Opinion
NO. 01-20-00078-CV
03-23-2021
KEYWORDVALET, LLC, Appellant v. PARTS BASE, INC., Appellee
On Appeal from the 98th District Court Travis County, Texas
Trial Court Case No. D-1-GN-17-005421
The Texas Supreme Court transferred this appeal to this Court from the Court of Appeals for the Third District of Texas. See TEX. GOV'T CODE § 73.001 (authorizing transfer of cases between courts of appeals).
MEMORANDUM OPINION
Appellant, KeywordValet, LLC ("Keyword"), sued appellee, Parts Base, Inc. ("PB"), for breach of two marketing-services contracts. After a bench trial, the trial court rendered judgment in favor of Keyword on its claims. In two issues, Keyword contends that the evidence is factually insufficient to support the trial court's award of damages and that the trial court erred in awarding attorney's fees.
We reverse and remand.
Background
PB is an online retailer selling wristwatches under the assumed name: "Certified Luxury Watches." Keyword is an internet marketing company. In January 2017, PB retained Keyword to provide Search Engine Marketing ("SEM") services pertaining to PB's website watchwepaymore.com. Pursuant to the parties' first Master Services Agreement ("MSA1"), "Statement of Work," Keyword agreed to provide:
• Development of search engine marketing strategy
• Development and management of keyword libraries
• Creation of Google Ad words account
• MSN/Bing Adcenter account creation when ready for expansion beyond Google
• Testing and development of ad copy
• Establishment and management of keyword bidding process
• Optimization of Return On Ad Spend (ROAS)
• Provision of status reports and campaign metrics
• Help with installing Google Analytics (if not using already) and Google Adwords conversion counter
• Set up of daily and weekly reports from MSN/Bing and Google if wanted
The Statement of Work provided that its term was from January 16, 2017 to April 30, 2017. Thereafter, the agreement automatically renewed for an additional six-month term, unless either party gave 30 days' notice of termination. Further, PB agreed to pay Keyword a prorated fee of $1,500.00 for the month of January and a fee of $3,000.00 per month thereafter, payable on the first of each month.
The general terms of MSA1 stated, in pertinent part, as follows:
SCOPE OF SERVICES
[Keyword] shall provide certain consulting services to [PB] as set forth in the accompanying . . . ("Statement of Work"). . . . Each Statement of Work shall be deemed to constitute a separate work project under this Agreement. No modification may be made to any Statement of Work without the written consent of the parties. To permit the services to be performed in accordance with the Statement of Work, [PB] shall timely perform all of its obligations set forth herein and in the Statement of Work, including, but not limited to, providing [Keyword] with access to all hardware, software, Client employees, books, records and facilities, and making reasonable efforts to facilitate completion of the Statement of Work.
. . . .
PAYMENT
[PB] agrees to pay to [Keyword] the fees and charges set forth in the Statement of Work . . . . [Keyword] shall have no obligation to deliver the final deliverables, prior to full payment of all outstanding invoices or as otherwise set forth in the Statement of Work. . . .
. . . .
LIMITED WARRANTY
[Keyword] warrants that it will utilize its best efforts to perform the services set forth in the Statement of Work . . . .
. . . .
BREACH AND TERMINATION
If [PB] breaches any term of this Agreement or of any term contained in the Statement of Work, or fails to pay any valid invoice rendered by [Keyword] or other amounts due to [Keyword], [Keyword] shall have the right to terminate this Agreement immediately as well as all Statements of Work then in process and, in addition to all other rights of [Keyword], all amounts which would have become due and payable under this Agreement including any Statement of Work will immediately become due and payable to [Keyword]. . . . In the event [PB] terminates this Agreement prior to the end of the term as set forth in the Statement of Work, [PB] shall pay to [Keyword] all amounts then due and owing through the date of termination and shall also pay to [Keyword] all amounts that [Keyword] would have been entitled to had this Agreement been fully performed in accordance with its terms.
. . . .
NOTICES
All notices pursuant to this Agreement shall be sent by certified mail, postage prepaid to the address of a party set forth above, and shall be deemed to have been given three business days after posting unless earlier received by the other party through an alternative method.
