Court Opinion

ID: 4075982
Source: CourtListenerOpinion
Date Created: 2016-09-30 06:53:37.692431+00
Date Added: 2024-06-11T14:32:54.172733
License: Public Domain

Opinion issued December 17, 2015

                                     In The

                              Court of Appeals
                                     For The

                          First District of Texas
                            ————————————
                              NO. 01-14-00997-CV
                           ———————————
 PERRY D. FELIX D/B/A HAN’S LASER TECHNOLOGY CO., Appellant
                                        V.
                        PROSPERITY BANK, Appellee

                   On Appeal from the 164th District Court
                            Harris County, Texas
                      Trial Court Case No. 2013-50191

                         MEMORANDUM OPINION

      Appellant/cross-appellee Perry D. Felix d/b/a Han’s Laser Technology Co.

appeals the trial court’s traditional summary judgment in favor of appellee,

Prosperity Bank. In its cross-appeal, Prosperity Bank contends that the trial court
erred in denying its request for an award of attorney’s fees. We affirm in part and

reverse in part.

                                   Background

      This dispute concerns allegedly fraudulent wire transfers made from Felix’s

deposit account with Prosperity Bank. The account was governed by a written

deposit agreement, which, in relevant part, required Felix to examine his

statements and comply with specified procedures for reporting unauthorized

transactions:

      STATEMENTS – You must examine your statement of account with
      “reasonable promptness.” If you discover (or reasonably should have
      discovered) any unauthorized payments or alterations, you must
      promptly notify us of the relevant facts. If you fail to do either of
      these duties, you will have to either share the loss with us, or bear the
      loss entirely yourself (depending on whether we used ordinary care
      and, if not, whether we contributed to the loss). . . .

      You agree that the time you have to examine your statement and
      report to us will depend on the circumstances, but will not, in any
      circumstance, exceed a total of 30 days from when the statement is
      first made available to you.

      You further agree that if you fail to report any unauthorized
      signatures, alterations, forgeries or any other errors in your account
      within 60 days of when we make the statement available, you cannot
      assert a claim against us on any items in that statement, and the loss
      will be entirely yours. This 60 day limitation is without regard to
      whether we exercised ordinary care. The limitation in this paragraph
      is in addition to that contained in the first paragraph of this section.

      In September 2011, Felix identified several purportedly unauthorized

outgoing wire transfers occurring between May and December 2010.                  Each

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purportedly unauthorized transaction had been reflected on monthly statements

provided by Prosperity Bank in 2010. The latest of the transactions at issue were

reflected on the statement dated December 31, 2010.

       In December 2013, Felix sued Prosperity Bank, alleging liability for

unauthorized wire transfers from his account. Prosperity Bank counterclaimed,

alleging breach of the parties’ deposit contract and seeking recovery of attorney’s

fees and costs. Prosperity Bank moved for traditional summary judgment on

Felix’s claims and its counterclaim, arguing that the undisputed evidence

established that Felix failed to timely notify Prosperity Bank of any fraudulent

transactions, which, under the parties’ deposit agreement, barred Felix from

pursuing a claim against Prosperity Bank related to such transactions. The trial

court granted summary judgment in favor of Prosperity Bank on all claims, but

awarded no damages or attorney’s fees. Both parties appealed.

                    Felix’s Challenge to the Summary Judgment

       The appellate record was filed on January 22, 2015. After we extended the

briefing deadlines, initial briefing from both parties was due March 25, 2015.

Felix failed to fail a brief.

       On June 3, 2015, having received no brief from Felix, we notified Felix that

failure to file a brief or a motion for extension could lead to dismissal of his appeal.

                                           3
See TEX. R. APP. P. 38.8(a), 42.3(b). To date, no brief has been filed and Felix has

not offered any explanation for failing to file a brief.

      Accordingly, we dismiss Felix’s appeal for want of prosecution. See TEX. R.

APP. P. 38.8(a), 42.3(b).

                             Prosperity Bank’s Cross-Appeal

      Prosperity Bank maintains that the trial court erred in failing to award

attorney’s fees under Chapter 38 of the Civil Practice and Remedies Code after

granting summary judgment in favor of Prosperity Bank on all claims.

      A.        Standard of Review

      Whether attorney’s fees are available under a particular statute is a question

of law for the court. Holland v. Wal-Mart Stores, Inc., 1 S.W.3d 91, 94 (Tex.

