## In the Cou rt of Appeal s Secon d Appellate Distri ct of Te xas at Fort Worth

___________________________ No. 02

- 20

- 00371

- CV

___________________________

On Appeal from the 462nd District Court Denton County, Texas Trial Court No. 17

- 1244

- 431
Before Sudderth, C.J.; Bassel and Womack, JJ. Memorandum O pinion by Justice Bassel 

### A STA 

### P ARTNERS 

### , LLC AND 

### A STA 

### G OLD 

### 1, LLC , Appellants

V



### . V ELUMANI 

### P ALANISWAMY 

### , Appellee2 MEMORAN DUM OPINION
I. Introduction
This is a case in which a founding co

- manager

— Appellee Velumani Palaniswamy (Velu)

— s iphon ed funds from Appellants Asta Partners, LL C and Asta
Gold 1 , LLC from 2009 to 201 5

. Appellant s then sued Velu , 1 alleging c laim s for
th e ft, conversion, breach of contract, breach of fidu ciary duty, fraud, and malice and seeking loss

- of

- use damages , prejudgment interest, and attorneys ’ fe es. The claims
were resolved p iecemeal via a summary judgment , a jur y trial , and a bench trial

. The trial court granted summary ju d gme nt for Ap pellants on their claims for theft, conversion, and breach of contract

. The damages related to those claims were t ried to

a jury, as well as the claims for breach of fi duciary duty , fraud, and malice. After both
sides res ted in the jury trial, t he trial court gr a nted Appellants ’ motion for a directe d

ver dict on their breach

- of

- fi duciary

- duty claim ; the jur y foun d no fraud or ma lice and , following the agreed

- to mitigation

- of

- damages instru ction that wa s inclu ded in the jury charge, aw arded Appellants $130,100 as da mages for theft, conversion, and
breach of contract

. The trial cour t he ld a bench trial on prejudgment interest, loss

- of

use damages , and attorney s ’ fees and awarded Ap pellant s $52 ,040 in attorneys ’ fe es

1 Appella nts initially sued Velu; Ve lu ’ s wi fe, Selvi Pa lanis wamy ; an d Kannan K alimuthu but non suited Kal imuthu six months later

. App ellants amend ed their petition to sue only Ve lu an d Selvi , but prio r to th e s tart of th e jury trial , Appellants nonsuite d their claims a gainst Sel vi in exchang e for a stipulation tha t “ any a m ou n ts with drawn from any Ast a a ccou nt by [V elu], per checks written to Selvi [ w e re] to be treated ju st as if he [ha d written] the ch e c ks hi mself

. ”3 for the trial p roceed ings an d $0 for prej udgment i ntere st. The trial court ’ s final judgment included only the jury ’ s damages award , the award of trial attorneys ’ fee s, and a statement that no preju dgment interest was awarded ; thus , the judgment

o mitt ed any reference to the claim f or loss

- of

- use damages and to the directed verdict
on the breach

- of

- fid uciary

- duty claim

. Appell ants filed a motion to correct the judgment so that it would r eference the directed ver dict on t he breach

- of

- fiduciary

d uty claim. Within that motion, they also sought a judgment not withstanding the
verdic t (JNOV) on the damages aw ard, asking the trial court to disregard the jury ’ s fin ding that Appellants could have avoided $102 ,563.7 3 of the damages for theft , conversion, and breach of contract by exercising reasonable care and claiming that they conclusively proved $232, 663.73 in damages. B ut the tr ial court d enied the
motion

. On appe al, Appellants raise five issu es contending that the trial court erred by denying their JNOV and by not award ing th e full amount of damages that they claim

were conclusi vely prove n ; tha t the tr ial court ab used its dis cretion by fail ing to award
the f ull amount of proven attorneys ’ fees a nd any appe lla te atto r neys ’ fees , prejudgment inte rest , and loss

- of

- use damages ; and that the trial court abused its
discretion by failin g to amend the j udgment to include the directed verdi ct on the
breach

- of

- fiduciary

- duty claim. Based o n t he analys es below for Ap pellants ’ first, second, fourth , and fifth issues , we hold that the trial court did not err or abuse its
discr etion because4 • th e jury charge specific ally allowed the jury to reduce the damages by the
amount th at the jury found App ellants could have a voided by the
exercise of reasona ble care , regardless of the discovery date of the
breach ; thus, sufficient evidence supported the ju ry ’ s answer to the mitigation instruction;

• the general principles of equity governing prejudgment interest did not

warrant an awar d of prejud gment interest under the facts here;

• A ppellants failed to conclu sively establish that they had incu rred loss

- of

use damages b ased on their pleadings; and

• t he ruling on the directed verdict merged into the t rial court ’ s judgment.
But because the trial court ’ s findings of fact reflect th at the tria l court failed to foll ow the two

- step lodestar method for calculating tri al attorneys ’ fees and because the trial court failed to award any appell ate attorneys ’ fees despite that Appellants were entit led to an award of appellate attorn eys ’ fees, we s ustain Appellants ’ third issue an d reverse and remand solely fo r a r e determinat ion of trial attorneys ’ fees and for the trial cou r t

to determine the amount of appellate attorneys ’ fees.5 II. B ackground
A sta Pa rtners, LLC and Asta Go ld 1, LLC were for med in 2008 2 by an initial group of tw e nty members

— consisting of fa mily, f rien ds, a nd relatives of Velu and
Selvi and Ramasamy Eswaran (Samy) and his wife

— who pooled to gether over $400 ,000 and purch ase d a building t he following year

. The member s agreed to have a
prop erty

- mana gement company manage the bu ilding ’ s day

- to

- day op erations and
selected Vi n tage Realty to serve as the propert y manage r. Vintage Realty he ld the
checkbook for Asta G o ld.
Velu and S amy served as Appellants ’ initial c o

- man ag ers , b u t Velu served as the point person

. Although Samy was authorized to sign checks o n Appe llants ’ account
at PointBank and had equal online acc ess to the account , Velu held the only
check book for Asta Partners and was t he o nly one with access to the Quick B ooks ®
for Asta Partners

. Vintage sent profit

- a nd

- loss reports only to Velu. Dale D owning

serv ed as the C PA who prepared Appellants ’ tax r eturns , but he did not serve as a b ook k eeper; i nstead, Velu was in charge of the boo kke eping and supplied Downing
with the financial state ments that he prepare d on QuickBook s . ®

2 Each LLC had its own Comp any Agreement

. The Company Agreements contained vi rtually the same provisi ons , e xc ept that t he C o m p any A greement for Ast a Partners contains Sections 6.04 through 6.10, dealing with managers; Asta Go ld ’ s C o mpany A greement omits those sections. The parties focus on t he Asta Partners ’ Company Ag reement
. W e th e r efore al so referenc e singul arly to th at Company Agreement.6 According to the Company Agreeme nt s , the members were en ti t led to annual
financial state ments
. In 2009, Samy and other members started ask ing Velu for the
financi al statements

. Velu gave excuses for why he could not provide the financials. Samy continued to ask Velu quarterly for financ ial s tate ments f or the following six
years but did not take any additional steps despite receiving no fina ncial statements
from V elu. Samy became concerned only when PointBa nk called him in June 2015
and told him that the prior y ear ’ s tax es had not been paid

. The following month , the members received an email from Velu in which he
stated that he had loaned money to himself from A pp ellants and that he would pay it
back with nominal interes t. Velu did not st ate the amo unt t hat he had taken. In August 2015, Velu turned over Appellants ’ financial statements to Samy

. 3
The amount calc ulated from QuickBooks ® that Velu had turn ed over sho we d that he
had taken $155,000, but a calculation that was m ade a t a later d ate using Velu ’ s personal bank statements showed that he had taken $232,000

. A f ter Velu failed to r e pay the money , Appellants filed the underlying suit alleg ing c la ims for th eft, c onversion, breach of co ntract, brea ch of fidu ciary duty , fraud, and malice and seeking actual damages, loss

- of

- use damages , prejudgment interest, and attorneys ’ fe es . As noted above, t he trial court gr anted summary

3 A fter re ceivin g the fina n ci al information from Velu , Sa my and fellow member Maha Sengo tt iyan we n t to Poi nt Bank and removed Velu from the account and a dded Sengot tiy an’s name to th e account ; S eng o t tiyan als o replaced Velu as a co

- mana ge r
.7 ju d gme nt in favor of A p pellan ts on their claims f or the ft, conver sion, and breach of

contr act
. During the jury trial on the damages for the theft, conversion, and breach

- of

contract claims , Velu agreed that from 2009 to 2015, he h ad taken over $412,000 out
of Appel l ants ’ a ccount s by check and tr ansferred it to his account , listing the
transactio ns on the financial sta teme nts as “ loan to others

. ” 4 From the $412, 000 , he made annual tax payments and a $25,000 payme nt back to As ta Partne r s . He

a dmitted th at he h ad not paid back $232,663. 7 3

— an amoun t that A ppellants ’ attorney said reflected a deduct ion for the $25,000 payment.
Velu agreed that he should not have made the loans to himself because they
were pr ohibited by the C ompany A greement. Velu testi fied that Samy d id not know
about the loans and that July 2015 was the first time that Velu had told the members
that he had taken money. Even Velu ’ s wife, who was a member, did not know tha t her husband had stolen money fr om Appe llants

. 5 Samy testified that h e did n ot know prior to Velu ’ s July 2015 em ai l th at V e lu had taken money from A ppellants

. Samy said that he had asked Velu quarterly for the
financial sta tement s b ecause he wanted to know the amoun t they were saving and the

4 Ho wever, t he 20 1 1 tax return reflected a loan to Velu

.
5 S elvi testif ied that Velu ha d a j ob tr a veling to India and wa s not paid for two years of wor k and that she believe s he took the m on e y beca use he was ash amed t hat he could not p rovide f or h is fam ily. S elvi did not believe that Velu had intended to hurt a nyone.8 return on investment

. Samy agreed that he coul d ha ve gone to the bank dur ing the
2009 to Ju ne 2015 time frame and looked at the bank statements, but the withdrawals
would not have been identif ied as loans to Velu o r “loan s to o thers.” 6 Samy admitted
that t he tax return s did note a loan to members. Samy kn ew who served as Appe llants ’ accountant , but he never asked Do wning to provide a copy of the tax

return s from 20 09 to 2015. Sam y al so admi tted t hat he had met t he a ccount manager at Vintage and could have called her and asked to receive the p roper ty

- manageme nt reports. Samy testified that he should have looked at th e tax returns, the financials, and Vintage’s repor ts f rom 2009 to 20 15 but that he had trus ted Velu 100%. Samy agreed that under the C ompany A greement , it was his job as a co

- manager to look at
th ose documents

. Du ring cross

- examination , def ense counsel questioned Samy about how long
he sho uld have wa ited for financial in forma tion from Velu before seeking to o btain
the in fo rmation from other sources : Q. How many years do you think somebody has to deny you basic fin ancial i nformation be fore you are failing to use ordinary care to call V

inta ge, who kne w you were a manager and y ou could get the information from, Dale Downing, who knew you were the manager and you could get information from, or PointBank, who knew you were the manager and y ou could get information from?

