Court Opinion

ID: 4503272
Source: CourtListenerOpinion
Date Created: 2020-01-31 07:11:21.533486+00
Date Added: 2024-06-11T12:49:29.527377
License: Public Domain

Opinion issued January 30, 2020

                                     In The

                              Court of Appeals
                                     For The

                          First District of Texas
                            ————————————
                              NO. 01-19-00115-CV
                           ———————————
DARRIN WINNER, INDIVIDUALLY AND DERIVATIVELY ON BEHALF
            OF LAND GUARDIAN, INC., Appellant
                                        V.
                          AYMAN JARRAH, Appellee

                    On Appeal from the 55th District Court
                            Harris County, Texas
                      Trial Court Case No. 2017-04100

                                  OPINION

      This is an appeal from the trial court’s summary judgment dismissing claims

asserted by Darrin Winner individually and derivatively on behalf of Land

Guardian, Inc. (“LGI”). LGI is an entity formed by Ayman Jarrah to own and

operate a bar in Houston, Texas. This suit arises from Jarrah’s alleged breach of a
stock purchase agreement between him and Winner. In the course of the

proceedings below, Winner judicially admitted that, under the agreement, Jarrah

promised to transfer 10% of LGI’s stock to Winner in exchange for Winner’s

promise, among other consideration, to allow LGI to use his company’s liquor

license. But because Texas law prohibits the holder of a liquor license from

allowing another person to use the license, the trial court ruled that the agreement

was void and unenforceable due to illegal consideration and accordingly dismissed

Winner’s claims.

      In two issues, Winner contends that the trial court (1) erred in granting

summary judgment and (2) abused its discretion in awarding Jarrah attorney’s fees.

      We affirm.

                                   Background

The Stock Purchase Agreement

      Darrin Winner and Clifford Kitten are life partners who met at the Brazos

River Bottom (“the Bar”), located at 2400 Brazos in Houston, Texas (“the

Property”). Winner eventually became the owner of the Brazos River Bottom Club,

Inc. (“the BRB”), the entity that owned the Bar. And Kitten, through his family

limited partnership, eventually became the owner of the Property.

      For roughly seven years, Kitten leased the Property to the BRB, which

owned and operated the Bar. But as the area changed and the Property fell into

                                         2
disrepair, the Bar became less profitable, and Winner and Kitten began looking for

a new tenant.

      In the late summer of 2012, Winner and Kitten met Ayman Jarrah. Jarrah

wanted to open a new club in the area and had formed a closely held corporation,

Land Guardian, Inc. (“LGI”), to be the owner and holder of the lease. Jarrah

decided that the Property was the ideal location for the new club, and he began

negotiating with Winner, who acted on behalf of both Kitten and himself.

      Ultimately, Winner and Jarrah settled on a deal whereby Winner would

become a minority shareholder in LGI (“the Stock Purchase Agreement”). Under

the Stock Purchase Agreement, Jarrah promised to transfer 10% of LGI’s stock to

Winner, and Winner promised to (1) terminate BRB’s lease with Kitten so that

Kitten could enter into a new lease with LGI, (2) allow LGI to use BRB’s liquor

license until LGI acquired its own, and (3) allow LGI to use an adjacent parking lot

owned by Winner for customer and employee parking. The one caveat was that

Winner would not begin to receive his share of the profits until Jarrah recouped his

expenses from renovating the Property. The parties did not memorialize their

agreement in writing.

      BRB terminated its lease with Kitten; Kitten entered into a new lease with

LGI; and a new club, the Gaslamp, opened at the Property. At some point, Jarrah

and Winner’s relationship deteriorated, with Winner accusing Jarrah of failing to

                                         3
fairly distribute LGI’s profits, refusing to allow Winner to inspect LGI’s books and

records, and engaging in various other related misconduct.

The first lawsuit

      In October 2015, Winner filed suit against Jarrah, asserting claims both

individually and derivatively on behalf of LGI. Jarrah filed a no-evidence motion

for summary judgment, arguing in part that there was no evidence that Winner was

a shareholder of LGI. Winner responded that he “paid consideration” for LGI stock

and that the consideration included his “allowing LGI to temporarily use the liquor

license [he] controlled until it received its own.” Winner supported his response

with an affidavit in which he described BRB’s liquor license as having “substantial

value.” Winner also filed an amended petition, which alleged that he agreed to

allow LGI to use BRB’s liquor license as partial consideration for the LGI stock.

