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explaining a plaintiff can challenge the award of attorney's fees in a post judgment motion and outlining various sister courts refusing to review an issue of attorney's fees that was not preserved on appeal either during trial or in a post judgment motion
Summary of this case from Bell v. Midway Petroleum Grp., L.P.Opinion
No. 07-17-00125-CV
02-13-2018
MICHAEL QUINN SULLIVAN, APPELLANT v. SALEM ABRAHAM, APPELLEE
On Appeal from the 31st District Court Hemphill County, Texas
Trial Court No. 6994, Honorable Steven Ray Emmert, Presiding
MEMORANDUM OPINION
Before QUINN, C.J., and CAMPBELL and PARKER, JJ.
"The road is long with many a winding turn that leads us to who knows where, who knows where . . . ."
"He Ain't Heavy, He's My Brother." Thank you, Mr. Scott and Mr. Russell.
It began with a slander at a political event in 2012; felt the rise, fall, and twist of lawsuits and appeals; and eventually looped back to us. Now we try to capture the wisdom of Mr. Harrison's words in "All things must pass all things must pass away."
Michael Quinn Sullivan again appeals the trial court's decision regarding attorney's fees. He initially sought $296,805.00, argued that Salem Abraham only challenged $30,715.50 of that sum, and, consequently, maintained that he should receive at least $266,089.50. The trial court found "that reasonable and necessary attorneys' fees for the services of [his] attorneys, from the beginning of this case until remand by the Supreme Court of Texas to [the trial court was] in the amount of $35,000.00." That finding was followed by another wherein the court said, "[T]he Court's evaluation of what level of services [were] necessary, and what rendered services were unnecessary, the Court finds that reasonable and necessary attorneys' fees for the services of Defendant's attorneys, after remand by the Supreme Court, is in the amount of $7,200,00." Those sums were then awarded. Sullivan deems the awards "excessively low and extreme" and an instance of abused discretion. He also contends that various findings of fact entered by the trial court lacked sufficient evidentiary basis. We reverse in part.
Sullivan invoked the authority of § 27.009 of the Texas Civil Practice and Remedies Code to obtain his attorney's fees after having successfully caused the dismissal of Abraham's suit against him. According to that provision, "[i]f the court orders dismissal of a legal action . . ., the court shall award to the moving party: court costs, reasonable attorney's fees, and other expenses incurred in defending against the legal action as justice and equity may require." TEX. CIV. PRAC. & REM. CODE ANN. § 27.009(a)(1) (West 2015). Given the opportunity to interpret § 27.009(a)(1), our Supreme Court recently told us that a "'reasonable' attorney's fee 'is one that is not excessive or extreme, but rather moderate or fair.'" Sullivan v. Abraham, 488 S.W.3d 294, 299 (Tex. 2016) (quoting Garcia v. Gomez, 319 S.W.3d 638 (Tex. 2010)). And, what that fee may be "rests within the [trial] court's sound discretion." Id.
So too must sanctions be awarded, which sanctions must be sufficient to deter the party from initiating other like suits. TEX. CIV. PRAC. & REM. CODE ANN. § 27.009(a)(2). Sanctions were assessed here but are not part of the appeal.
So too were we told that the measure prescribed in § 27.009(a)(1) differs from that in § 37.009 of the same Civil Practice and Remedies Code. See id. at 296. The latter talks of "award[ing] costs and reasonable and necessary fees as are equitable and just." TEX. CIV. PRAC. & REM. CODE ANN. § 37.009 (West 2015). While notions of justice and equity may be considered when determining the amount of fees to give those involved in a declaratory action, they are not when one succeeds in dismissing a suit based on a party's right to speak freely, petition the government, or associate. See Sullivan, 488 S.W.3d. at 299 (stating that the trial court's discretion under § 27.009 "does not also specifically include considerations of justice and equity").
There appears one further difference between § 27.009(a)(1) and § 37.009 of the Civil Practice and Remedies Code. The former requires an award of a "reasonable attorney's fee," TEX. CIV. PRAC. & REM. CODE ANN. § 27.009(a)(1), while the latter permits an award of "reasonable and necessary attorney's fees." Id. § 37.009. Missing from § 27.009(a)(1) is the modifying word "necessary." Indeed, § 27.009(a) reads more like the § 38.001 of the Civil Practice and Remedies Code, which provision permits a person to "recover reasonable attorney's fees from an individual or corporation" in suits involving contract. Id. § 38.001 (West 2015). This omission of the word is of import since its absence causes the standard for awarding fees to differ. Simply put, it apparently relieves the party seeking the fees from proving that they were necessary. See, e.g., Busteed v. Coldspring-Oakhurst Consol. Indep. Sch. Dist., No. 07-02-00013-CV, 2002 Tex. App. LEXIS 8139, at *7-8 (Tex. App.—Amarillo Nov. 18, 2002, no pet.) (not designated for publication) (involving § 38.001 of the Civil Practice and Remedies Code and holding that the claimant did not have to present evidence showing the fees sought were necessary); Lilly v. Tolar, No. 06-01-00163-CV, 2002 Tex. App. LEXIS 6092, at *33-34 (Tex. App.—Texarkana Aug. 22, 2002, pet. denied) (not designated for publication) (involving and holding the same); Murrco Agency, Inc. v. Ryan, 800 S.W.2d 600, 606 (Tex. App.—Dallas 1990, no writ) (involving and holding the same).