In April 2017, PB decided to discontinue its website, watchwepaymore.com, and it determined that it no longer needed Keyword's services. It is undisputed that PB did not pay Keyword its $3,000.00 fee for the final month of the term, April 2017. It is also undisputed that PB terminated MSA1.
In May 2017, Keyword agreed to provide SEM services pertaining to another PB website: certifiedluxurywatches.com. Keyword and PB entered into a second Master Services Agreement ("MSA2"). The MSA2 Statement of Work provided that the term was from May 23, 2017 to August 31, 2017. Thereafter, the agreement was to "automatically renew for an additional 6 month term unless 30 days' notice [was] given." PB agreed to pay Keyword a prorated fee of $800.00 for the month of May and a fee of $3,000.00 per month thereafter, payable on the first of each month. The general terms of MSA2, including the services in the Statement of Work, were substantively identical to those in MSA1.
Subsequently, as discussed below, a dispute ensued. It is undisputed that PB did not pay Keyword its $3,000.00 fee for each of the final two months of the term of MSA2, July and August 2017. PB asserted that it stopped paying as agreed after Keyword breached the contract by failing to perform the services as agreed. Keyword contended that it performed all of the services as agreed. The parties also disputed whether PB terminated MSA2 or it automatically renewed under its terms.
In September 2017, Keyword sued PB for breach of contract, seeking to recover the unpaid monthly fees under both MSA1 and MSA2, and for unjust enrichment. In its petition, Keyword alleged that the parties entered into two valid contracts, namely, MSA1 and MSA2, pursuant to which Keyword agreed to provide SEM services to PB in exchange for compensation. Keyword alleged that PB breached MSA1 by failing to pay as agreed for the final month of the term, i.e., $3,000.00 fee for April 2017. And, PB breached MSA2 by failing to pay as agreed for the final two months of the term, i.e., $3,000.00 fee for each of July and August 2017. Keyword further alleged that, because PB did not timely terminate MSA2, the agreement automatically renewed for a six-month term at $3,000.00 per month. In sum, Keyword sought damages in the amount of $3,000.00 for the breach of MSA1, $24,000.00 for the breach of MSA2, and attorney's fees.
PB answered and asserted various affirmative defenses, including prior material breach. PB asserted that its breach was excused by Keyword having failed to fully perform its services as agreed. PB also asserted a counterclaim, alleging that Keyword breached MSA2 by failing to perform all of its services.
At trial, the president of PB, Anthony J. Rinaldi, admitted that PB had entered into MSA1, that Keyword had performed the services in accordance with its terms, and that PB had failed to pay the $3,000.00 fee due for the month of April 2017. Rinaldi testified that PB's website, watchmepaymore.com, was simply not "working," in that the "site itself was inadequate," and PB decided to close it down. Because it no longer needed Keyword's services, Rinaldi called Keyword's president, Dan Brotman, and terminated MSA1.
Rinaldi further testified that, in May 2017, PB and Keyword entered into MSA2, pertaining to PB's website: certifiedluxurywatches.com. Rinaldi admitted that PB did not pay Keyword the fees due under MSA2 for the final two months of the term. Rinaldi testified that PB did not pay as agreed because Keyword did not render services as agreed. He testified that, of the ten services listed in the MSA2 Statement of Work, Keyword performed "[e]very single one of them . . . with the exception of Optimization of Return on Ad Spend." With respect to that point, he asserted, Keyword simply provided raw data and did not provide advice leading to a reduction in costs. He noted, however, that "[i]t was attempted to be performed." He complained that Keyword utilized a "shotgun" marketing approach that simply created "clicks" on broadly worded ads that failed to target appropriate customers, and Keyword refused to utilize the name "Rolex" in its advertising campaign to more specifically target customers. PB presented, and the trial court admitted into evidence, a string of emails between PB and Keyword, dated June 2017, reflecting that the parties were working together to resolve technical issues related to PB's attempted use of a "Rolex" image in its ad campaign. Keyword presented, and the trial court admitted into evidence, a letter from Rolex Watch U.S.A., Inc., refusing PB's request to use its federally registered trademarks, which Rinaldi acknowledged in his testimony.
