financial services firms was consolidated with the suit against Jennifer on January 28, 2015.
Appellants filed an amended petition against Jennifer on July 12, 2016, and asked the trial court to "determine the rights of the parties to" the assets that were the subject of the lawsuit. Jennifer amended her live pleading the following day, and she requested a declaratory judgment that the accounts in question "legally belong to her," and "the October 16, 2012 Power of Attorney is invalid, as well as any transactions or actions related thereto or entered thereunder." The case proceeded to a bench trial beginning on July 21, 2016.
II. Law & Analysis
Under section 37.009 of the civil practice and remedies code, a trial court may award attorney's fees to a party in a declaratory judgment action, including a party who successfully defends against a declaratory judgment claim, if the trial court believes such fees to be reasonable and necessary and the award of such fees to be equitable and just. TEX. CIV. PRAC. & REM. CODE § 37.009; Anderton, 555 S.W.3d at 372-73. When a trial court sits as the trier of fact, the amount of a fee award generally rests in the sound discretion of the trial court, and its judgment will not be reversed on appeal absent a clear abuse of discretion. Anderton, 555 S.W.3d at 373. Sufficiency of the evidence to support the award is a relevant factor in assessing whether the trial court abused its discretion. Id.
When, as here, a claimant prevails on some claims for which fees are recoverable and some claims for which they are not, the claimant generally must segregate her fees between the two kinds of claims. See Guillory v. Dietrich, 598 S.W.3d 284, 300 (Tex. App.—Dallas 2020, pet. denied) (citing Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 311 (Tex. 2006)). Segregation evidence need not be extensive to be sufficient. See Chapa, 212 S.W.3d at 314. An attorney need not keep separate time records; rather, "it is sufficient to submit to the fact-finder testimony from a party's attorney concerning the percentage of hours that related solely to a claim for which fees are not recoverable." RM Crowe Prop. Servs. Co., L.P. v. Strategic Energy, L.L.C., 348 S.W.3d 444, 453 (Tex. App.—Dallas 2011, no pet.) (citing Chapa, 212 S.W.3d at 314).
A. Defending a Declaratory Judgment Action
In their first issue, appellants argue the trial court erred by concluding Jennifer was defending herself in a declaratory judgment action as of January 28, 2015, because Jennifer did not seek a declaratory judgment until July 2016.
Appellants' suit against Jennifer was consolidated with appellants' suit against the banks, insurance companies, and financial services firms on January 28, 2015. At that time, appellants sought a declaration that the Trust was "the primary beneficiary of the accounts made the subject matter of this suit," meaning Jennifer was not. The requested declaration would have adjudicated both appellants' and Jennifer's legal rights to the accounts, and Jennifer, believing she was the primary beneficiary of the accounts, had to defend against the requested declaratory judgment. Therefore, based on the record in this case, the trial court did not abuse its discretion by concluding Jennifer was defending against a declaratory judgment action on January 28, 2015, when the cases were consolidated. We overrule appellants' first issue.
B. Amount of Trial Attorney's Fees Awarded
In their second issue, appellants argue the trial court erred by awarding $149,780 in attorney's fees attributable to the declaratory judgment action to Jennifer. They argue Jennifer failed to segregate her fees and did not show the intertwined exception applies.
During the original trial, Jennifer's attorneys testified about the amount of fees incurred, their hourly rates, the categories of work performed, the reasonableness and necessity of the fees and costs, and the factors discussed in Arthur Anderson & Co. v. Perry Equipment Co., 945 S.W.2d 812 (Tex. 1997). Billing records were admitted at trial. Appellants did not object to the testimony or billing records from Jennifer's attorneys at trial.
On remand, Jennifer filed a brief with the trial court discussing her attorney's fees and subsequent segregation of those fees. Jennifer explained that she removed all attorney fee entries predating January 28, 2015, and removed all entries not related to her or appellants' requests to be declared the beneficiary of Frances's accounts. Jennifer submitted the same attorney's fee invoices as she had at trial, but modified them to show which entries were eliminated and which were reduced.
