Summary
In Nabers, the court rejected the appellant's contention that the appellee "tacked on" her DJA claim to a breach of contract claim.
Summary of this case from Ramey & Schwaller, LLP v. The Document Grp.Opinion
NO. 14-18-00968-CV
02-20-2020
JOSEPH SCOTT NABERS, Appellant v. DONNA NABERS, Appellee
On Appeal from the 157th District Court Harris County, Texas
Trial Court Cause No. 2017-42846
MEMORANDUM OPINION
Appellant Joseph Scott Nabers ("Scott") appeals from a judgment awarding attorney's fees to his ex-wife, appellee Donna Nabers, under the Uniform Declaratory Judgments Act ("UDJA"). Scott challenges the trial court's judgment and subsequent order denying a new trial on three grounds: (1) Donna was not entitled to UDJA attorney's fees because she impermissibly "tacked on" a UDJA claim to her matured breach-of-contract claim; (2) Donna waived the right to recover these attorney's fees in a mediated settlement agreement; and (3) after Scott nonsuited his UDJA claim, the trial court lacked jurisdiction to award attorney's fees to Donna for defending Scott's UDJA claim because the issue was moot.
We affirm the trial court's judgment.
Background
After Donna and Scott divorced in November 2009, Scott purchased a house with his separate funds (the "Property"). Donna occupied the Property with their children for several years, paying rent and expenses. Donna filed suit against Scott for a declaratory judgment that the Property belonged to her. Scott filed a counterclaim for a declaration that the Property was his separate property. He also filed numerous other counterclaims against Donna, including slander of title, tortious interference with contract, trespass, conversion, and fraud. Donna amended her petition to add additional claims against Scott, including breach of contract, breach of fiduciary duty, unjust enrichment, and negligent misrepresentation. The trial court ordered the parties to mediation, which resulted in a mediated settlement agreement of all claims (the "MSA"). Pursuant to the MSA, Donna acknowledged that the Property was Scott's sole and separate property. However, Donna was permitted to occupy the Property for three additional months. Scott agreed to accept the Property in "as is" condition once Donna vacated it, subject to a term that if Donna "intentionally or maliciously" damaged the Property, the entire MSA would be void. The parties also agreed to release and dismiss their claims against one another as of the MSA's date arising from or related to the events and transactions which were the subject matter of the case, "save and except the terms of [the MSA]." The MSA provided that the parties were responsible for their own legal fees.
Before the parties dismissed their claims against each other, Scott supplemented his counterclaims to add a declaratory-judgment claim that the MSA was void because Donna had intentionally damaged the Property. According to the record, the Property sustained damaged from Hurricane Harvey, and Scott alleged that Donna had authorized certain demolition work without Scott's approval, which resulted in approximately $45,000 worth of repair or remodeling work that would not be covered by insurance. Scott sought attorney's fees pursuant to the UDJA.
Donna filed an answer to Scott's counterclaim and a supplemental petition in which she sought her attorney's fees for defending against Scott's new declaratory-judgment counterclaim and requested a counter-declaration that the MSA was valid and enforceable. Donna then supplemented her petition a second time, adding a claim for breach of the MSA based on Scott's alleged repudiation of and failure to pay sums due under the MSA. Donna also sought Chapter 38 attorney's fees in her second supplemental petition. The parties attended a second day of mediation, which apparently did not end with any new agreements.
Approximately one month after he filed it, Scott nonsuited his UDJA counterclaim to declare the MSA void. The trial court signed an order granting the nonsuit without prejudice. Donna then moved for partial summary judgment on her claim for attorney's fees in defending Scott's UDJA counterclaim, attaching an affidavit and copies of itemized attorney-fee statements. Scott responded to Donna's motion, asserting that (1) Donna could not recover attorney's fees by mirroring Scott's nonsuited claim and mirroring her own affirmative defense to Scott's nonsuited claim; (2) it would not be equitable and just to award Donna her attorney's fees, considering all the circumstances including the MSA language; and (3) a fact question existed regarding the reasonableness and necessity of the attorney's fees.