6 Howe ver, S engott iyan , who r eplaced V elu as co

- man ager, agreed at trial that oth er tha n two cash withdraw a l s t ha t Velu had made

— one in 2009 and one in 201 4

— totaling $6,000 , the re st o f t he funds t aken could have b een discovered by look in g at the bank statements

. Velu withdrew the rest of the money via checks written to himself.9 How many years do y ou h ave to not get i nformation befor e you ’ re not using ordinary care as a manager to get the informatio n?
A. I never suspe cted him, so that ’ s why I didn ’ t make an attempt. But beca use the other members were asking for financials, my wife was asking for t he finan cial de tail s, so I was insi sting we need to do that because I ’ m also a co [

- ] manager. I was repeti tively asking. Q. And so as the co [

- ] manager, if Velu ’ s not

-- in other wo rds, if Velu ’ s not responsiv e to the members, there ’ s someone else who can be. It was y ou, r ig ht?
A. Corre ct. Correct

.

. . . . Q. And at any point in time, you could have gone to PointBan k and said, I want to get all the statements that you have for this account, I ’ m a signatory, and they would have given it to you, co rre ct?
A. T ha t ’ s correct. Q. And you didn ’ t do that in 2009, correct?
A. Yes. Q. 2010, correct?
A. Yes. Q. Or any time before 2015?
A. Correct.

. . . . Q. So you igno red your re sponsibilities as the manager because

-- A. I won ’ t say i gnore d. Q.

-- becau se you were treating him like a friend; is that it?10 A. More than a friend. Q. So you ignor ed your responsibilities outlined in the [C] ompany [A] greement to maint a in the records , to maintain the assets, and you just relied o n h im an d did n ’ t do your j ob?
A. You ca nnot say I didn ’ t do it. I was asking for that detail [] , and he was delaying it. So

-- but I could have [taken the] extra step to go find out, if I had suspected. I did not suspect him [of] doing that. Samy mad e exc us es about how h is work sche dule prevented him from

o btaining Appel la nts ’ financial information but admitted that h e could have contacted Downing via email and that he “should have done it, b ut [he] didn’t do it.” During the trial, a chart wa s adm it ted that liste d t h e amount s taken by Velu
from 2009 to 2015. The chart showed t hat Velu had taken $ 73,000 in 2009 and $57,100 in 2010 , for a total of $130,100. The chart further showed that the t o tal
amount taken by Velu dur ing t he 2009 to 20 15 time fra me

— after deducting the taxes paid and his $25,000 repayment

— w as $232,663.73.
A t t he conclusi on o f the evidence, the trial court gra nted Appellants ’ motion
for a directe d ver dict on their breach

- of

- f

i duciary

- duty claim

. Th e jury considered Appe llants ’ claims for fraud and mali ce and damages for theft, conversion, and breach
of contract
. The jury found no fr aud or malice and returned a verdict for Appellants
in the amo unt of $130,100 for the the ft , c o nversion, an d breach

- of

- contract claims

.11 A bench tr ial was later held on two dates, and the trial court heard evidence and argument on attorneys ’ fees , loss

- o f

- use damages, and prejud gment interest

. 7 The
p arties also file d b r i efs on the same issues

. The trial court rendered a judgment on the jury ’ s damages for the theft, conversion, and br eac h

- of

- co ntract claims ; awarded tri al
attorneys ’ fees of $52,040; and awarded $0 prej ud gmen t interest.
III. D amages Foun d b y the Jury In their first issue, A p pellan ts argue that the trial court erred when it failed to
award what Appellants c h ar acteri z e as “ the full amount of t he damages ” for the theft, conversion, and breach

- of

- con tract claims

— $23 2, 663.73

— notwi t h standing the jury ’ s verdict that reduced th at amount. Be c ause , as explained below, (1) the jury charge specifically all o w e d the j ur y to consider the time before Appellants discovered the stealing in reduc ing the damages to only $130,100, and because (2) some evidence supports the jury ’ s finding that A ppellants c ould have avoided in curring $102,563.73 by exercis ing reas o nable care , the trial court did not err by not altering the jury ’ s damage award

. A. Stand ard of Revie w A trial court may disregard a jury ’ s verdict and grant a JNOV if a di rected
verdict would ha v e been proper. Tex. R. Civ. P. 301; Fort Bend Cnty. Drainage Dist. v. Sbrus ch , 818 S.W.2d 392, 394 (Tex. 1991). We review the grant or denial of a motion

7 A more de tai led summary o f the bench trial is set forth within t he d isc ussion of A p pellants ’ se c ond , th ird, and f ourth issu es.12 for J NOV under a l egal

- sufficiency standard. Tanner v. Nationwide Mut. Fire Ins

. , 289 S.W.3d 828, 8 30 (Tex. 2009) ; Pointe W. Ctr., LLC v. It ’ s Alive , Inc. , 476 S.W.3d 141, 150 (Tex. App.

— Houston [1st Dist.] 2015, pet. denied)

. Ther efore , because f ailure to
mi tiga te damages is an affirmative defense , Zimmerman Truck Lines, Inc. v. Pastran , 587
S.W.3d 8 4 7, 862 (Tex. App.

— El Paso 2019, no pet.) , Appella nts must show that no evidence supports t he jury ’ s mitigation finding , s ee Graham Cent. Station, Inc . v. Peña , 4 42
S .W.3d 261, 263 (Tex. 2014).
We may sustain a legal

- suf fi cienc y challenge

— t hat is, a no

- evi d ence challenge

— only when (1) the record bears no evidence of a vital fact, (2) the ru les of
law or of evidence bar the court from giving weight to the only evi denc e offered to prove a vital fact, (3) the evidence off ere d to pr ove a vital f act is no mor e t h an a mere scintilla, or (4) the evidence establishes conclusiv ely the opposite of a v ital fact. Shields v. Ltd. P’ship v. Br adberry , 526 S.W.3d 47 1, 480 (T ex. 201 7); see also Ford Motor Co. v.
C

a stillo , 444 S.W.3d 6 16, 6 20 (T ex. 2014) (op. on reh’g); Uni r

oyal Goodrich Tire Co. v. Martinez , 977 S.W.2d 328, 334 (Tex. 1998) (op. on reh’g). In determining whether legally sufficien t evidence supports th e finding un der review, we must consider
evidenc e favorable to the fi ndi ng if a reasonable fac tfinder cou ld a nd must disregard contrary evidence unless a reasonable factfi nder could not. Cent. Ready Mix Concrete
Co. v. Islas , 228 S.W .3d 649, 651 (Tex. 200 7); City of Kell er v. Wilson , 168 S.W.3d 802,
80 7 , 827 (Tex. 2005). We in dulge “every reasonabl e inferen ce d educible from the13 evidence” in support of the challenged findi ng. Gunn v. McCoy , 554 S.W.3d 645, 658 (Tex. 2018). Anything more than a scintil la o f evidence i s le gally suffi c ient to support a findi ng . Co nt’l Coffee Prods. Co. v. Cazar ez

, 937 S.W.2d 444, 450 (Tex. 1996) ; Leitch v. Hornsby , 935 S .W.2d 114, 118 (Tex. 1996 ) ; see also 4Front Engineered Sol s . , I nc. v. Rosales , 505 S.W.3d 905, 909 (Te x. 2 016) (“The e vide nce is lega l ly sufficient if

. . . th ere i s

mor e than a scintilla of evid ence on which a rea s onable juror could find the fact to be

tr ue.”)

. Scintilla means a sp ark or trace. Scintilla , Black’s L aw Dictionary ( 11 th ed.
201 9 ). Mo re th an a scintilla e xist s if the ev i dence rises to a level th at wo uld e nable
reasonable and fair

- minded people to di f fer in their conclusions. Rocor Int’l, I nc. v. N at’l Union Fire Ins. , 77 S.W.3d 253, 262 (Tex. 2002); M errell Dow Pharm s ., Inc. v. Hav ner , 953 S.W .2d 706, 711 (Te x. 1997). O n the other hand, when th e e vi dence offered to prove a vital fact is so weak tha t it creates no more than a mere surmise o r suspic ion
of its existence , the evidence is no more than a sc intilla and, in legal effect, i s n o evi denc e. King Ran ch, Inc. v. Cha p man , 118 S.W.3d 742, 75 1 (Te x. 2003 ) ; Kindred v. Con/Chem , In c. , 650 S.W.2d 61, 6 3 (Tex. 1983). Without an objection to th e jury charge, we review evi dentiary sufficiency in light of th e charge submitted. Romero v. KPH Cons olid ation, Inc. , 166 S.W.3d 212 , 221 (Tex. 2005) (citin g Wal

- M art S tores, Inc. v. Sturges , 52 S.W.3d 711, 715 (T e x. 2001)).14 B. The Charge The following da mages question , which Appell ants did not object to , contains a mitigation instru ction :

D uring closing argument, Ve lu’s counsel walked the jury through Question 2.
He pointed to the C ompany A gree ment and Samy ’ s d u ties as a c o

- manager under that
agreement. He t hen told the jur y t h at they woul d get to decide how long i t w as

reas onable for Samy to wait be fore he did his job and suggested that they conclude that he should have waited no longer than one year. C. Relev a nt Trial Exhibits
The unobjected

- t o c hart t hat follows s ets forth the d a tes, the check numbers , and t he am o unts taken by Ve lu :151617 The “ Company Agreement of Asta Partners, LLC ” was also admitted i n to evidence, and the jury heard testimony abou t Sa my ’ s du t i es a s c o

- mana ger. Those
du ti es included , among oth ers , (a) entering i n t o, ma king, and performing contr acts, agreements, and other undertakings binding the Company that may be necessary, appro priate, or advisable in furtherance of the purposes of the Comp a ny and makin g all decisi on s and waivers thereunder , i ncluding a Fundam e n ta l B usiness Transaction; (b) opening and maintaining bank and investment accounts and arrangements, drawing checks and other orders for the payment of money, and designa ting individ u al s wi th aut hority to si gn o r g ive instructions wi th r espect to those a c co unt s and arrangements; (c) m aintaining the assets of the Company in good order ; [and ]

. . . . (h) selecting, removi ng, and changing the authority and responsibility o f la wyers, a c co u nta nts, a nd other adv is er s a nd consultants [.]
D. An aly si s The c rux of Appellants ’ argumen t on appeal

— that the jury c ould not have reduced the damages from the $2 3 2 ,633.73 net to tal shown on Appellants ’ chart

— goes to the mitigation ins truction. App e l l a nt s spend a fu ll p age o f t heir brief stating
what Velu was r e quire d to show in order to esta blish mitigation and citing cases on this topic

. They argue that the jury could have only considered whether Appellants
exercised reasonable ca re in avoid ing dam a g es after July 201 5, when they actually
discovered Velu ’ s stealing. This is an a ttack on the scope of the trial c ourt ’ s18 mitigati on instruction within the damages questi o n . Yet, Appellants di d n ot object
d uring the charge confer ence to the su bmiss ion of t h e mi t igation instru ction , which
does not so limit the jury ’ s consideration of mitigation

. Because Appellants did not object to the mitigation instruction contained in the damages questio n, we must
examine the sufficiency of the evid enc e in l ight of t he c h ar ge as given. S e e id

. ; B aye r Corp. v. DX Terminals, Ltd

. , 21 4 S.W.3d 586, 604 (Tex. Ap p.

— Houston [14th Dist .] 2006, pet. denied ) ; see also Swank v. Sverdlin , 121 S.W.3d 785, 80 2 (Tex. App.

