Revised July 27, 2001

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

_______________________

No. 00-20380

_______________________

NORTHWINDS ABATEMENT, INC.

Plaintiff-Appellee,

versus

EMPLOYERS INSURANCE OF WAUSAU,

Defendant-Appellant.

______________________________________________________________

Appeal from the United States District Court

for the Southern District of Texas

_________________________________________________________________

July 11, 2001

Before KING, Chief Judge, REAVLEY and JONES, Circuit Judges.

EDITH H. JONES, Circuit Judge:

In the second appearan ce of this case before us on

appeal, Employers Insurance of Wausau (“Wausa u”) appeals a jury

verdict in favor of Northwinds Abatement, Inc. (“Northwinds”) and

the resulting judgment of nearly $1.1 million, including actual and

treble damages, attorney’s fees, interest and costs. Wausau

asserts that, as a servicing company, it was an agent of the Texas

Workers’ Compensation Insurance Facility (the “Facility”) and

therefore exempt from liability claims pursuant to now-superseded1 The Texas statutes establishing an insurer of last resort

for workers compensation insurance have been the subject of

frequent revision and redrafting. The Facility was formerly known

as the Texas Workers’ Compensa tion Assigned Risk Pool, with the

Facility replacing the Risk Pool on January 1, 1991. S ee Tex. Ins.

Code Ann. art. 5.76-2 (Vernon 1991)(amended 1993 and repealed 1997,

now Tex. Ins. Code Ann. art. 21.28-C (Vernon 2000)). On January

1, 19 94, the Texas Workers’ Compensation Insurance Fund replaced

the Facility as the insurer of last resort. S ee id

. (19 9 3

revision). While the Fund retained its name, the statutes governing

2 Article 5.76-2, § 2.12 of the Texas Insurance Code. We disagree,

and affirm the district court’s holding that Wausau is not an agent

of the Facility. Wausau also argues that the claims underlying the

jury verdict are all invalid as a matter of law. Wausau is in part

correct, but under Texas law both the Texas Deceptive Trade

Practices Act (“DTPA”) and Insurance Code claims are viable, and we

must affirm the judgment on these ex tra-contractual claims.

Finally, although the aw ard of statutory attorneys’ fees to

Northwinds is high, it is not reversible. The judgment is

AFFIRMED.

BACKGROUND

Northwinds is a corporation engaged in the hazardous

business of asbestos abate m ent, remediation and removal work.

Unable to obtain workers’ compensation insu rance on the open

market, it applied for and received coverage through the Texas

Workers Compensation Insurance Facility, a private, nonprofit,

unincorporated association of insurers created by statute with the

purpose, inter alia , of providing coverage for employers who are

unable to obtain insurance in the voluntary insurance market. 1 Theagain changed in 1997. S ee Tex. Ins. Code Ann. art. 5.76-3 and

art. 21.28-C §§ 26, 27. (Vernon 2000).

2 The servicing company contracts with the Facility to

issue policies evide ncing the insurance coverage provided and to

service the risk. While the servicing company is the issuer of the

policy, the Facility itself is the in surer. The members of the

Facil ity collectively reinsure each policy it issues, dividing

reinsurance liability in proportion to p remiums received by each

member.

Notwithstanding its limited liability, the servicing company

still performs many of the traditional functions o f an insurer.

The servicing company issues the policy; investigates, reports, and

pays claims; inspects and classifies risks; and provides legal

support as required by the policy. S e e Tex. Ins. Code Ann. art.

5.76-2.

The oper ational mechanics of the Facility are discussed at

length in the earlier appeal of this case. S ee Northwinds

Abatement, Inc. v. Employers Insurance of W ausau , 69 F.3d 1304,

1305-06 (5th Cir. 1996)( Northwinds I ).

