Court Opinion

ID: 4236260
Source: CourtListenerOpinion
Date Created: 2018-01-12 08:27:18.700206+00
Date Added: 2024-06-11T14:43:06.033022
License: Public Domain

ACCEPTED
                                                                                 09-17-00265-CV
                                                                      NINTH COURT OF APPEALS
                                                                             BEAUMONT, TEXAS
                                                                               1/9/2018 12:12 PM
                                                                          CAROL ANNE HARLEY
                                                                                          CLERK

                      NO. 09-17-00265-CV
                                               FILED IN
                                        9th COURT OF APPEALS
                                          BEAUMONT, TEXAS
           IN   THE NINTH COURT OF APPEALS
                                        1/9/2018 12:12:17 PM
                                         CAROL ANNE HARLEY
                  AT BEAUMONT, TEXAS            Clerk

                   MINDA LAO TOLEDO,
                                                Appellant
                               v.
  KBMT OPERATING COMPANY, LLC, KBMT LICENSE
COMPANY, LLC, BRIAN BURNS, JACKIE SIMIEN and TRACY
                    KENNICK,
                                                 Appellee
      Appeal from the 128th District Court of Orange, Texas
       The Honorable Courtney Arkeen, Judge Presiding

  APPELLANT’S REPLY BRIEF AND CROSS-APPELLEE’S BRIEF

                                    Joe House
                                    Texas Bar No. 10042150
                                    Email: joe@houseperron.com
                                    Norfolk Tower
                                    2211 Norfolk Street, Suite 1150
                                    Houston, Texas 77098
                                    Phone: 281-762-1377
                                    Fax: 866-342-7683

                                                                i|Page
                                TABLE OF CONTENTS

I.     RESPONSE TO CROSS-APPELLANTS’ BRIEF ............................... 1

II.    REPLY TO APPELLEE’S RESPONSE BRIEF .................................. 2

III.   CONCLUSION .......................................................................................10

IV.    CERTIFICATE OF COMPLIANCE………………………………...12

V.     CERTIFICATE OF SERVICE……………………………………….12

                                                 ii
                                       INDEX OF AUTHORITIES

AUTHORITY                                                                                                            PAGE

CASES

Acad. Corp. v. Interior Buildout & Turnkey Constr., Inc., 21 S.W.3d 732, 742

  (Tex. App.—Houston [14th Dist.] 2000, no pet.)..................................................5

Aecon Buildings, Inc. v. Zurich N. Am., No. C07-832MJP, 2008 WL 2434205, at

  *1-*2 (W.D.Wash. June 13, 2008) ........................................................................3

El Apple I, Ltd. v. Olivas, 55 Tex. Sup. Ct. J. 954, 960 (Tex. June 22, 2012) ..........7

First United Pentecostal Church of Beaumont v. Parker, 514 S.W.3d 214, 221-222

  (Tex.2017) ..............................................................................................................4

Fitzgerald v. Advanced Spine Fixation Sys., 996 S.W.2d 864, 866 (Tex. 1999) ......1

Garcia v. Gomez, 319 S.W.3d 638, 642 (Tex. 2010) ..............................................11

Ginsberg v. Fifth Court of Appeals, 686 S.W.2d 105, 108 (Tex. 1985) (orig.

  proceeding).............................................................................................................3

Guity v. C.C.I. Ent., Co., 54 S.W.3d 526, 529 (Tex. App.–Houston [1st Dist.] 2001,

  no pet.)....................................................................................................................7

Hornbeck Offshore Servs., L.L.C. v. Salazar, Civil Action No. 10-1663, 2011 WL
2214765, at *20 (E.D.La. June 1, 2011) (rec. dec., aff'd June 23, 2011) ..............3

                                                             iii
In re Estate of Johnston, No. 04-11-00467-CV, 2012 Tex. App. LEXIS 4255, 2012
WL 1940656, at *3 (Tex. App.—San Antonio May 30, 2012) .............................8

John Moore Servs., Inc. v. Better Bus. Bureau of Metro. Houston Inc., No. 01-14-

  00906-CV, 2016 Tex. App. LEXIS 5814, 2016 WL 3162206, at *1, 7 (Tex.

