Opinion
NUMBER 13-18-00222-CV
06-06-2019
HILDA GONZALEZ GARZA, Appellant, v. THE PRUNEDA LAW FIRM, PLLC, Appellee.
On appeal from the County Court at Law No. 5 of Hidalgo County, Texas.
MEMORANDUM OPINION
Before Chief Justice Contreras and Justices Longoria and Perkes
Memorandum Opinion by Justice Longoria
Appellee, the Pruneda Law Firm (Pruneda), filed suit against appellant Hilda Gonzalez Garza for breach of contract. The trial court granted partial summary judgment on the breach of contract damages, and after a bench trial, the trial court awarded attorney's fees to Pruneda. By eleven issues that we have grouped together, Garza argues that the trial court erred by: (1) granting summary judgment on Pruneda's breach of contract claim; and (2) awarding Pruneda attorney's fees. We affirm.
I. BACKGROUND
The underlying facts are largely uncontested. Garza was an assistant county attorney until she was terminated shortly after she announced that she was running to be on the local school board. Pruneda, with Michael Pruneda as the sole managing member, entered into a contract in April of 2012 to represent Garza in her claim against Starr County and county attorney Victor Canales. Garza alleged wrongful termination and retaliation. Pruneda's contract did not list an hourly rate for attorney services but it stipulated that Pruneda would receive a 35% contingency fee of "any financial advantage realized by [Garza] by settlement upon the filing of a lawsuit, by any means including but not limited to: mediation, arbitration, or other legal binding process." Additionally, for sums recovered within ninety days before the initial trial setting, the contract increased the contingency fee to 40%.
Garza's case against Starr County proceeded in the United States District Court in McAllen, Texas. The jury returned a verdict of $68,400.61 for past earnings and $1,421,600 for lost future earnings. The trial court entered judgment on the $68,400.61 for past earnings and awarded $54,170 in attorney's fees, but in lieu of the $1,421,600 in future earnings as recommended by the jury, the trial court ordered that Garza be reinstated to the position of assistant county attorney. Pruneda did not challenge the trial court's disregard of the $1,421,600 verdict. According to Garza, Pruneda suggested that she should not appeal the judgment. The defendants appealed to the United States Court of Appeals for the Fifth Circuit. However, the contract emphasized that Pruneda's legal representation "shall not cover any appeal" because Pruneda is not an appellate specialist. Accordingly, Pruneda helped Garza obtain appellate counsel. Pruneda argues that although it "did not act as Garza's lead appellate counsel, [it] remained actively involved and assisted her appellate counsel." Garza's new appellate counsel suggested cross-appealing the deletion of her $1,421,600 front-pay award. In October of 2015, the Fifth Circuit reversed the deletion of her front pay damages and remanded to the district court. The case eventually settled.
In March of 2016, Pruneda sued Garza for breach of contract and declaratory judgment. Pruneda alleged that it was entitled to $260,000 as a percentage of the settlement. On August 28, 2017, Pruneda filed a motion for partial summary judgment. Pruneda argued that it was entitled to its 40% contingency fee under the contract for all monetary gains Garza received from the suit even though it was a different law firm that represented her on appeal and obtained a reinstatement of the front pay award. In her response, Garza asserted that Pruneda was not entitled to a portion of the settlement because Pruneda did not participate in the appeal that led to the reinstatement of the front pay award. Also, Garza alleged that Pruneda informed her that it "had no more legal obligations toward [her]" once the case was appealed. Therefore, Garza contended that Pruneda was only entitled to 40% of the judgment that was pending when the defendants appealed: $68,400.11 for past damages. The court granted Pruneda's motion for partial summary judgment, finding that Pruneda was entitled to recover $260,000 on its breach of contract claim.
