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PROSECUTING AND DEFENDING ATTORNEYS’ FEES IN TEXAS

PROSECUTING AND. DEFENDING ATTORNEYS'. fees IN TEXAS . John W. Bridger David A. Kirby STRONG PIPKIN BISSELL & LEDYARD, 4900 Woodway Drive, Suite 1200. Houston, TEXAS 77056. PRESENTED FOR HOUSTON BAR ASSOCIATION. MAY 10, 2019. TABLE OF CONTENTS. TABLE OF AUTHORITIES .. i xxiii I. INTRODUCTION .. 1. II. TEXAS FOLLOWS THE AMERICAN RULE .. 2. III. CHAPTER 38 .. 2. A. Statutory Language .. 2. 1. Only Reasonable Attorneys' fees Are Recoverable .. 2. (a) Contractual Provisions May Not Require the Reasonableness Limitation .. 3. (b) Some Statutes Do Not Require the Reasonable and Necessary Limitation .. 4. 2. Contract Broadly 4. (a) Bailment May Constitute a Contract 4. (i.) PRACTICE POINTER: Determine Whether the Bailment Pleaded as a 5. 3. Recovery Permitted for Quantum Meruit Claims .. 5. 4. No Recovery for Pets under Section (6) .. 5. 5. If Pleaded and Proved, Attorneys' fees Are Mandatory under Chapter 5.

PROSECUTING AND DEFENDING ATTORNEYS’ FEES IN TEXAS . John W. Bridger . David A. Kirby . STRONG PIPKIN BISSELL & LEDYARD, L.L.P. . 4900 Woodway Drive, Suite 1200 ...

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Transcription of PROSECUTING AND DEFENDING ATTORNEYS’ FEES IN TEXAS

1 PROSECUTING AND. DEFENDING ATTORNEYS'. fees IN TEXAS . John W. Bridger David A. Kirby STRONG PIPKIN BISSELL & LEDYARD, 4900 Woodway Drive, Suite 1200. Houston, TEXAS 77056. PRESENTED FOR HOUSTON BAR ASSOCIATION. MAY 10, 2019. TABLE OF CONTENTS. TABLE OF AUTHORITIES .. i xxiii I. INTRODUCTION .. 1. II. TEXAS FOLLOWS THE AMERICAN RULE .. 2. III. CHAPTER 38 .. 2. A. Statutory Language .. 2. 1. Only Reasonable Attorneys' fees Are Recoverable .. 2. (a) Contractual Provisions May Not Require the Reasonableness Limitation .. 3. (b) Some Statutes Do Not Require the Reasonable and Necessary Limitation .. 4. 2. Contract Broadly 4. (a) Bailment May Constitute a Contract 4. (i.) PRACTICE POINTER: Determine Whether the Bailment Pleaded as a 5. 3. Recovery Permitted for Quantum Meruit Claims .. 5. 4. No Recovery for Pets under Section (6) .. 5. 5. If Pleaded and Proved, Attorneys' fees Are Mandatory under Chapter 5.

2 6. Only Attorneys' fees are Recoverable, Not 6. 7. fees Exceeding Damages Award can be Reasonable .. 6. (a) PRACTICE POINTER: Object to the Overall Fee as Unreasonable and Excessive .. 7. 8. Attorneys' fees are Only Recoverable From Individuals and Corporations, Not Partnerships, Limited Partnerships, or Limited Liability Companies .. 7. (a) PRACTICE POINTER (Debtor/Defendant): Object, Plead Affirmative Defense, and Move for Summary 8. (b) PRACTICE POINTER (Claimant): Check Your Contract Provisions and Plead Appropriately .. 8. B. Recovering Attorneys' fees under Chapter 38 .. 9. 1. Only Claimants May Recover .. 9. (a) PRACTICE POINTER: Defendants Should Consider an Offer of Settlement under Rule 167 and Chapter 42 .. 9. 2. Represented by an attorney .. 10. 3. Presumption and Judicial Notice .. 10. 4. Presentment .. 11. (a) Claimant Must Plead and Prove Presentment (and Right to Recover Attorneys' fees , with or without Presentment).

