in the Interest of A.Y.K., M.Y.K. and A.Y.K., Children ( 2021 )

Affirmed in part; Reversed in part and Opinion Filed August 30, 2021
In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-20-00547-CV
IN THE INTEREST OF A.Y.K., M.Y.K. AND A.Y.K., CHILDREN
On Appeal from the 469th Judicial District Court
Collin County, Texas
Trial Court Cause No. 469-51499-2016
MEMORANDUM OPINION
Before Justices Molberg, Reichek, and Nowell
Opinion by Justice Molberg
In this family dispute, the trial court entered a final judgment ordering
appellants Muhammad Nabih Y. Kanaan (“Nick”) and Yassine Kanaan (“Yassine”)
to jointly and severally pay $16,025.47 in attorneys’ fees to appellee Mennatallah
Oussama Jammal (“Jammal”) and denying all other relief. In two issues, Nick and
Yassine appeal the portion of the judgment awarding attorneys’ fees to Jammal and
the failure to award attorneys’ fees to Yassine. For the reasons explained below, we
affirm the judgment in part, reverse it in part, and render a take-nothing judgment
on Jammal’s cross-claim against Yassine. Because the issues are well-settled in law,
we issue this memorandum opinion. See TEX. R. APP. P. 47.4.
BACKGROUND
The parties are current or former family members. Nick is Yassine’s father.
Jammal is Yassine’s ex-wife.
Yassine and Jammal were divorced on June 14, 2017. While the two were
married, they purchased a condominium in Michigan (Michigan condo) and a home
in Plano (Plano home). Their agreed final decree of divorce discussed the two
properties and directed that they be sold and for the proceeds to be divided according
to the decree’s terms.
The crux of the present dispute involves Nick’s claim that he allegedly loaned
Yassine and Jammal $93,500 to purchase those two properties. No debts to Nick
were mentioned, divided, or assumed by either party in Yassine and Jammal’s
divorce decree.
The decree contained mutual releases, warranties, and other provisions in
which Yassine and Jammal made certain representations to the other regarding
marital debts, including an agreement to indemnify and defend the other as provided
in the agreement. For example, in the decree, Yassine and Jammal each released
and discharged the other “from every claim, demand, right and obligation
whatsoever, both in law and in equity, that either of them ever had or now has against
the other or their property upon the reason of any matter, cause, including tort claims
of any kind, or thing up to April 4, 2017; provided, however, that neither party is
–2–
released or discharged from any obligation, indemnity or warranty under this
[decree] or any instrument or document executed pursuant to this [decree].”
The decree contained an indemnification provision that stated as follows:
INDEMNIFICATION
Each party represents and warrants that he or she has not incurred any
outstanding debt, obligation, or other liability on which the other party
is or may be liable, other than those described in this Decree. [1] Each
party agrees and IT IS ORDERED that if any claim, action, or
proceeding is hereafter initiated seeking to hold the party not assuming
a debt, an obligation, a liability, an act, or an omission of the other party
liable for such debt, obligation, liability, act or omission of the other
party, that other party will, at that other party’s sole expense, defend the
party not assuming the debt, obligation, liability, act, or omission of the
other party against any such claim or demand, whether or not well
founded, and will indemnify the party not assuming the debt,
obligation, liability, act, or omission of the other party and hold him or
her harmless from all damages resulting from the claim or demand.
Damages, as used in this provision, includes any reasonable loss, cost,
expense, penalty, and other damage, including without limitation
attorney’s fees and other costs and expenses reasonably and necessarily
incurred in enforcing this indemnity.
IT IS ORDERED that the indemnifying party will reimburse the
indemnified party, on demand, for any payment made by the
indemnified party at any time after the entry of the divorce decree to
satisfy any judgment of any court of competent jurisdiction in
accordance with a bona fide compromise or settlement of claims,
demands, or actions for any damages to which this indemnity relates.
The parties agree and IT IS ORDERED that each party will give the
other party prompt written notice of any litigation threatened or
1
In another section of the decree, Yassine and Jammal confirmed that he or she had “made a full and
fair disclosure of all the assets and liabilities of the parties of which [each was] aware in [his or her] most
current sworn inventory and appraisement.” The decree also provided, “Any mistakenly omitted liabilities
which are later determined to have been the joint liabilities of the parties shall be subject to future allocation
by the Court,” and “any undivided community liabilities determined to have been intentionally or
fraudulently undisclosed by a party in [the decree] are hereby partitioned one hundred percent (100%) to
the party who incurred the liability.”