On January 22, 2018, a bench trial was held on Pruneda's request for attorney's fees. At the bench trial, attorney Ray Thomas testified that he represented Pruneda in its suit against Garza. He testified that his attorney fee rate of $525 per hour is reasonable; he further testified that because of certain factors in the present case, such as the amount in controversy, it would be reasonable to increase the attorney fee rate by 25% to $656.25 per hour. According to Thomas, one of his associates also worked on the case. Thomas testified that the associate normally billed $300 per hour; with the 25% increase, the rate would go up to $437.50 per hour. Thomas also testified that two appellate lawyers worked on the case; their billing rate was $300 an hour. The trial court awarded Pruneda $185,809.10 in attorney's fees, $24,112.33 in prejudgment interest, in addition to the following conditional attorney's fees: $15,000 if an appeal was made to the court of appeals; an additional $8,000 for filing a petition for review; and an additional $15,000 for preparing a brief on the merits if requested by the Texas Supreme Court. Garza filed a motion for new trial, which was denied. This appeal followed.
II. SUMMARY JUDGMENT
In her first issue, Garza argues that the trial court erred in granting Pruneda's partial motion for summary judgment and awarding Pruneda $260,000 in breach of contract damages.
A. Standard of Review and Applicable Law
We review a traditional summary judgment de novo. See Merriman v. XTO Energy, Inc., 407 S.W.3d 244, 248 (Tex. 2013). In a traditional motion for summary judgment, the movant has the burden to show both that no genuine issue of material fact exists and that the movant is entitled to judgment as a matter of law. See TEX. R. CIV. P. 166a(c); Provident Life & Acc. Ins. Co. v. Knott, 128 S.W.3d 211, 216 (Tex. 2003). Once the movant meets its burden, the burden shifts to the non-movant to present evidence raising a genuine issue of material fact; if the non-movant raises a fact issue, summary judgment is not appropriate. See Ayeni v. State, 440 S.W.3d 707, 709 (Tex. App.—Austin 2013, no pet.). All evidence favorable to the nonmovant must be taken as true, and all reasonable doubts must be resolved in favor of the nonmovant. See Childs v. Haussecker, 974 S.W.2d 31, 40 (Tex. 1998).
The elements of a breach-of-contract claim are: (1) the existence of a valid contract; (2) performance or tendered performance by the plaintiff; (3) breach by the defendant; and (4) damages as a result of breach. See Bank of Tex. v. VR Elec., Inc., 276 S.W.3d 671, 677 (Tex. App.— Houston [1st Dist.] 2008, pet. denied).
B. Analysis
Garza argues that the $260,000 fee awarded to Pruneda was unconscionable and against public policy. However, "[a]n allegation that a provision in a contract is void, unenforceable, or unconscionable is a matter in the nature of avoidance and must be affirmatively pleaded. If a party fails to plead the affirmative defense, it is waived." Godoy v. Wells Fargo Bank, N.A., 542 S.W.3d 50, 54 (Tex. App.—Houston [14th Dist.] 2017, pet. granted); see TEX. R. CIV. P. 94. In her answer to Pruneda's suit and in her response to Pruneda's motion for summary judgment, Garza never argued that the contract was unconscionable. She raised the issue of conscionability for the first time in her motion for new trial. Therefore, Garza has waived this argument. See Godoy, 542 S.W.3d at 54.
Garza also generally avers it was error to grant Pruneda's motion for summary judgment because Pruneda did not conclusively establish that there were no genuine issues of material fact. Garza repeatedly asserts that Pruneda only represented her at the trial court level and that Pruneda did not represent her on appeal or perform any appellate work. According to Garza, Pruneda's work concluded as soon as a judgment was obtained in the trial court. However, Garza concedes that she never terminated Pruneda and that Pruneda never filed a motion to withdraw. Furthermore, Pruneda remained Garza's attorney of record during the appeal and after her case was remanded.
