Chris Lawry v. Pecan Plantation Owners Association, Inc. and Pecan Plantation Volunteer Fire Department and Emergency Medical Services, Inc. ( 2016 )

COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH
NO. 02-15-00079-CV
CHRIS LAWRY APPELLANT
V.
PECAN PLANTATION OWNERS APPELLEES
ASSOCIATION, INC. AND PECAN
PLANTATION VOLUNTEER FIRE
DEPARTMENT AND EMERGENCY
MEDICAL SERVICES, INC.
----------
FROM THE COUNTY COURT AT LAW OF HOOD COUNTY
TRIAL COURT NO. C06397
----------
MEMORANDUM OPINION1
----------
Chris Lawry appeals from two underlying summary judgment rulings and a
final judgment for attorney’s fees in favor of Pecan Plantation Owners
Association, Inc. (the Association) and Pecan Plantation Volunteer Fire
1
See Tex. R. App. P. 47.4.
Department and Emergency Medical Services, Inc. (the Fire Department). We
modify the judgment in part, affirm it in part, and reverse and remand it in part.
Background
Pecan Plantation is a subdivision located in Hood and Johnson Counties,
Texas. The Association is a nonprofit corporation with members who are
property owners in the subdivision. The Association was established to provide
members with common amenities such as a clubhouse, recreational facilities,
private roadways, and security.
Historically, fire and other emergency services (EMS), including dispatch
services for the subdivision, were provided by the Association, but in 1996, the
Fire Department was incorporated as a separate nonprofit entity. In 2006, the
Fire Department ceased performing dispatch services for Pecan Plantation, and
Hood County’s 911 system began providing dispatch services. Thereafter, the
Association and the Fire Department agreed that the Fire Department would be
the exclusive provider of EMS for the subdivision, and they entered into an
Agreement for Emergency Services (the Agreement) dated September 12, 2006.
The Fire Department also entered into a mutual aid agreement with Hood County
and Hood County EMS to provide backup services for each other.
The Agreement contains a provision stating that the Fire Department will
bill a patient’s insurance when it provides emergency services. The version of
the Agreement in the record also contains the following statement in the same
paragraph as the above provision, which is struck out, with initials next to the
2
strikeout, and the handwritten date “8/23/07”: “Any bill or a portion of the bill not
covered by the insurance will not be billed to the patient.” The Agreement also
contains an indemnification provision: “[The Fire Department] agrees to
indemnify, hold harmless, and defend [the Association] from and against any and
all claims, losses, liabilities, damages, costs, expenses, demands and
obligations, including attorney fees arising out of, or relating in any way to, the
[Fire Department’s] services.”
Before 2008, the Association’s bylaws allowed for the levy of assessments
on members for the purpose of the “improvement, maintenance, management,
and administration of” Association property and common facilities as authorized
by the recorded declaration of covenants, conditions, and restrictions governing
the subdivision (the Declaration). In 2008, in accordance with the Association’s
bylaws, the members approved a ballot proposal to change the bylaws to allow
assessments for the additional purpose of “providing financial support for fire
protection and emergency services.” The ballot measure indicated that if it
passed, each member would be charged $10 per month per lot for that new
purpose. Thus, effective March 1, 2008, the bylaws provided for assessments
for the purpose of providing financial support for fire protection and
emergency services and improvement, maintenance, management,
and administration of the Association Property and Common
facilities, including, but not limited to, the payment of taxes and
insurance thereon and repair replacement and additions thereto, and
for the expenses of administering and enforcing the [Declaration] . . .
and for carrying out the purposes of the Corporation as stated in its
Articles of Incorporation as amended.
3
In December 2012, Lawry sued the Association asserting claims for breach
of contract and the filing of a fraudulent lien2 and seeking a declaratory judgment
that the March 1, 2008 bylaws amendment is void and violative of the
Declaration. A little over a month later, Lawry filed a second amended petition
that included only the declaratory judgment claims; he also filed a motion for
summary judgment. The Association then filed a traditional and no-evidence
summary judgment motion on all of Lawry’s claims and a traditional motion for
summary judgment seeking its attorney’s fees. See Tex. Civ. Prac. & Rem.
