Opinion ID: 2455468
Heading Depth: 1
Heading Rank: 3

Heading: Defendant's Attorneys' Fees

Text: The Donwerths next complain that the court of appeals erred in concluding that Preston II was entitled to recover attorneys' fees against them under section 17.50(c), which provides as follows: On a finding by the court that an action under this section was groundless and brought in bad faith, or brought for the purpose of harassment, the court shall award to the defendant reasonable and necessary attorney's fees and court costs. We hold that the court of appeals erred in holding that the Donwerths' action was groundless and brought in bad faith. The jury found, in response to a single issue, that the Donwerths' claim was both groundless and brought in bad faith. The court of appeals correctly held that a determination of groundlessness is for the court. However it erred in concluding that the action brought by the Donwerths was groundless. The court stated: Because the Donwerths could come forward with no evidence to support a DTPA complaint against Preston II, their suit was without arguable basis in fact and, therefore, groundless as a matter of law. 744 S.W.2d at 145. Even if the court's approach were correct, our holding that there was some evidence to support the jury's answer to the DTPA inquiry would require a reversal on the determination of groundlessness. However we find the whole approach of the court of appeals flawed. To equate groundlessness with no evidence would preclude the award of attorneys' fees in obviously fraudulent or malicious actions when some evidence was presented, yet discourage legitimately wronged consumers from seeking the protections afforded by the Act for fear of failure in court. Groundless under the DTPA has the same meaning as groundless under Rule 13 of the Texas Rules of Civil Procedure: [N]o basis in law or fact and not warranted by good faith argument for the extension, modification, or reversal of existing law. Tex.R.Civ.P. 13. Even evidence that is legally inadmissible or subject to other defects may be considered by a court in determining whether an arguable basis existed for the suit, provided there is some good faith basis for belief that the tendered evidence might be admissible or that it could reasonably lead to the discovery of admissible evidence. [2] Cf. Tex.R. App.P. 84 (appeal without sufficient cause); Fed.R.Civ.P. 11 (reasonable basis for pleading or motion). As a matter of law, the Donwerths' claim was not groundless. The court of appeals next held that the existence of bad faith is an issue for the finder of fact, and that there was some evidence of bad faith to support the jury's finding. This was also erroneous. Under the Act, defendants may recover their attorneys' fees when the court finds the DTPA action was groundless and brought in bad faith, or was brought for the purpose of harassment. Tex.Bus. & Com. Code § 17.50(c) (emphasis added). See Leissner v. Schott, 668 S.W.2d 686 (Tex. 1984). Despite the plain words of the statute, a number of courts of appeals have interpreted this section as providing that the finder of fact determines bad faith and harassment while the court determines whether the action is groundless. See Mader v. Aetna Casualty and Surety Co., 683 S.W.2d 731, 734 (Tex.App.-Corpus Christi 1984, no writ); Parks v. McDougall, 659 S.W.2d 875, 876-77 (Tex.App.-San Antonio 1983, no writ); LaChance v. McKown, 649 S.W.2d 658, 661 (Tex.App.- Texarkana 1983, writ ref'd n.r.e.); Computer Business Services, Inc. v. West, 627 S.W.2d 759, 761 (Tex.App.-Tyler 1981, writ ref'd n.r.e.); O'Shea v. International Business Machines Corp., 578 S.W.2d 844, 848 (Tex.Civ.App.-Houston [1st Dist.] 1979, writ ref'd n.r.e.). But see Blizzard v. Nationwide Mut. Fire Ins. Co., 756 S.W.2d 801, 802-10 (Tex.App.-Dallas 1988, no writ). While this approach is admittedly appealing, it is contrary to the plain words of the statute. The court, not the factfinder, must determine the existence of groundlessness, bad faith and harassment under section 17.50(c). [3] Under the statute, attorneys' fees may be awarded against the consumer if the court determines that the action was brought for the purpose of harassment. See Leissner v. Schott, 668 S.W.2d at 686. Because Preston II did not complain of the trial court's failure to find that the suit was brought for the purpose of harassment, Preston II has not preserved any claim to attorneys' fees on that ground. Because the trial court expressly refused to find the action was groundless, and because as a matter of law the action was not groundless, it appears Preston II could not have prevailed on a claim the suit was brought for the purposes of harassment in any event. Section 17.44 of the DTPA provides that the Act shall be liberally construed and applied to promote its underlying purposes, which are to protect consumers against false, misleading, and deceptive business practices, unconscionable actions, and breaches of warranty and to provide efficient and economical procedures to secure such protection. This legislative direction for a liberal construction to protect consumers means, at the very least, that the requirement that the suit be brought for purposes of harassment must mean it was brought for the sole purpose of harassment. See Curry, The 1979 Amendments to the Deceptive Trade PracticesConsumer Protection Act, 32 Baylor L.Rev. 51, 67 (1980). Because any purpose for recovering money damages, however small, as a motivating factor would defeat such a finding, it is difficult to conceive of a case which was not groundless but was brought for purposes of harassment. In Leissner v. Schott , this court, in refusing the application for writ of error, no reversible error, held that a judgment for attorney's fees could be based on a finding that a suit was brought for the purpose of harassment even in the absence of a finding of groundlessness. 668 S.W.2d at 686. However, neither party in Leissner urged that the failure to find groundlessness necessarily precluded a finding of purposes of harassment.