We make two final observations before turning to the issues at bar. The first is that the determination of a reasonable attorney's fee is a question of fact. Garcia, 319 S.W.3d at 642; accord Kinsel v. Lindsey, 526 S.W.3d 411, 427 (Tex. 2017) (stating that "[t]he determination of reasonable and necessary attorney's fees is an issue generally left to the trier of fact"). And while the testimony of an interested party generally raises only a question of fact for the fact-finder to resolve, that is not always true. See Garcia, 319 S.W.3d at 641-42. Such testimony from an interested person must be accepted as true, as a matter of law, when it is (1) uncontradicted by other evidence or circumstances, (2) clear, direct, and positive, and (3) free from internal contradiction, inaccuracies, and circumstances tending to cast suspicion on it. See id. at 642.
Lastly, and as said above, the amount of fees to award under § 27.009(a) lies within the trial court's discretion. So, we cannot simply substitute our decision for that of the trial court. In re Marriage of Rampley, No. 07-15-00426-CV, 2016 Tex. App. LEXIS 12307, at *3-4 (Tex. App.—Amarillo Nov. 16, 2016, no pet.) (per curiam) (mem. op.). Instead, the trial court's decision is entitled to deference as long as it is not arbitrary, comports with controlling rules and principles, and has evidentiary support. See Ford Motor Co. v. Garcia, 363 S.W.3d 573, 578 (Tex. 2012) (stating that a "trial court abuses its discretion by ruling (1) arbitrarily, unreasonably, or without regard to guiding legal principles; or (2) without supporting evidence"); In re Marriage of Vick, No. 07-15-00019-CV, 2016 Tex. App. LEXIS 11975, at *9 (Tex. App.—Amarillo Nov. 3, 2016, no pet.) (mem. op.) (stating that a "trial court abuses its discretion by ruling without supporting evidence").
Abuse of Discretion - Wrong Standard
We begin our disposition of the appeal by first considering Sullivan's allegation that the trial court abused its discretion by applying the wrong measure. Instead of determining what a "reasonable and necessary fee" would be, it should have merely decided what a "reasonable fee" would be, according to Sullivan. This was argued below and is argued here, as well. To the extent Sullivan is correct given the holdings in the Busteed, Lilly, and Murrco opinions we referenced above, the error is harmless as we explain below.
As the Supreme Court observed in its Sullivan opinion, the parties at bar agreed to calculate fees through the lodestar method. See Sullivan, 488 S.W.3d at 299. Moreover, counsel for Sullivan acknowledged as much below when he informed the trial court that "the [Supreme] Court said Lodestar approach, we've used the Lodestar approach, there's a mandate." And, while § 27.009(a)(1) may say nothing of the fee being both reasonable and necessary , the same is not true of the "Lodestar approach." That method of calculating fees requires consideration of time spent by the attorney, the reasonable value of that time, and "whether the time was reasonable and necessary ." City of Laredo v. Montano, 414 S.W.3d 731, 736 (Tex. 2013) (per curiam) (emphasis added). This may be why counsel for Sullivan stated in his third supplemental affidavit supporting the request for attorney's fees that "The Hourly Rates Charged in this Matter are Reasonable and Necessary " and that, in his "opinion, these fees and expenses were absolutely reasonable and necessary in the defense of this lawsuit and prosecution of the appeal." (Emphasis added).
Counsel for Sullivan (i.e., Joseph Nixon) also attested in his third supplemental affidavit in support of attorney's fees that "the U.S. Supreme Court has used the lodestar approach to help determine the reasonableness of the award of attorney's fees. In applying this approach and following the factors set forth under TEXAS DISCIPLINARY RULES OF PROFESSIONAL CONDUCT Rule 1.04(b), I further considered" the factors listed therein. (Emphasis added).
So, it appears that what the legislature may have opted to exclude from § 27.009(a), Sullivan and Abraham intentionally opted to include; they agreed to include into the equation the factor of necessity. Consequently, any purported error committed by the trial court in deviating from the words of § 27.009(a)(1) was rendered meaningless given that Sullivan asked the trial court to apply the very standard he now deems improper. See Buckingham v. McAfee, 393 S.W.3d 372, 375 (Tex. App.—Amarillo 2012, pet. denied) (holding that a party may not complain of error he invited).
