Opinion
NO. 01-14-00906-CV
06-02-2016
JOHN MOORE SERVICES, INC. AND JOHN MOORE RENOVATION, LLC, Appellants v. THE BETTER BUSINESS BUREAU OF METROPOLITAN HOUSTON INC., Appellee
On Appeal from the 269th District Court Harris County, Texas
Trial Court Case No. 2012-35162
MEMORANDUM OPINION
In this appeal, John Moore Services, Inc. and John Moore Renovation, LLC (collectively, John Moore) challenge the trial court's rendition of a final take-nothing judgment and award of attorney's fees and sanctions to the Better Business Bureau of Metropolitan Houston, Inc. John Moore raises two issues challenging the legal sufficiency of the evidence to support attorney's fees and arguing that the trial court improperly failed to consolidate with this case another pending lawsuit seeking damages arising from the same underlying facts.
We affirm.
Background
John Moore sued the Bureau alleging that it was harmed by the Bureau's publication of an unfavorable online review. The Bureau filed a motion to dismiss John Moore's claims under the Texas Citizens Participation Act (TCPA), TEX. CIV. PRAC. & REM. CODE §§ 27.001-.011. The trial court denied the motion, and the Bureau appealed. On appeal, we held that the trial court erred by denying the motion because the Bureau satisfied its burden to show that the claims were based on, related to, or in response to the exercise of its free speech rights, and John Moore failed to satisfy its burden to make a prima facie case for each element of its claims or to demonstrate that they fell within the commercial-speech exemption. See Better Bus. Bureau of Metro. Houston, Inc. v. John Moore Servs., Inc., 441 S.W.3d 345, 350-51 (Tex. App.—Houston [1st Dist.] 2013 pet. denied) (BBB I). We reversed the trial court's order and remanded the case to the trial court for further proceedings to determine sanctions and attorney's fees.See id.
During the pendency of the BBB I interlocutory appeal, John Moore attempted to amend its petition. When that pleading was struck by the trial court, John Moore filed a second lawsuit adding the parties and claims it attempted to add in its amended pleading. These facts are set forth in more detail in Better Bus. Bureau of Metro. Houston, Inc. v. John Moore Servs., Inc., No. 01-14-00687-CV, the interlocutory appeal taken from that second lawsuit. As we explain later in this opinion, although John Moore attempted to consolidate the cases, it never obtained a ruling on its motion. Therefore we dispose of the interlocutory appeal from the second suit, No. 01-14-00687-CV, separately.
At trial, the Bureau sought $375,000 in attorney's fees. The Bureau's evidence included a biography and resume of lead attorney Jeffrey R. Elkin from the website of his law firm, Porter & Hedges, as well as Elkin's affidavit, which was prepared in anticipation of a nonjury hearing on attorney's fees. The affidavit explained in detail the basis for the Bureau's attorney's fees. It listed the hourly billing rates for the attorneys who worked on the case, asserted that the rates were comparable to rates charged by similarly situated lawyers in Harris County, Texas for similar work, elaborated on the type and nature of the work done on behalf of the Bureau, tabulated the attorney's fees accrued on a monthly basis, transmitted the actual billing invoices, summarized the costs and expenses sought, and estimated the attorney's fees that would be accrued in the event of an appeal. In the affidavit, Elkin averred that the fees sought were reasonable in light of the factors set forth by the Supreme Court in Arthur Anderson & Co. v. Perry Equipment Corp., 945 S.W.2d 812 (Tex. 1997).
The actual billing invoices showed the name and address of the client (the Bureau), the matter name, the date of the service rendered, the initials of the person completing the service, a description of the work that was done, and the time spent to the nearest one-tenth of an hour. Some entries were included exactly as sent to the Bureau for payment. For example, an entry from June 29, 2012, attributed to "JRE" (Jeffrey R. Elkin), stated that he spent 1.00 hour doing the following task: "Outline issues for motion to dismiss Petition under CPRC section 27.001." Other entries were partially redacted. For example, on July 31, 2012, Elkin spent 3.50 hours doing the following task: "Background research regarding [redacted] cases involving motions to dismiss under Chapter 27; draft outline of issues for motion to dismiss." Yet other entries were heavily redacted. For example, on August 21, 2012, "MHS", an associate attorney, spent 0.20 hours on the following task: "Meet with J. Elkin to discuss [redacted]; email K. Cross regarding same."