      The trial court denied Jarrah’s no-evidence motion for summary judgment.

Winner filed a notice of nonsuit, and the trial court dismissed Winner’s claims

without prejudice.

The current lawsuit

      Shortly after the dismissal of the first lawsuit, Winner initiated the current

lawsuit, filing an original petition that asserted claims derivatively on behalf of

LGI. Jarrah answered and filed a third-party petition, seeking a declaratory

judgment that Winner is not a shareholder in LGI. Winner then filed an original

                                         4
counterclaim, asserting individual claims for breach of contract and fraud.

Winner’s original and live pleadings (his second amended petition and second

amended counterclaim) continued to allege that he agreed to allow LGI to use

BRB’s liquor license as partial consideration for 10% ownership in LGI.

      Trial was set for the August 20, 2018 docket, and the parties were assigned

an August 29 trial date. The parties were called for trial and appeared at an August

13 docket call.

      Among other pre-trial motions, Jarrah filed a Rule 166(g) motion, arguing

that the Stock Purchase Agreement was based on illegal consideration—Winner’s

promise to allow LGI to use BRB’s liquor license. Jarrah also filed a motion for

summary judgment, which further developed the argument made in his Rule

166(g) motion. In his motions, Jarrah explained that the Texas Alcoholic Beverage

Code prohibits the holder of a liquor license from sharing its license with another

person. See, e.g., TEX. ALCO. BEV. CODE § 11.05 (“A permittee may not consent to

or allow the use or display of the permittee’s permit by a person other than the

person to whom the permit was issued.”). Thus, Jarrah argued, the Stock Purchase

Agreement was based on illegal consideration and therefore void and

unenforceable. As a result, Jarrah concluded, Winner did not have viable claims.

      On August 28, the trial court held a telephone hearing on Jarrah’s motions.

The trial court set the motions for hearing on September 27 and granted Winner

                                         5
leave to file a response. The trial court did not, however, grant leave for the parties

to amend their pleadings or take any other action.

      Nevertheless, after the telephone hearing, on September 13, 2018, Winner

filed a third amended petition and third amended counterclaim. Both amended

pleadings omitted Winner’s former (and repeated) allegation that part of the

consideration he paid for the LGI stock included LGI’s temporary use of BRB’s

liquor license.

      In addition to the third amended pleadings, Winner also filed a response to

Jarrah’s motion for summary judgment. Winner argued that there was no evidence

that the Stock Purchase Agreement was illegal because his third amended

pleadings no longer alleged that the use of BRB’s liquor license was part of the

consideration paid for the stock. Winner supported his response with an affidavit.

In the affidavit, Winner explained that, when Kitten and he began negotiating the

new lease with Jarrah, they told Jarrah that they could not allow him to use BRB’s

liquor license because they planned to reopen the Bar in a new location. Thus,

BRB’s liquor license was not part of the consideration Winner paid for the LGI

stock. According to Winner, it was only after they had determined that they would

not be able to reopen the Bar in a new location—and after the parties had executed

the new lease and Stock Purchase Agreement—that they agreed to allow LGI to

use BRB’s liquor license until it obtained its own.

                                          6
      Jarrah filed a motion to strike Winner’s third amended petition and third

amended counterclaim. Jarrah observed that throughout the entire first case Winner

had repeatedly and consistently alleged that the consideration he paid for the shares

included his “allowing LGI to temporarily use [BRB’s] liquor license” and had

even described the liquor license as having “substantial value.” Jarrah further

observed that Winner had maintained the same position throughout the entire

second case, including after Jarrah asserted illegality as an affirmative defense in

his answer, after Jarrah explained the basis of the defense in his responses to

Winner’s interrogatories, and after the parties were called for trial and appeared for

their docket call. It was not until after Jarrah filed his pre-trial Rule 166(g) motion

and motion for summary judgment that Winner changed his position and alleged

that the only consideration he had paid for the LGI stock was his promise to

terminate BRB’s lease so that LGI and Kitten could enter into a new one. Jarrah

therefore argued that Winner’s amended pleadings should be struck because they

were filed without leave of court, were calculated to surprise and prejudice Jarrah,

and, if permitted, would reshape the nature of the suit.

