Court Opinion

ID: 9949253
Source: CourtListenerOpinion
Date Created: 2024-03-10 08:16:12.325195+00
Date Added: 2024-06-11T14:29:14.226354
License: Public Domain

Affirmed in part, Reversed and Remanded in part, and Opinion filed March 5,
2024.

                                       In The

                     Fourteenth Court of Appeals

                               NO. 14-23-00165-CV

                            JINSUN, LLC, Appellant
                                         V.

                     ALIDAD MIRESKANDARI, Appellee

             On Appeal from the County Civil Court at Law No. 2
                           Harris County, Texas
                      Trial Court Cause No. 1181704

                                  OPINION

      In this dispute regarding a settlement agreement, appellant Jinsun, LLC
appeals from a final summary judgment and order awarding attorney’s fees in
appellee Alidad Mireskandari’s favor. In three issues, Jinsun contends the trial court
erred in granting Mireskandari’s summary-judgment motion, denying Jinsun’s
summary-judgment motion, and awarding Mireskandari attorney’s fees.
       Because Jinsun has not challenged all grounds asserted in Mireskandari’s
summary-judgment motion, we overrule Jinsun’s first two issues. We affirm the
trial court’s final declaratory judgment in Mireskandari’s favor.

       However, we sustain Jinsun’s challenge to the award of conditional appellate
attorney’s fees, raised in its third issue, because Mireskandari provided insufficient
evidence in support of this award. Accordingly, we reverse the award of conditional
appellate attorney’s fees, and we remand the case for reconsideration limited to that
issue only.

                                        Background

       In 2016, Jinsun obtained a judgment and order in the United States District
Court for the Southern District of Texas against Mireskandari for $377,948, plus
interest. Before paying any amounts owed and while a motion for sanctions and
attorney’s fees was pending in the district court regarding Mireskandari’s failure to
pay the judgment, Mireskandari filed for bankruptcy in November 2018. In October
2019, Jinsun and Mireskandari signed a settlement agreement regarding the
judgment, under which Mireskandari agreed to pay Jinsun “(a) $300,000 plus (b) the
amount, if any, awarded by the Southern District of Texas in respect of [Jinsun’s]
Sanctions Application[1] through a final order after exhaustion of any applicable
rights of appeal (the ‘Settlement Amount’).” Mireskandari was to pay the Settlement
Amount according to the following schedule:

       i.     [Mireskandari] shall pay $100,000 within 60 days after the
              Effective Date[2] (the “Initial Payment Date”);

       1
         The parties refer to Jinsun’s motion for sanctions and attorney’s fees as the “Sanctions
Application,” so we do as well.
       2
         The “Effective Date” was the date the bankruptcy court entered an order approving the
settlement agreement, which was on December 11, 2019. Thus, Mireskandari’s first payment was
due February 9, 2020.

                                               2
      ii.     [Mireskandari] shall pay $25,000 within 30 days after the Initial
              Payment Date; and
      iii.    [Mireskandari] shall pay [the] remaining balance of the
              Settlement Amount in twenty-four (24) monthly installments
              following the Initial Payment Date, provided that any attorneys’
              fees awarded in the Sanctions Application through a final order
              after exhaustion of any applicable rights of appeal in excess of
              $40,000.00 will be paid in twelve equal monthly installments
              beginning twenty-four (24) months after the Initial Payment
              Date. For clarification purposes, if $100,000.00 is awarded in
              the Sanctions Application, then $60,000.00 will be paid in twelve
              equal monthly installments beginning twenty-four (24) months
              after the Initial Payment Date. . . .

After the bankruptcy court approved the settlement agreement, the federal district
court awarded Jinsun $73,824.91 in attorney’s fees to resolve Jinsun’s Sanctions
Application on January 27, 2020. Mireskandari appealed the sanctions order.

      Beginning in February 2020, and while his appeal of the sanctions order was
pending, Mireskandari made payments pursuant to the schedule in the settlement
agreement. The payments consisted of an initial payment of $100,000, another lump
sum payment of $25,000, and twenty-four monthly payments of $7,291.67. As of
February 11, 2022—the approximate two-year anniversary of the initial payment—
Mireskandari had paid a total of $300,000. None of these payments included any
portion of the $73,824.91 sanctions award that was on appeal.

      The United States Court of Appeals for the Fifth Circuit affirmed the sanctions
order on January 4, 2022. Then a dispute arose about how much of the Settlement
Amount Mireskandari still owed. Mireskandari made no further payments, and the
instant lawsuit followed.