  App.—Houston [1st Dist.] June 2, 2016, no pet.) .................................................9

Johnson v. Georgia Highway Express, Inc.,488 F.2d 714, 717–19 (5th Cir. 1974) .6

Lewis v. Wittig, 877 S.W.2d 52, 57 (Tex. App.—Houston [14th Dist.] 1994, orig.

  proceeding).............................................................................................................3

Lindy Bros. Builders, Inc. of Philadelphia v. American Radiator & Standard

  Sanitary Corp., 487 F.2d 161 (1973), appeal after remand, 540 F.2d 102 (1976)

   ................................................................................................................................7

Nath v. Tex. Children's Hosp., 446 S.W.3d 355, 365 (Tex. 2014) ...........................4

Nationwide Payment Solutions, 831 F. Supp. 2d 337, 339 (2011) ..............................2

Occidental Chem. Corp. v. Banales, 907 S.W.2d 488, 490 (Tex. 1995) (per curiam)

  (orig. proceeding) ...................................................................................................3

Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542, 553–54 (2010) ...............................6

Perry v. Cohen, 272 S.W.3d 585, 587 (Tex. 2008) ...................................................4

Petco Animal Supplies v. Schuster, 144 S.W.3d 554 (Tex. App.—Austin 2004, no

   pet)..........................................................................................................................5

                                                               iv
Pillsbury Winthrop Shaw Pittman LLP v. Brown Sims, P.C., Civil No. 4:09-mc-

   365, 2010 WL 56045, at *5-*7 (S.D.Tex. Jan. 6, 2010)........................................3

Ragsdale v. Progressive Voters League, 801 S.W.2d 880, 882 (Tex. 1990) ............6

Republic Ins. Co. v. Davis, 856 S.W.2d 158, 163 (Tex. 1993)..................................3

Sentinel Integrity Solutions, Inc. v. Mistras Grp., Inc., 414 S.W.3d 911 (Tex.

   App.—Houston [1st Dist.] 2013, pet denied) ........................................................9

Singleton v. Wulff, 428 U.S. 106, 121 (1976) ............................................................2

Smith v. Patrick W.Y. Tam Trust, 296 S.W.3d 545, 547 (Tex. 2009)........................6

Sullivan v. Abraham, 488 S.W.3d 294, 299 (Tex. 2016).....................................1, 11

Woodhaven Partners, Ltd. V. Shamoun & Norman, LLP, 422 S.W.3d 821

   (Tex.App.—Dallas 2014, no pet.)..........................................................................9

STATUTES

Tex. Civ. Prac. & Rem. Code § 27.009(a)(1) ......................................................1, 10

                                                     v
                RESPONSE TO CROSS-APPELLANTS’ BRIEF

      Cross-Appellants appeal the trial court’s judgment, arguing that the trial court

should have awarded fees for the appeal. First, the legislature did not add any

language in the TCPA statute awarding fees for an appeal defending a fee petition.

             Sec. 27.009. Damages and Costs.
            (a) If the court orders dismissal of a legal action under this
      chapter, the court shall award to the moving party:
            (1) court costs, reasonable attorney’s fees, and other expenses
      incurred in defending against the legal action as justice and equity may
      require; and
      The plain language of the statute is the surest guide to the legislature’s intent.

Sullivan v. Abraham, 488 S.W.3d 294, 299 (Tex. 2016). A court cannot speculate

what the legislature intended. When a court strays from the plain language of a

statute, it risks encroaching on the Legislature’s function to decide what the law

should be. Fitzgerald v. Advanced Spine Fixation Sys., 996 S.W.2d 864, 866 (Tex.

1999). The Legislature certainly must have been aware of what it was doing in

enacting the statute. Thus, the American Rule applies where there is no contractual

provision or statutory provision to the contrary. If the legislature intended to provide

those fees, it would have. Nowhere in that statute is a provision to award fees in

defending a fee award.

                                                                             1|Page
                 REPLY TO APPELLEE’S RESPONSE BRIEF

                        No waiver of offensive use doctrine

      Appellees argue that Dr. Toledo “waived” any argument regarding the

offensive use privilege as it applies to the numerous redactions in its billing records.

