Court Opinion

ID: 9943723
Source: CourtListenerOpinion
Date Created: 2024-02-25 15:09:35.180776+00
Date Added: 2024-06-11T13:47:54.634576
License: Public Domain

Supreme Court of Texas
                           ══════════
                            No. 22-0459
                           ══════════

 Sealy Emergency Room, L.L.C. and Kannappan Krishnaswamy,
                           M.D.
                             Petitioners,

                                   v.

 Free Standing Emergency Room Managers of America, L.L.C.,
 Dr. Atul Dhingra, Dr. Swapan Dubey, and Dr. Sanjeev Dubey,
                             Respondents

   ═══════════════════════════════════════
              On Petition for Review from the
       Court of Appeals for the First District of Texas
   ═══════════════════════════════════════

                      Argued October 24, 2023

      JUSTICE BUSBY delivered the opinion of the Court.

      This case presents two questions regarding when a judgment
becomes final and appealable. First, does severing claims disposed of on
partial summary judgment into a new action render the judgment final
even though other claims between the parties remain pending in the
original action? We answer yes. When claims are severed into separate
actions, the two-part Lehmann test for finality applies to each action
separately. See Lehmann v. Har-Con Corp., 39 S.W.3d 191, 200 (Tex.
2001). Thus, any claims that remain pending in the original action are
not relevant in deciding whether there is a final judgment in the severed
action.   And although severance is improper if the claims are
interwoven, any procedural error in ordering severance—which carries
its own consequences—does not affect judgment finality or appellate
jurisdiction.
       Second, when a party seeks attorney’s fees as a remedy for a claim
under a prevailing-party standard, does a summary judgment against
the party on that claim also dispose of its fee request? We answer yes.
The court’s failure to recite that it is also denying the fee request will
not prevent finality if the court’s orders in fact dispose of all parties and
claims.
       Applying these rules, the trial court’s order granting partial
summary judgment disposed of all parties and claims that were later
severed into a new action. Accordingly, the severed action became final
when the severance order was signed, and the losing party timely
appealed. Because the court of appeals erred in holding that it lacked
appellate jurisdiction, we reverse and remand for that court to address
the merits of the appeal.

                              BACKGROUND

       Dr. Krishnaswamy built Sealy Emergency Room and contracted
with Free Standing Emergency Room Managers of America (FERMA) to
manage it. When a dispute arose, FERMA sued Dr. Krishnaswamy and
Sealy Emergency Room (collectively Sealy ER) for breach of contract as
well as a declaratory judgment that the contract was valid and
enforceable, and it requested attorney’s fees on both claims. Sealy ER

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brought counterclaims against FERMA for breach of contract, fraud,
fraudulent inducement, and negligence. Sealy ER also brought third-
party claims against three of FERMA’s individual doctors for fraud,
fraudulent inducement, and negligence. Sealy ER requested attorney’s
fees in its petitions without specifying the basis on which it claimed
entitlement to fees.
        FERMA and its doctors (collectively FERMA) filed a traditional
motion for partial summary judgment on Sealy ER’s counterclaims and
third-party claims.    FERMA’s motion did not mention Sealy ER’s
request for attorney’s fees. The trial court granted FERMA’s motion and
dismissed all of Sealy ER’s claims “in their entirety with prejudice.”
        FERMA then moved to sever the claims disposed of on partial
summary judgment, and Sealy ER moved for reconsideration of the
summary judgment. The trial court held a hearing at which Sealy ER’s
counsel made two additional points relevant here.          First, counsel
expressed concern that the partial summary judgment would “preclude[]
[Sealy ER] from putting evidence on of [its] affirmative defenses” to
FERMA’s claim for breach of contract, which Sealy ER characterized as
“identical” to its breach-of-contract counterclaim.     Second, although
Sealy ER’s counsel agreed with FERMA’s proposal to sever, he
requested that the underlying case be abated pending the severed
action’s outcome on appeal because “it just doesn’t make sense [to] . . .
have two cases, two trials . . . on the same facts.”
        Responding to the first point, FERMA’s counsel said that “under
no procedural paradigm do affirmative defenses of [Sealy ER] come into
play”   in   FERMA’s     “mo[tion]   for   summary     judgment   on     the