More importantly, Pruneda did not need to establish that it represented Garza on appeal to prevail on its breach of contract claim. Garza does not dispute the existence of the contract or that Pruneda performed under the contract. Garza argued that there was no breach and thus no damages. However, Garza also conceded that the terms of the contract were unambiguous. "The construction of an unambiguous contract is a question of law, which we review de novo." Wright Group Architects-Planners, P.L.L.C. v. Pierce, 343 S.W.3d 196, 200 (Tex. App.—Dallas 2011, no pet.). The contract simply states Pruneda is entitled to 40% of any recovery Garza obtains from the case, including mediation, arbitration, and any other legal processes. It also states Pruneda is required only to represent her at trial. Therefore, Pruneda performed under the contract. Applying the unambiguous terms of the contract, we conclude Pruneda was entitled to 40% of the settlement because it falls within the broad contract terms of being a monetary gain from a legal process. Thus, Pruneda met its initial burden of demonstrating its entitlement to judgment as a matter of law. See TEX. R. CIV. P. 166a(c); Provident Life, 128 S.W.3d at 216. The burden then shifted to Garza to provide evidence raising a genuine issue of fact. See Ayeni, 440 S.W.3d at 709. However, Garza's assertions that Pruneda did not represent her on appeal and her belief that Pruneda's representation of her had ended do not raise a genuine issue of fact regarding Pruneda's breach-of-contract claim. Even when we take all the evidence favorable to Garza as true, there is no genuine issue of fact regarding the unambiguous terms of the contract that entitle Pruneda to 40% of the monetary gains from the lawsuit. We overrule Garza's first issue.
III. ATTORNEY'S FEES
In her second issue, Garza argues that the trial court abused its discretion in awarding attorney's fees because: (1) the attorney's fees were unreasonable, unnecessary, and excessive; and (2) there was no evidence that Pruneda pleaded and proved presentment of its claim for attorney's fees.
A. Standard of Review and Applicable Law
We generally review the trial court's award of attorney's fees for an abuse of discretion. See Russell v. Russell, 478 S.W.3d 36, 47 (Tex. App.—Houston [14th Dist.] 2015, no pet.). "The reasonableness of attorney's fees is ordinarily left to the factfinder, and a reviewing court may not substitute its judgment for the fact finder's." Id. at 48. Some of the factors a factfinder may consider in determining the reasonableness of attorney's fees include:
(1) the time and labor required, the novelty and difficulty of the questions involved, and the skill required to perform the legal service properly;
(2) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer;
(3) the fee customarily charged in the locality for similar legal services;
(4) the amount involved and the results obtained;
(5) the time limitations imposed by the client or by the circumstances;
(6) the nature and length of the professional relationship with the client;
(7) the experience, reputation, and ability of the lawyer or lawyers performing the services; and
(8) whether the fee is fixed or contingent on results obtained or uncertainty of collection before the legal services have been rendered.TEX. DISCIPLINARY RULES PROF'L CONDUCT 1.04(b) reprinted in TEX. GOV'T CODE ANN., tit. 2, subtit. G app. (West, Westlaw through 2019 R.S.); Arthur Andersen & Co. v. Perry Equip. Corp., 945 S.W.2d 812, 818 (Tex. 1997). A court may then adjust the base lodestar up or down "if relevant factors indicate an adjustment is necessary to reach a reasonable fee in the case." Auz v. Cisneros, 477 S.W.3d 355, 361 (Tex. App.—Houston [14th Dist.] 2015, no pet.).
Attorney's fees are not recoverable unless authorized by statute or by the parties' contract. TEX. CIV. PRAC. & REM. CODE ANN. § 38.002 (West, Westlaw through 2019 R.S.); see New Amsterdam Cas. Co. v. Tex. Indus, Inc., 414 S.W.2d 914 (Tex. 1967); Peterson Grp., Inc. v. PLTQ Lotus Grp. L.P., 417 S.W.3d 46, 61 (Tex. App.—Houston [1st Dist.] 2013, pet. denied). When a party makes a claim for attorney's fees under Chapter 38, the party claiming attorney's fees bears the burden of both pleading and proving presentment. See Genender v. USA Store Fixtures, LLC, 451 S.W.3d 916, 924 (Tex. App.—Houston [14th Dist.] 2014, no pet.). However, "[w]hen a party seeks attorney's fees pursuant to a contractual provision allowing the recovery of such fees, the party need not prove presentment, which is a statutory procedural requirement." Fortitude Energy, LLC v. Sooner Pipe LLC, 564 S.W.3d 167, 187 (Tex. App.—Houston [1st Dist.] 2018, no pet.).