Code Ann. § 37.009 (West 2015). The trial court granted the Association’s
motion for summary judgment as to Lawry’s claims but denied its motion as to
attorney’s fees.
Lawry then filed another amended petition3 reiterating his claims against
the Association and adding the Fire Department as a defendant. He sought a
declaratory judgment that the indemnification provision in the Agreement made
the Fire Department jointly and severally liable for any attorney’s fees he might
be ordered to pay the Association as a result of his suit. Lawry also sought
2
The Declaration provides that the Association has a lien upon a property
owner’s lot to secure the payment of any “dues, fees, and charges” assessed to
members in accordance with the provision of maintenance and services by the
Association.
3
By the time the trial court rendered its final judgment, the last live petition
was the Fifth Amended Petition.
4
attorney’s fees from the Fire Department under section 37.009 of the civil
practice and remedies code.
The Fire Department filed a motion for summary judgment incorporating
the arguments in and evidence attached to the Association’s motion for summary
judgment. The Fire Department also alleged that Lawry lacked standing to bring
his indemnification claim because he is not a party to the Agreement and he did
not plead or prove that he is a third party beneficiary. The Fire Department
likewise pled for a traditional summary judgment for attorney’s fees, alleging that
Lawry’s suit against it was groundless and brought in bad faith and that it was
entitled to fees under section 37.009. See Tex. Civ. Prac. & Rem. Code Ann.
§§ 10.001–.006 (West 2002), 37.009; Tex. R. Civ. P. 13.
Lawry filed his Fifth Amended Petition before the hearing on the Fire
Department’s motion for summary judgment; in it, he added a claim seeking
damages in the amount of past EMS assessments he had paid to the Association
under a theory that the Fire Department had been unjustly enriched by receiving
them from the Association. Accordingly, the Fire Department filed a second
motion for summary judgment addressing the new claim. The trial court
eventually granted the Fire Department’s motion for summary judgment on both
of Lawry’s claims, but it denied the Fire Department’s motion for summary
judgment on attorney’s fees. The trial court also found that Lawry’s claims had
not been brought in bad faith.
5
The parties tried the Association’s and Fire Department’s claims for
attorney’s fees to a jury. The jury awarded (1) the Association $31,611.13 for
trial, $10,000 for an appeal through this court, and $23,000 for an appeal through
the supreme court, and (2) the Fire Department $31,795 for trial, $15,000 for an
appeal through this court, and $28,000 for an appeal through the supreme court.
Issues
Lawry raises six issues in this appeal: (1) that the trial court erred by
granting the Association’s motion for summary judgment; (2) that the trial court
erred by granting the Fire Department’s motion for summary judgment; (3) that
the trial court erred by excluding his proffered trial testimony regarding his
attempts to resolve the dispute before filing suit; and (4–6) that the evidence is
legally and factually insufficient to support the jury’s award of trial and appellate
attorney’s fees for the Fire Department and appellate attorney’s fees for the
Association.
Summary Judgment Standard of Review4
We review a summary judgment de novo. Travelers Ins. Co. v. Joachim,
315 S.W.3d 860, 862 (Tex. 2010). We consider the evidence presented in the
light most favorable to the nonmovant, crediting evidence favorable to the
nonmovant if reasonable jurors could, and disregarding evidence contrary to the
4
Because we resolve the summary judgment motion issues on traditional
grounds only, we will recite the standard of review for traditional motions for
summary judgment only.
6
nonmovant unless reasonable jurors could not. Mann Frankfort Stein & Lipp
Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009). We indulge every
reasonable inference and resolve any doubts in the nonmovant’s favor. 20801,
Inc. v. Parker, 249 S.W.3d 392, 399 (Tex. 2008). A defendant who conclusively
negates at least one essential element of a cause of action is entitled to
summary judgment on that claim. Frost Nat’l Bank v. Fernandez, 315 S.W.3d
494, 508 (Tex. 2010), cert. denied, 562 U.S. 1180 (2011); see Tex. R. Civ. P.
166a(b), (c).