The trial court granted partial summary judgment on Donna's request for attorney's fees for defending Scott's UDJA claim. The court awarded Donna $10,759.34 in attorney's fees, as well as conditional fees in the event Scott filed a motion for new trial or appeal. The parties agreed to dismiss all remaining claims against each other, and the trial court ultimately signed a final judgment incorporating its prior partial summary judgment order. Scott filed a motion for new trial, which was overruled by operation of law, and this appeal followed.
Issues
Scott contends that the trial court erred in denying his motion for new trial and awarding Donna attorney's fees under the UDJA for three reasons. First, Scott argues that fees are not available when, as he contends occurred here, a claim for declaratory relief is merely tacked onto a matured breach of contract claim. Second, Scott argues that Donna waived her claim to these fees under the MSA's language. Third, Scott argues that the court lacked jurisdiction to award Donna fees because the dispute was rendered moot when he nonsuited his UDJA counterclaim.
Analysis
A court may award attorney's fees only if those fees are provided for by statute or by contract. Gulf States Utils. Co. v. Low, 79 S.W.3d 561, 567 (Tex. 2002). Donna sought attorney's fees for defending against Scott's counterclaim under the UDJA. Reasonable and necessary attorney's fees may be awarded in any proceeding utilizing the UDJA if they are equitable and just. See Tex. Civ. Prac. & Rem. Code § 37.009. Trial courts have wide discretion in determining what is equitable and just in awarding attorney's fees, and appellate courts will not overturn such a decision unless it is clear from the facts the trial court abused its discretion. See Bocquet v. Herring, 972 S.W.2d 19, 21 (Tex. 1998); Am. Int'l Indus., Inc. v. Scott, 355 S.W.3d 155, 162 (Tex. App.—Houston [1st Dist.] 2011, no pet.) (reviewing fee award for defending UDJA claim); see also Corcoran v. Atasocita Comm'n Imp. Ass'n, Inc., No. 14-12-00982-CV, 2013 WL 5888127, at *9 (Tex. App.—Houston [14th Dist.] Oct. 31, 2013, pet. denied) (mem. op.); Gilbert v. City of El Paso, 327 S.W.3d 332, 336 (Tex. App.—El Paso 2010, no pet.) ("An award of attorney's fees under the UDJA is within the trial court's discretion."). The trial court abuses its discretion if it acts in an arbitrary or unreasonable manner. Worford v. Stamper, 801 S.W.2d 108, 109 (Tex. 1990) (per curiam).
The trial court's conclusion regarding an equitable and just fee award is based on all the circumstances of the case. See Carpenter v. Carpenter, No. 02-10-00243-CV, 2011 WL 5118802, at *5-6 (Tex. App.—Fort Worth Oct. 27, 2011, pet. denied) (mem. op.). A discretionary award of attorney's fees in a declaratory-judgment action is not dependent upon a finding that a party substantially prevailed. Bank of N.Y. Mellon v. Soniavou Books, LLC, 403 S.W.3d 900, 907 (Tex. App.—Houston [14th Dist.] 2013, no pet.). In the exercise of its discretion to award attorney's fees in a declaratory-judgment action, the trial court may award attorney's fees to the prevailing party, may decline to award attorney's fees to either party, or may award attorney's fees to the non-prevailing party, regardless of which party sought declaratory judgment. Ochoa v. Craig, 262 S.W.3d 29, 33 (Tex. App.—Dallas 2008, pet. denied).
A. Donna Did Not "Tack on" a Claim for Declaratory Relief
In his first issue, Scott claims that Donna is not entitled to UDJA attorney's fees because she impermissibly "tacked on" her UDJA claim for fees to a matured breach of contract claim. See, e.g., MBM Fin. Corp. v. Woodlands Operating Co., 292 S.W.3d 660, 670 (Tex. 2009). In MBM, the Supreme Court of Texas stated that "when a claim for declaratory relief is merely tacked onto a standard suit based on a matured breach of contract, allowing fees under Chapter 37 would frustrate the limits Chapter 38 imposes on such fee recoveries." Id. There, the Woodlands Operating Company recovered no damages on its breach of contract claim, thus foreclosing attorney's fees under Chapter 38. The court held that the Woodlands Operating Company could not recover the same fees under its alternative UDJA claim because doing so would "frustrate the provisions and limitations of the neighboring chapter in the same Code." Id.