The court also admitted into evidence several summaries prepared by the Bureau to help the jury understand the voluminous records. These exhibits summarized: (1) the court costs and expenses by date; (2) the billing records by month, showing the total attorney hours billed and the total attorney's fees billed; (3) the billing records by activity (such as: motion to dismiss, interlocutory appeal, written discovery, mediation), showing the attorney's name, hours spent, and fees billed; (4) billing records by timekeeper, showing attorney's name, title, years of experience, hourly rate by year, total hours spent, and total fees billed; and (5) the major pleadings, hearings, and discovery records by date of service, showing the number of pages in the documents and attached exhibits.
In addition to the documentary evidence, Elkin testified at trial. His testimony spans approximately 155 pages of the record. He testified that the billing invoices were redacted for the purpose of trial, to protect confidentiality, attorney-client privilege, and attorney work-product privilege, because the documents would become public records and he believed that failing to redact the invoices would be malpractice. Elkin emphasized that the invoices sent to the Bureau were unredacted.
Elkin explained that he reviewed billing invoices before sending them to the Bureau, and he testified that he would adjust the bills to reduce the hours or total fees billed when he felt that an attorney had spent too much time on a particular task. He testified about his experience and expertise, and he opined that the hourly rates charged for each attorney's work and the overall attorney's fees were reasonable. Elkin also testified that for the purpose of recovering attorney's fees at trial, he had reduced the bills further by eliminating any charges for work done by paralegals or inexperienced young associate attorneys. Finally, the total amount sought, $375,000, did not include any fees incurred for recovering attorney's fees.
Elkin testified that the manner in which the tasks were entered in the invoices changed during the course of the litigation because the firm changed its billing software. However, he also testified that there was nothing improper about "block" billing, the practice of including multiple tasks in one billing description with a total amount of time spent.
Elkin testified that the case, particularly the first interlocutory appeal, was both difficult and novel because the dispute concerned a new statute with little recorded case law interpreting it. The amount of money at risk in the lawsuit was between $10 million and $20 million. Elkin testified that the firm obtained favorable results for the Bureau, which had been a longstanding client of his since at least 1994. He testified that the attorney's fees were computed by multiplying the total hours worked by the hourly rate for the attorney, and he testified that $375,000 was a reasonable fee for the services provided to the Bureau. Elkin testified that in addition to seeking $375,000 in attorney's fees that had already been incurred, the Bureau also sought an additional $155,000 in conditional appellate attorney's fees, plus court costs and expenses.
On cross-examination, John Moore's attorney questioned Elkin about the redacted details of the billing invoices, the amount of time billed for specific tasks, whether the attorneys worked efficiently, and whether some of the tasks could have been done by administrative staff or were duplicative of work done by other attorneys. In addition, Lori Hood, John Moore's attorney, testified that the amount of attorney's fees requested was "highly unreasonable." Based on her review of the billing records, she believed that the attorneys and overall staffing of the case were inefficient, and the redactions in the invoices made it difficult or impossible to determine how much time an attorney billed to a particular task, what the task involved, or how the task contributed to the litigation. She also testified that hourly rates for attorneys with similar levels of experience in the area were lower than what was billed by the Bureau's lawyers.
The jury was asked only one question: "What is a reasonable fee for the necessary services of Houston BBB's attorneys in defending against John Moore's legal action, stated in dollars and cents?" The jury verdict awarded the Bureau approximately $250,000 in attorney's fees. This included $106,369 for representation in the trial court before and during the original interlocutory appeal, $81,360 for representation in the court of appeals for the original interlocutory appeal, $37,982 for representation at the petition-for-review stage to the Supreme Court of Texas for the original interlocutory appeal, and $24,289 for representation in the trial court after the original interlocutory appeal was decided. The jury did not award any contingent fees for subsequent appeal.