Association’s Motion for Summary Judgment
The Association moved for summary judgment on the following grounds:
Lawry’s claim is barred by limitations, Lawry ratified the amendment by voting for
it and then waiting over four years to file suit, and even if the suit is not barred, as
a matter of law the bylaws amendment does not conflict with the Declaration.
The trial judge did not state the specific grounds for granting the motion in the
written order5 although he verbally noted at the hearing on the motion, “I granted
their motion for summary judgment on limitations for sure.” [Emphasis added.]
The trial judge also verbally denied Lawry’s motion for summary judgment.
5
Lawry incorrectly states in his brief that the trial court granted the motion
solely on the limitations ground. See Provident Life & Accident Ins. Co. v. Knott,
128 S.W.3d 211, 215 (Tex. 2003); Cincinnati Life Ins. Co. v. Cates, 927 S.W.2d
623, 625–26 (Tex. 1996).
7
Live Pleading at Time of Order (Third Amended Petition)
In his Third Amended Petition, Lawry sought a declaration that the March
1, 2008 bylaw amendment allowing assessments for EMS purposes conflicts with
the Declaration in violation of property code section 209.0041. Tex. Prop. Code
Ann. § 209.0041 (West Supp. 2016); see Tex. Civ. Prac. & Rem. Code Ann.
§ 37.003 (West 2015). He also sought a declaration that the past assessments
against him in accordance with that amendment were void as a matter of law for
the same reason, as well as recovery of his “costs incurred in this [a]ction.” The
gist of Lawry’s complaint is that the bylaws amendment allowing the
Association’s board of directors to make assessments for “providing financial
support for fire protection and emergency services” falls outside of the
Declaration’s grant of authority to the Association to make assessments for “any
other services and benefits which the Association may provide for the benefit of
the lots, facilities, and members.”
Applicable Law and Declaration Provisions
Property code section 209.0041(i), which applies to “a residential
subdivision in which property owners are subject to mandatory membership in a
property owners’ association,” provides that a bylaw of a property owners’
association “may not be amended to conflict with the declaration.” Tex. Prop.
Code Ann. § 209.0041(b), (i). This provision was enacted during the 2011
legislative session with an effective date of September 1, 2011. Act of May 29,
2011, 82nd Leg., R.S., ch. 1217, §§ 4–5, 2011 Tex. Sess. Law Serv. 3250, 3252.
8
Because Lawry’s claims against the Association challenge whether the wording
and purpose of the bylaw amendment conflicts with the wording and purpose of
the Declaration, we must turn to general rules of construction.
We review a trial court’s interpretation of restrictive covenants de novo.
Buckner v. Lakes of Somerset Homeowners Ass’n, Inc., 133 S.W.3d 294, 297
(Tex. App.––Fort Worth 2004, pet. denied). We apply general rules of contract
construction when construing restrictive covenants. Id.; see Pilarcik v. Emmons,
966 S.W.2d 474, 478 (Tex. 1998). If the covenant has a definite or certain
meaning, it is unambiguous as a matter of law. Buckner, 133 S.W.3d at 297. A
restrictive covenant should be liberally construed to give effect to its purpose and
intent. Tex. Prop. Code Ann. § 202.003(a) (West 2014); Buckner, 133 S.W.3d at
297.
Here, the Declaration defined the Association as “a non-profit corporation
organized for the purposes stated in paragraph III C 5 below.” In paragraph
III C 5, the Association is described as “a non-profit corporation organized for the
purpose of providing its members with a clubhouse and private recreational
facilities and of establishing and maintaining private ways, security protection and
other services for the common benefit of all lot owners.” [Emphasis added.] That
paragraph goes on to state that a lot owner’s membership in the Association
shall be conditioned upon observance of the rules and regulations
established by the Association for the benefit and general welfare of
its members and for the official operation thereof. Said membership
shall also be conditioned upon payment, when due, of such dues,
fees, and charges as the Association shall find necessary for the
9
maintenance of the aforesaid facilities and services and any other
services and benefits which the Association may provide for the
benefit of the lots, facilities, and members.
