Court Opinion

ID: 4053355
Source: CourtListenerOpinion
Date Created: 2016-09-29 03:36:12.648165+00
Date Added: 2024-06-11T14:27:24.515728
License: Public Domain

ACCEPTED
                                                                                           01-14-00687-CV
                                                                                 FIRST COURT OF APPEALS
                                                                                         HOUSTON, TEXAS
                                                                                      3/13/2015 3:53:40 PM
                                                                                       CHRISTOPHER PRINE
                                                                                                    CLERK

                          Cause No. 01-14-00687-CV
                     __________________________________
                                                                         FILED IN
                           IN THE COURT OF APPEALS                1st COURT OF APPEALS
                                                                      HOUSTON, TEXAS
                        FOR THE FIRST DISTRICT OF TEXAS
                                                                  3/13/2015 3:53:40 PM
                                HOUSTON, TEXAS                    CHRISTOPHER A. PRINE
                                                                          Clerk

     THE BETTER BUSINESS BUREAU OF METROPOLITAN HOUSTON, INC.,
   THE BETTER BUSINESS BUREAU OF METROPOLITAN HOUSTON EDUCATION
   FOUNDATION, DAN PARSONS, CHRIS CHURCH, CHURCH ENTERPRISES, INC.,
    GARY MILLESON, RONALD N. MCMILLAN, D’ARTAGNAN BEBEL, MARK
           GOLDIE, CHARLIE HOLLIS, AND STEVEN LUFBURROW,
                                          Appellants,
                                  v.
     JOHN MOORE SERVICES, INC. AND JOHN MOORE RENOVATION, LLC,
                                          Appellees.

           Appeal from the 269th District Court of Harris County, Texas
                             Cause No. 2013-76215

    JOHN MOORE SERVICES, INC. AND JOHN MOORE RENOVATION, LLC’S
   RESPONSE TO APPELLANTS’ OBJECTIONS TO CONSOLIDATION OF RELATED
                        CASES FOR SUBMISSION

      COME NOW Appellees John Moore Services, Inc. and John Moore

Renovation, LLC and file this Response to Appellants’ Objections to

Consolidation of Related Cases for Submission and in support thereof would

respectfully show as follows:

      1.     Appellees support the consolidation of these matters on appeal. As

stated in their brief on the merits, Appellees argue that the first and second lawsuits

should have been consolidated in the trial court. Thus, the proliferation of appeals

is not John Moore’s doing. Indeed, John Moore (1) attempted to bring these
claims in the original litigation by amended pleading; (2) filed a separate suit only

when the Houston Better Business Bureau asserted an inapplicable stay provision

to prevent that amendment; and (3) asked the trial court to consolidate the matters

after the purported stay had expired. CRI:10-1, 967, 905, 1100 (Clerk’s Record in

Cause No. 01-14-00687-CV). If the trial court had consolidated the two actions,

there would have been only one appeal after the new claims were decided.

      2.       Rather, it was the Houston Better Business Bureau’s rush to obtain an

award of attorneys’ fees that caused these matters to be separately submitted to this

Court. One of Appellees’ arguments in the first lawsuit was whether the claim for

fees was ripe due to the pendency of the antitrust (and other) claims asserted in the

second lawsuit. Ex. A at 15 (Supplemental Clerk’s Record in Cause No. 01-14-

00906-CV) (Supplemental Record Requested).            Because the Houston Better

Business Bureau has not prevailed on all claims, an award of attorneys’ fees would

be premature and would serve neither justice nor equity. Id. Thus, the two appeals

are related.

      3.       Consolidation now would serve the ends of justice and efficiency.

The parties could have one judgment that decides all of their issues. Consider the

difficulties if the attorneys’ fees judgment were affirmed and the antitrust claims

were remanded for trial on the merits. If the appeals continue to proceed on

separate tracks, the confusion will only multiply.

                                          2
                                       Respectfully submitted,

                                       /s/ Douglas Pritchett, Jr.
                                       Douglas Pritchett, Jr.
                                       State Bar No. 24007877
                                       dpritchett@johnsontrent.com
                                       Lori Hood
                                       State Bar No. 09943430
                                       JOHNSON, TRENT, WEST & TAYLOR, L.L.P.
                                       919 Milam Street, Suite 1700
                                       Houston, Texas 77002
                                       (713) 222-2323 (Telephone)
                                       (713) 222-2226 (Facsimile)

                                       ATTORNEYS FOR APPELLEES
                                       JOHN MOORE SERVICES, INC. AND
                                       JOHN MOORE RENOVATION, LLC

                         CERTIFICATE OF SERVICE
      On this the 13th day of March 2015, the foregoing was served on the
following persons by electronic service:

        Lauren B. Harris
        Jeffrey R. Elkin
        M. Harris Stamey
        Porter Hedges LLP
        1000 Main Street, 36th Floor
        Houston, Texas 77002
        Attorneys for Appellants

                                       /s/ Douglas Pritchett, Jr.
                                       Douglas Pritchett, Jr.

