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concluding party abandoned claim because he "did not seek to obtain a jury verdict" on that claim
Summary of this case from Tex. Law Shield, LLP v. CrowleyOpinion
No. 05-16-01364-CV
06-07-2018
On Appeal from the 95th Judicial District Court Dallas County, Texas
Trial Court Cause No. DC-12-09866-D
MEMORANDUM OPINION
Before Justices Lang, Fillmore, and Schenck
Opinion by Justice Schenck
Appellant Marumar Anani ("Anani"), sometimes referred to as Mike Anani, appeals a judgment entered on a jury verdict finding him liable for breach of contract. In eight issues, Anani asserts: appellee Joseph Abuzaid lacks standing to sue for breach of contract; there is no enforceable contract between Abuzaid and Anani; the statute of frauds bars Abuzaid's claims; and that the trial court erred in awarding damages, attorney's fees, and prejudgment interest, in denying him leave to assert various defenses, and in allowing expert opinion testimony concerning damages. Appellants Hanadi Anani, Big-D Concrete, Inc. ("Big-D"), and Anani, LLC also appeal the final judgment. They assert the trial court should have awarded them costs and should have specified that Abuzaid take nothing against Big-D and Anani, LLC in the final judgment. We modify the final judgment to reflect the correct prejudgment interest, to expressly deny recovery from Big-D and Anani, LLC, and to award costs pursuant to rule 131 of the Texas Rules of Civil Procedure. We affirm the judgment as modified. We remand the issue of court costs to the trial court for determination. Because all issues are settled in law, we issue this memorandum opinion. TEX. R. APP. P. 47.4.
BACKGROUND
Abuzaid and Anani had known each other for a considerable time before the events giving rise to this case occurred and they sometimes joined together to invest in business ventures. In 2011, Anani, and one of his business associates, David Wittwer, approached Abuzaid about participating in one such venture, that being a sand mining company known as Frontier Mining and Minerals, LLC ("Frontier"), in which Anani and Wittwer had ownership interests. At that time, Abuzaid resided in California, and Anani and Wittwer resided in Texas. In July 2011, Abuzaid agreed to provide Anani with $452,000 in investment capital, $156,250 of which was to be invested in Frontier and the remainder was to be used to purchase real property in Seagoville (the purchase of which never came to fruition).
Within the ensuing year, the relationship between Abuzaid and Anani deteriorated, and on May 8 2012, Anani and Wittwer had Abuzaid physically ejected from the business. On August 29, 2012, Abuzaid sued Anani, Anani's wife (Hanadi Anani), Frontier, and Big-D (another company in which Anani had an ownership interest to which Abuzaid asserted investment funds had been diverted) asserting various claims including breach of contract and conversion. Thereafter, Abuzaid amended his petition to add as additional parties Wittwer and his family trust ("Wittwer Trust"), Wael Fares (a friend of Anani's who Abuzaid claimed conspired with Anani to remove from Frontier's records all references to Abuzaid as an investor), and Chatfield Materials, LLC, Metroplex Gunite, LP, Metro Gunite Mgt, LLC, and Anani, LLC (entities to which Abuzaid claimed Anani and Wittwer fraudulently transferred assets).
Abuzaid claimed that initially he was to own 25% of Frontier, Anani was to own 35%, and Hazem Awad (a mutual friend of Abuzaid and Anani) and the Wittwer Trust were each to own 20%. Abuzaid alleged that Anani induced him into making the investment by representing he was in the process of selling Big-D and would devote his full time and efforts into running Frontier. He further claimed that the sale of Big-D did not go through and Anani did not make good on his promise to run Frontier. As a result, Abuzaid claims he agreed to take over the management of the company in exchange for: (1) an increase in his ownership interest to 51%; (2) a promise that Anani and Awad would contribute up to $200,000 in additional capital if needed; (3) an agreement to pay Abuzaid a bonus of $60,000, if the business became profitable by the end of June 2012; and (4) reimbursement of his expenses.
Abuzaid claims he increased his investment in Frontier to $318,750 to purchase the increase in his ownership interest.
The trial began on March 22, 2016. Abuzaid's claims against Chatfield Materials , LLC were stayed pending resolution of a bankruptcy proceeding, and no jury questions were submitted as to Abuzaid's claims against Frontier, Metroplex Gunite, LP, Metro Gunite Mgt, LLC, or Anani, LLC. The jury returned a verdict in favor of Abuzaid on his contract claims against Anani and the Wittwer Trust, awarding Abuzaid $894,000. Wittwer did not appear at trial and the Wittwer Trust is not a party to this appeal. The jury found against Abuzaid on his claims against Hanadi Anani and Big-D.
In reaching its verdict against Anani, the jury found Anani and Abuzaid had an agreement that: Abuzaid would receive a 51% equity interest in Frontier in exchange for an additional investment in Frontier; Abuzaid would get a $10,000 a month bonus if he worked at Frontier and Frontier became profitable within six months; Abuzaid would be reimbursed for his travel expenses to and from Texas; Abuzaid would be reimbursed for Frontier business expenses charged to his personal credit cards; and Abuzaid would be paid the money he gave to Anani and his wife in the amount of $452,000. The parties agreed to submit the issue of attorney's fees to the trial court. The trial court found Abuzaid was entitled to $512,794.94 in attorney's fees through the date of judgment ($100,959.75 for the Law Office of Brad Jackson, $100,000 for Jules Slim, $132,179.19 for Modjarrad & Associates, P.C., and $179,656 for Goldfarb PLLC), in addition to conditional appellate fees. The trial court also found that Abuzaid was entitled to prejudgment and postjudgment interest, and costs of court.
