Luc J. Messier v. Katy Shuk Chi Lau Messier , 458 S.W.3d 155 ( 2015 )


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  • Affirmed as Modified and Opinion filed January 27, 2015.
    In The
    Fourteenth Court of Appeals
    NO. 14-13-00572-CV
    LUC J. MESSIER, Appellant
    V.
    KATY SHUK CHI LAU MESSIER, Appellee
    On Appeal from the 311th District Court
    Harris County, Texas
    Trial Court Cause No. 2009-45158
    OPINION
    Luc J. Messier appeals from the trial court’s order purporting to enforce and
    clarify portions of the final decree of divorce between Luc and his ex-wife, Katy
    Shuk Chi Lau Messier.       The issues below and on appeal revolve around
    community property stock options held in Luc’s name. A portion of these options
    were awarded to Katy in the decree, and the principal dispute concerns whether
    Luc was required to exercise the options upon Katy’s demand or, instead, was
    entitled or required to use his own discretion in deciding when to execute them.
    The trial court determined that the options had to be exercised on Katy’s demand
    and issued an order providing for enforcement mechanisms. The trial court further
    found that, in failing to exercise the options on Katy’s demand, Luc breached his
    fiduciary duty to Katy, and the court awarded Katy attorney’s fees.
    In four issues, Luc contends that the trial court erred in (1) construing the
    decree as requiring Luc to exercise the options on Katy’s demand, (2) “clarifying”
    the decree by adding detailed orders for Luc to perform and consequences for
    failure to do so, (3) holding Luc breached his fiduciary duty, and (4) awarding
    Katy her attorney’s fees. Because certain claims and issues have become moot
    during the pendency of the appeal, we vacate the portions of the trial court’s order
    that purport to clarify the divorce decree and that hold Luc breached his fiduciary
    duty to Katy, and we dismiss those claims. Additionally, we modify the award of
    Katy’s attorney’s fees. We affirm the trial court’s order as modified.
    I.     Background
    The final decree was signed on February 11, 2011. Among other things, the
    decree divided the marital estate and determined issues relating to the custody of
    the children of the marriage.1 As part of the division of property, Katy was
    awarded a 60% interest and Luc a 40% interest in a number of stock options that
    Luc had earned through his employment during the marriage as a senior executive
    for ConocoPhillips.2 Specifically, as to Luc’s share, the decree awarded him “[t]he
    following ConocoPhillips Stock Option Awards, representing 40% of the
    1
    In a prior appeal from the decree, Katy, a native of Hong Kong, challenged the trial
    court’s grant of permanent injunctions concerning international travel with the children. Messier
    v. Messier, 
    389 S.W.3d 904
    , 905 (Tex. App.—Houston [14th Dist.] 2012, no pet.). This court
    modified the decree to remove certain requirements that were not supported by the record, but
    otherwise affirmed the travel restrictions and the decree. 
    Id. at 911.
           2
    The decree confirmed certain other stock options were his separate property.
    2
    community portions from [Luc’s] employment, subject to all related tax liabilities
    and withholdings . . . .” The decree then listed specific numbers of options from
    among nine sets of options earned on particular days, for example:             “16,320
    options of the vested options attributable to the 40,800 options from the 02/08/07
    award with an exercise price of $66.37.” In the portion of the decree awarding
    property to Katy, it awarded her “[a] portion of the benefits, if any, received by
    Luc . . . upon exercise of the following ConocoPhillips Stock Option Awards,
    representing 60% of the community portions from [Luc’s] employment, subject to
    all related actual tax liabilities and withholdings . . . .” It then listed nine sets of
    options corresponding to the nine sets listed for Luc, for example, “24,480 options
    of the vested options attributable to the 40,800 options from the 02/08/07 award
    with an exercise price of $66.37.”
    A subsequent section of the decree contained “Special Provisions Regarding
    Stock Options.” This section stated in part:
    The award to [Katy] of a portion of the community stock
    options is subject to all of the terms, conditions and restrictions of the
    Company’s Stock Incentive Plan . . . as well as other restrictions that
    may be imposed by the Company, such as those designated in the
    Company’s insider trading policy.
    Pursuant to the terms of the Plans, the stock options awarded to
    [Katy] cannot be assigned and/or transferred from [Luc] to [Katy] by
    the Company. The parties acknowledge that (i) the stock options
    awarded to [Katy] may be exercisable only by [Luc] (or [Luc’s] legal
    representative or estate) and (ii) the exercise of the stock options may
    be subject to restrictions by reason of [Luc’s] employment, including
    but not limited to the applicable insider trading rules and regulations.
    However, [Katy] shall have equitable ownership of the stock options
    awarded to [Katy].
    [Katy’s] stock options are subject to a constructive trust.
    [Katy’s] rights in and to the stock options awarded to [Katy] herein,
    and all benefits appurtenant thereto, shall inure to the benefit of
    3
    [Katy’s] heirs, executors and assigns. Similarly, [Luc’s] obligations
    as set forth herein shall be binding on [Luc] and on [Luc’s] heirs,
    executors, administrators and assigns. Upon the death of [Luc], any
    stock options awarded to [Katy] which are still exercisable shall be
    exercised by [Luc’s] executor or administrator, or by the person who
    acquires such stock options by will or the laws of descent and
    distribution, or otherwise by reason of the death of [Luc], as directed
    by [Katy].
    [Luc] shall account for taxes assessed on the exercised stock
    options and shall cause the proceeds from the stock option exercise,
    net of taxes assessed, to be transferred to [Katy]. [Katy] shall pay all
    taxes related to any portion of benefits awarded to her herein by either
    reporting the income and related withholdings on her return(s), or
    reimbursing [Luc] for any taxes he is required to pay on amounts
    awarded to her that are in excess of the related withholdings on her
    portion.
    When [Luc] exercises any option in which [Katy] has an
    interest . . . , he will account to her by delivering the net proceeds.
    The division of the options will be proportionate between [Luc’s]
    separate property and the community property portions henceforth
    owned jointly between [Luc] and [Katy], and the division of the
    community property portions of the options shall be 60% to [Katy]
    and 40% to [Luc].
    In April 2012, Katy filed suit in the court of continuing jurisdiction after Luc
    declined to exercise the stock options on her demand.3 In her Third Amended
    Motion, her live pleading at the time of trial, Katy essentially contended that the
    final decree unambiguously established rights and duties that Luc had failed to
    follow. On that basis, she sought enforcement of the decree, damages for breach of
    fiduciary duty, imposition of a fine among other relief for contempt, an accounting,
    and declaratory judgment setting forth Luc’s obligations relating to the options. In
    the alternative, she sought clarification of the decree.
    3
    Between the time the final decree issued and Katy filed the present action, the presiding
    judge of the trial court retired and a new judge was appointed.
    4
    During a hearing on December 19, 2012, Luc testified that he believed that
    under the final decree, he had a duty as the constructive trustee to use his discretion
    in deciding when to exercise the options so as to maximize the benefit for Katy.