The trial court entered a final judgment dismissing John Moore's claims, awarding attorney's fees in accordance with the jury's verdict, and assessing $6,000 in sanctions. John Moore filed a motion for new trial and motion to modify the judgment, arguing that the evidence was insufficient to support the jury's verdict and the court's award of attorney's fees, and that the sanctions awarded by the court were not appropriate. After the motions for new trial and to modify the judgment were overruled by operation of law, John Moore appealed.
Analysis
In two issues, John Moore challenges the legal sufficiency of the evidence to support the award of attorney's fees and the trial court's failure to consolidate the underlying case with a second, parallel lawsuit that John Moore filed during the pendency of the interlocutory appeal.
I. Attorney's fees
In its first issue, John Moore contends that the Bureau's invoices for legal fees were so significantly redacted as to be legally insufficient to support the award. We review this issue under the usual standard for legal sufficiency review, and we determine whether the evidence "would enable reasonable and fair-minded people to reach the verdict under review." City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005). We consider all of the evidence in a light most favorable to the jury's verdict, crediting the evidence that favors the finding if a reasonable factfinder could, and disregarding evidence contrary to the challenged finding unless a reasonable factfinder could not. Id. at 822, 827. We may not sustain a legal sufficiency, or "no evidence," point unless the record demonstrates: (1) a complete absence of a vital fact; (2) the court is barred by rules of law or of evidence from giving weight to the only evidence offered to prove a vital fact; (3) the evidence offered to prove a vital fact is no more than a mere scintilla; or (4) the evidence conclusively establishes the opposite of the vital fact. Id. at 810.
John Moore's brief includes a single reference to the sufficiency of the evidence to support the trial court's award of sanctions. To the extent that John Moore intended to challenge the sanctions award, that issue is waived by inadequate briefing. See TEX. R. APP. P. 38.1. --------
Section 27.009(a)(1) directs a trial court to award reasonable attorney's fees to a party whose motion to dismiss under the TCPA has been granted. TEX. CIV. PRAC. & REM. CODE §§ 27.009. The amount and reasonableness of statutory attorney's fees is a question of fact. Sentinel Integrity Sols., Inc. v. Mistras Grp., Inc., 414 S.W.3d 911, 927-28 (Tex. App.—Houston [1st Dist.] 2013, pet. denied) (citing Garcia v. Gomez, 319 S.W.3d 638, 642 (Tex. 2010), and Bocquet v. Herring, 972 S.W.2d 19, 21 (Tex. 1998)). The party seeking attorney's fees has the burden of proof on the amount and reasonableness of the fees sought. El Apple I, Ltd. v. Olivas, 370 S.W.3d 757, 762-63 (Tex. 2012).
The lodestar method is a technique for calculating reasonable attorney's fees by multiplying "the reasonable hours spent by counsel in the case" by the applicable "reasonable hourly rate for such work." Id. at 760. "[G]eneralities about tasks performed provide insufficient information for the fact finder to meaningfully review whether the tasks and hours were reasonable and necessary under the lodestar method." Long v. Griffin, 442 S.W.3d 253, 255 (Tex. 2014). A party seeking to recover attorney's fees using the lodestar method should include proof of "(1) the nature of the work, (2) who performed the services and their rate, (3) approximately when the services were performed, and (4) the number of hours worked." El Apple, 370 S.W.3d at 763. Evidence of the aggregate hours worked and the attorney's hourly rate is legally insufficient to support a lodestar calculation when it is not accompanied by evidence of the time the attorney spent on specific tasks. See Long, 442 S.W.3d at 255; El Apple, 370 S.W.3d at 763. Evidence of general legal tasks performed, such as an affidavit averring that the case "involved extensive discovery, several pretrial hearings, multiple summary judgment motions," Long, 442 S.W.3d at 255, or reference to "generalities such as the amount of discovery in the case, the number of pleadings filed, the number of witnesses questioned, and the length of trial," El Apple, 370 S.W.3d at 763, also may be insufficient due to lack of specificity.
In addition, a party seeking attorney's fees should introduce evidence that the fees sought are reasonable. See Garcia, 319 S.W.3d at 642. "A reasonable fee is one that is not excessive or extreme, but rather moderate or fair." Id. A factfinder may consider the following factors when determining whether a requested fee is reasonable:
(1) the time and labor required, the novelty and difficulty of the questions involved, and the skill required to perform the legal service properly;Arthur Andersen & Co. v. Perry Equip. Corp., 945 S.W.2d 812, 818 (Tex. 1997) (citing Tex. Disciplinary Rules Prof'l Conduct R. 1.04, reprinted in TEX. GOV'T CODE, tit. 2, subtit. G app. A (Tex. State Bar Rules, art. X, § 9)).