Abuzaid was represented by five different attorneys during the course of this litigation and sought fees of $562,269.64. The trial court disallowed fees requested for the services of J. Richard Tubbs, P.C. and applied a further discount to the requested amount.
DISCUSSION
I. Standing
In his first issue, Anani challenges Abuzaid's standing to sue over the investment. Standing is an essential element of subject matter jurisdiction. Douglas v. Delp, 987 S.W.2d 879, 882 (Tex. 1999). Subject matter jurisdiction is a necessary predicate to a court's authority to decide a case. Texas Ass'n of Business v. Texas Air Control Bd., 852 S.W.2d 440, 445 (Tex. 1993).
Absent a statutory exception, a plaintiff can establish his standing to sue if he shows (1) he suffered an actual or threatened injury that is concrete and particularized, not hypothetical, (2) the injury can be fairly traced to the defendant's conduct and is not the result of an independent action of a third party, and (3) there is a substantial likelihood the requested relief will remedy the alleged injury. Heckman v. Williamson Cty., 369 S.W.3d 137, 155 (Tex. 2012).
Anani asserts Abuzaid does not have standing in this case because implicit in the jury's finding that Anani did not hold any money belonging to Abuzaid, is a determination that Abuzaid supplied no funds of his own for the investment. He further argues that if Abuzaid did not supply any of the funds, he could not have suffered an actual or threatened injury and thus lacks standing to sue over the investment.
While it is not entirely clear, it appears that in making this argument Anani is referring to and relying on two of the jury's findings, one finding that Anani did not wrongfully secure or passively receive money or a benefit that rightfully belongs to Abuzaid, and another that Anani did not hold money which in equity and good conscious belongs to Abuzaid. These findings were made in connection with questions that were submitted to the jury concerning Abuzaid's unjust enrichment and money had and received claims, upon which he did not recover. Contrary to Anani's assertion, these findings do not conclusively establish Abuzaid did not invest his own funds, only that he did not transfer funds under circumstances that would, in equity, support the imposition of a constructive trust. Meadows v. Bierschwale, 516 S.W.2d 125, 131 (Tex. 1974). Moreover, the record before us includes evidence that the money invested belonged to Abuzaid and came from cash he and his wife physically kept in their home and from funds loaned to Abuzaid by his brother. Accordingly, we overrule Anani's first issue.
Unjust enrichment occurs when the person sought to be charged has wrongfully secured a benefit or has passively receive one that it would be unconscionable to retain. Stewart Title Guar. Co. v. Mims, 405 S.W.3d 319, 339 (Tex. App.—Dallas 2013, no pet.). To prove a claim for money had and received, a plaintiff must show that a defendant holds money which in equity and good conscience belongs to him. MGA Ins. Co. v. Charles R. Chesnutt, P.C., 358 S.W.3d 808, 814 (Tex. App.—Dallas 2012, no pet.).
II. Statute of Frauds
In his second issue, Anani argues Abuzaid's breach of contract claim is barred by the statute of frauds. Abuzaid contends Anani did not properly preserve his statute-of-frauds defense for appellate review because he failed to object at trial or request the submission of a jury question on this issue. We disagree. Whether a contract comes within the statute of frauds is a question of law. Bratcher v. Dozier, 346 S.W.2d 795, 796 (Tex. 1961). Questions of law are for the courts and should not be submitted to the jury. See Millhouse v. Wiesenthal, 775 S.W.2d 626, 627-28 (Tex. 1989); Knutson v. Ripson, 354 S.W.2d 575, 576 (Tex. 1962) (submission of question of law to the jury was improper). To properly place a statute-of-frauds defense before the trial court, a party must assert such defense in its pleadings. See TEX. R. CIV. P. 94.
Anani raised the statute of frauds as a defense in its trial pleadings and in his motion for judgment notwithstanding the verdict. Therefore, his statute-of-frauds complaint is properly before us.
The party relying on the statute of frauds as a defense must prove its applicability. Wilhoite v. Frank, No. 02-10-00134-CV, 2011 WL 754384, at *3 (Tex. App.—Fort Worth Mar. 3, 2011, no pet.) (mem. op.). In support of his statute-of-frauds defense, Anani relies on section 101.151 of the business organizations code. Section 101.151 provides, "[a] promise to make a contribution or otherwise pay cash or transfer property to a limited liability company is enforceable only if the promise is: (1) in writing; and (2) signed by the person making the promise." TEX. BUS. ORGS. CODE ANN. § 101.151 (West 2012).
Anani's reliance on section 101.151 is misplaced because this is not a case involving a failure to make an investment as promised. Here, Abuzaid is not suing Anani for failure to contribute cash or property to Frontier, rather his suit is based on Anani's alleged failures to: (1) account for Abuzaid's 51% interest in Frontier; (2) reimburse Abuzaid for expenses and money he advanced for the business; (3) compensate Abuzaid for managing the business; and (4) buy out his investment. Accordingly, we overrule Anani's second issue.
III. Breach of Contract - Sufficiency of the Evidence
In his third issue, Anani asserts the evidence is insufficient to establish he individually entered into an enforceable contract and breached same. As a sub-part to his third issue, Anani urges the trial court erred in admitting evidence of what Anani characterizes as settlement negotiations to supply contract terms.
