Court Opinion

ID: 24800
Source: CourtListenerOpinion
Date Created: 2010-04-25 08:26:50+00
Date Added: 2024-06-11T15:04:40.588486
License: Public Domain

Revised July 27, 2001

                  UNITED STATES COURT OF APPEALS
                       FOR THE FIFTH CIRCUIT

                     _______________________

                            No. 00-20380

                     _______________________

                    NORTHWINDS ABATEMENT, INC.

                                                 Plaintiff-Appellee,

                               versus

                    EMPLOYERS INSURANCE OF WAUSAU,

                                                 Defendant-Appellant.

______________________________________________________________

           Appeal from the United States District Court
                for the Southern District of Texas
_________________________________________________________________

                            July 11, 2001

Before KING, Chief Judge, REAVLEY and JONES, Circuit Judges.

EDITH H. JONES, Circuit Judge:

          In the second appearance of this case before us on

appeal, Employers Insurance of Wausau (“Wausau”) appeals a jury

verdict in favor of Northwinds Abatement, Inc. (“Northwinds”) and

the resulting judgment of nearly $1.1 million, including actual and

treble damages, attorney’s fees, interest and costs.            Wausau

asserts that, as a servicing company, it was an agent of the Texas

Workers’ Compensation    Insurance   Facility   (the   “Facility”)   and

therefore exempt from liability claims pursuant to now-superseded
Article 5.76-2, § 2.12 of the Texas Insurance Code.                         We disagree,

and affirm the district court’s holding that Wausau is not an agent

of the Facility. Wausau also argues that the claims underlying the

jury verdict are all invalid as a matter of law.                      Wausau is in part

correct, but         under    Texas    law      both    the   Texas   Deceptive    Trade

Practices Act (“DTPA”) and Insurance Code claims are viable, and we

must       affirm   the   judgment        on    these    extra-contractual      claims.

Finally,      although       the    award      of   statutory     attorneys’    fees   to

Northwinds      is    high,    it    is     not     reversible.       The   judgment   is

AFFIRMED.

                                       BACKGROUND

               Northwinds is a corporation engaged in the hazardous

business of asbestos abatement, remediation and removal work.

Unable to obtain workers’ compensation insurance on the open

market, it applied for and received coverage through the Texas

Workers Compensation Insurance Facility, a private, nonprofit,

unincorporated association of insurers created by statute with the

purpose, inter alia, of providing coverage for employers who are

unable to obtain insurance in the voluntary insurance market.1                         The

       1
          The Texas statutes establishing an insurer of last resort
for workers compensation insurance have been the subject of
frequent revision and redrafting. The Facility was formerly known
as the Texas Workers’ Compensation Assigned Risk Pool, with the
Facility replacing the Risk Pool on January 1, 1991. See Tex. Ins.
Code Ann. art. 5.76-2 (Vernon 1991)(amended 1993 and repealed 1997,
now Tex. Ins. Code Ann. art. 21.28-C (Vernon 2000)). On January
1, 1994, the Texas Workers’ Compensation Insurance Fund replaced
the Facility as the insurer of last resort.         See id. (1993
revision). While the Fund retained its name, the statutes governing

                                                2
Facility designated Wausau as the primary “servicing company” for

Northwinds and Wausau subsequently issued Northwinds a workers’

compensation policy.2

            In 1993 Northwinds filed suit against Wausau for alleged

mishandling    of     workers’   compensation     claims   filed   by   four

Northwinds employees.       Northwinds alleged that Wausau paid these

four claims without properly investigating them, thereby causing

increased insurance premiums for Northwinds and a loss of business

due to the customer perception that Northwinds was a safety risk.