Rinaldi further testified that, on either June 29 or July 1, 2017, he called Brotman and terminated MSA2. And, thereafter, PB brought its online marketing in-house and stopped communicating with Keyword. In support, Rinaldi presented an email from Brotman, dated June 29, 2017, stating:
I have just been in the account and I see that you have granted access to another agency. . . . With regards to the mobile campaign, I can take
your current strategy as far as it goes. I respect you and your business plan and I have a multitude of ideas that can help your organization. Stick with a pro and we will both benefit.Rinaldi admitted that, pursuant to the terms of MSA2, PB remained liable for the fees due under the term set forth in the Statement of Work despite PB's termination.
Brotman admitted that PB timely terminated the earlier contract, MSA1, noting that Rinaldi called in April 2017 and said that PB was closing its website and no longer needed Keyword's services. Brotman testified, however, that PB did not pay Keyword the $3,000.00 fee owed for April. Subsequently, PB retained Keyword's services for a new website, and the parties executed MSA2. Brotman testified that Keyword performed all of the services listed in the Statement of Work, including "Optimization of Return on Ad Spend." He developed keywords and tried to "optimize Ad Spend through increasing conversion rate, giving advice on landing pages, ad copy, [and] managing the cost per click." He noted, "Optimization is kind of a generic term that says, 'I'm going to do my best to make sure that the account is performing to the best of my abilities,' which is what I did." And, the "only problem was that it's not really under my control whether they make sales or not."
Brotman further testified that PB failed to pay the fees due under MSA2 for the final two months of its term, i.e., July and August 2017. In addition, PB did not terminate MSA2 in accordance with its terms and thus, upon its expiration on August 31, 2017, the agreement automatically renewed for an additional six-month term. Brotman explained that, because PB stopped paying the monthly fee in July 2017, Keyword ceased performing most services thereafter, as authorized under the terms of MSA2. Brotman testified that he monitored PB's website until November 2017, when Google denied him further access to PB's account.
In its final judgment, the trial court stated: "After consideration of the evidence and the arguments of the Parties, the Court finds in favor of [Keyword]." It awarded Keyword "the sum of $3,000.00 in actual damages for breach of contract; $1,000.00 in reasonable and necessary attorney's fees; $1,372.93 in prejudgment interest; and $1,552.50 in costs of court." It ordered that all other relief not granted was denied and that PB take nothing on its counterclaim.
Keyword filed a motion for new trial, asserting that the trial court's award of damages was against the great weight and preponderance of the evidence and that the amount of attorney's fees awarded was arbitrary. Keyword's motion for new trial was denied by operation of law.
Sufficiency of the Evidence to Support Damages
In its first issue, Keyword argues that the evidence is factually insufficient to support the trial court's award of only $3,000.00 in damages on Keyword's claims for breach of MSA1 and MSA2 because Keyword presented evidence of damages totaling $27,000.00.
A. Standard of Review
In a nonjury trial, when no findings of fact or conclusions of law are filed, as here, we imply that the trial court made all necessary findings to support its judgment. See Pharo v. Chambers Cty., 922 S.W.2d 945, 948 (Tex. 1996). When a reporter's record is filed, as here, the implied findings are not conclusive, and a party may challenge the sufficiency of the evidence supporting those findings. See BMC Software Belg., N. V. v. Marchand, 83 S.W.3d 789, 795 (Tex. 2002); Zenner v. Lone Star Striping & Paving L.L.C., 371 S.W.3d 311, 314 (Tex. App.—Houston [1st Dist.] 2012, pet. denied). The applicable standard of review is the same as those applied to review jury findings. Roberson v. Robinson, 768 S.W.2d 280, 281 (Tex. 1989). The trial court's judgment must be affirmed if it can be upheld on any legal theory finding support in the evidence. Worford v. Stamper, 801 S.W.2d 108, 109 (Tex. 1990).
When a party challenges the factual sufficiency of an adverse finding on an issue on which it had the burden of proof, it must demonstrate on appeal that the adverse finding is against the great weight and preponderance of the evidence. Dow Chem. Co. v. Francis, 46 S.W.3d 237, 242 (Tex. 2001). We review all of the evidence in a neutral light and will reverse only if the evidence supporting the finding is so contrary to the overwhelming weight of the evidence as to make the judgment manifestly unjust. Id.