    Luc introduced evidence that the options had increased significantly in value from
    the time of Katy’s demand to the time of trial. Luc acknowledged, however, that at
    least a part of his motivation in refusing to exercise the options upon Katy’s
    demand was to prevent Katy from leaving the country with the children in
    violation of travel restrictions placed upon her in the final decree. Katy presented a
    financial expert who emphasized the significant differences between the financial
    situations of Luc and Katy and suggested Katy had a more immediate need for
    access to the options proceeds than did Luc.
    The court signed an Order of Enforcement of Final Decree of Divorce and
    Order of Clarification of Property Division on March 25, 2013. In the order, the
    court held that Luc breached his fiduciary duty as constructive trustee of Katy’s
    stock options by failing to exercise the options on her request. The order also
    included declarations or clarifications requiring Luc to exercise within 24 hours the
    options that Katy already had requested be exercised and imposing a fine of $5,000
    a day for each business day that he failed to do so.4 The court further ordered Luc
    to exercise any options requested by Katy no later than 10 a.m. on the first day
    following the expiration of 48 hours from the receipt of written notice to exercise
    the options. The order additionally included provisions governing the possibility
    that requests may come during periods when Luc was prohibited from exercising
    the options and provisions ensuring distribution of the proceeds to Katy.
    In its order, the court further awarded Katy her “reasonable and necessary”
    4
    The section of the order in which the instructions appear is titled “Declaratory Judgment
    & Clarification.”
    5
    attorney’s fees and costs of $59,198.75, plus additional amounts in the event Luc
    filed an appeal.5 The court stated that the fees were “warranted for numerous
    reasons including the delay caused by [Luc’s] refusal to exercise [options] upon
    [Katy’s] request.” The court also stated that Luc had stipulated to the amount and
    reasonableness of the fees. The court subsequently issued a set of 134 separately
    numbered findings of fact and conclusions of law.                   Luc requested additional
    findings. Among the findings, the court stated that Luc “did not have unlimited
    discretion as to whether to exercise the stock options awarded to Katy” and he
    breached his fiduciary duty and failed to comply with the decree when he refused
    to exercise options as Katy requested. During oral argument before this court,
    counsel representing both parties informed the court that Luc has exercised all of
    the stock options that were the subject of this action and delivered the proceeds to
    Katy.
    II. The Mootness Doctrine
    As stated, counsel for both parties have represented to this court that Luc
    has, in fact, exercised all of the options assigned to Katy in the decree and
    delivered the proceeds to her as per her request. In post-submission briefing,
    Katy’s counsel has indicated acceptance of Luc’s performance and no intention to
    pursue any further enforcement, claims, or remedies concerning the exercise of the
    options and distribution of the proceeds. We cannot decide moot issues. See, e.g.,
    Valley Baptist Med. Ctr. v. Gonzalez, 
    33 S.W.3d 821
    , 822 (Tex. 2000) (per curiam)
    (holding appeal of trial court’s order became moot once appellant complied with
    order and court of appeals was notified of compliance and court of appeals erred in
    5
    As will be discussed below, the order required the appellate fees to be paid the day after
    a notice of appeal was filed for an appeal to the court of appeals and the day after the Texas
    Supreme Court requested briefing if a petition for review was filed with that court. The appellate
    fees were not made contingent on a successful defense by Katy. The amount for an appeal to the
    court of appeals was set at $25,000, and the amount for a petition for review was set at $15,000.
    6
    issuing advisory opinion on merits of appeal).6 The question then becomes which,
    if any, of Luc’s appellate issues still present live controversies requiring resolution
    by this court. See Robinson v. Alief I.S.D., 
    298 S.W.3d 321
    , 324 (Tex. App.—
    Houston [14th Dist.] 2009, pet. denied) (“The mootness doctrine precludes a court
    from rendering an advisory opinion in a case where there is no live controversy.”);
    Thompson v. Ricardo, 
    269 S.W.3d 100
    , 103 (Tex. App.—Houston [14th Dist.]
    2008, no pet.) (“[I]f a judgment cannot have a practical effect on an existing
    controversy, the case is moot and any opinion issued on the merits in the appeal
    would constitute an impermissible advisory opinion.”).
    As set forth above, Luc raises four issues in this appeal, contending the trial
    court erred in (1) construing the decree as requiring Luc exercise the options on
    Katy’s demand, (2) “clarifying” the decree by adding detailed orders for Luc to
    perform as directed and consequences should he fail to do so, (3) holding Luc
    breached his fiduciary duty, and (4) awarding Katy attorney’s fees. The attorney’s
    fees issue clearly still presents a live controversy as Katy has not relinquished her
    claim to the award and Luc has not conceded that he should have to pay the fees.
    See Allstate Ins. Co. v. Hallman, 
    159 S.W.3d 640
    , 642-43 (Tex. 2005) (holding
    that a dispute concerning attorney’s fees preserved a live controversy in an
    otherwise moot appeal); Camarena v. Tex. Emp’t Comm’n, 
    754 S.W.2d 149
    , 150-
    51 (Tex. 1988) (same). Similarly, the question of who possessed the right to
    decide when the options would be exercised is likewise a live controversy because
    in exercising the options and distributing the proceeds to Katy, Luc did not
    concede that she had the right to demand he take these actions and, if Luc is correct
    that he had the right to determine when to exercise the options, there would be no
    6
    Mootness is a jurisdictional issue, and we are required to review such issues even if not
    raised by the parties. See M.O. Dental Lab v. Rape, 
    139 S.W.3d 671
    , 673 (Tex. 2004); Robinson
    v. Alief I.S.D., 
    298 S.W.3d 321
    , 330 (Tex. App.—Houston [14th Dist.] 2009, pet. denied).
    7
    basis for awarding attorney’s fees to Katy. See 
    Camarena, 754 S.W.2d at 151
    (noting propriety of attorney’s fees award was in part dependent on success on the
    merits). These two issues are, therefore, not moot and still need to be resolved in
    this appeal.
    However, because the trial court’s “clarifications” no longer have any
    possible force or effect, given that the options have been exercised and proceeds
    distributed to Katy’s satisfaction, the clarifications and the appellate issue
    challenging them have been rendered moot. Likewise, because the only remedy
    clearly provided based on the breach of fiduciary duty finding was the
    clarifications, and they have no possible force or effect, the breach of fiduciary
    duty issue is also rendered moot. Accordingly, we vacate the portions of the trial
    court’s judgment that purport to clarify the divorce decree and that hold Luc
    breached his fiduciary duty to Katy, and we dismiss Katy’s causes of action
    seeking clarification and alleging breach of fiduciary duty. See Houston Mun.
    Emps. Pension Sys. v. Ferrell, 
    248 S.W.3d 151
    , 153-54, 156-57 (Tex. 2007)
    (vacating portions of court of appeals’ judgment and trial court’s order that became
    moot after plaintiff nonsuited cause of action and dismissing that cause of action);
    Daftary v. Prestonwood Mkt. Square, Ltd., 
    399 S.W.3d 708
    , 710 (Tex. App.—
    Dallas 2013, pet. denied) (vacating portion of judgment awarding possession of
    property and dismissing moot claim); Lawton v. Lawton, No. 01–12–00932–CV,
    