(2) the likelihood . . . that the acceptance of the particular employment will preclude other employment by the lawyer;
(3) the fee customarily charged in the locality for similar legal services;
(4) the amount involved and the results obtained;
(5) the time limitations imposed by the client or by the circumstances;
(6) the nature and length of the professional relationship with the client;
(7) the experience, reputation, and ability of the lawyer or lawyers performing the services; and
(8) whether the fee is fixed or contingent on results obtained or uncertainty of collection before the legal services have been rendered.
John Moore argues that the evidence is legally insufficient by considering isolated pieces of evidence individually and concluding that each is legally insufficient to support the associated part of the fees. For example, John Moore argues that the invoices are legally inadequate because some of the particular entries are redacted to such an extent that it is difficult to determine what tasks were performed. John Moore quotes seven entries from five days, asserts that this is representative of the entirety of the billing records, and uses this as the basis for its argument that the invoices are insufficient for failing to identify which tasks were performed. However, many of the entries on the billing invoices were not so heavily redacted as to obscure the tasks that were performed.
In Long v. Griffin, 442 S.W.3d 253 (Tex. 2014), the Supreme Court held that the evidence was legally insufficient because there was no evidence of specific tasks accomplished by the attorneys. Long, 442 S.W.3d at 255. The affidavit in Long stated the aggregate hours spent by each attorney and the attorney's respective hourly rates. Id. And though the affidavit included general categories of legal work, such as "extensive discovery," "no evidence accompanied the affidavit to inform the trial court [of] the time spent on specific tasks." Id. Here the numerous unredacted entries in the billing records provide some evidence to inform the factfinder of how much time the attorneys spent on specific tasks. In addition, the Bureau did not rely solely on the redacted billing records, but it introduced other supporting evidence, including Elkin's testimony and the numerous exhibits prepared to show the jury how the attorneys' time was spent in furtherance of the litigation.
In Sentinel Integrity Solutions, Inc. v. Mistras Group, Inc., 414 S.W.3d 911 (Tex. App.—Houston [1st Dist.] 2013, pet. denied), this court considered whether an award of attorney's fees was supported by evidence that included redacted bills. Sentinel Integrity Sols., 414 S.W.3d at 928-29. The summary of attorney's fees presented in that case showed a total amount of fees of $834,750. Id. at 928. That total amount was supported by redacted bills, as well as testimony from the attorney which "expounded upon the billings admitted into the record." Id. at 929. The attorney also testified that he was familiar and experienced with similar litigation and rates charged locally, and as such, he believed that the attorney's fees request was reasonable and necessary. Id. His testimony detailed the work done on the case, including the various hearings, pleadings, motions, discovery, interlocutory appeal, and arbitration. Id. Considering the evidence together, this court found it legally sufficient to support the jury's award of $750,000 in attorney's fees. Id.
This case is similar to Sentinel. The Bureau introduced redacted, contemporaneous billing records that showed what services were performed, the amount of time spent, the person who performed the services, and the dates the services were performed. Elkin testified at trial and averred in his affidavit what the hourly billing rates were for each attorney involved in providing services to the Bureau. In addition, Elkin testified that he was familiar and experienced with hourly fees charged for legal services in similar litigation in Harris County. Based on that expertise, he opined that the hourly rates charged in this case were reasonable. His testimony and documentary evidence admitted at trial expounded on the evidence in the redacted billing records and detailed the work done on the case, including the motion to dismiss, discovery, interlocutory appeal, enforcement of a stay, and mediation. As such, the evidence is legally sufficient to support the attorney's fees award in this case as well.