–3–
instituted against either party that might constitute the basis of a claim
for indemnity under this Decree.
The divorce decree also stated, “To the extent permitted by law, the parties
stipulate the agreement is enforceable as a contract.” The decree contained a
paragraph regarding attorneys’ fees and expenses for enforcement which stated:
Attorney’s Fees and Expenses for Enforcement
Reasonable attorney’s fees and expenses of a party incurred in
successfully prosecuting or defending a suit under these contractual
provisions against the other party or the other party’s estate will be
recoverable by the successful party in the action.
Yassine and Jammal signed the divorce decree, and their signatures reflected
agreement with the decree both as to form and substance. Nick was not a party to
the decree.
In addition to claiming that he loaned $93,500 to Yassine and Jammal, Nick
also claims in this lawsuit that, after Yassine and Jammal divorced, Yassine made a
partial payment to him of fifty percent of the total amount owed. Nick demanded
payment from Jammal of the remaining portion and sued her when she refused.
Nick’s lawsuit against Jammal was later consolidated with Yassine and
Jammal’s family court case. In his live pleading, Nick claimed Jammal owes him
$46,750 for the monies he alleges he loaned Yassine and Jammal during their
marriage, and he sought damages, attorneys’ fees, and other relief through various
claims, including breach of contract, quantum meruit, money had and received, and
unjust enrichment. Nick’s live pleading also included a section entitled “vicarious
–4–
liability,” in which he alleged that at the time of the occurrences giving rise to this
lawsuit, Jammal had granted Yassine authority to act on her behalf or, alternatively,
had allowed Yassine to believe he had authority to act on her behalf or that the
actions Yassine took on her behalf were authorized. Nick claimed Jammal discussed
obtaining loans from Nick with Yassine and that she “authorized . . . and allowed
[Yassine] to believe that he had authority to obtain loans on their behalf.” Nick also
claimed “[a]t the time of the events giving rise to this suit, [Yassine] was acting
within the scope of authority granted by [Jammal].” Finally, Nick’s live pleading
claimed, in the alternative, that “after [Jammal] was made fully aware of [Yassine’s]
actions . . . and the loans obtained by [him] on his and her behalf, [Jammal] approved
[Yassine’s] actions . . . in obtaining the loans from [Nick] with the intent to validate
the actions of [Yassine].”
Jammal filed an answer to Nick’s lawsuit and a cross-petition and
supplemental cross-petition against Yassine. In her live answer to Nick’s claims,
she sought attorneys’ fees from Nick, and the only basis she specified for such fees
was the offer-of-settlement rule in Texas Rule of Civil Procedure 167 and chapter
42 of the Texas Civil Practice and Remedies Code.2 See TEX. CIV. PRAC. & REM.
CODE §§ 42.001–.005; TEX. R. CIV. P. 167.
2
Jammal’s first amended answer included a section entitled “Attorneys’ Fees” that stated:
13. It was necessary for Defendant to secure the services of Chris J. Harding and the
law firm Sullivan & Cook, LLC, licensed attorneys, to prepare and prosecute this suit.
Judgment for attorney’s fees, expenses, and costs through trial and appeal should be
–5–
In her live pleadings against Yassine, Jammal sought, among other things, an
award of attorneys’ fees under Texas Rule of Civil Procedure 167 and chapter 42 of
the Texas Civil Practice and Remedies Code, as well as under the divorce decree’s
indemnification provision, which is quoted in full above.
Yassine answered Jammal’s cross-petition, and in his pleading, Yassine
generally denied Jammal’s claim. He also asked the court to dismiss Jammal’s
claim, enter a take nothing judgment, and award him costs and attorneys’ fees based
on the attorneys’ fees provision in the decree that we quoted above.
The parties’ claims were tried in a bench trial on September 9, 2019. Nick,
Yassine, Jammal, and others testified, and at the conclusion of the trial, the trial court
took the matter under advisement.
On January 13, 2020, the trial judge issued a “Court’s Memorandum” stating,
in pertinent part, that “[t]he Court finds that no financial obligation exists for
[Jammal],” “[a]ttorney fees in the amount of $16,025.47 are awarded against [Nick]
and [Yassine] [who] are jointly and severally liable,” and that “[a]ny and all relief
not expressly granted is hereby DENIED.” The memorandum instructed Jammal’s
attorney to draft a proposed final order and, if agreement could be reached, for the
granted against Plaintiff and in favor of Defendant for the use and benefit of Defendant’s
attorney and be ordered paid directly to Defendant’s attorney, who may enforce the
judgment in the attorney’s own name. Defendant requests postjudgment interest as allowed
by law.