                                     3
counterclaims.” The trial court then addressed Sealy ER’s concern,
referencing this “admission” by FERMA and stating that Sealy ER’s
“affirmative defenses that are on file . . . are not part of the summary
judgment order.” The court also granted FERMA’s motion to sever Sealy
ER’s counterclaims and third-party claims into a new action with a
separate cause number. The order granting severance—like the order
granting partial summary judgment—contains no finality language and
makes no mention of Sealy ER’s request for attorney’s fees.
      Sealy ER appealed the summary judgment in the severed action
to the First Court of Appeals, where FERMA argued there was no final
appealable order after all because claims between it and Sealy ER
arising out of the same operative facts were still pending in the trial
court. The court of appeals agreed and dismissed Sealy ER’s appeal for
lack of appellate jurisdiction. 669 S.W.3d 488, 493-94 (Tex. App.—
Houston [1st Dist.] 2022).
      The court of appeals followed its prior decisions holding that
“[s]everance does not make an interlocutory judgment final and
appealable if the judgment disposes of only a subset of the claims among
the severed parties.” Id. at 493. Thus, when a party like Sealy ER
“appeals from a partial summary judgment that disposes of some but
not all claims between the parties, we must dismiss the appeal for lack
of jurisdiction, even if the trial court severed the disposed-of claims from
those that remain pending.” Id. Sealy ER then filed a petition for review
in this Court, which we granted.

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                                   ANALYSIS

I.     Orders in a severed action result in a final judgment if the
       Lehmann test is met as to that action alone.

       There are two paths for an order to become a final judgment
without a trial: the order can (1) dispose of all remaining parties and
claims then before the court, regardless of its language; or (2) include
unequivocal finality language that expressly disposes of all claims and
parties. Lehmann, 39 S.W.3d at 200. 1 We have also recognized that,
“[a]s a rule, the severance of an interlocutory judgment into a separate
cause makes it final.” Diversified Fin. Sys., Inc. v. Hill, Heard, O’Neal,
Gilstrap & Goetz, P.C., 63 S.W.3d 795, 795 (Tex. 2001). 2 This case
requires us to decide how these rules intersect.

       A.      The lack of finality in an original action does not
               affect the finality of orders in a severed action.

       We focus on the first Lehmann path because the order at issue
here contains no finality language. Under this path, an order need not
be labeled a final judgment.          Rather, an order constitutes a final
judgment—and the time to appeal begins to run—when that order

       1 When a party wants to ensure finality, the best practice is to follow

the second path and ask the trial court to include express finality language in
its order. See In re Guardianship of Jones, 629 S.W.3d 921, 924 (Tex. 2021)
(noting that “[t]alismanic phrases are not required or dispositive” but
repeating our guidance in Lehmann that a “statement like, ‘This judgment
finally disposes of all parties and all claims and is appealable,’ would leave no
doubt about the court’s intention” (quoting Lehmann, 39 S.W.3d at 206)).
       2 Of course, severance is not always sought for purposes of finality.   For
example, severance is sometimes sought to avoid undue prejudice caused by
trying two pending claims together. See, e.g., Liberty Nat’l Fire Ins. Co. v. Akin,
927 S.W.2d 627, 630 (Tex. 1996).

                                        5
disposes of the last claim among the parties to the action. McFadin v.
Broadway Coffeehouse, LLC, 539 S.W.3d 278, 283-84 (Tex. 2018) (“If a
judgment disposes of every remaining issue in a case, it does not lack
finality for purposes of appeal merely because it recites that it is partial,
refers to only some of the parties or claims, or lacks Mother Hubbard
language.”). 3
       Sealy ER argues that orders severed into a separate action
become final and appealable upon severance if those orders dispose of
all claims between the parties in the severed action. FERMA disagrees,
contending that orders severed into a separate action between certain
parties result in a final judgment only if all claims between those parties
have been disposed of in both the severed and the original actions. The
court of appeals agreed with FERMA, relying on a line of First Court of
Appeals cases holding that a severed action is not final on appeal if
pending claims remain in the underlying action. 4 Under our precedent,
however, we conclude that Sealy ER is correct.