The circumstances in today's case are distinguishable from MBM. The record does not support Scott's contention that Donna "tacked on" a claim for UDJA fees to a matured breach of contract claim. Donna filed her answer requesting UDJA fees nearly two weeks before she filed her breach of contract claim. Donna's fee request was explicitly premised on defending Scott's UDJA counterclaim:
Defendant filed a counterclaim against Plaintiff in this case in which the Defendant invoked the Texas Declaratory Judgment Act. By filing such an action, the Defendant invoked the Declaratory Judgment Act's attorney fee provision, which says that the Court may award costs and reasonable and necessary attorney's fees as are equitable and just. The award of attorney fees and costs includes awarding attorney fees and costs to the Plaintiff for defending the counterclaim. Section 37.009, Texas Civil Practice & Remedies Code.(Emphases added).
Plaintiff asserts that it is equitable and just to award the Plaintiff her attorney fees and costs in defending this counterclaim.
Unlike in MBM, the present case is not a situation where Donna asserted a breach of contract claim, failed to recover on that claim, but sought attorney's fees under the UDJA for the fees incurred in pursuing the failed contract claim. In her answer, Donna asserted the right to recover prevailing party attorney's fees incurred in having to defend Scott's counterclaim for a declaration that the MSA was void. This is precisely the relief Donna sought in her motion for partial summary judgment, the availability of which is supported by authority. See Lederer v. Lederer, 561 S.W.3d 693, 700 (Tex. App.—Houston [14th Dist.] 2018, pet. denied) (explaining that the appellant's premise that appellee attempted to use the UDJA to recover fees not otherwise recoverable ignores the fact that appellant expressly sought declaratory relief and appellees answered and counterclaimed for attorney's fees under the UDJA for having to respond to appellant's UDJA claim). The UDJA permits the award of fees in that situation—even when the UDJA claimant nonsuits his UDJA claim. See, e.g., id.; Devon Energy Prod. Co. v. KCS Res., LLC, 450 S.W.3d 203, 223-24 (Tex. App.—Houston [14th Dist.] 2014, pet. denied); Killam Ranch Props., Ltd. v. Webb County, No. 04-08-00105-CV, 2008 WL 4958452, at *4-5 (Tex. App.—San Antonio Nov. 19, 2008, no pet.) (mem. op.); Montemayor v. Ortiz, 208 S.W.3d 627, 666-67 (Tex. App.—Corpus Christi 2006, pet. denied); AAA Free Move Ministorage, L.L.C. v. Latigo Props., Inc., No. 04-14-00075-CV, 2015 WL 1120330, at *2 (Tex. App.—San Antonio Mar. 11, 2015, no pet.) (mem. op.); Town of Flower Mound v. Upper Trinity Reg'l Water Dist., 178 S.W.3d 841, 844 (Tex. App.—Fort Worth 2005, no pet.); Falls County v. Perkins & Cullum, 798 S.W.2d 868, 870-72 (Tex. App.—Fort Worth 1990, no writ).
We overrule Scott's first issue.
B. Donna Did Not Waive These Attorney's Fees in the MSA
Scott urges in his second issue that Donna waived her right to attorney's fees under the MSA's terms, read as a whole. We disagree.
