Opinion
No. 01-08-00639-CV
Opinion issued August 19, 2010.
On Appeal from the 270th District Court Harris County, Texas, Trial Court Case No. 0639331.
Panel consists of Justices KEYES, SHARP, and MASSENGALE.
Justice MASSENGALE, concurring.
MEMORANDUM OPINION
This is an appeal of an award of attorney's fees to appellants, CSFB 1998-PI Buffalo Speedway Office, Ltd. Partnership, LNR Partners, Inc., and Mirio, Inc., d/b/a Moody Rambin Office Services f/k/a Moody Rambin Interests, Inc. (collectively, CSFB). In two issues, CSFB argues that: (1) the trial court erred in sustaining the objection of appellee, Amtech Elevator Services Company (Amtech), to CSFB's attorney's affidavit regarding attorney's fees; and (2) the award of attorney's fees was insufficient.
We reverse and remand.
Background
In 2003, VTM Elevator Company entered into a service contract with CSFB whereby VTM would service elevators at 3700 Buffalo Speedway, a property owned by CSFB. Subsequently, Amtech entered into a contract that assumed the contractual responsibilities of VTM. On August 9, 2004, Ross Bridwell sustained an injury on one of CSFB's elevators when the elevator dropped and then stopped abruptly. Bridwell sued Amtech and CSFB alleging negligence and premises liability.
CSFB filed a cross action against Amtech, alleging that Amtech had breached its contract by failing to defend and indemnify CSFB and by failing to name CSFB as an additional insured on Amtech's liability policy. Amtech denied the allegations. CSFB moved for summary judgment, arguing that the service contract and indemnity agreement were valid and enforceable. On February 15, 2007, the trial court granted summary judgment in favor of CSFB, finding that "Amtech [had] a duty to defend [CSFB] in the underlying suit" and that "Amtech [had] a duty to indemnify [CSFB] for any amount awarded to [Bridwell] by the trier-of-fact against [CSFB]." The trial court ordered Amtech to pay CSFB $2,500 "for the reasonable and necessary attorney's fees incurred by [CSFB] to defend themselves in this suit and to prosecute the Cross-claim against Amtech" and to "pay all costs of such defense through the end of this case and all appeals that may follow." On the same day, the trial court signed an order allowing an interlocutory appeal of its summary judgment order under Texas Civil Practice and Remedies Code section 51.014(d), which allows an interlocutory appeal of a controlling question of law if certain requirements are met. See TEX. CIV. PRAC. REM. CODE ANN. § 51.014(d) (Vernon 2008).
On March 5, 2007, CSFB moved the trial court to reconsider or, in the alternative, to amend the summary judgment order on attorney's fees only. CSFB argued that the amount of attorney's fees awarded by the trial court's summary judgment order "did not comport with the evidence submitted to the Court on that issue." CFSB stated that it had incurred approximately $15,738.85 in attorney's fees as of February 27, 2007 and that Amtech had "submitted no evidence countering that evidence on attorney's fees." The trial court denied CSFB's motion.
On May 11, 2007, Amtech filed its notice of interlocutory appeal of the trial court's summary judgment to this Court, arguing that the indemnity provision in the service contract was unenforceable because it did not satisfy both fair notice requirements of the express negligence doctrine and conspicuousness, and that summary judgment was improper because Amtech had complied with its contractual agreement to name CSFB as an additional insured on its insurance policy. Amtech Elevator Servs. Co. v. CSFB 1998-PI Buffalo Speedway Office Ltd. P'ship, 248 S.W.3d 373, 377, 379 (Tex. App.-Houston [1st] 2007, no pet.). This Court overruled both of Amtech's issues and affirmed the trial court's summary judgment order. Id. at 379, 381.
