Court Opinion

ID: 2760060
Source: CourtListenerOpinion
Date Created: 2014-12-12 07:07:04.214232+00
Date Added: 2024-06-11T11:27:03.102451
License: Public Domain

COURT OF APPEALS
                          SECOND DISTRICT OF TEXAS
                               FORT WORTH

                              NO. 02-14-00122-CV

RICHARD A. MYERS                                                     APPELLANT

                                        V.

SOUTHWEST BANK                                                         APPELLEE

                                     ----------

          FROM THE 236TH DISTRICT COURT OF TARRANT COUNTY
                    TRIAL COURT NO. 236-265286-13

                                     ----------

                         MEMORANDUM OPINION 1

                                     ----------

      Appellant Richard Myers appeals from a summary judgment for Appellee

Southwest Bank on its deficiency claim against him.         In four points, Myers

challenges the sufficiency of the evidence supporting the judgment as to

Southwest’s deficiency claim and the award of attorney’s fees, as well as the trial

court’s finding that he had waived his right to a fair market value determination

      1
       See Tex. R. App. P. 47.4.
and offset as provided in property code section 51.003. 2 Because we hold that

the evidence supports the summary judgment and that the trial court did not err

by granting summary judgment despite Myers’s pleading the application of

section 51.003, we affirm.

                                  Background

      Myers is the chief executive officer of Realty Capital Wichita Falls, L.P.

(Realty LP), which is the general partner of Realty Capital Partners, LLC (Realty

LLC). In 2008, Realty LP borrowed $1,800,000 from Southwest under a note

signed by Myers in his capacity as Realty LP’s CEO. The note was secured by a

deed of trust on property in Wichita County, Texas.        Myers also signed a

guaranty in connection with the loan.

      In April 2013, Southwest sold the Wichita County property at a nonjudicial

foreclosure sale and applied the proceeds of the sale to the unpaid balance on

the note. Southwest then filed suit against Myers for breach of the guaranty,

seeking to recover the deficiency on the note. Southwest also sued Realty LP

and Realty LLC but subsequently nonsuited both entities.

      Southwest filed a traditional motion for summary judgment on its claim

against Myers. It also sought summary judgment on its claim for attorney’s fees.

      Myers amended his answer and filed a response to the summary judgment

motion. In his amended answer, he requested the court to determine fair market

      2
       Tex. Prop. Code Ann. § 51.003 (West 2014).

                                        2
value of the property on the date of foreclosure as provided in section 51.003 and

to offset the deficiency amount by the amount that the fair market value

exceeded the foreclosure sale price. In Myers’s summary judgment response,

he stated that he had a statutory right to an offset under section 51.003, and that

because he had requested a fair market value determination and offset under

that section, “a fact issue exists” as to the amount of any deficiency.

      The day before the summary judgment hearing, Southwest filed a reply to

Myers’s summary judgment response. In that reply, Southwest argued that the

guaranty contained language providing that Myers had waived his right to a

section 51.003 offset.

      The trial court granted judgment for Southwest, ordering that Southwest

recover from Myers $420,633.24 plus interest, $5,000 in attorney’s fees, and an

additional amount of conditional appellate attorney’s fees. Myers now appeals.

                               Standard of Review

      We review a summary judgment de novo. 3           We consider the evidence

presented in the light most favorable to the nonmovant, crediting evidence

favorable to the nonmovant if reasonable jurors could and disregarding evidence

contrary to the nonmovant unless reasonable jurors could not. 4           We indulge

      3
       Travelers Ins. Co. v. Joachim, 315 S.W.3d 860, 862 (Tex. 2010).
      4
      Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844,
848 (Tex. 2009).