    2014 WL 3408699
    , at *1, 5 (Tex. App.—Houston [1st Dist.] July 10, 2014, no
    pet.) (mem. op.) (vacating portion of order granting summary judgment on moot
    claims and dismissing those claims); McConnell v. State Farm Lloyds, No. 03-98-
    00078-CV, 
    1999 WL 816736
    , at *5 (Tex. App.—Austin Oct. 14, 1999, pet.
    denied) (not designated for publication) (vacating judgment on claim rendered
    8
    moot by change in the law and dismissing that claim).7
    We will now proceed to consider the remaining live issues concerning the
    trial court’s construction of the decree and award of attorney’s fees. See In re
    Kellogg Brown & Root, Inc., 
    166 S.W.3d 732
    , 737 (Tex. 2005) (orig. proceeding)
    (“A case is not rendered moot simply because some of the issues become moot
    during the appellate process.”).
    III. Construction of the Decree
    In his first issue, Luc contends that the trial court erred in interpreting the
    decree as requiring him to exercise the options on Katy’s demand. To the contrary,
    Luc asserts that the decree afforded him the discretion to decide when to exercise
    the options. As explained above, this issue still presents a live controversy as it
    7
    Luc asserts that issues two and three, concerning, respectively, the clarifications and
    breach of fiduciary duty finding, also are relevant to the question of whether the trial court
    properly awarded attorney’s fees to Katy. As will be discussed more fully below, because we
    find the award of attorney’s fees is supported by the trial court’s determination that Katy had the
    right to decide when the options would be exercised, we need not consider whether the award
    was additionally supported by the clarifications or the breach of fiduciary duty finding. We
    further note that attorney’s fees are generally not recoverable for breaches of fiduciary duties.
    See Hollister v. Maloney, Martin & Mitchell LLP, No. 14–12–00529–CV, 
    2013 WL 2149823
    , at
    *2 (Tex. App.—Houston [14th Dist.] May 16, 2013, no pet.) (mem. op.). Issues two and three
    are therefore moot.
    In post-submission briefing, Luc urges application of the collateral consequences
    exception to the mootness doctrine. “The ‘collateral consequences’ exception has been applied
    when Texas courts have recognized that prejudicial events have occurred ‘whose effects
    continued to stigmatize helpless or hated individuals long after the unconstitutional judgment had
    ceased to operate. Such effects were not absolved by mere dismissal of the cause as moot.’”
    Gen. Land Office v. OXY U.S.A., Inc., 
    789 S.W.2d 569
    , 571 (Tex. 1990) (quoting Spring Branch
    I.S.D. v. Reynolds, 
    764 S.W.2d 16
    , 19 (Tex. App.—Houston [1st Dist.] 1988, no writ)). Luc’s
    arguments appear premised on the notion that the mootness of these issues would leave the trial
    court’s order unchanged, including the finding of a breach of fiduciary duty. He makes no
    argument that any disadvantage he perceives from the court’s order would persist even once the
    portion of the order he complains about has been vacated. We find no merit in his argument.
    See Reule v. RLZ Invs., 
    411 S.W.3d 31
    , 33 (Tex. App.—Houston [14th Dist.] 2013, no pet.)
    (declining to apply collateral consequences exception where appellant failed to explain why
    perceived disadvantage would persist after judgment was vacated).
    9
    pertains to the question of whether Katy is entitled to her attorney’s fees.
    A trial court’s ruling on a motion for enforcement is reviewed under an
    abuse of discretion standard; however, issues regarding interpretation of a divorce
    decree are subject to de novo review on appeal. Shanks v. Treadway, 
    110 S.W.3d 444
    , 447 (Tex. 2003). The general rules regarding the construction of judgments
    are applied. 
    Id. “If the
    decree, when read as a whole, is unambiguous as to the
    property’s disposition, the court must effectuate the order in light of the literal
    language used.” 
    Id. We agree
    with the trial court that the decree unambiguously
    afforded Katy the right to determine when her portion of the options should be
    exercised.
    Luc’s primary argument is a negative one: at no point in the decree does it
    expressly require him to exercise the options on Katy’s demand. The decree,
    however, also is devoid of any express language authorizing or requiring Luc to
    use his own discretion regarding when to exercise the options. Moreover, the
    decree clearly awards certain of the options to Katy as her property and gives her
    control over that property.
    Luc acknowledged in his testimony that Katy’s options could be exercised
    separately from his own options, even those awarded on the same day. 8 Indeed,
    the decree culls out a specific number of options for Katy for each date on which
    options were awarded to Luc. As explained in the decree, the ConocoPhillips
    Stock Incentive Plan prevented transfer of ownership of the options themselves;
    Katy could receive the proceeds only upon exercise. For this reason, the decree
    awarded her “[a] portion of the benefits, if any, received by Luc . . . upon exercise
    8
    Luc suggests in his brief that “Katy can be assured that Luc’s decision to exercise
    options will be made with the utmost consideration for time and price as he will be acting, in
    part, for his own financial benefit, having been awarded 40% of the divisible options, with others
    confirmed as his separate property.” But nothing in the record supports this assurance.
    10
    of the following . . . Awards,” and it described her ownership of the options as
    “equitable ownership” and established a constructive trust over the options prior to
    their exercise. Equitable ownership is commonly defined as “the present right to
    compel legal title.” See, e.g., AHF-Arbors at Huntsville I, LLC v. Walker Cnty.
    Appraisal Dist., 
    410 S.W.3d 831
    , 837 (Tex. 2012).                     The court, by awarding
    equitable ownership, therefore intended to give Katy the right to direct when the
    options would be exercised.9 The decree repeatedly describes the award to Katy as
    “[t]he award to [Katy] of a portion of the community stock options” and “the stock
    options awarded to [Katy].” It is clear that this was Katy’s property.
    Luc insists that the creation of a constructive trust necessarily provided him
    with the authority and discretion to determine when the options awarded to Katy
    were to be exercised, but in doing so, he appears to misunderstand the nature of a
    constructive trust.10 A constructive trust is imposed when one party holds property
    that legally belongs to the other. See In re Marriage of Harrison, 
    310 S.W.3d 209
    ,
    214 (Tex. App.—Amarillo 2010, pet. denied) (“[C]onstructive trusts are used to
    right a wrong or prevent unjust enrichment . . . .”). The scope and application of a
    constructive trust is generally left up to the court imposing it. Baker Botts, L.L.P.
    v. Cailloux, 
    224 S.W.3d 723
    , 736 (Tex. App.—San Antonio 2007, pet. denied).
    There is no indication in the court’s creation of a constructive trust or the language
    of the decree that gave Luc discretion to determine when to exercise the options.