[Emphasis added.] Paragraph 6 provides that the Association will have a lien on
the member’s lot “to secure the payment of the aforementioned dues, fees, and
charges.”
Paragraph III C 8, entitled Assessments, provides as follows:
8. Assessments. Beginning upon completion of
Clubhouse and opening of the Golf Course each purchaser of a lot
from Dedicator, and the successors and assigns of said purchaser,
shall be assessed the sum of $15.00 per month payable to the
Association for the maintenance and operations of the Association’s
services and facilities, and Dedicator shall pay all other sums
incurred by the Association for the construction, development, and
operation of its facilities and services. Such assessments shall
continue until such time as Dedicator, if it elects to do so in its
discretion, has transferred the voting rights in the stock to the
membership at large of the Association; thereafter, such assessment
shall be determined by the Association in accordance with its By-
laws. . . .
[Emphasis added.]
Analysis
One of the Declaration’s enumerated purposes for the Association is to
establish and maintain “any other services for the common benefit of all lot
owners.” The Declaration set the original assessment amount at $15.00 per
month “for the maintenance and operations of the Association’s services.” And
the Declaration further provided that after control of the Association transferred to
the membership at large rather than the original developer, assessments were to
be determined in accordance with the Association’s bylaws. The March 1, 2008
10
bylaw amendment proposed to charge members an additional $10 per month “for
fire protection and emergency services.”
Lawry contends that because the most recent version of the Agreement
deleted the provision prohibiting the Fire Department from charging property
owners for EMS not covered by medical insurance, he does not receive a benefit
from the assessment; therefore, it is not being used for the “common benefit” of
all owners in the subdivision. But whether the Fire Department is using the
assessment in the manner for which it was assessed is a separate issue from
whether the bylaws amendment allowing assessments to be made for “providing
financial support for fire protection and emergency services” conflicts with the
language in the Declaration. Nevertheless, the Association’s summary judgment
evidence shows that the Fire Department agreed to respond to “emergency
response dispatches . . . for the entirety” of Pecan Plantation “24 hours of each
day of the year” and to “maintain at least one fully equipped ambulance and crew
for emergency calls at all times.” The Association also attached evidence that
the Fire Department used the annual $120 per owner assessment to help fund
staffing expenses and accumulate capital reserves and that the high quality
rating of the Fire Department’s equipment resulted in lower insurance premiums
for the homeowners.
We conclude and hold that as a matter of law, the amendment to the
bylaws authorizing an additional assessment for “fire protection and emergency
services” does not conflict with the language in the Declaration providing that
11
assessments may be used to provide “other services for the common benefit of
all lot owners.” See Tex. Prop. Code Ann. § 209.0041(i); Buckner, 133 S.W.3d at
297. Accordingly, the trial court did not err by granting the Association’s motion
for summary judgment. See Provident Life & Accident Ins. Co. v. Knott, 128
S.W.3d 211, 216 (Tex. 2003). Because we conclude and hold that the trial court
did not err by granting the Association’s motion on traditional grounds, we need
not address Lawry’s arguments regarding the no-evidence motion or whether he
was entitled to additional discovery. See Tex. R. App. P. 47.1; Tex. R. Civ. P.
166a(i). We overrule his first issue.
Fire Department’s Motion for Summary Judgment
In his Fifth Amended Petition, Lawry sought a declaratory judgment that if
he were to be found liable for the Association’s attorney’s fees, the Fire
Department should be jointly and severally liable for those fees. According to
Lawry, as a member of the Association, he is either a party to the Agreement or a
third-party beneficiary. Additionally, he sought recovery from the Fire
Department of the $10 per month assessments that he had paid to the
Association for “fire protection and emergency services”; Lawry alleged that the
Fire Department had been unjustly enriched when the Association paid the
assessments to the Fire Department because the Agreement did not provide for
any payment to the Fire Department and because Lawry received no benefit from
the assessment. In its answer, the Fire Department asserted limitations, lack of
12
standing, law of the case, judicial estoppel, res judicata, waiver, and ratification
as affirmative defenses.