                                         3
every reasonable inference and resolve any doubts in the nonmovant’s favor. 5 A

plaintiff is entitled to summary judgment on a cause of action if it conclusively

proves all essential elements of the claim. 6

                                     Analysis

      Myers argues in his first point that the trial court erred by granting

Southwest’s summary judgment motion over his objections because the motion

was not supported by sufficient evidence. We therefore look at the evidence

relied on by Southwest in the light most favorable to Myers to see if Southwest

established all essential elements of its deficiency claim. 7 Myers argues that the

evidence supporting Southwest’s breach of guaranty claim was conclusory,

based on hearsay, and not based on personal knowledge.

      To support its breach of guaranty claim, Southwest attached to its motion

the affidavit of Jerry Hendrix, senior vice president at Southwest.        Hendrix

attached to his affidavit copies of the promissory note, deed of trust, guaranty,

and the deed from the foreclosure sale.

      In Hendrix’s affidavit, he stated that he is one of the custodians of records

at Southwest and that all the exhibits attached to his affidavit were kept in the

      5
       20801, Inc. v. Parker, 249 S.W.3d 392, 399 (Tex. 2008).
      6
       See Tex. R. Civ. P. 166a(a), (c); MMP, Ltd. v. Jones, 710 S.W.2d 59, 60
(Tex. 1986).
      7
      See Tex. R. Civ. P. 166a(a), (c); Fielding, 289 S.W.3d at 848; MMP, Ltd.,
710 S.W.2d at 60.

                                          4
regular course of Southwest’s business.       He stated that he had personal

knowledge of the facts set out in his affidavit by virtue of his position with

Southwest, his review of the relevant files, and his personal dealings with the

matter.

      Hendrix asserted that at the time of the foreclosure sale, the balance owed

on the note was $1,604,813.09, plus $32,924.39 in interest; that Southwest

purchased the property at the foreclosure sale for a credit bid of $1,100,000,

resulting in a deficiency of $504,813.09; and that the current amount of accrued

interest was $47,677.85. Hendrix further stated that under the guaranty, Myers

agreed to be jointly and severally liable for up to $400,000 of the principal plus

interest and attorney’s fees incurred in enforcing the guaranty. He stated that on

February 27, 2013, Southwest had made a demand on Myers for payment under

the guaranty.

      The copy of guaranty attached to the affidavit stated that Myers

guaranteed the prompt and full payment of the note, provided, however, that his

obligation under the guaranty “shall be $400,000 in principal” plus interest that

accrued from the date that Southwest made demand on him for payment. And

Myers agreed in the guaranty to pay on demand “all reasonable attorneys’ fees

incurred by [Southwest] in connection with the enforcement and/or collection” of

the guaranty.

      Myers argues that Hendrix’s statements about the outstanding balance are

not supported by the documents attached to his affidavit, that the record does not

                                        5
contain documentation showing the outstanding balance on the note at the time

of foreclosure, and that Hendrix’s testimony was therefore conclusory.          He

asserts that Realty LP “presumably” paid Southwest $668,308.80 under the note,

and the record does not include any default letters sent to Realty LP.

      This court has held that “[a] lender need not file detailed proof [of] the

calculations reflecting the balance due on a note; an affidavit by a bank

employee which sets forth the total balance due on a note is sufficient to sustain

an award of summary judgment.” 8 Thus, the fact that Southwest did not provide

documentation of how it calculated the outstanding balance did not in and of itself

make its evidence conclusory or insufficient as to the amount of the outstanding

balance.

      Myers concedes that a bank officer may testify about an outstanding loan

balance, but he counters that the affidavit “must affirmatively show how the

affiant became personally familiar with the facts,” and Hendrix does not say what

he reviewed in the file, if anything, to make his determination. But Hendrix stated

that he had reviewed the bank’s file and had personally dealt with the matter. He

      8
       Energico Prod., Inc. v. Frost Nat’l Bank, No. 02-11-00148-CV, 2012 WL
254093, at *5 (Tex. App.—Fort Worth Jan. 26, 2012, pet. denied) (mem. op.);
see also Martin v. First Republic Bank, Fort Worth, N.S., 799 S.W.2d 482, 485
(Tex. App.—Fort Worth 1990, writ denied).