      Winner responded by filing an amended affidavit. In the amended affidavit,

Winner stated that consideration is a legal concept that he had misunderstood and

misused in his previous affidavits:

      I am not a lawyer. I generally understand consideration to mean that
      one party provides something of value. As explained further below
                                          7
      and in my September 17, 2018 affidavit, after I owned an interest in
      [LGI], I allowed [LGI] to operate with the BRB liquor license. Based
      on my understanding of what consideration means, I do not
      understand why the 2016 testimony may conflict with the testimony in
      my September 17, 2018 affidavit.

      In three orders, the trial court (1) struck Winner’s third amended petition and

third amended counterclaims, finding that they were filed after the date scheduled

for trial without leave of court, (2) struck Winner’s amended affidavit under the

sham affidavit rule, finding that it conflicted with his prior sworn testimony

without providing a sufficient explanation for the conflict, (3) ruled that the Stock

Purchase Agreement was supported by illegal consideration and therefore void,

(4) declared that Winner is not an LGI shareholder and therefore lacks standing to

sue derivatively on LGI’s behalf, (5) dismissed Winner’s individual and derivative

claims with prejudice, and (6) awarded Jarrah attorney’s fees under the Declaratory

Judgment Act. See TEX. CIV. PRAC. & REM. CODE § 37.009.

      Winner appeals.

                               Summary Judgment

      In his first issue, Winner argues that the trial court erred in granting

summary judgment because Jarrah failed to prove as a matter of law that the Stock

Purchase Agreement is supported by illegal consideration and therefore void.

                                         8
A.    Standard of review

      We review the trial court’s grant of summary judgment de novo. Lujan v.

Navistar, Inc., 555 S.W.3d 79, 84 (Tex. 2018). A traditional motion for summary

judgment requires the moving party to show that no genuine issue of material fact

exists and that it is entitled to judgment as a matter of law. TEX. R. CIV. P. 166a(c);

Lujan, 555 S.W.3d at 84. If the movant carries this burden, the burden shifts to the

nonmovant to raise a genuine issue of material fact precluding summary judgment.

Lujan, 555 S.W.3d at 84. In reviewing the grant of summary judgment, we must

credit evidence favoring the nonmovant, indulging every reasonable inference and

resolving all doubts in his favor. Id.

B.    Analysis

      1.     Winner judicially admitted that the Stock Purchase Agreement
             was based in part on illegal consideration.

      Under the TABC, the holder of a liquor license is prohibited from allowing

another person to use its license. TEX. ALCO. BEV. CODE § 11.05 (“A permittee

may not consent to or allow the use or display of the permittee’s permit by a

person other than the person to whom the permit was issued.”).1 And under Texas

contract law, a contract that requires a violation of the TABC is void and

unenforceable. Merry Homes, Inc. v. Chi Hung Luu, 312 S.W.3d 938, 946 (Tex.
1
      See also TEX. ALCO. BEV. CODE § 109.53 (“No person shall . . . consent to the use
      of or allow his permit to be displayed by or used by any person other than the one
      to whom the permit was issued.”).

                                           9
App.—Houston [1st Dist.] 2010, no pet.) (“Any contract or lease that requires a

violation of this statute [the TABC] is void.”). A contract supported by illegal

consideration is likewise generally considered void. In re Kasschau, 11 S.W.3d
305, 313 (Tex. App.—Houston [14th Dist.] 1999, orig. proceeding) (“As a general

rule, where part of the consideration for an agreement is illegal, the entire

agreement is void if the contract is entire and indivisible.”). Thus, if Winner

promised to allow LGI to use BRB’s liquor license as partial consideration for LGI

stock, then the Stock Purchase Agreement is supported by illegal consideration and

therefore void and unenforceable.