      Mireskandari was the first to file suit. He sought a declaration that he was not
in violation of the settlement agreement and that he owed only $33,824.91—not
$73,824.91.
                                          3
       Jinsun filed a counterclaim, the live version of which seeks a declaration that
Mireskandari breached the settlement agreement. According to Jinsun’s pleading,
the settlement agreement provided that Mireskandari was to pay $340,000 ($300,000
plus the first $40,000 of the sanctions award) over two years, and $33,824.91 in year
three. Jinsun alleged that Mireskandari, having paid only $300,000 in the first two
years, was in breach and thus owed the entire amount due under the original
judgment, less the $300,000 already paid.3

       In response to Jinsun’s allegation that Mireskandari was required to pay
$340,000 instead of $300,000 in the first two years, Mireskandari filed an amended
pleading in which he asserted affirmative defenses of waiver, quasi-estoppel, usury,
and unlawful penalty.

       The parties filed competing motions for summary judgment. Mireskandari
sought summary judgment on his affirmative declaratory judgment claim. He
argued that he owed only an additional $33,824.91, based on his reading of the
settlement agreement. According to him, only the amount of the sanctions award
above $40,000 was required to be paid beginning in February 2022. Under his
reading, he had no obligation to pay $40,000 of the sanctions award. Alternatively,
he claimed he owed at most an additional $73,824.91.

       In his motion, Mireskandari also presented argument on a number of his
affirmative defenses, including waiver. He argued that Jinsun had waived any
entitlement to be paid $40,000 of the sanctions award during the first two years after
the Initial Payment Date because Jinsun had accepted without objection two years’
worth of monthly payments that did not include any portion of the sanctions award.
According to Mireskandari, it was impossible to include any part of the sanctions

       3
       Jinsun asserts that, as of the date Jinsun filed its appellate brief, the remaining balance
owed under the original judgment was $151,772.83.

                                                4
award portion of the Settlement Amount in the first two years of installment
payments because the final amount of the sanctions, being on appeal, was not known
and was subject to reduction or reversal.

      Jinsun filed its own summary-judgment motion on its competing declaratory
judgment claim, asserting that Mireskandari breached the settlement agreement by
failing to timely pay the settlement amount. Jinsun argued that Mireskandari was
required to pay $340,000 over the first two years after the Initial Payment Date.
Because Mireskandari paid only $300,000 over that period, and nothing afterward,
Jinsun argued that it was entitled to treat the settlement agreement as repudiated and
recover under the original judgment and sanctions award. Jinsun also responded to
Mireskandari’s arguments on his affirmative defenses.

      The trial court granted Mireskandari’s motion, denied Jinsun’s motion, and
signed a summary judgment in Mireskandari’s favor ordering that Jinsun take
nothing on its counterclaim and declaring that Mireskandari owed Jinsun only
$33,824.91 under the terms of the settlement agreement. The trial court’s order
authorized Mireskandari to file an application for attorney’s fees pursuant to the
Declaratory Judgment Act. The trial court signed a subsequent order awarding
Mireskandari $60,742.50 in attorney’s fees (offset by the $33,824 the court had
previously decreed he owed to Jinsun), as well as conditional appellate attorney’s
fees. With the signing of the attorney fee order, the trial court disposed of all claims
of all parties. Jinsun timely appealed.

                                       Analysis

      Jinsun contends the trial court erred in granting Mireskandari’s summary-
judgment motion, in denying its competing motion, and in awarding attorney’s fees
to Mireskandari. We address Jinsun’s first two issues together.

                                            5
A.     Summary Judgment in Mireskandari’s Favor

       We do not reach the merits of Jinsun’s first two issues because it has not
challenged all grounds presented in Mireskandari’s summary-judgment motion. The
summary judgment in Mireskandari’s favor states that Mireskandari owes Jinsun
$33,824.91, but it articulates no rationale for the ruling. When, as here, a summary-
judgment motion asserts multiple grounds and the order granting summary judgment
does not specify the ground on which judgment was rendered, the appellant must
challenge and negate all summary-judgment grounds on appeal. Collins v. D.R.
Horton-Tex. Ltd., 574 S.W.3d 39, 44 (Tex. App.—Houston [14th Dist.] 2018, pet.
denied); Heritage Gulf Coast Props., Ltd. v. Sandalwood Apartments, Inc., 416
S.W.3d 642, 653 (Tex. App.—Houston [14th Dist.] 2013, no pet.); see FM Props.
Operating Co. v. City of Austin, 22 S.W.3d 868, 872-73 (Tex. 2000). If summary
judgment may have been rendered, properly or improperly, on a ground not
challenged on appeal, the judgment must be affirmed. Jackson v. Patten Law Firm,
No. 14-19-00376-CV, 2020 WL 4098402, at *2 (Tex. App.—Houston [14th Dist.]
July 21, 2020, no pet.) (mem. op); Collins, 574 S.W.3d at 44; see Lujan v. Navistar,
Inc., No. 14-14-00345-CV, 2021 WL 56184, at *3 (Tex. App.—Houston [14th Dist.]
Jan. 7, 2021, pet. denied) (mem. op.); Heritage Gulf Coast Props., 416 S.W.3d at
653.