                                        6
therefore provided the basis for his opinion. He was not required to detail which

specific documents he had reviewed. 9

      Myers also argues that Hendrix needed to provide supporting documents

to support his statement that the property sold at foreclosure for $1,100,000. He

contends that based on the language of the foreclosure deed, Southwest “could

have bid” $1,650,000, thereby satisfying the note in full. And he argues that to

the extent Hendrix’s testimony is based on the foreclosure deed, it is hearsay.

But Southwest did not need to consult the foreclosure deed to tell it how much it

had bid at the sale. Hendrix, like any other corporate employee, is presumed to

know the facts that he would learn in the usual course of his job. 10 The amount

that Southwest bid at foreclosure is information that Hendrix would learn by virtue

of his position as a senior vice president and by reviewing Southwest’s files.

      In a reply brief, Myers cites an opinion from this court for the well-

established rule that “[i]f uncontroverted summary judgment evidence is from an

interested witness, it does nothing more than raise a fact issue unless it is clear,

positive and direct, otherwise credible and free from contradictions and

      9
       See Energico Prod., 2012 WL 254093, at *6 (stating that “[a] corporate
employee is generally presumed to possess personal knowledge of facts that he
or she would learn in the usual course of employment without having to
otherwise prove personal knowledge”).
      10
          See id.

                                         7
inconsistencies, and could have been readily controverted.” 11 Myers emphasizes

the “interested witness” language in that rule.

      We agree that our prior opinion correctly stated the law regarding the

testimony of an interested witness. But Myers does not point out how Hendrix’s

testimony falls outside of the “unless” part of the rule. As set out in the summary

judgment rule, the affidavit of an interested witness can support summary

judgment when it is “clear, positive and direct, otherwise credible and free from

contradictions and inconsistencies, and could have been readily controverted.” 12

      The only argument Myers makes about why, as an interested witness,

Hendrix’s affidavit cannot support summary judgment is that the foreclosure deed

does not corroborate Hendrix’s testimony because that deed states that the

property was sold to Southwest for “an amount in excess of . . . $1,000.00 . . .

and other good and valuable consideration paid as a credit upon the obligation

secured by the Deed of Trust, in compliance with the terms thereof.” Myers cites

a case from this court in which we held that a fact issue existed because an

affidavit supporting a summary judgment motion was directly contradicted by

evidence attached to that affidavit. 13

      11
       See Travelers Ins. Co. v. Bosler, 906 S.W.2d 635, 645 n.7 (Tex. App.—
Fort Worth 1995), pet. granted, judgm’t vacated w.r.m., 938 S.W.2d 716 (Tex.
1997).
      12
        Tex. R. Civ. P. 166a(c).
      13
       FFP Mktg. Co., Inc. v. Long Lane Master Trust IV, 169 S.W.3d 402, 410
(Tex. App.—Fort Worth 2005, no pet.).

                                          8
      But although the foreclosure deed attached to Hendrix’s affidavit does not

confirm Hendrix’s affidavit testimony that the property was sold for a credit bid of

$1,100,000, it also does not contradict Hendrix’s testimony. FFP is therefore

inapplicable. Myers does not point out any way that Hendrix’s testimony was not

clear, positive, and direct, was not free from contradictions and inconsistencies,

and could not have been readily controverted, and we do not see any such

problems with his testimony. We hold that Hendrix’s testimony was sufficient to

establish the outstanding balance on the note at the time of foreclosure and the

amount that Southwest paid at the foreclosure and credited on the note. We

overrule Myers’s first point.