Abuse of Discretion - Did Not Award a Reasonable Fee and No Evidence
Sullivan next contends that the trial court abused its discretion by failing to award a reasonable fee, as the term was defined by the Supreme Court in its Sullivan opinion. He continues his argument by representing that there was "very little disagreement in the record about what an award of reasonable fees should be," and a correct application of the Arthur Anderson factors would not have resulted in the extremely low fee the trial court awarded. We agree error occurred, but before discussing why, we must first address several arguments of Abraham.
See Arthur Andersen & Co. v. Perry Equip. Corp., 945 S.W.2d 812, 818 (Tex. 1997).
The arguments in question are related and generally encompass the scope of the evidence subject to consideration by this and the trial court. They consist of (1) "[p]ost-judgment fees cannot be determined after appeal by remand to the trial court"; (2) "[a]ppellate fees must be established in the initial trial"; (3) "Sullivan's request for appellate attorney's fees should be limited to the amounts requested in the initial trial"; (4) the scope of the remand did not permit consideration of new evidence on attorney's fees; (5) "Abraham's attorney objected to Sullivan's request for appellate attorney's fees reminding the trial court that in June of 2013, Nixon testified by affidavit that appellate fees would be $45,000 all the way through oral arguments at the Supreme Court"; and (6) "[a]n expert opinion is conclusory when it offers an opinion with no factual substantiation" and the opinion of Sullivan's counsel in his initial attorney's fee affidavit was conclusory.
The record discloses that, after the Supreme Court remanded "the cause . . . to the trial court for further proceedings consistent with this opinion," Sullivan, 488 S.W.3d at 300, Abraham filed a "demand for jury." Thereafter, Sullivan's counsel filed supplemental affidavits explaining, in some detail, the time expended and fees charged through the disposition of the underlying suit via dismissal as well as disposition of the appeals through this court and the Supreme Court. The trial court subsequently convened a hearing on Sullivan's request.
At the hearing, Abraham's counsel reminded the trial court that "[w]e have made a jury demand for a jury to try all issues of fact which I believe will be the reasonableness and necessity of any attorney's fees." So too did he cite authority from a foreign state purporting to entitle him to such a jury trial. After extended exchanges between counsel, Abraham conceded that "here's what we're willing to do is if we're allowed to file controverting affidavits to the affidavits that were filed last Friday, given a reasonable opportunity to file that, then we would be willing to waive the jury and allow you to decide the matter on submission both on attorney's fees and sanctions." That comment was followed by: "We . . . are here to contest . . . the attorney's fees and the sanctions request, put on evidence regarding the sanctions, put on evidence regarding the attorney's fees, but we're willing to do that by affidavit if we're given the opportunity to file that." That concession resulted in an extended objection and argument from Sullivan's counsel. Nonetheless, the trial court said: "[W]hat I'm going to do is . . . I'll give counsel for Plaintiffs [i.e., Abraham] . . . 10 days to file a controverting affidavit . . . . In the interest of fair play, I'll give you [i.e., Sullivan] 10 days to respond. And counsel agree the Court can make a determination on the pleadings, right?" Both sides answered in the affirmative to the latter question from the court. So, the controversy regarding attorney's fees was submitted on affidavits.
Once each side tendered its respective affidavits and documentation, the trial court entered its written final judgment. The judgment began with "ON THIS DAY came on to be heard the Motion for Entry of Final Judgment by Defendant, Michael Quinn Sullivan, and the Court, after considering the Motion, the pleadings, all of the evidence before the Court, and the argument of counsel, and following the mandate of the Supreme Court of Texas and Texas Civil Practice and Remedies Code § 27.009." (Emphasis added). The trial court's subsequently issued findings of fact and conclusions of law filed at the behest of Sullivan and containing similar language. That is, it said the following in the opening paragraph of the document: (1) "On June 29, 2016, the above captioned cause came on for an evidentiary hearing on the issue of costs, reasonable attorney's fees, additional expenses, and sanctions"; (2) "The Court provided Salem Abraham additional time after the hearing to offer evidence upon submission, with Michael Quinn Sullivan also having additional time to reply and offer evidence upon submission"; (3) "Abraham responded on July 11, 2016, and Sullivan replied on July 21, 2016"; and (4) "After considering the pleadings, the mandate and opinion of the Texas Supreme Court, the evidence , and the arguments and authorities presented by counsel." (Emphasis added).
Though rather long-winded, our foregoing recitation of the appellate record's content serves a purpose. If nothing else, it illustrates that neither litigant wanted to restrict the evidence of attorney's fees to the data provided the trial court before the initial appeal to this court. Each side sought opportunity to proffer more evidence on the topic. More importantly, their efforts resulted in the trial court deciding not only to receive that additional evidence but also to consider it when arriving at its decision. So, Abraham's current objections about (1) the scope of evidence being restricted to what was originally offered before any appeal, (2) the scope of remand, (3) the fees being limited to the amounts previously sought, etc. ring hollow.