While the appeal of the original summary judgment was pending, approximately two months after Amtech filed its notice of appeal, CSFB filed a motion in the trial court for award of appellate attorney's fees. This motion was accompanied by the affidavit of Scott Weiss, who, after listing his background experience, averred that CSFB had "incurred $14,137.50 in appellate fees to date, accounting for a total of 113.10 hours worked on the matter multiplied by my billable rate of $125.00 per hour." Weiss further outlined the specific work he completed in defending the appeal, including reviewing documents, drafting motions, including a motion to extend time, conducting research, drafting and filing an appellate brief, and working on additional briefing for possible filing.
Amtech responded, arguing, in part, that an order granting additional attorney's fees "would violate the applicable rules because such an order would interfere with the order currently pending on interlocutory appeal," that CSFB had waived its right to request additional attorney's fees by failing to request them previously, and that the attorney's fees CSFB sought were "not reasonable or necessary." This response was accompanied by the "Counter-Affidavit of Bradley M. Bingham on Affidavit on Appellate Attorney's Fees of Scott Weiss." Bingham's affidavit provided his background as a partner at Bingham, Mann, House Gibson and as a licensed attorney since 1978. Bingham averred that $14,137.50 for 113.10 hours of work was not reasonable or necessary because "the issues on appeal were drafted and argued extensively before the trial court prior to appeal" and CSFB's brief was "just over 14 pages long and is confined to the issues briefed and argued before the trial court." Bingham also averred that "the motion for extension of time, post-filing research, and additional briefing for possible filing" listed by Weiss in his affidavit were not "necessary services, and the fees charged for these services are therefore not reasonable and necessary." The trial court subsequently held a hearing on the motion to award appellate attorney's fees and issued an order on August 13, 2007 denying CSFB's motion.
Just one day before we issued our opinion on the interlocutory appeal of the original summary judgment, the trial court issued its order granting Bridwell's motion to dismiss his claims without prejudice. CSFB and Amtech both filed motions for entry of final judgment. CSFB's motion stated that Amtech "refuses to honor its contractual obligations and reimburse [CSFB] for all attorney's fees incurred defending the claims asserted by [Bridwell] and prosecuting [CSFB's] breach of contract claims against [Amtech]." CSFB asked the trial court to "enter a Final Judgment in this case awarding [CSFB] all attorney's fees incurred by them to defend against [Bridwell's] suit and those incurred prosecuting their breach of contract claim against [Amtech] as well as for the settlement funds paid to settle [Bridwell's] suit as more fully described in the attached affidavit of Les Pickett." Pickett's affidavit listed the actions CSFB took in defending itself against Bridwell's claim and in prosecuting its claims against Amtech and then stated,
In connection with the representation of [CSFB] in this case, the necessary and reasonable attorney's fees and expenses incurred to date are approximately $67,000.00. To preserve their privileges, [CSFB] will submit fee bills for an in camera inspection to substantiate the amount of attorney's fees incurred in this litigation rather than attaching them to this Motion for Entry of Final Judgment. [CSFB], however, incorporates the referenced fee bills in its Motion for Entry of Final Judgment as if set forth fully therein. In addition to those fees already incurred, [CSFB] expect[s] to incur at least an additional $1,000.00 for fees and expenses to handle this matter through the entry of final judgment.
Amtech's motion for entry of final judgment asked the trial court to enter final judgment awarding the $2,500 in attorney's fees that the trial court ordered in its original summary judgment. Amtech argued that this Court's judgment on the interlocutory appeal affirmed that original summary judgment, "which included the award of $2,500," that the trial court had already repeatedly denied CSFB's requests for additional attorney's fees, and that CSFB had "waived any right to complain about the award" because it "did not raise an issue with this award for attorney's fees in the appeal of the order or otherwise appeal the award of attorney's fees." Amtech also objected to Pickett's affidavit on attorney's fees, arguing that it could not be easily controverted and could not support attorney's fees of $67,000. Amtech did not provide any countervailing evidence.