Only new issues are waived, not the refinement of an argument on an issue presented

to the lower court. In this case, Dr. Toledo did in fact press the argument to the trial

court that the redactions were not privileged in her briefing. [CR, Vol 2, p. 242]. It

is not a new issue raised on appeal. Refining an argument is not presenting a new

issue. Dr. Toledo does not change positions. Appellees evidently confuse the

refinement of an argument with an issue that was raised below. There was no

relinquishment of an argument or claim.

      The specific argument of “offensive use” is an argument based on a question

of law, and this Court is justified in reaching the issue “where proper resolution is

beyond any doubt.” Singleton v. Wulff, 428 U.S. 106, 121 (1976). The “offensive

use” argument does not require further fact-finding or factual development. In the

briefing to the trial court, Plaintiff cited several cases regarding privilege in this

context. [CR Vol 2, pg. 243]. The Nationwide Payment Solutions case discusses

extensively the offensive use doctrine, albeit not with that label, but conceptually

and precisely as to billing records. 831 F. Supp. 2d 337 (2011). A direct quote was

published in that brief, stating:
                                           2
      Put differently, a claimant who seeks attorney fees and submits attorney
      fee invoices in support of that request can be said to have impliedly
      waived any applicable privilege or protection, at least as to its opponent
      and as to the invoices themselves. See, e.g., Hornbeck Offshore Servs.,
      L.L.C. v. Salazar, Civil Action No. 10-1663, 2011 WL 2214765, at *20
      (E.D.La. June 1, 2011) (rec. dec., aff'd June 23, 2011); Pillsbury
      Winthrop Shaw Pittman LLP v. Brown Sims, P.C., Civil No. 4:09-mc-
      365, 2010 WL 56045, at *5-*7 (S.D. Tex. Jan. 6, 2010); Aecon
      Buildings, Inc. v. Zurich N. Am., No. C07-832MJP, 2008 WL 2434205,
      at *1-*2 (W.D. Wash. June 13, 2008).
Id. at 339.
      This is the offensive use waiver in Texas. “A plaintiff cannot use one hand to

seek affirmative relief in court and with the other lower an iron curtain of silence

against otherwise pertinent and proper questions which may have a bearing upon his

right to maintain his action." Ginsberg v. Fifth Court of Appeals, 686 S.W.2d 105,

108 (Tex. 1985) (orig. proceeding); see also Republic Ins. Co. v. Davis, 856 S.W.2d
158, 163 (Tex. 1993) (stating, in context of whether attorney-client privilege has

been waived, that "[i]n an instance in which the privilege is being used as a sword

rather than a shield, the privilege may be waived"). The work product privilege can

be waived by a party's offensive use of the privilege. Lewis v. Wittig, 877 S.W.2d
52, 57 (Tex. App.—Houston [14th Dist.] 1994, orig. proceeding); see also

Occidental Chem. Corp. v. Banales, 907 S.W.2d 488, 490 (Tex. 1995) (per curiam)

(orig. proceeding) ("[T]he work product privilege may be waived under the

offensive use doctrine.").

      As to waiver/forfeiture, the Texas Supreme Court has held:

                                          3
              We generally hesitate to turn away claims based on waiver or
      failure to preserve the issue. See Nath v. Tex. Children's Hosp., 446
S.W.3d 355, 365 (Tex. 2014). In considering assertions that claims have
      been waived, we have urged courts of appeals, and reminded ourselves,
      to construe briefing "reasonably, yet liberally, so that the right to
      appellate review is not lost by waiver." Perry v. Cohen, 272 S.W.3d
585, 587 (Tex. 2008). That standard is simply an explication of Texas
      Rule of Appellate Procedure 38.1(f), which requires courts to treat the
      statement of an issue "as covering every subsidiary question that is
      fairly included."
First United Pentecostal Church of Beaumont v. Parker, 514 S.W.3d 214, 221-222
(Tex. 2017).
      Here, the “offensive use” theory was inextricably linked to the redactions

argument in this case and it is essential to the analysis to the issue directly on appeal.

An appellate court retains the independent power to identify and apply the proper

construction of governing law from the Texas Supreme Court.

