No. 12-14-00365-CV

 

IN THE COURT OF APPEALS 

TWELFTH DISTRICT OF TEXAS 

AT TYLER 

 

EDOM CORNER, LLC AND EARL A. BERRY, JR., 

APPELLANTS 

v.

IT’S THE BERRYS, LLC d/b/a MARY ELLEN’S, 

APPELLEE 

On Appeal from the 294th Judicial District Court 

Of Van Zandt County, Texas 

Trial Court Cause 09-00138 

Hon. Teresa Drum, Judge Presiding 

 _____ 

APPELLANTS’ REPLY BRIEF 

 _____ 

 

Katherine A. Ferguson

SBN 06918050

Renshaw, Davis & Ferguson, 

L.L.P.

2900 Lee Street, Suite 102

P.O. Box 21

Greenville, Texas 75403-0021

Telephone: (903) 454-6050

Facsimile: (903) 454-4898

Email: rdflawoffice@yahoo.com

Richard L. Ray

SBN 16606300

Ray & Thatcher, P.C.

300 S. Trade Days Blvd.

Canton, Texas 75103

Telephone: (903) 567-2051

Facsimile: (903) 567-6998

ATTORNEYS FOR APPELLANTS EDOM CORNER, LLC 

AND EARL A. BERRY, JR. 

 ORAL ARGUMENT REQUESTED

ACCEPTED

12-14-00365-CV

TWELFTH COURT OF APPEALS

TYLER, TEXAS

5/25/2015 11:22:22 AM

CATHY LUSK

CLERK

 FILED IN 12th COURT OF APPEALS TYLER, TEXAS 5/25/2015 11:22:22 AM CATHY S. LUSK Clerk
2

IDENTITY OF PARTIES AND COUNSEL

Appellants:

Edom Corner, LLC

Earl A. Berry, Jr.

Appellants’ Attorneys:

Katherine A. Ferguson

Renshaw, Davis & Ferguson, LLP

P.O. Box 21

Greenville, Texas 75403-0021

Richard L. Ray

Ray & Thatcher, P.C.

300 S. Trade Days Blvd.

Canton, Texas 75103

Appellants’ Trial Attorneys:

Katherine A. Ferguson

Renshaw, Davis & Ferguson, LLP

P.O. Box 21

Greenville, Texas 75403-0021

Richard L. Ray

Ray & Thatcher, P.C.

300 S. Trade Days Blvd.

Canton, Texas 75103

Appellee:

It’s the Berry’s, LLC d/b/a Mary Ellen’s

Appellee’s Attorneys:

Larry M. Lesh, Esq.

1 Forest Park Drive

Richardson, Texas 75080

R. Paul Elliot, Esq.

301 S. Main St.

Canton, Texas 75103

Appellee’s Trial Attorneys:

Larry M. Lesh, Esq.

1 Forest Park Drive
3

Richardson, Texas 75080

R. Paul Elliot, Esq.

301 S. Main St.

Canton, Texas 75103

Trial Court:

Hon. Teresa A. Drum

294th Judicial District Court
4

TABLE OF CONTENTS

Identity of the Parties and Counsel ............................................................................2

Table of Contents.......................................................................................................4

Index of Authorities...................................................................................................5

Reply Issues Presented...............................................................................................6

Reply Issue One

THE TRIAL COUR ERRED IN FINDING THAT APPELLEEE WAS

THE PREVAILING PARTY IN THE LITIGATION

Reply Issue Two

THE TRIAL COURT ERRED IN FINDING NEITHER RES JUDICATA 

NOR COLLATERAL ESTOPPEL BARRED APPELLEE’S SUIT

Reply Issue Three

THE TRIAL COURT ERRED IN FINDING BERRY INDIVIDUALLY 

LIABLE IN APPELLEE’S SUIT

Reply Issue Four

THE TRIAL COURT ERRED IN AWARDING ATTORNEY’S FEES ON 

SUMMARY JUDGMENT TO APPELLEE

Argument and Authorities..........................................................................................7

Conclusion and Prayer for relief..............................................................................13

Certificate of compliance of typeface and Word Count ..........................................14

Certificate of Service ...............................................................................................14
5

INDEX OF AUTHORITIES

State Cases:

Goldman v. Olmstead, 

 414 S.W.3d 346 (Tex. App. - Dallas 2013, no pet)............................................8, 9

Igal v. Brightstar Information Technology Group, Inc.,

 250 S.W.3d 78, 86 (Tex. 2008)............................................................................10

In Re Nalle Plastics Family Ltd. Partnership,

 406 S.W.3d 168 (Tex. 2013).................................................................................14

Insurance Co. of the State of Pennsylvania v. Oraco,

 170 S.W.3d 129 (Tex. App. – San Antonio 2005, no pet.).....................................9

It’s the Berry’s, LLC v. Edom Corner, LLC,

 271 S.W.3d 765 (Tex. App. – Amarillo 2008, no pet.) ........................................10

Laredo Independent School Dist. v. Trevino, 

 25 S.W.3d 263 (Tex. App. – San Antonio 2000, pet. denied).............................13

MBM Financial Corp. v. Woodlands Operating Co.,

 292 S.W.3d 660 (Tex. 2009).................................................................................13

Robbins v. Capozzi, 

 100 S.W.3d 18 (Tex. App. - Tyler 2002, no pet.)...................................................8

State Statutes:

TEX. BUS. ORGAN. CODE SEC. 101.113 ....................................................................11

TEX. BUS. ORGAN. CODE SEC. 101.114 ....................................................................11
6

REPLY ISSUES PRESENTED

Issue Number One

THE TRIAL COUR ERRED IN FINDING THAT APPELLEE WAS

THE PREVAILING PARTY IN THE LITIGATION

Issue Number Two

THE TRIAL COURT ERRED IN FINDING NEITHER RES JUDICATA OR 

COLLATERAL ESTOPPEL BARRED APPELLEE’S SUIT

Issue Number Three

THE TRIAL COURT ERRED IN FINDING BERRY INDIVIDUALLY 

LIABLE IN APPELLEE’S SUIT

Issue Number Four

THE TRIAL COURT ERRED IN AWARDING ATTORNEY’S FEES ON 

SUMMARY JUDGMENT TO APPELLEE
7

ARGUMENT AND AUTHORITIES 

REPLY ISSUE ONE: THE TRIAL COUR ERRED IN FINDING THAT 

APPELLEE WAS THE PREVAILING PARTY IN THE LITIGATION

In the Appellee’s Brief1(hereinafter, the “Brief”) Appellee misstates the law 

to support its argument that it was the prevailing party in the Litigation. Appellee 

asserts that it prevailed because Appellants did not achieve the aim of evicting 

Appellee from the property. Brief at 15. Appellants were not thwarted in the 

objective to evict Appellee due to an adverse legal ruling; the passage of time 

involved during the course of the Litigation rendered the issue moot because 

Appellee forgot to renew the Lease and the Lease expired. Nothing about the 

Litigation would have prevented Appellants from starting over again and pursuing 

an eviction action against Appellee had the Lease still been in effect. Because there 

was no decision on the merits by a court of competent jurisdiction that denied 

Appellants’ the right to seek to evict Appellee, Appellee did not prevail in the 

Litigation. 

Appellee cites this Court to Robbins v. Capozzi, 100 S.W.3d 18 (Tex. App. -

Tyler 2002, no pet.) and Goldman v. Olmstead, 414 S.W.3d 346 (Tex. App. - Dallas

2013, no pet) in support of its argument, but fails to note the critical factual 

distinction: in both Robbins and Goldman, the defendants successfully defended the 

 

1 This Reply Brief will use the same abbreviations as used in the Appellants’ Brief.
8

claims on the merits. Robbins, 100 S.W.3d at. 27; Goldman, 424 S.W3d at 367. 

“Whether a party is a prevailing party is based on success on the merits . . . . A 

prevailing party is one who is vindicated by the trial court's judgment.” Robbins, 

100 S.W.3d at 27, citing Insurance Co. of the State of Pennsylvania v. Oraco, 170 

S.W.3d 129, 134 (Tex. App. – San Antonio 2005, no pet.) Appellee was never 

vindicated by Appellants receiving an adverse ruling on the merits in the District 

Court Case.2 Appellee therefore was not the prevailing party and was not entitled 

to recover attorney’s fees. Similarly, Appellee either did not receive rulings in its

favor on the merits in any of the other cases comprising the Litigation, or the 

Appellee’s request for attorney’s fees was denied in those rulings. 

REPLY ISSUE TWO: THE TRIAL COURT ERRED IN FINDING 

NEITHER RES JUDICATA NOR COLLATERAL ESTOPPEL BARRED 

APPELLEE’S SUIT

In its brief, Appellee asserts that the District Court lacked jurisdiction over its

claims for attorney’s fees in the District Court Case and therefore res judicata does 

not apply. Appellees are misrepresenting both the facts of the District Court Case 

and the Seventh Court of Appeal’s ruling. Appellees filed a separate counterclaim 

against Appellants in the District Court Case. (CR Vol. 2, #279-284). Appellee 

sought an award of attorney’s fees on its counterclaim for a declaratory judgment. 

 

2 Appellee did not raise the jurisdiction issue in the District Court Case; therefore, any positions taken by Appellee

at the District Court level were not ‘vindicated’ at the appellate court level.
9

The Trial Court denied all of Appellee’s claims in its declaratory judgment action. 