The trial court denied CSFB's motion for entry of final judgment and sustained Amtech's objection to Pickett's affidavit on attorney's fees on March 27, 2008. On April 28, 2008, without any further hearing or motions, the trial court entered final judgment ordering Amtech to pay CFSB $46,599 "representing the amounts [CSFB] paid to [Bridwell] in settlement of" Bridwell's claims and $2,500 "for the reasonable and necessary attorney's fees incurred by [CSFB] to defend themselves in this suit and to prosecute their cross-action against Amtech Elevator Services Company." On May 21, 2008, CSFB filed a motion for new trial, arguing that the award of attorney's fees in the final judgment was improper. Amtech responded, arguing, among other things, that this Court had already decided the issue of attorney's fees in the interlocutory appeal and that CSFB had waived any right it had to assert a claim for increased attorney's fees because it did not raise that issue in the interlocutory appeal. The trial court denied the motion for new trial on June 4, 2008. This appeal followed.
Waiver
Amtech argues that CSFB waived its right to complain about the amount of attorney's fees awarded by the trial court because it did not complain about the award of $2,500 in the interlocutory appeal of the original summary judgment.
The first appeal was brought pursuant to section 51.014(d) of the Texas Civil Practice and Remedies Code, which provides:
A district court, county court at law, or county court may issue a written order for interlocutory appeal in a civil action not otherwise appealable under this section if:
(1) the parties agree that the order involves a controlling question of law as to which there is a substantial ground for difference of opinion;
(2) an immediate appeal from the order may materially advance the ultimate termination of the litigation; and
(3) the parties agree to the order.
TEX. CIV. PRAC. REM. CODE ANN. § 51.014(d). Section 51.014(e) provides:
An appeal under Subsection (d) does not stay proceedings in the trial court unless the parties agree and the trial order, the court of appeals, or a judge of the court of appeals orders a stay of the proceedings.
TEX. CIV. PRAC. REM. CODE ANN. § 51.014(e). It is well-settled that interlocutory orders not disposing of all parties are immediately appealable in only narrow situations permitted by statute. State Fair of Texas v. Iron Mountain Info. Mgmt., Inc., 299 S.W.3d 261, 262 (Tex. App.-Dallas 2009, no pet.); see Gross v. Innes, 988 S.W.2d 727, 729 (Tex. 1998); Jack B. Anglin Co. v. Tipps, 842 S.W.2d 266, 272 (Tex. 1992). Statutes authorizing interlocutory appeals are strictly construed. W. Dow Hamm III Corp. v. Millennium Income Fund, L.L.C., 237 S.W.3d 745, 751 (Tex. App.-Houston [1st] 2007, no pet.).
Agreed interlocutory appeals brought under section 51.014(d) are limited to considering "a controlling question of law as to which there is a substantial ground for difference of opinion." See TEX. CIV. PRAC. REM. CODE ANN. § 51.014(d)(1); see also State Fair, 299 S.W.3d at 263 (dismissing interlocutory appeal for want of jurisdiction because notice of appeal did not identify "`controlling question of law as to which there is a substantial ground for difference of opinion' or how the court's order involves such a question"). Furthermore, an interlocutory appeal under section 51.014(d) does not automatically stay proceedings in the trial court or deprive the trial court of jurisdiction. See TEX. CIV. PRAC. REM. CODE ANN. § 51.014(e).
Here, CSFB is arguing that the amount of attorney's fees awarded by the trial court was insufficient because CSFB continued to incur expenses due to Amtech's appeal of the trial court's original summary judgment order and the continued litigation in the trial court. This complaint, by its very nature, could not have been brought in the previous appeal, because it is not "a controlling question of law as to which there is a substantial ground for difference of opinion" and because the total amount of attorney's fees CSFB incurred in defending against Bridwell's claims and prosecuting its claims against Amtech could not be determined on interlocutory appeal while the trial court still had jurisdiction and litigation was ongoing. See TEX. CIV. PRAC. REM. CODE ANN. § 51.014(d), (e); see also Volume Millwork, Inc. v. W. Houston Airport Corp., 218 S.W.3d 722, 735 (Tex. App.-Houston [1st] 2006, pet. denied) ("The reasonableness of an attorney's fee award generally presents a question of fact."). The additional expenses about which CSFB complains in this appeal had not yet been incurred at the time of the first appeal. Thus, CSFB's multiple motions filed after the trial court's original grant of summary judgment raising the issue of the amount of attorney's fees continually being incurred were timely and sufficient to put the trial court on notice of CSFB's complaint. See TEX. R. APP. P. 33.1(a) (stating that party must have presented timely request, objection, or motion that states specific grounds for desired ruling to trial court to preserve complaint for appellate review).