      Surely an appellate court has the power to raise other grounds to make a

decision on an issue presented when it is purely a matter of applying the law to the

facts. Importantly, the Court cannot ignore Texas precedent on the assertion of

privilege to billing records in the effort to get fees paid. The trial court was briefed

on Dr. Toledo’s opposition as to those redactions, the issue was raised, the argument

made. Simply put, Appellees improperly invoke the waiver argument, and in doing

so, diminish and/or mischaracterize the arguments that were indeed made below.

                                            4
                                 Andersen Factors

      Appellees hammer out, again, the Andersen factors to support the fees. The

eight Andersen factors are not elements of proof; instead, they are general guidelines

to be considered when determining the reasonableness of a fee. See, e.g., Petco

Animal Supplies v. Schuster, 144 S.W.3d 554 (Tex. App.–Austin 2004, no pet);

Acad. Corp. v. Interior Buildout & Turnkey Constr., Inc., 21 S.W.3d 732, 742 (Tex.

App.—Houston [14th Dist.] 2000, no pet.). The factors are a laundry list of criteria

from the Code of Professional Responsibility, but there are additional evaluative

criteria. For example, in determining “the time and labor required,” [factor (1)], the

court should evaluate the reasonableness of the number of hours charged. This

requires an objective rating of the amount of work different legal tasks should

require. Fine tuning is necessary because of the shortcomings in the Andersen factors

checklist.

             No Need for Contradictory Testimony from Dr. Toledo

      Appellees argue that Dr. Toledo had to come up with evidence at the hearing

to contest the fees. Generally, the determination of reasonable attorney's fees is a

question of fact and "'the testimony of an interested witness, such as a party to the

suit, though not contradicted, does no more than raise a fact issue to be determined

                                          5
by the jury.'" Smith v. Patrick W.Y. Tam Trust, 296 S.W.3d 545, 547 (Tex. 2009)

(quoting Ragsdale v. Progressive Voters League, 801 S.W.2d 880, 882 (Tex. 1990)).

        The focus in this fee dispute is application of the law to the facts as presented

by the Appellees, which includes the billing records. Dr. Toledo presented its legal

argument controverting the fee request. That is all she is required to do, controvert.

It is Appellees’ burden to shore up their fee request with a showing of reasonableness

under lodestar and all the nuances of billing judgment. This includes, fees that have

been adequately documented, fees that are not excessive, redundant, or otherwise

unnecessary. Dr. Toledo showed, with a legal analysis, that the billing records were

rife with problems.

        In another vein, self-serving testimony from Mr. McCabe on the Andersen

factors is subjective and simply not enough in a case requesting over a quarter of a

million dollars from a private citizen. Andersen factors provide little guidance, and

the U.S. Supreme Court in Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542, 553–54

(2010), in discussing the federal “Johnson factors”1 – which are nearly identical to

the Andersen factors, cautions against the sole use of the Johnson factors to calculate

a reasonable attorney’s fee. For example, the Andersen factors do not assist in any

in-depth analysis of the hours reasonably expended on the litigation, this Court must

1
 Johnson v. Georgia Highway Express, Inc.,488 F.2d 714, 717–19 (5th Cir. 1974) (the “Johnson factors”),1
abrogated on other grounds by Blanchard v. Bergeron, 489 U.S. 87 (1989).
                                                       6
resolve issues of reasonable hourly rates, reasonable hours expended on the task in

questions, and the adequacy of the billing records allowing a court to determine what

exactly was done. The fee applicant should provide the court “sufficient information

to make a meaningful evaluation” and exclude hours that are duplicative, excessive,

redundant, inadequately documented, or otherwise unnecessary. El Apple I, Ltd. v.

Olivas, 55 Tex. Sup. Ct. J. 954, 960 (Tex. June 22, 2012). This is where the analysis

of the billing records is important, not solely reliance on the Andersen factors.