(CR Vol. 2, #285) The Seventh Court specifically severed and dismissed the forcible 

detainer action from the Appellee’s counterclaim, and affirmed the Trial Court’s 

denial of attorney’s fees on Appellee’s declaratory judgment action. It’s the Berry’s, 

LLC v. Edom Corner, LLC, 271 S.W.3d 765, 772 (Tex. App. – Amarillo 2008, no 

pet) (Appellee “did not contend the absence of an award of attorney’s fees under the 

Uniform Declaratory Judgment Acts . . . was error. We overrule [ITB’s] eleventh 

issue as to its claim for attorney’s fees.”) The Trial Court did have jurisdiction over 

Appellee’s claims for attorney’s fees in the District Court Case, and it denied the 

claim. Appellee waived that issue by failing to argue that the Trial Court’s denial of 

attorney’s fees under the declaratory judgments act was error. Thus the Seventh 

Court of Appeals affirmed the Trial Court’s ruling, and that decision is now res 

judicata. Appellee is seeking to correct its error in failing to raise the issue to the 

Seventh Court of Appeals by bringing this action. The law does not allow Appellee 

another bite at the apple.

In its Brief, Appellee does not contest the fact that in all of the other judgments 

comprising the Litigation, Appellee either sought and was denied its claim for 

attorney’s fees, or it did not raise the claim in those actions. “A party may not pursue 

a claim determined by a court of competent jurisdiction in a prior suit as a ground of 

recovery in a later suit against the same parties.” Igal v. Brightstar Information 
10

Technology Group, Inc., 250 S.W.3d 78, 86 (Tex. 2008) The Trial Court erred in 

holding that Appellee’s claims were not barred by res judicata and the judgment of 

the Trial Court should be reversed. 

REPLY ISSUE THREE: THE TRIAL COURT ERRED IN FINDING

BERRY INDIVIDUALLY LIABLE IN APPELLE’S SUIT

It is significant that Appellee fails to address the fact that the Texas Business 

and Organizations Code, Sections 101.113 and 101.114 wholly negate its claims

against Appellant Berry. Appellee’s brief fails to point to any fact to show that the 

regulations of Appellant Edom Corner provided for the members to have any 

individual liability for the debts of Appellant Edom Corner and further failed to show 

any pattern or course of dealing by Appellant Berry that would establish individual 

liability of Appellant Berry for the debts of Appellant Edom Corner. The Trial Court 

erred in finding Appellant Berry liable. This Court should reverse the ruling of the 

Trial Court and order that Appellees take nothing against Appellant Berry.

Appellee also ignores the fact that, assuming arguendo its tortured reading of 

the Lease is correct and Appellant Berry was a party to the Lease, its claims against 

Appellant Berry under the Lease necessarily arose from the same nexus of facts as 

the claims against Appellant Edom Corner in the District Court Case and the other 

cases comprising the Litigation. Appellee wholly fails to acknowledge, let alone 

refute, the argument that those claims were compulsory counterclaims which 

Appellee should have raised in any of the cases making up the Litigation. Appellee 
11

fails to address this because it cannot refute the clear case law that Appellee’s claims

against Appellant Berry are barred by res judicata. The Trial Court erred in finding 

otherwise and this Court should reverse the judgment of the Trial Court and render 

a judgment in favor of Appellants.

ISSUE FOUR: THE TRIAL COURT ERRED IN AWARDING 

ATTORNEY’S FEES ON SUMMARY JUDGMENT TO APPELLEE

Appellee claims that Appellants wholly failed to rebut the presumption of 

reasonableness of its fees. Appellee is incorrect. Appellants attached to their 

response to the Third Motion the Bennett Affidavit (CR Vol. 9, #1481 1610). 

Appellee claims the Bennett Affidavit did not rebut the “statutory presumption” of 

reasonableness of its claims for attorney’s fees. Appellee is incorrect.

The Bennett Affidavit directly controverted the statements in prior affidavits 

submitted by Appellee as to the reasonableness and necessity of the attorney’s fees. 

For example, in paragraph 8, the Bennett Affidavit noted the practice of Appellee’s 

lead attorney of billing in a minimum of half hour increments. (CR Vol. 9, #1484) 

The Bennett Affidavit stated that such a practice was neither reasonable, usual nor 

customary in Van Zandt County, Texas. In paragraph 9, the Bennett Affidavit noted 

that many of the entries included as part of the claim for “attorney’s fees” were 

actually claims for reimbursement of costs incurred rather than attorney work, and 

as such did not belong as part of a claim for attorney fees. (CR Vol. 9, #1484-85) 

In paragraph 11, the Bennett Affidavit noted that there were numerous 
12

inconsistencies between the bills of the three attorneys for Appellee (CR Vol. 9, 

#1486), including instances where one attorney billed a certain time for attending a 

hearing while another attorney billed significantly less for attending and 

participating in the same hearing (CR Vol. 9, #1486), and that multiple attorneys 

billed for the same task, a redundancy which Bennett stated was not a reasonable, 

usual or customary practice in Van Zandt County, Texas. 