1999). We review the trial court’s decision whether to award attorney’s fees de

novo. G.R.A.V.I.T.Y. Enters., Inc. v. Reece Supply Co., 177 S.W.3d 537, 546 (Tex.

App.—Dallas 2005, no pet.).

      B.        Applicable Law

      Texas follows the “American Rule” with respect to attorney’s fees. MBM

Fin. Corp. v. Woodlands Operating Co., 292 S.W.3d 660, 669 (Tex. 2009). Under

that rule, litigants are entitled to recover attorney’s fees incurred in prosecuting or

defending the present litigation only if specifically provided for by statute or

contract. Id.

                                            4
      Chapter 38 of the Civil Practice and Remedies Code allows recovery of

attorney’s fees in breach of contract cases: “A person may recover reasonable

attorney’s fees . . . in addition to the amount of a valid claim and costs, if the claim

is for . . . an oral or written contract.” TEX. CIV. PRAC. & REM. CODE ANN.

§ 38.001 (West 2015). In order to recover attorney’s fees under Chapter 38, a

litigant must (1) prevail on a breach of contract claim and (2) recover damages.

MBM Fin. Corp., 292 S.W.3d at 666.

      C.        Analysis

      1.        May Prosperity Bank recover attorney’s fees under Chapter 38?

      Prosperity Bank’s counterclaim alleges that Felix breached the parties’

contract by suing Prosperity Bank despite his agreement that he could not assert a

claim against Prosperity Bank if he failed to report unauthorized transactions

within 60 days of when Prosperity Bank made available a statement reflecting such

transactions.     Prosperity Bank sought and the trial court granted summary

judgment in favor of Prosperity Bank. Thus, Prosperity Bank prevailed on a

contract claim against Felix.

      Ordinarily, it is not possible to recover attorney’s fees under Chapter 38

without recovering some damages. MBM Fin. Corp., 292 S.W.3d at 666; Mustang

Pipeline Co., Inc. v. Driver Pipeline Co., Inc., 134 S.W.3d 195, 201 (Tex. 2004)

(per curiam) (holding that neither party was entitled to attorney’s fees under

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Chapter 38 where one party did not have a valid breach of contract claim and other

party was not awarded any damages on its valid breach of contract claim); Green

Int’l, Inc. v. Solis, 951 S.W.2d 384, 390 (Tex. 1997) (plaintiff not entitled to

recover attorney’s fees under Chapter 38 where jury awarded zero damages to

plaintiff on its breach of contract claim). Nevertheless, Prosperity Bank maintains

that it is entitled to an award of attorney’s fees under Chapter 38 despite not being

awarded any economic damages because it obtained enforcement of a material

contract right—the covenant not to sue—and thus obtained relief of some value

sufficient to support an award of attorney’s fees under Chapter 38.

      This Court previously has held that a judgment requiring specific

performance of a material contract right is an award of value that will support an

award of attorney’s fees under Chapter 38 in the absence of a monetary damage

award. Boyaki v. John M. O’Quinn Assocs., PLLC, No. 01–12–00984–CV, 2014
WL 4855021, at *13–14 (Tex. App.—Houston [1st Dist.] Sept. 30, 2014, pet.

denied) (mem. op.) (holding that judgment requiring specific performance of

material contract right in a Rule 11 agreement is an award of value sufficient to

support Chapter 38 attorney’s fees); see also Woody v. J. Black’s, L.P., No. 07–12–

00192–CV, 2013 WL 5744359, at *6 (Tex. App.—Amarillo Oct. 18, 2013, pet.

denied) (mem. op.) (concluding that “injunction enforcing specific performance of

a contract is something of value” sufficient to support Chapter 38 attorney’s fees);

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Albataineh v. Eshtehardi, No. 01–12–00671–CV, 2013 WL 1858864, at *1–2

(Tex. App.—Houston [1st Dist.] May 2, 2013, no pet.) (mem. op.) (“[J]udgment

requiring specific performance of a material contract right can support an award of

attorney’s fees.”). These cases recognize that “an injunction to enforce specific

performance under a contract is of pecuniary value if that enforcement prevents

actual loss to the aggrieved party.” Boyaki, 2014 WL 4855021, at *14.

      That is the case here.      The trial court’s summary judgment effectively

enforced specific performance of Felix’s covenant not to sue, preventing actual

loss to Prosperity Bank. Accordingly, following these authorities, we agree that

the summary judgment in Prosperity Bank’s favor is sufficient to support an award

of attorney’s fees under Chapter 38.