      Here, Jarrah contends, and the trial court found, that Winner judicially

admitted that he promised to allow LGI to use BRB’s liquor license as partial

consideration for a 10% interest in LGI. We therefore consider whether Winner

made such a judicial admission.

      A judicial admission occurs when a party makes a statement of fact that

conclusively disproves a right of recovery or defense he currently asserts. H2O

Sols., Ltd. v. PM Realty Grp., LP, 438 S.W.3d 606, 617 (Tex. App.—Houston [1st

Dist.] 2014, pet. denied). A judicial admission has conclusive effect and bars the

admitting party from later disputing the admitted fact. Holy Cross Church of God

in Christ v. Wolf, 44 S.W.3d 562, 568 (Tex. 2001). A party can make a judicial

                                       10
admission in pleadings, motions, responses, and affidavits. See id. (motions and

responses); H2O Sols., 438 S.W.3d at 616–21 (pleadings and affidavits).

      A statement qualifies as a judicial admission if: (1) it is made in the course

of a judicial proceeding, (2) it is contrary to an essential fact or defense asserted by

the party, (3) it is deliberate, clear, and unequivocal, (4) it is not destructive of the

opposing party’s theory of recovery or defense, and (5) enforcing it as a judicial

admission would be consistent with public policy. H2O Sols., 438 S.W.3d at 617.

      Throughout the course of both lawsuits, Winner repeatedly and consistently

stated that he agreed to allow LGI to use BRB’s liquor license as partial

consideration for the LGI stock.

      In the first lawsuit, Winner made the allegation in his live pleading: “In

exchange for BRB agreeing to terminate its lease and allow LGI to lease the

Premises in its stead and allowing LGI to use its liquor license, Mr. Winner

received 10% of LGI.” He made the allegation in his response to Jarrah’s no-

evidence motion for summary judgment: “Winner paid consideration for the shares

by: a. releasing the lease Winner controlled on the property to LGI so that LGI

could operate its business on the premises; b. allowing LGI to temporarily use the

liquor license Winner controlled until it received its own; c. allowing LGI to

temporarily control an adjacent parking lot Winner controlled which allowed LGI

customers parking; and d. allowing LGI employees to park in the adjacent parking

                                           11
lot Winner controlled for free.” And he made the allegation in the affidavit

attached to his response: “I paid consideration for the shares by a) releasing the

lease I controlled on the property to LGI so that LGI could operate its business on

the premises, b) allowing LGI to temporarily use the liquor license I controlled

until it received its own, c) allowing LGI to temporarily control an adjacent

parking lot I controlled which allowed LGI customers parking, and d) allowing

LGI employees to park in the adjacent parking lot I controlled for free.” In his

affidavit, he even described the liquor license as having “substantial value.”

        In the second and current lawsuit, Winner made the allegation in his original

pleadings, his first amended pleadings, and his live pleadings. In his second

amended petition, Winner alleged: “In exchange for BRB agreeing to terminate its

lease and allow LGI to lease the Premises in its stead and allowing LGI to use its

liquor license, Defendant promised Mr. Winner 10% of LGI.” In his second

amended counterclaim, Winner likewise alleged: “Among other consideration, in

exchange for BRB agreeing to terminate its lease, allowing LGI to lease the

Premises in its stead, allowing LGI to use BRB’s liquor license, and allowing LGI

to use a parking lot Oaks Ranch LLC has under lease, Winner received 10% of

LGI.”

        Winner’s statements were made in the course of judicial proceedings.

Winner’s statements are contrary to a fact essential to his theory of recovery, i.e.,

                                          12
that the parties entered into a valid and enforceable Stock Purchase Agreement.

Winner’s statements were deliberate, made under the guidance of counsel in

furtherance of his claims. Winner’s statements are clear and unequivocal about

what he paid in consideration for the LGI stock. Winner’s statements are not

destructive of Jarrah’s defense. In fact, they support it. Finally, enforcing Winner’s

statements as judicial admissions is consistent with public policy. See TEX. ALCO.