3 Facility designated Wausau as the primary “servicing company” for

Northwinds and Wausau subsequently issued Northwinds a workers’

compensation policy. 2

In 1993 Northwinds filed suit against Wausau for alleged

mishandling of workers’ compensation claims filed by four

Northwinds employ ees. Northwinds alleged that Wausau paid these

four claims without properly investigating them, thereby ca using

increased insurance premiums for Northwinds and a loss of business

due to the customer perception that Northwinds was a safety risk.

Northwinds characterized its claims as raising fraudulent and bad

faith settlement practices, breach of contract, negligence,

violations of the Texas DTPA and violations of the Texas Insurance

Code.4 Northwinds’ sui t was removed to federal court, where

Wausau filed a motion to dismiss for lack of subject matter

jurisdiction, citing Northwinds’ failure to exhaust its

administrative remedies through the Facility and the Texas

Department of Insurance. The district court denied this motion.

Wausau then moved for summary judgment, contending that it was not

liable to Northwinds because it was only a servicing company for

the Facility and not Northwinds’ insurer. When the district court

granted this motion, Northwinds appealed. On appeal, Wausau

renewed its challenge to the district court’s jurisdiction.

This court determined that, pursuant to the doctrine of

primary jurisdiction, the district court had jurisdiction because

the remedies sought by Northwinds could n ot be provided

administratively. S ee Northwinds Abatement, Inc. v. Employers

Insurance of Wausau , 69 F.3d 1304 (5th Cir. 1995) ( Northwinds I ).

However, this court also determined that the district court should

abst ain from resolving Northwinds’ claims until certain factual

determinations were made in the administrative proceedings.

Rejecting Northwinds’ claim for breach of the duty of good faith

and fair dealing, the court nevertheless reversed the summary

judgment as to all other claims

. See Northwinds I

, 69 F.3d at

1311-12.

In Septemb er 1998, the district court held that

Northwinds had exhausted all avenues of administrative review, and

the case approached trial. Wausau filed a last-minute motion for5

summary judgment, asserting that it was an agent of the Facility

and, as such, protected from liability under Article 5.76-2, § 2.12

of the Texas Insurance Code. After supplemental briefing on the

issue, the district court denied the motion, and the case went to

trial.

The jury returned a verdict in favor of Northwinds on all

claims except that for breach of contract. The jury awarded actual

damages of $19,234.95 for the increased premiums Northwind s was

forced to pay, $55,335.49 for attorneys’ fees incurred in defending

the lawsuit initiated against it by the Facility at Wausau’s

urging, and $712,000 in attorneys’ fees incurred in the federal

suit against Wausau. The district court entered a judgment

awarding Northwinds $74,570 in actual damages, $223,711.32 in

treble damages, $712,000 in attorneys’ fees, prejudgment interest

on the actual damages, post-judgment interest, and costs. Wausau

now appeals.

WAUSAU AS AN “AGENT” OF THE FACILITY

Wausau first argues that as a servicing company, it is an

agent of the Facility and thereby immune from liabil ity under

Article 5.76-2, § 2.12 of the Texas Insurance Code.

Article 5.76-2, § 2.12 states in relevant part that:

“ There shall be no liability on the part of and no cause

of action shall arise against the governing commit tee,

the facility, its executive director, or any of its

staff, agents , servants, or employees arising out of or

in connection with any judgment or decision made in

connection with the performance of the powers and duties6

under thi s article or for recommendation or decision

concerning any inspections or safety engineering

investigations performed or for any recommendation or

decision made in good faith”. (Emphasis added).

According to Wausau, this court has already deemed it an

agent of the Facility, based on the conclusion in Northwinds I that

“an agent [Wausau] may be liable for its own acts of negligence or

frau d”. 69 F.3d at 1311. Wausau takes this as a judicial

determination that it is an agent of the Facility. Further, Wausau

argues that this court’s invocation in Northwinds I of Maintenance,

Inc. v. ITT Hartford Group, Inc.