— Houston [1st Dist.] 2003, pet. denied) ( “ We a re not auth ori z ed t o e valuate the
suff ic ien cy of the evi dence under calculati o ns d ifferent from those the jury were instructed to employ. ” ). 8

8 In their reply brief, Appellants state that the language in t h e charge is from Texas Patter n Jury Charge 11 5.8 a nd then proceed to disc us s comment 1 to t h e ins truction : That the Patter n Jury Charge c ommittee believed this l anguage required t he defendant to sh ow that the damages were increased as a result of the plaintiff’s action or inaction after the damages were i nflicted is made clear by the comments t o the i nstruction. According to the Committee, the instruction is used when “t he evidenc e raises a questio n about the plaintiff ’ s failure to mitigate damages after the defendant ’ s actionable conduct” and requ ires th at the “defendant must of fer evidence sh o w ing
n ot just the plaintiff ’ s lack of care but also the amount by whic h the da mages were increased by such failure to mitigate.” [ State Bar of Tex., Texas Pattern Jury Charges: Bu siness, C o nsumer, Insurance & Empl oyment PJC 11 5.8 cmt. 1 ( 2018) .] In oth e r word s, the Committee believes that this lang uage requi res the eviden ce to sa tisfy the conditions of Texa s law regarding mitigation of damages, as outlined by [Appellants] in [their] Appellants’ Brief and wh ich [Ve lu] agrees is “a correc t statement of th e law.”19 Here, examining the sufficiency of the evidence in light o f the charge as given,

t he jury was free to c hoose which amount s fr om th e c h art to include in it s dam ages

a ward

. The jury was also req u ired to follow the mi tigation instruction and to exclude any amount that Appellants could have avoided by the exercise o f reasonable care.
Based on the se instructio ns, the jury found dam ages o f $ 130 ,100, which represent s the total o f t he amounts taken by Velu in 2009 ($7 3,000) and in 2010 ($57,100)

.

Essentially, [Velu] urges this Court to repudiate t he Pattern J ury Char ge Committ ee’s work and decl are that this instruction does not properly capture Texas law but instead allows for the reduction of damages for any reasons whatso ev er. This instr u c tion was not meant to be and is not a blank c heck for the jury to sim ply redu ce the dam ages to be awarded to the plaintiff. [Velu] arg ues that the charge allows the jury to reduce the damages based on the t heory t hat it could have found t hat [Appellants ] shoul d have discovered [Velu ’ s] misconduct be fore it actually did. T his is n ot evidenc e of the failure to mitigate damages, as [Velu] effectively concedes, is not what this in struction allows, and is not wha t this [c] ourt should interpre t the Pattern Jur y Charg e instruction to allow. Appellants thus attempt to distinguish between pre

- act ion able versus post

actionable con duct and argue that t he mitigation instruction was not applicable to the damages here

. But as poin ted out above, Co mm ent 1 specifically states, “ If the evidence raises a question abo ut the plaintiff ’ s failu re to mi tigate dam ages after the defe n dant ’ s actiona b le co nduct, an instruction on mitigation should be included with t he damages question. ” Id. (em pha sis added). I t does not limit the instruction to a failure to mitigate after di scovery of the actionabl e conduc t. Bas e d on the arguments that App ellants raise on appeal, they should have objected during the charge conference in the trial court that th e m itigation inst ru ction was not properly limited in time, but the y did not do that . Instea d, without rais ing a ny objecti o n, Appellants let the unlimited mitigation ins truction remain in the charge

. As we conclud ed above, it is A p pellant s ’ failure to obj ect that prevents u s fro m looking behind the charge that was given

.20 T he jury implicitly determined that after repeated requests of Velu to provid e the financial s and n o forthcoming report s , Samy shou l d not h a v e waited mor e than

two y ear s to obtain the fin a ncial information from o t h er sources
. The testimony at
trial confirmed that the stolen funds could have been identified if Samy had r equested
th e bank statements from Point Bank or had ac cessed t he s tateme nts or t h e c a nce led
checks onlin e. M oreove r, it w as Samy ’ s job as a co

- mana g e r to maintain the assets of the company in good order , and he could not maintain the funds in the bank account
without review ing the financial documents

. Inste ad, he asked Velu quar terly fo r fi na ncial statements for six y ears , r eceived nothing, and took n o furthe r action despite having direct access to the bank account , the a cc oun tant , and t he property

man agement company. Appellants argue that becaus e they did not learn of the t heft until t h e s u mmer of 2015 and immediately took s teps to remove Velu from c o ntrol of its fin ances, there
is no evidence tha t any thing Appellants di d con stituted a lack of reasonable care. But

“ [ t ] he mitigat i on standard is that of o rdina ry care

— what an o rdi nary p ru d ent person would do in the same or simi lar circ u ms tances. ” See Pulaski Bank & Tr. Co . v. Te x. Am . Bank/Fort Worth, N.A. , 7 59 S.W. 2d 723, 736 (Tex. App.

— Dallas 1 988, wr it
den ied ) . Here, more than a scin tilla of evidence s uppor ts that an or din a ry p rudent
p erson acting a s a co

- man ager with specific dutie s u nder the C o mpany Agreement
would not have waite d more than two years to s eek financial information from the
LLC ’ s bank , accountant, or property

- man a gement com pany when no fin an cial21 inform at ion was being s u pplied after repe ated re quests to the other co

- ma n ag er. See
id. ( “ I t takes no special expertise to discern that it was unw is e t o allow Lab Management to continue to with draw money that did not belon g to it. ” )

. Based on the t estimony and evi d ence presente d , we co nclud e th at th e jury ’ s de termination

— tha t A ppellants should not recoup more than $13 0,100 ( the total of
the amount s tak en by Velu in 2009 and 2010 ) because they failed to exercise
reasonable care

— is s upported by m ore t han a scintil la o f evi dence

. S ee Cont’l Coffee
Prods. , 937 S.W.2d at 450 ; Lei t ch , 935 S.W.2d at 118 ; s ee also Pulaski Bank & Tr . Co

. , 7 59
S.W. 2d at 736 (h old i ng th at bank could not recover t he funds attributable to i ts fai l ure
to mi tigat e) . And havin g con clu ded that t he e vide nce is s u fficient to suppo rt the jury ’ s damage award, we h ol d that the trial court did not err by leaving t he jury ’ s damage award u nc han ged

. Cf. Mundheim v. Lepp , No. 05

- 19

- 01490

- CV, 2021 WL
1 921122 , at *7 ( Tex. App.

— Dall as Ma y 13, 2021, p e t. filed ) (mem. op.) ( “ H aving
fou nd the evide nce su fficient to s u pp ort the complained

- of j ury findings, we conclud e [that] the trial court did no t err [by] denying the [appellants ’ ] motion for judgment notwithstanding the v er dict and motion for new trial

. ” ). We ov e rrule Appell an ts ’ fi rst
issue

. I V. A t torneys ’ Fees Awarded b y t he Tr ial Court
In th e ir third issue, Appellants argue that the amount of attorneys ’ fees awarded by the trial court “ was improper and oug ht to be corre cted ” by this court

. Ap p ellants challenge the legal an d fact u al sufficiency of the tr i al court ’ s award of trial22 attorneys ’ fees in the amount of $52,040

— which was calculated by applying the
contracted

- for 4 0% contingency fee to the jury ’ s damages award of $1 30,10 0

— a nd
the tri al c ourt ’ s failure to award any ap pellat e attorne ys ’ fee s. As d isc ussed below, the
trial court ’ s findings of fact demonstrate that it did not follow the lodestar method of calculating trial attorneys ’ f ees but relied sole ly on the continge ncy

- fee arrangement , which was error. Additiona l l y, the trial court abused its dis cretion b y not awarding appella te attorneys ’ fees be ca use case law manda tes that if an award of trial attorneys ’
fees is mandatory under an authorizing sta tute, then an awar d o f appellate attorne ys ’
fees is like wise manda t o ry if proof o f reasonable fe es i s presented. See Ventling v. Johnson , 466 S.W.3d 143, 154 (Tex. 2015)

. A. Standard of Review
We review a trial court ’ s award of attorne y s ’ fees for an abu se of discretion. El Apple I, Ltd. v. Olivas , 370 S.W.3d 757, 761 (T ex. 2 0 12). A trial court ab uses that discretion if it acts arbitrarily, unreasonably, or without regard to guiding legal principles, or if its decision is not supporte d by legally or fac tuall y sufficient evi d ence. See Bocquet v. Herring , 972 S.W.2d 19, 2 1 (Te x . 1998); see also Beau mont Bank, N.A. v.
Buller , 806 S.W.2d 223, 226 (Tex. 1991) (explaining that legal and factual sufficiency of
the evidence are relevant facto rs in determining w hethe r the trial c our t abused its discretion).23 B. Applicable Law
T h e T e xa s Supreme Court laid ou t th e framewor k for determining attorneys ’
fees in Rohrmoos Venture v. UTSW DVA Heal thcare, LLP : [T] he lo destar method as we presented it in El Apple applies f or determining t he r easonableness and necessity of attorney ’ s fees i n a fe e

shifting situation:
Unde r the lodestar method, the determination of what constitutes a reasonable attorney ’ s fee involves two steps. First, the [fact finder] must determine the re aso nable hours
s pen t by counsel in the case and a reasonable hourly ra te f

or such work. The [fa ct fin der] then multiplies the number of such hours by the applicable rate, the product of which is the base fee or lodestar. The [fact find er] may then adjust t he base lodestar up or down (apply a multiplier), if relevant facto r s indi ca te an adjustment i s neces sary to reach a reasonable fee in the case.
370 S.W.3d at 760 (citations omitted). Thus, the fact [] finder must first determine a bas e lodestar figure bas ed on reasonable ho u rs worked multiplied by a reasonable hourly rat e . Id. In a jury trial, th e jury should be instructed that the base lodestar figu re is presumed to represent reasonable and necessary attorney ’ s fees, but other consi derations may justify an enhancement or r eduction to the base lodestar; accordingly, the fa ct [] fi nder must then deter mine whether evidence of those considerations overcomes the presumption and necessitates an adjustment to reach a reasonable fee. Id. at 7 65; see also Perdue [ v. Kenny A. ex r el. Winn ] , 559 U.S. [542,] 558

– 59, 130 S. Ct. [ 1662 , 1 676

– 77 (2010) ] (suggesting that adequate appellate review is only feasible when the fact [] finder makes reasonably specifi c findings as to each step of the fee determ ination). Arthur And ers en lists rele van t considerations that may justify an adjustment, bu t
. . . considerations alre ady incorporated into the base calculation may not be applied to rebut the presum ption that the base calculation reflects reasonable and n ecessary attorney ’ s f ees . See Arthur An d ersen [ & Co. v. Perry Equip. Corp. ] , 945 S.W.2d [8 12,] 8 18 [( Tex. 1997)] ; cf. Per due , 559 U.S. at 553, 130 S. Ct. [at 1673 ] ; [ C ity of ] Burlington [ v. Dague ] , 505 U.S. [557,] 562

– 63, 112 S. Ct. 2638 [ , 2641 (1992) ] ; Blum [ v. Stenson ] , 465 U. S. [88 6,] 898

– 90 0 , 104 S

. Ct. 1541 [ , 1548

– 50 (19 84) ]

.24 General, con clu sor y testimony devoid o f an y real substance will not support a fee award. Thus, a claimant seeking an award of attorney ’ s fees must prove the attorney ’ s reaso nable hours worked and rea sonable rate by p resenting sufficient evidence to support the fe e aw ard so ught. See Long [ v. Grif fin ] , 442 S.W.3d [253,] 255