400148.1-03122015

                                         3
                                                                                                               6/12/2014 6:49:12 PM
                                                                                          Chris Daniel - District Clerk Harris County
                                                                                                              Envelope No. 1529641
                                                                                                                 By: GAYLE FULLER

                                               NO. 2012-35162

JOHN MOORE SERVICES, INC. and                            §                  IN THE DISTRICT COURT OF
JOHN MOORE RENOVATION, LLC                               §
                                                         §
v.                                                       §
                                                         §                      HARRIS COUNTY, TEXAS
THE BETTER BUSINESS BUREAU OF                            §
METROPOLITAN HOUSTON, INC.                               §            269th JUDICIAL DISTRICT COURT

    PLAINTIFFS’ RESPONSE AND OBJECTION TO DEFENDANT’S MOTION FOR AWARD
      OF ATTORNEYS’ FEES, COURT COSTS, EXPENSES, AND SANCTIONS AND FOR
                        ENTRY OF FINAL JUDGMENT AND
             PLAINTIFFS’ MOTIONS TO CONSOLIDATE AND TO COMPEL

        Plaintiffs, John Moore Services, Inc. and John Moore Renovation, LLC, (“John Moore”

or “Moore”) hereby file this their Response and Objection to Defendant, The Better Business

Bureau of Metropolitan Houston, Inc.’s (“Houston BBB” or “BBB”) Motion for Award of

Attorneys’ Fees, Court Costs, Expenses, and Sanctions and for Entry of Final Judgment

(“Motion”) and, in support thereof, state as follows.

                                  SUMMARY OF THE ARGUMENT

        The Houston BBB, by and through its counsel Porter Hedges, LLC, ("Porter Hedges"),

seeks an award of $390,858.35 in fees, $6,237.77 in expenses, $62.35 in court costs, and $50,000

in sanctions. There are two considerations to an award of attorneys’ fees under Chapter 27: (1)

whether they are reasonable and necessary and (2) whether they are equitable and just.1 The first

consideration is a question for the factfinder, which in this case is a jury. The second is a

question for the judge sitting in equity.

1
        While section 27.009 says “reasonable attorney’s fees,” necessity is inseparable under Texas jurisprudence
from reasonableness. See infra, at p.6. In other words, unnecessary fees would be unreasonable. Therefore, this
motion includes the concept of necessity when discussing the fact issues that must be decided.

                                                                                              bñÜáÄáí=^
           The primary issue before the trier of fact will be whether the amount sought by Porter

Hedges in its Motion is reasonable and necessary. TEX. CIV. PRAC. & REM. CODE § 27.009(a).

As the Houston BBB seeks nearly $400,000.00 in fees and expenses, close examination and

careful consideration of its Motion and evidence is indeed warranted. It is against this backdrop

that the trier of fact is asked to review the fees and expenses at issue. Even if the Houston BBB

has presented some evidence that the fees are reasonable and necessary, it has not presented

conclusive evidence. Therefore, a fact finding will be required, and John Moore has requested a

jury and paid the jury fee in this case.

           The primary issue before the judge will be whether the amount sought by Porter Hedges

is just and equitable and whether John Moore must bear sanctions. TEX. CIV. PRAC. & REM.

CODE § 27.009(a), (b). Because the Houston BBB has not achieved a dismissal of all claims that

John Moore has brought, it is not at all clear that it would be just or equitable to award attorneys’

fees or sanctions based on the Houston BBB’s partial victory. Furthermore, the Houston BBB’s

own arguments emphasize the uncertainty that the parties confronted with this newly enacted

statute.     There was a great amount of uncertainty in 2012 whether Chapter 27 should be

interpreted to apply to the claims made in this lawsuit, or what standard of proof John Moore

would be required to establish to survive a motion to dismiss. Under these circumstances, it is

neither equitable nor just to award almost half a million dollars in fees and sanctions against John

Moore.

                                           BACKGROUND

           John Moore filed suit against the Houston BBB for reputational torts, fraud, and

interference with prospective and existing contracts. The BBB argued that the claims against it

arose out of its right to participate in government by freely speaking, associating, and petitioning

                                                 2
and filed a motion to dismiss under section 27.005 of the Texas Civil Practice and Remedies

Code (the Anti-SLAPP statute).

         During the pendency of the Anti-SLAPP motion, this Court allowed only limited

discovery, i.e., the production of BBB consumer complaints.

         In response to the Anti-SLAPP motion, John Moore argued that the statute did not apply

under the circumstances, and presented evidence in support of each essential element of its

claims. The Court signed an order denying the BBB’s motion to dismiss.

         In response to this Court’s denial of its motion, the Houston BBB elected to file an

interlocutory appeal. As the Houston BBB notes, the preparation of this case for trial continued.

Both parties engaged in discovery. In the end, the First Court of Appeals reversed this Court’s

order, and John Moore’s petition for review was denied. The case was remanded to the trial

court for further proceedings.

         In light of the court of appeals’ decision, John Moore amended it petition to assert causes

of action (1) that were supported and suggested by the evidence discovered after the motion to

dismiss was denied and (2) that would not implicate the Houston BBB’s speech rights. Pursuant

to the Houston BBB’s motion, that amended petition was struck, forcing John Moore to file the

causes of action in a separate suit and giving the Houston BBB another bite at the Chapter 27

apple.