BEV. CODE § 1.03 (“This code is an exercise of the police power of the state for the

protection of the welfare, health, peace, temperance, and safety of the people of the

state.”); Merry Homes, 312 S.W.3d at 946 (“[W]e must not enforce

an illegal contract, ‘particularly where the contract involves the doing of an act

prohibited by statutes intended for the protection of the public health and

welfare.’” (quoting Peniche v. Aeroméxico, 580 S.W.2d 152, 155 (Tex. App.—

Houston [1st Dist.] 1979, no writ)). We hold that Winner’s statements qualify as

judicial admissions.

      Thus, Winner’s statements conclusively prove that, in exchange for a 10%

interest in LGI, Winner promised, among other consideration, to allow LGI to use

BRB’s liquor license. See Holy Cross Church of God in Christ, 44 S.W.3d at 568.

Because the TABC prohibits the holder of liquor license from allowing another

person to use the license, TEX. ALCO. BEV. CODE §§ 11.05, 109.53, Winner’s

                                         13
statements further prove that the Stock Purchase Agreement was supported by

illegal consideration.

      2.     The illegal consideration is not severable from the rest of the
             agreement.

      Winner argues that the Stock Purchase Agreement is still enforceable

because the illegal consideration can be severed from the rest of the agreement. We

disagree.

      The severability doctrine only applies when the original consideration for

the contract is legal. In re Kasschau, 11 S.W.3d at 313 (“The doctrine of

severability is an exception that applies in circumstances in which the original

consideration for the contract is legal, but incidental promises within the contract

are found to be illegal.”); see also Seligman-Hargis v. Hargis, 186 S.W.3d 582,

587 (Tex. App.—Dallas 2006, no pet.) (same); Montgomery v. Browder, 930
S.W.2d 772, 778 (Tex. App.—Amarillo 1996, writ denied) (same). That is not the

case here. Because the illegal portion of the Stock Purchase Agreement was part of

the original consideration Winner paid for the stock, it is not severable from the

remainder of the agreement.

      3.     The trial court did not abuse its discretion in striking Winner’s
             third amended pleadings and amended affidavit.

      Winner further contends that the trial court abused its discretion in striking

his third amended pleadings and his amended affidavit. Winner insists that these

                                        14
amended filings clarified that the use of BRB’s liquor license was not, in fact, part

of the consideration he paid for the LGI stock, thereby rebutting the basis of

Jarrah’s dispositive motions. See Lujan, 555 S.W.3d at 84 (trial court’s refusal to

consider evidence under sham affidavit rule reviewed for abuse of discretion); Air

Prods. & Chems., Inc. v. Odfjell Seachem A/S, 305 S.W.3d 87, 92 (Tex. App.—

Houston [1st Dist.] 2009, no pet.) (trial court’s decision whether to allow

amendment of pleadings reviewed for abuse of discretion). We consider each type

of amended filing in turn.

      We begin with Winner’s third amended pleadings. Under our procedural

rules, a trial court may strike an amended pleading upon a showing of surprise or

prejudice to the other party. Air Prods. & Chems., Inc., 305 S.W.3d at 92; see TEX.

R. CIV. P. 63 (“Parties may amend their pleadings . . . as they may desire by filing

such [pleadings] with the clerk at such time as not to operate as a surprise to the

opposite party . . . .”). Here, the trial court could have struck Winner’s third

amended pleadings on either of these grounds.

      Winner filed his third amended pleadings on September 13, 2018—after the

date scheduled for trial, after the parties appeared for a docket call, and, tellingly,

after Jarrah filed his dispositive motions. Up until then, Winner had consistently

and repeatedly stated that the use of BRB’s liquor license was part of the

consideration he paid for the LGI stock. Winner maintained this position over the

                                          15
course of two lawsuits for nearly three years. Even when the parties were set to go

to trial in the second lawsuit, Winner made no attempt to amend. It was not until

after Jarrah filed his dispositive motions that Winner sought to amend his

pleadings to modify the material terms of the Stock Purchase Agreement.