Northwinds characterized its claims as raising fraudulent and bad

faith    settlement    practices,   breach   of    contract,   negligence,

violations of the Texas DTPA and violations of the Texas Insurance

Code.

again changed in 1997. See Tex. Ins. Code Ann. art. 5.76-3 and
art. 21.28-C §§ 26, 27. (Vernon 2000).
     2
          The servicing company contracts with the Facility to
issue policies evidencing the insurance coverage provided and to
service the risk. While the servicing company is the issuer of the
policy, the Facility itself is the insurer. The members of the
Facility collectively reinsure each policy it issues, dividing
reinsurance liability in proportion to premiums received by each
member.
     Notwithstanding its limited liability, the servicing company
still performs many of the traditional functions of an insurer.
The servicing company issues the policy; investigates, reports, and
pays claims; inspects and classifies risks; and provides legal
support as required by the policy. See Tex. Ins. Code Ann. art.
5.76-2.
     The operational mechanics of the Facility are discussed at
length in the earlier appeal of this case.          See Northwinds
Abatement, Inc. v. Employers Insurance of Wausau, 69 F.3d 1304,
1305-06 (5th Cir. 1996)(Northwinds I).

                                     3
           Northwinds’ suit was removed to federal court, where

Wausau filed a motion to dismiss for lack of subject matter

jurisdiction,     citing     Northwinds’             failure   to     exhaust      its

administrative    remedies        through      the     Facility     and    the    Texas

Department of Insurance.          The district court denied this motion.

Wausau then moved for summary judgment, contending that it was not

liable to Northwinds because it was only a servicing company for

the Facility and not Northwinds’ insurer.                When the district court

granted this motion, Northwinds appealed.                      On appeal, Wausau

renewed its challenge to the district court’s jurisdiction.

           This court determined that, pursuant to the doctrine of

primary jurisdiction, the district court had jurisdiction because

the   remedies    sought     by    Northwinds          could   not    be     provided

administratively.     See Northwinds Abatement, Inc. v. Employers

Insurance of Wausau, 69 F.3d 1304 (5th Cir. 1995) (Northwinds I).

However, this court also determined that the district court should

abstain from resolving Northwinds’ claims until certain factual

determinations    were     made     in   the     administrative           proceedings.

Rejecting Northwinds’ claim for breach of the duty of good faith

and fair dealing, the court nevertheless reversed the summary

judgment as to all other claims.               See Northwinds I, 69 F.3d at

1311-12.

           In    September    1998,      the     district       court      held   that

Northwinds had exhausted all avenues of administrative review, and

the case approached trial.         Wausau filed a last-minute motion for

                                         4
summary judgment, asserting that it was an agent of the Facility

and, as such, protected from liability under Article 5.76-2, § 2.12

of the Texas Insurance Code.    After supplemental briefing on the

issue, the district court denied the motion, and the case went to

trial.

          The jury returned a verdict in favor of Northwinds on all

claims except that for breach of contract. The jury awarded actual

damages of $19,234.95 for the increased premiums Northwinds was

forced to pay, $55,335.49 for attorneys’ fees incurred in defending

the lawsuit initiated against it by the Facility at Wausau’s

urging, and $712,000 in attorneys’ fees incurred in the federal

suit against   Wausau.   The   district   court   entered   a   judgment

awarding Northwinds $74,570 in actual damages, $223,711.32 in

treble damages, $712,000 in attorneys’ fees, prejudgment interest

on the actual damages, post-judgment interest, and costs.        Wausau

now appeals.

               WAUSAU AS AN “AGENT” OF THE FACILITY

          Wausau first argues that as a servicing company, it is an

agent of the Facility and thereby immune from liability under

Article 5.76-2, § 2.12 of the Texas Insurance Code.

Article 5.76-2, § 2.12 states in relevant part that:

     “There shall be no liability on the part of and no cause
     of action shall arise against the governing committee,
     the facility, its executive director, or any of its
     staff, agents, servants, or employees arising out of or
     in connection with any judgment or decision made in
     connection with the performance of the powers and duties

                                 5
     under this article or for recommendation or decision
     concerning any inspections or safety engineering
     investigations performed or for any recommendation or
     decision made in good faith”. (Emphasis added).