The test for legal sufficiency is "whether the evidence at trial would enable reasonable and fair-minded people to reach the verdict under review." City of Keller v. Wilson, 168 S.W.3d 802, 823 (Tex. 2005). In our review of the evidence, we "credit favorable evidence if reasonable jurors could, and disregard contrary evidence unless reasonable jurors could not." Id. We will uphold the jury's finding if more than a scintilla of competent evidence supports it. Tanner v. Nationwide Mut. Fire Ins. Co., 289 S.W.3d 828, 830 (Tex. 2009).
When reviewing a jury verdict to determine the factual sufficiency of the evidence, we must consider and weigh all the evidence, and should set aside the verdict only if it is contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust. Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986) (per curiam). As detailed below, we conclude that the verdict is supported by legally and factually sufficient evidence.
Anani first contends the evidence is insufficient to support the jury's finding Abuzaid and Anani agreed Abuzaid would get a 25% interest in Frontier because Abuzaid agreed Anani and Wittwer would retain 80% and 20% ownership respectively. Anani attempts to support this contention with an email from Abuzaid to Wittwer in which he states "Dave: I understand. Have Mike own 80% and we will have an outside agreement. Also please have him change your and Mike [s]alaries to $60,000 a year please." Abuzaid sent the email in response to Wittwer's email stating "Hi Joe, [o]ur [a]ttorney is having difficulty writing our new [documents] as Mike Anani and [s]ilent [i]nvestors (presumably the silent investors were the persons Abuzaid initially indicated might be interested in investing along with him). He is suggesting the following: 1. Just name Mike with 80% and then you have an outside agreement 2. Create a LP with Mike and the silent investors 3. Name Mike along with each specific silent investor[] and their respective ownership shares. Please let me know what you think." This email exchange, which simply discusses how the deal could be structured, does not negate Abuzaid's claim he was ultimately promised a 25% ownership interest in Frontier. Next, Anani relies on his testimony the investment money was not for an ownership interest in Frontier and that he and Abuzaid agreed they would look at the investment in a year to ascertain a permanent plan. But this testimony was contradicted by Abuzaid and others, including Hazem Awad (another investor in Frontier) and Masoud Khayyat (a former business partner and confidant of Anani), who testified Abuzaid had a 25% ownership interest in Frontier. In addition, the evidence includes a receipt dated October 26, 2011 acknowledging Anani received $452,000 from Abuzaid, $156,250 of which was for the 25% ownership of Abuzaid in Frontier, and the remainder, $295,750, for the purchase of the Seagoville property. While Anani denied signing the receipt, the jury, as the fact finder, was in the best position to judge the credibility of the witnesses and the weight to be given their competing testimony. Leibovitz v. Sequoia Real Estate Holdings, L.P., 465 S.W.3d 331, 350 (Tex. App.—Dallas 2015, no pet.). The jury resolved the discrepancy in Anani and Abuzaid's testimony against Anani. We conclude there is sufficient evidence to support the jury's finding Abuzaid had an agreement with Anani whereby Abuzaid was to receive a 25% interest in Frontier.
Anani also contends there is insufficient evidence to support a finding that he individually, rather than on behalf of Frontier, entered into an agreement with Abuzaid. Abuzaid responds asserting Anani cannot argue he is not liable individually because he did not file a verified denial pursuant to rule 93(c) of the Texas Rules of Civil Procedure challenging the capacity in which he was sued. The capacity addressed in rule 93(c) goes to Anani's standing to assert or defend the action before the Court. See TEX. R. CIV. P. 93(c). It does not relate to the merits of the cause of action or the merits of the defenses thereto. Accordingly, Anani may still challenge the proof of Abuzaid's right to recover in any capacity alleged. See Light v. Wilson, 663 S.W.2d 813, 814 (Tex. 1983); Conrad v. Artha Garza, 615 S.W.2d 238 (Tex. Civ. App.—Dallas 1981, no writ).
By filing a general denial, Anani placed the merit of Abuzaid's suit against him in issue. Shell Chemical Company v. Lamb, 493 S.W.2d 742 (Tex. 1973).
As to whether Abuzaid had an agreement with Anani individually, the email exchange referenced above is some evidence from which the jury could have concluded Abuzaid was dealing with Anani individually. In addition, the evidence establishes the investment dollars were sent to Anani, not to Frontier, and were made payable to Anani personally. Consequently, there is sufficient evidence to support a finding against Anani individually.
Anani also contends there is insufficient evidence he received any consideration in connection with any alleged agreement. As stated above, the evidence shows Abuzaid agreed to make an investment with Anani. The obligation of Abuzaid to invest is valid consideration for the agreement between Abuzaid and Anani. See e.g., Robbins v. Payne, 55 S.W.3d 740, 751 (Tex. App.—Amarillo 2001, pet. denied) (obligation of one founder of new internet business to invest money for start-up costs was valid consideration for contract between two founders and made the parties' promises mutual).
Next, Anani claims there is insufficient evidence to support the jury's findings he and Abuzaid agreed: Abuzaid's investment in Frontier would be increased to 51% in exchange for an additional investment in Frontier; Abuzaid was to receive a $10,000 a month bonus if he worked at Frontier and Frontier became profitable within six months; Abuzaid would be reimbursed for business expenses he incurred; Abuzaid would be repaid the investment of $452,000; and Abuzaid would be reimbursed for his travel expenses. However, the evidence before the jury includes text messages and responses between Anani to Abuzaid whereby Anani agreed to give Abuzaid all of his money (which included the $452,000 investment, credit card charges, travel expenses, and bonus) and a letter dated May 8, 2012, in which Anani agreed to refund Abuzaid's initial investment plus credit card expenses for Frontier. Thus, there is sufficient evidence to support these jury findings.
