"[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 , 442 S.W.3d at 255 ; Hong v. Havey , 551 S.W.3d 875, 893 (Tex. App.—Houston [14th Dist.] 2018, no pet.). A trial court’s fee award cannot be based on evidence that fails to describe tasks and allocate hours spent on those tasks.
Section 21.223 does not define the phrase "primarily for the direct benefit." See BUS. ORGS. § 21.223; Hong v. Havey, 551 S.W.3d 875, 885 (Tex. App.—Houston [14th Dist.] 2018, no pet.). However, courts have concluded that evidence showing that funds derived from the corporation's fraudulent conduct were "pocketed by or diverted to" the individual defendant is sufficient to demonstrate the requirement of a direct personal benefit.
More recent cases fail to demonstrate any consensus. The Fourteenth Court of Appeals has followed its TecLogistics opinion in Hong v. Havey , 551 S.W.3d 875 (Tex. App.—Houston [14th Dist. 2018, no pet.). In Argent Holdings LLC v. East El Paso Physicians Med. Ctr., LLC , No. EP-17-CV-00199-ATB, 2018 WL 3328416 (W.D. Tex. Jan. 16, 2018) and 2018 WL 548676 (W.D. Tex. Jan. 23, 2018), the court applied the longstanding rule that a corporate agent is personally liable for his own fraudulent or tortious acts, even when acting in the course and scope of his employment, to conclude that an individual could be personally liable for fraud, negligent misrepresentation, and conversion if the claims were sufficient.
"[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, 442 S.W,3d at 255; Hong v. Havey, 551 S.W.3d 875, 893 (Tex. App.—Houston [14th Dist.] 2018, no pet.). A trial court’s fee award cannot be based on evidence that fails to describe tasks and allocate hours spent on those tasks.
Question 41 tracks Pattern Jury Charges 108.1 and 108.2 addressing standards for piercing the corporate veil based on an alter ego theory. See Comm. on Pattern Jury Charges, State Bar of Tex., Texas Pattern Jury Charges: Business PJC 108.1, 108.2 & cmt. (2018); Hong v. Havey , 551 S.W.3d 875, 881 (Tex. App.—Houston [14th Dist.] 2018, no pet.). When reviewing the legal sufficiency of the evidence, we consider the evidence in the light most favorable to the challenged finding and indulge every reasonable inference that would support it.
" Hong v. Havey , 551 S.W.3d 875, 889 (Tex. App.—Houston [14th Dist.] 2018, no pet.) (citing TEX. BUS. ORGS. CODE ANN. § 21.223(a)(2) ). As an express exception of the statutory protection, however, subsection (a) of section 21.223 does not apply, "if [an] obligee demonstrates that the holder, beneficial owner, subscriber, or affiliate caused the corporation to be used for the purpose of perpetrating and did perpetrate an actual fraud on the obligee primarily for the direct personal benefit of the holder, beneficial owner, subscriber, or affiliate."
Herlong discussed the fee factors generally, but "generalities 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 , 442 S.W.3d at 255 ; Hong v. Havey , 551 S.W.3d 875, 893 (Tex. App.—Houston [14th Dist.] 2018, no pet.). A trial court's fee award cannot be based on evidence that fails to describe tasks and allocate hours spent on those tasks.SeeHong , 551 S.W.3d at 893.
Herlong discussed the fee factors generally, but "generalities 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, 442 S.W.3d at 255; Hong v. Havey, 551 S.W.3d 875, 893 (Tex. App.—Houston [14th Dist.] 2018, no pet.). A trial court's fee award cannot be based on evidence that fails to describe tasks and allocate hours spent on those tasks.
This requirement is met where the "evidence show[s] that funds derived from the corporation's allegedly fraudulent conduct were pocketed by or diverted to the individual defendant." Hong v. Havey , 551 S.W.3d 875, 885 (Tex. App.—Houston [14th Dist.] 2018, no pet.). Hughes contends that the second prong is not satisfied where, as here, an individual purportedly perpetrates a fraud solely to be able to continue to operate a business and continue to receive a salary.
“The party seeking attorney's fees bears the burden of proof.” Hong v. Havey, 551 S.W.3d 875, 891 (Tex. App-Houston [14th Dist.] 2018, no pet.).