      Third, Appellees turn Texas case law on its ear when they argue reliance on

“foreign law” is somehow wrong. the lodestar approach, was pioneered by the Third

Circuit in Lindy Bros. Builders, Inc. of Philadelphia v. American Radiator &

Standard Sanitary Corp., 487 F.2d 161 (1973), appeal after remand, 540 F.2d 102

(1976). Reliance on federal law is entirely appropriate in the determination of

reasonably expended hours. In its analysis of the lodestar method, the Texas

Supreme Court borrowed heavily from federal law and noted that in appropriate

cases, Texas courts may consider “the far greater body of federal court experience

with lodestar and fee shifting . . . .” El Apple I, Ltd. v. Olivas, 55 Tex. Sup. Ct. J.
954, 960 (Tex. June 22, 2012). See Guity v. C.C.I. Ent., Co., 54 S.W.3d 526, 529

(Tex.App.–Houston [1st Dist.] 2001, no pet.):

            In determining the reasonableness of attorney's fees, the fact
      finder must be guided by a specific standard. This standard is
      substantially similar under both federal law and state law. See Purcell,
                                          7
999 F.2d at 961 (setting out the federal standard); Arthur Andersen v.
      Perry Equip. Corp., 945 S.W.2d 812, 818 (Tex. 1997) (setting out the
      state standard and citing to TEX. DISCIPLINARY R. PROF'L
      CONDUCT 1.04, reprinted in TEX. GOV'T CODE ANN., tit. 2, subtit.
      G app. A (Vernon 1998) (TEX. STATE BAR R., art. X, § 9); Gorges
      Foodservice, Inc. v. Huerta, 964 S.W.2d 656, 673 (Tex. App.—Corpus
      Christi 1997, no pet.).
Other cases were also cited in Dr. Toledo’s opening brief and in the Opposition filed

in the trial court showing that Texas often does rely on federal jurisprudence.

                                Redactions/Privilege

      First, the claim that the incidents of redactions were isolated is wrong.

Examples were shown, but the billings are permeated with redactions and listed and

cited to the records. The trial court asked for an unredacted version of the billing

statements. Those were not submitted.

      Appellees cited several cases suggesting that redactions are permitted. The

cases are fact specific and do not expound on the assertion of attorney client privilege

and the offensive use waiver of the privilege sanctioned by the Texas courts and the

Texas Supreme Court.

      Aside from the fact that the affirmative use waiver was never brought as an

issue in the Appellees’ cited authorities, those cases are otherwise distinguishable.

For example, in Sentinel Integrity Solutions, Inc. v. Mistras Grp., Inc., 414 S.W.3d
911 (Tex. App.—Houston [1st Dist.] 2013, pet denied), while lip service was given

                                           8
to the redactions, a review of the briefings on appeal, shows this was not an issue on

appeal. [Documents retrieved from the case search link at http://www.txcourts.gov].2

         Woodhaven Partners, Ltd. V. Shamoun & Norman, LLP, 422 S.W.3d 821

(Tex.App.—Dallas 2014, no pet.) was not a lodestar case.

         In John Moore Servs., Inc. v. Better Bus. Bureau of Metro. Houston Inc., No.

01-14-00906-CV, 2016 Tex. App. LEXIS 5814, 2016 WL 3162206, at *1, 7 (Tex.

App.—Houston [1st Dist.] June 2, 2016, no pet.), the court determined that the

invoices were not so heavily redacted as to obscure the tasks that were performed.

Dr. Toledo, on the other hand, has explicitly pointed out that the redactions obscured

the tasks that were performed. The court in John Moore did consider the redactions

but found that many of the entries on the billing invoices were not so heavily

redacted as to obscure the tasks that were performed.

         The issue is a highly fact specific inquiry and no case announces categorical

rules.

                  The Robinson Fee Award is NOT one of Similarity:
                     Andersen factor 12, “awards in similar cases”

         Appellees sticks to their guns in arguing that the Robinson case and the Toledo

case are comparable. All Dr. Toledo did was file her Petition in state court, getting

2
 http://www.search.txcourts.gov/SearchMedia.aspx?MediaVersionID=a61bf6f3-1348-4d4d-a68d-
d209cd16218f&coa=coa01&DT=Brief&MediaID=59824609-9294-4f2c-8aaa-7b8949d850f2
                                                   9
favorable results in the trial court and the 9th Circuit Court of Appeals. This was not

a case of Dr. Toledo’s vexatious conduct in prolonging litigation. And, as important,

the plaintiff is Robinson did not contest the fee petition. Appellees seriously

underestimate the significant differences between the two cases. The Court must

ignore the Robinson case as “similar.”