Anani contends the trial court erred in admitting evidence of his communications concerning a refund of the investment and other payments because they were made in connection with settlement negotiations. To preserve error, a party must make a timely request, objection, or motion stating the grounds for the ruling sought and obtain a ruling on the request, objection, or motion or object to the trial court's failure to rule. See TEX. R. APP. P. 33.1(a). Also, unless a party obtains a running objection, the party must object each time the evidence is presented or risk waiver of potential error. Bay Area Healthcare Group, Ltd. v. McShane, 239 S.W.3d 231, 235 (Tex. 2007); In re A.M., 418 S.W.3d 830, 841 (Tex. App.—Dallas 2013, no pet.). Anani did not object to questioning concerning whether he sent an email transmitting a letter dated May 8, 2012 in which he stated a final decision had been made to refund Abuzaid's initial investment plus whatever he had spent on his credit card for Frontier. Therefore, Anani's complaint on appeal concerning what he characterizes to be evidence of offers of compromise was not preserved in the trial court.
Considering and weighing all of the evidence in the record pertinent to the jury's findings Abuzaid had an agreement with Anani whereby (1) Abuzaid would initially receive a 25% interest in Frontier, (2) Abuzaid would get a 51% interest in Frontier in exchange for an additional investment in Frontier, (3) Abuzaid would be paid a $10,000 a month bonus if he worked at Frontier and the company became profitable within six months, (4) Abuzaid would be reimbursed for Frontier business expenses he incurred, (5) Abuzaid would be repaid his $452,000 investment, (6) Abuzaid would be reimbursed for his travel expenses to and from Texas, and (7) Anani failed to comply with these terms of their agreement, we conclude there is more than a scintilla of competent evidence to support the findings, and the jury's findings are not contrary to the overwhelming weight of all the evidence as to be clearly wrong and unjust. Therefore, the evidence is legally and factually sufficient to support the jury's findings on the existence of an agreement between Abuzaid and Anani and Anani's breach. Accordingly, we overrule Anani's third issue.
IV. Damages
In his fourth issue, Anani claims the damage award is improper because (1) it exceeds Abuzaid's pleadings, (2) Abuzaid did not disclose the amount and method of calculating unreimbursed expenses, working bonus, or travel expenses in response to requests for disclosure, and (3) it included inconsistent measures of damages.
A. Pleadings
The judgment must conform to the pleadings. TEX. R. CIV. P. 301. Anani claims that while Abuzaid alleged the owners of Frontier agreed that Frontier would reimburse Abuzaid for his travel expenses and that he would be paid a bonus if the company was profitable, he did not plead Anani agreed to same.
In his live pleading, Abuzaid alleged Anani and others made agreements with him that they breached without justification or excuse causing Abuzaid actual compensatory harm. Abuzaid's pleading included a request that he recover from Anani all compensatory damages. Thus, Abuzaid's pleading sufficiently covered all damages sought by Abuzaid. Moreover, Anani has failed to demonstrate that he raised this issue at any point during trial. Accordingly, Anani has failed to preserve his pleading complaint for appeal. See Murray v. O&A Express, Inc., 630 S.W.2d 633, 637 (Tex. 1982).
B. Disclosure of Damages
Anani admits that in response to requests for disclosure, Abuzaid disclosed that he was seeking unreimbursed expenses of $156,000 and a bonus of $60,000 from Frontier. He claims Abuzaid did not disclose that he intended to seek unreimbursed expenses, a working bonus, or travel expenses from Anani. As we previously stated, Abuzaid clearly indicated that he was seeking to recover all compensable damages from Anani. Moreover, Anani fails to demonstrate that he objected to evidence concerning these damages or sought a limiting instruction concerning same during trial. Consequently, Anani has failed to preserve this complaint for appellate review. TEX. R. APP. P. 33.1(a).
C. Damage Awards
Anani does not challenge the sufficiency of the evidence to support the jury's findings on damages. Rather, Anani asserts it was error for the trial court to award both benefit-of-the-bargain and out-of-pocket damages. We note that double recoveries for alternative measures of damages are not permitted. Birchfield v. Texarkana Memorial Hosp., 747 S.W.2d 361, 367 (Tex. 1987). Benefit-of-the-bargain damages and out-of-pocket damages are alternative measures of damages. Playboy Enters. v. Editorial Caballero, S.A. de C.V., 202 S.W.3d 250, 271 (Tex. App.—Corpus Christi 2006, pet. denied ); see, e.g., Foley v. Parlier, 68 S.W.3d 870, 885 (Tex. App.—Fort Worth 2002, no pet.) (disallowing recovery of out-of-pocket damages where benefit-of-bargain damages awarded).
Anani requested that the trial court: submit to the jury: (1) a question on the existence of each agreement in dispute; and (2) a separate breach question for each agreement asserted, and assure the measures of damages are defined and have separate blanks. The trial court did so. In responding to the question on compensatory damages for Anani's failure to comply with his agreements, the jury awarded Abuzaid benefit-of-the-bargain damages of $211,000 for Anani's breach of the investment agreement, and $60,000 for unpaid bonuses. The jury further awarded Abuzaid out-of-pocket damages totaling $171,000 for business and travel expenses, and $452,000 to recoup his investment funds. Neither award reflects a claimed loss arising from the same injury, but, instead, reflect distinct claims and injuries. On this record, we conclude there is no double recovery of damages. See Birchfield, 747 S.W.2d at 367 (stressing an overlap of exemplary damages and statutory treble damages for a single loss). Thus, the trial court did not award inconsistent damages. We overrule, Anani's fourth issue.