       We focus on Mireskandari’s waiver argument. Waiver is an affirmative
defense, which he pleaded. Nowak v. DAS Inv. Corp., 110 S.W.3d 677, 680 (Tex.
App.—Houston [14th Dist.] 2003, no pet.). A party who has raised an affirmative
defense and moves for summary judgment on that basis bears the burden of proving
each essential element of the defense. Nat’l City Bank of Indiana v. Ortiz, 401
S.W.3d 867, 874 (Tex. App.—Houston [14th Dist.] 2013, pet. denied); see Fed.
Deposit Ins. Corp. v. Lenk, 361 S.W.3d 602, 609 (Tex. 2012). In his summary-

                                         6
judgment motion, Mireskandari argued that he owed Jinsun only $33,824.91 for
multiple reasons. One reason was because Jinsun had waived its pleaded assertion
that $40,000 of the sanctions award was supposed to have been paid along with the
$300,000 payable within the first two years after the Initial Payment Date.

      In its opening appellate brief, Jinsun makes no mention of Mireskandari’s
waiver ground asserted in his summary-judgment motion. Jinsun argues only that
the trial court interpreted the settlement agreement’s terms incorrectly.        Even
construing Jinsun’s brief liberally, we cannot conclude that it has challenged each
ground on which the trial court may have granted Mireskandari’s summary-
judgment motion, whether properly or improperly. Thus, we must affirm the
judgment. Collins, 574 S.W.3d at 44; Heritage Gulf Coast Props., 416 S.W.3d at
653-54 (affirming summary judgment when appellant failed to challenge waiver
ground on appeal).

      Jinsun addresses Mireskandari’s affirmative defenses in its reply brief. We
generally do not consider issues raised for the first time in a reply brief and decline
to do so here. See Collins, 574 S.W.3d at 44; HMT Tank Serv. LLC v. Am. Tank &
Vessel, Inc., 565 S.W.3d 799, 812 n.10 (Tex. App.—Houston [14th Dist.] 2018, pet.
denied); Yeske v. Piazza Del Arte, Inc., 513 S.W.3d 652, 672 n.5 (Tex. App.—
Houston [14th Dist.] 2016, no pet.).

      We overrule Jinsun’s first and second issues.

B.    Attorney’s Fees

      In Jinsun’s third issue, it contends the trial court erred in awarding attorney’s
fees to Mireskandari. Because the fees were awarded apart from the summary
judgment on his declaratory judgment claim, we address this issue separately.

                                          7
      The first half of Jinsun’s argument rests on its assertion that the declaration
and grant of summary judgment in Mireskandari’s favor constitute reversible error.
But because we have overruled Jinsun’s first two issues challenging the summary
judgment, this portion of its argument does not provide a basis to reverse the
attorney’s fee award.

      In another part of its issue, Jinsun argues that we should partially reverse the
fee award because Mireskandari’s application for contingent appellate fees failed to
set forth the anticipated work on appeal to support the amounts requested, failed to
establish that the amounts were reasonable, and failed to provide any evidence that
counsel was qualified to proffer such an opinion.

      In support of the request for conditional appellate attorney’s fees,
Mireskandari’s counsel filed a declaration, which stated in relevant part:

      • “In the event that Defendant Jinsun, LLC appeals this matter to the
      Court of Appeals, Plaintiff Alidad Mireskandari will incur additional
      legal expenses in excess of $60,000.”
      • “In the event that Defendant Jinsun, LLC appeals this matter to the
      Texas Supreme Court, I estimate that Plaintiff Alidad Mireskandari will
      incur additional legal expenses in excess of $40,000.”
      • “In the event that the Texas Supreme Court requests full briefing,
      estimate that Plaintiff will incur additional legal expenses in excess of
      $40,000 and, if oral argument is requested, an additional $35,000.”
      The trial court’s order granting Mireskandari conditional attorney’s fees on
appeal ordered that Mireskandari would recover: (1) an additional $60,000 if he
prevails in defending an appeal to the court of appeals; (2) an additional $40,000 if
he should “prevail in defending an appeal to the Texas Supreme Court”; (3) an
additional $40,000 if the supreme court requests full briefing; and (4) an additional
$35,000 if “oral argument is requested.”