Under the MSA, the parties agreed "to release, discharge, and forever hold the other harmless from any and all claims, demands or suits, known, unknown, fixed or contingent, liquidated or unliquidated whether or not asserted in the above case, as of this date, arising from or related to the events and transactions which are the subject matter of this case, save and except the terms of this Agreement." (Emphasis added). The MSA was signed December 21, 2017, and it did not settle Scott's supplemental UDJA claim seeking to void the MSA, which was not filed until January 9, 2018. Scott's declaratory-judgment claim did not exist as of the date of the MSA, so any relief stemming from this claim was not released or waived by the MSA, which by its express terms only waived claims existing as of December 21, 2017. Accord Victoria Bank & Trust Co. v. Brady, 811 S.W.2d 931, 938 (Tex. 1991) (explaining that valid release must "mention" claims to be released). The MSA also provided that all parties "agree to pay their own legal fees," but that clause is reasonably construed to apply to the claims settled and agreed to be dismissed by the MSA and does not purport to waive attorney's fees incurred for future claims in the event one or both parties sued to enforce the MSA or declare it void. Moreover, the parties excepted from the release any claims regarding the terms of the MSA, and Scott's UDJA claim explicitly concerned the terms of the MSA—i.e., whether Donna "intentionally or maliciously" damaged the Property, thus voiding the MSA.
Notably, Scott pleaded for recovery of attorney's fees under the UDJA in connection with his supplemental counterclaim filed January 9.
We overrule Scott's second issue.
C. Mootness
In Scott's third issue, he claims the trial court lost jurisdiction to award UDJA attorney's fees to Donna when he nonsuited his UDJA counterclaim. Scott urges that his nonsuit rendered Donna's claim for UDJA attorney's fees moot. Again, we disagree.
A case becomes moot when there ceases to be a justiciable controversy between the parties or when the parties cease to have "a legally cognizable interest in the outcome." Williams v. Lara, 52 S.W.3d 171, 184 (Tex. 2001) (citing Murphy v. Hunt, 455 U.S. 478, 481 (1982)). Mootness occurs when events make it impossible for the court to grant the relief requested or otherwise "affect the parties' rights or interests." Heckman v. Williamson County, 369 S.W.3d 137, 162 (Tex. 2012). When a case becomes moot, the court loses jurisdiction and cannot hear the case because any decision would constitute an advisory opinion that is "outside the jurisdiction conferred by Texas Constitution article II, section 1." Matthews v. Kountze Indep. Sch. Dist., 484 S.W.3d 416, 418 (Tex. 2016). But a case "is not rendered moot simply because some of the issues become moot during the appellate process." In re Kellogg Brown & Root, Inc., 166 S.W.3d 732, 737 (Tex. 2005) (orig. proceeding). If only some claims or issues become moot, the case remains "live," at least as to other claims or issues that are not moot. See id.
In some instances, a claim for attorney's fees "breathes life" into a suit that has otherwise become moot. State ex rel. Best v. Harper, 462 S.W.3d 1, 7 (Tex. 2018). For example, a claim for attorney's fees always "breathes life" into an otherwise moot case when a statute permits a non-prevailing party to recover fees under equitable principles. See id. The UDJA authorizes an award of attorney's fees to prevailing and non-prevailing parties. See Tex. Civ. Prac. & Rem. Code § 37.009; Lederer, 561 S.W.3d at 700. Several courts, including this court, have held that a claim for attorney's fees under the UDJA is a claim for affirmative relief that survives a nonsuit. See Devon Energy Prod. Co., 450 S.W.3d at 223-24; Killam Ranch Props., 2008 WL 4958452, at *4-5; Montemayor, 208 S.W.3d at 666-67; AAA Free Move Ministorage, 2015 WL 1120330, at *2; Town of Flower Mound, 178 S.W.3d at 844; Falls County, 798 S.W.2d at 870-72. The trial court awarded attorney's fees incurred only for the short time period Scott's supplemental counterclaim was pending.
We conclude that Scott's nonsuit of his declaratory-judgment counterclaim did not render moot Donna's request for attorney's fees incurred in defending the counterclaim.
We overrule Scott's third issue.
Conclusion
We affirm the trial court's judgment.
/s/ Kevin Jewell
Justice Panel consists of Justices Wise, Jewell, and Poissant.