Opinion
NO. 01-17-00256-CV
07-10-2018
G. WESLEY URQUHART, G. WESLEY URQUHART, P.C., AND MARY ELIZABETH URQUHART, Appellants v. RICHARD STEPHEN CALKINS, INDIVIDUALLY AND AS AGENT-IN-FACT FOR MARY OLIVE CALKINS, AND MICHAEL EASTON, Appellees
On Appeal from the 61st District Court Harris County, Texas
Trial Court Case No. 2011-21236
MEMORANDUM OPINION
This is a subsequent appeal in one of several lawsuits between Carolyn Calkins James and her brother, Richard Stephen Calkins, and other involved parties, regarding the estate and guardianship of their mother, Mary Olive Calkins. In the original lawsuit, plaintiffs Calkins (individually and as agent-in-fact for Mary Olive) and Michael Easton sued defendants Carolyn Calkins James, G. Wesley Urquhart (one of James's lawyers); G. Wesley Urquhart, P.C., and Mary Elizabeth Urquhart (an employee of G. Wesley Urquhart, P.C.). We concluded that the Texas Citizen's Participation Act (TCPA) barred that action and remanded the case to the trial court so that it could award attorney's fees, costs, expenses, and sanctions. James v. Calkins, 446 S.W.3d 135, 150 (Tex. App.—Houston [1st Dist.] 2014, pet. denied). On remand, the trial court rendered an award and dismissed the suit.
During this lawsuit, Easton changed his name to Michael Bitgood. For ease of reference and consistency, we refer to him as Easton in this opinion.
James has not appealed the trial court's final judgment in this case; only G. Wesley Urquhart, G. Wesley Urquhart, P.C., and Mary Elizabeth Urquhart have appealed.
Appellants now contend that the trial court abused its discretion by awarding less than they requested in attorney's fees, expenses, costs, and sanctions. Appellants also contend that the trial court should have awarded post-judgment interest. We modify the judgment to include post-judgment interest and an award of all costs. We also reverse and remand as to incurred and conditional appellate attorney's fees. We otherwise affirm.
Background
On remand from our decision that the TCPA barred plaintiffs' cause of action, appellants (defendants in the original case) moved for dismissal and an award of fees, costs, expenses, and sanctions, as provided for in the statute. Appellants attached supporting documentation, including an affidavit of their attorney, Kenneth Zimmern.
At the hearing, Zimmern presented expert testimony in support of appellants' request for fees, costs, expenses, and sanctions. Appellants sought:
• $128,065.00 in attorney's fees for defending the case in the trial court;Appellants offered invoices and other records in support of these requests.
• $51,187.50 in attorney's fees for the first appeal to this court;
• $47,162.50 in attorney's fees for the proceeding at the Texas Supreme Court;
• $75,000 in conditional fees for a subsequent appeal to the court of appeals;
• $25,000 in conditional fees if a petition for review were filed with the Texas Supreme Court, $50,000 if the Supreme Court were to request briefing, and $10,000 if the Supreme Court were to grant a petition for review;
• $15,919.45 in expenses;
• $234,984.45 in sanctions; and
• all court costs.
For their part, appellees introduced various rebuttal evidence, including (1) expert testimony from three lawyers, Scott Rothenberg, Craig Anthony Washington, Jr., and Brad Beers, and (2) affidavits from Calkins' lawyer, Susan Norman, and from Easton in his pro se capacity.
The trial court rendered judgment dismissing the suit with prejudice and awarding appellants:
• $25,000 in attorney's fees for defending the case in the trial court;The trial court did not make findings of fact or conclusions of law. Appellants requested findings of fact and conclusions of law but did not file a notice of past-due findings.
• $5,000 in attorney's fees for the first appeal to this court;
• $3,000 in attorney's fees for the first proceeding at the Texas Supreme Court;
• Nothing in conditional attorney's fees for a subsequent appeal or proceeding at the Texas Supreme Court;
• $2,000 in expenses;
• $2,000 in sanctions; and
• up to $2,500 in costs.
Appellants complain that the trial court failed to file findings of fact and conclusions of law and that we should presume that the failure to file findings was harmful. But although appellants initially requested findings below, they did not file a notice of past-due findings, as required. See Powell v. Reiswerg, No. 14-12-00776-CV, 2013 WL 5883807, at *2 (Tex. App.—Houston [14th Dist.] Oct. 31, 2013, no pet.) (mem. op.) ("Because the record does not reveal that Powell timely filed a reminder of past due findings of fact and conclusions of law as required by Rule 297, this appellate complaint is waived."); Anglo-Dutch Petrol. Int'l, Inc. v. Shore Harbour Capital Mgmt. Corp., No. 01-09-00417-CV, 2011 WL 862117, at *2 (Tex. App.—Houston [1st Dist.] Mar. 10, 2011, no pet.) (mem. op.).