At the hearing on attorney's fees, Jennifer's attorney explained the methodology to the trial court:
We went through every single entry on every single invoice and we highlighted, in yellow, areas that were a complete reduction, areas that we thought, You know what, they don't have anything to do with the dec action so we're going to take those out.As a result of the modifications to the invoices, Jennifer's requested attorney's fees on remand were 33 percent lower than the fees she originally sought. Appellants filed a response brief, but did not offer controverting evidence.
We highlighted, in blue, entries that were partial reductions, meaning if there were five things with semicolons in between and we felt that one of those things did not relate to the dec action, then we attributed a time factor to that and reduced it so that if the time in the invoice for that particular date was 3.5 hours and we felt that one hour was not attributable to the dec action, then we reduced that . . . from 3.5 to 2.5, by one hour.
After considering the parties' briefing and arguments, the trial court found Jennifer's "reasonable, necessary, equitable and just attorneys' fees attributable to declaratory causes of action through trial are $149,780.00." The trial court ordered Jennifer recover this amount from appellants.
Appellants concede the hourly rates charged by Jennifer's attorneys were reasonable. But they argue the fees were not reasonable, necessary, equitable, or just because Jennifer filed her declaratory judgment claim only one week before trial and, therefore, could not have incurred nearly $150,000 in associated fees. However, as discussed in response to appellants' first issue, the trial court did not abuse its discretion by concluding Jennifer was defending against a declaratory judgment action as of January 28, 2015, nearly eighteen months before trial, and January 28, 2015, was the relevant date for calculating Jennifer's attorney's fees pursuant to chapter 37 of the civil practice and remedies code.
To the extent appellants argue Jennifer "is attempting to use CPRC § 37.009 to funnel her attorneys' fees from all her other claims - which were voluminous - into her declaratory judgment claim, which was a single claim pending for merely a week," we previously rejected this precise argument. See Anderton, 555 S.W.3d at 374 ("[W]e reject James's argument that Jennifer 'use[d] Sec. 37.009 to sneak in an award of attorney's fees for claims that otherwise would not be eligible for such an award.'"). We decline the invitation to revisit our prior decision.
Finally, appellants argue Jennifer failed to properly segregate her fees. Nothing in the record contradicts Jennifer's attorney's explanation to the trial court about segregating the fees, so we take it as true. See generally Snowhite Textile & Furnishings, Inc. v. Innvision Hosp., Inc., No. 05-18-01447-CV, 2020 WL 7332677, at *15 (Tex. App.—Dallas Dec. 14, 2020, no pet.) (mem. op.) (citing In re A.B.P., 291 S.W.3d 91, 98 (Tex. App.—Dallas 2009, no pet.)). Jennifer's attorney provided modified billing records and explained how the lawyers determined which fees did and did not relate to the declaratory judgment action. Based on the uncontroverted evidence in the record, the trial court did not abuse its discretion by concluding Jennifer adequately segregated her fees and her recoverable attorney's fees were $149,780. We overrule appellants' second issue.
C. Appellate Attorney's Fees
In their third issue, appellants argue the trial court erred by awarding $46,646 in appellate attorney's fees to Jennifer. The trial court's award is based on a request Jennifer made in her brief on attorney's fees filed after this case was remanded. In that brief, Jennifer presented a two-paragraph argument to support her request for $46,646 in appellate attorney's fees. The first paragraph sets forth language from our Mandate from the prior appeal:
It is ORDERED that appellee Jennifer Green recover her costs of this appeal from appellants James D. Anderton, Individually and as a Trustee of the Jimmie W. Anderton and Frances E. Anderton Revocable Living Trust Agreement.The second paragraph states: "Jennifer incurred Appellate Attorneys' Fees of $46,646.00 , as shown in the appellate invoices attached hereto as Exhibit 4." Exhibit 4 is a series of billing records from Jennifer's lawyers showing she incurred $46,646 in legal fees for the first appeal of this case. The trial court's Final Judgment on Jennifer Green's Attorney's Fees states: "Green's reasonable, necessary, equitable and just attorneys' fees attributable to the appeal are $46,646.00."