John Moore also argues that the practice of "block billing" prevented it from ascertaining how much time was spent on a particular task. It asserts that this was "precisely the problem that the Supreme Court noted in El Apple." We disagree because we find this case factually distinguishable from El Apple, in which there was far less evidence of attorney's fees, and it was presented in a far more summary fashion. In El Apple, the affidavit in support of the application for attorney's fees included the aggregate number of hours worked by each of two attorneys, 700 hours and 190 hours. El Apple, 370 S.W.3d at 759. Unlike the attorneys for the Bureau, the Supreme Court explained that the attorneys who sought fees in El Apple did not attach any evidence to their affidavit:
In this case, neither attorney indicated how the 890 hours they spent in the aggregate were devoted to any particular task or category of tasks. Neither attorney presented time records or other documentary evidence. Nor did they testify based on their recollection of such records. The attorneys instead based their time estimates on generalities such as the amount of discovery in the case, the number of pleadings filed, the number of witnesses questioned, and the length of the trial. While all this is relevant, it provides none of the specificity needed for the trial court to make a meaningful lodestar determination. The court could not discern from the evidence how many hours each of the tasks required and whether that time was reasonable. Without at least some indication of the time spent on various parts of the case, a court has little basis upon which to conduct a meaningful review of the fee award.Id. at 763.
In this case, the Bureau's attorneys presented contemporaneous time records and other documentary evidence in support of its request and as a basis for Elkin's testimony. Elkin testified that he reviewed the unredacted records and that his testimony was based on his recollection of them. The time records and summaries detailed the nature of the work done, identified the attorney who completed the work, recalled when the work was done, and documented the amount of time spent doing the work. Moreover, the jury as factfinder was entitled to consider the redactions when making its determination of a reasonable amount of attorneys' fees. The jury's verdict was for approximately $250,000 in attorneys' fees, which is approximately two-thirds of the amount requested by the Bureau.
John Moore further argues that the block-billing descriptions render the evidence here insufficient for the same reasons that the evidence of attorney's fees was insufficient in City of Laredo v. Montano, 414 S.W.3d 731 (Tex. 2013). In that case, the attorney estimated that he spent six hours per week for 226 weeks working on the case, for an aggregate of 1,356 hours. Montano, 414 S.W.3d at 736. The record in that case provided "no clue" as to how the attorney "came to conclude that six hours a week was a 'conservative' estimate of his time in the case." Id. The Supreme Court expressed its further "puzzlement" at the fact that the attorney made no record of his time, prepared no bills or invoices for the client, and "offered nothing to document his time in the case other than the 'thousands and thousands and thousands of pages'" of documents generated during the course of litigation. Id. The Court also found that the attorney's general testimony "that he spent 'a lot of time getting ready for the lawsuit,' conducted 'a lot of legal research,' visited the premises 'many, many, many, many times,' and spent 'countless' hours on motions and depositions" was "not evidence of a reasonable attorney's fee." Id.
The block-billing technique used in some of the time entries in the billing invoices in this case is distinguishable from the aggregate and conclusory time estimates provided in Montano. The block-billing entries here describe the work that was done, specify the date the work was done, provide the total amount of time spent accomplishing the tasks, and identify the person who did the work.
Finally, John Moore argues that Elkin's testimony was legally insufficient because his opinion that the total amount of attorney's fees requested was reasonable was a bare, baseless, unsupported conclusion, no more than the ipse dixit of an expert.
Expert testimony must be both relevant and reliable, and the expert must be qualified. Whirlpool Corp. v. Camacho, 298 S.W.3d 631, 637 (Tex. 2009); Gammill v. Jack Williams Chevrolet, Inc., 972 S.W.2d 713, 727 (Tex. 1998). Expert testimony is relevant when it assists the fact finder in determining an issue or in understanding other evidence. See TEX. R. EVID. 702; TXI Transp. Co. v. Hughes, 306 S.W.3d 230, 234 (Tex.2010). "Expert opinions must be supported by facts in evidence, not conjecture." Marathon Corp. v. Pitzner, 106 S.W.3d 724, 729 (Tex. 2003) (citing Burroughs Wellcome Co. v. Crye, 907 S.W.2d 497, 499-500 (Tex. 1995)). "[I]t is the basis of the witness's opinion, and not the witness's qualifications or his bare opinions alone, that can settle an issue as a matter of law; a claim will not stand or fall on the mere ipse dixit of a credentialed witness." Burrow v. Arce, 997 S.W.2d 229, 235 (Tex. 1999). "[I]f no basis for the opinion is offered, or the basis offered provides no support, the opinion is merely a conclusory statement and cannot be considered probative evidence." City of San Antonio v. Pollock, 284 S.W.3d 809, 818 (Tex. 2009).