Fees, Costs, and Expenses
A successful motion to dismiss under the TCPA entitles the moving party to an award of "court costs, reasonable attorney's fees, and other expenses incurred in defending against the legal action as justice and equity may require." TEX. CIV. PRAC. & REM. CODE § 27.009(a)(1). On appeal, appellants complain about the amount of attorney's fees, costs, and expenses awarded by the trial court. They argue that the trial court abused its discretion by failing to award (1) reasonable attorney's fees, (2) incurred expenses, and (3) all costs. We disagree as to expenses and incurred trial-court attorneys' fees. But we sustain appellants' challenge as to costs and incurred and conditional appellate fees.
A. Analysis
1. Attorney's fees
The trial court did not abuse its discretion in its award of attorney's fees for the work performed at trial. But we reverse the award of incurred and conditional appellate fees.
The TCPA provides that "[i]f the court orders dismissal of a legal action under this chapter, the court shall award to the moving party: . . . reasonable attorney's fees . . . ." TEX. CIV. PRAC. & REM. CODE § 27.009(a)(1). A "reasonable" attorney's fee "is not excessive or extreme, but rather moderate or fair." Sullivan, 488 S.W.3d at 299. The reasonableness of a fee award rests within the trial court's discretion. Id.
Whether attorney's fees are reasonable is generally a question of fact. See Garcia v. Gomez, 319 S.W.3d 638, 642 (Tex. 2010); Ruder v. Jordan, No. 05-16-00742-CV, 2018 WL 672091, at *3 (Tex. App.—Dallas Feb. 2, 2018, no pet.) (mem. op.). "An abuse of discretion does not exist where the trial court bases its decisions on conflicting evidence." Gen. Tire, Inc. v. Kepple, 970 S.W.2d 520, 526 (Tex. 1998); Ruder, 2018 WL 672091, at *4 (trial court did not abuse its discretion in awarding fees, costs, and expenses under the TCPA where award was based upon conflicting evidence and trial court exercised discretion in resolving fact question regarding reasonableness).
A party seeking attorney's fees must prove the amount and reasonableness of the fees sought. El Apple I, Ltd. v. Olivas, 370 S.W.3d 757, 762-63 (Tex. 2012). In analyzing fees, courts consider the following non-exclusive list of factors: (1) the time and labor required, novelty and difficulty of the question presented, and the skill required; (2) the likelihood that acceptance of employment precluded other employment; (3) the fee customarily charged in the locality for similar services; (4) the amount involved and the results obtained; (5) the time limitations imposed by the client or the circumstances; (6) the nature and length of the professional relationship with the client; (7) the experience, reputation, and ability of the lawyer performing the services; and (8) whether the fee is fixed or contingent. Arthur Andersen & Co. v. Perry Equip. Corp., 945 S.W.2d 812, 818 (Tex. 1997).
The next sections address attorney's fees at trial, incurred appellate fees, and conditional appellate fees.
Trial fees.
The parties submitted conflicting evidence on reasonable fees incurred during the trial phase. In support of their request for $128,065, appellants submitted Zimmern's affidavit; Zimmern's testimony; and invoices showing hours billed, billing rates, and task descriptions.
Appellees challenged the reasonableness of these requested trial-level fees on several grounds:
• Appellants requested all their fees from the inception of the case, even though the original petition included distinct causes of action and was filed before the TCPA was enacted, and even though appellants filed their TCPA-based motion to dismiss only after appellees raised new causes of action that were covered by the TCPA;Appellees adduced testimony that the appropriate amount of incurred attorney's fees (trial and appellate combined) was instead $300.
• Appellants requested attorney's fees for the entire pendency of the suit, although, at times, at least one appellant represented himself;
• Various related litigation proceeded during the period that the present lawsuit was pending—some of which was initiated by James and/or the other appellants—and some of those other cases may have contributed to expenses and resulted in, among other things, James suing at least one trial-court judge;
• Some of Zimmern's actions—and the related fees sought—were allegedly unreasonable; and
• Some itemized charges reflected in invoices were disputed and allegedly unreasonable.