       3 See also Ford v. Exxon Mobil Chem. Co., 235 S.W.3d 615, 617 (Tex.

2007) (“We have never held that an order disposing of all claims can be final
only if it itemizes each and every element of damages pleaded.”).
       4 See Blomstrom v. Altered Images Hair Studio, No. 01-19-00456-CV,

2020 WL 6065437 (Tex. App.—Houston [1st Dist.] Oct. 15, 2020, no pet.); Van
Duren v. Chife, 569 S.W.3d 176 (Tex. App.—Houston [1st Dist.] 2018, no pet.);
Davati v. McElya, 530 S.W.3d 265 (Tex. App.—Houston [1st Dist.] 2017, no
pet.); Duke v. Am. W. Steel, 526 S.W.3d 814 (Tex. App.—Houston [1st Dist.]
2017, no pet.); Alaniz v. O’Quinn L. Firm, No. 01-14-00027-CV, 2015 WL
6755614 (Tex. App.—Houston [1st Dist.] Nov. 5, 2015, no pet.); Gonzales v.
Terrell, No. 01-14-00711-CV, 2015 WL 1735370 (Tex. App.—Houston [1st
Dist.] Apr. 14, 2015, no pet.); Cryogenic Vessel Alts., Inc. v. Lily & Yvette
Constr., LLC, No. 01-13-00737-CV, 2015 WL 222135 (Tex. App.—Houston [1st
Dist.] Jan. 15, 2015, no pet.). For the reasons explained below, we disapprove
the holdings of these cases regarding finality.

                                      6
      In the same year we decided Lehmann, we held that a summary
judgment order became final when the claims it addressed were severed
into a separate action “because [the judgment] disposed of all parties
and issues in that cause.” Harris County Flood Control Dist. v. Adam,
66 S.W.3d 265, 266 (Tex. 2001) (per curiam) (emphasis added).          In
Adam, the trial court granted summary judgment for only two of three
defendants. The court then severed the claims against those defendants
from the original action, “thereby making the judgment final in the
severed case.” Id. The remaining defendant in the original action filed
pleas to the jurisdiction, arguing that the severance order was a final
judgment in the original action. The trial court disagreed and overruled
the pleas. The court of appeals affirmed and held the severance order
rendered only the severed action final, not the original action.
      We agreed with the court of appeals that the severance order
could only bring finality to the severed action, not the original action.
Taking the first Lehmann path to finality, we explained that “the
judgment in the severed cause was final because it disposed of all parties
and issues in that cause.” Id. We also observed that “the obvious
purpose of the [severance] order was to sever claims that had been
adjudicated into a separate cause, not to adjudicate the claims
remaining in the original cause.” Id.
      Similarly, the lack of orders disposing of all claims and parties in
an original action does not undermine the finality of orders disposing of
all claims and parties in a severed one. The severance prevents such an
effect by “divid[ing] the lawsuit into two or more separate and

                                    7
independent causes.” Hall v. City of Austin, 450 S.W.2d 836, 838 (Tex.
1970) (emphasis added).
       Adam is not alone in reaching this conclusion.             In Hall, we
explained that when a severance order is signed, “a judgment which
disposes of all parties and issues in one of the severed causes is final and
appealable.” Id. at 837-38. And in Farmer v. Ben E. Keith Co., we
confirmed    that    “[w]hen    a   judgment     is   interlocutory    because
unadjudicated parties or claims remain before the court, and when one
moves to have such unadjudicated claims or parties removed by
severance, . . . the appellate timetable runs from the signing of [the
severance] order disposing of those claims or parties.” 907 S.W.2d 495,
496 (Tex. 1995) (citing Martinez v. Humble Sand & Gravel, Inc., 875
S.W.2d 311, 313 (Tex. 1994)). 5
       Because the severed action here consists only of claims that have
been fully and finally resolved on summary judgment, it must be
considered final under Lehmann and Adam. Whether the parties have
other claims pending in the original action has no bearing on the severed
action’s finality.