      2.     Did Prosperity Bank’s summary-judgment evidence conclusively
             prove the amount of its reasonable and necessary attorney’s fees?

      “Under the lodestar method, the determination of what constitutes a

reasonable attorney’s fee involves two steps.” El Apple I Ltd. v. Olivas, 370
S.W.3d 757, 760 (Tex. 2012). “First, the court must determine the reasonable

hours spent by counsel in the case and a reasonable hourly rate for such work.” Id.

(citing Dillard Dep’t Stores, Inc. v. Gonzales, 72 S.W.3d 398, 412 (Tex. App.—El

Paso 2002, pet. denied)). “The court then multiplies the number of such hours by

the applicable rate, the product of which is the base fee or lodestar.” Id. (citing La.

Power & Light Co. v. Kellstrom, 50 F.3d 319, 323–24 (5th Cir. 1995)).

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      “[G]eneralities about tasks performed provide insufficient information for

the fact finder to meaningfully review whether the tasks and hours were reasonable

and necessary under the lodestar method.” Long v. Griffin, 442 S.W.3d 253, 255

(Tex. 2014).    “Sufficient evidence includes, at a minimum, evidence ‘of the

services performed, who performed them and at what hourly rate, when they were

performed, and how much time the work required.’” Id.; see also El Apple, 370
S.W.3d at 763–64 (concluding that testimony failed to prove reasonableness and

necessity of fees where it was limited to total number of hours worked and

generalities regarding discovery and length of trial).      Because the trial court

disposed of the case via summary judgment, we may award attorney’s fees only if

the summary judgment evidence conclusively establishes the amount of attorney’s

fees to which Prosperity Bank is entitled. See Auz v. Cisneros, --- S.W.3d ---, No.

14–13–00989–CV, 2015 WL 5156878, at *4 (Tex. App.—Houston [14th Dist.]

August 27, 2015, no pet. h.).

      The Texas Supreme Court recently reiterated the standard for legally

sufficient evidence supporting an award of attorney’s fees. Long, 442 S.W.3d at

255–56. In Long, the sole support for requested attorney’s fees was an attorney’s

affidavit providing the respective hourly rates for two attorneys and indicating that

one had spent 300 hours on the case and the other had spent 344.50 hours on the

case. Id. at 255. The affidavit went on to state that the case had involved

                                         8
“extensive discovery, several pretrial hearings, multiple summary judgment

motions, and a four and one-half day trial, and that litigating the matter required

understanding a related suit that settled after ten years of litigation.” Id. However,

the affidavit did not inform the trial court of how much time was spent on specific

tasks. Id. The Texas Supreme Court reversed and remanded for redetermination

of attorney’s fees, explaining that “without any evidence of the time spent on

specific tasks, the trial court had insufficient information to meaningfully review

the fee request.” Id.

      Here, Prosperity Bank attempted to establish its reasonable and necessary

attorney’s fees through two attorney affidavits. The affidavit of William

Huttenbach reports that he charges $345 per hour and describes work that he or

members of his firm performed in generalities similar to that rejected by the Texas

Supreme Court in Long. The affidavit of Charles J. Pignuolo reflects that he

charges $300 per hour and describes work performed in generalities again similar

to that rejected by the Long court. These affidavits provide some evidence of

Prosperity Bank’s attorney’s fees, but Prosperity Bank’s proof is not conclusive.

See Long, 442 S.W.3d at 255–56; El Apple, 370 S.W.3d at 763–64. Without any

evidence of the time spent on specific tasks—through the affidavits or otherwise—

we cannot meaningfully review the fee request. Id.

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      Because the summary-judgment evidence does not conclusively prove the

amount of Prosperity Bank’s reasonable and necessary attorney’s fees, we cannot

render judgment for attorney’s fees. Instead, the appropriate appellate remedy is to

reverse the trial court’s judgment as to Prosperity Bank’s request for reasonable

and necessary attorney’s fees and remand for further proceedings regarding this

request. Id.; Auz, --- S.W.3d ---, 2015 WL 5156878, at *4.

                                    Conclusion

      We reverse the trial court’s summary judgment with respect to attorney’s

fees and remand for the trial court to determine the amount of reasonable and

necessary attorney’s fees to be awarded to Prosperity Bank under Chapter 38. We

affirm the trial court’s summary judgment in all other respects.

                                              Rebeca Huddle
                                              Justice

Panel consists of Justices Higley, Huddle, and Lloyd.

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