V. Prejudgment Interest
In his fifth issue, Anani urges the trial court erred in awarding prejudgment interest beginning on May 8, 2012, rather than on August 29, 2012. Prejudgment interest accrues beginning on the earliest of (1) the 180th day after the date the defendant receives written notice of a claim, or (2) the date the suit is filed. TEX. FIN. CODE ANN. § 304.104 (West 2016). In this case, the date notice was given and the date of suit are not in dispute. Thus, prejudgment interest does not hinge on any factual finding. Instead, the issue turns on which potential accrual date precedes the other. The question of which date controls is a matter of law, which we review de novo. See Figueroa v. Davis, 318 S.W.3d 53, 66-67 (Tex. App.—Houston [1st Dist.] 2010, no pet.). The trial court used the date of the written notice, not the 180th day thereafter. Suit was filed on August 29, 2012, which was earlier that than the 180th day after written notice was given. Thus, prejudgment interest accrued on August 29, 2012. Accordingly, we sustain Anani's fifth issue.
VI. Leave to Assert Affirmative Defenses
In his sixth issue, Anani urges the trial court erred in denying him leave to file an amended answer adding the affirmative defenses of res judicata and collateral estoppel. Anani contends the bankruptcy court's ruling on Abuzaid's motion to dismiss Frontier's bankruptcy proceeding precludes a claim of an ownership interest in Frontier. Rule 63 of the Texas Rules of Civil Procedure specifically provides that parties may amend their pleadings provided, that any amendment offered for filing within seven days of the date of trial, or thereafter, shall be filed only after leave of the judge is obtained, which leave shall be granted by the judge unless there is a showing that such amendment will operate as a surprise to the opposite party. TEX. R. CIV. P. 63.
It has been firmly established that the action on the part of the trial court in granting or refusing the right to file amended pleadings within the seven-day period is a matter clearly within the discretion of the trial judge and his decision will not be disturbed on appeal unless the complaining party makes a clear showing of abuse of discretion. Box v. Associates Inv. Co., 389 S.W.2d 687, 689 (Tex. Civ. App.—Dallas 1965, no writ). The burden is upon the complaining party to show that the court's action in denying amended pleadings was arbitrary, or that it resulted in substantial and consequential injury. Id.
Anani has failed to show that the trial court abused its discretion in denying him leave to amend his answer. The record before this Court includes the bankruptcy court's order denying Abuzaid's amended motion to dismiss chapter 7, which states:
[t]he Court considered the Motion and the Responses filed thereto, along with the other pleadings and papers on file, as well as the evidence that was presented, and heard from counsel and parties appearing. Upon due consideration thereof, it is ORDERED that the said Motion be, and is hereby denied.This order does not specify the court's rationale for denying Abuzaid's motion and Abuzaid's motion is not before us. Consequently, Anani has failed to establish the bankruptcy court's ruling would have had any material impact in this case or, consequently, that the trial court abused its discretion in denying him leave to amend his answer and to assert the defenses of res judicata and collateral estoppel. Accordingly, we overrule Anani's sixth issue.
VII. Designation of Expert Witness
In his seventh issue, Anani urges the trial court erred in permitting Abuzaid to present the testimony of Karl Weisheit on damages because Abuzaid failed to timely designate him as an expert witness.
The July 20, 2013 scheduling order required designations of expert witnesses 90 days prior to a trial setting of January 21, 2014. The case ultimately went to trial on March 22, 2016. It appears there was a subsequent scheduling order that may not have specifically addressed expert designations and that after the July 20, 2013 scheduling order was entered, the parties may have, by agreement, extended the discovery deadlines.
It appears Abuzaid first identified Weisheit as a testifying expert on June 20, 2014 by way of amended disclosure. Abuzaid indicated that Weisheit would testify on the subject of Abuzaid's damages, including lost profits. Anani moved to strike the designation of Weisheit shortly thereafter on the ground that the designation was untimely. A hearing on Anani's motion was conducted on July 8, 2014. No ruling on the motion appears in the record. Thereafter, on May 19, 2015, Abuzaid supplemented his disclosures to specifically set forth the amounts of the claimed lost profits for the years 2011 through 2014. On November 10, 2015, Abuzaid served his second supplemental disclosures, which included Weisheit's written report with an evaluation theory based on industry and market information, rather than on Frontier's records, due to the lack of disclosure of Frontier's financial information. On March 18, 2016, Anani filed his motion in limine seeking, in part, to exclude the testimony of Weisheit as untimely.
Assuming, without deciding, Abuzaid's amended and supplemental disclosures were untimely, we must determine whether there was good cause for the late designation or no unfair surprise or prejudice to Anani. See TEX. R. CIV. P. 193.6(a). At the pretrial conference, the trial court considered Anani's request to strike Abuzaid's designation of Weisheit as an expert witness. The trial court denied the motion finding good cause existed for the failure to timely make, amend or supplement the response to requests for disclosure and the failure to do so would not unfairly surprise or unfairly prejudice Anani.
Determination of good cause is within the sound discretion of the trial court and will only be set aside if that discretion was abused. Morrow v. H.E.B., Inc., 714 S.W.2d 297 (Tex. 1986). An abuse of discretion results when a court acts without reference to any guiding rules and principles. Id. at 298. The record as a whole can be taken into consideration when making the determination of whether a party is unfairly surprised or prejudiced or whether there is good cause to allow testimony from a witness who was not timely disclosed. Northwestern Nat'l Cty. Mut. v. Rodriquez, 18 S.W.3d 718, 722-23 (Tex. App.—San Antonio, 2000, pet. denied).