14. Litigation costs are further recoverable under Texas Rule of Civil Procedure 167
and Chapter 42 of the [Texas Rules of Civil Procedure] [sic].
–6–
parties to submit the proposed order with agreed signatures to the court for the
court’s own signature by February 27, 2020. Otherwise, the court instructed the
parties and counsel to appear at a hearing on February 28, 2020, regarding entry of
the final order.
On February 26, 2020, the trial court entered the final judgment at issue in this
appeal, and counsel for the parties signed the order and noted agreement as to its
form. As to the matters raised in this appeal, the final judgment stated, in part:
Orders
IT IS ORDERED, ADJUDGED AND DECREED that Muhammad
Nabih Y. Kanaan and Yassine Kanaan take nothing on their claims
against Mennatallah Jammal.
Attorney’s Fees and Costs
IT IS ORDERED that a money judgment is awarded to Mennatallah
Jammal in the amount of sixteen thousand, twenty-five dollars and
forty-seven cents ($16,025.47) for reasonable attorney’s fees, with
interest at five percent per year from the date the judgment is signed
until paid. The judgment, for which let execution issue, is awarded
against Muhammad Nabih Y. Kanaan and Yassine Kanaan, as jointly
and severally liable parties.
....
Relief Not Granted
All relief requested and not expressly granted is denied. This judgment
is final, disposes all claims and all parties, and is appealable.
The final judgment did not specify the basis upon which Jammal’s attorneys’
fees award was made or how it was calculated.
–7–
After entry of the final judgment, Nick and Yassine sought, and the trial court
provided, findings of fact and conclusion of law. In them, the court stated, among
other things, that “[n]o contract, oral or otherwise, existed between [Nick] and
[Jammal],” “[a]ny monies provided to [Jammal] and [Yassine] by [Nick] were gifts,”
and Jammal “is entitled to attorney’s fees against [Nick] and Yassine . . . as jointly
and severally liable parties.”
Like the final judgment, the court’s findings of fact and conclusions of law
did not specify any basis upon which the attorneys’ fees award to Jammal was made
or how it was calculated. However, in its findings of fact, the trial court stated that
Jammal “has incurred $16,025.47 for reasonabl[e] attorney’s fees” and that
“[d]amages, as used in the indemnification section of the decree, includes attorney’s
fees.” In its conclusions of law, the trial court stated, “[Jammal] is entitled to
attorney’s fees against [Nick] and [Yassine] as jointly and severally liable parties.”
ANALYSIS
Nick and Yassine raise two issues in this appeal. First, they argue the trial
court erred as a matter of law in awarding attorneys’ fees to Jammal. Second, they
argue the trial court erred in failing to award attorneys’ fees to Yassine because, they
assert, the evidence legally and factually establishes Yassine’s right to the award.
Jammal disputes both issues.
–8–
Attorneys’ Fees Award to Jammal
In their first issue, Nick and Yassine argue the trial court erred as a matter of
law in awarding attorneys’ fees to Jammal.
Generally, we review a trial court’s award of attorneys’ fees under an abuse
of discretion standard. See Ridge Oil Co., Inc. v. Guinn Invs., Inc., 148 S.W.3d 143,
163 (Tex. 2004). Here, however, the issue is whether Texas law recognizes a basis
for the recovery of attorneys’ fees, which is a question of law that we review de
novo. See Heckman v. Williamson Cty., 369 S.W.3d 137, 150 (Tex. 2012) (appellate
courts review questions of law de novo); Holland v. Wal-Mart Stores, Inc., 1 S.W.3d
91, 94 (Tex. 1999) (per curiam) (availability of attorneys’ fees under particular
statute is question of law) (citation omitted).
“In Texas, as in the federal courts, each party generally must pay its own way
in attorney’s fees.” Rohrmoos Venture v. UTSW DVA Healthcare, LLP, 578 S.W.3d
469, 483 (Tex. 2019) (citations omitted). But in some circumstances, such as when
authorized by statute or contract, a prevailing party may recover fees from the
opposing party. See Brewer v. Lennox Hearth Products, LLC, 601 S.W.3d 704, 721
n.71 (Tex. 2020) (“trial courts do not have inherent authority to award attorney’s
fees when not provided by contract or statute” but may impose sanctions for bad-
faith conduct which can include attorney’s fees incurred because of misconduct);3
3
No such misconduct is at issue here.