      In his second point, Myers argues that the trial court erred by denying his

right under property code section 51.003 to have any deficiency reduced by the

fair market value of the property because that issue was not before the trial court

when it granted summary judgment for Southwest. Myers’s specific complaint

under this point arises from the timing of Southwest’s reply to his summary

judgment response.       He argues that Southwest did not timely address his

defense under 51.003 in its motion for summary judgment or response, and

therefore the trial court could not have properly granted summary judgment

against him on the defense.

      After Southwest filed its summary judgment motion, Myers amended his

answer and filed a summary judgment response raising section 51.003.

                                         9
Southwest’s reply to his response pointed out the following provisions of the

guaranty he had signed:

            Bank may at any time, without the consent of or notice to
      Guarantor, without incurring responsibility to Guarantor and without
      impairing, releasing, reducing[,] or affecting the obligations of
      Guarantor hereunder: . . . (iii) sell, exchange, release, surrender,
      subordinate, realize upon[,] or otherwise deal with in any manner
      and in any order any collateral for all or any part of the Guaranteed
      Indebtedness or this Guaranty or setoff against all or any part of the
      Guaranteed Indebtedness. . . .

                ....

            . . . Guarantor hereby further waives and releases all claims,
      causes of action, defenses[,] and offsets for any act or omission of
      Bank, its directors, officers, employees, representatives[,] or agents
      in connection with Bank’s administration of the Guaranteed
      Indebtedness, except for Bank’s willful misconduct and gross
      negligence.

                ....

              Guarantor agrees that its obligations under this Guaranty shall
      not be released, diminished, impaired, reduced[,] or affected by the
      occurrence of any one or more of the following events: . . . (iv) the
      taking or accepting of any collateral for all or any part of the
      Guaranteed Indebtedness or this Guaranty; . . . (x) any other
      circumstance which might otherwise constitute a defense available
      to, or discharge of, Borrower, Guarantor[,] or any other guarantor of
      all or any part of the Guaranteed Indebtedness.

Southwest argued that by this language, Myers had waived section 51.003’s right

to an offset.

      This reply was filed the day before the summary judgment hearing. At the

hearing, the trial court heard arguments related to the reply and stated that it took

                                         10
judicial notice of the reply. In its judgment, the trial court specifically found that

Myers had waived his right under section 51.003.

      Southwest’s summary judgment motion did not address Myers’s section

51.003 defense—a defense Myers did not plead until after Southwest had

already filed the motion. Myers contends that under rule 63 of the rules of civil

procedure, 14 Southwest could not file its reply addressing his defense as late as

it did without leave of court. And Myers contends that because Southwest’s

motion did not address section 51.003, and because its reply was filed too close

to the summary judgment hearing, there were no summary judgment grounds

addressing section 51.003. As Myers points out, summary judgment may not be

granted on a ground not included in a motion. 15

      Southwest counters Myers’s point with several arguments, including an

argument that Myers failed to bring forward any evidence on his affirmative

defense, and therefore his assertion of section 51.003 could not defeat its right to

summary judgment. We agree.

      Section 51.003 provides an affirmative defense to the traditional deficiency

calculation based on the amount of a foreclosure sale. 16 When a party invokes

      14
        Tex. R. Civ. P. 63.
      15
        McConnell v. Southside I.S.D., 858 S.W.2d 337, 341 (Tex. 1993).
      16
        Moayedi v. Interstate 35/Chisam Rd., L.P., 438 S.W.3d 1, at 6 (Tex.
2014) (stating that section 51.003 provides a defense to the traditional definition
of deficiency, which is based on the foreclosure proceeds, in the form of “an
offset that otherwise would not be available”); Waterway Ranch, LLC v. Tex.

                                         11
section 51.003, the parties must provide the trial court with evidence of the

property’s fair market value at the time of the foreclosure sale. 17 This evidence

can include (but is not limited to) evidence of comparable sales, cost of sale, and

expert opinion testimony. 18 If no competent evidence is provided to the trial

court, the court must use the sale price at the foreclosure sale to compute the

deficiency. 19

       A party relying on an affirmative defense such as section 51.003 to avoid

summary judgment must produce evidence that raises a fact issue on each

element of the affirmative defense. 20 Because Myers was relying on section

51.003 to avoid Southwest’s right to a deficiency judgment based on the

foreclosure sale price, he had the burden to produce evidence of the fair market

value. Myers did not, however, produce any evidence of fair market value.