3 12. (i.) PRACTICE POINTER: Pleading .. 14. (ii.) PRACTICE POINTER: Proving .. 14. (b) Condition Precedent .. 14. (c) Condition Precedents Require Specific 15. (d) No Particular Form of Presentment Required .. 15. (e) Pleadings are Not Presentment .. 17. (f) Elements of Presentment: Notice, Amount, and Time .. 17. (i.) PRACTICE POINTER: Requirements of Presentment Demand 18. (g) Timing of Presentment .. 18. (h) Tender .. 18. (i.) PRACTICE POINTER (Claimant).. 19. (ii.) PRACTICE POINTER (Debtor/Defendant) .. 19. (i) When fees Begin to Accrue .. 19. (j) Excessive Demand .. 21. (i.) Application .. 21. (ii.) Debtor/Defendant Must Plead and Prove the Affirmative Defense .. 22. (iii.) Debtor/Defendant Must Obtain a Finding of Fact on Excessiveness .. 22. (iv.) Factors Determining 23. (v.) Demand Exceeding Award is Not Necessarily Excessive .. 24. (k) Additional PRACTICE POINTERS: On Presentment (Claimants).

4 25. (l) Additional PRACTICE POINTERS: On Presentment and Excessive Demand (Debtor/Defendant) .. 26. C. Parties May Contractually Waive Chapter 38 Attorneys' fees .. 27. IV. PREVAILING 28. A. Ordinary Meaning: Receive Some Relief or Direct Benefit Altering the Parties'. Relationship .. 28. B. Only One Party Prevails, It Is Not a Theory by Theory Determination .. 30. C. No Net Recovery Due to Offset from Counterclaim vs. Settlement .. 30. D. Amount Recovered Less Than Tendered or Sought at Trial Does Not Matter, Since Still Prevailing 31. E. Amount at Issue Small Enough for JP Court Is Not a Defense to Fee Award .. 31. F. Contractual Provisions .. 32. 1. Generally, the Contract Controls, Not Statutes or Case Law .. 32. 2. Prevailing Party Undefined: Main Action or Main Issue 32. (a) PRACTICE POINTER: Main Issue Analysis Better With Entire Record . 34.

5 (b) PRACTICE POINTER: Consider Contractually Defining Prevailing Party .. 34. 3. No Relief to Breaching Party, Unless Excused .. 34. 4. Scope of the Provision: Broad vs. Narrow .. 35. 5. Exclusive Remedy and Limitation of Liability Provisions Do Not Preclude Recovering Attorneys' fees .. 35. G. Attorneys' fees Typically Are Not Damages Supporting Status as Prevailing Party .. 36. H. Defendant as Prevailing Party in Contract and Certain Statutory .. 36. 1. Standard for Prevailing Defendant .. 36. 2. Epps Criteria for Prevailing Defendant Based on Non-Suit without Prejudice .. 36. I. If Awarded Trial fees , Must Be Awarded Appellate 37. J. Only Successful Appeal Results in Appellate Attorneys' fees .. 37. 1. Practice Pointer: Make Judgment Conform to Pattern Jury 39. K. Appellate Court's Can Consider Record and Own Knowledge to Assess Appellate fees Awards.

6 40. L. Conditional Appellate fees Are Not Unconstitutional .. 40. V. PROVING ATTORNEYS' fees .. 40. A. Arthur Andersen Factors and Lodestar .. 40. B. The Arthur Andersen 43. 1. Proof of All 8 Arthur Andersen Factors Is Not Necessary .. 43. 2. Bare Minimum Proof: Describe Services Provided, Who Performed, When, How Much Time, And Hourly 43. C. No One Factor Determinative .. 44. D. Electing the Lodestar 45. 1. Lodestar Presumptively Produces a Reasonable Fee .. 46. (a) PRACTICE POINTER: Beware Electing Lodestar without Knowing It .. 47. (b) PRACTICE POINTER: Lodestar Reward Outweighs Burden .. 47. E. Proceeding under the Traditional Method (Rejecting Lodestar) .. 47. 1. Flat Fee Cases .. 47. 2. PRACTICE POINTER .. 47. F. Reasonable Hourly Rate .. 48. G. Contingency fees Not Necessarily Precluded As 49. 1. PRACTICE POINTER: Proving a Contingency 52. 2.