         Defendant now seeks recovery of attorney’s fees, expenses and court costs under section

27.009(a) of the Anti-SLAPP statute. The statute provides that costs and “reasonable” attorney’s

fees shall be awarded to the moving party as “justice and equity may require.” Id. As noted

below, the determination as to the reasonableness of fees is a fact issue for the trier of fact. John

Moore reiterates its demand from its original petition that a jury consisting of twelve good and

                                                  3
lawful jurors be duly qualified, tested, selected, and impaneled and the case proceed to trial on the

reasonableness and necessity of the requested attorney’s fees, expenses and court costs and any and

all other fact issues.

        John Moore also asks that the court consolidate the cases.

                                           ARGUMENT

        The Houston BBB does not state the basis for its motion. In the latest conference with

the Court, the Houston BBB has characterized it as a motion for judgment in preparation for a

bench trial. At other times, the Houston BBB’s attorneys have characterized it as a motion for

summary judgment. In either event, the motion cannot be granted.

        First, a bench trial is not appropriate. John Moore filed a jury demand, paid the fee, and

this case is pending on the jury docket. Reasonableness of attorneys’ fees is a question for the

fact finder, which, in this case, is a jury. Second, the Houston BBB has not presented conclusive

evidence that the fees are reasonable and necessary. Indeed, it is not certain that the Houston

BBB has presented competent evidence at all. Finally, an award of fees would be neither just

nor equitable at this time, and the question of sanctions is premature and overreaching as to

amount.

I.      REASONABLENESS OF ATTORNEYS’ FEES IS AN ISSUE FOR THE JURY.

        John Moore is entitled to a jury trial on the question of reasonableness of attorneys’ fees.

Chapter 27 requires a determination of “reasonable attorney’s fees.” TEX. CIV. PRAC. & REM.

CODE § 27.009(a)(1). Because this is a fact issue and because John Moore has requested a jury

trial in this case, this issue cannot be tried to the bench. The BBB even admits in its Motion that

whether fees are reasonable and necessary is a question of fact, citing Bocquet v. Herring, 972
S.W.2d 19, 20-21. (Tex. 1998). See Motion, p. 4.

                                                  4
         Fee shifting provisions in which the reasonableness of a fee must be determined present a

jury issue. The Texas Supreme Court has consistently interpreted similar fee shifting provisions

to raise fact questions on the issues of reasonableness and necessity that entitle the party against

whom the fees are to be assessed to demand a jury trial. See Transcontinental Ins. Co. v. Crump,

330 S.W.3d 211, 213 (Tex. 2011) (and cases cited therein); see also Commerce & Indus. Ins. Co.

v. Ferguson-Stewart, 339 S.W.3d 744, 748-49 (Tex. App.—Houston [1st Dist.] 2011, pet.

denied) (reversing and remanding for a jury trial the bench trial judgment awarding attorneys’

fees). Chapter 27 is indistinguishable from other similar fee shifting provisions as discussed

below.

         Like the Citizens’ Participation Act, the Texas Labor Code mandates that “the court”

award attorneys’ fees to a workers’ compensation claimant under a fee shifting provision.

Crump, 330 S.W.3d at 213. The injured worker submitted his attorneys’ fees to the bench and

the trial court awarded fees, but the insurer argued that it was entitled to a jury determination

under the statute. Id. at 214. The Texas Labor Code provides:

         An insurance carrier . . . is liable for reasonable and necessary attorney’s fees . . .
         if the claimant prevails on an issue on which judicial review is sought . . . . [T]he
         court shall apportion and award fees to the claimant’s attorney only for the issues
         on which the claimant prevails. In making that apportionment, the court shall
         consider the factors prescribed . . . .

TEX. LAB. CODE § 408.221 (emphasis added). The Texas Supreme Court noted that the statute

mentioned “the court” but was “silent on the critical judge-or-jury question.” Crump, 330
S.W.3d at 229. The Court considered this silence to create an ambiguity and relied on the

common law interpretations of other fee-shifting provisions to resolve the ambiguity. Id.

         The Court noted that fee shifting provisions generally raise a fact issue. Id. at 230 (“In

general, the reasonableness of statutory attorney’s fees is a jury question.”). For example, the

Public Information Act also states that “the court” is to assess the amount of reasonable and
                                                   5
necessary fees. Id. at 230 (citing TEX. GOVT. CODE § 552.323). The Texas Supreme Court

determined this to be a jury question. See City of Garland v. Dallas Morning News, 22 S.W.3d
351, 367 (Tex. 2000).

        Likewise, the Declaratory Judgment Act permits “the court” to award reasonable and

necessary fees. TEX. CIV. PRAC. & REM. CODE § 37.009. Because reasonableness and necessity

are both fact issues, they are questions that are committed to a jury. Crump, 330 S.W.3d at 231

(citing Bocquet, 972 S.W.2d at 21). Applying this general rule to the statute in Crump, the Court

decided that the Texas Workers’ Compensation Act’s fee shifting provision preserved the right

to “submit the issue of the reasonableness and necessity of a claimant’s attorney’s fees, where

disputed, to a jury.” Id. at 231.