In a bench trial, the trial court determines the credibility of the witnesses and the weight to be given their testimony. See Zenner, 371 S.W.3d at 314; see also City of Keller v. Wilson, 168 S.W.3d 802, 819 (Tex. 2005). The trial court may believe one witness and disbelieve others, and it may resolve any inconsistencies in a witness's testimony. McGalliard v. Kuhlmann, 722 S.W.2d 694, 697 (Tex. 1986); Zenner, 371 S.W.3d at 314. In making credibility determinations, the fact-finder "cannot ignore undisputed testimony that is clear, positive, direct, otherwise credible, free from contradictions and inconsistencies, and could have been readily controverted." City of Keller, 168 S.W.3d at 820. Further, the fact-finder is not "free to believe testimony that is conclusively negated by undisputed facts." Id.
In reviewing the factual sufficiency of a damages award, we examine and consider all the evidence that bears on the challenged category of damages. Golden Eagle Archery, Inc. v. Jackson, 116 S.W.3d 757, 773 (Tex. 2003). The fact-finder generally has discretion to award damages within the range of evidence presented at trial. Gulf States Utils., Co. v. Low, 79 S.W.3d 561, 566 (Tex. 2002). It may not, however, "arbitrarily assess an amount neither authorized nor supported by the evidence presented at trial." First State Bank v. Keilman, 851 S.W.2d 914, 930 (Tex. App.—Austin 1993, writ denied). A rational basis for the calculation must exist. Id.
This case also requires us to construe contractual provisions. In construing a written contract, a court must ascertain and give effect to the intentions of the parties as expressed in the writing itself. Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am., 341 S.W.3d 323, 333 (Tex. 2011). We give contract terms their plain, ordinary, and generally accepted meanings unless the contract itself shows them to be used in a technical or different sense. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 662 (Tex. 2005). We examine and consider the entire writing in an effort to harmonize and give effect to all the contract's provisions so that none will be rendered meaningless. Italian Cowboy Partners, 341 S.W.3d at 333. If, after applying the pertinent contract construction rules, the contract can be given a certain or definite legal meaning or interpretation, then it is not ambiguous, and we will construe the contract as a matter of law. Id. If a contract "is subject to two or more reasonable interpretations after applying the pertinent rules of construction, the contract is ambiguous, creating a fact issue on the parties' intent." J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003). Only if a contract is ambiguous may we consider the parties' interpretation and consider extraneous evidence. Italian Cowboy Partners, 341 S.W.3d at 333-34.
B. Analysis
To prevail on a breach-of-contract claim, a plaintiff must establish (1) that a valid contract existed between the parties; (2) that the plaintiff performed or tendered performance of his obligations, or that his performance was excused; (3) that the defendant breached the terms of the contract; and (4) that the plaintiff sustained damages as a result of the breach. AMS Const. Co. v. K.H.K. Scaffolding Hous., Inc., 357 S.W.3d 30, 41 (Tex. App.—Houston [1st Dist.] 2011, pet. dism'd). "The normal measure of damages in a breach-of-contract case is the benefit-of-the-bargain measure, the purpose of which is to restore the injured party to the economic position it would have been in had the contract been performed." Yazdani-Beioky v. Sharifan, 550 S.W.3d 808, 828 (Tex. App.—Houston [14th Dist.] 2018, pet. denied).
Here, as PB states in its brief, Keyword "asked the Court to find that [PB] breached two contracts, MSA1 and MSA2." Keyword sought damages of $3,000.00 for PB's breach of MSA1 and $24,000.00 for PB's breach of MSA2. In its final judgment, the trial court stated: "After consideration of the evidence and the arguments of the Parties, the Court finds in favor of [Keyword]." The trial court awarded Keyword "the sum of $3,000.00 in actual damages for breach of contract."
