Opinion
No. 05-08-01160-CV
Opinion Filed June 18, 2009.
On Appeal from the County Court at Law No. 3, Dallas County, Texas, Trial Court Cause No. CC-06-01840-C.
Before Justices MOSELEY, O'NEILL, and MURPHY.
MEMORANDUM OPINION
Robert C. Sullivan filed suit against his former client, Pam Elaine White, to recover unpaid attorneys' fees. White counterclaimed for damages for negligence and unconscionable conduct under the Deceptive Trade Practices-Consumer Protection Act ("DTPA"). Following a jury verdict awarding no damages to either party, the trial court signed a final judgment awarding $3,068.58 to White as court costs. Sullivan appeals the trial court's final judgment awarding costs against him. The background of the case and the evidence adduced at trial are known to the parties; thus, we do not recite them here in detail. Because all dispositive issues are settled in law, we issue this memorandum opinion. Tex. R. App. P. 47.2(a), 47.4. We reverse the trial court's judgment and render judgment that the parties take nothing on their claims and bear their own costs incurred in the trial court.
In his first issue, Sullivan argues he was denied due process when the trial court signed the final judgment without additional notice and a hearing. We reject Sullivan's first issue because the constitutional due process arguments were not presented to the trial court. See Tex. R. App. P. 33.1; In re L.M.I., 119 S.W.3d 707, 711 (Tex. 2003) (to preserve issue for appellate review, including constitutional error, party must present to trial court a timely request, motion, or objection, state specific grounds therefor, and obtain ruling). The default judgment case cited by Sullivan, Peralta v. Heights Medical Center, Inc., 485 U.S. 80 (1988), does not apply to this case involving the rendition of a final judgment following a trial of the merits. Moreover, after the verdict, both parties filed motions for entry of judgment and the trial court held a hearing, but reserved ruling on the issue of costs. White filed a brief in support of costs and a proposed final judgment. The trial court signed White's proposed judgment without holding another hearing. Sullivan then filed a motion to modify, correct or reform the judgment where he raised his arguments about the award of costs to White. The trial court held a hearing on the motion where Sullivan again presented his arguments. The motion to modify was overruled by operation of law. We overrule Sullivan's first issue.
Sullivan argues in his second issue that the trial court erred by awarding costs to White because she was not the successful party at trial. See Tex. R. Civ. P. 131, 141, 303. The successful party to a suit is entitled to recover its costs from the adverse party. Tex. R. Civ. P. 131. The successful party is the party obtaining a judgment vindicating a civil claim of right. See Hasty Inc. v. Inwood Buckhorn Joint Venture, 908 S.W.2d 494, 502 (Tex.App. 1995, writ denied). The trial court may, however, for good cause stated on the record, award costs other than as provided by law or the rules. Tex. R. Civ. P. 141. Where a counterclaim is pleaded, "the party in whose favor final judgment is rendered shall also recover the costs." Id. 303. We review a trial court's allocation of costs under an abuse of discretion standard. Univ. of Houston-Clear Lake v. Marsh, 981 S.W.2d 912, 914 (Tex.App.-Houston [1st Dist.] 1998, no pet.). The trial court did not state on the record any reason for awarding costs in this case to White.
Both parties in this case sought to recover damages from the other, but the jury found neither liability nor damages against either party. Sullivan agrees that both parties properly received a take-nothing judgment as to the merits of their claims, but argues he is the "prevailing party" because White's counterclaim against him involved multiple causes of action and claimed more damages than his claim. See Chilton Ins. Co. v. Pate Pate Enters., 930 S.W.2d 877, 895 (Tex.App.1996, writ denied) (in suits involving counterclaims, party receiving larger recovery entitled to costs). Because neither party here received any recovery, Chilton is distinguishable.
Other courts have concluded that when both sides successfully prosecute their claims, a trial court can in its discretion split costs between the parties. See Bayer Corp v. DX Terminals, Ltd., 214 S.W.3d 586, 612 (Tex.App. 2006, pet. denied); Niemeyer v. Tana Oil Gas Corp., 39 S.W.3d 380, 389-90 (Tex.App. 2001, pet. denied); Building Concepts, Inc. v. Duncan, 667 S.W.2d 897, 905-06 (Tex.App. 1984, writ ref'd n.r.e.); but see Reyna v. First Nat. Bank, 55 S.W.3d 58, 74 (Tex.App.2001, no pet.) (concluding trial court did not abuse its discretion in awarding costs against plaintiff where plaintiff was not successful on any of his claims and trial court granted directed verdict on defendant's counterclaim). This Court has recognized that where neither party was wholly successful in that one expected to receive more while the other expected to pay less, the trial court does not abuse its discretion by taxing costs against both parties. Okon v. Levy, 612 S.W.2d 938, 943-44 (Tex.Civ.App. 1981, writ ref'd n.r.e.); see also Mobil Producing Tex. New Mexico, Inc. v. Cantor, 93 S.W.3d 916, 920 (Tex.App.2002, no pet.).
Both parties were successful in defending the claims against them and unsuccessful on their claims against the other. Because both parties in this case were equally successful, and the trial court did not state good cause on the record for awarding costs differently, we conclude it was an abuse of discretion to award all costs to White. Failure to state on the record a finding of good cause to vary from Rule 131 constitutes an abuse of discretion. See Finlay v. Olive, 77 S.W.3d 520, 528 (Tex.App.-Houston [1st Dist.] 2002, no pet.); State v. B L Landfill, Inc., 758 S.W.2d 297, 300 (Tex.App. 1988, no writ). We sustain Sullivan's second issue.
We reverse the trial court's judgment and render judgment that the parties take nothing on their claims and bear their own costs incurred in the trial court.