Court Opinion

ID: 3077029
Source: CourtListenerOpinion
Date Created: 2015-10-16 01:23:31.3807+00
Date Added: 2024-06-11T09:15:01.999714
License: Public Domain

In The

                               Court of Appeals
                   Ninth District of Texas at Beaumont
                          ____________________
                             NO. 09-12-00061-CV
                          ____________________

                            JOE WARE, Appellant

                                       V.

                      UNITED FIRE LLOYDS, Appellee
_______________________________________________________          ______________

                   On Appeal from the 260th District Court
                           Orange County, Texas
                        Trial Cause No. D-100048-C
________________________________________________________          _____________

                         MEMORANDUM OPINION

      Joe Ware appeals from the trial court’s award of attorney fees and court

costs in a property insurance dispute. He argues the trial court erred in awarding

him only $3,133.20 in attorney fees. He claims he proved attorney fees of

$133,497.00, and asks this Court to render a judgment awarding him that amount.

He does not ask that the case be remanded. Ware also contends the award for court

costs failed to include all taxable costs. We conclude Ware is not entitled to the

judgment he requests on appeal.

                                        1
                                    IKE AND RITA

      Ware owned two commercial properties in Orange County at the time of

Hurricane Rita in 2005 and Hurricane Ike in 2008. After Hurricane Rita, but before

Hurricane Ike, Ware filed a lawsuit on an insurance claim for damage to the

properties during Hurricane Rita. See In re Acceptance Indem. Ins. Co., No. 09-08-

033-CV, 2008 WL 659438 (Tex. App.—Beaumont Mar. 13, 2008, orig.

proceeding). He was paid $146,170.85. After Hurricane Ike, Ware filed a claim

with United Fire Lloyds, his new insurance carrier, for damage to the same

properties. Ware made a written pre-suit demand of $187,121.51. Lloyds paid

Ware $12,197.81 on the Ike claim.

      Ware sued Lloyds for breach of contract, breach of the duty of good faith

and fair dealing, violations of Chapters 541 and 542 of the Texas Insurance Code,

and violations of the Deceptive Trade Practices Act. With the exception of the

breach of contract claim, the jury rejected his claims. The jury awarded Ware

$7,833.01 in damages for breach of contract. In addition to the damages found by

the jury, the trial judge awarded Ware $4,300.27 in statutory interest penalty under

the Texas Insurance Code and $713.56 for prejudgment interest. Neither party

challenges the jury’s verdict.

                                         2
                                  FINDINGS OF FACT

      The parties agreed to submit the issue of attorney fees to the trial court. The

court awarded $3,133.20 for attorney fees, and $333.00 for court costs. In its

findings of fact and conclusions of law, the trial court found that Ware’s written

settlement demand for damages to both properties was $187,121.51, which

included attorney fees “calculated on the basis of a 40% contingent fee contract

with the [p]laintiff.” The findings reflect that the parties later submitted the case to

mediation. Ware’s settlement demand then was $251,559.64, subsequently reduced

to $245,000.00. Lloyds offered to settle the claims for $9,653.00. The offer was

rejected. The case proceeded to trial.

      The trial court found that Ware and his attorneys “acted unreasonably and in

bad faith in claiming damages from [H]urricane Ike when those damages had been

caused by either flooding [excluded under the policy] or by [H]urricane Rita, and

such a claim constituted an excessive demand and was unreasonable.” The trial

court further found that “[p]laintiff stated under oath that his properties had

suffered no flood damages as a result of [H]urricane Ike.” “This statement was not

true, and it was undisputed that the property had been subjected to flooding of up

to 18 inches in one building and 24 inches in another building.” The court also

found that Ware’s attorneys “submitted a statement for attorney fees in an amount

                                           3
of $133,947.00 based on various hourly rates[,]” and that Ware’s “original demand

letter requested attorney fees based upon a 40% contingent fee contract with

[Ware].” The court found that the “excessive and unreasonable demands caused

unnecessary and excessive litigation costs, including attorney fees and court costs.”

      Ware challenges the trial court’s finding -- that his damages claim was

unreasonable and in bad faith -- though he acknowledges that the settlement

demand included flood damages which were not recoverable under the policy with

Lloyds. Ware asserts that the inclusion of the flood damages in the settlement

demand was a mistake, and he states that Lloyds was made aware of the mistake

long before trial. There is evidence in the record, however, that Ware’s attorney

and his expert met “the week before trial” to remove flood damages from the

estimates, and that the expert did not remove each item that he considered to be

damages caused by flood waters until the middle of trial. Moreover, Ware had

stated under oath in a discovery response that his properties had suffered no flood

damages as a result of Hurricane Ike. He does not dispute the trial court’s finding

that this sworn statement was not true. The trial court also heard evidence that a

portion of the damages sought by Ware in his demand letter were the result of

Hurricane Rita or pre-existing leaks to the property.

                                          4
                                 ATTORNEY FEES

       Ware argues that Lloyds stipulated at trial to Lloyds’ untimely payment of

the claim. He contends he is entitled to attorney fees as a matter of law under both

the breach of contract claim and the prompt payment provision of the Insurance

Code. See Tex. Ins. Code Ann. § 542.058 (West Supp. 2012), § 542.060 (West

2009); Tex. Civ. Prac. & Rem. Code Ann. § 38.001 (West 2008). Arguing that the

attorney fees sought by Ware are excessive, Lloyds raised the defense of

“excessive demand” with the trial court, and asserts that the fees sought by Ware

are unreasonable and, in part, unnecessary. See Oyster Creek Fin. Corp. v.