– 56 [ (Tex. 2014)] ; [ City of Laredo
v. ] Montano , 414 S.W.3d [731,] 736

– 37 [ (Tex. 2013)] ; El Apple , 370 S.W .3d at 763

– 64. Suffici ent evidence inc lud e s, at a minimum, evidence of (1) particular ser v

ice s p erf ormed, (2) who perfo rmed those services, (3) a pproximately when the services were performed, (4) the reasonable amount of time required to perform the servi ces, and (5) the reason abl e hourly rate fo r each person performing such services. See El A ppl e , 370 S.W.3d at 762

– 63.
578 S .W. 3d 469, 501

– 0 2 ( Tex. 2019).
C
. Evidence P r esented Appellants’ attorney , Mike Yanof, testified that he had twenty

- two years of experience as a trial and appellate sp eci a list and that he was a partner with the
Lenahan Law Fi rm. Yano f ex plained that he was hired in this case because the originating attorney was not a trial specialist and wanted him to take over the case as there w ere pending Rul e 9 1a motions se e king dismissal of the case. See Tex. R. Civ. P.
91a. He s aid that A ppellants ’ goal w as to b e ma d e whole and that they wanted their
attorneys to determine how much Velu had taken because they had no id ea of the

amount as the nu mbers of how muc h had been taken differ ed widely

. Yanof testified
that the total of th e f unds t aken w as i n dispute until the Sunday night before trial and
that , althoug h it was very di fficult to put the pieces of t he puzzle together, the am ount
in contr ove r sy was ultimately d etermined to be $232,000

.25 Yanof testified that his hour ly rate of $5 75 was a reasonable rate that is customarily and routinely charged in the DFW area

. He said that he ha d s een rate s of $4 5 0 to $800 per hour for twent y
- year attorneys
. Yanof stated tha t he wa s not asking
for an up wa rd departure from the actual time spe nt on the case , which was billed in
0 .1 increments , times $575 per hour

. Yanof testifi ed that t he case wa s handled on a contingency

- f ee contract but that he had not fac tored th at into the fees sought

. A ledger reflecting attorneys’ fees based on the time sp ent on various tasks

— without regard to the cont i ngency

- fee agreement

— wa s a dmitted i nto evi d ence . 9 The hours are not totaled on the exhibit, but our sum mation of the hourly ent ries reveals
that 588.4 hour s were spent. 10 Multiplying the 588.4 hours by the h ourly r ate of $575

r esults in $338,330 for tot al attorneys ’ fe e s through t he date of the b ench trial. Yanof

test ifie d t hat the time spent f or e ach of the tasks listed on the exhibit represented
reasonable and necessary hours and fees for the case.
When a sked wh eth er he had seg re g a ted fees in the billing, Ya nof testified , I did. Well, let me clarify

. I se gregated fees for li abil ity. There were different claims in this case and individual causes of action, and the discrete tasks that I di d for the indi vi dual ca use s of action w hen I took

9 The exhibit wa s admitted over the foll owing re spons e s fr om Velu ’ s attorney:

“ I have objections to the sufficiency of the evidence to support the attorneys ’ fees , but n ot to
. . . that [ ;] that is a true a nd co rrect ch art of the fees that they have calcul ated , ” and “ o n t he attorneys ’ fees, I ha ve sever al ar g umen ts [,] . . . but those, I think, are objections to the evidence , not to the exhibits. ”

10 Yanof te stified that the only es tim ates on the ch ar t wer e for the bench trial held on October 23, 2 0 19 , but he explained that b ased on how long the hea r i ng had last ed , h e had under estimated those am ounts
.26 over the case and pa rticularly when I amended the petition, the resear ch I did for the fra ud, breach of fiduciary duty, and conversion claims, I segregated those fees out and at times I just did not bill th em at all. Bu t for ame ndi ng the petiti on a nd for the initial research , I noted that I wa s exempting those out of the fe es in [the fee s exhi bit]

. When it came to damages, I did not segregate fees because there [was] one set of damages. They were intertw ined. All of th e damag es were intertwi ned regardless of the claims. T hat ’ s evidenced by the fact that there was u ltimat ely a single damage que stion submitted to the jury, and it was not tied to particular claims. And we never had a damage model that was separate for di fferent cl aims.
And s o t h e damages were inextricably intertwined,

. . . and they could not be se parated out.
He explained that getting paid for this case would be di ffic ult because, “ for starters, it ’ s a contingency[

- ]fee c ase tied to collecting the ju dgment. ” Yanof said that
what “ makes it a little more unique is tha t there ’ s serious col lect i b ili ty issues. ” He said
that he had information th at there may be funds to collect the judgment but that it migh t take goin g to India t o c ollect the as set s . 11
Ya nof t es tified that he had given Appella nts val ue b ased on “ [f]ir st an d foremost, the result. ” He explained that after taking over the case while Rule 91a
motion s to dismiss w ere pen ding, he positioned the ca se to obtain a s u mmary judgment on the theft, co nversio n, and breach

- of

- contract claims an d ensur ed that he
would rec ove r attorneys ’ fees. Yanof also made sure that the firm had only twenty

11 Whe n Yanof retook the stand during rebutta l, Velu ’ s attorney questione d h im on the coll ec tibil ity of the judgment

. Yanof testified that he understood that he could get a chargi ng or d er on Velu’s inter est in t he LLC and that he knew that Velu ha d “stuff of value.”27 plus

- year attorneys working on the case because associ ate s tend t o bil l f o r excessive research, whi le two twent y
- p lus

- ye ar partners did “ what [was] absolu tely essential on
the c ase to position it to place [the ir] clients in the best position. ” Yanof opined that
his firm had obt ained “ a very good resu lt ” for App ellan ts a nd had obtained hundre ds of pages of rec ords, “ many of which [were fr om accounts that ] Velu [had] n ot
agree [d] in his deposition

. . . were his bank accounts. ”
When asked whether taking this case precluded hi m from taking other wor k,
Yanof sa id , “ It p otentially did. ” He then explained that he serves as the “ med

- mal go

to person ” in the firm and th at h e had turned down a number of med

- mal cases while working on this case because “ it was not reali stic t o t ake an y med

- mal case th at would
need to be filed in the next five months ” due to the time that it t ake s to pres creen and obtain experts to r eview t h at type of case . Addi tionally, Yanof said that all other cases stood still while he was working on this case and that t his case ke pt hi m f r om moving
the firm ’ s other cases.
When asked about the nature, le n gth , and pro fessional re lations hip with App ellants , Ya nof stat ed this is a one

- time lawsuit

. As a resul t, Yanof said that there is no expectation that A p p ellants will hav e other litigation , so there was no discounted
fee as there is when dealing with a v o lum e client or an insti tutiona l client that provides him with “ lots of work. ”
Yanof was also asked about his experience with appellate matters

. Yanof

ca t aloged his experience in handling appeals for twenty years at the various levels,28 i ncluding the Texas Su pre me Cou r t a nd various circuit c ourts. Yanof op ined that $575 per hour is a rea sonable rate for appellate work “ here ”

— i n t his area

. Yanof
esti mated that an appeal to the Second Court of Appeals would take 5 0 hours 12 at $575 per hour for a total of $2 8 ,75 0

. Yanof e stimated that filing a petition for review
in the Te xas Supreme Cour t would take 30 hours 13 at $575 per hour fo r a total of $ 17, 250. Yanof estimated that filing a brief on the merits in the Texas Supreme Court
would t ake 80 hours 14 at $575 p er ho ur for a total of $46,000

. Velu ’ s attorney , Samuel B. B u rke, cross

- examined Yanof

. Yano f con fir m ed
that Appellants had contracted f or a 40% contingency

- fee agreement , so 40% is all that Appellant s are obligated to pay his fi rm. When asked what pe rcen tag e of the tr ial preparation was neces sary because of the fraud and exemp lar y
- damage s cla ims , Yanof
testified that he did not attribute any time to those causes of action because the trial

came down to damages, and the da ma ges wer e the same for every ca us e o f action.

12 Yanof broke do wn th e 50 h ours as follows: 10 hours to desig na te po rtions of the record and review the entire record, i ncluding the jury trial; 25 hours to researc h is sues to be raised in the briefs and to dra ft any reply; 10 hours to pre pare for oral argument; and 5 hours to trav el and to give the or al argument.

13 Yanof broke do wn th e 3 0 hours as follows: 5 hours to research for the petition for revie w a nd 20 hours to draft the response to th e petiti on for rev iew , but he did not account for the remaining 5 hours

.
14

Yanof br oke do wn th e 8 0 h ou rs as follows: 10 hours to rese arch ; 30 hours to dra ft the bri ef; 30 hours to prepare for oral argum e nt; and 10 hours to travel an d to give the oral argum ent.29 Burke offer ed re buttal te stimony on the issue of Ap pellants ’ att or n e ys ’ fees.
Burke , who had been licensed for 21 years, testified that a reasonable rate in this case in this locality is betwee n $400 and $450 and tha t a rate of $575 i s exces siv e and is not
consistent w ith the market

. Burk e sta ted that the initial disclosure that was served on March 31, 2017, sought $216,298.44 in damages. Burke testified that the ca se was mediate d in August
and that a pproximately 500 hours of attorney time had bee n spe nt on the case s in ce the medi ation

. The net result of that work was an increase in d amages from $216,000 to $232,000. Burke opined, “ That ’ s not rea sonable [,] and it ’ s not necess ary. ”
Burk e further criti qued the type of work that the at to rney s had p e r formed.
Bur ke p ointed out that Appellants used attorneys with an hourly rate of $575 to go through cancel ed checks and calculate the amount that Velu ha d sto len.
Burke mentioned the contingency

- fee agr eeme nt and sai d that if Appellants
ha d n ot ha d a con t ing e ncy

- fee agr eeme nt and had instead been paying $575 per hour,

“ they would n ’ t have had their $575

- an

- hour lawyer counting checks. T hey ’ d h ave done it a different way, and you would n ’ t have thi s excessive leg al bi ll here. ” Burke

su ggested to th e t r ial court,
I f you simply want to compensate [Appellants] for what they were out

-- in o ther words, w hat it cost them to get here

-- it ’s $5 2,000 , and they are saying a reasonable and necessary fee is $338,0 00. In my experience, that ’s no t true a nd it ’ s n ot r easonable and necessary[] and it ’s certainly not in Denton County in a case like t his.30 Burke further testified that a reason able and necessary fee in this case is “ somewhere between $22,000 , wh ich i s about what had been in cur red up t o the po i nt of
mediati on , and $ 52,000 , which is what these people actually will owe Mr. Yanof based
on his 40 per cent contingency fee

. ”
D
. Trial Court ’ s Find ings and Co nclusions on Attorneys ’ Fees
The trial co urt made the following f ind ing s of fact an d c onclusions of la w rela t ed to att orneys ’ fees : 6. The [c] ourt fi nds that a signi fi cant portion of the attorneys’ fees
s ought by [ Appella nts] were excessive an d th at a si gni fi cant part of the work pe rf orm ed by [ Appellants ’ ] couns el was no t reas on able or n ecessary.
7. Th e [c] o u rt fi nds that for signi fi cant portions of the work performed by [A ppellants ’ ] counsel $575.00 per hour was not a r easonable hourly rate.
8. The [ c] ourt fi nds the reasonable amoun t nec ess ary to compensate [Appel lan ts] fo r the f ees actually incurred was $ 5 2,040.00. [ 15 ]
9. The [c] ourt fi nds the total hourly fees requested by [Ap pellants] were unreasonable and e xcessiv e given the nature of t he claim and the size of the recover y.