    9
    Luc suggests that the fact Katy could not own the options as per the Stock Incentive
    Plan means that the reference to her equitable ownership was a “contradiction in terms.” But it is
    the very fact that she cannot legally own the options that apparently led the court to describe her
    ownership as equitable. Moreover, the fact that she could not legally own them does not
    necessarily mean she cannot control their exercise.
    10
    In his reply brief, Luc states without supporting citation that “imposition of a
    constructive trust . . . vests in Luc the right to exercise the [options] at his discretion in Katy’s
    best interest.” At trial and in his briefing, Luc emphasized that he has significant expertise
    regarding his employer and the market value of its stock, and he asserts that the decree required
    him to use his discretion in exercising the options in order to maximize the benefit to Katy.
    11
    Luc additionally points to language in the decree providing that “[w]hen [he]
    exercises any option in which [Katy] has an interest . . . , he will account to her by
    delivering the net proceeds” as indicating he was to exercise his discretion in
    determining when to exercise her options.         This language, however, merely
    reiterates the fact that only Luc could legally perform the mechanical process of
    exercising the options and describes what must happen once he performs that
    function. It does not suggest that he had the right to determine when the options
    were exercised.
    Next, Luc points to decree language providing that Katy had a right to direct
    the exercise of any remaining options upon Luc’s death.           Luc relies on this
    language to argue that, in parallel fashion, the decree would have expressly
    authorized Katy to direct the exercise of any remaining options during Luc’s
    lifetime if the trial court had intended to create such a right. However, as discussed
    above, the decree clearly gave Katy the right to exercise her options during Luc’s
    lifetime. The additional language regarding who had control of the options in the
    event of Luc’s death may have been included simply to prevent any confusion
    should Luc die before the options were exercised.
    The trial court did not err in holding that the decree unambiguously gave
    Katy the right to determine when the options assigned to her would be exercised.
    Accordingly, we overrule Luc’s first issue.
    IV. Attorney’s Fees & Expenses
    In his fourth issue, Luc challenges the trial court’s award of $59,198.75 in
    attorney’s fees, costs, and expenses. We review a trial court’s decision to grant
    attorney’s fees under an abuse of discretion standard, but we review the amount of
    attorney’s fees awarded under a legal sufficiency standard. Am. Risk Ins. Co. v.
    Abousway, No. 14–13–00124–CV, 
    2014 WL 2767402
    , at *5 (Tex. App.—Houston
    12
    [14th Dist.] June 17, 2014, no pet.) (mem. op.).
    Luc raises numerous sub-issues related to this award, and we have grouped
    them into the following categories for discussion purposes: (1) the award was in
    error because Katy did not succeed on her contempt claim, (2) the evidence is
    legally insufficient to support the award, (3) there is no legal or factual basis for
    the award of expert fees, (4) Katy failed to properly segregate fees for causes of
    action on which fees are recoverable from those for which they are not, and (5) the
    award of appellate fees was in error for multiple reasons. We will address each set
    of arguments in turn, finding merit in some but not all.
    A. Contempt Claim
    We begin with Luc’s assertion that Katy was not entitled to recover
    attorney’s fees because the trial court did not hold Luc in contempt. The gist of the
    argument appears to be that (1) the trial court did not hold Luc in contempt; (2)
    therefore, it must have granted Katy judgment based on her breach of fiduciary
    duty cause of action; and (3) attorney’s fees generally cannot be recovered on a
    claim for breach of fiduciary duty. See Hollister v. Maloney, Martin & Mitchell
    LLP, No. 14–12–00529–CV, 
    2013 WL 2149823
    , at *2 (Tex. App.—Houston [14th
    Dist.] May 16, 2013, no pet.) (mem. op.).
    Katy pleaded generally for attorney’s fees and pleaded several grounds that
    could potentially support an award of attorney’s fees, including a declaratory
    judgment action and enforcement and clarification of the decree. In making the
    award, the court did not state the basis for its decision but stated that “[t]he award
    of attorneys’ fees to [Katy] is warranted for numerous reason[s] including the
    delay caused by [Luc’s] refusal to exercise upon [Katy’s] request, options
    equitably owned by [Katy].” This language links the award to the necessity of
    filing the enforcement action. A trial court may award reasonable attorney’s fees
    13
    in an enforcement or clarification action. See Tex. Fam. Code § 9.014; McKnight
    v. Trogdon-McKnight, 
    132 S.W.3d 126
    , 132 (Tex. App.—Houston [14th Dist.]
    2004, no pet.). Although the trial court did not provide Katy with all of the relief
    she requested related to the enforcement action (i.e., the trial court did not hold Luc
    in criminal contempt), it did order Luc to exercise the options as Katy had
    previously directed and turn the proceeds over to her. Contempt is not the only
    available remedy in a suit to enforce a divorce decree. See generally Tex. Fam.
    Code §§ 9.001-.014. Because Katy was required to file suit in order to enforce her
    right to determine when the stock options were to be exercised, the trial court did
    not abuse its discretion in awarding attorney’s fees to Katy. See Tex. Fam. Code §
    9.014; Pahlavan v. Ghods, No. 14-02-00585-CV, 
    2003 WL 21981819
    , at *1-2
    (Tex. App.—Houston [14th Dist.] Aug. 21, 2003, no pet.) (mem. op.).11
    Regardless of whether the trial court held Luc in criminal contempt, Katy
    nonetheless was required to pursue the lawsuit after Luc refused to exercise the
    options upon her demand and deliver the proceeds to her.12
    11
    See also John J. Sampson & Harry L. Tindall, et. al, Sampson & Tindall’s Texas
    Family Code Annotated 140 (2014) (“Before passage of [section 9.014] there was no provision
    for the recovery of attorney’s fees against an uncooperative party after a divorce. Thwarting the
    order of the court elicited no punitive consequences, even when a party was found to be the
    wrongdoer. This section now makes clear that the award of attorney’s fees is appropriate in such
    a fact situation.”).
    12
    At least one court of appeals has observed that Section 9.014 does not expressly require
    that the trial court find a party as the prevailing party before awarding attorney’s fees to that
    party. See In re S.E.C., No. 05–08–00781–CV, 
    2009 WL 3353624
    , at *3 (Tex. App.—Dallas
    Oct. 20, 2009, no pet.) (mem. op.). “Rather, by its express language, the statute’s only
    requirements are that the award be ‘reasonable’ and in connection with a proceeding to enforce a
    decree of divorce or annulment providing for a division of property.” 
    Id. Luc cites
    one case in support of his argument, Preston v. Preston, No. 04-03-00333-CV,
    