, 895 S. W.2d 816 (Tex.App.--

Texarkana 1995) (“ Maintenance III ”), demonstrates that Wausau has

already been determined to be the agent of the Facility.

We disagree that Wausau’s agency status under § 2.12 was

determined in Northwinds I . That opinion explicitly refused to

consider whether Wausau was an agent of the Facility f or § 2.12

purposes. See Northwinds I , 69 F.3d at 1308, n.3. Additionally,

the citation in Northwinds I to Maintenance III represented not a

wholesale adoption of the Texas intermediate court of appeals’

opinion, but an acknowledgment that the M aintenance III decisi o n

had been withdrawn and substantially modified. S ee id

. at 1311.

Thus, the law of the case does not govern Wausau’s status as an

agent under § 2.12.

Whether a “servici ng company” is an “agent” of the

Facility is a novel question of Texas law. Article 5.76-2 of the

Texas Insurance Code does not define an “agent.” It defines a3 It is w orth noting that other, more recent, Texas

statutes expli citly grant immunity to member insurers. For

example, in the context of the Texas Proper ty and Casualty

Insurance Guaranty Association “[t]here is no liability on the part

of, and no cause of action of any nature arises against any member

insurer [of the Association]

. . . for any good faith action or

failure to act in the performance of powers and duties under this

Act.” S ee Tex. Ins. Code Ann. art. 21.28-C, § 16(a) (Vernon 2000).

This indicat es that had the Texas Legislature sought to grant

similar immunity to members of the Facility in art. 5.76-2, it

would have so stated.

4 A few Texas courts of appeals have, with little

discussion or analysis, labeled servicing companies as the agents

of the Facility for the limited purpose of issuing a policy. S ee

, Maintenance, Inc. v. ITT Hartford Group

, 895 S.W.2d 816, 818 (Tex.

Ct. App.--Texarkana 1995, writ denied) ( Maintenance III )(holding

that the servicing company is an “agent to issue a policy for the

pool.”); Tex. Workers Comp. Ins. Facility v. Peakload, Inc. , 1998

WL 798640, at *1 (Tex. Ct. App.

- Austin, 1998) (unpub.) (“The

servicing company

is simply an agent that issues a policy for the pool.”). However,

these cases do not discuss subsequent transactions, such as claims

handling.

7 “servicing company” as “a member of the facility or other eligible

entity that i s designated by the board to issue a policy that

evidences the insurance coverages provided by the fund to a

rejected risk and to service the risk as provided by this article.”

Tex. Ins. Code Ann. art. 5.76-2, § 1.01(12). A “member,” in turn,

is defined as “an insurer that is a member of the facility.” Id

.

at § 1.01(15). We have found no evidence that the Texas

Legislature intended to protect servicing companies from liability

in § 2.12, and the Texas Supreme Court has never considered this

issue. 3 Texas intermediate court decisions contain offhand

references to servicing companies a s agents of the Facility, but

they are not definitive. 48 The structure of the Insurance Code offers the only

direct interpretive information, and it suggests that § 2.12 does

not apply to servicing companies. Article 5.76-2 of the Texas

Insurance Code is divided into five parts. Part 2, in which § 2.12

is found, does not discuss or even mention servicing co mpanies.

Part 4, in turn, sets out the rules governing servicing companies

but contains no exemption from liability comparable to § 2.12.

Under the doctrine of ejusdem generis , the term “agent” in § 2.12

should be restricted to the class of persons enumerated in Part 2.

See Dawkins v. Meyer, 825 S.W.2d 444, 447 (Tex. 1992)(outlining the

doctrine of ejusdem generis and explaining that “where specific and

particular enumerations of persons or things are followed by

general words

. . . , the general words are not to be construed in

their widest meaning or extent, but are treated as limited and

applying only to persons or things of the same kind or class as

those expressly mentioned.”). Viewed thus in context, “agent” must

be a term related to the Facility, its governing body and

employees, and not to the members or to servici ng companies.