B. Analysis
On appeal, Garza makes two arguments concerning the trial court's award of attorney's fees. First, Garza contends that the attorney's fees awarded were unreasonable and excessive for attorneys in South Texas. Garza asks that we take judicial notice that the median billing rate of attorneys in South Texas with over twenty-five years of experience is $250 per hour according to a State Bar Salary Survey.
However, we conclude Garza has not shown that the trial court abused its discretion. Thomas testified that the hourly rates charged in this case were reasonable and customary "when you take into account our reputation, the years of practice, the kind of case this is, the other 1.04 factors and the fact that that is what our other clients pay us as well." Concerning the upward adjustment of 25%, Thomas testified as follows:
The factor that I would ask the Court to take into account—there are a couple of factors. I think that one of the factors that some lawyers use to ask for an upwards adjustment it might—their reputation and their skill and all of that—I am not asking for that kind of an adjustment because I think that is already reflected in our hourly rates. What I am asking the Court to consider is that this was—that we did handle this case on a contingent basis, and although I am not asking for 40% or for anything like that, the fact is that we took a risk by handling this on a contingency basis. And it also precluded us from doing other hourly work that pays as soon as we bill or within thirty days after we bill, and so the delay in payment and the risk of not getting paid is something that would warrant an upward departure. In other cases where I have testified on attorney's fees, I will often ask for two to two and a half times for an upward departure, but in this case, I am only asking for a 25% upward departure.
Thomas's testimony concerning the reasonableness of the attorney's fees and the 25% upward adjustment was completely uncontroverted at the trial. In her motion for new trial, Garza attached an affidavit from another attorney that simply asserted that $500 per hour for attorney's fees in this case was unreasonable; but during the trial itself, Garza offered nothing to dispute Thomas's testimony concerning reasonable fees. And her affidavit failed to demonstrate that the trial court abused its discretion in awarding attorney's fees based on the evidence before it at the time the fees were awarded. Garza has failed to demonstrate that the assessed attorney's fees or the 25% upward adjustment were unreasonable. See TEX. DISCIPLINARY RULES PROF'L CONDUCT 1.04; Arthur Andersen, 945 S.W.2d at 818; Russell, 478 S.W.3d at 47; Auz, 477 S.W.3d at 361. Based on the evidence before it, the trial court could have reasonably concluded that the attorney's fees and the upward adjustment, as established in Thomas's testimony, were necessary and reasonable. See Russell, 478 S.W.3d at 47.
Second, Garza contends there is no evidence in the record that Pruneda pleaded and proved presentment of its attorney's fees claim to Garza. However, Pruneda did not seek attorney's fees under Chapter 38; rather, Pruneda sought attorney's fees pursuant to contract terms. The contingent fee employment agreement that Garza and Pruneda entered into clearly states:
in the event [Pruneda] is compelled to intervene in a pending lawsuit or initiate any subsequent lawsuit in order to recover fees, costs, and/or expenses for services rendered due to [Pruneda], [Garza] agrees to pay, in addition to fees, costs, and/or expenses due to [Pruneda], any and all attorney's fees, costs, and/or expenses accruing in favor of [Pruneda] pursuant to the terms of this contract, and, additionally, [Garza] agrees to pay any and all court costs and expenses connected with the pending lawsuit or any subsequent lawsuit as herein above described.Pruneda pleaded in its original petition that Chapter 38 authorized attorney's fees in this case. However, Pruneda also argued it was "entitled to recover attorney's fees and expenses incurred in having to prosecute this civil action. The fee agreement obligates Garza to pay these fees." Because Pruneda sought attorney's fees pursuant to the fee agreement, it did not need to comply with Chapter 38's requirement of presentment. Fortitude Energy, 564 S.W.3d at 187.
Therefore, we conclude the trial court did not abuse its discretion in awarding attorney's fees. See Russell, 478 S.W.3d at 47. We overrule Garza's second issue.
IV. CONCLUSION
We affirm the judgment of the trial court.
All pending motions are dismissed as moot.
NORA L. LONGORIA
Justice Delivered and filed the 6th day of June, 2019.