15 Th e fin al ju dgment states how the amount of trial attorne ys ’ fee s w as calculated:
A ccord ingly, after the jury trial conclude d, [Appellants] and [Velu] appeared before the [c] ourt and p r esented evidence, authorities, and argume nt s regarding the award of attor neys’ fees to [Appellants] , . . . and the [c] our t havin g consi der [ed] same and th e ple adings and records on fi le in this [l aws uit ] found that [Appellants] should be awarded their att o rneys’ f ees in the amount of $52,040.00 ( 40% of the jury verdict of $130, 100.00) [. ]31 C ONCLUSI O N S O F L AW

. . . . 5. The fe es reque sted by [ Appellants] in e xcess o f $52,040 .00 were not reasonable or necessary [] and were excessive.
E
. A n alysis of Award of Tri al Atto rneys ’ Fees
As set for th above, Appellants presented evidence that two att orneys who charged $575 per hour ha d spe nt 5 88.4 hours working on t he ca se , for a total of $338,330 in trial attorneys ’ fees

. The chart that they p res ented contain s evidence of (1) the particular se rvices performed, (2) who performed the services, (3) whe n the services were perf orm ed, and (4 ) t he t ime required to perfor m the s ervice s. Yanof
testified to the reasonableness of the hourly rate and the time spent on the cas e. Burke challeng ed the reasona bleness of the hourly rate , stating that it was si gnificantly highe r t ha n the usual $ 4 0 0 to $450 that was reasonable for simila r attor neys in t he area, and challenging whether it was necessary to use partner

- level att orneys to go through chec ks and bank statements to determine how much Velu had sto len from Appellants. Th e e vidence prese nte d thus informed the trial court of the ti me spen t on
spec ific tasks and enabled the trial court to meaningfully review t he requ ested fees.
T he tr ial court ’ s findings of fact demonstrate that the trial court found Appellants ’ trial attorn eys ’ $575 hourly ra t e to be unreasonable for “ significant
po rtions of the wo rk [that they] p erformed. ” The trial court ’ s findings, howeve r, do
not demonstr ate that the trial court determined what a reasonable rate should be for32 s uch work. Instead , t he tria l cour t, a s reflected in the final ju dgment , chose to
calc ulate A ppellants ’ trial attorneys ’ fees based so lely on the contingency

- fee
ag reement of 40% of the damages awarded by the jury. Th e a ward of trial attorneys ’
fees based on this calculati on cannot stand

. As set forth in Rohrmoos , the fact finder must first perfor m a lodes tar calculatio n based on reasonable hours worked multip lied by a reasonable hour ly rate. 578 S.W.3d
at 501. We have no indication that the trial c ourt determined the reas ona ble hou rs

wor ked or a reasona ble hourly rate . The trial court in stead s k ipped th is step and

re lied solely on the continge ncy

- fee agree m ent. A con tingency

- fee a greement , however, is only one factor that is considered when calcul ating the lodestar and

c ann ot be t he onl y f a ctor use d to determine attorneys ’ fees

. See Art hur And ersen , 94 5
S.W.2d at 81 8

– 19 (holding that although “[a] continge nt fee may indeed be a

re asonable fee from the standpoint of the parties to the contract,” it is not “in and of
itsel f r easonab le for pu r poses of shifting that fee to the defendant” ) ; S tate Of fice of R isk Mgmt. v . O livas , 509 S .W.3d 499, 508 (Tex. A p p.

— El Paso 20 16, no pet.) (stat ing that a contingency

- f ee agreement is a factor for a court to cons ider in making a fee awa rd,
but it canno t b e the only factor ). Even if we presume that th e t rial co urt made a base lodes tar calculation, the
trial court was not allowed under the second step of the lodestar method to reduce
the calculation based on t he c ontingency

- fee agreement

. See Roh rmoos , 57 8 S.W.3d at
501 (stating that the Arthur Andersen c onsider ations , s uch as the e xistenc e of a33 contingency

- fee agreement , already incorporated into the base calculation may not be applied to rebut the presumption th at the base calculation ref lects r easona ble and
necessary attorney s ’ fees ); cf. City of Burlin gton , 505 U.S. at 562

– 63 , 56 6

– 67 , 11 2 S. Ct.

at 2641 , 264 3

– 44 (disallowing an enhanc ement for continge ncy

- fee agreement because it would likely duplicate in substantial p art considerations alrea dy subsume d in t he b ase lodestar calculation, as “[t]he risk o f loss in a par ticular c ase (and, th erefore, the
attorney ’ s contingent risk)

. . . i s ordinarily refle cted in the lode star

— either in the higher number of hours expended t o overcome the difficult y, or in t he hig her hourly rate of the attorney skilled and ex perienced enoug h to do s o”).
Based on the evidence presented, Appellants ma y not h ave been entitled to recover all of their requested attorneys ’ fees, but they were sta tutorily entitled to the ir

reasona ble at tor n eys ’ fees incurred. See generally Tex. C iv. Prac. & Rem. C o de Ann. § § 38.001( b)(8) (permitting award of attorneys ’ fee s for s uccessful breach

- o f

- contract
claim ) , 134.005 (permitting award of attor neys ’ fees for successful claim under t he
Texas T heft L iab i lity Act)

. We conclu d e that the trial court ’ s award of tri al attorn eys ’
fees based solely on the contingency

- fee agree ment is without re ference to the gui ding principles set forth in Rohrmoos and is legally insu f ficient

. See 578 S.W.3 d a t 501

. We
th ere f ore hold that the trial court abused its dis cretion by a war ding tria l attorne ys ’ fees of $52 ,040. Accord ingly, w e sustain the por tion of Appellants ’ third issue challenging
the am ount of trial attorneys ’ fee s.34 F
. Analysis of Award of N o A ppellat e Atto rne y s ’ Fees Appella nts also argue within their t hird issue that the tria l court ’ s failure to award them appel late at torneys ’ fees is b oth legally and factually insufficient. Velu ’ s brief does not res pond to App ellants ’ argu men t regar ding a ppe l late attorney s ’ fees

. When, as here, trial attorneys ’ fees a re m andatory un der a sta tute, then appellate

attorne ys ’ fees are also mandatory when proof of reasonable fees is presented. See Ventling , 466 S.W.3d at 1 54. Here, Appellants p r o vided o pinion te s timony about the
services that they reasonably believed woul d be nece ssary to defend the appeal and
the h ourly r ate for those serv ices. Even if the trial court determined that the hourly rate of $575 was not rea sonable, the trial court ha d no discret i on t o determine that Appellants were not entitled to a ny conditi onal appe llate attorneys ’ fees. Because the

tr ial court ’ s failur e to award a ppellate attorneys ’ fees is without refer ence to the gui ding principles set out in Ventling , we hol d t hat the tria l co u rt abused its discretion by failing to award Appellants thei r appellat e att orneys ’ f ees . See Daimle rCh r ys le r Motors
Co. v. Ma nuel , 362 S.W.3d 160, 19 8

– 9 9 (Tex. App.

— Fort Worth 2012, no pet. ) (remanding case for a new trial concer ning th e a mount of rea s ona b le and necessary

a pp ellate attorney ’ s fees because the tria l court had awa r ded none de spite such fee s being mandatory under S ection 38.001). W e therefore sustain th e remaining portion
of Appellants ’ third issue challenging the trial co urt ’ s failure t o aw a rd appellate

at torneys ’ fees

.35 V
. Z ero Prejud gment Interest Awarded b y the Tria l Cou rt
In th e i r fou r th issu e, Appellants argu e that t he trial c ourt abused it s discretion by failing to award prejud gment int erest. As expl ain ed below, an y pr e j ud gment
interest award in this suit could only be based on general princip les o f equ ity,

a ccording to which th e tr ia l c o urt did not abuse its dis cret ion by denying prejud gment
interest under the facts prese nted

. A. Law on Prejudgm ent In terest
T his c our t has previously summar i zed the law o n prejud gment interest: An award of preju dgment interes t ad vance s two ends: 1) ac hie ving fu ll compensation to plainti ffs; and 2) expediting both settlements and trials. Th e two legal sources for a p rej udgment inte r est award are 1) gen eral p rinciples of e quity, and 2) an enabling statut e. The e nabling statut e, T exas Fi nance Code [S] ec ti on 304.104 , only applies to wrongful death, personal injury, and property damage case s. W here no statute controls the aw ard of preju d gme n t interest, the decisi on to award pr ejudgment interest is left to the sound discretion of t he t rial court, which sho ul d
r ely upo n equitable princi ples and public policy in making this decision

. Citizens Nat ’ l Bank v. Allen Rae Inv s

. , I nc. , 142 S.W.3d 459 , 486

– 87 (Tex. Ap p.

— For t Worth 2004, no pet.) (op. on r eh ’ g) (foo tnotes omit ted).
B. Applic able Find ings o f Fa ct an d Conclusions of L aw The tri al court made the followin g finding of fact an d conclusions of l aw related to prejudgment interest : 5

. F u rt her , the [ c ]our t fi n ds an offer of settlement was tendere d by [Velu] exceeding th e amount of the judgment before the [ sui t] began.

. . . .36 C ONCLUSI O NS OF L AW

. . . . 3. Pr ejud gment intere st is “ compensa tion a llowed by law as additional d amages for lost us e of th e mon e y d u e as damages during the lapse of time between t h e acc rual of the claim and th e date of judgment. ” Ca vnar v. Quality

- C o ntr ol Park ing, Inc. , 696 S.W .2d 5 49, 552 (Tex. 1985) (citing McCorm ick, D amages § 50 (1935)).
4. No p re[]ju dgment in ter est i s r ecov e rab l e by [Appellants].
C. Ev idence Regarding S e tt lement Offer
Th e record reflect s that on Ap ril 7, 2016, Appel lan ts dema nded that Velu and
Selvi pay $206,500 withi n 10 days aft er rece iving the demand letter

. On May 12 , 2 016,
V elu an d Se l vi ma de an offer of settlement

. In the letter that Velu ’ s counsel sent to Appell a nts ’ then

- attorn ey , Velu an d Se lvi ask ed Appellan ts ’ m em be rs to agree to accept (1) a transf er of Vel u ’s and Selvi ’s membership interests in the two ent ities ( s t ati n g that the “ book value ” of thei r interests was $110,000) ; (2) the payment that they previou sly made in the amount of $ 2 5,00 0 ; and ( 3) an addi tional payme nt i n the amount of $14,000

. The settlement offer furthe r state s, “ If thi s offer is a c cep t able, please provide direction regardin g to whom [ Velu ’ s ] and Selvi [ ’ s] membership
interests shoul d be assigned and to w hom the additi onal $1 4,000.0 0 pay ment s hould
be made. ” Th us, t he total amount of the settlem ent offer (ca l cul ated using t h e b o ok
value stated in t he letter) was $149 ,000. The offer was not accepted.
At the outset o f the bench trial, the trial court a gre ed t o tak e judicial no tice of the jury tr ial and to con sider all th e pr eviously admitted evidence

. Duri n g t h e jury37 trial, Samy had te stified that Velu and Sel vi each owned a 5.5% interest (or 11% total)
in Appe llant s . T he Company Agreem en t call s for a me mber ’ s in terest to be
d ete rmined as follows:
14.07 Deter mination of Fair Value

. Th e “ Fair Valu e ” o f a Membership I nterest sh all be the amount that wo uld be distributable to the Member holding such inte rest in the event that the assets of t he Co mpany were sold fo r ca sh and the p roc eeds, net of liabilities, were distributed to the hold ers of all Memb e rsh i p Interests pur suant to t his Agreement. In the ev ent that the Fair Value of a Membership Interest is to be determined under this Agreemen t, the Members sha ll se le ct a qualified i nde pendent ap praiser to make such determination, and the Mem bers shall m a ke t he books and re cords avai lable to the appra iser fo r such purpose. The determination of Fair Value mad e by such appraiser shall be final, co nclus ive, and bi nding o n the Company, a ll Members,
a nd all Assignees of a Membership Interest

. Velu ’ s co u nsel questioned Samy abou t valuing a member ’ s inte rest and

re ferenced the Company Agreement: [By Defen se Co unsel:] So, generally speaking , Artic le 14 deals with b uy
out of [a ] member shi p inte rest, correct?
A. Corr ect. Q. And it dea ls w ith several d iff e rent scenarios, death of a
m ember, bankrup tcy of a me mber, insufficient surplus, other members ’ optio ns to p urchase, a nd then it has Sect ions 14 .06, 14.07, and 14 .08, which de al with an exerci se of an option to purc hase. Do you see th at?
A. Yes, I s ee i t. Q. Okay. And Section 1 4.07 deals wit h how we ’ re going to value a member ’ s interest, correct?
A

. Co rrect.38 Q. Okay. And it has a definit ion of fair val ue . I t says [, “ ] The f air value of a membership interes t shall be [the] amo unt that would be di s tributed to the member holding suc h interest in the event t hat the assets of the company were sold for cash and the proceeds net of liabil ities w ere distributed t o th e holders of all membe rsh i p interests pursuant to this agreement. [ ” ]
Hav e I read th at co r rectly?
A. Yes.