Indemnification
The Fire Department raised the following grounds in its motion for
summary judgment on the indemnification claim: (1) Lawry lacks standing
because he is a stranger to the Agreement and there is no evidence that he is
either a party or third party beneficiary; and (2) the trial court’s summary
judgment for the Association is law of the case as to whether Lawry’s claim is
barred by limitations. The Fire Department also incorporated the Association’s
motion for summary judgment and attachments. Lawry responded with an
affidavit in which he averred that “the members of the [Association] received no
benefit from the assessment for a donation to [the Fire Department]” and that as
a member of the Association, he is “either a party to the Agreement or a third
party beneficiary. The members of the [Association] were the intended
beneficiaries of the Agreement.”
This court has held that a party’s status as a member of a nonprofit
corporation does not automatically confer standing on that party to enforce an
agreement between the nonprofit corporation and a third party. See Maddox v.
Vantage Energy, LLC, 361 S.W.3d 752, 756–60 (Tex. App.––Fort Worth 2012,
pet. denied). Instead, the member of that corporation must show that he or she
qualifies as either a donee or creditor beneficiary of the contract rather than one
who is benefitted only incidentally by performance of the contract. Id. at 757. A
13
donee beneficiary is a party to whom the performance promised will, when
rendered, come to him as a pure donation; a creditor beneficiary is one to whom
the performance promised will come in satisfaction of a legal duty owed to him by
the promisee. MCI Telecomms. Corp. v. Tex. Util. Elec. Co., 995 S.W.2d 647,
651 (Tex. 1999); Maddox, 361 S.W.3d at 757. This legal duty may include
indebtedness, contractual obligations, or other legally enforceable commitments
owed to the third party. MCI Telecomms., 995 S.W.3d at 651; Maddox, 361
S.W.3d at 757.
Nothing in the Agreement indicates that the indemnification provision was
intended to inure to the benefit of individual members of the Association. The
indemnification language itself indicates that the Fire Department agreed to
indemnify “PPOA,” defined as the Association, not any other parties or the
Association’s individual members. See Drilltec Techs., Inc. v. Remp, 64 S.W.3d
212, 215 (Tex. App.––Houston [14th Dist.] 2001, no pet.). The Agreement also
contains a provision stating that “[n]either party may assign any part of the rights
or obligations under this Agreement to any third party, without the express written
consent of the other party.” See id. Lawry is not a donee beneficiary of the
Agreement, as the indemnification he seeks would be in exchange for the
services provided in the Agreement. See Maddox, 361 S.W.3d at 760. Nor
would he be considered a creditor beneficiary because, as we have determined,
the language of the indemnification provision indicates that it was only intended
to be enforceable by the Association itself. See id. Accordingly, we conclude
14
and hold that the trial court did not err by granting summary judgment for the Fire
Department as to Lawry’s indemnification claim.
Unjust Enrichment
In its motion for summary judgment on Lawry’s claim that the Fire
Department had been unjustly enriched in receiving the assessments, the Fire
Department again incorporated the Association’s motion for summary judgment
and attachments. The Fire Department raised as additional grounds that there is
no evidence that it was unjustly enriched or that it “wrongfully secured or
passively accepted payments from [the Association] that would be
unconscionable for [the Fire Department] to retain.” It further contended that
there is no evidence that it would be “inequitable or against [its] good conscience
. . . to retain the money . . . donated” to it by the Association for EMS.
Lawry responded with his own affidavit in which he averred that he
“receive[s] no benefit from the monthly donation to” the Fire Department. He also
averred that a separate provider, Texas EMS, also provides EMS in Pecan
Plantation and that “EMS service was available to members of Pecan Plantation
before the Agreement was signed through at least one other EMS service aside
from” the Fire Department. Finally, Lawry averred that before the Association
entered into the Agreement, contributions or donations to the Fire Department
were voluntary but that as a result of the bylaws amendment, he “would be
charged the same rate [the Fire Department] charges anyone else for their
15
services in Hood County even though [he] contribute[s] a ‘forced’ $10 per month
donation to them.”