       5 See also Piranha Partners v. Neuhoff, 596 S.W.3d 740, 743 n.4 (Tex.

2020) (observing that trial court “granted a motion for partial summary
judgment, but it severed all remaining claims, counterclaims, and defenses
into a separate case, making this judgment final”); Pierce v. Reynolds, 329
S.W.2d 76, 77 (Tex. 1959) (“[A] judgment which effectively disposes of a severed
and severable phase of the case is final for the purposes of an appeal.”).

                                       8
      B.     Whether a severance is procedurally improper does
             not affect finality or appellate jurisdiction.

      One rationale offered for FERMA’s position—that the finality
inquiry includes all claims between the parties in both the original and
severed actions—is that it helps guard against improper severances for
the purpose of obtaining early appellate review. But this position would
upend our long-standing finality jurisprudence, and it is not needed to
guard against improper severances—which come with their own costs
that may lead parties to prefer a permissive appeal.
      Rule 41 authorizes trial courts to sever “[a]ny claim against a
party.” TEX. R. CIV. P. 41. Our cases have recognized three principles
to guide trial courts’ discretion in ruling on motions to sever—whether
they are contested or agreed.    A severance is proper when “(1) the
controversy involves more than one cause of action, (2) the severed claim
is one that would be the proper subject of an independently asserted
lawsuit, and (3) the severed claim is not so interwoven with the
remaining action that the actions involve the same facts and issues.”
State v. Morello, 547 S.W.3d 881, 889 (Tex. 2018); see Guar. Fed. Sav.
Bank v. Horseshoe Operating Co., 793 S.W.2d 652, 658 (Tex. 1990).
Within these parameters, a trial court may grant a severance to avoid
prejudice, do justice, and increase convenience.       F.F.P. Operating
Partners, L.P. v. Duenez, 237 S.W.3d 680, 693 (Tex. 2007). When a
severance order is challenged, an appellate court reviews it for abuse of
discretion. See id.
      In light of these principles, we have concluded that “severance of
a single cause of action into two parts is never proper.”      Pierce v.
Reynolds, 329 S.W.2d 76, 79 n.1 (Tex. 1959); see TEX. R. CIV. P. 41

                                   9
(authorizing severance of a “claim”).         We have also observed that
severance “should not be granted for the purpose of enabling the
litigants to obtain an early appellate ruling on the trial court’s
determination of one phase of the case.” Pierce, 329 S.W.2d at 79 n.1.
Similarly, severance of two or more causes of action involving the same
facts and issues is improper. See Morello, 547 S.W.3d at 889; F.F.P.
Operating Partners, 237 S.W.3d at 693 (holding severance was abuse of
discretion because “F.F.P.’s claim against Ruiz is ‘interwoven with the
remaining action’: it involves the same facts and issues to be litigated in
the Duenezes’ action against F.F.P.”). 6 Both parties appear to agree that
this is what happened here. 7
       Nevertheless, over fifty years ago we held that “the appealability
of a judgment should [not] be made to turn upon whether the action is
severable.”    Pierce, 329 S.W.2d at 78.            An erroneous “order of
severance . . . effectively separates the controversy into two causes,” and
“[a] judgment which fully adjudicates one of the severed causes is
appealable even though the entire controversy as it existed prior to the
severance is not determined thereby.”          Id. at 78-79.    Of course, an

       6 See also State Dep’t of Highways & Pub. Transp. v. Cotner, 845 S.W.2d

818, 819 (Tex. 1993) (“The facts and issues related to liability for the accident
are the same for Stephen as for Cherie, and to some extent Stephen’s damage
allegations are related to the extent of damages Cherie suffered. For this
additional reason the trial court erred in severing Stephen’s claims.”).
       7   As discussed in the background section above, both Sealy ER and
FERMA have acknowledged at some point that the claims in the severed and
underlying actions are identical and arise out of the same operative facts. The
court of appeals also recognized as much. See 669 S.W.3d at 492 (“FERMA still
has affirmative claims, arising out of the same operative facts, against Sealy
ER . . . .”).