       Because Myers had the burden to produce evidence on his affirmative

defense but did not do so, by statute the trial court had to use the foreclosure

Bank Fin., No. 02-13-00350-CV, 2014 WL 1389752, at *2, *4 (Tex. App.—Fort
Worth Apr. 10, 2014, pet. dism’d) (mem. op.) (stating that the section 51.003
offset is an affirmative defense).
       17
        Tex. Prop. Code Ann. § 51.003(b).
       18
        Id.
       19
        Id. § 51.003(c).
       20
        Brownlee v. Brownlee, 665 S.W.2d 111, 112 (Tex. 1984).

                                        12
sale price to compute the deficiency. 21 Accordingly, the trial court did not need to

consider whether Myers had waived his section 51.003 defense because even if

Myers did not waive the defense by signing the guaranty, 22 he failed to meet his

burden on the affirmative defense. 23 Accordingly, the trial court did not err by

determining the amount of the deficiency based on the foreclosure sale price.

      In his reply brief, Myers disputes Southwest’s reading of Bauer v. Jasso 24

regarding the burden of proof on an affirmative defense in the context of a

summary judgment. Southwest cited this case for the proposition that a plaintiff

moving for summary judgment may ignore an affirmative defense pled by the

nonmovant defendant.       It argued that a party who relies on an affirmative

defense to defeat summary judgment must come forward with summary

judgment evidence to raise a fact issue on each element of that defense. Myers

counters that “Bauer actually held the opposite of what Appellee contends, and

Appellee certainly cannot ignore Appellant’s affirmative defense.”

      As Myers points out in his brief, the court of appeals in Bauer held that “the

trial court improperly required Bauer to prove his affirmative defense before

      21
        Id.
      22
        See Moayedi, 438 S.W.3d, at 6 (holding that the offset right under
property code section 51.003 is a defense that may be waived and that by
signing the guaranty agreement at issue, Moayedi waived section 51.003).
      23
        See Brownlee, 665 S.W.2d at 112.
      24
        946 S.W.2d 552, 555 (Tex. App.—Corpus Christi 1997, no writ).

                                         13
trial.” 25 But Southwest does not argue that Myers was required to prove his

affirmative defense to defeat its right to summary judgment. It argues that Myers

was required to raise a fact issue on his affirmative defense, which is exactly the

standard set out by the Corpus Christi court of appeals in Bauer. 26 To the extent

that Myers argues that under the law, he had no burden to raise a fact issue on

his affirmative defense once Southwest showed its entitlement to judgment, he is

simply wrong. 27

        Myers then argues that Southwest’s own summary judgment evidence

raised a fact issue on his affirmative defense because “[a]n alleged deficiency

exists” between the foreclosure sale price and the outstanding balance on the

note.    But the evidence that a deficiency exists is not the kind of evidence

required under section 51.003. 28 Section 51.003 presumes a deficiency, and the

question is how the deficiency should be calculated.        Myers was required to

produce evidence on the property’s fair market value at the time of foreclosure,

and if he did not do so, the trial court had to use the foreclosure sale price. 29 The

fact that a deficiency existed between how much the property sold for at

        25
         Id. at 556.
        26
         Id. at 555.
        27
         See Brownlee, 665 S.W.2d at 112.
        28
         See Tex. Prop. Code Ann. § 51.003.
        29
         Id.

                                         14
foreclosure and the outstanding balance does not provide evidence of the fair

market value of the property.