This court has held that unjust enrichment is not an independent cause of
action “but rather ‘characterizes the result of a failure to make restitution of
benefits either wrongfully or passively received under circumstances that give
rise to an implied or quasi-contractual obligation to repay.’” Davis v. OneWest
Bank N.A., No. 02-14-00264-CV, 2015 WL 1623541, at *1 (Tex. App.––Fort
Worth Apr. 9, 2015, pet. denied) (mem. op.) (collecting cases). Lawry’s basis for
the return of the assessments is his argument that the bylaws amendment is
void. However, we have already held that the trial court did not err by granting
the Association’s summary judgment on that part of Lawry’s claims. Because the
Fire Department incorporated the Association’s motion and evidence, we
conclude and hold for the same reason that the trial court did not err by granting
the Fire Department’s motion for summary judgment as to Lawry’s pleading for
damages in the amount of past assessments he had paid for EMS. We therefore
conclude and hold that the trial court did not err by granting summary judgment
for the Fire Department on Lawry’s second claim. We overrule Lawry’s second
issue.
Issues Related to Attorney’s Fees
Exclusion of Lawry’s Testimony at Trial
In his third issue, Lawry contends that the trial court abused its discretion
by excluding “virtually all offered testimony by . . . Lawry as to the reason for his
16
filing the original lawsuit.” Lawry made an offer of proof summarizing his
expected testimony that he tried to discuss his complaint with the Association
and Fire Department representatives before filing suit, and they refused to
discuss it with him. The trial court denied his offer, stating, “[I]t’s irrelevant, and
also based on res judicata those issues have been resolved.” According to
Lawry, “[t]he testimony of why [he] filed the lawsuit only after attempting to
discuss the issues with the [Association and Fire Department] was relevant to the
issue of [whether] the award of fees [is] equitable and just and the issue before
the jury of the fees being reasonable and necessary.” The Association
characterizes Lawry’s argument as “the Association’s failure to see the
Amendment (and subsequent Assessment) as invalid forced Appellant to file the
lawsuit, resulting in the Association incurring attorney’s fees.”
In a proceeding under the Uniform Declaratory Judgments Act, “the court
may award . . . reasonable and necessary attorney’s fees as are equitable and
just.” Tex. Civ. Prac. & Rem. Code Ann. § 37.009. The reasonableness and
necessity of attorney’s fees are questions of fact. Bocquet v. Herring, 972
S.W.2d 19, 21 (Tex. 1998). Whether an award of fees is equitable and just is a
matter of law to be decided within the trial court’s discretion. Id. Lawry has not
appealed the trial court’s determination that an award of attorney’s fees is
equitable and just.6 Therefore, we review Lawry’s evidentiary complaint to
6
In the context of his argument that his testimony should not have been
excluded, he states that it was the only evidence regarding whether the fees
17
determine its relevance to the question of whether the alleged attorney’s fees
were reasonable and necessary. See id.
The well-known factors a court must consider when reviewing whether the
evidence supports a finding that attorney’s fees are reasonable and necessary
include the following:
(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)
(op. on reh’g) (citing Tex. Disciplinary R. Prof’l Conduct 1.04, reprinted in Tex.
were just and equitable; however, he does not seek reversal or rendition from
this court on that basis.
18
Gov’t Code Ann. tit. 2, subtit. G app. (State Bar Rules, art. X, § 9)). Here,
because the question for the jury’s determination was whether or not the fees
incurred after Lawry filed suit were reasonable and necessary, the trial court did
not abuse its discretion by excluding evidence regarding matters occurring before
the suit. See id.; Bocquet, 972 S.W.2d at 21; see also Tex. Civ. Prac. & Rem.
Code Ann. § 37.009. Moreover, to the extent that the evidence is pertinent to the
trial court’s determination of whether the imposition of fees is equitable and just,
the trial court had already considered this evidence via Lawry’s affidavit attached
to his response to the Fire Department’s summary judgment motion. We
overrule Lawry’s third issue.
Sufficiency of Evidence of Fire Department’s Trial and Appellate Fees
In his fourth and fifth issues, Lawry contends the evidence is legally and
factually insufficient to support the award of trial and appellate attorney’s fees to
the Fire Department.
