Opinion
No. 04-07-00525-CV
Delivered and Filed April 16, 2008.
Appeal from the 45th Judicial District Court, Bexar County, Texas, Trial Court No. 2004-CI-13236, Honorable Peter Sakai, Judge Presiding.
Sitting: CATHERINE STONE, Justice, SANDEE BRYAN MARION, Justice, REBECCA SIMMONS, Justice.
MEMORANDUM OPINION
AFFIRMED IN PART, REVERSED AND REMANDED IN PART
Knight Aerospace Products, Inc. and Alfred W. Knight (collectively "Knight") appeal the summary judgment granted in favor of Leonard J. Gittinger, Jr., Trustee, and Leonard J. Gittinger, Jr., Independent Executor of the Estate of Virginia L. Wurzbach, Deceased. Knight contends the trial court erred in granting summary judgment with regard to Gittinger's request for specific performance. Knight further contends the summary judgment record did not contain evidence to support the amount of attorney's fees awarded. We reverse the portions of the trial court's judgment granting Gittinger's request for specific performance and the award of attorney's fees. We affirm the remaining portions of the trial court's judgment.
Background
Knight executed five promissory notes in favor of Gittinger. The notes were secured by a security interest in various forms of tangible personal property and Knight's equity interest in certain leased property. The notes also were secured by an assignment of life insurance proceeds on the life of Alfred W. Knight. When Knight defaulted on the notes, Gittinger filed a lawsuit seeking a judgment for the accelerated balance remaining on the notes and a foreclosure of his security interests. Gittinger also sought specific performance to compel Knight to execute a new assignment of life insurance proceeds and new UCC-1's. The trial court granted summary judgment in favor of Gittinger.
Standard of Review
The standard for reviewing a traditional summary judgment is whether the successful movant at the trial level carried its burden of showing that there is no genuine issue of material fact and that judgment should be granted as a matter of law. KPMG Marwick v. Harrison County Housing Fin. Corp., 988 S.W.2d 746, 748 (Tex. 1999). In conducting our review, we take as true all evidence favorable to the nonmovant, and we make all reasonable inferences in the nonmovant's favor. Id.
Specific Performance
Knight contends that the trial court erred in granting Gittinger specific performance with regard to the life insurance policy and the execution of UCC-1's. Specific performance is an equitable remedy that may be awarded upon a showing of breach of contract. Stafford v. Southern Vanity Magazine, Inc., 231 S.W.3d 530, 535 (Tex.App.-Dallas 2007, pet. denied); Guzman v. Acuna, 653 S.W.2d 315, 318 (Tex.App.-San Antonio 1983, writ dism'd). Specific performance is not a separate cause of action, but rather is an equitable remedy used as a substitute for monetary damages when such damages would not adequately compensate a party for his loss. Stafford, 231 S.W.3d at 535; Horton v. Robinson, 776 S.W.2d 260, 267-68 (Tex.App.-El Paso 1989, no pet.); Guzman, 653 S.W.2d at 318. Specific performance may be granted only if there is no adequate remedy at law. Stafford, 231 S.W.3d at 535; Horton, 776 S.W.2d at 268; Guzman, 653 S.W.2d at 318. In this case, Gittinger offered no summary judgment evidence to establish that the monetary damages he was awarded were not an adequate remedy at law. Accordingly, Gittinger failed to conclusively establish his entitlement to specific performance, and the trial court erred in granting summary judgment as to that relief.