PB did not appeal this ruling. --------
With respect to MSA1, the Statement of Work provided that its term was from January 16, 2017 to April 30, 2017. And, PB agreed to pay Keyword a prorated fee of $1,500.00 for the month of January and a fee of $3,000.00 per month, on the first of each month, thereafter. It is undisputed that PB breached MSA1 by failing to pay as agreed. See AMS Const., 357 S.W.3d at 41. Namely, PB failed to pay Keyword its fee for the final month of the term, i.e., $3,000.00 for April 2017. Further, it is undisputed that PB terminated MSA1. Thus, for PB's breach of MSA1, the trial court could have reasonably concluded that Keyword sustained actual damages in the amount of $3,000.00.
With respect to MSA2, the Statement of Work provided that its term was from May 23, 2017 to August 31, 2017. And, PB agreed to pay a prorated fee of $800.00 for the month of May and a fee of $3,000.00 per month, on the first of each month, thereafter. It is undisputed that PB breached MSA2 by failing or refusing to pay as agreed. See id. Namely, PB did not pay Keyword the final two months of the term, i.e., $3,000.00 for each of July and August 2017, or $6,000.00. Keyword asserts that the trial court failed to award it these additional damages.
PB asserts that the trial court's decision not to award Keyword such damages on MSA2 constitutes an implied finding in favor of PB on its affirmative defense of prior material breach. See TEX. R. CIV. P. 94; Triton 88, L.P. v. Star Elec., L.L.C., 411 S.W.3d 42, 58 (Tex. App.—Houston [1st Dist.] 2013, no pet.) ("The contention that a party to a contract is excused from performance because of a prior material breach by the other contracting party is an affirmative defense . . . ." (internal quotations omitted)); see generally Zorrilla v. Aypco Constr. II, LLC, 469 S.W.3d 143, 156 (Tex. 2015) (discussing affirmative defenses and confession-and-avoidance). PB asserts on appeal, as it did in the trial court, that its breach of MSA2 was excused by Keyword's prior breach in failing to perform services as agreed. See Mustang Pipeline Co. v. Driver Pipeline Co., 134 S.W.3d 195, 196 (Tex. 2004) ("It is a fundamental principle of contract law that when one party to a contract commits a material breach of that contract, the other party is discharged or excused from further performance.").
The MSA2 Statement of Work sets forth, as presented above, ten services that Keyword agreed to perform and states that Keyword warranted that it would "utilize its best efforts" to perform those services. See Dorsett, 164 S.W.3d at 662 (holding that contract terms are given their plain, ordinary, and generally accepted meanings).
At trial, Keyword's president, Brotman, testified that Keyword performed all of the services listed in the Statement of Work. With respect to "Optimization of Return on Ad Spend," Brotman testified that he developed keywords and tried to "optimize Ad Spend through increasing conversion rate, giving advice on landing pages, ad copy, [and] managing the cost per click." He noted, "Optimization is kind of a generic term that says, 'I'm going to do my best to make sure that the account is performing to the best of my abilities,' which is what I did." And, the "only problem was that it's not really under my control whether they make sales or not."
PB's president, Rinaldi, testified that, of the ten services listed in the MSA2 Statement of Work, Keyword performed "[e]very single one of them . . . with the exception of Optimization of Return on Ad Spend," for which Keyword simply provided raw data and did not provide advice leading to a reduction in costs. However, Rinaldi admitted: "It was attempted to be performed."
Rinaldi also testified that Keyword utilized a "shotgun" marketing approach that simply created "clicks" on broadly worded ads that failed to target appropriate customers and that Keyword refused to utilize the name "Rolex" in its advertising campaign to more specifically target customers. PB presented a string of emails with Keyword, dated in June 2017, reflecting that the parties were working together to resolve some technical issues related to PB's attempted use of a "Rolex" image in its ad campaign. Keyword presented a letter from Rolex Watch U.S.A., Inc., however, refusing PB's request to use its federally registered trademarks, which Rinaldi acknowledged in his testimony. See City of Keller, 168 S.W.3d at 820 (holding fact-finder is not free to believe testimony conclusively negated by undisputed facts).
Rinaldi further testified that PB did not pay Keyword in July or August 2017 because Keyword did not provide services in those months. Conversely, Brotman testified that because PB failed to pay as agreed in July or August 2017, Keyword did not provide services, as was authorized under the terms of MSA2.