Appellee cites this court to Laredo Independent School Dist. v. Trevino, 25 

S.W.3d 263 (Tex. App. – San Antonio 2000, pet. denied) in support. Appellees are 

misconstruing Laredo. In Laredo, Trevino presented summary judgment evidence 

as to the usual and customary fee to be recovered in a quasi-contract case. Trevino

presented evidence that a 40% contingency fee was a reasonable and customary fee. 

Laredo “introduced no evidence to the contrary.” Id. at. 266 (emphasis added). The

Laredo case does not stand for the proposition that if one side argues its fees are 

usual and customary that the court is then bound by law to find them so. Rather, 

Laredo merely supports that proposition that a trial court may find attorney’s fees 

usual and customary if the other party fails to challenge that assertion. This is not 

what happened in the present case.

Appellee is engaging in a circular argument. Appellee asserts a trial court 

may take judicial notice of a usual and customary fee, and then attempts to extend

that rule to provide that if one party asserts its fee is the usual and customary fee, the 
13

opposing party by law cannot rebut that assertion. This is incorrect. Just because 

Appellee claimed its fees were usual, reasonable and customary does not mean by

law that such fees were. Appellants presented an affidavit that raised fact questions 

that a large portion of the attorney fees claimed by Appellee were not usual, 

customary or reasonable. Because Appellants raised a fact issue, the Trial Court 

erred in granting summary judgment in favor of Appellee.

Appellee fails to address MBM Financial Corp. v. Woodlands Operating Co.,

292 S.W.3d 660 (Tex. 2009), which holds that without actual damages, a claim for 

attorney’s fees is inappropriate. Appellee never sought, nor was it awarded, actual 

damages in any of the cases that made up the Litigation. Therefore, it is not entitled

to recover attorney’s fees in this cause.

Finally, it is important to note that Appellee has yet again misconstrued the 

law to support its claims. Appellee asserts that In re Nalle Plastics Family Limited 

Partnership, 406 S.W.3d 168 (Tex. 2013) supports its position that it can recover 

attorney’s fees without having recovered any actual damages. Appellee is incorrect. 

Nalle merely recognized that if the “underlying suit concerns a claim for attorney’s 

fees as an element of damages . . . then those fees may property be included in a 

compensatory damage award.” Id at 175. In other words, if the underlying case, for 

example, was for collection of attorney’s fees by an attorney pursuant to a contract 

for the rendering of legal services, then the attorney’s fees would be part of the 
14

compensatory damages. Nalle specifically recognized that suits to recover 

attorney’s fees incurred for prosecuting a claim, as is the case here, are not 

compensatory damages and are not recoverable.

CONCLUSION AND PRAYER FOR RELIEF

WHEREFORE, PREMISES CONSIDERED, Appellants pray that this Court 

reverse the judgment of the Trial Court and render judgment of in favor of 

Appellants or, alternatively, remand the cause to the Trial Court for further 

proceedings.

Respectfully submitted,

RENSHAW, DAVIS & FERGUSON, LLP

By: /s/ Katherine A. Ferguson

Katherine A. Ferguson

(SBN 06918050)

2900 Lee Street, Suite 102

P.O. Box 21

Greenville, Texas 75403-0021

Telephone: (903) 454-6050

Facsimile: (903) 454-4898

Email: rdflawoffice@yahoo.com

Richard L. Ray, Esq.

RAY & THATCHER, P.C.

300 S. Trade Days Blvd.

Canton, Texas 75103

Telephone: (903) 567-2051

Facsimile: (903) 567-0998
15

CERTIFICATE OF SERVICE

I certify that a true and correct copy of the Appellants’ Brief was served on 

May 25, 2015 on the parties below by first class United States mail.

/s/Katherine A. Ferguson 

Katherine A. Ferguson

Larry M. Lesh

Law offices of Larry M. Lesh

1 Forest Park Drive

Richardson, Texas 75080

R. Paul Elliot

301 S. Main

Canton, Texas 75103

CERTIFICATE OF COMPLIANCE

I certify this document was produced on a computer using Microsoft Word 

2013 and contains 1,861 words, as determined by the computer software’s word 

count function, excluding sections of the document listed in Texas Rules of 

Appellate Procedure 9.4(i)(1).

/s/Katherine A. Ferguson

Katherine A. Ferguson