Knight's brief also appears to challenge the trial court's granting of summary judgment with regard to Gittinger's request for a judicial foreclosure of his security interests. Although Knight briefs this issue as a challenge to the trial court's granting of specific performance with regard to the execution of the UCC-1's, the foreclosure relief is not based on specific performance. As previously noted, Gittinger failed to conclusively establish his right to specific performance that would require Knight to execute new UCC-1's. Gittinger did, however, conclusively establish his entitlement to a judicial foreclosure of whatever security interests he had. A secured creditor is entitled to seek judicial foreclosure of his security interests. See Tex. Bus. Com. Code Ann. § 9.601 (Vernon 2007); Conseco Fin. Servicing Corp. v. Cabrera, 190 S.W.3d 41, 43 (Tex.App.-Amarillo 2005, no pet.). Gittinger was entitled to both a judgment for the accelerated balance due on the notes and the foreclosure of his security interests. T.A.M.E. Const., Inc. v. Langley, No. 04-00-00379-CV, 2002 WL 86865, at *3 (Tex.App.-San Antonio Jan. 23, 2002, no pet.). While the alleged lapse in the UCC-1's filings might affect the priority of Gittinger's lien, Gittinger was not required to perfect his security interest in order for that interest to be valid, and Gittinger is entitled to foreclose on his security interest. See Tex. Bus. Com. Code Ann. § 9.601 (Vernon 2007); Gulf Oil Co. U.S. v. First Nat'l Bank of Hereford, 503 S.W.2d 300, 307 (Tex.App.-Amarillo 1973, no writ). Accordingly, Knight's issue with regard to the portion of the trial court's judgment ordering a judicial foreclosure is overruled.
Attorney's Fees
Knight finally contends that the trial court erred in awarding Gittinger $64,184.60. The trial court's judgment provides:
Plaintiffs shall recover from Knight Aerospace Products, Inc. and Alfred W. Knight, Individually, jointly and severally their attorney's fees in the sum of $64,184.60. The Court further grants a remittitur of attorney fees of $7,500.00 if a Petition for Review is not granted to Defendants or either of them in the Texas Supreme Court; remittitur of $12,500.00 if a Petition for Review is not made by the Defendants or either of them to the Texas Supreme Court; remittitur of $22,500.00 if an appeal is not perfected by Defendants or either of them to the Court of Appeals; remittitur of $27,500.00 if no Motion for New Trial is made in the Trial Court by the Defendants or either of them.
Although judgments can award appellate attorney's fees by using conditional language, the awarding of attorney's fees subject to remittitur is also proper. Int'l Security Life Ins. Co. v. Spray, 468 S.W.2d 347, 349-50 (Tex. 1971); Lee v. Kline, No. 14-98-00268-CV, 2000 WL 19227, at *11 (Tex.App.-Houston [14th Dist.] Jan. 13, 2000, pet. denied).
We agree with Knight that Gittinger failed to conclusively establish his entitlement to the attorney's fees in the amount awarded. Gittinger, who is a practicing attorney, stated in his affidavit that reasonable and necessary attorney's fees for the underlying trial were $36,183.00. Gittinger also stated that the following would be additional reasonable and necessary fees: (1) $5,000.00 for the filing and hearing of a motion for new trial; (2) $10,000.00 if an appeal was taken to the Court of Appeals; (3) $5,000.00 if a Petition for Review was filed with the Texas Supreme Court; and (4) $7,500.00 if a Petition for Review was granted by the Texas Supreme Court. Wallace Jacobs, who assisted in representing Gittinger at trial, stated in his affidavit that reasonable and necessary legal fees for trial were $36,183.00. Jacobs further stated that the following would be additional reasonable and necessary fees: (1) $10,000.00 if an appeal was taken to the Court of Appeals; (2) $5,000.00 if a Petition for Review was filed with the Texas Supreme Court; and (3) $7,500.00 if a Petition for Review was granted by the Texas Supreme Court. The only evidence of a reasonable and necessary fee for the filing of a motion for new trial was Gittinger's testimony that $5,000.00 would be a proper amount. In addition, the only evidence of a reasonable and necessary fee for the filing of an appeal was $10,000.00 and for the filing of a Petition for Review was $5,000.00. In this case, the trial court apparently awarded $27,500.00 in the event a motion for new trial was filed and heard, $22,500.00 in the event an appeal was filed, and $12,500.00 in the event a Petition for Review was filed. Because this amount is not supported by the evidence, the trial court erred in awarding Gittinger $64,184.60 in attorney's fees.
Conclusion
The portions of the trial court's judgment ordering specific performance and awarding attorney's fees are reversed, and the cause is remanded for further proceedings. The remaining portions of the trial court's judgment are affirmed.