MSA2 provides that PB's payment of the monthly fee was due on the "1st of each month." And, any failure to pay as agreed authorized Keyword to "immediately" terminate its services, as follows:
BREACH AND TERMINATION
If [PB] breaches any term of this Agreement or of any term contained in the Statement of Work, or fails to pay any valid invoice rendered by
[Keyword] or other amounts due to [Keyword], [Keyword] shall have the right to terminate this Agreement immediately as well as all Statements of Work then in process and, in addition to all other rights of [Keyword], all amounts which would have become due and payable under this Agreement including any Statement of Work will immediately become due and payable to [Keyword]. . . . In the event [PB] terminates this Agreement prior to the end of the term as set forth in the Statement of Work, [PB] shall pay to [Keyword] all amounts then due and owing through the date of termination and shall also pay to [Keyword] all amounts that [Keyword] would have been entitled to had this Agreement been fully performed in accordance with its terms.(Emphasis added.) Thus, when PB failed to pay on July 1, 2017, the terms of MSA2 authorized Keyword to terminate its performance of services. See Italian Cowboy Partners, Ltd., 341 S.W.3d at 333.
We conclude that the evidence does not support a finding that PB's breach of MSA2, by failing to pay the final two months of the term, i.e., $3,000.00 for each of July and August 2017, was excused by a prior breach by Keyword, in failing to perform services as agreed. Thus, the trial court's implied finding that Keyword was not entitled to such damages is against the great weight and preponderance of the evidence. See Jackson, 116 S.W.3d at 773; Dow Chem. Co., 46 S.W.3d at 242.
Next, Keyword asserts that it was "also entitled to judgment against [PB] for the amounts due under the renewal period for MSA2." The MSA2 Statement of Work provided that the initial term of the agreement was from May 23, 2017 through August 31, 2017. PB agreed to pay Keyword a fee, after May, of $3,000.00 per month. After the initial term expired, the agreement "automatically renew[ed] for an additional 6 month term unless 30 days' notice [was] given." Keyword asserts that PB failed to present evidence that it timely terminated MSA2. Thus, it asserts, the trial court erred in not finding that MSA2 renewed on its terms and that PB was liable for payment of $3,000.00 per month for the six-month term, or $18,000.00.
The record shows that Rinaldi testified that, "no sooner than 5:19 [p.m.] on the 29th" of June and "no later than July 1," he called Brotman and terminated MSA2. And, thereafter, PB brought its online marketing in-house and stopped communicating with Keyword. Brotman denied that Rinaldi called him or that PB terminated MSA2. However, PB presented an email from Brotman to Rinaldi, dated June 29, 2017, stating:
I have just been in the account and I see that you have granted access to another agency. . . . With regards to the mobile campaign, I can take your current strategy as far as it goes. I respect you and your business plan and I have a multitude of ideas that can help your organization. Stick with a pro and we will both benefit.(Emphasis added.) Brotman also admitted that, after July 1, 2017, Keyword and PB did not communicate. The trial court, as the sole judge of the witnesses' credibility, may have chosen to believe Rinaldi's testimony that PB terminated MSA2. See Zenner, 371 S.W.3d at 314. From the evidence, the trial court could have reasonably concluded that PB terminated MSA2 on June 29, 2017.
With respect to notice of termination, MSA2 provides that "[a]ll notices pursuant to this Agreement shall be sent by certified mail, postage prepaid to the address of a party set forth above, and shall be deemed to have been given three business days after posting unless earlier received by the other party through an alternative method." (Emphasis added.) It is undisputed that PB terminated the previous contract, MSA1, by telephone call from Rinaldi to Brotman. The trial court could have reasonably concluded that PB properly terminated MSA2 in the same manner.
Because the trial court could have reasonably concluded that PB terminated MSA2 on June 29, 2017, the contract did not automatically renew. Thus, the trial court's implied finding that Keyword was not entitled to damages for the automatic six-month extension of the term of MSA2 is not so against the great weight and preponderance of the evidence as to be manifestly unjust. See Jackson, 116 S.W.3d at 773.