7 PRACTICE POINTER: Jury Getting Close to Lodestar .. 52. 3. PRACTICE POINTER: If Damages Reduced, Offer 52. H. fees Not Paid, in Whole or in Part, or Paid by Third Party Still 52. 1. Practice Pointer: Discounted 53. I. Contemporaneous Billing Records: Traditional vs. Lodestar .. 53. 1. Traditional Method Does Not Require Documentation .. 53. 2. Lodestar Method Usually Requires Documentary 54. (a) PRACTICE POINTER: Cases Exceeding 100 Hours Should Provide Contemporaneous Billing Records-Cures Many 56. (b) PRACTICE POINTER: Contemporaneous Billing Records Allow Ability to Segregate .. 56. 3. Other Issues .. 56. (a) Must Allocate Specific Time to Specific Tasks .. 56. (b) Block Billing Not Prohibited .. 58. (c) Billing for Clerical Tasks Prohibited .. 59. (d) Redacting .. 59. (i.) PRACTICE POINTER: Minimize Unnecessary Redactions .. 61. (e) Billing Judgment: Proving Work Not Duplicative, Excessive, or Inadequately Documented.

8 61. (i.) PRACTICE POINTER: Keep Track of Written Off and Written Down Time .. 62. (ii.) PRACTICE POINTER: Tying Client Discounts to Billing Judgment .. 62. (iii.) PRACTICE POINTER: Aver Billing Judgment in Your Application or 62. (f) 63. (i.) PRACTICE POINTER: You Can Edit Your Contemporaneous Billing Record 63. (g) Objections to Attorneys' fees Must Be Specific, Documented, and Proven By Example .. 63. (i.) PRACTICE POINTER: Objections to Vagueness, Redaction, Block Billing, Should Be Tied To Precluding Cross-Examination on A Substantive Ground, Like Segregation .. 64. (ii.) PRACTICE POINTER: Applicants Should Consider Satisfying Defendant's Arguably Valid Objections .. 64. (h) Utilizing Cost and Necessity Affidavit to Submit fees and Billing Records .. 65. J. Segregating fees .. 65. 1. Segregate by Discrete Legal Task (Sterling Is Dead; Long Live Chapa).

9 65. (a) Historical Sterling Exception for Intertwined Facts .. 65. (b) Chapa Modifies Sterling, Mandating Task By Task Segregation .. 66. (c) Appellate Courts Strictly Following Chapa .. 68. (d) Appellate Courts Effectively Reverting To Sterling .. 72. (e) Blending: All the Discrete Tasks Prove the Same Fact for Each Cause of Action .. 74. 2. Discrete Tasks Defined .. 74. (a) Segregating For Counterclaims, Cross-Claims, and Affirmative 75. (i.) PRACTICE POINTER: Consideration for fees Related to Affirmative Defenses and 77. (b) Segregating by Defendant .. 77. (i.) Possible Exception for Jointly and Severally Liable Defendants .. 78. (c) Contractual Provisions Impacting Segregation .. 79. (d) Segregating By Estimating a Percentage Attributable To Unrecoverable Claims .. 80. (e) Segregating by Excluding All Time Solely Related to Unrecoverable Claims 82.

10 3. Preserving Error on Failing to Segregate fees .. 82. (a) PRACTICE POINTERS: When to Object .. 84. 4. Appellate fees Should Be Segregated .. 84. 5. Unsegregated fees Result In Remand, Not Rendition .. 85. 6. Curing Unsegregated fees with Remittitur .. 85. 7. PRACTICE POINTERS .. 86. (a) Entry-By-Entry Segregation .. 86. (b) Estimate Only If You Have To .. 86. (c) Also Keep Track Of Your Unrecoverable Time .. 86. (d) Start Putting Together Objectionable Time Entries Early .. 87. (e) Tasks vs. Facts .. 87. (f) Should You Plead The Unrecoverable Action? .. 88. (g) Hard Line Approach to Segregation .. 88. (h) Appellate 88. (i) Request Findings of Fact and Conclusions of Law on 88. (j) Offer to Remit .. 89. (k) If All Else Fails, Seek a New Trial to Cure Segregating Errors .. 89. K. Uncontroverted, Non-Conclusory fees .. 89. 1. Uncontroverted fees Should Be Awarded As a Matter of Law.