Appellees also raised an argument that the only invoices submitted into evidence were directed to James, the sole defendant who is not appealing the judgment, and therefore they do not support the other appellants' claims regarding fees.
The trial court considered and resolved this conflicting evidence in determining a reasonable award for fees at the trial level. We find no abuse of discretion.
Incurred appellate fees.
We reverse the trial court's award of incurred appellate fees. On this record, the trial court abused its discretion by awarding only $5,000 in fees for the appeal to our Court and $3,000 for the proceedings at the Texas Supreme Court.
Appellants' lawyer, testifying as a fees expert, averred that appellants incurred $51,187.50 in fees for the first appeal to this court and $47,162.50 in fees before the Texas Supreme Court—a total of $98,350. He arrived at these numbers by multiplying the number of hours he worked on the appeal and the Supreme Court proceeding—146.25 and 134.75, respectively—by his hourly billing rate of $350. Invoices reflecting these totals were admitted into evidence.
Appellants' lawyer testified that these incurred appellate fees were reasonable and necessary. He emphasized the case's complexity, asserting that the case presented novel and difficult issues involving interpretations of the newly enacted TCPA. He testified that the lawsuit—purportedly one of the first under the TCPA—presented "esoteric and technical legal problems that were not commonly encountered in general commercial litigation." And he stated that appellants' frequent filings increased his workload.
Although appellees generally challenged appellants' request for incurred fees, they focused on trial-level fees and did not put forth evidence separately attacking the reasonableness of appellants' incurred appellate fees. Appellees submitted an affidavit that the appropriate amount of incurred fees (trial and appellate combined) would be $300, but they did not explain what portion, if any, was attributable to incurred appellate fees. Appellees did not specify any number that would be reasonable for incurred appellate fees, nor did they present evidence that the time appellants spent on the first appeal or the Supreme Court proceeding was unreasonable.
In reviewing the appellate attorney's fees, we consider the record and draw on our knowledge as appellate justices and attorneys. See Keith v. Keith, 221 S.W.3d 156, 169 (Tex. App.—Houston [1st Dist.] 2006, no pet.) (appellate court has authority in looking at entire record to draw on common knowledge of justices and their legal experience). The record shows that the activity in the first appeal and in the Supreme Court proceeding was significant.
In the first appeal, appellants filed a 53-page brief citing 63 cases and 26 statutes. After appellees filed their brief and appellants filed their 13-page reply brief, appellees filed a substantive motion to dismiss, which caused this court to request a response from appellants. Before appellants filed their response, appellees filed a supplement to their motion to dismiss containing additional arguments. Appellants subsequently filed a 13-page response to the motion to dismiss and supplement. Appellants then filed a motion to stay the trial-court proceedings because the version of the TCPA in effect at the time did not include a stay and the case was set for trial. This court granted the stay. Appellees then filed a response to appellants' reply brief, without seeking leave of court, and filed a reply to appellants' response to the motion to dismiss and supplement. Appellees also filed a "post-submission brief" a few days before the appellate submission date. After this court issued its opinion, appellees filed a motion for rehearing and a motion for en banc reconsideration, as well as a motion to order re-briefing and for oral argument.
The workload before the Supreme Court was also significant. Pursuant to a request from the Supreme Court, appellants filed a 20-page response to appellees' petition for review. And after appellees filed a reply, appellants filed a 9-page sur-reply. The Supreme Court then requested merits briefing and appellants filed a 41-page merits brief. After the Supreme Court denied appellees' petition for review, appellees moved for rehearing, and the Supreme Court requested a response from appellants. Appellants filed a 17-page brief. The Supreme Court subsequently denied the motion for rehearing.
In light of the evidence presented to the trial court regarding incurred appellate fees, and the work performed in the first appeal, the trial court's award of $5,000 for the first appellate proceeding and $3,000 for the Supreme Court proceeding is arbitrary and bears no relationship to the volume of work required. See Keith, 221 S.W.3d at 169; see also Robinson v. Brannon, 313 S.W.3d 860, 868 (Tex. App.—Houston [14th Dist.] 2010, no pet.) (trial court abuses discretion if attorney's-fee award is arbitrary). The trial court abused its discretion in awarding only $8,000 in incurred appellate fees.
Conditional appellate fees.
We also reverse as to the trial court's award of no conditional appellate fees. Appellants' lawyer, testifying as a fees expert, averred that a reasonable attorney's fee for a future appeal to the court of appeals was $75,000, based on a $350 per hour rate. He further testified that a reasonable fee for filing a petition or response in the Texas Supreme Court would be $25,000. He opined that if the Texas Supreme Court requested briefing, the defendants would incur additional fees of $50,000. Finally, he testified that these conditional appellate fees were reasonable, necessary, and consistent with the considerations to be applied to an award of attorney's fees.
