Source: http://www.terralex.org/publication/p00b1f25ec0
Timestamp: 2019-04-24 06:03:38+00:00

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The point from these three fact patterns is straightforward: when a party incurs attorneys’ fees because another party breaches a specific contract provision—regardless of what that provision is—those fees may be recoverable as actual damages.
So, when a party negotiates an arbitration clause in its contract, only to later find out it must incur attorneys’ fees to get what it bargained for, those fees are likely recoverable as actual damages and should be sought either as part of a counterclaim or a motion to compel arbitration. Otherwise the dispute resolution clause is rendered meaningless and can be breached with impunity.
1 Wheelabrator Air Pollution Control, Inc., v. City of San Antonio, 489 S.W.3d 448, 453 n. 4 (Tex. 2016).
2 Haubold v. Med. Carbon Research Institute, LLC, 2014 WL 1018008 *8 (Tex. App.—Austin 2014, no pet.); Turner v. Turner, 385 S.W.2d 230, 234 (Tex. 1964) (“the general rule is that  attorneys’ fees are not recoverable in the absence of some statutory or contract provision permitting their recovery, but  there are exceptions and modifications to this general rule.”).
3 Tex. Elec. Util. Const., Ltd. v. Infrasource Underground Const. Services, L.L.C., NO. 12-09-00287-CV, 2010 WL 2638066 *2 (Tex. App.—Tyler 2010, pet. granted) (citing Haden v. David J. Sacks, P.C., 2322 S.W.3d 580, 597 (Tex. App.—Houston [1st Dist.] 2007), rev’d in part on other grounds, 263 S.W.3d 919 (Tex. 2008) (emphasis in original).
4 Turner, 385 S.W.2d at 234.
5 Thomas v. Prudential Securities, Inc., 921 S.W.2d 847, 851 (Tex. App.—Austin 1996, no writ).
6 Lancer Corp. v. Murillo, 909 S.W.2d 122 (Tex. App.—San Antonio 1995, no writ).
7 At a minimum, the following discussion should serve as a reminder that parties double-check their dispute resolution clauses before filing or answering a lawsuit—lest they may face a demand to pay the other side’s fees or miss an opportunity to make such a demand.
8 No. 05-93-00849-CV, 1997 WL 142750 *4 (Tex. App.—Dallas 1997, writ denied).
9 465 S.W.3d 331, 355 (Tex. App.—Dallas 2015, no pet.).
10 No. 3:14-CV-3601-B, 2016 WL 4368302 *3 (N.D. Tex. 2016) (August 16, 2016).
16 588 S.W.2d 681, 683 (Tex. App.—Houston [14th Dist.] 1979, writ ref’d n.r.e.).
20 Id. (emphasis added) (citing Owens v. Withee, 3 Tex. 161 (1848); Brown v. Eubank, 443 S.W.2d 386 (Tex. Civ. App.—Dallas 1969, no writ); see also Fogal v. Stature Const., Inc., 294 S.W.3d 708, 722 (Tex. App.—Houston [1st Dist. 2009, pet. denied] (upholding arbitration award that “included attorneys’ fees as the damages caused by [plaintiff’s] breach of the arbitration agreement”). Other jurisdictions have reached similar conclusions. See Yakima County v. Yakima County Law Enforcement Officers Guild, 257 Wn.App. 304, 341, 237 P.3d 316 (2010) (reinstating arbitrator award of attorneys’ fees incurred in court action to enforce arbitration agreement); Intern’l Broth. of Elec. Workers, Local 1417 v. Thomas Electronics, Inc., No. CA 4-76-333, 1977 WL 1723 (N.D. Tex. 1977) (stating that a party can recover fees when compelling arbitration if the opposing party’s argument against arbitration is in bad faith, i.e., without justification, and lacks a reasonable chance of prevailing); Intern’l Longshoremen’s and Warehousemen’s Union, Local 6 v. Cutter Lab., 552 F. Supp. 979, 981 (N.D. Cal. 1982) (same).
21 Id. (emphasis added). Indeed, “arbitration is preferred by many as a way to resolve commercial disputes. It has many advantages over litigation in court, such as party control of the process,” as well as “typically lower costs and shorter time to resolution.” Alternative Dispute Resolution Section, State Bar of Texas, and the Texas Arbitration Council, The Benefits of Arbitration in Texas, 1 (December 2014). Additional advantages include privacy, awards which are final and enforceable, and “decision makers who are selected by the parties on the basis of desired characteristics and experience.” Id.
* David S. Salton is an associate in the Litigation Practice and International Arbitration Groups in the Houston, Texas office of Porter Hedges LP. Mr. Salton can be contacted at dsalton@porterhedges.com.

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