Appeal from the 55th District Court Harris County, Texas
Trial Court Case No. 2014-43646
consists of Justices Lloyd, Kelly, and Hightower.
central question in this appeal is whether the final judgment
properly awarded attorney's fees to appellee Jackie Thai,
who prevailed in the underlying contract dispute. Thai
pleaded for attorney's fees in accordance with Chapter 38
of the Texas Civil Practice and Remedies Code, and the case
was tried to a jury, which determined reasonable
attorney's fees for litigation in the trial court. The
trial court entered judgment on the verdict, and the Svobodas
appeal, the Svobodas contend that: (1) the court erred by
awarding attorney's fees because Thai did not plead and
prove presentment, and because the amount of fees found by
the jury was unreasonable, and (2) the jury's finding
that Thai did not make an excessive demand was contrary to
the great weight of the evidence. Because there was neither
an express nor deemed fact finding about presentment, we
cannot consider the appellants' contention that there was
no proof of presentment under the usual sufficiency standards
of review. Considering the appellants' arguments in light
of the procedural history, we conclude that presentment was
not proved as a matter of law, and therefore the judgment for
attorney's fees must be reversed. Accordingly, we reverse
the award of attorney's fees and render judgment for Thai
on her contract claim.
Thai sold a nail salon, "Jenny Nails," to Brandon
and Karen Svoboda for $54, 000. The bill of sale provided for
three payments: (1) $23, 000 due at closing on April 7, 2014;
(2) $23, 000 due on May 7, 2014; and (3) $8, 000 due on
August 7, 2014. The Svobodas made the first two payments. The
bill of sale provided for the transfer of all assets of the
business, including goodwill, to the Svobodas. It did not
require Thai to continue working or be present at the nail
salon after the sale, but the Svobodas maintained that Thai
had separately, orally agreed to assist with introduction and
retention of clients. When that did not occur in a manner
that satisfied the Svobodas, their lawyer sent Thai a demand
letter under the Texas Deceptive Trade Practices Act (DTPA).
The letter, which was sent three weeks before the final $8,
000 payment was due, asserted that Thai had fraudulently
induced the Svobodas' purchase of the nail salon and
sought return of the $46, 000 of the purchase price that had
been paid. Two weeks later, Thai filed suit against the
Svobodas for breach of contract.
sued the Svobodas for the outstanding $8, 000 on the contract
for sale of Jenny Nails. She alleged: "On or about July
11, 2014, Defendants [the Svobodas] notified Plaintiff [Thai]
that they refuse to comply with the Agreement and refuse to
pay the remaining $8, 000 balance." Thai also pleaded
for "an award of attorney's fees and costs pursuant
to Section 38.001 et seq. of the Texas Civil Practices &
Svobodas filed a general denial, and they alleged that Thai
was not entitled to attorney's fees because she failed to
present the claim as required by Chapter 38. The Svobodas
filed counterclaims for fraudulent inducement and violation
of the DTPA. They also later asserted that a subsequent
settlement demand should not be construed as presentment, but
if it were, the demand was excessive.
trial, Thai's attorney, John Na, testified about
attorney's fees. He testified about his experience and
that of his colleagues, and he explained the hourly rates and
charges shown on the billing records. He initially testified
that the total amount of attorney's fees through trial
was $16, 542.50, but then he corrected himself and testified
that the number did not include fees for an emergency hearing
and for trial. Na testified that, including the emergency
hearing and the trial, the attorney's fees were $19,
437.50. On cross-examination, Na was asked about the fees for
specific tasks, and he testified that there were no
depositions, little discovery, and few hearings before trial.
testified without objection that Texas law permits recovery
of attorney's fees "as long as you make a
presentment where the other side has an opportunity to pay
what's owed and avoid $20, 000 going to trial." He
asserted that his firm had presented the claim to the
Svobodas twice: (1) in January 2015 when a colleague sent a
demand letter seeking $18, 000, and (2) by oral conversations
with the Svobodas' prior attorney in which Na demanded
payment of at least $8, 000 and negotiated attorney's
fees. Na said that the $18, 000 demanded in the letter
represented the $8, 000 contract claim plus attorney's
fees that accrued as of the date of the letter. When
confronted with his billing statements, he acknowledged that
less than $4, 000 in attorney's fees had accrued by the
date of the letter. Na then testified that the letter was
part of settlement negotiations, and "you always start
high." Na could not identify a date when the oral
conversations with the Svobodas' prior attorney occurred,
and he acknowledged that that no phone calls or conversations
with opposing counsel were noted in his billing records. He
nevertheless testified that he "remember[ed] as a fact
that he did" talk to the Svobodas' prior attorney.
He also testified that the conversations with the attorney
were in the context of settlement: "I saw that my office
made a demand for 18, 000. But in my phone conversations with
[the Svobodas' attorney], I told him . . . their clients
need to come at least up to 8, 000, which they wouldn't
do so we can talk about settlement."
jury found in favor of Thai on the breach-of-contract claim,
and it found that Thai did not make an excessive demand for
payment. The jury determined that $16, 542.26 was a
reasonable attorney's fee for representation in the trial
court. The trial court entered judgment on the verdict, which
included an award of attorney's fees.