The record shows the timeliness of Abuzaid's disclosure of Weisheit was argued at length on more than one occasion. At the pretrial conference, the trial court consulted previous hearing transcripts, including the transcript from the hearing that occurred almost two years prior when Anani first challenged the designation of Weisheit. Moreover, the trial court was aware of discovery disputes and discussions concerning access to documents Weisheit wanted to see to make his evaluation, which the record suggests Anani and others did not preserve and may have destroyed. Abuzaid argued that when it became apparent the documents Weisheit wanted to see were not forthcoming, Weisheit was forced to use information from other sources to come up with a secondary valuation theory which necessitated engaging in third party discovery and required additional time. In reaching its ruling against Anani on his motion to strike, the trial court stated:
While Weisheit's report is dated September 14, 2015, it was not produced until November 10, 2015. This fact was presented to the trial court and evidently, given the history of this case and the actions of the parties and their attorneys, did not impact the judge's ruling.
[t]he reality was your people were so busy hiding and destroying documents[,] or this side of the table was[,] that this expert couldn't get a fix on it. I mean, that's what it comes down to here. And that was part of the problem that I had . . . .The trial court recognized and articulated that Anani and the other defendants' antics prevented Weisheit from fully formulating his opinions within the time frame provided by the rules of procedure or court order. Consequently, the record supports the trial court's finding good cause existed for Abuzaid's failure to timely amend or supplement the discovery responses concerning Weishert's opinions. As to the identification of Weishert as an expert witness, the record establishes Abuzaid identified Weisheit almost two years before the case actually went to trial. Thus, the trial court did abuse its discretion in finding no unfair surprise or unfair prejudice. We overrule Anani's seventh issue.
VIII. Attorney's Fees
In his eight issue, Anani challenges the trial court's award of attorney's fees. Anani's complaint has four components: First, that Abuzaid is not entitled to attorney's fees because he failed to adequately plead a request for attorney's fees; second, the trial court impermissibly awarded Abuzaid "lodestar" attorney's fees for the services of attorney Slim; third, the trial court erred in awarding Abuzaid attorney's fees because he failed to segregate fees between claims for which attorney's fees are recoverable and those which are not; and fourth, the trial court erred in applying a multiplier to attorney Goldfarb's fees.
A. Pleadings
A party may recover reasonable attorney's fees for a valid breach of contract claim. TEX. CIV. PRAC. & REM. CODE ANN. § 38.001. In its fourth amended petition, the live pleading at trial, Abuzaid pleaded that as a result of the defendants' breaches of contract, he is entitled to recover reasonable attorney's fees under Chapter 38 of the Texas Civil Practice & Remedies Code. Thus, contrary to Anani's assertion, Abuzaid's pleading supports an award of attorney's fees in this case.
B. El Appel Requirements
Anani challenges the legal sufficiency of the evidence to support an award of attorney's fees for the services of Jules Slim. We review a trial court's decision to award attorney's fees for abuse of discretion. El Apple I, Ltd. v. Olivas, 370 S.W.3d 757, 761 (Tex. 2012); Blackstone Medical, Inc. v. Phoenix Surgicals, L.L.C., 470 S.W.3d 636, 657 (Tex. App.—Dallas 2015, no pet.). If attorney's fees are proper under section 38.001(8) of the Texas Civil Practice & Remedies Code, the trial court has no discretion to deny them. Smith v. Patrick W.Y. Tam Trust, 296 S.W.3d 545, 547 (Tex. 2009). The sufficiency of the evidence to support the amount of the award is a relevant factor in assessing whether the trial court abused its discretion. Blackstone, 470 S.W.3d at 657.
Anani relies on El Apple to argue Abuzaid cannot recover Slim's fees because he did not present time records for Slim or otherwise document the hours he expended on the litigation and the value of those hours. Abuzaid represented at trial that he was seeking to recover attorney's fees for Slim's services under the lodestar method. The party applying for the award of attorneys' fees under the lodestar method bears the burden of "documenting the hours expended on the litigation and the value of those hours." El Apple, 370 S.W.3d at 761. In the absence of contemporaneous evidence of services provided, attorneys may reconstruct their work to provide the trial court with sufficient details of the work performed to allow the court to make a meaningful review of the fee request. Id. at 764. For purposes of lodestar calculations, this evidence includes, at a minimum, evidence of: (1) the nature of the work; (2) who performed the services and their rate, e.g., if multiple attorneys or other legal professionals are involved in a case, the fee request should indicate which attorney performed a particular task or category of tasks; (3) approximately when the services were performed; and (4) the number of hours worked. Id. at 763. In addition, a trial court may take judicial notice of the usual and customary attorney's fees and the contents of the case file without receiving further evidence in a jury case to which the amount of attorney's fees is submitted to the court by agreement. TEX. CIV. PRAC. & REM. CODE ANN. § 38.004; see also Fluorine On Call, Ltd. v. Fluorogas Ltd., 380 F.3d 849, 866-67 (5th Cir. 2004); BMW Fin. Servs. v. Rio Grande Valley Motors, Inc., No. 7:11-CV-292, 2013 WL 12143836, at *2 (S.D. Tex. Jan. 3, 2013).