Wausau’s attempt to shelter itself under the wing of Part 2 of the

Insurance Code thus seems ill-conceived.

Moreover, the ordinary meaning of the term “agent” also

fail s to express Wausau’s relationship with the Facility. In

Texas, “[a]gency is a legal relationship created by an express or

implied agreement or by operation of law whereby the agent is9

authorize d to act for the principal, subject to the principal’s

control.” K arl Rove & Co. v. Thornburgh

, 39 F.3d 12 73, 1295-96

( 5th Cir. 1994). The essential element in determining agency

relationship is the principal’s right to control the agent: “To

prove an agency relation under Texas law, there must be evidence

from which the court could conclude that ‘[t]he alleged principal

[had] the right to control both the means and the details of the

process by which the alleged agent [was] to accomplish the task.’”

Id . (quoting In re Carolin Paxson Adver., Inc. , 938 F.2d 595, 598

(5th Cir. 1991)). “The right to control the details of a person’s

work determines whether an employment or independent contractor

relationship exists.” W eidner v. Sanchez

, 14 S.W.3d 353 (Tex. Ct.

App.-- Houston [14th Dist.] 2000, writ denied). The portion of the

Texas Insur ance Code detailing the relationship between the

Facility and the servicing companies leaves substantial discretion

to the servicing company to determine the means for accomplishing

its tasks. S ee T ex. Ins. Code Ann. Art. 5.76-2, § 4.08. The

Facility’s lack of control over how the servicing company

accom plishes its designated tasks indicates that the servicing

company is not an agent of the Facility.

This conclusion is also supported by the contract between

the Facility and Wausau, which states that Wausau is an independent

contractor, and that the company retains the right to control the

means, manner, and details of fulfilling its obligations under the

agreement. Under Texas law, “[a] written contract that expressly5 Northwinds contends that Wausau did not properly preserve

error and that, as such, the fraud, negligence and statutory claims

should be reviewed only for plain error. We disagree. Wausau

adequately preserved error on these claims via its motion for

directed verdict, objection to the submission of certain jury

questions, opposition to Northwinds’ motion for judgment, and the

10 provides for an independent contractor relationship is

determinative of the part ies’ relationship in the absence of

extrinsic evidence indicating th at the contract was subterfuge,

t hat the hiring party exercised control in a manner inconsist ent

with the contract provisions, or if the written contract has been

modified by a subsequent agreement, either express or implied.”

Weidner

, 14 S.W.3d at 353. There is nothing in the record to

indicate that the Facility exercised a greater level of control

over Wausau’s w ork than that specified in the contract. For all

these reasons, Wausau is not an agent of the Facility, it cannot

take refuge behind § 2.12, and Northwinds’ claims are not barred.

NORTHWINDS’ FRAUD, NEGLIGENCE AND STATUTORY CLAIMS

Five theories of liability were submitted to the jury in

this case: statutory claims under the DTPA and Insurance Code, and

common law theori es of breach of contract, fraud and negligence.

The jury found in Northwinds’ favor on all but the breach of

contract claim. Wausau now challenges both the legal basis for

these claims and the sufficiency of the evidence supporting each of

them. We review questions of law de novo, while the sufficiency of

the evidence is reviewed by examining all the evidence in the light

most favorable to the verdict. 5 S ee Hollowell v. Orlean s Reg’lpost-trial renewal of its motion for a directed verdict.

6 Northwinds elected t o recover judgment under the Texas

Insurance Code claim, but Wausau, to prevail on appeal, would have

to overturn the common law claims as well.

7 Interpreting Texas law, a federal district court has

clearly analyzed this issue:

A tort claim has been found to arise out of the breach of

an insurance carrier’s contractual duty in on l y two

instances: (1) when the insurer breaches its duty of good

faith and fair dealing or (2) when the insurer fails to

exercise ordinary care and prudence in consider ing an

offer of settlement within the policy limits. All other

claims, like that asserted for negligent claims handling,

have no legally independent basis and, therefor e, are

regarded merely as actions for breach of contract.