. . . . Q. Wel l, so you knew in 2015 th at Velu had taken money in breach of the [C] ompa ny [A ] greement, corre ct?
A. C orrect. Q. Okay. And ther e were ac tually some discu ssi ons about applying his members hip intere st t o the debt, c orr e ct?
A. There may have been. Q. Oka y. And so those conversa tions should have referenced the [C] ompany [ A] gre ement and followed t hose p rovisio ns. Do you agree wit h that?
A. No. We rejec ted his claim about submitting his sh ares b ecau se we are f oc use d on getting the money back that he has tak en. W e never admitted ab out using his shares. Q. You have refu sed t o use this procedure?
A. No. W e ar e focused on gett ing the m oney he has taken

. Q

. Okay. So in

. . . the summer of 201 5, w hat were th e val u e of the company asset s?
A. That requir es an appraisal, so

. . . I don ’ t kn ow. Q. Did you request an appraisal?39 A. We did not.

. . . . Q. Do you ha ve any id ea how muc h an apprai sal in 2015 would have cost the comp any?
A. I don ’ t kn o w. Q. Have you i nvestigated that at all?
A. We never thought about apprai sing.
V elu put on valuation evidence through Gre g Johns on

— a commercial real

es tate br oker, a re al es t ate dev el oper, and an investor. J ohns on testifie d tha t he was qual ified to value the proper ty owned by A ppel lants

. For the building owned by Appellants, Johnson reviewed the r ent roll , analy zed the tenant t ypes , and per formed

a c al culat io n using the net opera tin g income of $175, 000 and a 7% ca p rat e 16 to come up with a purchase price of $2. 5 million. To make sure tha t the $2 .5 million was a realistic numbe r of “ what th e marke t would have pai d, ” Johnson reviewed ac tual sa les

16

Johnson explained th e cap rate as fol l o ws : [I] n the real e st ate w orld, we short en that to cap rate. It ’ s actually capitalization r ate. Essen tia lly, what that me a ns is if you paid cash f or the property, that ’ s w hat your retu rn on inves tment wou ld be ever y . . . year. S o, for example, a 7 perc e nt cap rate

-- ther e ’ s a ma thematical for mula to determine what ’ s t he value of the property. You take the net income and y o u divide that by 7 perce nt, and that will give yo u the value
o f what you could pay for it. If you paid cash, that would mean you w o uld ge t 7 percent r e tu rn on your money ev ery year that the rent sta yed the same.40 and noted that the cap rates r anged “ fr o m 6 .4ish up in to th e mid 8 ’ s. ” After looking at comparable sales, Joh ns on tes tified that the sal es price “ would have been a little
north of t he $2.5 million

. ” Johnson said, “ I felt l ike if somebody s aid, [ ‘ ]Can y ou sell
this buil din g fo r $2.5 m i ll io n, [ ’ ] I ’ d put my name on it and say, [ ‘ ]Yes. [ ’ ] ”
The ev idenc e during the jury tr ial also showed that Appellant s ’ sole de bt wa s the lo an fr om PointBank for t he mortgage on the buil ding

. A chart was admitted into
evide nce show ing that th e out s tanding a mount on t h e loan around the time of Velu ’ s settl ement off er was $ 1,145,1 81.25. 17
Usi ng th e sales pr ice d etermin e d by Jo hns on and the ou tstanding amount on
th e loan a s shown on the loan c har t , Velu ’ s attorney in h is appe llat e bri e f calculat ed
Velu ’ s and Sel vi ’ s membe rship interest as foll ows: $2 ,500,000 .00 Value of the property if sold for cas h ( $1 ,145,181. 00 ) L es s mortgage on th e property $1,35 4 , 81 9.0 0 Value of asset net of liab ili ty that could be di stri buted
x .1 1 Velu a nd Selvi ’ s int erest as a per c entag e $ 14 9,030 .0 9 V alue of Velu and S elvi ’ s joint membership interest
D urin g the bench t rial , Velu ’ s att orne y argue d, “The uncontr adi cted evidence at
tria l wa s t hat the value o f th at interest w as $ 146,000[, 18 which is] an amount in exces s of what the j ury award e d.” He explaine d that this differs from the book

- value of fer ,

17 Vel u ’ s b rie f uses the amount remaining as of M ay 31, 2016 , instead of the amount remaining as of May 2, 2016 , w hich was clos er in time to the date of the offer. Th e M ay 2, 2016 amo un t w as $ 1,148,839.36 and would have valued Velu and Se l vi ’ s joi nt m ember sh i p interest at $148, 627.67.

18 It is not clear why Velu ’ s att orney u sed $146,000 instea d of $ 149,000.41 but “ if you take the equity, the fair value, then the val ue of t hat interest was $ 146 ,000.
It’s the equ ity in the re al p roperty plus the $14,000 in the bank acco unt ti mes 11
perc ent, $146,000 .” In ad dition to Velu ’ s and Selvi ’ s membership in tere sts, t he ir

se ttlement offer a lso included the $25,000 t hat they had previ ously paid an d an

a dditional $14 ,000, thus br in g i ng the settlement offer to over $188,000.
D. Analysi s
H ere, App ellants agree that there is no statute allowing for the recover y of
pre judgme nt inte rest for the cla ims on which they preva ile d. Thus, th e t rial court was
perm itted to re ly on equitable principles and public polic y in deciding whethe r to award pre judgment in teres t.
In maki ng the decision not to award pre j udgm ent in tere st, t he trial court h eard
evidence on the var iou s values placed on Velu ’ s an d Selvi ’ s membe rshi p int erests
. Be c ause the Company Agreement specified that “ fair value ” w as to be used i n calculat ing t h e value of a membership interest , the tria l co urt co uld hav e determined
tha t Appellants had thwar ted the process of d etermining t he fair value by no t

re ques ting an a ppr a isal pursuant to the terms of the Company Agreement . T h e trial

court c ould have furthe r determin ed that Velu ’ s May 2016 settleme nt o ffer

— w

hether using either the book value of the members hip interests as stated in t he offer of
settlem ent ($110,000) or th e value of th e membership interests ca lculated using the sales price as determine d by Jo hnson ($14 9,000) and the remainin g loan ba lanc e from
th e lo an chart , plus ap plyin g t he additional $25,000 prior pay ment and the $14,00042 cash payme nt

— exc eeded the a mo u nt that the ju ry award e d A p p e l l a n t s f o r d a m a g e s . E ither total

— t he $149,00 0 and the $188,0 00

— constit u te more than a s cinti lla o f
eviden ce t o supp ort the trial court ’ s d ecision that it was equitab le to deny prejudgment interest bec ause App ella nts had rej ec ted a settlement offer that exceeded
the $130,100 in damages awarded by the jur y . See H ame ed Ag e ncie s (pvt) Ltd. v. J.C.
Pen ney Purchasin g Co rp. , No. 11

- 05

- 00140

- CV, 20 07 WL 431339, at *6

– 7 (Tex. App.

— Eastland Feb. 8, 2007, pet. den ied) ( mem. op.) ( cons id eri n g settlement offer that

ex ceeded appellant ’ s recovery in affirming tri a l co urt ’ s deci si on not to award prejudgment interest i n c ontrac t di sput e ). App ell ants rely on a case f rom this court to a rgue t hat there is no authori ty
autho rizing the trial cour t to d epr ive them of equity

- based prejudgment interest based
on their refusal to accept a set t le ment of fer. See AMX Enters., L. L.P . v. M aste r Re alty
Co rp. , 283 S.W.3d 506 (Tex. A p p.

— Fort Worth 2009, no pet. ) (op. on re h ’ g)

. T h e prejudgmen t in ter est in A MX En t erpris es , however, was award ed based on a n e nabl ing

st atute

— the Prompt P ayment to Contra ctors Act. B ecause the case was decided
und er an enabl ing statute

— not gen eral principles of equity

— and did not d iscuss
whether settlement offers c an b e considere d in d etermining whether to award preju dgment interest according to e qui t able pr inciples , AMX Enterprise s is thus
dist inguishable. 19

19 Moreo ver , afte r AMX Ent erp r ises , t his co urt remanded a b reach

- of

- cont ract case for the trial court to recal culate the cor rect amount of prejud gm e n t interest43 In th eir reply brief, Appellants argue for the fi rst time t hat Velu ’s offe r to settle
the cl aim did not inc lude “the actua l pro d uction of funds to pay the amount due ”
because Velu offered only an owners hip int erest; an d as a res ult, “the alleged ‘offer ’ i s

not a ‘tender ’ triggering this rule [ pre ve nting any preju d gme nt i nterest from accruing]

. ” 20 A n “ app el lan t may file a reply brief a ddressing any matter in the
app ellee ’ s brief , ” s ee T ex. R. A pp . P. 38.3 , b ut “[t]he Tex as Rules o f App ellate Procedure do not allow an appellant to incl ude in a repl y br ief a n ew issue in res p on se

to some matte r po inte d out i n the appellee ’ s briefs but not raised by the appellant ’ s orig inal brief.” Jennings v. Jennings , 625 S.W.3d 854, 868

– 69 (Tex. A p p.

— S an Antonio 2021, pet. filed ) ; Da ll

. C n ty. v. Gonz ales , 183 S.W .3d 94, 104 (Tex. App.

— Dal l as 2006,
pet s . deni ed ) (op. on reh ’ g)

. Ap pellant s wai v ed this contention by rai sing it for the
first time in t heir reply brief. See Pi neridge Assoc s . , L.P. v. Ridgepine, LLC , 337 S .W.3d 461, 472 n.10 (Tex. App.

— For t Worth 2011, no pet.)

. H avin g he ld that there is more t ha n a s cinti lla o f evi den ce to su pp ort the trial

court ’s decisio n to award $0 prejudgment inte rest under the se facts , w e hold that the

“ [b ]ec ause neither party ha[d] briefed what da te should apply , and beca use appellants cla im that they are entitle d to the tolling of the ac crual of inter es t w hi le a settlement offer was open
. ” See Dall. Ar ea Rap id Tr ans it v. Agent Sys., Inc. , No. 02

- 12

- 00 5 17

- CV , 2014 WL 6686 331, at *1 6 (Tex. A p p.