                                       10
erroneous severance can be challenged on appeal if it was not agreed.
And an erroneous severance can have consequences for any preclusion
defenses. Id. at 78; see, e.g., Street v. Second Ct. of Appeals, 756 S.W.2d
299, 301 (Tex. 1988) (noting differences between finality for purposes of
jurisdiction and preclusion).      As a result, parties should consider
carefully whether a severance is proper before requesting or agreeing to
one.
       For example, “the res judicata effects of an action cannot preclude
litigation of claims that a trial court explicitly separates or severs from
that action.” Van Dyke v. Boswell, O’Toole, Davis & Pickering, 697
S.W.2d 381, 384 (Tex. 1985). And the rule against claim-splitting, which
is a “branch of the broader doctrine of res adjudicata” or claim
preclusion, “is for the benefit of and may be waived by the defendant.”
Pierce, 329 S.W.2d at 78.      Issue preclusion may also be waived by
representations made to secure a severance or foreclosed by the
language of the severance order. See, e.g., Currier v. Virginia, 138 S. Ct.
2144, 2154 (2018) (plurality opinion of Gorsuch, J.) (noting civil issue
preclusion “doesn’t often have much to say about the preclusive effects
of rulings ‘within the framework of a continuing action’” or “when the
parties agree[]” to hold a second proceeding “covering much the same
terrain at a later stage” (quoting 18A CHARLES ALAN WRIGHT & ARTHUR
R. MILLER, FEDERAL PRACTICE AND PROCEDURE § 4434 (3d ed. updated
2023))). 8

       8 See also 18A WRIGHT & MILLER, supra, § 4424.1 (“A court that foresees

future litigation may seek to limit directly the possible preclusion
consequences of its own judgment. . . . A court that knows of parallel

                                     11
       Although none of these concerns and consequences raise a
jurisdictional infirmity, there is another possible avenue of appellate
review that avoids them. The trial court may permit an appeal from an
interlocutory order when the order “involves a controlling question of
law as to which there is a substantial ground for difference of opinion”
and the appeal “may materially advance the ultimate termination of the
litigation.” TEX. CIV. PRAC. & REM. CODE § 51.014(d). In cases where
severance would be procedurally improper, courts should encourage
parties to use the permissive appeal option provided by the Legislature.

II.    When a party seeks attorney’s fees as a remedy for a claim
       under a prevailing-party standard, a summary judgment
       against the party on that claim also disposes of the fee
       request.

       FERMA also argues that even if the Lehmann analysis focuses
only on the severed action, this summary judgment is not final because
it did not expressly dispose of Sealy ER’s request for attorney’s fees.
Parsing the words of the trial court’s order, FERMA questions whether
dismissing all of Sealy ER’s claims “in their entirety with prejudice” also
dismissed its request for attorney’s fees. We reject FERMA’s argument
because it prioritizes the technical recitation of unnecessary language
over clarity in determining the time for perfecting an appeal.

proceedings, for example, may believe that the circumstances of its own
proceedings should not support nonmutual issue preclusion. Other courts
should respect any explicit statement to that effect . . . .”); cf. Edmonds v.
Smith, 922 F.3d 737, 739 (6th Cir. 2019) (“The defining feature of the law-of-
the-case doctrine is that it applies only within the same case. . . . [T]he law-of-
the-case doctrine does not apply across separate habeas actions brought
independently by petitioners who were codefendants in the underlying
criminal proceedings.”).