–9–
Rohrmoos Venture, 578 S.W.3d at 484 (“When fee-shifting is authorized, whether
by statute or contract, the party seeking a fee award must prove the reasonableness
and necessity of the requested attorney’s fees.”) (citations omitted).
Nick and Yassine argue that attorneys’ fees are not available to Jammal under
statute or contract, which Jammal disputes. As to both appellants, Jammal argues
attorneys’ fees are available by statute through chapter 42 of the civil practice and
remedies code and rule of civil procedure 167. See TEX. CIV. PRAC. & REM. CODE
§§ 42.001–.005; TEX. R. CIV. P. 167. These authorities provide that if a settlement
offer made in accordance with the rule and statute is rejected, and the judgment to
be awarded on the monetary claims covered by the offer is significantly less
favorable to the offeree than was the offer, the court must award the offering party
litigation costs against the rejecting party from the time the offer was rejected to the
time of judgment. See TEX. CIV. PRAC. & REM. CODE §§ 42.001–.005 (describing
parties as either an “offering party” or “rejecting party”); TEX. R. CIV. P. 167.4(a)
(describing parties as “offeror” or “offeree”). A judgment award on monetary claims
is significantly less favorable than an offer to settle those claims if the rejecting
party/offeree is a claimant and the judgment would be less than 80 percent of the
rejected offer, or if the rejecting party/offeree is a defendant and the judgment would
be more than 120 percent of the rejected offer. See TEX. CIV. PRAC. & REM. CODE
§ 42.004(b); TEX. R. CIV. P. 167.4(b). Litigation costs that may be awarded under
–10–
the statute and rule include, but are not limited to, reasonable attorneys’ fees. See
TEX. CIV. PRAC. & REM. CODE § 42.001(5)(D); TEX. R. CIV. P. 167.4(c)(4).
In this case, Jammal cites her October 15, 2018 offer to Nick and Yassine
which conveyed, among other non-monetary terms, that “[n]o money [be] paid by
any party to the other.” Under the circumstances, where no monetary offer was
made, and no judgment award on monetary claims was made in Nick or Yassine’s
favor, the litigation cost-shifting rule was not triggered, and thus no attorneys’ fees
were recoverable thereunder, because there was no judgment award on monetary
claims that was significantly less favorable to Nick or Yassine than Jammal’s
October 15, 2018 offer. Cf. Mahaffey v. Washburne, 582 S.W.3d 527, 529 (Tex.
App.—Fort Worth 2018, pet. denied) (concluding that litigation cost-shifting rule
was triggered when defendant made offer of roughly $15,000 that claimants rejected
prior to non-suiting case). Additionally, even if the rule had been triggered, because
Nick and Yassine took nothing by way of judgment, any litigation costs awarded to
Jammal could not exceed the total amount of zero, considering that “the litigation
costs that may be awarded to any party under this rule” may not exceed “the total
amount that the claimant recovers or would recover before . . . subtracting as an
offset an award of litigation costs under this rule in favor of the defendant.” TEX. R.
CIV. P. 167.4(d)(2); see TEX. CIV. PRAC. & REM. CODE § 42.004(d); Mahaffey, 582
S.W.3d at 529 (stating that, despite rule being triggered, any litigation costs could
not exceed the total amount of zero when claimants took nothing by way of judgment
–11–
after non-suiting claims). Thus, Jammal’s attorneys’ fees award is not authorized
by chapter 42 of the civil practice and remedies code or civil procedure rule 167.
See TEX. CIV. PRAC. & REM. CODE §§ 42.001–.005; TEX. R. CIV. P. 167.
Alternatively, as to Yassine,4 Jammal also argues attorneys’ fees are available
by contract through the divorce decree’s indemnification provision. We conclude
the indemnification provision does not apply under the circumstances. By the plain
terms of the indemnification provision in the decree, Yassine’s and Jammal’s
defense and indemnification of the other party is conditioned on the initiation of any
“claim, action or proceeding” that “seek[s] to hold the party not assuming a debt, an
obligation, a liability, an act, or an omission of the other party liable for such
obligation, liability, act, or omission” (emphasis added). Because Yassine did not
assume the alleged debt to Nick in the decree—nor could he, based on the trial
court’s unchallenged findings5—Jammal could not be considered to be “the party
not assuming a debt, an obligation, a liability, an act, or an omission of [Yassine]”
with respect to that alleged debt under the indemnification provision.