As stated in our mandate, we ordered that Jennifer recover her costs of the initial appeal. That award of costs was made pursuant to Texas Rule of Appellate Procedure 43.4, which states in part: "The court of appeals' judgment should award to the prevailing party costs incurred by that party related to the appeal, including filing fees in the court of appeals and costs for preparation of the record." TEX. R. APP. P. 43.4. Rule 43.4 does not empower this Court or the trial court to award appellate attorney's fees to either party, and our mandate did not order that Jennifer recover her appellate attorney's fees. We conclude the trial court erred by awarding $46,646.00 in appellate attorney's fees to Jennifer based on our mandate. We sustain appellants' third issue.
In its judgment, the trial court ordered Jennifer recover post-judgment interest compounded annually from the date of the final judgment until "the date of full satisfaction of the sum of $196,426.00 representing Green's attorney's fees and court costs." $196,426.00 is the sum of $46,646.00 in appellate attorney's fees and $149,780.00 in trial court attorney's fees related to the declaratory judgment. Because the $46,646.00 in appellate attorney's fees was awarded erroneously, we conclude the trial court's sum of $196,426.00 is also in error, and we reduce it by $46,646.00 to $149,780.00.
III. Conclusion
We reverse the trial court's award of $46,646.00 attributable to appellate attorney's fees, and we strike the following provision from the trial court's Final Judgment on Jennifer Green's Attorney's Fees: "IT IS ORDERED, ADJUDGED, DECLARED, AND DECREED that Green shall have and recover $46,646.00 from James Anderton individually and from the Trust, jointly and severally, and Anderton shall pay $46,646.00 to Green in Anderton's individual capacity and as Trustee of the Trust, joint and severally."
We modify the trial court's judgment to show appellants must pay "post-judgment interest compounded annually at 5% from the date the Court signs this Final Judgment until the date of full satisfaction of the sum of $149,780.00, representing Green's attorneys' fees and court costs."
In all other respects, we affirm the trial court's judgment.
/Erin A. Nowell/
ERIN A. NOWELL
JUSTICE 191294F.P05
JUDGMENT
JAMES D. ANDERTON, AS TRUSTEE OF THE JIMMIE W. ANDERTON AND FRANCES E. ANDERTON REVOCABLE LIVING TRUST AGREEMENT, Appellants V. JENNIFER GREEN, Appellee On Appeal from the 354th Judicial District Court, Hunt County, Texas
Trial Court Cause No. 79011.
Opinion delivered by Justice Nowell. Justices Molberg and Reichek participating.
In accordance with this Court's opinion of this date:
We REVERSE the trial court's award of $46,646.00 attributable to appellate attorney's fees awarded to appellee Jennifer Green, and we STRIKE the following provision from the trial court's Final Judgment on Jennifer Green's Attorney's Fees: "IT IS ORDERED, ADJUDGED, DECLARED, AND DECREED that Green shall have and recover $46,646.00 from James Anderton individually and from the Trust, jointly and severally, and Anderton shall pay $46,646.00 to Green in Anderton's individual capacity and as Trustee of the Trust, joint and severally."
We MODIFY the trial court's judgment to show appellants must pay "post-judgment interest compounded annually at 5% from the date the Court signs this Final Judgment until the date of full satisfaction of the sum of $149,780.00, representing Green's attorneys' fees and court costs."
In all other respects, the judgment of the trial court is AFFIRMED.
It is ORDERED that each party bear its own costs of this appeal. Judgment entered this 24th day of March, 2021.