The parties induced the trial court to open the door through their mutual agreement. The trial court opened that door and walked through it to encounter a morass of additional paperwork, information, and harping. Given this, we too reluctantly join the trial court in its walk and encounter. See Haedge v. Cent. Tex. Cattlemen's Ass'n, No. 07-15-00368-CV, 2016 Tex. App. LEXIS 11092, at *26 n. 10 (Tex. App.—Amarillo Oct. 11, 2016, pet. denied) (mem. op.) (holding that a "party cannot complain on appeal that the trial court took a specific action that the complaining party requested").
As for the suggestion that the information provided via Sullivan's evidence was too conclusory and, therefore, non-evidence, it pertained to the data contained in the original affidavit filed by Joseph Nixon. The latter affiant added to his initial attestations via four supplemental affidavits containing detailed descriptions of the work done, time expended, and fees charged. Needless to say, Sullivan's evidence is no longer conclusory, assuming it ever was.
Now, we turn to the substance of Sullivan's complaint. It is true that the Supreme Court in Sullivan described a reasonable fee as one that is not excessive or extreme, but rather fair and moderate. See Sullivan, 488 S.W.3d at 299 (quoting Garcia, 319 S.W.3d at 642). Similarly, true is the fact that the court also discussed the lodestar method of arriving at a reasonable fee and the "'starting point'" when that method is utilized. Id. at 299-300. The "starting point," according to the court, was that mentioned in El Apple I, Ltd. v. Olivas, 370 S.W.3d 757, 762-63 (Tex. 2012).
Per El Apple, the point consisted of the number of hours reasonably expended on the litigation. See Sullivan, 488 S.W.3d at 299. That was followed by a brief discussion of the burden of proof, and the minimally acceptable evidence needed to satisfy that burden. See id. at 299-300. The latter evidence was to consist of "'documentation of the services performed, who performed them and at what hourly rate, when they were performed, and how much time the work required.'" Id. at 299 (quoting El Apple, 370 S.W.3d at 764).
In citing El Apple and referring to the "starting point," we do not read Sullivan as in any way limiting El Apple or as limiting the criteria used in determining a reasonable fee under the lodestar approach. That is, we do not read the former as modifying the lodestar test to simply determining what is "excessive," "extreme," "fair," and "moderate." Rather, the test continues to require consideration of its various criteria as discussed in El Apple and elsewhere. If application of those criteria to the record support the fee awarded, then the fee is fair and moderate and not excessive or extreme. See El Apple, 370 S.W.3d at 765 (stating that the court "accept[ed] the premise that lodestar presumptively produces a reasonable fee" though "exceptional circumstances may justify enhancements to the base lodestar").
As for the pertinent criteria, we begin with the number of hours reasonably expended on the litigation. See Sullivan, 488 S.W.3d at 299. The party seeking the fees has the burden of proof, and the proof offered should address (1) the nature of the work, (2) who performed it and their respective rates, (3) when the services were performed, and (4) the number of hours worked. El Apple, 370 S.W.3d at 762-63; Matlock v. Hill, No. 07-15-00048-CV, 2016 Tex. App. LEXIS 7028, at *19-20 (Tex. App.—Amarillo June 30, 2016, no pet.) (mem. op.). As for the nature or type of proof to be offered, it should come in the form of billing records or other documentary evidence. See El Apple, 370 S.W.3d at 762 (stating that "[w]hile Texas courts have not routinely required billing records or other documentary evidence to substantiate a claim for attorney's fees, the requirement has merit in contested cases under the lodestar approach"). "Thus, . . . attorneys should document their time much as they would for their own clients, that is, contemporaneous billing records or other documentation recorded reasonably close to the time when the work is performed." Id. at 763. And, the documentation or records should be sufficiently specific "for the trial court to make a meaningful lodestar determination." Id.; see Matlock, 2016 Tex. App. LEXIS 7028, at *20-21 (wherein affidavits were used to provide the requisite information)
Services provided by legal professionals other than attorneys may also be compensated under lodestar. And, obtaining payment for such services normally requires evidence about the person's qualifications to perform substantive legal work, the performance of such work under the direction and supervision of an attorney, the nature of the work performed, the person's hourly rate, and the number of hours expended. See El Apple, 370 S.W.3d at 763.
From the foregoing data, the trial court is obligated to exclude charges for duplicative, excessive or inadequately documented work. Id. at 762 (stating that "[c]harges for duplicative, excessive, or inadequately documented work should be excluded"). And, considerable deference is accorded a trial court's findings on those matters. Id. at 763-64. This is so because trial judges normally possess a superior understanding of the case and factual issues involved. Id. at 764.