Notwithstanding PB's June 29, 2017 termination of MSA2, however, PB remained liable, as Rinaldi admitted at trial, for the monthly fees attributable to the remaining months of the initial term, i.e., July and August 2017. The terms of MSA2 provided that, in the event that PB terminated the agreement prior to the end of the term set forth in the Statement of Work, i.e., May 23, 2017 through August 31, 2017, PB remained liable for all amounts to which Keyword would have been entitled had the agreement been fully performed in accordance with its terms, as follows:
BREACH AND TERMINATION
. . . . In the event [PB] terminates this Agreement prior to the end of the term as set forth in the Statement of Work, [PB] shall pay to [Keyword] all amounts then due and owing through the date of termination and shall also pay to [Keyword] all amounts that [Keyword] would have been entitled to had this Agreement been fully performed in accordance with its terms.
In sum, we conclude that the trial court's damages award to Keyword of $3,000.00 for PB's breach of MSA1 and MSA2, which is essentially a finding of no damages on MSA2, is so contrary to the overwhelming weight and preponderance of the evidence that it is manifestly unjust. See Alfia v. Overseas Serv. Haus, Inc., No. 05-11-01390-CV, 2013 WL 3477345, at *6 (Tex. App.—Dallas July 9, 2013, no pet.) (mem. op.) (holding that, based on evidence that defendant failed to make interest-only payments, from at least January 2008 until trial in May 2011, and failed to pay principal amount, trial court's deemed finding of no damages was so contrary to overwhelming weight and preponderance of evidence as to be manifestly unjust). Accordingly, we hold that the evidence is factually insufficient to support the trial court's award of damages.
We sustain Keyword's first issue.
Attorney's Fees
In its second issue, Keyword asserts that the trial court erred in not awarding it the full amount of its attorney's fees. Keyword sought attorney's fees in the amount of $16,200.00. The trial court awarded $1,000.00.
Keyword moved for attorney's fees pursuant to Texas Civil Practice and Remedies Code section 38.001, which provides that a party "may recover reasonable attorney's fees from an individual or corporation . . . if the claim is for . . . an oral or written contract." TEX. CIV. PRAC. & REM. CODE § 38.001(8). To recover attorney's fees under section 38.001, a party must (1) prevail on a cause of action for which attorney's fees are recoverable and (2) recover damages. Green Int'l v. Solis, 951 S.W.2d 384, 390 (Tex. 1997). Here, Keyword prevailed on its breach-of-contract claims and recovered damages. See id.
Ordinarily, the amount of an attorney's fees award rests within the sound discretion of the trial court and will not be reversed absent an abuse of discretion. Ragsdale v. Progressive Voters League, 801 S.W.2d 880, 881 (Tex. 1990). In determining the reasonableness of attorney's fees, courts consider:
(1) the time and labor required, the novelty and difficulty of the questions involved, and the skill required to perform the legal service properly;
(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.Arthur Andersen & Co. v. Perry Equip. Corp., 945 S.W.2d 812, 818 (Tex. 1997); see also Wayland v. City of Arlington, 711 S.W.2d 232, 233 (Tex. 1986) ("One of the factors in determining the reasonableness of attorney's fees is the amount of damages awarded.").
Because we cannot be reasonably certain that the trial court's award of attorney's fees was not significantly influenced by the error in the amount of damages awarded, we conclude that the trial court should be given an opportunity to reconsider its assessment of attorney's fees when it renders a new judgment. See Young v. Qualls, 223 S.W.3d 312, 315 (Tex. 2007) ("[T]aking into account the difference between the erroneous and correct amounts of damages, . . . we cannot be reasonably certain that the trial court was not significantly affected by the error."); rePipe, Inc. v. Turpin, 275 S.W.3d 39, 51 (Tex. App.—Houston [14th Dist.] 2008, no pet.); see also Arthur Andersen & Co., 945 S.W.2d at 818 (holding that, in determining reasonableness of attorney's fees, courts consider amount involved and results obtained); Wayland, 711 S.W.2d at 233 ("One of the factors in determining the reasonableness of attorney's fees is the amount of damages awarded.").
We sustain Keyword's second issue.
Conclusion
We reverse the trial court's judgment and remand for further proceedings.
Sherry Radack
Chief Justice Panel consists of Chief Justice Radack and Justices Kelly and Rivas-Molloy.