We hold that CSFB did not waive its right to bring its complaints on appeal.
Amount of Attorney's Fees
In its first issue, CSFB argues that the trial court erred in sustaining Amtech's objection to CSFB's attorney's affidavit regarding attorney's fees. In its second issue, CSFB argues that the trial court's award of $2,500 in attorney's fees was insufficient in light of its uncontroverted evidence that it expended $67,000 in defending itself against Bridwell's claims and in prosecuting its own breach of contract claims against Amtech.
Amtech argues that the trial court did not err because the affidavit of CSFB's attorney, Les Pickett, "could not be readily controverted and, once challenged, could not support an award of `at least $67,000.00' in attorney's fees." Amtech argues that "the affidavit did not contain an itemization including the specific work performed, the billing rates of the attorneys and other legal staff who performed the work, or the time billed for the work performed" and that it was not sufficient for Amtech to submit billing records in camera for the trial court to review and not submit those records to Amtech itself for review. Thus, Amtech argues that the evidence supports the trial court's award of $2,500 in attorney's fees.
This Court determined in the interlocutory appeal that Amtech was required to indemnify CSFB for its reasonable and necessary attorney's fees incurred in definding itself against Bridwell's claims and in prosecuting its cross-claims against Amtech. See Amtech Elevator Servs., 248 S.W.3d at 379 (affirming trial court's summary judgment order finding valid indemnity agreement between Amtech and CSFB). Thus, the only question regarding attorney's fees to be answered by the trial court before it entered final judgment was the amount of fees CSFB reasonably incurred in defending itself against Bridwell's claims and in seeking to enforce the indemnity agreement with Amtech.
We review both evidentiary rulings and a trial court's award of attorney's fees for an abuse of discretion. See Owens-Corning Fiberglas Corp. v. Malone, 972 S.W.2d 35, 43 (Tex. 1998) (providing standard of review for evidentiary rulings); Bocquet v. Herring, 972 S.W.2d 19, 21 (Tex. 1998) (providing standard of review for award of attorney's fees). A trial court abuses its discretion when it rules without regard for any guiding rules or principles. Malone, 972 S.W.2d at 43. The party seeking attorney's fees bears the burden of proving those fees. Stewart Title Guar. Co. v. Sterling, 822 S.W.2d 1, 10 (Tex. 1991). Whether fees are reasonable and necessary is a question of fact. Bocquet, 972 S.W.2d at 21.
Both parties apply traditional legal and factually sufficiency-review standards to the award of attorney's fees. However, awards of attorney's fees are reviewed for an abuse of discretion, as this memorandum opinion sets out. See, e.g., Ragsdale v. Progressive Voters League, 801 S.W.2d 880, 881 (Tex. 1990) (reviewing award of attorney's fees for abuse of discretion).