French v. State Farm Ins. Co.

, 156 F.R.D. 159, 162 (S.D.

Tex. 1994).

11 Hosp. LLC , 217 F.3d 379, 385 (5th Cir. 2000)(de novo standard for

questions of law); United States v. Guerrero

, 234 F.3d 259, 261-62

(5th Cir. 2000) (stating the standard of review for sufficiency of

the evidence).

COMMON LAW CLAIMS

Wausau argues that Texas law does not recognize causes of

action for negligent claims handling or fraud in regard to the

subject matter of the contract and that the jury’s findings on

those is sues must be overturned. 6 This is correct. In

Higginbotham v. State Farm Mut. Auto Ins. Co. , 103 F.3d 456, 460

(5th Cir. 1997), this court recognized th e absence of a cause of

action for negligent claims handling under Texas law. 7 Negligent12

claims handling is subsumed into breach of contract except under

very limited circumstances. In examining whether an action sounds

in contract or tort, the Texas Supreme Court has declared that

“[i]f the defendant’s c onduct

. . . would give rise to liability

independent of the fact that a contract exists between the parties,

the plaintiff’s claim may also sound in tort.” Southwestern Bell

Tel. Co. v. Delanney

, 809 S.W.2d 493, 494 (Tex. 1991) (emphasis

added). Similarly, for an action to sound in fraud instead of

breach of contract, Wausau’s fraudulent conduct must give rise to

liability independent of the contract. I d

. The Texas Supreme

Court held there that “[w]hen the only loss or damage is to the

subject matter of the contract, the plaintiff’s action is

ordinarily on the contract.” I d

. The essence of Northwinds’

common law claims lay in Wausau’s false statement that it was fully

investigating the disputed workers compensation claims and in the

resulting damages from increased premium payments when Northwinds

was rendered unable to contest the claims. No liability

independent of the contractual duty to handle claims exists as a

result of this false statement. Neither of the common law claims

can be sustained under Texas law.

STATUTORY CLAIMS

Certain statutory causes of action exist in Texas under

the DTPA and the Insurance Code, however, reg ardless whether the

plaintiff also has a vi able breach of contract claim. S ee First8 An Insurance Code claim based on breach of the duty of

good faith and fair dealing will generally fail in the absence of

a viable breach of contract claim. Northwinds’ claims did not

depend on good faith and fair dealing alone but also on

misrepresentation.

13 Title of Waco v. Garrett

, 860 S.W.2d 74, 76-77 (Tex. 1993); Jack B.

Anglin Co., Inc. v. Tipps

, 842 S.W.2d 266, 270-71 (Tex. 1992); Vail

v. Texas Farm Bureau Mut. Ins. Co. , 754 S.W.2d 129, 136 (Tex.

1988). 8 Further, a servicing company of the Facility can be liable

in its individual capacity for violations of the DTPA and the

Insurance Code. S ee Maintenance III

, 895 S.W.2d at 819. Where, as

here, there has been no breach of contract or violation of the duty

of good faith and fair dealing, the bar for establishing extracontractual liability is high: the insurer must “commit some act,

so extreme, that [it] would cause injury independent of the policy

claim.” R epublic Ins. Co. v. Stoker

, 903 S.W.2d 338, 341 (Te x

.

1995).

Wausau’s successful efforts to persuade the Facility to

sue Northwinds baselessly involve d acts that a reasonable jury

could find extreme, and they clearly caused Northwinds extracontractual damages, as the compa ny had to spend over $55,000

defending itself against the lawsuit. Examined under the

deferential standard of appellate review, the evidence supports the

finding of an extreme extra-contractual act sufficient to satisfy

the Stoker standard.14 ATTORNEYS’ FEES

Wausau challenge s the jury’s award of $712,000 in

attorneys’ fees to Northwinds as both insufficiently supported by

the evidence and excessive. In diversity cases such as this one,

attorneys’ fee awards are governed by state law. M id-Contine n t

Casualty Co. v. Chevron Pipe Line Co.