Yet, a trial court's work is not necessarily finished upon determining the reasonable hours spent and reasonable hourly rate and then multiplying those hours by that rate. Doing such completes the first step of the process and establishes the base fee or lodestar. Id. at 760. One other step remains which permits the trial court to 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." Id. The relevant factors include such things as (1) the time and labor required; (2) the novelty and difficulty of the questions involved; (3) the skill needed to perform the legal service properly; (4) the likelihood that the work will preclude other employment by the lawyer; (5) the fee customarily charged in the locality for similar legal services; (6) the amount involved and the results obtained; (7) the time limitations imposed by the client or by the circumstances; (8) the nature and length of the professional relationship with the client; (9) the experience, reputation, and ability of the lawyer or lawyers performing the services; and (10) whether the fee is fixed or contingent on results obtained or uncertainty of collection before the legal services have been rendered. See id. at 761 (citing TEX. DISCIPLINARY R. PROF'L CONDUCT R. 1.04(b), reprinted in TEX. GOV'T CODE ANN., tit. 2, subtit. G app. A (West 2013), and Arthur Andersen, 945 S.W.2d at 818). The foregoing indicia are non-exclusive, however, id., and any adjustment selected by the trial court may range from 25% to 400% of the base fee, up or down. See id.
Fees Pre-Remand by the Supreme Court
Here, Sullivan utilized an original and "supplemental" affidavits to provide the trial court the information needed to satisfy the dictates of lodestar. Each was executed by Joseph Nixon. Nixon's third "supplemental" affidavit provided a detailed description of the work done by each lawyer and legal professional, the hours expended by each, and the date on which they were expended. The lawyers consisted of partners and associates. So too did the affiant specify the hourly rate charged; it was a blended rate of $385 based on a "new billing arrangement" in which the law firm entered presumably with its client. Additionally, the hours expended reflected work done in responding to Abraham's lawsuit, causing its dismissal, appealing issues to this intermediate appellate court, successfully petitioning for review by and appealing to the Supreme Court and returning to the trial court for the purpose of obtaining attorney's fees, costs, and sanctions from Abraham. The hours expended numbered 753.5, and when multiplied by $385, they derive a product of $290,097.50. Though Sullivan actually requested $296,805.00, and Nixon attested to the reasonableness of that sum, the trial court awarded $35,000.
We mention that they are "supplemental" because supplemental purports to add to pre-existing information or documentation, as opposed to replacing it via "amended" documents. See Daniels v. Bertolino, No. 03-14-00671-CV, 2015 Tex. App. LEXIS 8403, at *4-5 (Tex. App.— Austin Aug. 12, 2015, no pet.) (mem. op.) (discussing the difference between supplemental and amended pleading and describing how supplemental pleadings add to prior pleadings while an amended pleading replaces or substitutes for a prior pleading).
Awarding $35,000 for 753 hours of work allowed Sullivan's counsel to charge an effective hourly rate of $46.48. Or, it simply paid him for almost 91 hours of time at $385 per hour. Whether the trial court selected either mode of viewing the evidence or some other is unclear. Nonetheless, the record does contain evidence upon which the trial court could have rationally found that the total fee sought by Sullivan was unreasonable and excessive. Much of that evidence comes from contradictions appearing in the multiple affidavits submitted by Sullivan's legal counsel.
For instance, through the third supplemental affidavit, Nixon described the work purportedly done by the multiple attorneys representing Sullivan throughout the litigation. A portion of that work entailed the first appeal to and appearance before this intermediate appellate court. According to the information provided, six attorneys worked on that appeal and expended approximately 145 hours. Multiplying those hours by the hourly rate of $385 results in a fee of $55,825. Why six were needed to work on one appeal went unexplained. Nevertheless, the same attorney previously attested, via an earlier affidavit, that a reasonable fee for the same work would be $25,000. We know of no authority requiring the trial court to ignore the $30,825 difference between the two sums. Nor do we know of authority obligating the trial court to accept the greater sum. And, Sullivan failed to cite us to authority filling the void.
In turn, counsel for Abraham expended about 115 hours representing his client's interests in the intermediate appellate court, and their paralegal another 12.5 hours. Furthermore, the combined attorney's fee charged Abraham approximated $22,400. If one were to add 115 and 12.5 and divide that sum into $22,400 they would derive a blended hourly rate of about $175 per hour for the work done in the intermediate appellate court.
Similarly, Nixon initially attested that a reasonable fee for pursuing and/or defending against a petition for review in the Texas Supreme Court would be $20,000. The sum encompassed the entire process through oral argument and disposition. Dividing $20,000 by the hourly rate of $385 is some evidence indicating that a reasonable and necessary quantum of time to perform those services would approximate 52 hours. Via Nixon's third supplemental affidavit, though, the trial court was told that four attorneys actually worked on that aspect of the appeal and expended roughly 420 hours in completing it. Multiplying 420 by the $385 hourly rate derives a fee of $161,700. Needless to say, $161,700 is much greater than $20,000. So, the same witness effectively represented that both $20,000 and $161,700 were reasonable and necessary fees for the same work. Which contradictory representation to believe, if either, fell to the trial court given its role as fact-finder.
In contrast, counsel for Abraham expended about 222 hours defending their client in the Supreme Court. Their paralegal also expended about 30 hours. The fee charged Abraham for that work approximated $54,800.
We further mention that the hours expended by Sullivan's legal counsel in pursuing his client's interests through the Supreme Court included time spent communicating with the media. We know of no authority obligating the trial court to saddle Abraham with those fees. Nor did Sullivan provide us such authority.