                                           8
       A trial court may award conditional appellate attorney’s fees to a party. These
are “essentially an award of fees that have not yet been incurred and that the party is
not entitled to recover unless and until the appeal is resolved in that party’s favor.”
Ventling v. Johnson, 466 S.W.3d 143, 156 (Tex. 2015). Although the Supreme Court
strongly favors the lodestar method for shifting attorney’s fees,4 that method does
not apply for conditional appellate attorney’s fees that have not yet been incurred
and can only be projected based on an expert’s opinion testimony. Yowell v. Granite
Operating Co., 620 S.W.3d 335, 355 (Tex. 2020). This is so because when a trial
court awards such conditional appellate attorney’s fees, “any appeal is still
hypothetical.” Id. “There is no certainty regarding who will represent the appellee
in the appellate courts, what counsel’s hourly rate(s) will be, or what services will
be necessary to ensure appropriate representation in light of the issues the appellant
chooses to raise.”       Id.    Nonetheless, the party seeking conditional appellate
attorney’s fees must support the fee request with expert testimony “about the
services it reasonably believes will be necessary to defend the appeal and a
reasonable hourly rate for those services.” Id.

       Although Mireskandari’s counsel testified about the amount and
reasonableness of attorney’s fees for work that had already been incurred, counsel
did not provide any statements regarding his opinion of a reasonable appellate fee to
be charged or the required services necessary to defend an appeal. Counsel’s
declaration contains no statement or testimony that the amount of legal “expenses”
he estimates for each stage of appeal described are reasonable. The declaration does

       4
         See Rohrmoos Venture v. UTSW DVA Healthcare, LLP, 578 S.W.3d 469, 496 (Tex.
2019). The lodestar method requires the fact finder to derive reasonable attorney’s fees by first
determining the reasonable hours spent by counsel in the case and the reasonable hourly rate for
counsel’s work. See El Apple I, Ltd. v. Olivas, 370 S.W.3d 757, 760 (Tex. 2012). The fact finder
then multiplies the number of hours counsel worked on the case by the applicable rate, the product
of which is the base fee or lodestar. Id.

                                                9
not distinguish between attorney’s fees and expenses, which are different. Nor does
the declaration describe any relevant appellate experience by counsel that could form
a basis for an assertion that the estimated amounts are reasonable for an appeal of
this type of case. Accordingly, the evidence is insufficient to support the award of
conditional appellate attorney’s fees. See id.; see also Davenport v. Davenport,
No. 01-15-01031-CV, 2016 WL 7011406, at *8 (Tex. App.—Houston [1st Dist.]
Dec. 1, 2016, no pet.) (mem. op.) (modifying judgment to delete portion granting
conditional appellate attorney’s fees when there was no evidence to support them);
Assoun v. Gustafson, 493 S.W.3d 156, 168 (Tex. App.—Dallas 2016, pet. denied)
(testimony failed to include opinion of what a reasonable attorney’s fee would be for
the services that would be necessary in the event of appeal; appellate fee award
reversed).

      We sustain in part Jinsun’s third issue. We remand the case to the trial court
for further proceeding limited to redetermining reasonable and necessary attorney’s
fees on appeal. See Tex. Civ. Prac. & Rem. Code § 37.009; Milliken v. Turoff,
No. 14-19-00761-CV, 2021 WL 2156224, at *3 (Tex. App.—Houston [14th Dist.]
May 27, 2021, no pet.) (mem. op.).

                                     Conclusion

      We affirm in part the trial court’s judgment declaring that Mireskandari owes
Jinsun $33,824.91 and ordering that Jinsun take nothing on its counterclaim.
However, we reverse in part the trial court’s order granting Mireskandari conditional

                                         10
appellate attorney’s fees, and we remand for further consideration of that issue
consistent with this opinion.

                                      /s/    Kevin Jewell
                                             Justice

Panel consists of Chief Justice Christopher and Justices Wise and Jewell.

                                        11