United States District Court, S.D. Texas, Brownsville Division
G.C. DEVELOPMENT CORP., Plaintiff/Counter-Defendant,
DR. JOE D. ZAYAS, Defendant/Counter-Plaintiff.
REPORT AND RECOMMENDATION OF THE MAGISTRATE
G. Morgan United States Magistrate Judge.
February 16, 2016, Plaintiff/Counter-Defendant G.C.
Development Corporation (“G.C. Development”)
filed a motion for summary judgment and a motion for judgment
on the pleadings. Dkt. No. 23. G.C. Development sought
summary judgment in its favor for the claims that it brought
- which related to the breach of a mediated settlement
agreement - and judgment on the pleadings for the
counterclaims made by Defendant/Counter-Plaintiff Dr. Joe D.
September 30, 2016, the District Judge granted both motions
in favor of G.C. Development, expressly finding that Zayas
“has breached” the settlement agreement. Dkt. No.
October 14, 2016, G.C. Development filed a motion for
attorney's fees. Dkt. No. 49. Zayas has filed a response
in opposition. Dkt. No. 50. G.C. Development filed a reply
brief. Dkt. No. 51. The parties disagree as to the relevant
identity of the “local legal community” and the
hourly rate for attorney's fees in that community. Dkt.
Nos. 53, 54.
motion has been referred to the undersigned pursuant to 28
U.S.C. § 636(b).
factual nature of the dispute between G.C. Development and
Zayas is set out in the undersigned's previous report and
recommendation on the motion for summary judgment and the
Court will not rehash all of the facts. Dkt. No. 41. Stated
briefly, G.C. Development and Zayas entered into a mediated
settlement agreement regarding a construction dispute. As
part of the agreement, Zayas agreed to pay G.C. Development
$162, 000 by May 11, 2015. Zayas failed to make that payment
and G.C. Development sued for breach of contract. Dkt. No. 1.
point, there are four questions before the Court: (1) if G.C.
Development is entitled to attorney's fees as a matter of
law; (2) if they are entitled to attorney's fees, who is
the proper finder of fact for this issue; (3) what is a
proper and reasonable award of attorney's fees in this
case; and (4) if G.C. Development is entitled to
reimbursement of court costs from Zayas.
reviewing the record and the relevant case law, it is
RECOMMENDED that the motion for attorneys
fees and court costs be granted, but at the amounts
Entitlement to Attorney's Fees
award of attorney fees “is governed by the same law
that serves as the rule of decision for the substantive
issues in the case.” Mathis v. Exxon Corp.,
302 F.3d 448, 461 (5th Cir. 2002). Thus, in a diversity case,
state law “controls both the award of and the
reasonableness of fees awarded.” Id. Because
Texas law controlled the substantive issues in this case,
Texas law will also control the question of attorney's
law expressly states that “[a] person may recover
reasonable attorney's fees from an individual or
corporation, in addition to the amount of a valid claim and
costs, if the claim is for . . . an oral or written
contract.” Tex. Civ. Prac. & Rem. Code §
38.001(8). Texas courts have consistently interpreted this
statute to apply to claims for breach of contract. See
Cytogenix, Inc. v. Waldroff, 213 S.W.3d 479, 489 (Tex.
App. 2006) (“A party who prevails on a breach of
contract claim may recover its reasonable attorney's fees
pursuant to section 38.001(8) of the Texas Civil Practice and
Remedies Code.”). In order to be awarded such fees, the
prevailing party must be awarded damages for the breach of
contract claim. Green Int'l, Inc. v. Solis, 951
S.W.2d 384, 390 (Tex.1997) (“To recover attorney's
fees under Section 38.001, a party must (1) prevail on a
cause of action for which attorney's fees are
recoverable, and (2) recover damages.”).
Development has met the standard for receiving an attorney
fee award. It prevailed on a breach of contract claim - for
which fees are recoverable under Section 38.001(8) - and it
was awarded damages for that breach. The entitlement to
attorney fees follows from the award of damages for the
argues that the amount of attorneys fees must be determined
by a jury; G.C. Development argues that it is a matter for
the Court to decide. Based upon controlling precedent, Zayas
is not entitled to a jury trial on the matter of
is generally correct that Texas courts are required to submit
the issue of attorneys' fees to a jury. Bill Miller
Bar-B-Q Enterprises, Ltd. v. Gonzales, No.
04-13-00704-CV, 2014 WL 5463951, at *5 (Tex. App. Oct. 29,
2014). That conclusion is limited, however, by the fact that,
“the right to a trial by jury in federal courts is a
matter of federal law.” Resolution Trust Corp. v.
Marshall, 939 F.2d 274, 279 (5th Cir. 1991). Moreover,
“[s]ince there is no common law right to recover
attorneys fees, the Seventh Amendment does not guarantee a
trial by jury to determine the amount of reasonable attorneys
the Court is the proper fact-finder for this motion.
Zayas's request for a jury trial on this issue should be
Amount of Attorneys' Fees
the attorney fees, the final issue for the Court to consider
is the amount of attorneys fees that should be awarded to
case, G.C. Development is seeking attorney's fees for
three attorneys: Bill Kroger (“Kroger”), Meghan
Dawson McElvy (“McElvy”) and Caroline Carter
(“Carter”). Kroger is a graduate of the
University of Texas School of Law; is the co-chair of Baker
Botts's energy litigation practice group; and has over 25
years of experience. Dkt. No. 53-1, p. 21. McElvy is a
graduate of the University of Chicago School of Law; clerked
for United States District Judge Andrew Hanen; has been
recognized as a “Texas Super Lawyer-Rising Star;”
and has 7 to 10 years of experience. Dkt. No. 53-1, p. 14.
Carter is a graduate of the University of Texas School of
Law; clerked for United States District Judge Ewing Werlein;
and has 3 to 5 years of experience. Dkt. No. 53-1. Baker
Botts also seeks fees for work done by paralegals that
“was legal in nature and which an associate would have
been required to handle at a higher billing rate if the
paralegal had not assisted.” Dkt. No. 53, p.
Kroger, G.C. Development seeks an hourly billing rate of
$807.50 for work performed in 2015 and $831.25 for work
performed in 2016. Dkt. No. 49-1, pp. 2-3. As to McElvy, G.C.
Development seeks an hourly billing rate of $570.00 for work
performed in 2015 and $593.75 for work performed in 2016.
Id. As to Carter, G.C. Development seeks an hourly
billing rate of $427.50 for work performed in 2015 and
$522.50 for work performed in 2016. Id. As to its
paralegals, G.C. Development seeks an hourly billing rate of
$261.25 for work performed in 2015 and $270.75 for work
performed in 2016. Id. As to its paralegal clerk,
G.C. Development seeks an hourly billing rate of $156.75 for
work performed in 2016. Id. In sum, G.C. Development
seeks $133, 715.56 in attorney's fees.
asserts that G.C. Development is entitled to, at most, $23,
864.50 in attorney's fees. Dkt. No. 54-5.
previously noted, the Court generally applies Texas law in
determining attorney fee awards. Mathis, 302 F.3d at
461. In determining such fees, Texas utilizes the
“lodestar” method. El Apple I, Ltd. v.
Olivas, 370 S.W.3d 757, 760 (Tex. 2012). Thus, the Court
must determine a reasonable hourly rate for counsel as well
as the reasonable number of hours worked and multiply those
figures to arrive at a total fee award. Id.
“The lodestar figure may then be adjusted for factors
known as multipliers, including the complexity of the case,
the skill of the attorney, ...