    2004 WL 1835765
    (Tex. App.—Houston [14th Dist.] Aug. 18, 2004, no pet.) (mem. op.). In
    Preston, we determined that the four-year statute of limitations governing breach of fiduciary
    duty causes of action applied where a constructive trust had been created rather than the two-year
    statute which generally governs suits to enforce the property. 
    Id. at *2.
    We addressed the breach
    of fiduciary duty cause of action, however, as an action “to enforce the divorce decree.” Section
    14
    B. Sufficiency of the Evidence
    Luc next challenges the sufficiency of the evidence to support the
    reasonableness of the attorney’s fees awarded. We will reverse a determination of
    the reasonableness of attorney’s fees on the basis of a legal sufficiency challenge
    only if there is no evidence to support it. See Redwine v. Wright, No. 14–10–
    00030–CV, 
    2010 WL 5238572
    , at *2 (Tex. App.—Houston [14th Dist.] Dec. 16,
    2010, no pet.) (mem. op.).          Factors that a factfinder should consider when
    determining the reasonableness of a fee include: the time, labor and skill required
    to properly perform the legal service; the novelty and difficulty of the questions
    involved; the customary fees charged in the local legal community for similar legal
    services; the amount involved and the results obtained; the nature and length of the
    professional relationship with the client; and the experience, reputation and ability
    of the lawyer performing the services. Arthur Andersen & Co. v. Perry Equip.
    Corp., 
    945 S.W.2d 812
    , 818 (Tex. 1997). The trial court does not need to hear
    evidence on each factor but can consider the entire record, the evidence presented
    on reasonableness, the amount in controversy, the common knowledge of the
    participants as lawyers and judges, and the relative success of the parties. In re
    Marriage of C.A.S. & D.P.S., 
    405 S.W.3d 373
    , 387 (Tex. App.—Dallas 2013, no
    pet.); Hagedorn v. Tisdale, 
    73 S.W.3d 341
    , 353 (Tex. App.—Amarillo 2002, no
    pet.).
    Luc begins by assailing the trial court’s statement in its order and in its
    findings of fact and conclusions of law that Luc had stipulated to the
    reasonableness of Katy’s fees. The supposed stipulation occurred when, toward
    the end of the trial, Katy’s counsel began his testimony in support of fees:
    9.014 authorizes trial courts to award reasonable attorney’s fees in a proceeding to enforce a
    decree. Nothing in Preston restricts this authority.
    15
    [Luc’s counsel]: Your Honor, I will stipulate that if he testifies, he
    will testify that the amount that he’s claimed here [apparently
    indicating Exhibit M150, which was a billing statement] is his fees in
    connection with this matter.
    [Katy’s counsel]: That’s correct. And my fees, [expert] fees, which
    have been paid through my firm. My fees, [expert] fees through my
    firm and [co-counsel’s] fees. So if I understand the stipulation, he’s
    stipulating not that they be paid, but that the rates and amounts
    charged are reasonable and necessary.
    [Luc’s counsel]: I stipulate that’s what you’re going to testify to.
    [Katy’s counsel]: All right. Well, do you stipulate to my qualifications
    and rate?
    [Luc’s counsel]: Yes.
    [Katy’s counsel]: All right. And [co-counsel’s]?
    [Luc’s counsel]: All your experts, yes.
    [Katy’s counsel]: Very good. I would offer Exhibit M150, fees that
    were incurred solely for this enforcement.
    ....
    [Luc’s counsel]: May I see it? Your honor, we have no objection to
    this as the testimony he would give. We do object to paying fees.
    Although it is not entirely clear exactly how broad the stipulation was
    intended to be, at a minimum, Luc’s counsel stipulated to Katy’s counsel’s
    qualifications and rate and that Katy’s counsel’s would testify that “the rates and
    amounts charged [were] reasonable and necessary.” At the conclusion of this
    exchange, the trial court admitted the detailed billing statement, and Katy’s counsel
    further testified that “all of the actions on the [statement] were taken and all of the
    fees were reasonable and necessary in and around Harris County for similarly
    complex cases for similarly qualified lawyers.” Luc’s counsel did not ask any
    questions or present any opposing evidence regarding fees. In addition to its
    statement regarding the stipulation, the court further specifically found that the
    attorney’s fees awarded were reasonable given the experience and expertise of
    16
    counsel and the circumstances presented in the case.
    On appeal, Luc contends that the stipulation regarding what Katy’s counsel
    would testify to was insufficient to support the award of fees because it was only
    an admission regarding what counsel would say and not an agreement the fees
    were reasonable and necessary. While this much is true, having stipulated to
    Katy’s counsel’s qualifications and that he would provide testimony supporting the
    reasonableness of his fees (without the necessity of actually having to provide such
    testimony), and having failed to contest the evidence of fees, Luc’s counsel
    essentially conceded that there was at least some evidence to support the
    reasonableness of the fees. At the time, Luc’s counsel expressed concern only
    about whether Luc would be required to pay the fees, not about the reasonableness
    of the fees charged. Moreover, Katy’s counsel then went on to testify as to the
    reasonableness of the fees and provide a detailed billing statement and a contract
    showing services provided, time spent, and amount charged. The trial court was
    entitled to and—according to its findings and conclusions—did consider the entire