Blake Cox testified that he had been an attorney in Tarrant County, Texas
for twenty-eight years, primarily practicing real estate litigation. He had handled
cases in Hood County and was familiar with the usual and customary fees
charged by attorneys in the area. Cox testified that his hourly rate was $350 per
hour and that his fellow attorneys’ rates were $300 and $200 per hour. In his
opinion, considering all of the Arthur Andersen factors, the Fire Department’s
reasonable and necessary fees for all work through the trial were $31,795. The
trial court admitted an exhibit containing a table showing generally how many
19
hours each attorney with Cox’s firm worked on the file and the total fee for each
based on their hourly rates. Cox testified in detail about the work the lawyers
collectively performed and why. Cox further testified that in his experience, a
reasonable and necessary fee for appeal to this court would be $15,000, $8,000
if a petition for review were filed in the supreme court, and $20,000 if the
supreme court granted that petition. Lawry did not present any controverting
evidence.
The Fire Department also offered two invoices purporting to show detailed
billing records for all three attorneys, but the trial court sustained Lawry’s
objection to their admission because the Fire Department had not supplemented
discovery with them. Cox admitted on cross-examination that the fee he had
testified to was reasonable and necessary and included the time that any of the
three lawyers with his firm “spent on the file at their respective rate.”
The supreme court has recently held that a party who sought attorney’s
fees in part under section 37.009 of the civil practice and remedies code by
presenting evidence of a total amount of hours worked multiplied by an hourly
fee––in the same manner as the Fire Department did here––had elected to use
the lodestar method of calculating attorney’s fees. Long v. Griffin, 442 S.W.3d
253, 255 (Tex. 2014); Helms v. Swanson, No. 12-14-00280-CV, 2016 WL
1730737, at *6 (Tex. App.––Tyler Apr. 29, 2016, pet. filed) (mem. op.). In Long,
the supreme court held that the evidence presented of the total hours worked,
hourly billing rates for two attorneys, and total fees based on those hours was
20
legally insufficient to support the total attorney’s fees award because there was
no supporting evidence regarding the amount of time each attorney spent on
each specific task. 442 S.W.3d at 255–56. The facts in this case are similar.
Although Cox testified regarding the type of work performed in detail, he did not
attempt to ascribe specific tasks to each of the attorneys, nor did the Fire
Department offer other supporting evidence that would have done so.
Accordingly, we conclude and hold that the trial attorney’s fees award to the Fire
Department was not supported by legally sufficient evidence. See id.; Felix v.
Prosperity Bank, No. 01-14-00997-CV, 2015 WL 9242048, at *4 (Tex. App.––
Houston [1st Dist.] Dec. 17, 2015, no pet.) (mem. op.); United Nat’l Ins. Co. v.
AMJ Invs., LLC, 447 S.W.3d 1, 16–18 (Tex. App.––Houston [14th Dist.] 2014,
pet. dism’d). But cf. Myers v. Sw. Bank, No. 02-14-00122-CV, 2014 WL
7009956, at *7 (Tex. App.––Fort Worth Feb. 5, 2015, pet. denied) (mem. op.)
(distinguishing Long and holding attorney’s fees affidavit sufficient when only one
attorney billed time). We sustain Lawry’s fifth issue.
However, we conclude and hold that the evidence of the Fire Department’s
appellate attorney’s fees was legally and factually sufficient. Cox testified to his
experience as a lawyer in Tarrant and Hood Counties and his familiarity with real
estate litigation, and his testimony was uncontroverted. See State & Cty. Mut.
Fire Ins. Co. ex rel. S. United Gen. Agency of Tex. v. Walker, 228 S.W.3d 404,
409–10 (Tex. App.––Fort Worth 2007, no pet.). Accordingly, we overrule Lawry’s
fourth issue.
21
Sufficiency of Evidence of Association’s Appellate Attorney’s Fees
In his sixth issue, Lawry challenges the legal and factual sufficiency of the
appellate attorney’s fees award to the Association.7 The Association’s attorney,
Clayton Hearn, testified that he was the managing shareholder of his law firm
and that he had been licensed since 1995. According to Hearn, since 1999 he
had almost exclusively represented property owner associations, townhomes,
condominiums, and planned unit developments. He had litigated “dozens and
dozens,” but fewer than one hundred, cases for homeowners associations; from
between ten to twenty of those cases had been litigated on the merits. Hearn is
board certified in labor and employment law.
