Opinion ID: 2764041
Heading Depth: 2
Heading Rank: 2

Heading: Fees as Damages for Tortious Interference

Text: Symetra also sought fees incurred in state court with respect to one annuitant, Kenneth Gross, as damages for tortious interference under Texas law. The district court granted Symetra’s request and awarded $87,859. Attorneys’ Fee Opinion, 2012 WL 5880799 at . Rapid now appeals that part of the district court’s ruling. An attorneys’ fee award in Texas will not be disturbed absent an abuse of discretion. Tex. Mut. Ins. Co. v. Sara Care Child Care Ctr., Inc., 324 S.W.3d 305, 319 (Tex. App. 2010); Am. Rice, Inc. v. Producers Rice Mill, Inc., 518 F.3d 321, 341 (5th Cir. 2008). However, any “findings of fact regarding the reasonableness of attorney’s fee awards are reviewed for clear error.” American Rice, 518 F.3d at 341. For example, the parties settled Thomas Remedies’s case during the litigation and 5 the district court’s injunction did not address it. Preliminary Injunction Opinion, 2007 WL 114497 at -13, 36. On remand, we leave it to the district court to decide whether, under these circumstances, Symetra can recover any fees related to the Remedies transfer. Rapid also argues that Symetra did not make the required Rule 26 disclosures, and therefore, Symetra cannot recover its fees. We do not address this argument, however, because it was raised for the first time in Rapid’s reply brief. Cavallini v. State Farm Mut. Auto Ins. Co., 44 F.3d 256, 260 n.9 (5th Cir. 1995). 12 Case: 13-20412 Document: 00512880370 Page: 13 Date Filed: 12/23/2014 No. 13-20412 Under Texas law, “‘necessary and reasonable attorneys’ fees and costs even though expended and incurred in previous litigation can be recovered as proper damages in a later suit based on tortious interference of [sic] contract.’” DP Solutions Inc., 353 F.3d at 431 (citing Texas Beef Cattle Co. v. Green, 883 S.W.2d 415, 430 (Tex. App. 1994) rev’d on other grounds, 921 S.W.2d 203 (Tex. 1996)). 6 But the “exception is limited to situations where the natural and proximate results and consequences of prior wrongful acts had been to involve a plaintiff . . . in litigation.” Id. (internal citation and quotation marks omitted). The natural and proximate result of Rapid’s conduct toward Gross was to drag Symetra into Indiana state court litigation, and therefore, the district court’s damage award was proper. Like the others, Gross contracted to sell his future payments to Rapid. Attorneys’ Fee Opinion, 2012 WL 5880799 at . Rapid did not obtain approval to transfer Gross’s future payments in Indiana state court. Id. Later, Rapid alleged that Gross breached the contract and compelled arbitration. Id. Gross “agreed” to an arbitration award that transferred all future payments to Rapid. Id. Rapid sought, and obtained, confirmation of the arbitration award in Texas state court. Id. Symetra, after finding out about the award in July 2005, successfully moved the Texas trial court to vacate it. Id. On appeal, the Texas First Court of Appeals held that 6 Texas appellate courts disagree on the recoverability of attorneys’ fees as damages. See Martin-Simon v. Womack, 68 S.W.3d 793, 797-98 (Tex. App. 2001) (“Under various circumstances, some of our sister courts of appeals have adopted an equitable exception to the general rule of non-recovery of attorney’s fees in tort cases. However, neither the Texas Supreme Court nor this court has adopted any [ ] exception to this rule and we decline to do so in this case.”) (footnotes omitted). And the Texas Supreme Court has not resolved the conflict, yet. See Akin, Gump, Strauss, Hauer & Feld, L.L.P. v. Nat’l Dev. & Research Corp., 299 S.W.3d 106, 119 (Tex. 2009) (“we need not and do not address whether the [litigation exception] should be adopted as Texas law”). Nevertheless, because this Court has already decided that the Texas Supreme Court would adopt the exception, we will continue to assume attorneys’ fees are recoverable as damages. See D.P. Solutions, 353 F.3d at 430-31. 13 Case: 13-20412 Document: 00512880370 Page: 14 Date Filed: 12/23/2014 No. 13-20412 the trial court lacked jurisdiction to vacate its judgment, but refused to enforce the arbitration award against Symetra. Id. While all this was happening, Gross contracted with Kent Niemeier to buy land. When Gross failed to complete the deal, Niemeier sued him and an Indiana court awarded Niemeier a nearly $113,000 judgment. Attorneys’ Fee Opinion, 2012 WL 5880799 at -20. In November 2005, Niemeier garnished a $150,000 payment that Symetra owed Gross. Id. In August 2006, before Symetra was scheduled to make the $150,000 payment, Rapid notified Symetra of the arbitration award and demanded the payment. Id. Based on the Indiana garnishment order and the Texas Court of Appeals’ ruling, Symetra refused. Id. Meanwhile, Niemeier moved to hold Symetra in contempt for not paying the garnished funds. Id. Symetra appeared in Indiana state court to contest the contempt motion. Id. It impleaded Rapid and asked for a declaration that Rapid’s attempted transfer via arbitration violated the Indiana Structured Settlement Protection Act. Id. The Indiana court agreed and declared Rapid’s attempted transfer invalid. See Niemeier v. Gross, No. 65C01-0504-PL-00105, 2008 WL 4892985 (Ind. Cir. Ct. Apr. 10, 2008). Contrary to Rapid’s assertions, Symetra’s involvement in the Indiana litigation was completely foreseeable. Rapid was on notice, at least since 2006 and probably earlier, that its arbitration scheme violated various State Structured Settlement Protection Acts. 7 An annuitant like Gross—a victim of 7 See In re Rapid Settlements Ltd.’s Application for Approval of Structured Settlement Payment Rights, 136 P.3d 765, 774-76 (Wash. App. 2006) (North Carolina); Allstate Settlement Corp. v. Rapid Settlements, Ltd., No. 06-4989, 2007 WL 1377667 (E.D. Penn., May 8, 2007) (Pennsylvania); Allstate Settlement Corp. v. Rapid Settlements, Ltd., 559 F.3d 164 (3d Cir. 2009) (same); Pac. Life Ins. Co. v. Rapid Settlements, Ltd., No. 06-CV-6554L, 2007 WL 2530098 (W.D.N.Y., Sept. 5, 2007) (New York); Pac. Life Ins. Co. v. Rapid Settlements, Ltd., 309 F. App’x 459 (2d Cir. 2009) (unpublished) (same); R&Q Reins. Co. v. Rapid Settlements Ltd., No. 06-14239-CIV, 2007 WL 2330899 (S.D. Fla., Aug. 13, 2007) (Florida); Allstate Life Ins. Co. v. Rapid Settlements Ltd, 328 F. App’x 289, 290 (5th Cir. 2009)