Court Opinion

ID: 52032
Source: CourtListenerOpinion
Date Created: 2010-04-26 01:11:24+00
Date Added: 2024-06-11T14:58:24.923273
License: Public Domain

United States Court of Appeals
                                                               Fifth Circuit
                                                            F I L E D
                    UNITED STATES COURT OF APPEALS
                                                            August 30, 2007
                        FOR THE FIFTH CIRCUIT
                                                        Charles R. Fulbruge III
                                                                Clerk

                             No. 06-51632
                           Summary Calendar

     In the Matter of: DONNA RAE GIBBONS-MARKEY

                      Debtor

     DONNA RAE GIBBONS-MARKEY,

                                        Appellee,

                                  v.

     TEXAS MEDICAL LIABILITY TRUST,

                                        Appellant

         Appeal from the United States District Court for the
                Western District of Texas, San Antonio
                            No. 5:04-CV-231

Before WIENER, GARZA, and BENAVIDES, Circuit Judges.

PER CURIAM:*

     Texas Medical Liability Trust (“TMLT”) challenges the district

court’s award of attorney’s fees to Donna Rae Gibbons-Markey. TMLT

argues that the district court erred in finding that TMLT waived

     *
       Pursuant to 5th Cir. R. 47.5, the Court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5th Cir. R. 47.5.4.
its argument under the Texas Insurance Code, and that the court

abused its discretion in awarding attorney’s fees.                  We affirm.1

     Appellee Donna Rae Gibbons-Markey sued TMLT in state court for

a breach of its duty to defend her in a medical malpractice case.

The case was removed to bankruptcy court after Gibbons-Markey filed

Chapter 7 bankruptcy.       After a bench trial, the bankruptcy court

entered a    take-nothing       judgment     in   favor    of   TMLT,    which   the

district    court   affirmed     on   appeal.       This    Court   subsequently

reversed and remanded the case to the district court to determine

attorney’s fees.     In November 2006, the district court entered an

order    granting   in   part    Gibbons-Markey’s         motion    to   determine

attorney’s fees, awarding her $44,493 in damages and attorney’s

fees and costs expended in the medical malpractice case, subject to

8.25% prejudgment simple interest, accruing from September 30,

1999; $8,400 in attorney’s fees for the bankruptcy proceedings;

$28,500 in attorney’s fees for appealing the bankruptcy decision to

both the district court and Fifth Circuit; and $255 in filing fees.

TMLT appeals.

     We    review   findings     of   fact    for   clear       error    and   legal

conclusions de novo.       Ivy v. Jones, 192 F.3d 514, 516 (5th Cir.

1999).    We review a district court’s award of attorney’s fees for

     1
      Appellant also requests that we certify the question of
whether a trust may be subject to an award of attorney’s fees under
Tex. Civ. Prac. & Rem. Code § 38.001 to the Texas Supreme Court.
We DENY that request.

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abuse of discretion.   See Saizan v. Delta Concrete Prods. Co., 448
F.3d 795, 800 (5th Cir. 2006).

     On remand to the district court, TMLT argued for the first

time that Tex. Civ. Prac. & Rem. Code § 38.001 and Tex. Ins. Code

Art. 21.49-4 preclude any award of attorney’s fees incurred during

the bankruptcy proceedings.   Section 38.001 states: “A person may

recover   reasonable   attorney’s       fees   from    an   individual   or

corporation . . . if the claim is for . . . an oral or written

contract.”   TMLT argues that it is neither an individual nor

corporation, but instead a trust organized pursuant to Tex. Ins.

Code. Art. 21.49.4, which allows physicians to self-insure, and is

therefore immune from attorney’s fees pursuant to Section 38.001.

The district court found that TMLT had waived this argument by not

raising it earlier, and we agree.

     TMLT argues that it was not required to plead or otherwise

argue the inapplicability of section 38.001 until the case was

remanded for an award of attorney’s fees because, as a matter of

law, the section does not provide for such an award.             See Base-

Seal, Inc. v. Jefferson County, 901 S.W.2d 783, 787–88 (Tex.

App.–Beaumont 1995)(holding that the county is not liable for

attorney’s fees under § 38.001 despite the county’s failure to

plead the defense of sovereign immunity).             At first blush, this

argument makes some sense: if the statute simply does not provide

for an award of attorney’s fees against a trust, as TMLT suggests,

then failing to raise that argument earlier does not now enable

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that statute to provide for such an award.           This distinction,

however, is immaterial.

     The Texas Supreme Court has noted, “[t]he general rule in

Texas (and elsewhere) has long been that suits against a trust must

be brought against its legal representative, the trustee.” Ray

Malooly Trust v. Juhl, 186 S.W.3d 568, 570 (Tex. 2006)(citations

omitted).   As the district court noted, had that been done in this

case, then the action against the trustees of TMLT would constitute

an action against an individual.        TMLT’s failure to assert this

argument during the bankruptcy trial potentially caused Gibbons-

Markey not to join any trustee in that proceeding.        By failing to

do so, TMLT effectively waived the right to argue that the Trust is

now excluded from the award of attorney’s fees.       Moreover, as the

district    court   noted,   the   Texas    legislature   clearly   and

unequivocally exempted self-insured medical liability trusts from

other provisions of the insurance code, see Tex. Ins. Code Art.

21.49–4(e), and would have likely done so with regard to section

38.001 had that been its intent.       Given that the Texas legislature

and Texas courts have not directly addressed whether attorney’s

fees can be awarded against a trust under section 38.001, this

Court will not further exempt TMLT from liability.2

     2
      Additionally, it has long been Texas law that an insuring
entity is liable for the attorney’s fees incurred by an insured in
a breach of contract action.     See American Home Assur. Co. v.
United Space Alliance, LLC, 378 F.3d 482, 492–93 (5th Cir. 2004).

                                   4
      Turning to TMLT’s argument that the district court abused its

discretion in awarding attorney’s fees, we will not set aside the

district court’s findings when they are supported by substantial

evidence unless, after a review of the record as a whole, we are

left with the unyielding belief that a mistake has been made.

Adams v. Unione Mediterranea Di Sicurta, 220 F.3d 659, 670 (5th

Cir. 2000).    TMLT argues that Gibbons-Markey failed to produce

substantial evidence supporting the fees, but we find otherwise.

In   determining   the   amount   of   the   award,   the   district   court

considered various sources, including affidavits, and reduced the

amount of fees sought by Gibbons-Markey by more than fifty percent.

We conclude that the district court’s findings were supported by

substantial evidence and that it did not abuse its discretion in

determining the award.

      For the foregoing reasons, we AFFIRM the district court.

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