Counsel for Sullivan also attested via his initial affidavit that a reasonable fee through dismissal of the cause was $55,205. Moreover, two hourly rates apparently were being used to derive this sum, one was $530 and the other was $405. Later, he would say via another document that a reasonable fee, apparently for the same work, was $67,290; the amount was also based on the hourly rates of $530 and $405. On the other hand, we find a different supplemental affidavit of Nixon filed after remand wherein he purported to detail the work done through dismissal and who did it. According to it, four attorneys now were involved, not just two as indicated in a prior affidavit. The time expended by those four to persuade the trial court to dismiss Abraham's suit approximated 141 hours. If one were to multiply 141 by $385, they could reasonably infer that Nixon now suggested $54,285 would be reasonable payment for the work. The same affiant providing the trial court three different opinions as to what a reasonable fee would be for the same work hardly facilitated the trial court's task or evinced the existence of uncontroverted evidence on the topic.
Of note is that the hours expended by the attorneys who did most of the work changed. For instance, in the affidavit through which Nixon suggested $67,290 was a reasonable fee, he attested that he expended 75 hours of his time in obtaining a dismissal. His co-counsel purportedly expended 68 hours. On the other hand, the same affiant said in his "Third Supplemental Affidavit" that the "TOTAL [hours] FOR DISMISSAL" spent by Nixon was 83.1 hours. Co-counsel's "TOTAL [hours] FOR DISMISSAL" became 55.5.
As for the hourly rate Sullivan purported to use in calculating a reasonable fee, we find no evidence indicating that $385 reflected an hourly rate within the rather rural locality wherein the suit was filed. The same is true of the $530 and $405 rates charged from time to time. Both apparently reflected some combination of rates that Nixon's "partners, associate attorneys, paralegals and law clerks in its Houston, Dallas, San Antonio, and Austin" offices charged per hour. Needless to say, neither the West Texas Panhandle nor the county of suit (Hemphill) are Houston, Dallas, San Antonio, Austin, or some other expanding metropolitan area. Though this omission was discussed in our original opinion issued several years earlier, it remained uncorrected. Sullivan v. Abraham, 472 S.W.3d 677, 682-83 (Tex. App.—Amarillo 2014) (observing that "Abraham initiated, and the parties litigated it in Hemphill County, Texas. This is of import because the Texas Disciplinary Rules of Professional Conduct cite 'the fee customarily charged in the locality for similar legal services' as the appropriate rate when calculating attorney's fees . . . Sullivan made no effort to establish . . . that the hourly rate charged in Houston, Dallas, San Antonio, and Austin is or likens to the hourly rate 'charged in the locality' or general area of the trial court in Hemphill County."), reversed in part on other grounds, Sullivan, 488 S.W.3d 294. Yet, the void was nonetheless filled by counsel for Abraham. His lead attorney (John Lovell) attested to his years of practice in the West Texas Panhandle wherein the suit pended and his familiarity with the hourly rates charged within the locality. The latter ranged from $180-$200 for work done by associates and $275-$375 for work done by partners. The trial court was free to utilize that evidence to calculate a reasonable fee payable to Sullivan. It appears that the trial court did just that as exemplified in its finding of fact number 8.
The trial court began that finding by stating: "Based upon the Court's knowledge of attorney's fees, including the rates customarily charged in the locality for similar legal services, the evidence presented on the fees customarily charged in the locality for similar services. . . ." This passage also indicates that judicial notice of the fees charged in the locality may have also been taken by the trial court, sua sponte. Authority exists holding that such notice of fees may only be taken in cases encompassed by § 38.001 of the Texas Civil Practice and Remedies Code. See, e.g., Charette v. Fitzgerald, 213 S.W.3d 505, 514-15 (Tex. App.—Houston [14th Dist.] 2006, no pet.) (so holding while also noting there to be a split of authority on the issue). Sullivan did not ask us to address the propriety of judicially noticing attorney's fees when same are sought under § 27.009 of the Texas Civil Practice and Remedies Code.
There also appears of record contradictory expert testimony regarding whether the time spent by all of Sullivan's attorneys was reasonable and necessary. Of course, Nixon opined that it was while Lovell opined that it was not. And to support their opinions, each described their respective legal experience and years of practice.
Sullivan represented in his appellate brief that "[d]espite the vitriol, the record before the district court does not disclose significant disagreement about what a reasonable attorney's fee award should be in this case." Our review of the same record belies that statement. The evidence was far from clear, far from uncontradicted. The trial court was left to wade through an ocean of conflicting and often unexplained data. And the turbulence created by all the evidence certainly permitted it to reasonably conclude that the eventual $296,805 sought by Sullivan was neither reasonable nor necessary. Consequently, we must defer to its findings of fact so concluding. Yet, that alone does not mean the fees it ultimately awarded constituted an unassailable exercise of discretion. Our problem comes in trying to find evidence to support the decision that $35,000 was reasonable and necessary fee under the circumstances and evidence of record. This is of import because, again, an exercise of discretion must not only comport with guiding rules and principles but also find support in the evidence. See Ford Motor Co., 363 S.W.3d at 578; In re Marriage of Vick, 2016 Tex. App. LEXIS 11975, at *8-9. So, a fee that is "not excessive or extreme, but rather moderate or fair" cannot simply be pulled out of the air. Rather, the evidence must support the conclusion that, on this record, $35,000 was so, and we find no such evidence.