Richwood Invs. II, Inc., 176 S.W.3d 307, 318 (Tex. App.—Houston [1st Dist.]

2004, pet. denied) (excessive demand). Ware argues the excessive demand doctrine

does not apply.

      Whether or not the excessive demand doctrine applies, the attorney fees

awarded must be reasonable and necessary. A party seeking to recover attorney

fees carries the burden of proof. See Smith v. Patrick W.Y. Tam Trust, 296 S.W.3d
545, 547 (Tex. 2009). Even when the testimony on fees is not contradicted by any

other witness, the fees sought may be unreasonable. See id. at 547-48. In Tam

Trust, the jury awarded $65,000 in damages, approximately one-third of the

damages sought by the plaintiff, but failed to award any attorney fees. Id. at 546.

                                         5
The trial court granted JNOV on the attorney fees and awarded $7,500 instead. Id.

at 546-47. The appeals court vacated the attorney fees award and rendered

judgment for $47,438.75 in attorney fees. Id. at 547. Relying on two earlier cases,

the Supreme Court found the fee awarded by the appeals court to be unreasonable

and stated that the factfinder had to consider, among other things, the amount of

money involved and the results obtained. Id. at 548 (citing Arthur Andersen & Co.

v. Perry Equip. Corp., 945 S.W.2d 812, 818 (Tex. 1997) and Ragsdale v.

Progressive Voters League, 801 S.W.2d 880, 881 (Tex. 1990)).

         In this case, the jury awarded $7,833.01 in damages. Ware does not contest

the jury’s determination of the value of the claim. Ware asks for $133,947.00 in

attorney fees. While acknowledging he signed a contingency fee agreement with

his attorney, Ware nonetheless argues he is free to pursue an award of attorney fees

based either on the contingency fee agreement or on what he calls a “per diem”

basis.

         In Tam Trust, the Texas Supreme Court cited Farrar v. Hobby, 506 U.S.
103, 114, 113 S. Ct. 566, 121 L. Ed. 2d 494 (1992), which held that “‘the degree of

the plaintiff’s overall success goes to the reasonableness’ of a fee award” and “‘the

most critical factor’ in determining the reasonableness of a fee award ‘is the degree

of success obtained.’” Tam Trust, 296 S.W.3d at 548 (quoting Farrar, 506 U.S. at

                                          6
114 (citations omitted)). Although the amount of the fees requested by Ware was

reflected on time sheets and affidavits, the trial court determined the amount

requested was unnecessary in view of the circumstances of the case, and

unreasonable. See Tam Trust, 296 S.W.3d at 548.

      An appellate court reviews a trial court’s award of attorney fees for abuse of

discretion. See Bocquet v. Herring, 972 S.W.2d 19, 20-21 (Tex. 1998). An

appellate court may conclude a trial court abuses its discretion if a trial court’s

decision is arbitrary, unreasonable, and without reference to guiding principles, or

if the court rules without supporting evidence. Unifund CCR Partners v. Villa, 299
S.W.3d 92, 97 (Tex. 2009). A trial court’s determination that claimed hours or fees

are excessive, duplicative, or unreasonable is given considerable deference. See

generally E1 Apple I, Ltd. v. Olivas, 370 S.W.3d 757, 758-64 (Tex. 2012).

      The trial court heard the testimony along with the jury. When confronted

with conflicting evidence, a factfinder sometimes rationally may choose to believe

one witness and disbelieve another, may resolve inconsistencies in the testimony of

any witness, or may reject expert testimony. See City of Keller v. Wilson, 168
S.W.3d 802, 819-20 (Tex. 2005). The trial court in this case considered the

evidence and resolved the conflicts against Ware. The trial court found that Ware’s

claim for attorney fees was excessive and unreasonable, and largely unnecessary.

                                         7
Under the circumstances, we see no abuse of discretion by the trial court. We

cannot conclude on this record that Ware is entitled to the judgment he requests on

appeal.

                                  COURT COSTS

      Ware argues the court costs award fails to include additional necessary

items, including costs of deposition transcripts and mediation fees. Rule 131 of the

Texas Rules of Civil Procedure states, “The successful party to a suit shall recover

of his adversary all costs incurred therein, except where otherwise provided.” Tex.

R. Civ. P. 131. Rule 141 states, “The court may, for good cause, to be stated on the

record, adjudge the costs otherwise than as provided by law or these rules.” Tex. R.

Civ. P. 141.

      The allocation of court costs under Rule 141 is a matter for the trial court’s

discretion and will not be overturned on appeal unless the trial court abused its

discretion. Rogers v. Walmart Stores, Inc., 686 S.W.2d 599, 601 (Tex. 1985).

Good cause is determined on a case-by-case basis. Id. When the prevailing party

unnecessarily prolongs the proceedings, unreasonably increases costs, or does

something that should be penalized, good cause may exist to “adjudge the costs

otherwise” under Rule 141. See Furr’s Supermarkets, Inc. v. Bethune, 53 S.W.3d
375, 377 (Tex. 2001). The trial court’s findings in this case demonstrate good

                                         8
cause to adjudge court costs differently than that sought by Ware. We see no abuse

of discretion by the trial court. The trial court’s judgment is affirmed. 1

      AFFIRMED.

                                               ________________________________
                                                      DAVID GAULTNEY
                                                           Justice

Submitted on December 13, 2012
Opinion Delivered May 9, 2013

Before McKeithen, C.J., Gaultney and Horton, JJ.

      1
       Because we affirm the judgment, we need not address the issues raised in
the conditional cross-appeal.
                                           9