    record, the particular circumstances of the case, and the common knowledge of the
    participants as lawyers and judges. See In re Marriage of C.A.S. & 
    D.P.S., 405 S.W.3d at 387
    ; 
    Hagedorn, 73 S.W.3d at 353
    . The evidence is sufficient to support
    the trial court’s award of attorney’s fees.13
    C. Expert Fees
    Luc further challenges the award of expert fees in the amount of $27,090.76
    13
    Luc specifically mentions that the billing statements contained a few entries for an
    associate attorney and a paralegal. The evidence was sufficient to support these fees as well. As
    discussed, Luc’s counsel stipulated that Katy’s counsel was qualified and would testify regarding
    the reasonableness of the charged fees. Katy’s counsel also testified in support of the
    reasonableness and necessity of the amounts contained within the billing statement. The charged
    rates were listed in the attorney-client contract that was admitted into evidence, and the trial
    judge was permitted to take her own knowledge into account regarding the case and the practice
    of law.
    17
    on the grounds that there is no legal or factual basis for the award.14 Generally
    speaking, the fee of an expert witness constitutes an incidental expense in
    preparation for trial and is not recoverable as costs. In re Weisinger, No. 14-12-
    00558-CV, 
    2012 WL 3861960
    , at *2-3 (Tex. App.—Houston [14th Dist.] Sept. 6,
    2012, orig. proceeding) (mem. op.); see also Stanley Stores, Inc. v. Chavana, 
    909 S.W.2d 554
    , 563 (Tex. App.—Corpus Christi 1995, writ denied) (holding the trial
    court erred in making an equitable award of expert witness fees absent statutory
    authorization). As we explained in Weisinger, expert fees have been awarded
    under certain provisions of the Family Code, such as chapters 6 (governing suits
    for dissolution of marriage) and 106 (concerning suits affecting the parent-child
    relationship). Each of the cited chapters, however, contains provisions permitting
    courts to award expenses in addition to costs and attorney’s fees. See Tex. Fam.
    Code §§ 6.708 (authorizing court to award attorney’s fees, costs, and expenses in a
    divorce action), 106.001 (authorizing award of costs in SAPCR), 106.002
    (authorizing award of attorney’s fees in SAPCR).                     In contrast, chapter 9,
    subchapter A, governing enforcement actions such as this, only authorizes the
    award of attorney’s fees and costs. 
    Id. §§ 9.013
    (authorizing award of costs in an
    enforcement action), 9.014 (authorizing award of attorney’s fees in an enforcement
    action). Indeed, section 9.013 expressly states that costs may be awarded in such
    actions “as in other civil cases.” Because expert fees are neither attorney’s fees nor
    costs, and because chapter 9, subchapter A does not allow an award of expenses in
    an enforcement action, the trial court erred in awarding Katy her expert witness
    fees.15 Accordingly, we modify the trial court’s judgment to decrease the award of
    14
    The expert fees were included as a line item in the billing statement by Katy’s attorney
    that was admitted into evidence. In her briefing to this court, Katy does not offer any rebuttal to
    Luc’s arguments concerning expert fees.
    15
    In dicta in In re Slanker, 
    365 S.W.3d 718
    , 720 (Tex. App.—Texarkana 2012, orig.
    proceeding), the Sixth Court of Appeals interpreted dicta in another court of appeals’ opinion,
    18
    fees and costs by $27,090.76.
    D. Segregation
    Next, Luc argues that Katy failed to properly segregate the fees expended in
    regards to causes of action on which attorney’s fees are recoverable, such as the
    enforcement action, from those expended on causes of action for which fees are
    generally not recoverable, such as breach of fiduciary duty. Absent a contract or
    statute, trial courts do not have inherent authority to require one party to pay
    another party’s attorney’s fees; thus, claimants generally are required to segregate
    fees between claims for which they are recoverable and claims for which they are
    not. Tony Gullo Motors I, L.P. v. Chapa, 
    212 S.W.3d 299
    , 311 (Tex. 2006).
    However, when discrete legal services advance both a recoverable and
    unrecoverable claim, the resulting fees are considered “intertwined” and need not
    be segregated in order to be recovered. 
    Id. at 313-14;
    Alief I.S.D. v. Perry, 
    440 S.W.3d 228
    , 245 (Tex. App.—Houston [14th Dist.] 2013, pet. denied). Still, if any
    attorney’s fees relate solely to a claim for which fees are unrecoverable, a claimant
    must segregate the recoverable from the unrecoverable fees. 
    Chapa, 212 S.W.3d at 313
    ; 
    Perry, 440 S.W.3d at 246
    .
    The party seeking to recover attorney’s fees has the burden of demonstrating
    that fee segregation is not required. Westergren v. Nat’l Prop. Holdings, L.P., 
    409 S.W.3d 110
    , 138 (Tex. App.—Houston [14th Dist.] 2013), aff’d in part, rev’d in
    part on other grounds, No. 13-0801, 
    2015 WL 123099
    (Tex. 2015). Here, when
    the trial court rejected Luc’s segregation argument, the court had before it the
    Parliament v. Parliament, 
    860 S.W.2d 144
    , 147 (Tex. App.—San Antonio 1993, writ denied), as
    recognizing that expert witness fees were authorized in enforcement actions. We do not agree
    with this reading of the Parliament analysis, wherein the court was merely presenting and
    rejecting a party’s argument. Regardless, as dicta from a sister court, the discussion in In re
    Slanker is not precedential. See generally Walden v. Affiliated Computer Servs., Inc., 
    97 S.W.3d 303
    , 330 n.22 (Tex. App.—Houston [14th Dist.] 2003, pet denied).
    19