            According to Wausau, this court has already deemed it an

agent of the Facility, based on the conclusion in Northwinds I that

“an agent [Wausau] may be liable for its own acts of negligence or

fraud”. 69 F.3d at 1311.     Wausau takes this as a judicial

determination that it is an agent of the Facility. Further, Wausau

argues that this court’s invocation in Northwinds I of Maintenance,

Inc. v. ITT Hartford Group, Inc., 895 S.W.2d 816 (Tex.App.--

Texarkana 1995) (“Maintenance III”), demonstrates that Wausau has

already been determined to be the agent of the Facility.

            We disagree that Wausau’s agency status under § 2.12 was

determined in Northwinds I.     That opinion explicitly refused to

consider whether Wausau was an agent of the Facility for § 2.12

purposes.    See Northwinds I, 69 F.3d at 1308, n.3.   Additionally,

the citation in Northwinds I to Maintenance III represented not a

wholesale adoption of the Texas intermediate court of appeals’

opinion, but an acknowledgment that the Maintenance III decision

had been withdrawn and substantially modified.     See id. at 1311.

Thus, the law of the case does not govern Wausau’s status as an

agent under § 2.12.

            Whether a “servicing company” is an “agent” of the

Facility is a novel question of Texas law.    Article 5.76-2 of the

Texas Insurance Code does not define an “agent.” It defines a

                                  6
“servicing company” as “a member of the facility or other eligible

entity that is designated by the board to issue a policy that

evidences        the   insurance   coverages    provided    by   the    fund   to a

rejected risk and to service the risk as provided by this article.”

Tex. Ins. Code Ann. art. 5.76-2, § 1.01(12).               A “member,” in turn,

is defined as “an insurer that is a member of the facility.”                     Id.

at   §       1.01(15).    We   have   found    no    evidence    that   the    Texas

Legislature intended to protect servicing companies from liability

in § 2.12, and the Texas Supreme Court has never considered this

issue.3         Texas    intermediate   court       decisions    contain   offhand

references to servicing companies as agents of the Facility, but

they are not definitive.4

         3
          It is worth noting that other, more recent, Texas
statutes explicitly grant immunity to member insurers.          For
example, in the context of the Texas Property and Casualty
Insurance Guaranty Association “[t]here is no liability on the part
of, and no cause of action of any nature arises against any member
insurer [of the Association] . . . for any good faith action or
failure to act in the performance of powers and duties under this
Act.” See Tex. Ins. Code Ann. art. 21.28-C, § 16(a) (Vernon 2000).
This indicates that had the Texas Legislature sought to grant
similar immunity to members of the Facility in art. 5.76-2, it
would have so stated.
         4
                A
             few Texas courts of appeals have, with little
discussion or analysis, labeled servicing companies as the agents
of the Facility for the limited purpose of issuing a policy. See,
Maintenance, Inc. v. ITT Hartford Group, 895 S.W.2d 816, 818 (Tex.
Ct. App.--Texarkana 1995, writ denied) (Maintenance III)(holding
that the servicing company is an “agent to issue a policy for the
pool.”); Tex. Workers Comp. Ins. Facility v. Peakload, Inc., 1998
WL 798640, at *1 (Tex. Ct. App. - Austin, 1998) (unpub.) (“The
servicing company
is simply an agent that issues a policy for the pool.”). However,
these cases do not discuss subsequent transactions, such as claims
handling.

                                         7
            The structure of the Insurance Code offers the only

direct interpretive information, and it suggests that § 2.12 does

not apply to servicing companies.           Article 5.76-2 of the Texas

Insurance Code is divided into five parts.         Part 2, in which § 2.12

is found, does not discuss or even mention servicing companies.

Part 4, in turn, sets out the rules governing servicing companies

but contains no exemption from liability comparable to § 2.12.

Under the doctrine of ejusdem generis, the term “agent” in § 2.12

should be restricted to the class of persons enumerated in Part 2.

