Opinion ID: 220543
Heading Depth: 3
Heading Rank: 3

Heading: Leedom Financial’s Cross-Appeal

Text: Leedom Financial presents two issues on cross-appeal: (1) the district court erred in failing to award attorney’s fees for the thirty-day time period after presentment; and (2) the district court erred in not awarding fees for work performed by Leedom Financial’s in-house counsel. Leedom Financial also asks us to remand this case to the district court so that the district court may determine its entitlement to attorney’s fees for this appeal. As to the first issue, we determine that the district court erred in holding that Leedom Financial could not recover attorney’s fees incurred during the thirty-day period following presentment.4 The district court was correct that the purpose of the presentment requirement was to allow a party to avoid liability for attorney’s fees by curing within thirty days. However, neither Texas case law nor Section 38.001 indicates that, once a party fails to tender performance, it does not then become liable for all reasonable attorney’s fees necessarily incurred in the prosecution of the claim. Although we have not found a Texas case speaking specifically to this issue, Texas courts have awarded attorney’s fees for that interim period. For example, in Welch v. Hrabar, 110 S.W.3d 601, 4 We note that Partners did not directly respond to this argument, but rather argued that the district court’s award was reasonable. 9 Case: 10-20626 Document: 00511533210 Page: 10 Date Filed: 07/07/2011 No. 10-20626 610-11 (Tex. App.—Houston [14th Dist.] 2003, pet. denied), the court awarded attorney’s fees to the appellant based on testimony from the appellant’s attorney that he worked forty hours on the case and typically charged $150 per hour. The attorney testified that at least thirty days before going to court, the attorney sent a certified letter to the appellee demanding payment of the bill, but payment was not received. Id. at 610. The court found that the elements of Chapter 38 were met and awarded attorney’s fees of $6,000, thereby seemingly compensating the attorney for all of the hours he spent on the case. Id. at 611. Although not specifically stating that the attorney received fees for work performed during the thirty days after presentment, the final award seems to encompass that work. Turning to the issue of fees for in-house counsel, we conclude that Leedom Financial waived its claim for such fees. During the hearing on attorney’s fees, Leedom Financial’s in-house counsel specifically stated that Leedom Financial was not seeking reimbursement of attorney’s fees for time in-house counsel spent on the case. Again in its brief to the district court on attorney’s fees, Leedom Financial stated that “the Leedom entities are not seeking any remuneration for the significant amount of [in-house counsel’s] time or travel costs spent in this action.” We note that the district court erred in stating that Leedom Financial could not recover an enhanced attorney’s fee award based on in-house counsel’s time because Leedom Financial hired outside counsel.5 However, Leedom Financial has not convinced us that it squarely presented the issue of in-house counsel fees to the district court. 5 Texas law allows for recovery of in-house counsel’s fees. See Tesoro Petroleum Corp. v. Coastal Ref. & Mktg., Inc., 754 S.W.2d 764, 766 (Tex. App.—Houston [1st Dist.] 1988, writ denied) (holding that a successful claimant may recover attorney’s fees for the legal services of in-house counsel); see also Campbell, Athey & Zukowski v. Thomasson, 863 F.2d 398, 400 (5th Cir. 1989) (finding that the unambiguous and direct holding in Tesoro that a successful claimant may recover attorney’s fees for in-house counsel represented the approach a Texas court would take in interpreting the attorneys’ fees statute). 10 Case: 10-20626 Document: 00511533210 Page: 11 Date Filed: 07/07/2011 No. 10-20626 Finally, we grant Leedom Financial’s request that we remand this case to the district court to determine its entitlement to appellate attorney’s fees. Partners has not addressed this request, and we have granted similar requests in the past. See Instone Travel Tech Marine & Offshore v. Int’l Shipping Partners, Inc., 334 F.3d 423, 433 (5th Cir. 2003) (remanding to allow the district court to determine whether to award appellate attorney’s fees); Penton v. Am. Bankers Ins. Co., 115 F. App’x 685, 687 (5th Cir. 2004) (unpublished) (same).6