        Thus, in three other fee shifting provisions mandating or authorizing “the court” to award

fees, the Texas Supreme Court has determined that “the court” means the jury when it comes to

the questions of reasonableness or necessity.2 Just like those provisions, section 27.009 of the

Civil Practice and Remedies Code requires “the court” to award “reasonable attorney’s fees.”

TEX. CIV. PRAC. & REM. CODE § 27.009(a)(1). Section 27.009 should be interpreted consistently

with the fee shifting provisions discussed above. Therefore, “the court” must mean “the jury” on

the issue of reasonableness.

        As set forth in the Hood Affidavit, there is at least a fact issue as to whether the Houston

BBB’s fees are reasonable. Ex. A (Affidavit of Lori Hood). John Moore has requested a jury

and paid the jury fee. This case is on the jury docket. John Moore is entitled to have a jury find

these facts.

2
        On the other hand, “the court” refers to the judge when it comes to determining whether justice or equity
would permit the award of fees. Crump, 330 S.W.3d at 231.

                                                       6
II.    THE HOUSTON BBB HAS NOT PRESENTED CONCLUSIVE EVIDENCE                         THAT THE
       ATTORNEYS’ FEES ARE REASONABLE AND NECESSARY.

       The Houston BBB’s evidence of attorneys’ fees is not conclusive. Indeed, it may not

even be legally sufficient.

       A.      The Houston BBB Must Provide Sufficient Evidence to Allow the Fact
               Finder to Make a Determination.

       The Anti-SLAPP statute mandates the award of “reasonable” attorneys’ fees in an

amount that satisfies “justice and equity.” TEX. CIV. PRAC. & REM. CODE § 27.009(a)(1). Texas

jurisprudence has always considered reasonableness and necessity together. See, e.g., El Apple I,

Ltd. v. Oivas, 370 S.W.3d 757, 762-63 (Tex. 2012) (considering necessity of the fees as a

component of reasonableness). Thus, the Houston BBB is tasked with providing evidence that

its attorneys’ fees are both reasonable and necessary.

       For the fact finder to make a meaningful determination and for the Court to conduct a

meaningful review, the Houston “must provide sufficient details of the work performed.” Id. at

764. This includes, “at a minimum, documentation of the services performed, who performed

them and at what hourly rate, when they were performed, and how much time the work

required.” Id. The El Apple requirements have been elaborated upon to require “evidence of the

time spent on specific tasks.” Long v. Griffin, __ S.W.3d __, 2014 WL 1643271, at *3 (Tex.

April 25, 2014).

       The BBB bears the burden of proof in support of its Motion, and cannot simply provide

general statements of the time spent multiplied by the hourly rate to the trier of fact. Id. The

Texas Supreme Court has provided further guidance in the form of factors that should be

considered when determining whether the requested compensation is reasonable.              These

guidelines are known as the “Anderson Factors” and are set forth below:

                                                 7
       a.      the time and labor required, the novelty and difficulty of the questions involved,
               and the skill required to perform the legal service properly;

       b.      the likelihood that the acceptance of the particular employment will preclude
               other employment by the lawyer;

       c.      the fee customarily charged in the locality for similar legal services;

       d.      the amount involved and the results obtained;

       e.      the time limitations imposed by the client or by the circumstances;

       f.      the nature and length of the professional relationship with the client;

       g.      the experience, reputation, and ability of the lawyer or lawyers performing the
               services; and

       h.      whether the fee is fixed or contingent on results obtained or uncertainty of
               collection before the legal services have been rendered.

Arthur Anderson & Co. v. Perry Equip. Corp., 945 S.W.2d 812, 818 (Tex. 1997).

       John Moore objects to the BBB’s purported evidence in support of its Motion, see infra,

pp. 15-17, and asserts that the jury is entitled to assess the credibility of the BBB’s witnesses and

determine the weight of the evidence and decide whether the BBB has met its burden of proof to

recover fees and expenses in this matter.

       B.      The Houston BBB Does Not Even Purport to Present Conclusive Evidence
               That Its Fees Are Reasonable and Necessary.

       Even if the Houston BBB’s evidence passes the legal sufficiency test, it is certainly not

conclusive. Indeed, the fees may well be unreasonable as a matter of law.

               1.      The Houston BBB’s proposed fee award is “patently unreasonable”
                       according to Justice Hecht.

       In a case involving an eight-day trial, three depositions, and approximately 2,500 pages

of document production, Justice Hecht opined that 890 hours of attorney time at a rate of over

$500 per hour was “patently unreasonable.” El Apple I, Ltd., 370 S.W.3d at 765 (Hecht, J.

concurring, joined by Wainwright, J. and Willet, J.). Justice Hecht also found it significant that

                                                 8
the attorneys for the opposing side spent only 266.7 hours at less than half the billing rate. Id. at

766. As Justice Hecht said, “Statutory fee-shifting is not a bonanza. It should take into account

what the market should.” Id.

       In this case, the Houston BBB prepared and filed eight contested pleadings and motions

in this Court including its 3-page answer and 10-page motion to dismiss. Ex. A ¶ 13. The

Houston BBB also produced approximately 12,000 pages of documents and participated in

several hearings. Id. In the appellate courts, the Houston BBB prepared and filed a brief of

appellant, a reply brief of appellant, and a response to petition for review. Id. There was no trial.