See Dawkins v. Meyer, 825 S.W.2d 444, 447 (Tex. 1992)(outlining the

doctrine of ejusdem generis and explaining that “where specific and

particular enumerations of persons or things are followed by

general words . . . , the general words are not to be construed in

their widest meaning or extent, but are treated as limited and

applying only to persons or things of the same kind or class as

those expressly mentioned.”). Viewed thus in context, “agent” must

be   a   term   related   to   the   Facility,   its   governing   body   and

employees, and not to the members or to servicing companies.

Wausau’s attempt to shelter itself under the wing of Part 2 of the

Insurance Code thus seems ill-conceived.

            Moreover, the ordinary meaning of the term “agent” also

fails to express Wausau’s relationship with the Facility.                 In

Texas, “[a]gency is a legal relationship created by an express or

implied agreement or by operation of law whereby the agent is

                                       8
authorized to act for the principal, subject to the principal’s

control.”    Karl Rove & Co. v. Thornburgh, 39 F.3d 1273, 1295-96

(5th Cir. 1994).       The essential element in determining agency

relationship is the principal’s right to control the agent:               “To

prove an agency relation under Texas law, there must be evidence

from which the court could conclude that ‘[t]he alleged principal

[had] the right to control both the means and the details of the

process by which the alleged agent [was] to accomplish the task.’”

Id. (quoting In re Carolin Paxson Adver., Inc., 938 F.2d 595, 598

(5th Cir. 1991)).    “The right to control the details of a person’s

work determines whether an employment or independent contractor

relationship exists.”       Weidner v. Sanchez, 14 S.W.3d 353 (Tex. Ct.

App.-- Houston [14th Dist.] 2000, writ denied). The portion of the

Texas   Insurance    Code    detailing     the   relationship   between   the

Facility and the servicing companies leaves substantial discretion

to the servicing company to determine the means for accomplishing

its tasks.     See Tex. Ins. Code Ann. Art. 5.76-2, § 4.08.               The

Facility’s    lack   of     control   over   how   the   servicing   company

accomplishes its designated tasks indicates that the servicing

company is not an agent of the Facility.

            This conclusion is also supported by the contract between

the Facility and Wausau, which states that Wausau is an independent

contractor, and that the company retains the right to control the

means, manner, and details of fulfilling its obligations under the

agreement.    Under Texas law, “[a] written contract that expressly

                                       9
provides    for   an   independent     contractor   relationship   is

determinative of the parties’ relationship in the absence of

extrinsic evidence indicating that the contract was subterfuge,

that the hiring party exercised control in a manner inconsistent

with the contract provisions, or if the written contract has been

modified by a subsequent agreement, either express or implied.”

Weidner, 14 S.W.3d at 353.     There is nothing in the record to

indicate that the Facility exercised a greater level of control

over Wausau’s work than that specified in the contract.       For all

these reasons, Wausau is not an agent of the Facility, it cannot

take refuge behind § 2.12, and Northwinds’ claims are not barred.

         NORTHWINDS’ FRAUD, NEGLIGENCE AND STATUTORY CLAIMS

           Five theories of liability were submitted to the jury in

this case: statutory claims under the DTPA and Insurance Code, and

common law theories of breach of contract, fraud and negligence.

The jury found in Northwinds’ favor on all but the breach of

contract claim.    Wausau now challenges both the legal basis for

these claims and the sufficiency of the evidence supporting each of

them. We review questions of law de novo, while the sufficiency of

the evidence is reviewed by examining all the evidence in the light

most favorable to the verdict.5       See Hollowell v. Orleans Reg’l

     5
          Northwinds contends that Wausau did not properly preserve
error and that, as such, the fraud, negligence and statutory claims
should be reviewed only for plain error.      We disagree.   Wausau
adequately preserved error on these claims via its motion for
directed verdict, objection to the submission of certain jury
questions, opposition to Northwinds’ motion for judgment, and the

                                 10
Hosp. LLC, 217 F.3d 379, 385 (5th Cir. 2000)(de novo standard for

questions of law); United States v. Guerrero, 234 F.3d 259, 261-62

(5th Cir. 2000) (stating the standard of review for sufficiency of

the evidence).