                                        12
      “Appellate procedure should not be tricky. It should be simple, it
should be certain, it should make sense, and it should facilitate
consideration of the parties’ arguments on the merits.” Lane Bank
Equip. Co. v. Smith S. Equip., Inc., 10 S.W.3d 308, 314 (Tex. 2000)
(Hecht, J., concurring). “Simplicity and certainty in appellate procedure
are nowhere more important than in determining the time for perfecting
appeal.” Lehmann, 39 S.W.3d at 205. These principles support a simple,
bright-line rule in this situation: a party who loses a claim on summary
judgment necessarily loses its request for prevailing-party attorney’s
fees as well.     We reject FERMA’s position that trial courts must
expressly dispose of such a request to achieve finality even though no
possible avenue for recovering fees remains.
      We begin with the American Rule, which provides that “attorney’s
fees are not awarded unless a statute or contract authorizes them.”
JCB, Inc. v. Horsburgh & Scott Co., 597 S.W.3d 481, 491 (Tex. 2019). 9
Some statutes and contracts provide for fees as one available remedy if
a party prevails on a claim. See id. In such cases, we have held that a
party who receives no affirmative judicial relief from the trial court
cannot recover attorney’s fees. Intercontinental Grp. P’ship v. KB Home
Lone Star L.P., 295 S.W.3d 650, 655 (Tex. 2009). Indeed, a favorable
judgment by the trial court is “critical to the prevailing-party
determination.”    Id. at 656 (emphasizing that favorable judgment,

      9 Fees can also be awarded in certain limited circumstances (not at issue

here) when they are recoverable as actual damages. See, e.g., RAS Grp., Inc.,
v. Rent-A-Center E., Inc., 335 S.W.3d 630, 641 (Tex. App.—Dallas 2010, no
pet.).

                                     13
consent decree, or settlement—rather than favorable verdict—is key
element in recovering attorney’s fees).
      We observed in KB Home that “a plaintiff ‘prevails’ when actual
relief on the merits of his claim materially alters the legal relationship
between the parties by modifying the defendant’s behavior in a way that
directly benefits the plaintiff.” Id. at 654 (quoting Farrar v. Hobby, 506
U.S. 103, 111-12 (1992)).      Thus, KB Home could not recover any
attorney’s fees as a prevailing party because it received no affirmative
judicial relief for the opposing party’s breach of contract—the trial court
awarded KB Home the amount of damages as found by the jury, which
was “[t]he sum of zero dollars.” Id.; see also Huff v. Fid. Union Life Ins.
Co., 312 S.W.2d 493, 501 (Tex. 1958) (“That a suit for the statutory
attorney’s fees as a separate action could not be maintained is evident
from the wording of the statute. . . . [A]ttorney’s fees, while not costs,
partake of the nature of the costs of suit and are assessed in accordance
with the judgment.”).
      Under these authorities, a summary judgment against a party’s
claim necessarily dooms its request for a prevailing-party fee remedy on
that claim. It follows that a court need not expressly reject the fee
request to make its judgment final. Once a trial court has rendered
summary judgment against a claim, denying a request for a fee remedy
that is only available under a prevailing-party standard is merely a
ministerial act, so the lack of an express denial will not prevent finality.
See Bertucci v. Watkins, No. 03-20-00058-CV, 2022 WL 3328986, at *5
(Tex. App.—Austin Aug. 12, 2022, order) (en banc) (holding stipulated
resolution of attorney’s fees makes trial court’s rendition of judgment on