      Myers then argues in his reply brief that by amending his answer to assert

section 51.003, he established his right to have a deficiency calculation

performed and offset, and therefore “the damages portion of the summary

judgment were no longer properly before the trial court.” The proceedings in this

case are distinguishable from Sosa v. Central Power & Light, 30 on which Myers

relies. In that case, the defendants filed a motion for summary judgment on the

ground of limitations. A defendant seeking summary judgment on the defense of

limitations has the burden to establish that defense. 31 The defendants in Sosa

attempted to meet their burden by arguing that the plaintiffs’ own pleadings

established that the plaintiffs’ claims were barred by limitations. 32 The plaintiffs

then amended their petition to remove the statements on which the defendants

had relied in their motion. The defendants’ motion, which was based entirely on

the plaintiffs pleading themselves out of court, no longer had any basis.

Summary judgment was therefore improper. 33

      30
        909 S.W.2d 893, 895 (Tex. 1995).
      31
       See Canada v. Canada, No. 02-11-00483-CV, 2013 WL 1759894, at *2
(Tex. App.—Fort Worth Apr. 25, 2013, no pet.) (mem. op.).
      32
        Sosa, 909 S.W.2d at 894.
      33
        Id. at 895.

                                         15
       Here, Southwest’s allegations about the existence of a deficiency or the

amount of the deficiency were not based on anything Myers said or did not say in

his answer or amended answer. Its summary judgment motion was based on its

own pleadings and evidence. Sosa does not help Myers. We overrule Myers’s

second point.

       In Myers’s third point, he argues that the trial court erred by denying his

right under section 51.003 because he did not waive that right when he signed

the guaranty. Because we have held that Myers failed to present evidence to

raise a fact issue on his affirmative defense under section 51.003, we need not

consider his third point. 34

       Myers’s fourth and final point is that the trial court erred by granting

Southwest its attorney’s fees because Southwest failed “to provide timesheets or

other sufficient evidence documenting its attorney’s fees and there are

controverting affidavits regarding the reasonableness of attorney’s fees.” Citing

the Supreme Court of Texas’s El Apple case, 35 Myers contends that Southwest’s

attorney was required to produce time sheets to be entitled to an award of fees.

       This court has declined to extend El Apple to require time records in all

cases in which an attorney uses the attorney’s hourly rate to calculate the fee. In

ordinary hourly-fee breach of contract cases, “[t]ime sheets or other detailed hour

       34
        See Tex. R. App. P. 47.1.
       35
        El Apple I, Ltd. v. Olivas, 370 S.W.3d 757, 764 (Tex. 2012).

                                        16
calculations are not required if the testimony regarding the hours of work required

is not speculative.” 36

       In this was a breach of contract case, Southwest was not required to use

the lodestar method. 37 Southwest was entitled to recover a “reasonable” fee

under civil practice and remedies code section 38.001. 38 Testimony about the

reasonableness of a fee when supported by relevant Arthur Anderson factors is

generally sufficient to support an award. 39 And in a breach of contract case, a

trial court may “take judicial notice of the usual and customary attorney’s fees

and of the contents of the case,” and the trial court must presume that the usual

and customary attorney’s fee was reasonable unless that presumption was

rebutted. 40

       Taplett’s affidavit did not attach time sheets. The affidavit did, however,

contain testimony about how many hours Taplett had worked on the foreclosure

and after the foreclosure, what tasks he had worked on after the foreclosure,

what his hourly rate is, that the rate is reasonable in the area for the service

       36
        Ferrant v. Graham Assocs., Inc., No. 02-12-00190-CV, 2014 WL
1875825, at *7, *8 (Tex. App.—Fort Worth May 8, 2014, no pet.) (mem. op.) (on
reh’g).
       37
        See id.
       38
        See Tex. Civ. Prac. & Rem. Code Ann. § 38.001 (West 2008).
       39
        Ferrant, 2014 WL 1875825, at *9 (citing Arthur Andersen & Co. v. Perry
Equip. Corp., 945 S.W.2d 812, 818 (Tex. 1997)).
       40
        See Tex. Civ. Prac. & Rem. Code Ann. §§ 38.003, 38.004 (West 2008).