Here, Abuzaid presented the testimony of Slim who testified as follows. He represented Abuzaid in this case for seven to eight months, being in March 2014. His usual hourly rate is $325 per hour. A full day of work would result in a charge $3,000. When he took over the case, he spent 3 days reviewing the file. He had at least ten meetings with former counsel, each lasting three to four hours. He took many depositions in this case. He spent at least a day preparing for each deposition. He spent two days deposing Anani and spent two days traveling to California and taking the deposition of Abuzaid's wife. He participated in discovery hearings that lasted two days. He spent time pursuing third party discovery, many hours in settlement conferences, and three days in discovery conferences with opposing counsel at which a court reporter was present. He prepared motions to compel, and prepared for trial multiple times without the case being called to trial. He further testified that opposing counsel was aggressive, so he had to work hard and that taking on this case was a tremendous commitment for him and precluded him from taking other work. He opined that $100,000 in fees is a conservative figure for the work he performed. This equates to thirty three days of work during the seven to eight months of his representation. At the conclusion of Slim's testimony, the trial court took judicial notice of the file and of Slim's contributions to the case. On this record, we conclude the trial court had before it sufficient details of the work performed by Slim to allow it to make a meaningful review of the fee request and did not abuse its discretion in awarding Abuzaid $100,000 for Slim's services.
C. Segregation of Fees
Next, we consider Anani's argument that Abuzaid failed to adequately segregate fees for work performed on claims for which fees are recoverable from work performed on claims for which fees are not recoverable.
A party seeking to recover attorney's fees has the burden to show that the fees were reasonable and necessary, which, among other things, requires the party to show the fees were incurred on a claim that allows recovery of such fees. Stewart Title Guar. Co. v. Sterling, 822 S.W.2d 1, 10-11 (Tex. 1991). When legal services advance claims for which the recovery of fees is permitted and claims for which the recovery of fees is not permitted, the party must segregate and exclude the fees for services related to the claims for which fees are not recoverable unless "the discrete legal services advance[d] both [the] recoverable claim and the unrecoverable claim." Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 313-14 (Tex. 2006); see also Petras v. Criswell, 248 S.W.3d 471, 481 (Tex. App.—Dallas 2008, no pet.). The need to segregate fees is a question of law, while the extent to which certain claims can or cannot be segregated is a mixed question of law and fact. Tony Gullo, 212 S.W.3d at 312-13. When the causes of action involved in the suit are dependent upon the same set of facts or circumstances and thus are "intertwined to the point of being inseparable," the party suing for attorney's fees may recover the entire amount covering all claims. Sterling, 822 S.W.2d at 10-11.
Segregation of fees does not require separate time records for each claim. Tony Gullo, 212 S.W.3d at 314. Instead, an opinion assigning a percentage to recoverable and unrecoverable fees is sufficient. Id.
At trial, Jeffrey Goldfarb testified that he reviewed the billing statements as well as the entire file, including paper and electronic documents, met with Abuzaid, had conversations with prior counsel, and assessed what were the key issues that consumed attorney time on behalf of Abuzaid. He concluded that the breach of contract claims, for which attorney's fees are recoverable, were the dominant claims in the case. He then applied a Tony Gullo segregation analysis as to each of Abuzaid's counsels' fees to arrive at an amount that should be segregated for recoverable claims.
As to the Law Office of Brad Jackson's fees totaling $149,570, Goldfarb applied a 25% segregation discount and arrived at a figure of $112,177.50. As to Modjarrad & Associates, P.C.'s fees of $225,947.33, Goldfarb discounted them to $135,568.40. He discounted their fees by more than 25% to take into account the claims that were active and the work performed during their representation. As to Goldfarb's firm's fees of $112,285, he applied a segregation discount of 15% and an additional discount of 5% to account for any duplication of effort and arrived at a figure of $89,828. He did so considering the relatively short period of time during which his firm represented Abuzaid—Goldfarb's firm was engaged on March 4, 2016, and the case went to trial on March 22, 2016—and the fact that the majority of the focus during his firm's engagement was on the contract claims or claims that were inextricably intertwined with the contract claims. Goldfarb further testified $100,000 was a reasonable fee for Slim's services in connection with the breach of contract claims. We conclude Abuzaid properly segregated fees among claims for which fees are recoverable and claims for which fees are not recoverable.
Goldfarb also testified about former counsel Jay Richard Tubbs, PC's fees. The trial court did not award any fees for their services.
D. Multiplier
Anani finally challenges the trial court's application of a multiplier to Goldfarb's firm's fees. Anani cites no case in support of his position that a multiplier should not apply to the circumstances presented in this case and we have found none.
The Texas Supreme Court has indicated that after making the lodestar calculation, "[t]he [trial] court may then adjust the base lodestar up or down (apply a multiplier), if relevant factors indicate an adjustment is necessary to reach a reasonable fee in the case." El Apple, 370 S.W.3d at 760. In making these determinations, the court must consider the factors specified in E.F. Johnson Co. v. Infinity Global Tech., No. 05-14-01209-CV, 2016 WL 4254496, at *12 (Tex. App.—Dallas Aug. 11, 2016, no pet.). The relevant factors are those set forth in rule 1.04(b) of the Texas Disciplinary Rules of Professional Conduct. See El Apple, 370 S.W.3d at 760. If a trial court concludes the circumstances of the case call for use of a multiplier, it should choose one that results in an award in the range of 25% to 400% of the lodestar figure. See id. (citing TEX. R. CIV. P. 42(i)(1)).