                                    14
attorney’s fees “ministerial or perfunctory”), disp. on merits, 2022 WL
17998480 (Tex. App.—Austin Dec. 30, 2022, pet. filed).
      Moreover, accepting FERMA’s position would put parties to the
expense, delay, and uncertainty of litigating whether various shades
and phases of order language that falls short of Lehmann’s unequivocal
finality standard are nevertheless sufficient to dispose of a fee request.
It would also leave losing parties trapped and unable to appeal an
otherwise final decision on the merits just because the judge did not
expressly deny a remedy that could not be recovered anyway.           We
decline to force these consequences on parties.
      A different rule applies, however, when a party has proven that
an award of attorney’s fees is mandatory or when a party requests a
discretionary award of attorney’s fees under a statute or contract that
does not require it to prevail. In either situation, the trial court must
expressly dispose of the fee request to render a final judgment. But
neither situation exists here.
      For example, an award of attorney’s fees is mandatory when a
statute provides that a party who prevails on its claim or meets other
specified requirements “may recover,” “shall be awarded,” or “is entitled
to” fees. Bocquet v. Herring, 972 S.W.2d 19, 20 (Tex. 1998); see Welch v.
Hrabar, 110 S.W.3d 601, 610 (Tex. App.—Houston [14th Dist.] 2003, pet.
denied) (holding fee award mandatory on prevailing party’s claim for
breach of contract). Thus, when a party seeking fees in connection with

                                   15
its claim meets the requirements of a mandatory fee-shifting statute, a
trial court must expressly dispose of the fee request to achieve finality. 10
      Courts must also expressly dispose of requests for attorney’s fees
under discretionary fee-shifting statutes that do not require the
requesting party to prevail.      The Declaratory Judgments Act, for
instance, provides that “the court may award costs and reasonable and
necessary attorney’s fees as are equitable and just.” TEX. CIV. PRAC. &
REM. CODE § 37.009. This language grants the trial court discretion in
awarding attorney’s fees. Bocquet, 972 S.W.2d at 20; see Barshop v.
Medina County Underground Water Conserv. Dist., 925 S.W.2d 618, 637
(Tex. 1996) (holding fee award “is not dependent on a finding that a
party ‘substantially prevailed’”). Thus, we held in McNally v. Guevara
that a judgment granting a party declaratory relief “was not an
appealable judgment” because it “does not appear final on its face” and
“did not dispose of the [party’s request] for attorney fees,” which
remained in the trial court’s discretion to award. 52 S.W.3d 195, 196
(Tex. 2001) (per curiam). And in another declaratory judgment case
where both parties requested attorney’s fees, we held that a summary
judgment order granting declaratory relief with a Mother Hubbard
clause did not dispose of the fee requests, so we affirmed dismissal of the

      10 On the other hand, given the American Rule, it is equally mandatory

that parties not receive attorney’s fees unless they meet the requirements of
the fee-shifting statute. Thus, as explained above, a party who loses a claim
on summary judgment necessarily loses its request for statutory prevailing-
party attorney’s fees, and the court need not expressly dispose of that fee
request to achieve finality.

                                     16
appeal for want of jurisdiction. Farm Bureau County Mut. Ins. Co. v.
Rogers, 455 S.W.3d 161, 164 (Tex. 2015) (per curiam).
       In this case, however, Sealy ER did not prevail on a claim for
which it sought mandatory fees. It also did not request an award of
discretionary fees, so McNally and Farm Bureau do not apply.
      Specifically, Sealy ER asserted counterclaims and third-party
claims for breach of contract, fraud, fraudulent inducement, and
negligence. The trial court’s partial summary judgment rejected Sealy
ER’s counterclaim for breach of contract, and the parties agree this left
no other avenue for Sealy ER to recover attorney’s fees. Because Sealy
ER never received a judgment granting it affirmative monetary relief on
its counterclaim for breach of contract, it is not a prevailing party and
cannot recover any attorney’s fees. Thus, the trial court’s summary
judgment against Sealy ER’s claim also disposed of its request for
attorney’s fees. The orders in the severed action therefore disposed of
all parties and claims, allowing Sealy ER to appeal from a final
judgment.

                             CONCLUSION

      For these reasons, the court of appeals’ judgment dismissing the
appeal for lack of jurisdiction is reversed, and the case is remanded to
the court of appeals for further proceedings on the merits of the appeal.

                                        J. Brett Busby
                                        Justice

OPINION DELIVERED: February 23, 2024

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