, 205 F.3d 222, 230 (5th Cir.

2000).

The Texas Insurance Code provides for a non-discretionary

award of attorneys’ fees to prevailing parties. S ee Tex. Ins. Code

art. 21.21 § 16. A plaintiff is entitled to attorney’s fees that

are “reasonable and necessary” for the prosecution of the suit.

See Stewart Title Guar. Co. v. Sterling

, 822 S. W.2d 1, 10 (Tex.

1992). The party seeking to recover attorneys’ fees bears the

burden of proof on the issue. However, where the party seeking

attorneys’ fees offers reasonable and credible testimony concerning

the fees, and the party opposing the attorneys’ fees has the

opportunity to contradict or disprove the testimony and fails to do

so, the testimony of the witness may be taken as true as a matter

of law. S ee Ragsdale v. Progressive Voters’ League

, 801 S.W.2d

880, 882 (Tex. 1990) (“In order for the court to award an amount of

attorneys’ fees as a matter of law, the evidence from an interested

witness must not be contradicted by any other witness or attendant

circumstances and the same must be clear, direct and positive, and

free from contradiction, inaccuracies and circumstances tending to9 In Arthur Anders en & Co. v. Perry Equipment Corp. , 945

S.W.2d 812, 818 (Tex. 19 97), the Texas Supreme Court identified

eight factors to be considered in evaluating the reasonableness of

attorneys’ fees: “(1) the time and labor required, the novelty and

difficulty of the question involved, and the skill required to

perform the legal service properly; (2)the likelihood

. . . that

the acceptance o f particular employment will preclude other

employment by the lawyer; (3) the fee customarily charged in the

locality for similar legal services; (4) the amount involved and

the result obtained; (5) the time limitations imposed by the client

or the circumstances; (6) the nature and length of the professional

relationship with the client; (7) the experience, reputation, and

ability of the lawyer or lawyers performing the services; and (8)

whether the fee is fixed or contingent on results obtained or

uncertainty of collection before the legal services have been

rendered.” McEldowney identified and discussed each of these

factors in relation to this case. These factors are virtually

identical to those examined by federal courts in awarding

attorneys’ fees. S ee Johnson v. Georgia Highway Express, Inc.

, 488

F.2d 714, 717-19 (5th Cir. 1974).

15 cast suspicion thereon.”); see also Brown v. Bank of Galveston

, 963

S.W.2d 511, 515 (Tex. 1998).

The jury’s verdict was within the range of evidence

p resented. The only evidence concerning attorneys’ fees was the

testimony of John McEldowney, a veteran Texas attorney. McEldowney

properly laid out the factors identified by the Texas Supreme Court

for consideration in determining an award of attorneys’ fees. 9

Wausau presented no evidence controverting McEldowney’s testimony,

and Wausau hardly cross-examined him.

Wausau contends, nevertheless, that because the contract

between Northwinds and its attorneys established only a contingency

fee, there is insufficient evidence to support the jury’s award of10 Indeed, it is odd that Wausau now objects to the jury’s

adoption of an hours-billed based fee, when in its cross

examination of McEldowney Wau sau seemingly attempted to persuade

the jury to adopt a fixed-fee award. Wausau’s attorney appeared to

attack the contingent fee model, inquiring of Mr. McEldowney

“[d]on’t you think that a better way for determining whether a

person should unwillingly be forced to pay a fee would be to look

a t the actual value of the actual work done, rather than some

voluntary agreement that the law firm suing had with their client?”