Discovery was limited, and no depositions were taken. Id. The Houston BBB seeks a bonanza

for its attorneys that is not consistent with the market.

       Furthermore, the fee invoices covering the periods from June 2012 through May 2013

(from the invoice dated July 23, 2012 through the invoice dated June 16, 2013) do not satisfy the

most basic requirement by showing the time billed and the rate for that time.

       That proof should include the basic facts underlying the lodestar, which are: (1)
       the nature of the work, (2) who performed the service and their rate, (3)
       approximately when he services were performed, and (4) the number of hours
       worked.

El Apple, 370 S.W.3d at 763. These invoices do not show the rate for the persons performing the

work at the time they performed the work. Although the Elkin Affidavit provides billing rates

for certain attorneys and legal staff, it does not provide the rates for all of the persons identified

in the invoices, and it does not provide the rates that were in effect at the time of the invoice.

Therefore, these invoices may not be considered.

       Finally, the Houston BBB’s evidence of reasonableness does not satisfy the Long v.

Griffin standard. Long, at *2. The billing invoices provided include 610 entries. Of those, only

373 provide the time spent on a specific task as required by the Texas Supreme Court. Id.; See

                                                   9
Ex. B-1 (Affidavit of Amelia Irving). The other 267 combine multiple tasks and actions into a

single time entry (i.e., block billing), making it impossible to determine whether the time was

well-spent or wasted. Id. This form of block billing does not even permit the fact finder to break

the hours spent down into general categories such as discovery, research, pleadings, witnesses,

etc., and even if this kind of general breakdown were possible, it is inadequate under Supreme

Court precedent. See El Apple, 370 S.W.3d at 763 (holding that such categorization “provides

none of the specificity needed for the trial court to make a meaningful lodestar determination.”).

       Without even the ability to consider the time spent on general activities, much less

specific tasks, the invoices are insufficient to support a finding that the fees included therein are

reasonable and necessary.

               2.      The Houston BBB has not produced conclusive evidence that the fees
                       represented in the invoices have been incurred.

       Section 27.009 only allows recovery of fees that have been “incurred.” TEX. CIV. PRAC.

& REM. CODE § 27.009(a)(1). The Elkin Affidavit does not establish which, if any, of the fees

invoiced were actually incurred by the Houston BBB in the sense that they were paid or that

there is an obligation to pay them in full. The Elkin Affidavit states that “Porter Hedges has

received payment for all work,” but it does not specify what that payment amount was.

Therefore, the Elkin Affidavit does not conclusively establish that the fees requested were

incurred.

               3.      The Houston BBB has not produced conclusive evidence that the
                       proposed fee award is reasonable and necessary.

       As discussed above, the Houston BBB’s invoices and the Elkin Affidavit do not satisfy

the Texas Supreme Court’s specificity requirements and are, therefore, not even some evidence

of the reasonableness of fees, much less conclusive evidence.          Indeed, much of the Elkin

Affidavit is conclusory, see infra, pp. 15-17, because it is largely an expression of opinion

                                                 10
without the underlying facts necessary to support the conclusion. Hou-Tex., Inc. v. Landmark

Graphics, 26 S.W.3d 103, 112 (Tex. App.—Houston [14th Dist.] 2000, no pet.). Even if the

evidence were competent and were considered, it would raise a fact issue at best.

       The reasonableness of the time spent in representing the Houston BBB is discussed only

in general terms in paragraphs 7 through 9. Paragraph 7 lists the kinds of legal tasks that one

would expect in any lawsuit, but only in vague terms. Paragraph 8 includes a chart of the month-

by-month billing. Paragraph 9 is intended to prove up the invoices. In paragraph 10, the time is

divided into four overlapping general categories. Paragraph 11 restates the total fees, costs, and

expenses allegedly incurred. Paragraph 12 provides a conclusory estimate of future legal fees.

None of these paragraphs discuss the reasonableness of the fees, much less relate the entries on

the invoices to any particular tasks and explain why they are reasonable. In short, they do not

provide any evidence that would allow a finder of fact to make a determination as to

reasonableness.

       Following is a review of the Anderson factors and the Houston BBB’s treatment of each

in the Elkin Affidavit.

                          a.   The time and labor required, the novelty and difficulty of the
                               questions involved, and the skill required to perform the legal
                               service properly.

       The work on this case was not complex or difficult for the Houston BBB. Ex. A ¶¶ 16-

17. Chapter 27 was designed to allow a defendant to easily and efficiently impose an immediate

burden on the plaintiff to present “clear and specific prima facie evidence” of the elements of its

claim. Id. The Houston BBB accomplished this with a short, ten page motion to dismiss.