Elkin testified based on his recollection of the unredacted billing records, but he also testified about the novelty and difficulty of the case, particularly the interlocutory appeal, the amount of money potentially at risk, and the favorable results achieved for his client. In addition, he testified about the voluminous discovery requests and responses, the expertise of the attorneys who worked on the case, the manner in which he had reduced the request of fees due regarding work performed by inexperienced associate attorneys or paralegals, and the various tasks and phases of litigation encompassed by the work for which the Bureau sought reimbursement of its legal fees. Contrary to John Moore's assertion, Elkin's opinion that the requested fees were reasonable was supported by both his detailed testimony and the documentary evidence introduced at trial.
Having concluded that the evidence in this case is legally sufficient to support the jury's verdict and the court's award, we overrule John Moore's first issue.
II. Consolidation of cases
In its second issue, John Moore argues that a new trial should be ordered to enable a factfinder to consider the Bureau's overall success in light of both the underlying case and the parallel case that it filed during the pendency of the first interlocutory appeal. The arguments center on John Moore's motion to consolidate the cases and its presumption that it will prevail on its antitrust claims in the parallel case.
John Moore filed its "Plaintiffs' Motion to Consolidate and Response to Defendant's Motion for Entry of Judgment and for Award of Court Costs, Expenses, and Sanctions and Plaintiffs' Motion to Disregard the Findings of the Jury in Part" on August 7, 2014. That same day, John Moore also sent a notice of hearing, setting the motion to consolidate and motion to disregard the findings of the jury in part for a hearing to be held the following day, August 8, 2014 at 11:00 am. The Bureau objected that the notice of hearing was untimely under Rule 21 of the Texas Rules of Civil Procedure, which requires three days' notice of a hearing on a motion. See TEX. R. CIV. P. 21(b). The trial court sustained the objection and entered final judgment, implicitly denying the motion to consolidate.
Under Rule 21 of the Texas Rules of Civil Procedure, a motion and notice of hearing must be served on all other parties "not less than three days before the time specified for the hearing." TEX. R. CIV. P. 21(b). John Moore's motion to consolidate and the notice of hearing on it were served the day before the time specified for the hearing. At the hearing, the Bureau objected that the motion was untimely because it was served the prior afternoon, less than 24 hours before the hearing. Because the motion and notice of hearing were untimely, the court properly sustained the Bureau's motion. See id.
In addition, the motion was also untimely relative to the course of litigation. Under Rule 41 of the Texas Rules of Civil Procedure, "suits filed separately may be consolidated" "at any stage of the action, before the time of submission to the jury or to the court if trial is without a jury, on such terms as are just." TEX. R. CIV. P. 41. John Moore sought to consolidate its claims from the parallel case, including antitrust claims, with its claims in the underlying case. However, it did not promptly file its motion. Rather, the motion to consolidate was filed more than a year after this court's judgment issued in the interlocutory appeal, in which we determined that the claims in this case should be dismissed under the TCPA. It was also four months after our mandate issued, following the Supreme Court's denial of John Moore's petition for review. Most significantly, the motion to consolidate was not filed until after the trial court held both the hearing on the motion to dismiss in the parallel case and the trial on attorney's fees in this case. At the time John Moore urged its motion, this court already had ruled on the merits of the underlying case and a jury already had returned a verdict as to attorney's fees. The motion does not explain the reason for this delay in seeking the requested relief. Under our procedural rules, John Moore's motion was simply too late. See id. "If a consolidation was desired, it should have been made before the trial . . . it came too late—after the trial—there being no good reason why it was not urged sooner." Needham Piano & Organ Co. v. Hollingsworth, 40 S.W. 750, 753 (Tex. Civ. App. 1897), aff'd, 91 Tex. 49, 40 S.W. 787 (1897).
We overrule John Moore's second issue.
Conclusion
We affirm the trial court's judgment.
Michael Massengale
Justice Panel consists of Justices Keyes, Bland, and Massengale.