— F ort Worth Nov. 26 , 2014, pe t. denied ) (mem.
o p. ).

20 Appellants appear to igno r e that Vel u ’s set tlement o ffer in clude d a p rior payment of $25,000 and a n offer to pay $14 ,000 in cash

.44 trial cour t did not abuse it s discretion by denying pre judgment i nterest
. W e overrule
A p pe llan ts ’ fou rth issue

. V I
. Z ero Los s - of

- Use Dam ages Awarded by t he T rial Court
In t h e ir sec ond issue, Ap pellants argue that the trial court erred by r ej ecting
their claim for compensatory damages fo r loss of use of the money take n by Velu and
that we should r everse and render judgmen t t o include an awa rd o f those dam ag es . As discus sed below, Appellants failed to conclusively establish that they had inc urred
loss

- of

- u se damages for al lege dly not b e ing able to p repay the mortgag e. A. Standard of Review A trial court’s findings of fa ct h ave the same fo r c e and dignity as a jury’s answers to jury questions. Anderson v. City of Seven Points , 806 S.W.2d 791, 794 (Tex. 1991)

. As with jury findings, a trial court’s fact

- findings on disputed issues are not conclusive, and, when the appella te r ecord contain s a reporter’s record, an appellant may challenge those findings for evidentiary sufficiency. Catalina v. B lasdel , 881
S.W .2d 295, 2 97 (Tex. 1994); Super Ventures, Inc. v. Chaudhry , 501 S.W.3d 121, 126 (Tex. App.

— Fort Worth 2016, no pet.)

. W e review the su f f iciency of the evidence supporting challenged findings using the same standards that we apply to jury
fi ndings. Catali na , 88 1 S. W.2d at 297. Additionally, [i] n a bench trial, the trial co urt is the factfinder and sole judge of the
cre dibi lity of th e w it n e sses. McGalliard v. Kuhl man n , 722 S.W.2d 694, 696 ( Tex. 1986). “Accordingly, the trial court may consi der all the fac ts and45 cir cumstances in connection with th e testimony of each witness and accept or reject all or part of that testi mony .” Hailey v. H a i

ley , 176 S.W.3d 374, 383 (Te x. App.

— Houston [1st Dis t.] 2004, no pet.). The trial court may believe one wi tness, disbe lieve othe rs, and resolve inconsistenci es in any testimony. McGallia rd , 72 2 S.W.2d at 697. “An appellate court may not substitut e i ts j udgment for the trial cou rt’ s assessment of witnesse s’ t estimony in a bench trial.” Hailey , 176 S.W.3d at 383.
12636 R s ch

. L td. v. Indian Bros., Inc. , No . 0 3

- 1 9

- 00078

- CV, 2021 WL 4170 27, at *5 (Tex. App.

— Austin Feb. 5, 2021, no pe t. ) (mem. op.)

. B
. Law on Omitted Findings
A recent case from t he Aus tin C o urt of A ppeals demons trate s how appe llat e

c ourts ha nd le omitted , unreques ted findings and their practic al effect on the court ’ s holding : [W] hile [appellant] may have satisfied h is b urden with re sp e c t to the elements of existence of and brea ch of the duty, it does not necessarily follow that he is entitled to relief f r om that gr ievance. Tex as law affords
an aggrieved individual several remedies for breach of fiduciary duty.

. . . In this case, a s c o mpensation for the breach of fiduciary duties, [appellant ] so ught an additional $71,778.40 in damages. [Appe lla nt] deri v es this su m from eviden ce of m onies Garc ia obtained while operating Active Euroworks and from his theory that “all of the profits
a nd p ayments would have been split between Garcia and [ appellant] ” had Garcia not breached his fiduciary duty by o pen ing and o per ating t he competing enterpr ise. Howe ver, the district court made no finding regarding Garcia ’ s profits from th e op eration of Ac ti v e Euroworks. Moreover, [appellant] presumes that all of Ga rc ia ’ s profits were made while the two men were st ill partner s , b ut th e district cour t made no finding regarding the date the partnership ended. Nor did either party specifica lly request any f in d i ngs regarding the alleged breach of fiduciary duty or any pr o fit Garcia might have made while operating Activ e E uroworks

. A s an ap pellate court , we mu st assume that any omitted, unrequested findings support the judgment. See Tex. R. Civ. P. 299; Robe rs o n v. Robinson , 768 S.W.2d 280, 281 (Tex. 1989); Williams v. Mi l liger ,46 352 S.W.2d 794, 795 (Tex. App. 1961, wri t r ef ’ d n.r

. e.) (“It i s implied in support of the ju dgment that the court found against the defendant on this issue since the cour t made no spe ci f i c finding on such issue and none was requested.”). In other wo rds, we must infer that the district court con clu ded: (1 ) th at th e fiduciary rel ationsh ip had alr eady ended when Garcia began earning profits from Active Euroworks, (2) th at [appellant] was no t harmed by Garcia ’ s operation of Active Euroworks, or (3) that [appellant] simply failed to prove any damage s in cur red.
Da ndac hli v . Active Motorw erks, I nc. , No. 03

- 19

- 00494

- CV, 2021 WL 3118437, at *6 (Tex. App.

— Austin July 23, 2021, no pet. ) (mem. op.).
C
. Law on Loss

- of

- Use D amages
N o rigid rule applies when determ ining loss

- of

- use damages. Canyon Vista P r op.
Ow ner s A ss ’ n

, In c. v. Laubac h , No. 03

- 11

- 0 0404

- CV, 2014 WL 411646, at *5 (Tex. App.

— Austin Jan. 31, 2014, no pet. ) (mem. op.)

. Instead, f actfinders must consider the particular circumstanc es of the plaintiff and the facts of each case in as sessing
los s

- of

- use dam ages. Id. The Texas Sup reme Court has set forth the following broad paramet ers o n loss

- of

- us e d a m ages : As with all consequential damages, the availability of loss

- of

- use damages is necessarily circumscribed by common [ ] s ense rule s. To begin w ith, th e da mages clai med may not be “too remot e.” This is not to say they must be “the usu al result of the w r ong ,” but they must be foreseeable and directly traceable to the tortious act. The damages also must not be spec ula tive. Alth ough math ematical e xactnes s is not requi red, the evidence o ffered must rise above the level of pure conjecture

. Moreover, the d a mag es may not be awarded for an unreaso nably long period of lost use. Whether framed as a duty of mitigation or a doctrine of avoid able conseque n ces, th e pr inciple is the same: A plaintiff may not recover loss

- of

- use damages for a peri od longer than th a t re asonably needed to replace the personal property. That princ iple comp els a47 plaintiff ’ s diligence in remedying his loss and deter s a n opportun i stic pl aint iff from d illy

- dallying at the expense of the defendant. After all, the role of a ctual damages i s to place the plaintiff in his rightful position, not the positio n he wishes to acqui re. J &D Towing, LLC v. Am. Alt . Ins. C orp. , 4 78 S.W

. 3d 649, 6 77 (Tex . 20 1 6) (citat ions omitted)

. D
. What the Record S hows Appellants pleaded for loss

- o f

- u se damages as foll ow s: 27. As a r e s ul t of [Velu ’ s] breache s of the [c] ontracts, [Appellants] and [their] other members suffered damages, including [App ellants ’ ] l o sing
us e of s aid fu nd s to pa y down the mort gage on the pro perty , pay taxes, and reduce the pr inc ipal on the l oa n.

. . . . 30

. As a result of [Velu ’ s] conversion of the property, [App ellants] l ost the use of those monies for [their] business purposes, i ncl udin g, bu t not limi te d to, p aying down the mortgage on the property, paying taxes, and reduci ng the princip al on the loan so a s to reduc e interest paid on the mortgage over time.

. . . . 34. [A ppellants have] sustained damages as a result [of Ve lu ’ s th eft] , i nc luding los s of prop erty [] and l o ss of use of property.

. . . . 46. As a result o f [ Velu ’ s] bre ac h of fiduciary d u ty, the ft , and fraud , and [Velu ’ s] breach of contract and conversion, [Appellants] and [their] other members have su ffered actu al dam age s i n the form of lost income and revenues of at least $350,000, interest on lost use of th is amount, an d other damages

.48 During the jury trial, Sengotti yan testif ied that h e beli eved the net revenue from
2009 to 2014 “ w as going towa rds pay ing off the lo an ” an d that he trusted that Velu was paying down the mortga ge with net r eve nu e ; in oth er words, without u sing the exact wording, it appears that Sengottiyan believed that they wer e prepaying the
mortgage
. At the time of the ju r y trial, Appellants ’ account had “ roughly c lose to $200,000. ” Se n g ottiyan was asked on cross

- ex amination w hat A p pellants had don e

w

ith the money, and he said that a majority of members had voted “ to pay the exce ss

amou nt towards the loan. ” W h en as ked what amount was applied to th e loan and when, Sengottiyan tes tified that he did not remem be r the exact det a i ls; he said, “ I can tell you we p aid one time $50,000 and another time 35

- some

- thousand. I don ’ t remember th e exact numbers, but we can look at the accounts and tell you. ” Upon
furth er questio ning to pinpoint the timing of the pa yments , Seng ott i y an testified , “ I
th ink both of th em were made ei ther in 2017, I think. ” On redirect, Seng ottiyan
agr eed tha t since 2015 , during the time th at he and Samy had been co

- manager s , “ at times, [the y had] pai d net revenues towards the mo rtgage to pay d o w n the mort gag e. ”
The sole findin g that the trial c ourt made on this issue was that “ t he interest [ App ellant s] sought to recover w [as] damage s for the loss of the use of money. ” The
trial court ’ s judg ment does not award lo ss

- o f

- use damag e s .49 E
. Ana lysis
In their openin g brief, Appellan ts r aise le gal arguments to show that Texas
allow s r ecover y of loss

- of

- use damages , 21 that A ppellants had a “ right to this award of damages , ” and that ne ither t he trial cou rt nor V el u presented a v i a ble basis for
den yin g Appellants a n award of loss

- of

- use damages. They rely on their cha r t showing a n interest calcula tion 22 o n the $130,100 da mages found by the jury , but they

set forth no evidence to show th at they conclus i v ely proved du ring th e bench trial
that th e stol en money would have been used to pay down the mortgage. Instead, App ell ant s state that they conclusiv ely established their “ right to this award of damages ” and th en set forth the following tw o senten ces: Se n g ott iyan testi fied th at during the time wh en [Ve lu] was the primary managing member, the expectation was that the net re ven ues were being used to redu ce the loan on the building

. Both Sengottiyan and [Samy ] tes tified that after Sengottiy an replace d [Velu ] as co

- managin g me mbe r of [Appellan ts] , th e use of accumulated revenue was discussed with [Appellants ’ ] members , and the fu nds were used to pay down t he principal of the mortgage [

— ] a claim born [e] out by the mor tgage account records

. [Rec o r d r efer ences omi t te d .]

21 O n appe al, Velu does not c h a llenge that Texas r ecognizes loss

- of

- use damages as a measure of damag es for claims of the ft and conversion. For purpos es of our an a ly sis , w e therefore a ssume that such damages we re available to Appellants if p roperly proven.