       While Chapter 27 was a new statute in Texas, it was based on a model that has been

adopted in many states, and there had already been a number of other cases in Texas in which it

had been used by other Better Business Bureaus (notably Dallas) as a defensive tactic. Id. ¶ 17.
                                                11
Therefore, the Houston BBB did not have to reinvent the wheel. Furthermore, the legal briefing

on the interpretation of the statute in the trial court and the court of appeals involved a

straightforward application of well-known and long-established precedent. Id. ¶ 16. This text-

based statutory construction was not difficult and involved legal authority that is so well known

that little research should have been necessary to supply the principles. Id.

                       b.     The likelihood that the acceptance of the particular
                              employment will preclude other employment by the lawyer.

       Porter Hedges acknowledges in the Elkin Affidavit, that taking on this engagement did

not prevent the firm from accepting any other clients.

                       c.     The fee customarily charged in the locality for similar legal
                              services.

       For a company the size of the Houston BBB, the rates indicated in the Elkin Affidavit

and, presumably, charged in the attached invoices were excessive. Ex. A ¶ 15. In the stratified

Houston legal market, small businesses like the Houston BBB (an in particular, non-profits)

simply do not engage firms that charge fees in the upper range of the market. Id. If they do

engage such firms, they do so at substantially discounted rates or as a pro bono matter. Id. For

example, the rates charged by John Moore’s attorneys were as much as 40% lower, resulting in

total fees incurred by John Moore of only $165,000 for precisely the same litigation. Id.

                       d.     The amount involved and the results obtained.

       Except for a handful of days in the fall of 2013, before its First Amended Original

Petition was struck, John Moore did not seek a damage multiplier. Ex. A ¶ 19. Therefore, with

the exception of the fees incurred to contest this filing, Porter Hedges’ rationale that it spent

extra time on the case for the other 21 months of litigation due to this pleading is disingenuous.

Id.

                                                12
       Furthermore, Porter Hedges has obtained only a partial dismissal of John Moore’s claims

to date. This result, while beneficial to the Houston BBB, does not justify the suggestion that the

Houston BBB’s position has been fully vindicated or that John Moore’s claims have no merit.

An award of attorneys’ fees is premature on this factor.

                       e.      The time limitations imposed by the client or by the
                               circumstances.

       There were no onerous time limits imposed in this litigation. Ex. A ¶ 20. Chapter 27

allows 60 days to prepare and file a motion to dismiss.           TEX. CIV. PRAC. & REM. CODE

§ 27.003(b). The Houston BBB had ample time to prepare the ten-page motion. Ex. A ¶ 20.

       In the interlocutory appeal, the Houston BBB requested and received two extensions of

time to file its principal brief, which John Moore did not oppose. Id. In the end, the Houston

BBB had 108 days to prepare and file its brief of appellant. Id. John Moore filed its brief in

response 35 days later. Id. After yet another extension of time, the Houston BBB had 27 days to

prepare and file a brief in reply. Id. There was no time pressure in the appal.

                       f.      The nature and length of the professional relationship with the
                               client.

       Porter Hedges states that it has an almost 20 year relationship with the Houston BBB.

The Houston BBB is a not-for-profit enterprise that markets itself as a performer of good works

for the consumers of Houston. Ex. A ¶ 15. These types of clients are often represented pro bono

or at substantially discounted rates and/or capped legal fees. Id. The Houston BBB’s evidence is

silent on its billing arrangement with the Porter Hedges. But the length of this relationship and

the nature of the Houston BBB’s activities suggest that, in the market, it would be able to engage

counsel for substantially less than the amount that it now suggests that it incurred. Id. ¶ 21.

                                                 13
                       g.      The experience, reputation, and ability of the lawyer or
                               lawyers performing the services.

        Paragraph 14 set out the experience of some of the timekeepers who appear on the

invoices. But there are many entries that include timekeepers whose experience is unstated.

There is no evidence of reputation or of ability for any timekeeper.

        Assuming that the lawyers involved were all “able” to a degree that is proportionate to

their experience, it appears that the time spent on this matter is not reflective of that ability. Ex.

A ¶ 22. For example, the appeal primarily involved basic, well-understood statutory construction

principles. Id ¶ 16. No new legal ground was explored in the textual analysis. Id. It was simply

a plain meaning-based legal argument. Id. The number of Texas Supreme Court cases setting

out the plain language standard of interpretation are so numerous, it would be difficult not to

know at least one off the top of the head. It is clear to John Moore that this legal argument

should not have required so much time to prepare both in terms of research and of drafting such

that it required two additional months of work. Id. ¶¶ 20, 22.

                       h.      Whether the fee is fixed or contingent on results obtained or
                               uncertainty of collection before the legal services have been
                               rendered.

        The Houston BBB states that its fee agreement was fixed, but the agreement is not

provided. Therefore, it is not certain what fees were incurred by the Houston BBB. The Elkin

Affidavit states that “payment” has been made, but does not specify the amount of that payment.

        Furthermore (and this may be an error, it is so unusual), the Elkin Affidavit states that the

fees are billed to the nearest six-tenths of an hour. If correct, this policy would be a substantial

departure from customary practice in the Houston legal market, and it would result in an

inordinate inflation of the Houston BBB’s legal invoices that would not be reasonable. Ex. A

¶ 23.

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III.   AN AWARD OF FEES AT THIS JUNCTURE WOULD BE NEITHER JUST NOR EQUITABLE.