"If trial attorney's fees are mandatory under [the statute], then appellate attorney's fees are also mandatory when proof of reasonable fees is presented." Ventling v. Johnson, 466 S.W.3d 143, 154 (Tex. 2015); Gill Sav. Ass'n v. Chair King, Inc., 797 S.W.2d 31, 32 (Tex. 1990) (per curiam) (remanding for retrial on appellate attorney's fees under Civil Practice & Remedies Code § 38.001 when there was some evidence to support award). The Texas Supreme Court recently addressed a situation in which "both parties presented evidence in the trial court on the proper amount of attorney's fees for [the] appeal," and the Court concluded that "while the trial court has discretion as to the amount of reasonable and necessary appellate attorney's fees, it had no discretion to award Johnson no fees." Ventling, 466 S.W.3d at 155. So too here.
Section 38.001 provides that the prevailing party on a specific set of claims "may recover reasonable attorney's fees from an individual or corporation, in addition to the amount of a valid claim and costs . . . ." TEX. CIV. PRAC. & REM. CODE § 38.001.
It was appellants' burden to establish a reasonable fee, and the trial court had discretion to weigh the evidence as to what a reasonable fee might be. But because the TCPA mandates an award of reasonable fees, because appellant offered some evidence as to what a reasonable conditional appellate fee might be, and because the record raises no potential that the appellate work would be included in a contingent arrangement (or some other arrangement) such that no fees would be incurred, the trial court lacked discretion to award no contingent appellate fees. See id.
2. Costs
The trial court also abused its discretion by limiting appellants' recovery of court costs. The TCPA mandates that, if the court orders dismissal of the action, the court shall award the moving party "court costs." TEX. CIV. PRAC. & REM. CODE § 27.009(a)(1); Sullivan, 488 S.W.3d at 296-99. No language in this provision qualifies the type of court costs that may be awarded in the dismissed action. Nor does this language offer the trial court discretion to determine what court costs to award. Instead, in the present circumstances, the statute requires the trial court to award court costs to the moving party.
The Texas Rules of Civil Procedure allow a court, "for good cause, to be stated on the record, [to] adjudge the costs otherwise than as provided by law or these rules." TEX. R. CIV. P. 141. But even assuming this provision's applicability here, the trial court did not state on the record good cause to depart from the TCPA's cost-award requirement.
Appellants requested all of their court costs, but the trial court (without explanation) awarded only up to $2,500 in costs. In doing so, the trial court abused its discretion. See TEX. CIV. PRAC. & REM. CODE § 27.009(a)(1); see also In re Dep't of Family & Protective Servs., 273 S.W.3d 637, 642-43 (Tex. 2009) (orig. proceeding).
In their appellate brief, appellants inform us that costs amounted to at least $10,330.73. Appellees do not dispute that the total amount of costs exceeded $2,500.
We modify the judgment accordingly.
3. Expenses
The trial court did not abuse its discretion, however, in its award of expenses. On a successful motion to dismiss, the TCPA requires the trial court to award "other expenses incurred in defending against the legal action as justice and equity may require." TEX. CIV. PRAC. & REM. CODE § 27.009(a)(1). Applying this law, the trial court was required to award expenses under the TCPA only to the extent that the trial court concluded that justice and equity required. Id.; see also Sullivan, 488 S.W.3d at 299. This determination is committed to the trial court's discretion.
The record presents conflicting evidence as to what expenses justice and equity required, and the trial court could have determined that justice and equity did not require the entire expense award requested by appellants. Sufficient evidence supports the trial court's award of expenses, and we find no abuse of discretion.
Appellants requested $15,919.50 in expenses; appellees argued that appellants should not be awarded expenses. The trial court awarded $2,000.
Sanctions
The trial court likewise did not abuse its discretion by failing to award additional sanctions.
The TCPA provides that if a court orders dismissal, the court shall award to the moving party "sanctions against the party who brought the legal action as the court determines sufficient to deter the party who brought the legal action from bringing similar actions described in this chapter." TEX. CIV. PRAC. & REM. CODE § 27.009(a)(2) (emphasis added); see Rich v. Range Res. Corp., 535 S.W.3d 610, 612-13 (Tex. App.—Fort Worth 2017, pet. denied) (award of sanctions to successful TCPA movant is mandatory). Again, the trial court possesses broad discretion in this area. See Rich, 535 S.W.3d at 612-13 ("[T]he trial court possesses discretion to determine the sanction amount that is required to deter the party who brought the legal action from bringing similar actions in the future.").