                              COMMON LAW CLAIMS

           Wausau argues that Texas law does not recognize causes of

action for negligent claims handling or fraud in regard to the

subject matter of the contract and that the jury’s findings on

those    issues   must   be    overturned.6   This   is   correct.   In

Higginbotham v. State Farm Mut. Auto Ins. Co., 103 F.3d 456, 460

(5th Cir. 1997), this court recognized the absence of a cause of

action for negligent claims handling under Texas law.7        Negligent

post-trial renewal of its motion for a directed verdict.
     6
          Northwinds elected to recover judgment under the Texas
Insurance Code claim, but Wausau, to prevail on appeal, would have
to overturn the common law claims as well.
     7
          Interpreting Texas law, a federal district court has
clearly analyzed this issue:

     A tort claim has been found to arise out of the breach of
     an insurance carrier’s contractual duty in only two
     instances: (1) when the insurer breaches its duty of good
     faith and fair dealing or (2) when the insurer fails to
     exercise ordinary care and prudence in considering an
     offer of settlement within the policy limits. All other
     claims, like that asserted for negligent claims handling,
     have no legally independent basis and, therefore, are
     regarded merely as actions for breach of contract.

     French v. State Farm Ins. Co., 156 F.R.D. 159, 162 (S.D.
     Tex. 1994).

                                     11
claims handling is subsumed into breach of contract except under

very limited circumstances.           In examining whether an action sounds

in contract or tort, the Texas Supreme Court has declared that

“[i]f the defendant’s conduct . . . would give rise to liability

independent of the fact that a contract exists between the parties,

the plaintiff’s claim may also sound in tort.”                  Southwestern Bell

Tel. Co. v. Delanney, 809 S.W.2d 493, 494 (Tex. 1991) (emphasis

added).   Similarly, for an action to sound in fraud instead of

breach of contract, Wausau’s fraudulent conduct must give rise to

liability independent of the contract.                Id.   The Texas Supreme

Court held there that “[w]hen the only loss or damage is to the

subject   matter     of     the    contract,    the    plaintiff’s      action   is

ordinarily on the contract.”             Id.    The essence of Northwinds’

common law claims lay in Wausau’s false statement that it was fully

investigating the disputed workers compensation claims and in the

resulting damages from increased premium payments when Northwinds

was   rendered     unable     to    contest    the    claims.      No   liability

independent of the contractual duty to handle claims exists as a

result of this false statement.           Neither of the common law claims

can be sustained under Texas law.

                                  STATUTORY CLAIMS

           Certain statutory causes of action exist in Texas under

the DTPA and the Insurance Code, however, regardless whether the

plaintiff also has a viable breach of contract claim.                   See First

                                         12
Title of Waco v. Garrett, 860 S.W.2d 74, 76-77 (Tex. 1993); Jack B.

Anglin Co., Inc. v. Tipps, 842 S.W.2d 266, 270-71 (Tex. 1992); Vail

v. Texas Farm Bureau Mut. Ins. Co., 754 S.W.2d 129, 136 (Tex.

1988).8   Further, a servicing company of the Facility can be liable

in its individual capacity for violations of the DTPA and the

Insurance Code.   See Maintenance III, 895 S.W.2d at 819.     Where, as

here, there has been no breach of contract or violation of the duty

of good faith and fair dealing, the bar for establishing extra-

contractual liability is high: the insurer must “commit some act,

so extreme, that [it] would cause injury independent of the policy

claim.”     Republic Ins. Co. v. Stoker, 903 S.W.2d 338, 341 (Tex.

1995).

            Wausau’s successful efforts to persuade the Facility to

sue Northwinds baselessly involved acts that a reasonable jury

could find extreme, and they clearly caused Northwinds extra-

contractual damages, as the company had to spend over $55,000

defending    itself   against   the    lawsuit.   Examined   under   the

deferential standard of appellate review, the evidence supports the

finding of an extreme extra-contractual act sufficient to satisfy

the Stoker standard.