Goldfarb addressed the rule 1.04(b) factors in arriving at the amount of fees he proposed as reasonable and necessary in this case. Moreover, the 2 times multiplier he proposed is well within the acceptable range provided by the rules. We conclude the evidence is sufficient to support the trial court's use of the 2.0 multiplier in this case and the trial court did not abuse its discretion in doing so. For the foregoing reasons, we overrule Anani's eight issue.
IX. Costs of Court
In their first issue, Hanadi Anani, Big-D, and Anani, LLC assert the trial court erred in failing to award them their costs of court. An appellate court reviews a trial court's award of costs for an abuse of discretion. Sparks v. Booth, 232 S.W.3d 853, 872 (Tex. App.—Dallas 2007, no pet.). Texas Rule of Civil Procedure 131 provides, "[t]he successful party to a suit shall recover of his adversary all costs incurred therein, except where otherwise provided." TEX. R. CIV. P. 131 (emphasis added). The court may, for good cause, to be stated on the record, adjudge the costs otherwise than as provided by law or rule 131. Id. 141.
Hanadi Anani and Big-D were "successful parties" because they received a jury verdict in their favor. See Dover Elevator Co. v. Servellon, 876 S.W.2d 166, 169 (Tex. App.—Dallas 1993, no writ). Therefore, the trial court was required to award them costs absent a showing on the record that good cause existed for adjudicating costs otherwise. Id. A trial court abuses its discretion if its judgment does not state any basis for varying from Rule 131. Id. Here, the trial court did not state any basis for varying from rule 131. Thus, the trial court abused its discretion by not awarding Hanadi Anani and Big-D their costs of court.
Abuzaid did not seek to obtain a jury verdict on his claims against Anani, LLC and did not move for judgment against Anani, LLC. Accordingly, he abandoned his claims against Anani, LLC. When a plaintiff abandons a claim against a party by non-suit, that party is the "successful party" as that phrase is used in Rule 131. See City of Houston v. Woods, 138 S.W.3d 574, 581 (Tex. App.—Houston [14th Dist.] 2004, no pet). By failing to pursue his claim against Anani, LLC, Abuzaid in essence non-suited his claims against the company, and Anani, LLC is entitled to recover its costs of court. For the foregoing reasons, we sustain Hanadi Anani, Big-D, and Anani, LLC's first issue.
X. Disposition of Claims
In their second issue, Big-D and Anani, LLC assert the trial court erred in failing to include a provision in the judgment denying Abuzaid all relief sought against them specifically, and in denying their motion to modify the judgment to specifically identify them.
The judgment identifies Big-D and Anani, LLC as having appeared through their representative and through counsel and having announced ready for trial. The judgment does not mention the fact that Abuzaid did not pursue a jury verdict against Anani, LLC or otherwise specifically name Big-D or Anani, LLC. The judgment does however state "[a]ll other relief requested by any party in this case and not specifically granted herein or previously disposed of, including any and all relief sought by or against Nadia Adnani, a/k/a Nadia Abuzaid, or Hanadi Anani, is DENIED" and includes a provision that "[t]his judgment finally disposes of all parties and all claims and is appealable." Thus, the judgment adequately disposes of Abuzaid's claims against Big-D and Anani, LLC. Thus, we overrule Big-D and Anani, LLC's second issue.
While the trial court did not err in denying Big-D and Anani, LLC's motion to modify the judgment, we may make appropriate orders that the law and the nature of the case require. TEX. R. APP. P. 43.6. Accordingly, we will modify the trial court's judgment to include express references to Big-D and Anani, LLC in the decretal portions of the judgment to ameliorate their business concerns that lay people may not understand the disposition of Abuzaid's claims against them without that clarification.
CONCLUSION
We modify the August 21, 2016 Final Judgment: to reflect an award of prejudgment interest from August 29, 2012, rather than from May 8, 2012; to include a decretal that all relief sought by Abuzaid against Big-D and Anani, LLC is denied; and to award Hanadi Anani, Big-D, and Anani, LLC costs of court as required by rule 131 of the Texas Rules of Procedure. We affirm the judgment as modified. We remand the issue of court costs to the trial court for determination.
/David J. Schenck/
DAVID J. SCHENCK
JUSTICE 161364F.P05
JUDGMENT
On Appeal from the 95th Judicial District Court, Dallas County, Texas
Trial Court Cause No. DC-12-09866-D.
Opinion delivered by Justice Schenck. Justices Lang and Fillmore participating.
In accordance with this Court's opinion of this date, the August 21, 2016 Final Judgment is MODIFIED to reflect prejudgment interest is to accrue from August 29, 2012, to reflect that all relief requested by Joseph Abuzaid against Big D Concrete, Inc. and Anani, LLC is denied, and to reflect Hanadi Anani, Big D Concrete, Inc., and Anani, LLC are awarded costs of court.
It is ORDERED that, as modified, the order of the trial court is AFFIRMED. We REMAND the case to the trial court to determine the costs of court to be awarded to Hanadi Anani, Big D Concrete, Inc., and Anani, LLC.
It is ORDERED that appellants Hanadi Anani, Big D Concrete, Inc. and Anani, LLC recover their costs of this appeal from appellee Joseph Abuzaid.
It is ORDERED that appellee Joseph Abuzaid recover his costs of this appeal and the full amount of the judgment as modified from appellant Muamar Anani and from the cash deposit in lieu of supersedeas bond. After the judgment and all costs have been paid, the District Clerk of Dallas County is directed to release the balance, if any, of the cash deposit in lieu of supersedeas bond to Muamar Anani. Judgment entered this 7th day of June, 2018.