Appellants requested a sanction of $234,984.45, and they argue that the $2,000 awarded by the trial court is insufficient to deter the appellees from filing similar actions. They contend that appellees have shown themselves to be extraordinarily litigious. But in light of the trial court's discretion and conflicting evidence about potential deterrence, we cannot conclude that the trial court abused its discretion in setting the sanctions award at $2,000. See TEX. CIV. PRAC. & REM. CODE § 27.009(a)(2); Rich, 535 S.W.3d at 613.
Post-Judgment Interest
Finally, appellants argue that the trial court erred by failing to award post-judgment interest. Post-judgment interest compensates a "judgment creditor for the lost use of money due as damages." Ventling, 466 S.W.3d at 149.
Under Texas law, "[a] money judgment of a court in this state must specify the postjudgment interest rate applicable to that judgment." TEX. FIN. CODE § 304.001. "Post-judgment interest is recoverable even if it is not specifically awarded in the judgment." DeGroot v. DeGroot, 369 S.W.3d 918, 926-27 (Tex. App.—Dallas 2012, no pet.); see also Office of the Att'y Gen. of Tex. v. Lee, 92 S.W.3d 526, 528 (Tex. 2002) (per curiam) (under predecessor statute, code "does not require, as a prerequisite for accruing interest, that judgments specifically include an award of postjudgment interest."); Hot-Hed, Inc. v. Safehouse Habitats (Scot.), Ltd., 333 S.W.3d 719, 734-35 (Tex. App.—Houston [1st Dist.] 2010, pet. denied) (post-judgment interest accrues automatically, even when judgment contains no reference to post-judgment interest).
Appellees argue that appellants waived their claim for post-judgment interest by not complaining about its omission to the trial court. But post-judgment interest accrues automatically. See Hot-Hed, 333 S.W.3d at 734-35. And appellants requested post-judgment interest below and submitted a proposed judgment that included an award of post-judgment interest. See, e.g., Metro. Transit Auth. of Harris Cty. v. Brooks, No. 01-16-00158-CV, 2018 WL 1003520, at *5 (Tex. App.—Houston [1st Dist.] Feb. 22, 2018, no pet.) (mem. op.) (rejecting waiver argument because post-judgment interest accrues automatically and Brooks preserved her complaint by filing a motion for entry of judgment with an attached proposed judgment that included an award of post-judgment interest).
We modify the judgment of the trial court to clarify that appellants are entitled to post-judgment interest by adding the following sentence: "Defendants shall also recover from plaintiffs post-judgment interest at a rate of five percent (5%), compounded annually." We note, however, that post-judgment interest on conditional appellate fees (as opposed to other post-judgment interest) accrues from the date the award is made final by the appropriate appellate court's judgment. Ventling, 466 S.W.3d at 156 ("[A]n award for conditional appellate attorney's fees accrues postjudgment interest from the date the award is made final by the appropriate appellate court's judgment.").
On the date of the trial court's judgment, March 15, 2017, the published post-judgment interest rate was five percent. See Phillips v. Bramlett, 407 S.W.3d 229, 239 (Tex. 2013) ("[P]ostjudgment interest begins to run from the date of the trial court's judgment."); Pettus v. Pettus, 237 S.W.3d 405, 423 (Tex. App.—Fort Worth 2007, pet. denied) (taking judicial notice of the post-judgment interest rate on appeal); see also TEX. FIN. CODE § 304.003(b) (directing the "consumer credit commissioner [to] determine the postjudgment interest rate" as set forth in the statute); TEX. OFF. OF CONSUMER CREDIT COMM'R, JUDGMENT RATE SUMMARY, available at http://occc.texas.gov/sites/default/files/uploads/interest/judgement-rate-summary.pdf (last visited July 3, 2018).
Conclusion
We modify the trial court's judgment to provide that all court costs are taxed against appellees and to include post-judgment interest, as set forth above. We reverse as to incurred appellate fees and conditional appellate fees and sever and remand those issues to the trial court to determine the appropriate amount of incurred and conditional appellate fees to be awarded to appellants. We otherwise affirm. We dismiss all pending motions as moot.
Jennifer Caughey
Justice Panel consists of Justices Higley, Brown, and Caughey.