      Under these circumstances, the trial court could have reasonably concluded

that Winner’s third amended pleadings were calculated to surprise and would have

prejudiced Jarrah, who had already filed dispositive motions based on Winner’s

judicial admissions concerning the consideration paid for the LGI stock. See Air

Prods. & Chems., Inc., 305 S.W.3d at 95 (holding that trial court did not abuse

discretion in striking amended pleadings when trial court “could have reasonably

concluded that the amended pleadings . . . would have reshaped the litigation,

prejudicing [opposing party] and possibly delaying the trial”); Tex. Black Iron, Inc.

v. Arawak Energy Int’l Ltd., 566 S.W.3d 801, 827–28 (Tex. App.—Houston [14th

Dist.] 2018, pet. denied) (holding that trial court did not abuse discretion in striking

supplier’s amended pleadings filed 10 days before original trial setting when

opposing party’s summary-judgment motion had already been filed and was

pending before court and new allegations were not based on newly-discovered

facts); Perez v. Embree Constr. Grp., Inc., 228 S.W.3d 875, 883 (Tex. App.—

Austin 2007, pet. denied) (holding that trial court did not abuse discretion in

striking amended pleadings more than three years after case was filed, more than

                                          16
nine months after amendment deadline, and around two months before trial). We

hold that the trial court did not abuse its discretion in striking Winner’s third

amended pleadings.

      We now turn to Winner’s amended affidavit, which the trial court struck as a

sham. Under the sham affidavit rule, if a party submits an affidavit that conflicts

with the affiant’s prior sworn testimony and does not provide a sufficient

explanation for the conflict, a trial court may disregard the affidavit when deciding

whether the party has raised a genuine fact issue to avoid summary judgment.

Lujan, 555 S.W.3d at 82. Here, the trial court made the following written findings

in determining that Winner’ amended affidavit was a sham:

      In an effort to explain this inconsistency, [Winner] executed yet a
      third Affidavit on September 23, 2018, which states that the problem
      is merely that “consideration” is a legal concept which was
      misunderstood or misused by him in his first affidavit. This
      explanation does not explain away that Mr. Winner has consistently
      listed use of the license as one of the deal points; in fact, one which he
      previously said had “substantial value.” It matters not at all that it was
      referred to as “consideration.” There was never any statement that it
      was not a deal point. At paragraph 6 the story changes yet again with
      the additional testimony that Winner only allowed LGI to use his
      license after he was already a 10% owner. No explanation is offered
      for this change. . . . Clearly, Winner’s story, affidavit and pleadings
      changed when the Rule 166(g) Motion was filed. The Lujan Court
      directs the trial court to look at the explanation offered. The best
      Winner offers is that the license only came up after he was 10%
      owner, but just because the facts played out over months does not
      change the clear statement made several times for and by Winner that
      the 10% for the license swap, with other consideration, was the deal.
      The pleadings constitute judicial admissions and support the first
      affidavit. The first affidavit is supplemented with deposition
                                         17
      testimony. Winner’s later affidavits to the contrary are shams as
      defined in the case law. The fact at issue is material and relevant.
      Explanations are offered but they do not explain away what is obvious
      to the Court.

      Given Winner’s consistent and repeated statement that he promised to allow

LGI to use BRB’s liquor license in exchange for LGI stock, and Winner’s

disavowal of that statement immediately after Jarrah observed that the promise

violated the TABC, we cannot say that the trial court abused its discretion in

disregarding Winner’s amended affidavit under the sham affidavit rule.

      4.     The trial court did not err in dismissing Winner’s claims.

      In sum, Winner judicially admitted that the Stock Purchase Agreement was

supported by illegal consideration. As a result, the Stock Purchase Agreement is

void. Winner does not have standing to assert derivative claims on behalf of LGI,

as he never became an LGI shareholder. And Winner’s individual claims fail as

well, as a plaintiff cannot predicate a claim on his illegal act.

      Accordingly, we overrule Winner’s first issue.

                                   Attorney’s Fees

      In his second issue, Winner argues that the trial court should not have

awarded Jarrah attorney’s fees under the Declaratory Judgments Act because (1)

the subject of Jarrah’s declaratory-judgment action was already before the trial

court and (2) an award of attorney’s fees is not equitable and just under the

circumstances.

                                           18
A.    Applicable law and standard of review

      Under the Declaratory Judgments Act, the trial court “may award costs and

reasonable and necessary attorney’s fees as are equitable and just.” TEX. CIV.