    parties’ pleadings, the evidence presented on the substantive issues in the case, the
    testimony of Katy’s counsel, and Katy’s counsel’s billing statements.         All of
    Katy’s causes of action involved essentially the same allegations regarding the
    same facts and sought essentially the same ultimate relief: exercise of the options
    as she directs and disbursement of the proceeds to her. Even if segregation were
    required in this case, Katy’s counsel testified that the billing statements admitted
    into evidence represented “fees that were incurred solely for this enforcement.”
    Luc’s counsel did not object, cross-examine Katy’s counsel regarding this
    statement, or present any evidence contradicting this representation.        For the
    foregoing reasons, Luc’s segregation arguments are without merit.
    E. Appellate Fees
    Lastly, Luc raises several complaints regarding the trial court’s award of
    appellate fees to Katy. The court awarded Katy $25,000 in the event of an appeal
    to an intermediate court of appeals and $15,000 in the event a petition for review
    was filed with the Texas Supreme Court. Luc specifically complains that the
    award was not supported by sufficient evidence, was not conditioned on Katy’s
    success on appeal, and was ordered to be paid the day after appeal was perfected,
    and that Katy was awarded post-judgment interest accruing on the amount of
    appellate fees from the date of the trial court’s order.
    (i) Sufficiency of the Evidence
    We generally review a trial court’s award of appellate attorney’s fees for an
    abuse of discretion. See, e.g., Law Offices of Windle Turley, P.C. v. French, 
    164 S.W.3d 487
    , 493 (Tex. App.—Dallas 2005, no pet.). To be proper, there must be
    evidence of the fees’ reasonableness pertaining to appellate work.        State and
    County Mut. Fire Ins. Co. ex rel. S. United Gen. Agency of Tex. v. Walker, 
    228 S.W.3d 404
    , 410 (Tex. App.—Fort Worth 2007, no pet.). Luc acknowledges that
    20
    at trial, Katy’s lead counsel testified that if the case were appealed, the amounts
    awarded by the court were reasonable for attorneys with similar experience to
    himself and his co-counsel. Luc asserts, however, that this statement was too
    conclusory and unsupported by other evidence. The statement, however, was not
    made in a vacuum.        As discussed above, Luc’s counsel stipulated to the
    qualifications and rate charged by Katy’s counsel, billing statements were admitted
    into evidence showing the work done on trial of the case, and the judge herself
    would have been familiar with the complexity of the case, the size of the record,
    and potential issues on appeal. This evidence was sufficient to support the trial
    court’s award of appellate attorney’s fees.
    (ii.) Unconditional Award
    Next, Luc complains that the award of appellate fees was not conditioned on
    Katy’s success in the appeal. A trial court may not grant a party an unconditional
    award of appellate attorney’s fees because to do so could penalize a party for
    taking a meritorious appeal. In re Ford Motor Co., 
    988 S.W.2d 714
    , 721 (Tex.
    1998); Watts v. Oliver, 
    396 S.W.3d 124
    , 135 n.3 (Tex. App.—Houston [14th Dist.]
    2013, no pet.). However, an unconditional award of attorney’s fees for appeal 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. Keith v. Keith, 
    221 S.W.3d 156
    , 171 (Tex. App.—Houston [1st Dist.]
    2006, no pet.). Accordingly, we will modify the trial court’s award of appellate
    fees in the present case to make it contingent on Katy’s success on appeal.
    (iii.) Date Due and Accrual of Interest
    Lastly, Luc complains that the trial court ordered him to pay Katy’s
    appellate fees within a day after she perfected her appeal in an intermediate
    appellate court or sought review in the Texas Supreme Court and provided that
    21
    post-judgment interest would begin to accrue on the amount awarded for appellate
    fees as of the date the trial court entered its judgment. We have previously
    explained that, because an award of appellate fees depends on the outcome of the
    appeal, it is not a final award until the appeal is concluded and the appellate court
    issues its judgment; thus, the fees would not be due and interest on those fees
    should not begin to accrue until the appellate court issues its judgment. See 
    Watts, 396 S.W.3d at 134-35
    (citing Apache Corp. v. Dynegy Midstream Servs., Ltd.
    P’ship, 
    214 S.W.3d 554
    , 566–67 (Tex. App.—Houston [14th Dist.] 2006), rev’d in
    part on other grounds, 
    294 S.W.3d 164
    (Tex. 2009), and Protechnics Int’l, Inc. v.
    Tru–Tag Sys., Inc., 
    843 S.W.2d 734
    , 736 (Tex. App.—Houston [14th Dist.] 1992,
    no writ)). Accordingly, we further modify the trial court’s judgment to clarify that
    payment of the fees is not due and interest on the fees does not begin until the
    appellate court issues its judgment. See 
    id. V. Conclusion
    We vacate the portions of the trial court’s order that purport to clarify the
    divorce decree and that hold Luc breached his fiduciary duty to Katy, and we
    dismiss those causes of action. Additionally, we modify the amount awarded as
    attorney’s fees and costs by subtracting $27,090.76 from the amount awarded. We
    further modify the trial court’s award of appellate fees to make such fees
    contingent on Katy’s success on appeal and to clarify that payment of the fees is
    not due and interest on the fees does not begin to accrue until the appellate court
    issues its judgment. We affirm the remainder of the trial court’s order.
    /s/     Martha Hill Jamison
    Justice
    Panel consists of Justices Boyce, Jamison, and Donovan.
    22
    