                                        17
performed, and that the number of hours spent were reasonable and necessary

in this type of case. He stated that he spent a total of “twenty-two (22) hours of

attorney time” between February 21, 2013, and April 25, 2013, “in connection

with the default by” Realty LP, Realty LLC, and Myers. He stated that he was

familiar with the usual and customary fees charged by attorneys of similar

experience in the area, and that the amount of time he spent and his hourly rate

of $225 an hour were necessary, reasonable, customary, and appropriate. He

listed some of the services he had performed after the foreclosure and an

estimate of the time he would need to spend to finalize and enforce any

judgment. Taplett concluded that in his opinion, $17,500 was a reasonable and

necessary attorney’s fee for the matter. This testimony was sufficient to support

the trial court’s award. 41

       Myers asserts in his reply brief that Taplett used the lodestar method to

calculate his fee, and under El Apple, Southwest was therefore required to

produce timesheets.           In Long v. Griffin, the Supreme Court of Texas

characterized the fee calculation used in the case as a lodestar fee because the

two attorneys in the case “relat[ed] the hours worked . . . multiplied by their hourly

rates for a total fee.” 42 Thus, Myers argues that because Taplett used his hourly

fee and number of hours worked in testifying about the reasonableness of his

       41
        See Ferrant, 2014 WL 1875825, at *9.
       42
        442 S.W.3d 253, 255 (Tex. 2014).

                                         18
fee, the production of time sheets was required. But Myers is mistaken about the

Supreme Court’s documentary requirements for lodestar fee cases, even if we

characterized the fee in this case as a lodestar fee.

      In City of Laredo v. Montano, the Supreme Court of Texas specifically

stated that El Apple does not require an attorney seeking fees to produce time

sheets. 43 Rather, El Apple states that to be awarded a fee based on the lodestar

method, the attorney will usually need to keep time records. 44 An attorney’s

testimony about his or her work can establish a fee under the lodestar method,

and therefore time records or billing statements are not strictly necessary. 45 But

“‘in all but the simplest cases, the attorney would probably have to refer to some

type of record or documentation to provide th[e] information’” about the work

performed by the attorney. 46 In other words, without documenting the work done

and the time spent, an attorney would usually not be able to accurately testify

about such matters. Accordingly, “attorneys using the lodestar method to shift

their fee to their opponent” are encouraged by the Supreme Court “to keep

contemporaneous records of their time as they would for their own client.” 47 The

      43
        414 S.W.3d 731, 736 (Tex. 2013).
      44
        See id.
      45
        Id.
      46
        Id. (citation omitted).
      47
        Id.

                                        19
court in Montano went on to uphold a fee award based on the attorney’s

testimony, not documentary evidence produced in the trial court. 48            Thus,

characterizing the attorney fee award as a lodestar fee would mean that Taplett

was probably required to keep track of his time spent on the case—and his

affidavit testimony includes the hours he worked on a number of tasks, indicating

that he kept track of his time—but he was not required to produce the record of

his time.

      Myers also argues that Taplett was required to but failed to segregate his

fees for the work performed in prosecution of Southwest’s claims against Myers,

Realty LP, and Realty LLP. In response, Southwest argues that segregation was

not required because the fees were incurred in connection with claims arising out

of the same transaction and were so interrelated that their prosecution entailed

proof of essentially the same facts. Southwest also argues that Myers failed to

preserve his complaint because he did not object to the lack of segregation.

      Myers’s attorney’s affidavit pointed out that fees were not segregated, and

he mentioned in the middle of his argument at the summary judgment hearing

that there was no segregation of fees. It is not clear from the record, however,

whether the trial court sustained Myer’s objection, overruled it, or ignored it. 49

      48
        Id. at 737.
      49
        See Tex. R. App. P. 33.1(a).

                                        20
But assuming that Myers preserved his complaint, we disagree that the award

was improper.