We assume without deciding that Les Pickett's affidavit submitted in support of CSFB's claim for attorney's fees was insufficient to establish as a matter of law that CSFB was entitled to $67,000 in attorney's fees. However, in filing its motion for entry of final judgment along with Pickett's affidavit, CSFB essentially requested a summary judgment on the amount of reasonable and necessary attorney's fees. See State Bar of Tex. v. Heard, 603 S.W.2d 829, 833 (Tex. 1980) (holding that courts give effect to substance of plea or motion rather than its form or title). Pickett's affidavit was sufficient to raise a fact question regarding the amount of attorney's fees that CSFB was entitled to pursuant to its indemnity agreement with Amtech. The affidavit listed the actions CSFB took in defending itself against, and ultimately settling, Bridwell's claims and in prosecuting its claims against Amtech under the indemnity agreement, including the interlocutory appeal to this court. Pickett averred that CSFB had incurred $67,000 in attorney's fees and expenses and that, in his opinion as an experienced attorney "familiar with the reasonable attorney's fees awarded in Harris County," this amount was reasonable and necessary based upon the factors provided in State Bar Disciplinary Rule 1.04 and Arthur Anderson Co. v. Perry Equipment Corp. See Arthur Anderson Co. v. Perry Equip Corp., 945 S.W.2d 812, 818 (Tex. 1997) (quoting TEX. DISCIPLINARY R. PROF. CONDUCT 1.04, reprinted in TEX. GOV'T CODE ANN., tit. 2, subtit. G app. (STATE BAR RULES, art. IX)) (listing eight factors fact-finder should consider in determining reasonableness of attorney's fees, including time and labor required, fee customarily charged in locality for similar legal services, nature and length of professional relationship with client, experience, reputation and ability of lawyer performing services, and others); see also Gutierrez v. Elizondo, 139 S.W.3d 768, 777 (Tex. App.-Corpus Christi 2004, no pet.) ("Testimony of a local attorney as to what would be a reasonable fee for handling the case is evidence that supports an award of attorney's fees.").
Pickett's affidavit, at a minimum, raised a fact question regarding the amount of attorney's fees, and it clearly supported an award of attorney's fees greater than the $2,500 awarded in the trial court's original summary judgment order, which was entered before Amtech pursued an interlocutory appeal and more than a year before the dispute was resolved and final judgment was entered. Moreover, the $2,500 award was made prior to this Court's judgment on interlocutory appeal that CSFB was entitled to enforce its indemnity agreement with Amtech, including indemnification for all reasonable and necessary attorney's fees incurred in defending against Bridwell's claim and in pursuing its rights against Amtech. See TEX. R. CIV. P. 166a(c) (providing that movant is only entitled to summary judgment when it shows there is no genuine issue of material fact and that it is entitled to judgment as matter of law); Owen Elec. Supply, Inc. v. Brite Day Constr., Inc., 821 S.W.2d 283, 288 (Tex. App.-Houston [1st] 1992, writ denied) (applying general summary judgment principles to summary proceedings on issue of attorney's fees).
We conclude that the trial court abused its discretion in summarily rejecting CSFB's claim for reasonable and necessary attorney's fees for the period of litigation following the summary judgment order, rather than submitting the issue to a fact-finder once it was clear that there was a question of fact. Malone, 972 S.W.2d at 43; see also Bocquet, 972 S.W.2d at 21(stating that whether fees are reasonable and necessary is question of fact).
We sustain CSFB's second issue.
Conclusion
We reverse the judgment of the trial court as to the amount of the attorney's fees awarded CSFB and remand the cause to the trial court for proceedings to determine the amount of reasonable and necessary attorney's fees.
CONCURRING OPINION
I join the opinion of the court, and write separately only to offer an additional observation about CSFB's request for attorney's fees, which was rejected by the trial court.
CSFB moved for entry of final judgment and requested that the trial court make an additional award of "all attorney's fees in the amount of at least $67,000." In support of that request CSFB submitted an affidavit that recited the history of the dispute up to the trial court's summary judgment order, and providing the following additional facts and expert opinion:
Rather than reimbursing [CSFB] and assuming their defense, [Amtech] appealed this Court's decision, which caused [CSFB] to incur substantially more fees than they had previously incurred up to the date the Court heard the summary judgment. Additionally, [CSFB was] forced to continue defending themselves from the Plaintiff's claims during the pendency of the appeal. Ultimately, the First Court of Appeals affirmed this Court's decision that [Amtech] breached its contractual obligations to defend and indemnify [CSFB].