     8
          An Insurance Code claim based on breach of the duty of
good faith and fair dealing will generally fail in the absence of
a viable breach of contract claim.    Northwinds’ claims did not
depend on good faith and fair dealing alone but also on
misrepresentation.

                                      13
                           ATTORNEYS’ FEES

           Wausau   challenges   the    jury’s   award    of    $712,000   in

attorneys’ fees to Northwinds as both insufficiently supported by

the evidence and excessive.      In diversity cases such as this one,

attorneys’ fee awards are governed by state law.               Mid-Continent

Casualty Co. v. Chevron Pipe Line Co., 205 F.3d 222, 230 (5th Cir.

2000).

           The Texas Insurance Code provides for a non-discretionary

award of attorneys’ fees to prevailing parties.          See Tex. Ins. Code

art. 21.21 § 16. A plaintiff is entitled to attorney’s fees that

are “reasonable and necessary” for the prosecution of the suit.

See Stewart Title Guar. Co. v. Sterling, 822 S.W.2d 1, 10 (Tex.

1992).    The party seeking to recover attorneys’ fees bears the

burden of proof on the issue.       However, where the party seeking

attorneys’ fees offers reasonable and credible testimony concerning

the fees, and the party opposing the attorneys’ fees has the

opportunity to contradict or disprove the testimony and fails to do

so, the testimony of the witness may be taken as true as a matter

of law.   See Ragsdale v. Progressive Voters’ League, 801 S.W.2d
880, 882 (Tex. 1990) (“In order for the court to award an amount of

attorneys’ fees as a matter of law, the evidence from an interested

witness must not be contradicted by any other witness or attendant

circumstances and the same must be clear, direct and positive, and

free from contradiction, inaccuracies and circumstances tending to

                                   14
cast suspicion thereon.”); see also Brown v. Bank of Galveston, 963
S.W.2d 511, 515 (Tex. 1998).

          The jury’s verdict was within the range of evidence

presented.   The only evidence concerning attorneys’ fees was the

testimony of John McEldowney, a veteran Texas attorney. McEldowney

properly laid out the factors identified by the Texas Supreme Court

for consideration in determining an award of attorneys’ fees.9

Wausau presented no evidence controverting McEldowney’s testimony,

and Wausau hardly cross-examined him.

          Wausau contends, nevertheless, that because the contract

between Northwinds and its attorneys established only a contingency

fee, there is insufficient evidence to support the jury’s award of

     9
           In Arthur Andersen & Co. v. Perry Equipment Corp., 945
S.W.2d 812, 818 (Tex. 1997), the Texas Supreme Court identified
eight factors to be considered in evaluating the reasonableness of
attorneys’ fees: “(1) the time and labor required, the novelty and
difficulty of the question involved, and the skill required to
perform the legal service properly; (2)the likelihood . . . that
the acceptance of particular employment will preclude other
employment by the lawyer; (3) the fee customarily charged in the
locality for similar legal services; (4) the amount involved and
the result obtained; (5) the time limitations imposed by the client
or the circumstances; (6) the nature and length of the professional
relationship with the client; (7) the experience, reputation, and
ability of the lawyer or lawyers performing the services; and (8)
whether the fee is fixed or contingent on results obtained or
uncertainty of collection before the legal services have been
rendered.”    McEldowney identified and discussed each of these
factors in relation to this case.     These factors are virtually
identical to those examined by federal courts in awarding
attorneys’ fees. See Johnson v. Georgia Highway Express, Inc., 488
F.2d 714, 717-19 (5th Cir. 1974).

                                15
fixed-rate (hourly billed) attorneys’ fees to Northwinds.10                We

disagree. In situations where counsel and client have entered into

a contingency fee arrangement, Texas law requires the finder of

fact to calculate a statutorily-founded award of reasonable and

necessary attorneys’ fees as a dollar amount rather than as a

percentage of the overall recovery.           See Arthur Andersen, 945
S.W.2d at 819 (interpreting fee-shifting provision of Texas DTPA).