Document Info

Docket Number: 14-13-00572-CV

Citation Numbers: 458 S.W.3d 155

Filed Date: 1/27/2015

Precedential Status: Precedential

Modified Date: 1/12/2023

Authorities (25)

Arthur Andersen & Co. v. Perry Equipment Corp. , 945 S.W.2d 812 ( 1997 )

Camarena v. Texas Employment Commission , 754 S.W.2d 149 ( 1988 )

Houston Municipal Employees Pension System v. Ferrell , 248 S.W.3d 151 ( 2007 )

In Re Ford Motor Co. , 988 S.W.2d 714 ( 1998 )

Valley Baptist Medical Center v. Gonzalez Ex Rel. M.G. , 33 S.W.3d 821 ( 2000 )

Shanks v. Treadway , 110 S.W.3d 444 ( 2003 )

McKnight v. Trogdon-McKnight , 132 S.W.3d 126 ( 2004 )

Keith v. Keith , 221 S.W.3d 156 ( 2006 )

In Re Slanker , 365 S.W.3d 718 ( 2012 )

Dynegy Midstream Services, Ltd. Partnership v. Apache Corp. , 294 S.W.3d 164 ( 2009 )

In Re Kellogg Brown & Root, Inc. , 166 S.W.3d 732 ( 2005 )

Allstate Insurance Co. v. Hallman , 159 S.W.3d 640 ( 2005 )

M.O. Dental Lab v. Rape , 139 S.W.3d 671 ( 2004 )

GENERAL LAND OFFICE OF THE STATE OF TEX. v. Oxy USA, Inc. , 789 S.W.2d 569 ( 1990 )

In Re the Marriage of Harrison , 310 S.W.3d 209 ( 2010 )

Stanley Stores, Inc. v. Chavana , 909 S.W.2d 554 ( 1995 )

Protechnics International, Inc. v. Tru-Tag Systems, Inc. , 843 S.W.2d 734 ( 1992 )

Law Offices of Windle Turley, P.C. v. French , 164 S.W.3d 487 ( 2005 )

Apache Corp. v. DYNEGY MIDSTREAM SERVICES , 214 S.W.3d 554 ( 2006 )

STATE AND CTY. MUT. FIRE INS. CO. v. Walker , 228 S.W.3d 404 ( 2007 )

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