Despite attempts between [CSFB] and [Amtech] to resolve the debt owed by [Amtech] to [CSFB], [Amtech] refuses to honor its contractual obligations and reimburse [CSFB] for all attorney's fees incurred defending the claims asserted by Plaintiff and prosecuting [CSFB's] breach of contract claims against [Amtech]. Further, [Amtech] has failed and continues to fail to indemnify [CSFB] for the sum of $46,599.00 paid to settle Plaintiff's claim and mitigate the damages incurred by [CSFB] as a result of [Amtech's] breach of its contract.
In connection with the representation of [CSFB] in this case, the necessary and reasonable attorneys' fees and expenses incurred to date are approximately $67,000.00. To preserve their privileges, [CSFB] will submit fee bills for an in camera inspection to substantiate the amount of attorney's fees incurred in this litigation rather than attaching them to this Motion for Entry of Final Judgment. [CSFB], however, incorporate[s] the referenced fee bills in its Motion for Entry of Final Judgment as if set forth fully therein. . . .
Such attorneys' fees and expenses are reasonable and necessary in connection with the proper representation of [CSFB] in these matters based upon the factors set out in Disciplinary Rule 1.04 of the State Bar Rules, including (1) the time and labor required; (2) the novelty and difficulty of the questions involved, and the skill required to perform the legal service properly; (3) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer; (4) the fee customarily charged in the locality; (5) the amount involved and the results obtained; (6) the time limitations imposed by the client or the circumstances; (7) the nature and length of the professional relationship with the client; (8) the experience, reputation, and ability of the lawyer or lawyers performing the services; and (9) whether the fee is fixed or contingent or results obtained or uncertainty of collection before the legal services have been rendered.
Amtech objected to the affidavit. Amtech complained that it could not readily controvert the affidavit when it had not been provided with itemized billing invoices, though those documents were relied upon by the expert and submitted to the trial court for review in camera. The trial court sustained this objection. It did not abuse its discretion in doing so.
"[T]he award of any attorney fee is a fact issue which must be passed upon by the trial court." Int'l Sec. Life Ins. Co. v. Spray, 468 S.W.2d 347, 349 (Tex. 1971); see also Great Am. Reserve Ins. Co. v. Britton, 406 S.W.2d 901, 907 (Tex. 1966). "The pattern for proving attorney's fees at trial usually follows that used for expert testimony in general: (1) present the expert's qualifications, and then (2) elicit the expert's opinion, and (3) her support for the opinion." Scott A. Brister, Proof of Attorney's Fees in Texas, 24 ST. MARY'S L.J. 313, 325 (1993). The support for the attorney's fees opinion proffered by CSFB was lacking, and that was the basis of Amtech's objection.
Whatever reasons may have motivated CSFB to offer its billing records to the trial court in camera, it has provided this court no authority approving a process of supporting a fees request with records that have been withheld from the opposing party. CSFB appears to have offensively used its billing records such that it waived any possible claim of privilege over those records. See Republic Ins. Co. v. Davis, 856 S.W.2d 158, 163 (Tex. 1993). But in any case, the documents that have been provided to, reviewed by, or prepared by or for an expert in anticipation of the expert's testimony are discoverable. TEX. R. CIV. P. 192.3(e) (authorizing discovery, among other things, of "the facts known by the expert that relate to or form the basis of the expert's mental impressions and opinions"); TEX. R. CIV. P. 194.2(f) (authorizing requests for disclosure of such documents for testifying experts). Amtech was entitled to request and receive discovery of such documents to enable it to controvert the opinion offered as to the reasonableness of CSFB's fees request. For that reason the trial court's ruling sustaining Amtech's objection to the affidavit was no abuse of discretion.
The Supreme Court has emphasized the importance that a party opposing a fees request have "the means and opportunity of disproving the testimony or evidence" before fees will be granted as matter of law. Ragsdale v. Progressive Voters League, 801 S.W.2d 880, 882 (Tex. 1990). On remand, Amtech should be given the opportunity to review those materials relied upon by CSFB to support its request for fees.