There is no reason why the Insurance Code’s fee-shifting provision

should be treated differently.      This point is meritless.

           Wausau also contends that, regardless of the sufficiency

of the evidence, the award of $712,000 in attorneys’ fees was

excessive.   This court reviews whether the district court abused

its   discretion   in   refusing   to    reduce   an   excessive   award   of

attorneys’ fees.    See Mid-Continent, 205 F.3d at 232; Romaguera v.

Gegenheimer, 162 F.3d 893, 896 (5th Cir. 1998).

           In deciding whether a fee is excessive, an appellate

court is “entitled to look at the entire record and to view the

      10
          Indeed, it is odd that Wausau now objects to the jury’s
adoption of an hours-billed based fee, when in its cross
examination of McEldowney Wausau seemingly attempted to persuade
the jury to adopt a fixed-fee award. Wausau’s attorney appeared to
attack the contingent fee model, inquiring of Mr. McEldowney
“[d]on’t you think that a better way for determining whether a
person should unwillingly be forced to pay a fee would be to look
at the actual value of the actual work done, rather than some
voluntary agreement that the law firm suing had with their client?”
Mr. McEldowney responded negatively, but the jury obviously agreed
with Wausau’s counsel, opting for an “actual value of actual work
done” fixed fee model over the contracted-for contingency model.

                                    16
matter in the light of the testimony, the amount in controversy,

the nature of the case, and our common knowledge and experience as

lawyers and judges.” Mid-Continent, 205 F.3d at 232 (quoting Giles

v. Cardenas, 697 S.W.2d 422, 429 (Tex. App. 1985, writ ref’d

n.r.e.)).   All of the factors outlined by this court in Johnson v.

Georgia Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir.

1974), and subsequently adopted into Texas law by the Texas Supreme

Court are to be considered.          See Arthur Andersen, 945 S.W.2d at

818. However, it is well established that the most critical factor

in determining an award of attorneys’ fees is the “degree of

success obtained” by the victorious plaintiffs.             Romaguera, 162
F.3d at 896 (quoting Hensley v. Eckerhart, 461 U.S. 424, 434

(1983)).    Moreover, the requested fees must bear a reasonable

relationship to the amount in controversy or to the complexity of

the case.   Jerry Parks Equip. Co. v. Southeast Equip. Co., 817 F.2d
340, 344 (5th Cir. 1987).

            The award of $712,000 as attorneys’ fees in this case was

more than three times the trebled damages award and more than nine

times the actual damages. Such disproportion alone does not render

the award of attorneys’ fees excessive.         See Gorman v. Countrywood

Property Owners Assoc., 1 S.W.3d 915, (Tex. Ct. App.--Beaumont

1999, pet. denied)(attorney’s fee award 2.5 times larger than

actual damages was not excessive).         However, Northwinds’ attorneys

were not    very   successful   in    their   prosecution   of   this   suit:

following this decision, Northwinds will have prevailed on only two

                                      17
of its original laundry list of claims; the actual damages awarded

to Northwinds are a tiny fraction of the multi-million dollar

recovery it sought; and Northwinds took nothing on its key theory

that Wausau’s actions reduced Northwinds’ profits by convincing its

customers and potential customers that it ran an unsafe operation.

Indeed, the only front on which Northwinds’ attorneys enjoyed

outright   success   was   in   convincing   the   jury   to   award   full

attorneys’ fees.

           On the other side of the ledger, this was a complex case

to litigate, as it involved two appeals to this court, the pursuit

of administrative remedies, and a full trial.              We review an

attorneys’ fee award for abuse of discretion.        Although the basic

damage award was far less than Northwinds sought, and although

Northwinds’ attorneys contractually agreed to a contingent fee, we

cannot overlook the complexity of the case, Wausau’s failure to

challenge the reasonableness of the fee amount, and the sound

judgment of the trial judge who shepherded this case.           The award

must be sustained.

                                CONCLUSION

           For the foregoing reasons, the judgment of the district

court is AFFIRMED.

                                    18