PRAC. & REM. CODE § 37.009. But because the Declaratory Judgments Act is not

available to settle disputes already pending before the trial court, BHP Petrol. Co.

v. Millard, 800 S.W.2d 838, 841 (Tex. 1990), a mirror-image counterclaim for

declaratory relief generally will not support an award of attorney fees, Save Our

Springs All., Inc. v. Lazy Nine Mun. Util. Dist. ex rel. Bd. of Directors, 198 S.W.3d
300, 318 (Tex. App.—Texarkana 2006, pet. denied).

      An exception to the mirror-image rule is when the plaintiff requests

declaratory relief. Id. If the plaintiff requests declaratory relief, the mirror-

image rule does not prohibit the trial court from awarding attorney fees, even if the

defendant’s counterclaim for declaratory relief merely duplicates the claims

already raised by the plaintiff. Id.; see Castille v. Serv. Datsun, Inc., No. 01-16-

00082-CV, 2017 WL 3910918, at *11 (Tex. App.—Houston [1st Dist.] Sept. 7,

2017, no pet.) (mem. op.) (“[A] trial court is not prohibited from awarding

attorney’s fees to a defendant that asks the court to make a corresponding contrary

declaration in a case where the plaintiffs have also brought a claim for declaratory

relief.”). This is because the Declaratory Judgments Act authorizes trial courts to

determine that it is equitable and just to award attorney’s fees to either party, so a

                                         19
defendant who raises a mirror-image counterclaim in response to a plaintiff’s

declaratory-judgment claim cannot be said to have raised the counterclaim solely

to pave the way for an award of otherwise-impermissible attorney’s fees. Castille,

2017 WL 3910918, at *11.

      Whether attorney’s fees are available under the Declaratory Judgments Act

is a question of law, which we review de novo. See Holland v. Wal-Mart Stores,

Inc., 1 S.W.3d 91, 94 (Tex. 1999); Indian Beach Prop. Owners’ Ass’n v. Linden,

222 S.W.3d 682, 705–06 (Tex. App.—Houston [1st Dist.] 2007, no pet.). But we

review the attorney fee award itself for an abuse of discretion. Feldman v. KPMG

LLP, 438 S.W.3d 678, 686 (Tex. App.—Houston [1st Dist.] 2014, no pet.). An

award is an abuse of discretion if it was made arbitrarily, unreasonably, or without

regard to guiding legal principles. Id. In determining whether an award was an

abuse of discretion, we view the evidence in the light most favorable to the trial

court’s ruling, indulging every presumption in its favor. Id.

B.    Analysis

      Winner argues that the trial court erred in awarding attorney’s fees because

the subject of Jarrah’s declaratory-judgment action was already before the trial

court, which made fees unavailable under the mirror-image rule. We disagree.

      As discussed above, when, as here, the plaintiff requests declaratory relief,

the mirror-image rule does not prohibit the trial court from awarding attorney fees.

                                          20
See Castille, 2017 WL 3910918, at *11; Save Our Springs All., 198 S.W.3d at 318.

Because Winner asserted a declaratory-judgment action first, and Jarrah responded

by requesting a corresponding contrary declaration, the mirror-image rule did not

prohibit the trial court from awarding Jarrah attorney’s fees.

      Winner further argues that the trial court abused its discretion in awarding

attorney’s fees because such an award was not equitable and just under the

circumstances. He emphasizes the many instances where Jarrah recognized that he

agreed to transfer 10% of LGI to Winner and contends that Jarrah should not be

allowed to further profit from an illegal deal. We agree with Jarrah that Winner’s

argument fails to apply the applicable standard of review and instead attempts to

re-argue the disputed facts and substitute his judgment for that of the trial court.

Viewing the evidence in the light most favorable to the trial court, we cannot say

the trial court abused its discretion in awarding attorney’s fees when Winner filed

suit in an attempt to enforce an illegal contract and then attempted to prolong the

litigation by filing a sham affidavit.

      Accordingly, we overrule Winner’s second issue.

                                          21
                                  Conclusion

      We affirm.

                                            Gordon Goodman
                                            Justice

Panel consists of Justices Keyes, Goodman, and Countiss.

                                       22