Mr. McEldowney responded negatively, but the jury obviously agreed

with Wausau’s counsel, opting for an “actual value of actual work

done” fixed fee model over the contracted-for contingency model.

16 fixed-rat e (hourly billed) attorneys’ fees to Northwinds. 1 0 We

disagree. In situations where counsel and client have entered into

a contingency fee arrangement, T exas law requires the finder of

fact to calc ulate a statutorily-founded award of reasonable and

necessary attorneys’ fees as a dollar amount rather than as a

percentage of the overall recovery. S ee Arthur Andersen

, 945

S.W.2d at 819 (interpreting fee-shifting provision of Texas DTPA).

There is no reason why the Insurance Code’s fee-shifting provision

should be treated differently. This point is meritless.

Wausau also contends that, regardless of the sufficiency

of the evidence, the award of $712,000 in attorneys’ fees was

excessive. This court reviews whether the district court abused

i ts discretion in refusing to reduce an excessive award of

attorneys’ fees. S ee Mid-Continent

, 205 F.3d at 232; Romaguera v.

Gegenheimer , 162 F.3d 893, 896 (5th Cir. 1998).

In deciding whether a fee is excessive, an ap pellate

court is “entitled to look at the entire record and to view the17

matter in the light of the testimony, the amount in controversy,

the nature of the case, and our common knowledge and experience as

lawyers and judges.” Mid-Continent

, 205 F.3d at 232 (quoting Giles

v. Cardenas

, 697 S.W.2d 422, 429 (Tex. App. 1985, writ ref’d

n.r.e.)). All of the factors outlined by this court in J ohnson v.

Georgia Hi ghway Express, Inc. , 488 F.2d 714, 717-19 (5th Cir.

1974), and subsequently adopted into Texas law by the Texas Supreme

C ourt are to be considered. S ee Arthur Andersen

, 945 S.W. 2d at

818. However, it is well established that the most critical factor

in determining an award of attorneys’ fees is the “degree of

success obtained” by the victorious plaintiffs. R omaguera

, 1 6 2

F.3d at 896 (quoting Hensley v. Eckerhart

, 461 U.S. 424, 434

(1983)). Moreover, the requested fees must bear a reasonable

relationship to the amount in controversy or to the complexity of

the case. J erry Parks Equip. Co. v. Southeast Equip. Co.

, 817 F.2d

340, 344 (5th Cir. 1987).

The award of $712,000 as attorneys’ fees in this case was

more than three times the trebled damages award and more than nine

times the actual damages. Such disproportion alone does not render

the award of attorneys’ fees excessive. S ee Gorman v. Countrywood

Property Owners Assoc.

, 1 S.W.3 d 915, (Tex. Ct. App.--Beaumont

1999, pet. denied)(attorney’s fee award 2.5 times larger than

actual damages was not excessive). However, Northwinds’ attorneys

were not very successful in their prosecution of this suit:

following this decision, Northwinds will have prevailed on only two18

of its original laundry list of claims; the actual damages awarded

to Northwinds are a tiny fraction of the multi-million dollar

recovery it sought; and Northwinds took nothing on its key theory

that Wausau’s actions reduced Northwinds’ profits by convincing its

customers and potential customers that it ran an unsafe operation.

Indeed, the only front on which Northwinds’ attorneys enjoyed

outright success was in convincing the jury to award full

attorneys’ fees.

On the other side of the ledger, this was a complex case

to litigate, as it involved two appeals to this court, the pursuit

of administrative remedies, and a full trial. We review an

attorneys’ fee award for abuse of discretion. Although the basic

damage award was far less than Northwinds sought, and although

Northwinds’ attorneys contractually agreed to a contingent fee, we

cannot overlook the complexity of the case, Wausau’s failure to

challenge the reasonableness of t he fee amount, and the sound

judgment of the trial judge who shepherded this case. The award

must be sustained.

CONCLUSION

For the foregoing reasons, the judgment of the district

court is AFFIRMED

.