       For two reasons, the award of fees suggested by the Houston BBB would be neither

equitable nor just. First, the application of Chapter 27 to John Moore’s claims was not certain

and there is no serious dispute that John Moore has been harmed by the Houston BBB’s actions.

Ex. A ¶¶ 7-10.

       Second, John Moore still has viable claims against the Houston BBB that arise out of this

transaction, which, but for the Houston BBB’s insistence, would be joined to this same lawsuit.

Under these circumstances, an award of over $400,000 in fees would serve neither justice nor

equity and would be premature.

       Indeed, as the Houston BBB has repeatedly stated, the claims in the second suit (Cause

No. 2013-76215) arise out of the same transaction. The Houston BBB’s motion to strike John

Moore’s First Amended Original Petition in the fall of 2013 caused a de facto severance of John

Moore’s claims into separate cases, and John Moore objects that such a splitting of its claims is

improper and would result in prejudice to John Moore in the form of improper attempts by the

Houston BBB to assert res judicata.

       John Moore does not believe that res judicata would apply under the circumstances. See

Van Dyke v. Boswell, O’Toole, Davis & Pickering, 697 S.W.2d 381, 384 (Tex. 1985) (“res

judicata effects of an action cannot preclude litigation of claims that a trial court explicitly

separates or severs from that action”); Dolenz v. Continental Nat’l Bank, 620 S.W.2d 572, 575

(Tex. 1981) (res judicata does not apply when conduct by a party estops it from asserting the

prior active jurisdiction); see also Wyatt v. Shaw Plumbing Co., 760 S.W.2d 245, 248 (Tex.

1988). But even though res judicata does not apply, the splitting of John Moore’s cause of

action is not consistent with Texas policy and should be corrected now that all statutory stays

preventing a consolidation have expired. See Pierce v. Reynolds, 329 S.W.2d 76, 78 (Tex. 1959)
                                               15
(claim splitting is improper); Ryland Group, Inc. v. White, 723 S.W.2d 160, 162 (Tex. App.—

Houston [1st Dist.] 1986, no writ) (compulsory claims that arise out of the same transaction

cannot be split into a separate cause).

       Under the circumstances, John Moore moves for consolidation of Cause No. 2013-76215

with this case. TEX. R. CIV. P. 174(a); cf. Wyatt., 760 S.W.2d at 247 (when the claims in a

second lawsuit should have been brought in a previously-filed case, the second suit should be

abated so the pleadings in the first suit can be amended to join the new claims). A consolidation

will allow the entire controversy to be decided at one time by a single jury.

IV.    JOHN MOORE OBJECTS TO THE ELKIN AFFIDAVIT                  AS   LEGALLY INSUFFICIENT   TO
       SUPPORT AN AWARD OF ATTORNEYS’ FEES.

       The Elkin Affidavit contains general and highly conclusory statements which are legally

insufficient to support an award of attorneys’ fees. A conclusory statement is “one that does not

provide the underlying facts to support the conclusion.” Hou–Tex, Inc., 26 S.W.3d at 112

(quoting Rizkallah v. Conner, 952 S.W.2d 580, 587 (Tex. App.—Houston [1st Dist.] 1997, no

writ)). A general statement by an attorney that an amount sought is reasonable is not conclusive

proof on the question of reasonableness. Nguyen Ngoc Giao v. Smith & Lamm, P.C., 714 S.W.2d
144, 149 (Tex. App. —Houston [1st Dist.] 1986, no writ); see also, Burrow v. Acre, 997 S.W.2d
229, 236 (Tex. 1999) (expert must support opinion by reasoned basis). Furthermore, an

agreement to pay an attorney a certain sum per hour is not proof of its reasonableness. Leal v.

Leal, 628 S.W.2d 168, 171 (Tex. App.—San Antonio 1982, no writ).

       John Moore’s objections include but are not limited to Elkin Affidavit paragraphs 6, 20

and 25, which state that Porter Hedges billing rates are customary, reasonable and comparable to

similar law firms in Harris County, Texas. These statements are conclusory and provide no

underlying facts to support the conclusion.

                                                16
       John Moore further objects to Elkin Affidavit paragraph 8, which concludes that Moore

has asserted numerous, meritless claims. This is a factually unsupported opinion and does not

provide a valid basis for the award of attorneys’ fees.

       The Elkin Affidavit is also objectionable as to paragraph 9 and the referenced invoices

attached as Exhibit 2. Specifically, the invoices contain multiple redactions to allegedly prevent

disclosure of attorney-client privileged material. The sheer number of redactions suggests that

the BBB, by and through its counsel, is not protecting attorney-client privilege but rather hiding

duplicative billing entries and unnecessary work product.         John Moore objects that Elkin

Affidavit’s reliance on the invoices contained in Exhibit 2 is based on insufficient, unreliable and

conclusory evidence.

       John Moore further objects to Elkin Affidavit paragraph 12, which contains an

unsupported and conclusory opinion that the BBB will incur $130,000.000 in legal fees to defend

and argue its Motion and any related appeals.

       John Moore objects to Elkin Affidavit conclusory paragraphs 17, 18 and 22 which allude

to the “complexity” of the Lawsuit without providing factual evidence of how Chapter 27 is a

complex statute and delineating with specificity what legal analysis and research were required

to prosecute the BBB’s Motion.