Hearn testified that he had experience in appellate work as well and had
worked on “several cases published from the court of appeals and . . . the
Supreme Court of Texas.” He estimated that “given all the parties and all the
issues in this case,” the Association’s appellate fees would be a minimum of
$10,000 for an appeal to this court, an additional minimum of $8,000 for a further
appeal to the supreme court, and an additional $15,000 if the supreme court
granted a petition for review. He added that additional travel time would need to
be taken into consideration for an appeal to the supreme court because it is
located in Austin. Hearn testified that in his experience, these fees would be
7
He does not challenge the trial attorney’s fees awarded to the Association.
22
reasonable and necessary even given his tendency to underestimate how much
time would be spent on an appeal.
Lawry contends that this evidence is insufficient because Hearn did not
detail how many hours would likely be spent in connection with an appeal, who
would work on the appeal, or what type of work would be required. He also
claims that Hearn did not give a clear expert opinion. However, Hearn did testify
regarding his experience and the basis of his familiarity with appeals; his
testimony was based on that experience and familiarity. Lawry did not controvert
this evidence. Accordingly, we conclude and hold that Hearn’s testimony was
both legally and factually sufficient to support the award of appellate attorney’s
fees for the Association. See, e.g., Nauman v. Lee, No. 03-11-00066-CV, 2012
WL 1149290, at *10 (Tex. App.––Austin Apr. 5, 2012, pet. denied) (mem. op.);
State & Cty. Mut. Fire Ins. Co., 228 S.W.3d at 409–10.
We overrule Lawry’s sixth issue.
Appellate Fees Not Unconditional
We note that both appellees’ appellate attorney’s fees awards are
unconditional—they are charged against Lawry regardless of whether he prevails
in the appeal. See Courtade v. Gloria Lopez Estrada Family Trust, Nos. 02-14-
00295-CV, 02-14-00296-CV, 2016 WL 1164159, at *7 (Tex. App.––Fort Worth
Mar. 24, 2016, no pet.) (mem. op.). A trial court may not grant an unconditional
award of appellate attorney’s fees because to do so could penalize a party for
bringing a meritorious appeal. In re Ford Motor Co., 988 S.W.2d 714, 721 (Tex.
23
1998) (orig. proceeding); Courtade, 2016 WL 1164159, at *7. However, an
unconditional award of appellate attorney’s fees does not require reversal;
instead, we may modify a trial court’s judgment to make the award of appellate
attorney’s fees contingent upon the receiving party’s success on appeal.
Courtade, 2016 WL 1164159, at *7.
We therefore modify the trial court’s awards of appellate attorney’s fees to
be contingent on the Association’s and Fire Department’s prevailing on appeal.
See id.
Conclusion
We modify the trial court’s judgment for the Association to make the award
of appellate attorney’s fees contingent upon its prevailing on appeal and affirm
the remainder of the judgment for the Association as modified.
We likewise modify the trial court’s judgment for the Fire Department to
make the award of appellate attorney’s fees contingent upon its prevailing on
appeal, and we affirm the remainder of the judgment for the Fire Department
except as to attorney’s fees related to trial. Thus, we reverse the award of trial
attorney’s fees for the Fire Department in the amount of $31,795, and we remand
this case to the trial court solely for a redetermination of the Fire Department’s
attorney’s fees through the trial date of October 27, 2014. See Long, 442 S.W.3d
at 256; Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 314 (Tex. 2006)
(holding that remand is appropriate when evidence is legally insufficient to
24
support entire unsegregated attorney’s fees award because that award is
nevertheless some evidence of segregated attorney’s fees).
/s/ Terrie Livingston
TERRIE LIVINGSTON
CHIEF JUSTICE
PANEL: LIVINGSTON, C.J.; GARDNER and WALKER, JJ.
DELIVERED: August 18, 2016
25