The statute invoked by Sullivan to obtain a dismissal of Abraham's suit was enacted in 2011. See TEX. CIV. PRAC. & REM. CODE ANN. § 27.001 (West 2015) (historical note stating "Added by Acts 2011, 82nd Leg., R.S., Ch. 341 (H.B. 2973), Sec. 2, eff. June 17, 2011"). Abraham commenced his suit before the statute's second anniversary. So, the legislative edict was quite new and the subject of little judicial exposition when invoked by Sullivan. Similarly unclear at the time was the meaning of § 27.009 of that same Code. Sullivan had to appeal not only the trial court's decision but also this court's in effort to gain the requisite clarity. So, it cannot logically be said that the controversies spawning the incursion of attorney's fees were unimportant or settled. And given the uncharted territory through which the parties, the trial court, this court, and the Supreme Court journeyed, it would be unreasonable to hold Sullivan to using only one attorney in completing the journey. This is especially true given Abraham's periodic retention of multiple attorneys and assistants while venturing down the same path. It may be that six were unnecessary at any given time or during any given portion of the litigation, but nothing of record indicates that the dispute called for only one at all times. Simply put, the novelty of the issues merit consideration when determining the reasonableness and necessity of fees incurred. Indeed, it seems as though the parties did and still do dispute what law controls any particular aspect of the litigation.
Next, let us assume that Sullivan was obligated to use only one attorney. Because the attorney this court and the trial court saw most often was Nixon, let us consider only the hours he expended. That amount would approximate 75 through dismissal in the trial court. To that information, we add the evidence from Abraham's counsel about the range of fees customarily charged in the locality, that range being $180-$200 for associates to $275-$375 for partners. Nixon being a partner in his law firm, we adopt the low of $275 for the sake of an example. Multiplying $275 by 75 gives us a product of $20,625; so, at the very least, the evidence would support a reasonable fee of $20,625 for work done by Nixon through dismissal of the cause at the trial level. To that, we add Nixon's own original estimates of what a reasonable fee would be to prosecute or defend the cause through appeal to an intermediate appellate court and the Supreme Court. That would seem appropriate since Abraham tended to argue that his opponent had to abide by that estimate, and the amount was $45,000. Forty-five thousand dollars is much less than the roughly $77,240 charged by Abraham's legal counsel for services provided in the same courts. Should one add $45,000 to $20,625, he would encounter the sum of $65,625 as approximating the base of what a reasonable fee would be under the record at bar. Yet, Sullivan was awarded only $35,000, or about $30,000 less.
Alternatively, we note that Abraham invited the trial court to use his own counsel's fees as a means of illustrating the purported unreasonableness of those incurred by Sullivan. The evidence of those fees illustrated them to be $42,357.75 for services in the trial court, $22,401.75 for the initial appeal to this court, and $54,839.75 for legal services provided in the Supreme Court. Adding them together is evidence of a reasonable fee of $119,599.25. Again, Sullivan was awarded only $35,000, or $84,599.25 less.
Our construing the evidence of record in a manner most adverse to Sullivan and even ignoring such criteria as the novelty of the issues involved requires us to hold the trial court's award as an instance of abused discretion. No evidence supports the finding that "reasonable and necessary attorneys' fees for the services of [Sullivan's] attorneys, from the beginning of this case until remand by the Supreme Court of Texas to this Court, is in the amount of $35,000.00." Thus, we have little choice but to require their redetermination. Given that such is an issue of fact, it falls outside our bailiwick. See Wisdom v. Smith, 146 Tex. 420, 425, 209 S.W.2d 164, 166 (1948) (holding that an appellate court lacks the original jurisdiction to determine questions of facts in cases brought on appeal); Mullins v. Elieson, 611 S.W.2d 921, 927 (Tex. Civ. App.—Amarillo 1981, no writ) (stating that "[t]he contradictory facts may not be resolved on appeal, for we have no jurisdiction to make original findings of fact"). We caution, though, that our opinion should not be interpreted in any way as suggesting what a fair, reasonable, or necessary fee should be. Our references to various sums were made solely for purposes of analyzing the issues before us.