      “A party seeking attorney’s fees must show that the fees were incurred on

a claim that allows recovery of such fees, and thus is ordinarily required to

segregate fees incurred on claims allowing recovery of fees from those that do

not” 50 and to segregate fees related to claims against different defendants when

the party has a claim for fees against only one of the defendants. 51        But

segregation is not required when legal services advance both recoverable and

unrecoverable claims 52 that “are dependent upon the same set of facts or

circumstances and thus are intertwined to the point of being inseparable.” 53

Fees must be segregated, however, when an attorney’s fees relate solely to a

claim for which the fees are unrecoverable. 54

      50
         Stewart Title Guar. Co. v. Aiello, 941 S.W.2d 68, 73 (Tex. 1997).
      51
        Stewart Title Guar. Co. v. Sterling, 822 S.W.2d 1, 10–11 (Tex. 1991)
(noting duty to segregate fees owed by settling defendants from nonsettling
defendants); City of Austin v. Roberson, No. 13-06-218-CV, 2008 WL 802315, at
*3 (Tex. App.—Corpus Christi Mar. 27, 2008, no pet.) (mem. op.) (noting fees
must be segregated among different defendants when fee claim is against only
one defendant).
      52
         Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 313–14 (Tex.
2006).
      53
         Id. at 311; Aiello, 941 S.W.2d at 73 (quotation marks omitted).
      54
         Chapa, 212 S.W.3d at 313–14.

                                         21
      As Myers acknowledges, the lawsuit against all three original defendants

involved the same loan, note, property, and deed of trust. All the claims arose

out of the foreclosure of the property under the deed of trust. All the claims

involved a showing of the foreclosure and the resulting deficiency.               The

prosecution of the claims against all three defendants entailed proof of

essentially the same facts and circumstances. 55

      And as Myers notes in his reply brief, Taplett asserted that he spent

twenty-two hours on the foreclosure proceedings alone, which at his hourly rate

incurred $4,950 in fees, nearly the whole amount awarded. Taplett further stated

that in his opinion, it would take at least ten hours of time to finalize and enforce

any judgment rendered in Southwest’s favor. That testimony relates to tasks

performed in the claim against Myers and is sufficient to support the award. 56

      Furthermore, Myers’s own attorney conceded that $5,000 would constitute

a reasonable fee. He stated in his controverting affidavit that “a reasonable fee

should not exceed $5,000.”        Myers argues that this statement was not a

concession that a $5,000 fee would be reasonable, but we disagree.                He

essentially stated that a reasonable fee could be as much as but not more than

$5,000, and that is exactly what the trial court awarded.

      55
        See Sterling, 822 S.W.2d at 10–11.
      56
        See Montano, 414 S.W.3d at 737 (observing that an attorney’s testimony
about her unbilled trial work was some evidence on which to base an award of
attorney’s fees “because it concerns contemporaneous or immediately completed
work for which she had not had time to bill, or presumably even record”).

                                         22
      Finally, Myers argues that the award was erroneous because where there

are controverting affidavits regarding attorney’s fees, awarding attorney’s fees in

summary judgment is improper.        But in his controverting affidavit, Myers’s

attorney conceded that a fee up to $5,000 could be a reasonable fee. Myers’s

attorney’s controverting affidavit therefore supported the amount of the trial

court’s award. We overrule Myers’s fourth issue.

                                   Conclusion

      Having overruled Myers’s fourth issue, we affirm the trial court’s judgment.

                                                   /s/ Lee Ann Dauphinot
                                                   LEE ANN DAUPHINOT
                                                   JUSTICE

PANEL: DAUPHINOT, GARDNER, and WALKER, JJ.

DELIVERED: December 11, 2014

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