                               The John Moore Case

      Appellees now argue that Better Bus. Bureau of Metro. Houston, Inc. v. John

Moore Servs., Inc., 441 S.W.3d 345, 2013 WL 3716693, at *12 (Tex. App.—

Houston [1st Dist.] 2013, pet. denied) supports their fee. That case involved

allegations of fraud, advertising misrepresentations, business disparagement,

misrepresentations in BBB ratings, misrepresentations of independence and

neutrality, and tortious interference, application of the TCPA exclusions, as well as

defamation. Simply because the two cases involve the TCPA does not give support

where the cases were different and there is the inability to determine, without the

relative invoicing as to what was done, how it was done, and who did it. What may

be reasonable in one case does not make it reasonable in another. Vetting the list of

detailed services in Dr. Toledo’s case is imperative to determine reasonableness.

This is a factual inquiry and does not figure into the Appellee’s burden of proof as

to reasonableness.

                                          10
                                  CONCLUSION

      A "reasonable" attorney's fee "is one that is not excessive or extreme, but

rather moderate or fair." Garcia v. Gomez, 319 S.W.3d 638, 642 (Tex. 2010) cited

in Sullivan v. Abraham, 488 S.W.3d 294, 299 (a TCPA fee case). The TCPA requires

an award of "reasonable attorney's fees" to the successful movant. See Tex. Civ.

Prac. & Rem. Code § 27.009(a)(1). Discretion is not unlimited; the trial court ruling

does not reflect valid judicial consideration of whether the fees allegedly incurred

were reasonably necessary. Its conclusion was clearly erroneous.

      Dr. Toledo has demonstrated in her opening brief that the trial court erred, and

the response of Appellees does not provide a basis for affirmance. Appellee’s brief

recites facts it deems favorable to its position but fails to reckon with the problems

inherent in its billing and the trial court’s judgment ignoring them.

      For the reasons set forth in this reply brief and the opening brief, this Court

should reverse/reduce the trial court’s award of attorney’s fees of a quarter of a

million dollars on a case decided on briefs.

                                          11
     Respectfully submitted,

     HOUSE PERRON & HOUSE PLLC

     ____________________________
     Joe House
     Attorney in Charge
     TX. Bar No. 10042150
     Email: joe@houseperron.com
     Carla Perron
     TX Bar No. 24042791
     Ben House
     TX. Bar No. 24092540
     Email: ben@houseperron.com
     Norfolk Tower
      2211 Norfolk Street
     Suite 1150
     Houston, Texas 77098
     Phone: 281-762-1377
     Fax: 866-342-7683

     ATTORNEYS FOR APPELLANT
     MINDA LAO TOLEDO

12
                     CERTIFICATE OF COMPLIANCE

    Cross Appellee’s Response Brief:

    I certify that this document brief/petition was prepared with Microsoft Word

2016, and that, according to that program’s word-count function, the sections

covered by TRAP 9.4(i)(2)(B) contain 219 words.

    Appellant’s Reply Brief:

    I certify that this document brief/petition was prepared with Microsoft Word

2016, and that, according to that program’s word-count function, the sections

covered by TRAP 9.4(i)(2)(C) contain 2389 words.

                                   Joe House

                                      13
                         CERTIFICATE OF SERVICE

     I, Joe House, do hereby certify that a true and correct copy of the above and

foregoing instrument has been forwarded to the following attorneys of record

pursuant to the Texas Rules of Civil Procedure by e-service and/or email on this

9th day of January, 2018.

Michael A. McCabe
Texas Bar No. 24007628
MUNCK WILSON MANDALA, LLP
12770 Coit Road, Suite 600
Dallas, Texas 75251
Telephone: (972) 628-3600
Fax: (972) 628-3616
ATTORNEYS FOR KBMT OPERATING COMPANY, LLC, KBMT
LICENSE COMPANY, LLC, BRIAN BURNS, JACKIE SIMIEN, AND
TRACY KENNICK

                                  JOE HOUSE

                                       14