Fees Post-Remand
As for the $7,200 fee awarded Sullivan for work done in the trial court after remand from the Texas Supreme Court, we find like error for like reason. Through his fourth supplemental affidavit, Nixon described in detail the work done by whom and in what amount. Two attorneys were involved in the process, a partner and an associate, and the time expended equaled 32.1 hours. To Nixon's attestations in his fourth supplement, we add the content of the record before us regarding what transpired after remand. Needless to say Abraham did not capitulate. His attorney continued to vigorously represent his interests which, in turn, required response from Sullivan's legal counsel. These circumstances hardly suggest that the 32.1 hours incurred by Nixon and his associate where unreasonable, unnecessary, or excessive. This is especially so given that no one offered evidence to the contrary. Indeed, because it was not contradicted, the evidence regarding the reasonableness of the time incurred should be accepted as true. See Garcia, 319 S.W.3d at 641-42 (stating that testimony from an interested person must be accepted as true, as a matter of law, when it is (1) uncontradicted by other evidence or circumstances, (2) clear, direct, and positive, and (3) free from internal contradiction, inaccuracies, and circumstances tending to cast suspicion on it).
The 32.1-hour total apparently excluded time spent travelling to Hemphill County to participate in a hearing. Though West Texas' wide-open spaces are beautiful, it takes quite some time to arrive at destinations located within them, like the Hemphill County Courthouse in Canadian, Texas.
Multiplying 32.1 by $385 leaves a product of $12,358.50, and that is what Sullivan requested. Multiplying 32.1 by $275 (i.e., the lowest rate charged by partners in Lovell's firm according to Lovell's earlier affidavit) derives the sum of $8,827.50. The $7,200 fee awarded by the trial court was less than both amounts. Simply put, it has no evidentiary support and also constitutes an instance of abused discretion.
Refusal to Award Conditional Appellate Attorney's Fees
Sullivan contends that he offered evidence of a reasonable amount of attorney's fees conditioned on a successful appeal in this intermediate appellate court and to the Supreme Court of Texas. "The district court abused its discretion in refusing to award them," he concludes. In searching through the lengthy record, though, we could not find where Sullivan objected to the omission or broached it with the trial court through a post-judgment motion. And while he objected to the trial court's findings and moved for additional ones, those objections and that motion did not encompass the award of conditional appellate fees. Thus, his current complaint was not preserved for review. See Marcus v. Smith, 313 S.W.3d 408, 416-17 (Tex. App.—Houston [1st Dist.] 2009, orig. proceeding) (holding that because Marcus failed to object to the award of attorney's fees, his appellate complaint about same was not preserved); Page v. Hulse, No. 14-06-00731-CV, 2007 Tex. App. LEXIS 5827, at *12 (Tex. App.—Houston [14th Dist.] July 26, 2007, pet. denied) (mem. op.) (holding that, because "Page failed to object to the court's failure to award attorney's fees and costs either during trial or in his post-trial motion to reform the judgment," it was waived); In re A.F.F., 120 S.W.3d 517, 519 (Tex. App.—Dallas 2003, no pet.) (involving the failure to award attorney's fees and holding that "[b]ecause Cook did not raise these complaints during trial or in a post-judgment motion, she has not preserved the issue for review, and we need not address them"); Lochinvar Corp. v. Meyers, 930 S.W.2d 182, 190 (Tex. App.—Dallas 1996, no writ) (wherein Meyers contended that the trial court erred in failing to award him appellate attorney's fees and the reviewing court concluded that the issue was not preserved since he did not bring it to the attention of the trial court through a motion for new trial or any other post-judgment motion); McCraw v. Maris, 837 S.W.2d 646, 652 (Tex. App.—Dallas 1990) (involving a like complaint as in Lochinvar and holding the same), rev'd on other grounds, 828 S.W.2d 756 (Tex. 1992); WLR, Inc. v. Borders, 690 S.W.2d 663, 668-69 (Tex. App.—Waco 1985, writ ref'd n.r.e.) (holding that, since Borders failed to complain to the trial court about its failure to award him mandatory attorney's fees via a post-judgment motion or request for additional findings or conclusions, the issue was not preserved for review).
The issues addressed by this court render moot the others raised by Sullivan. We sustain the complaint that the trial court abused its discretion in awarding the limited fees of $35,000 and $7,200 for legal services provided Sullivan pre- and post-remand from the Texas Supreme Court. We further reverse only that aspect of the final judgment awarding those two fees. In all other things, the judgment is affirmed. We also remand to the trial court for redetermination the issues of Sullivan's "[r]easonable attorney's fees from the beginning of the case until remand by the Supreme Court of Texas to" the trial court and his "[r]easonable attorney's fees after remand by the Supreme Court of Texas to" the trial court. Redetermination of those matters will be based upon the evidence provided the trial court by the litigants prior to the entry of its final judgment signed on February 28, 2017. This does not restrict the trial court from considering or awarding Sullivan 1) conditional attorney's fees should further appeal from the redetermination be necessary or 2) a reasonable attorney's fee for legal services incurred during the current remand to the trial court; evidence may be taken by the trial court on those issues.
"We can work it out . . . Life is very short, and there's no time for fussing and fighting . . . ." From the continuing wisdom of Liverpool's own John and Paul.
Brian Quinn
Chief Justice