Svobodas filed a motion for new trial in which they
challenged the award of attorney's fees and the
jury's verdict on a question on which the Svobodas had
the burden of proof: whether Thai had made an excessive
demand. They asserted that there was neither pleading nor
proof of presentment of the claim, as required by Chapter 38
of the Texas Civil Practice and Remedies Code and that the
amount of attorney's fees was excessive. They also
challenged the finding on excessive demand. The motion for
new trial was overruled by operation of law, and the Svobodas
Svobodas raise two issues on appeal, each with several
subpoints. Their first issue challenges the award of
attorney's fees. They assert that although Thai pleaded
for attorney's fees under Chapter 38, she did not
specifically plead that presentment occurred. They further
assert that there was no evidence of presentment and that the
jury's award of attorney's fees was unreasonable.
Their second issue challenges the jury's finding that
Thai's demand was not excessive.
The Svobodas challenge the evidence of
Chapter 38 requires presentment of a claim as a prerequisite
for obtaining a judgment for attorney's fees.
Texas, litigants generally are responsible for their own
attorney's fees, Ashford Partners, Ltd. v. ECO Res.,
Inc., 401 S.W.3d 35, 41 (Tex. 2012), unless an award of
attorney's fees is authorized by statute or the
parties' contract. Wells Fargo Bank, N.A. v.
Murphy, 458 S.W.3d 912, 915 (Tex. 2015); see
Peterson Grp., Inc. v. PLTQ Lotus Grp., L.P., 417 S.W.3d
46, 60 (Tex. App.-Houston [1st Dist.] 2013, pet. denied).
"Absent exceptions not applicable here, the party
requesting attorney's fees must affirmatively plead for
them to be eligible for a judgment containing a fee
award." Murphy, 458 S.W.3d at 915 (citing
Civil Practice and Remedies Code section 38.001 authorizes
recovery of attorney's fees on a breach-of-contract
claim. Tex. Civ. Prac. & Rem. Code § 38.001.
"To recover attorney's fees under this statute, a
party must first prevail on the underlying claim and
recover damages." In re Nalle Plastics Family Ltd.
P'ship, 406 S.W.3d 168, 173 (Tex. 2013). The statute
also requires that:
(1) the claimant must be represented by an attorney;
(2) the claimant must present the claim to the opposing party
or to a duly authorized agent of the opposing party; and
(3) payment for the just amount owed must not have been
tendered before the expiration of the 30th day after the
claim is presented.
Tex. Civ. Prac. & Rem. Code § 38.002.
purpose of the presentment requirement is to allow the party
against whom the claim is asserted an opportunity to pay it
or tender performance within 30 days after they have notice
of the claim without incurring an obligation for
attorney's fees." Gibson v. Cuellar, 440
S.W.3d 150, 157 (Tex. App.-Houston [14th Dist.] 2013, no
pet.); see Jones v. Kelley, 614 S.W.2d 95, 100 (Tex.
1981) (same; interpreting predecessor statute to section
38.001); Lyon v. Bldg. Galveston, Inc., No.
01-15-00664-CV, 2017 WL 4545831, at *11 (Tex. App.-Houston
[1st Dist.] Oct. 12, 2017, pet. denied) (mem. op.) (same).
Presentment is a demand or request for payment or
performance, whether written or oral. See Jones, 614
S.W.2d at 100; Lyon, 2017 WL 4545831, at *11. No
particular form of presentment is required, see
Lyon, 2017 WL 4545831, at *11, but "merely filing
suit for a breach of contract, by itself, does not constitute
presentment." Genender v. USA Store Fixtures,
LLC, 451 S.W.3d 916, 924 (Tex. App.-Houston [14th Dist.]
2014, no pet.).
must be pleaded and proved. See Lyon, 2017 WL
4545831, at *11. However, in the absence of a special
exception pointing out the lack of specific pleading of
presentment, a pleading that gives "fair notice"
that the party is seeking to recover attorney's fees
under Chapter 38 is sufficient. Id. at *10 (citing
Roark v. Allen, 633 S.W.2d 804, 810 (Tex. 1982)
("A petition is sufficient if it gives fair and adequate
notice of the facts upon which the pleader bases his
case, Thai pleaded for attorney's fees under Chapter 38:
"Plaintiff is further entitled to an award of
attorney's fees and costs pursuant to Section 38.001 et
seq. of the Texas Civil Practices & Remedies Code."
The Svobodas did not file a special exception regarding the
lack of specificity of Thai's pleading. In their first
amended answer, the Svobodas pleaded that Thai had not
"given proper demand under the statute upon which she
relies for an award of attorneys' fees." They
further pleaded that "a demand was made under the rubric
of a settlement demand, which under law should not be
considered a demand pursuant to statute." Considering
both the absence of special exceptions and the Svobodas'
answer, which indicated that they had fair notice of
Thai's intent to recover attorney's fees under
Chapter 38, we reject the Svobodas' argument that Thai
did not plead presentment. See Lyon, 2017 WL
4545831, at *10. We do not need to address Thai's
assertions that presentment was tried by consent.
See Tex. R. App. P. 47.1.
There was no actual or deemed fact finding of
Svobodas challenge the evidentiary support for presentment of
the claim, and in their brief, they recite the usual
standards of review for legal and factual sufficiency of an
adverse finding on an issue on which they did not bear the
burden of proof. Similarly, Thai's brief recites the
factual sufficiency standard of review for an adverse finding
on which a party did not bear the burden of proof. Both the
Svobodas and Thai have predicated their sufficiency arguments
on standards of review that require a factfinding. See
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