4
By excluding Nick from her discussion regarding the indemnification provision in her brief, Jammal
appears to agree, at least implicitly, that the indemnification does not apply to Nick. Additionally, in the
trial court, during his testimony regarding attorneys’ fees, Jammal’s counsel stated he believed the only
basis upon which an attorneys’ fees award could be ordered against Nick was under rule 167 and chapter
42 of the civil practice and remedies code. Specifically, he stated, “I believe the only way that Nick is on
the hook for any of this is if the Court rules in such a way and then reviews the 167 offer and finds that our
offer was more generous than the Court’s or equal to the Court’s ruling, otherwise, the amount I believe
would fall against Yassine through the indemnity clause in the agreed final decree of divorce.”
5
The trial court found that “[n]o contract, oral or otherwise, existed between [Nick] and [Jammal],”
and “[a]ny monies provided to [Jammal] and [Yassine] by [Nick] were gifts.” None of the parties have
challenged those findings in this appeal.
–12–
Because Jammal’s fee award against Nick and Yassine is not authorized by
statute or contract, we conclude the trial court erred as a matter of law in awarding
attorneys’ fees to Jammal. See Brewer, 601 S.W.3d at 721 n.71 (courts have no
inherent authority to award attorney’s fees when not provided by contract or statute);
Rohrmoos Venture, 578 S.W.3d at 483 (each party generally must pay its own way
in attorneys’ fees, but prevailing party may recover fees from the opposing party if
authorized by statute or contract).
We sustain appellants’ first issue.
Failure to Award Attorneys’ Fees to Yassine
In appellants’ second issue, Yassine argues the trial court erred in failing to
award Yassine attorneys’ fees because he conclusively established his right to an
award of attorney fees as a matter of law or, alternatively, because the failure to
award any attorney fees after successfully defending against the indemnity claim is
against the great weight and preponderance of the evidence. Jammal disputes this.
As a contractual basis for his alleged right to attorneys’ fees, Yassine relies
on the attorneys’ fees provision in the divorce decree which provides that
“[r]easonable attorney’s fees and expenses of a party incurred in successfully
prosecuting or defending a suit under these contractual provisions against the other
party . . . will be recoverable by the successful party in the action.”
Based on the plain terms of the attorneys’ fees provision in the divorce decree
and the trial court’s take-nothing judgment on Yassine’s claim against Jammal, we
–13–
conclude the trial court did not err in failing to award Yassine attorneys’ fees because
he was not a “successful party” as required by the attorneys’ fees provision in the
divorce decree. See Hirschfeld Steel Co. v. Kellogg Brown & Root, Inc., 201 S.W.3d
272, 289 (Tex. App.—Houston [14th Dist.] 2006, no pet.) (concluding trial court did
not err in concluding neither party was a prevailing party in litigation when court’s
judgment ordered that parties take nothing on their claims) (citing Western Skies
P’ship/Physician’s Healthcare Assocs., L.C. v. Physician’s Healthcare Assocs. L.C.,
No, 08-02-00231-CV, 2004 WL 1078491, at *4 (Tex. App.—El Paso May 13, 2004,
no pet.) (mem. op.)).
We overrule appellants’ second issue.
CONCLUSION
We reverse the portion of the final judgment awarding $16,025.47 in
attorneys’ fees to Jammal, render a take-nothing judgment on Jammal’s cross-claim
against Yassine, and affirm the judgment in all other respects.
/Ken Molberg/
200547f.p05 KEN MOLBERG
JUSTICE
–14–
Court of Appeals
Fifth District of Texas at Dallas
JUDGMENT
IN THE INTEREST OF A.Y.K., On Appeal from the 469th Judicial
M.Y.K. AND A.Y.K., CHILDREN District Court, Collin County, Texas
Trial Court Cause No. 469-51499-
No. 05-20-00547-CV 2016.
Opinion delivered by Justice
Molberg. Justices Reichek and
Nowell participating.
In accordance with this Court’s opinion of this date, the judgment of the trial
court is AFFIRMED in part and REVERSED in part. We REVERSE the portion
of the final judgment awarding $16,025.47 in attorneys’ fees to Jammal, RENDER
a take-nothing judgment on Jammal’s cross-claim against Yassine, and affirm the
judgment in all other respects.
It is ORDERED that each party bear its own costs of this appeal.
Judgment entered this 30th day of August, 2021.
–15–