       John Moore further objects to Elkin Affidavit paragraph 21 which contains the

conclusory statement that the hours expended by Porter Hedges, as reflected in the invoices

attached as Exhibit 2, were reasonable. John Moore re-asserts its objections to reliance on the

heavily redacted invoices as constituting insufficient and unreliable evidence.

                                                 17
       John Moore objects to Elkin Affidavit paragraph 24 which concludes, without any

supporting factual evidence, that Porter Hedges professionals were precluded from other

employment due to the acceptance of this case.

       John Moore further objects to Elkin Affidavit paragraph 28, which references the

experience, reputation and ability of Porter Hedges without providing any factual support. John

Moore also objects to the conclusory statement that Porter Hedges’ billing rates were reasonable

based on said experience.

       John Moore objects to Elkin Affidavit paragraph 31, which states that Porter Hedges

expenses are reasonable based on the length and complexity of this litigation. These statements

are conclusory and provide no underlying facts to support the conclusion.

       Finally, John Moore objects to Elkin Affidavit paragraph 32 as irrelevant to the BBB’s

Motion and unsupported by any evidence proffered in this matter.

       In sum, the Elkin Affidavit contains conclusions unsupported by any reasoning

connecting them to the facts as to the time and rates billed on specific tasks that would support a

finding that the claimed attorneys’ fees are reasonable and necessary. Thus, the statements in the

Elkin Affidavit regarding attorneys’ fees are conclusory and there is no evidence to support the

reasonableness of these fees. Coastal Terminal Operators v. Essex Crane Rental Corp., 2004

Tex. App. LEXIS 7257 at pp. 21-24 (Tex. App.—Houston. [14th Dist.] 2004, no pet) (citing

Burrow, 997 S.W.2d at 235-37).

           MOTION TO COMPEL RESPONSES TO MOORE’S DISCOVERY

       John Moore objects to Defendant’s request for fees and expenses incurred prosecuting its

Motion to Dismiss. Among other reasons, these fees and expenses should be denied by the trier

of fact because Porter Hedges has provided no substantive discovery responses to John Moore

                                                 18
regarding these requests, despite the fact that John Moore specifically requested such

information in a request for production to the Houston BBB. Ex. C.

       Defendant is in possession, custody or control of documents and information responsive

to John Moore’s request for production, yet Porter Hedges has produced no information

regarding fees and expenses it has incurred beyond the firm’s heavily redacted billing records.

John Moore is entitled to discovery on these fees and expenses in order to test their

reasonableness and necessity, and the Houston BBB should not be allowed to profit from its

blatant disregard for its discovery obligations. John Moore thus seeks an Order overruling the

Houston BBB’s objections and compelling production of the requested documents.

                                  RESERVATION OF RIGHTS

       John Moore expressly reserves the right to amend, modify, or supplement its Response to

Defendant’s Motion, and to assert additional grounds for objecting to the Motion, to the extent

discovery and expert analysis reveal additional issues concerning the propriety of compensation

sought in the Motion.

                                              PRAYER

       WHEREFORE, John Moore respectfully requests that this Court deny Defendant’s

Motion for Award of Attorneys’ Fees, Court Costs, Expenses, and Sanctions and for Entry of

Final Judgment and sustain John Moore’s objections to the evidence offered by Defendant

contained herein. John Moore further requests that the Court grant its motion to consolidate and

consolidate Cause No. 2013-76215 into this case and for the trier of fact to hear evidence to

determine the facts raised by the parties. Finally, John Moore requests that the Court grant its

motion to compel a response to its discovery requests. John Moore also requests that this Court

grant such other and further relief as is equitable and just.

                                                  19
20
                                            Respectfully submitted,

                                            JOHNSON, TRENT, WEST & TAYLOR, LLP

                                            By:    /s/ Lori Hood
                                                   Lori Hood
                                                   Texas Bar No. 09943430
                                                   Brian P. Johnson
                                                   Texas Bar No. 10685700
                                                   Tamara Madden
                                                   Texas Bar No. 00783720
                                                   919 Milam Street, Suite 1700
                                                   Houston, Texas 77002
                                                   (713) 222-2323
                                                   (713) 222-2226 (facsimile)
                                                   lhood@johnsontrent.com
                                                   bjohnson@johnsontrent.com
                                                   tmadden@johnsontrent.com

                                            ATTORNEYS FOR PLAINTIFFS

                                CERTIFICATE OF SERVICE

       I hereby certify that a true and correct copy of the foregoing instrument has been served
upon all counsel of record pursuant to Rule 21 and Rule 21(a) of the TEXAS RULES OF CIVIL
PROCEDURE on this 12th day of June 2014.

         Jeffrey R. Elkin                                                         Via E-Service
         M. Harris Stamey
         PORTER HEDGES, LLP
         1000 Main Street, 36th Floor
         Houston, Texas 77002
         jelkin@Porter Hedges.com
         mstamey@Porter Hedges.com

                                                   /s/ Tamara Madden
                                                   TAMARA MADDEN

329881

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