22 F or disposition of this iss u e, w e need not address the correctness of the interest rates used , bu t we note that the v arious interest charts t hat App el lants refe ren ce have different t otal s : P la intiff s ’ Exhibi t 14 shows the t otal interest a s $73,5 35.38 (t hou gh adding the yearly inter e st column produce s a total of $7 8,048.23 ) , while Plaintiff ’ s Exhibit

– Hearing Ex. 1 show s the total interest as $78,045

.50 Velu point s out t he fol lowing shortcomings in Appellants ’ theor y th at the
stolen money would ha ve been used to pay down the m ortgage because Appellants
had made additional mortgage payme nts “ at times ” after Velu w as removed as co

m a nager : No cont ext w as ever pr ovided by [Ap pellan ts] for why any payments on [their] mortgage “at times” were actuall y made a nd then comparing these circum stances with those that existed during the relevant time s at issue in this lawsuit. Stated another w a y, [] A ppellants f ail ed to s how that t he circ umstan ces allegedly warranting payment “at times” on the mortgage exis ted at a ny time when Velu is accused o f any wrongdoing, thus allegedly supporting the circumsta ntia l inference that addit io nal payments wo u l d have b een made a s we ll. In deed, ther e is no evide nce of the amount [Appellants] would have had in available cash had Velu
no t taken the $130,100.00; no evidence of how many alleged payments would have been made; how m uch each such all eg ed payment woul d have bee n; or when eac h s uch alleged pa yment w ould h ave been made. Myriad questions abound with regard to Appellant s’ theor y m aking it nothing more than unsubstantiated innuendo. For example, how much did [Appella nts] have at al l times ? Did the amount e xceed $2 00,000.00? Ev en if [ they] did, did [Appel lants] have other debts that [they] needed to pay with this money? Did [they] need to ke ep a cash reserve for any
s ecured loans to be sufficiently collateralized? What conditi on was the
e conomy in durin g the time in questio n? Was sa v

ing for contingencies more i mporta nt than paying off debt? Were there other opportuni ties that would yiel d a greater investment return than retiring the subject mortgage? [Appellants] failed to p rovide any c ontext whatsoev e r to prov e the findi ngs that w e re m ade were clearly wrong a nd unj ust. Another problem with [Appellants ’ ] theory is that it is totally d epe ndent on the self

- serving t estimony of its current managers.

. . . [Appellants ’ ] witnes ses provid ed no documentary e vidence that suppor ted their a sser tio n that [Appell ants] i ntende d to use excess cash to pay d own [Appellants ’ ] mortg age. Further, the g ene ral disinterest of [Appella nts ’ ] co

- manager, Samy, and [Appellants ’ ] failure to use
reas onable car e to avoid [their ] injuries , undermine s the test imony of [Ap pellants ’ ] man agers t hat th ere was a plan to pay down the mortgage. Additi onally, und ermining thei r c redibility is the lack of c lear recollection51 of the mortgage principal payments that [Ap pellan ts ] made since Ve l u ’s remov al. Finall y, a fact [ ] find er c oul d infer from t he test imony at trial that the mortgage payments made by [App ellants ] were made not a s p ar t of a preexisting plan b ut to bolster [Appellants ’ ] claim for consequential damages. App ellants file d a reply brief a tt acki ng Ve lu ’ s argum en ts, de s cribin g them as

“ newly

- minted theories. ” Without cit ing any authority, Appellan ts imply that Velu

was limited to raising the same arguments that h e raised in t he t r i al court because “ [t]o
the extent they do anything, the [t ]r ia l [c]ourt ’ s fin di n g s of fact and conclusions of law (d rafted by [ Vel u] ) point to those theories [that he rai sed in the trial court]

. ” Appellants f urther c ontend that “ [n o w here] in the factual findings doe s the [t ]rial [c]ourt cri tici ze the evidence pres ented by [A ppellants] as being ins ufficient to c arr y [their] bu rden of proof on this issue

. ” Appellants, however, fail ed to seek a dd it ional findings f r om the trial court on this issue

. As an a ppe llate court, w e m ust assume that any omitted, unrequested f indings sup p ort the j udgment , and we must assume from
the trial court ’ s decision to award $0 for los s

- of

- use damages that the trial c ou rt determined t h a t Appellants had failed to conclusivel y es tab lish the ir bur den on these damages

. See Tex. R. Civ. P. 29 9; Roberson , 768 S.W. 2d at 281 ; W illiams , 352 S.W.2d at
795

. Appell ant s also argue in their reply brief that this court cannot impl y a findi ng regardi n g the cr edibility of Appellants ’ witnes ses ’ te stimony. Yet, we must defer to
the trial court ’ s credibili ty deter min ations and cannot substitute our judg ment for the trial court’s assessment of witnesses’ testimony i n a bench trial. S ee 12636 R s ch

. , 202152 WL 417027, at *5

. H e re, the trial cou rt ’ s judgment award ing $0 for los s

- of

- use damages impl ie s that it d id n ot f ind Appell ants ’ witnesses ’ testimony credible ; thus , we de fer to that decisi on on the credibility of A ppellants ’ witn e s ses ’ testimony

. Appellants ’ reply bri ef f urt her contends th at Velu ur ge s this court to apply a
hi gher burden than Te xas law requi res by a sserting t hat Appellants had to prov e that money taken by Velu would have been used to pay down t he mo r tgage. Appellants argue that t hey are required to es tablish their damages with “ reasonable certainty , ” not

ma thematical precis ion , and that they need on ly show “ a rea son abl y foreseeable use of funds wrongfully ” taken. Reason a b le certainty , however, is not the que stio n ; the question is one st ep removed: it is whether Appellants credibly pr oved that they had
incurred loss

- of

- us e d amages. Based on the lim ited testi mo ny provided, which
amounted to mere conjectu re , Appellants fa i l ed t o conclusively establish that they had
incurred l oss

- of

- u se damages. Within this same argument, Appellants co ntend that “ [r]equiring proof that the

mo ney would have been used in a c ertain way imposes an imp ossible burden on [Appell an ts ]. ” Appellants, however , were the one s who pl eade d t h at they had “ lost
the use of those monies for

. . . bu siness purposes, including, but not li mit ed to, paying down the mortgage on th e pr operty
. ” Moreover , t he burde n was not an impo s s ible one as the trial court could have believed Appel lant s ’ w itn esses ’ testim ony ; it simply chose not to

.53 Appellant s ’ final reply is that “ [ Velu ] ’ s claim that the pr oof consists solely of

‘ self

- s erving ’ testi mony is incorrect

. ” Appel l a nts point to bank records , arguing that they show tha t fu nds in Appellants ’ possess ion after Velu was re moved fro m handling
money were used to prepay the mortga ge debt. S u ch evidence of prepaying the mortgage in 20 1 6 and 2017 , howe v e r, d oes not conclusively establish that Appellants
ha d an y i n ten tion of pre paying the mortga ge in 2009 to 2010

— th e initial years a fter
the LLCs w ere f orm ed.
After re view ing the re cord under the required standard of review a nd a nalyzing
the a r gume nts raised, we conclud e that Appellants ’ legal su ffic ien c y c hallenge fa ils

. F or Appellants to prevail on the ir claim for loss

- of

- use damages , the y h ad the burd en to conclusively establish their entit lement to interest for the loss o f use of the stol e n

mon ey. Appella nts ’ evide nce on loss

- of

- use damages was not con clusive ; the testimony about after

- the

- fact uses of the money seven to eight years aft er the money
was stolen amounted to mere co njecture as to how any net revenue would hav e been
used in 20 0 9 and 201 0. Neit her Samy n or Sengotti yan testified th a t t her e we re general meetings of the members duri ng 2009 an d 20 10 in which they voted to pay dow n t he

mor tga ge ; the only testimony was that Sengottiyan “ believed ” that the net revenue

w as being used t o pay down the mor tga ge from 2009 to 201 5

. Accordingl y , w e h o ld that Appellants failed to conclusively prove that they
suffered any loss

- of

- use damages , and thu s the trial court did not err by determini ng that Appellants should be awarde d $0 f or loss

- of

- u s e da mages. Cf. Wi ese v. Pro Am54 S er vs., In c. , 317 S.W .3d 857, 863

– 64 (Tex. App.

— Houston [14th Dist.] 2010, no pet
. ) (holding that there was no legally s uffic ien t evidence proving app ellee ’ s los s

- of

- use damages where appellee failed to pr ov ide competent e v i denc e that it was enti tled t o recover loss

- of

- use dam ages consist ing of lost profits); A utom ek, Inc. v. Orandy , 1 0 5 S.W.3d 60, 65 (Tex. App.

— Houston [1st Dis t.] 2003 , no pet.) ( stati ng that “ [w]ithout

a ny evidence, an award for damages f or los s of use mu s t be based upon con jecture

an d is thus impe rmis sib l e ” and holding that the evidence was legally insufficient to
ho ld that appellee had suffered loss

- of

- use damage s ). We overrule Appe llants ’ s econd
issue

. VI I. Breach

- of

- Fiduciary Ruli ng N o t Ex plicit in J u d gmen t As m entioned above, a t the conclus ion of th e ev idence in the jury trial, Appellants moved for a directed ve rdict on both the existe n ce of a fidu ciary d uty

ow e d to Appellants by Velu and Velu ’ s breach of that duty

. The tri al cou rt granted

t h e mo tion for direct ed verdi ct. After th e fi nal judgment was rendered, Appellants
filed a m otion to c orr ect the final judgment , requesting th e trial cou rt to “ identify this
cause of ac tio n or rulin g in the [f]inal [j ] udgment, ” b ut the tri al cour t d eni ed the
motion

. In th e ir fifth is sue, Appel lants re quest thi s court to mod ify the f inal judgment
to reflect tha t the t rial co urt granted a dire cted verdict in the ir fa vor on their breach

of

- fiduc iar y
- duty claim. Concluding that there was no abuse of dis cretion, w e decline
to do s o. See De utsch v. H oover, Bax & Slovacek, L.L.P. , 97 S. W.3d 179, 194 (Tex.55 A p p.

— Hou ston [1 4 th D ist.] 2002, no pet. ) (sta tin g that the trial court ’ s inter loc ut ory ruling gra n t i ng a d irected verdict on the enti re brea ch

- of

- f

id u cia ry

- duty claim merge d
into t he trial c ourt ’ s f i n al judgment). See generally Wagner v. Edlund , 229 S.W.3d 870 , 8 7 9 (Tex. App

. — Dall as 20 07, pet. denie d) (s tating that appellate court s re vi ew t he
denial o f a mo ti on to modify, correct, or refor m a judgm e nt for an abuse of
discretion )

. The reco rd reflect s th at the jury c harg e sought to have the ju ry assess damag es s ol ely fo r theft, con ver sion, and breach of contract; there was no que stio n

a sk ing the jury to a sses s dama ges re lated to the brea ch

- of

- fiduciary

- duty claim , and
there w e re no o bjection s to the c harge

. Th us, there was no damage aw ard for the
bre a ch o f fiduciary duty. According ly, w e ov e rrule Appellants ’ fifth issu e . VIII. Conclus i o n
Ha ving sustained Appellants ’ third issue because the trial court f ail e d to follow

t he ste p s set out in Rohrmoos f o r calculat ing trial attorneys ’ fee s and b ecause the trial

court fail ed to awar d a ny appellate attorneys ’ fees despite tha t Appellants were e ntit l ed to an award of appellate attorney s ’ fees , we reverse and remand for a new trial solely

on attorne ys ’ fees

. H aving overr ule d Ap pellan ts ’ first , secon d, fou rth , and fifth issues ,

we af fi rm the remainder of the trial court ’ s judgme n t
. /s/ Dabney Bassel Dabney Basse l Jus ti ce
De livered: No vember 4, 2021