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Davenport v. Hall

Court of Appeals of Texas, Fourth District, San Antonio

April 10, 2019

Dean DAVENPORT; Dillon Water Resources, Ltd.; 5D Drilling and Pump Service, Inc. f/k/a Davenport Drilling & Pump Service, Inc.; 5D Water Resources, LLC f/k/a Davenport Oper., LLC; Water Exploration Co., Ltd.; WAD, Inc.; Water Investment Leasing Company, LLC;Blue Gold Resources Management, LLC; Blue Gold Properties, LLC;and Blue Gold Development, LLC; Appellants
v.
Tom HALL, Thomas C. Hall P.C., and Blake Dietzmann, Appellees

          From the 225th Judicial District Court, Bexar County, Texas Trial Court No. 2012-CI-03086 Honorable Peter A. Sakai, Judge Presiding

          Sitting: Sandee Bryan Marion, Chief Justice Rebeca C. Martinez, Justice Irene Rios, Justice

          MEMORANDUM OPINION

          IRENE RIOS, JUSTICE

         Dean Davenport appeals from a judgment requiring him to pay $226, 795.01 in breach of contract damages and $1, 386, 745.96 in attorney's fees to his former lawyers, Tom Hall, Thomas C. Hall P.C., and Blake Dietzmann ("Hall and Dietzmann"). The same judgment orders Hall and Dietzmann to take nothing on claims they brought against multiple companies affiliated with Davenport ("the companies").[1] Davenport challenges both the damages and the attorney's fees awarded. The companies, which successfully defended the claims against them, challenge the trial court's failure to award them their court costs.

         We conclude that the evidence was legally insufficient to support an award of $226, 795.01 in damages and, in the absence of an award of damages on their breach of contract claim, Hall and Dietzmann were not entitled to recover attorney's fees. Therefore, we reverse the part of the judgment awarding Hall and Dietzmann damages and attorney's fees and render judgment that Hall and Dietzmann take nothing. We also conclude that the trial court should have awarded the companies their court costs. Therefore, we render judgment awarding the companies their court costs.

         Background

         Davenport engaged the services of lawyers Hall and Dietzmann to represent him in business-related litigation, which the parties refer to in their briefing as the Allen/Wynne lawsuit. The parties[2] signed a contingency fee agreement, and Hall and Dietzmann represented Davenport in the litigation. After the Allen/Wynne litigation concluded, a dispute arose about the terms of the contingency fee agreement.

         Hall and Dietzmann File Suit

         Hall and Dietzmann filed suit against Davenport and the companies. Their petition included multiple claims, including two breach of contract claims and an attorney's fees claim against Davenport. Under the first breach of contract claim, Hall and Dietzmann alleged that the terms of the contingency fee agreement entitled them to ownership interests in two companies, Water Exploration Co. Ltd. (WECO) and WAD Inc., and that Davenport had breached the contingency fee agreement by refusing to transfer ownership interests in the companies to Hall and Dietzmann. Under the second breach of contract claim, Hall and Dietzmann alleged that the terms of the contingency fee agreement entitled them to recover their litigation expenses and that Davenport had breached the contingency fee agreement by failing to reimburse them for the expenses they had incurred in the litigation.

         The Jury Trial

         The trial court held a jury trial on Hall and Dietzmann's claims. Determining that the contingency fee agreement was ambiguous, the trial court asked the jury to decide if Hall and Dietzmann were entitled to recover ownership interests in WECO and WAD under the agreement. The jury found that Hall and Dietzmann were not entitled to recover ownership interests in WECO and WAD under the agreement. Therefore, the jury found against Hall and Dietzmann on their first breach of contract claim. However, the jury found in favor of Hall and Dietzmann on their second breach of contract claim. Specifically, the jury found that Davenport had failed to comply with the fee agreement by not paying Hall and Dietzmann for litigation expenses and that $226, 795.01 would compensate Hall and Dietzmann for "reasonably necessary" expenses incurred in the litigation. Finally, the jury found against Hall and Dietzmann on the claims they had brought against the companies.

         The Bench Trial

         About six months after the jury trial, the trial court held a bench trial on Hall and Dietzmann's claim for attorney's fees. At the bench trial, Hall and Dietzmann asked the trial court to award them attorney's fees based on their successful breach of contract claim. The trial court awarded Hall and Dietzmann $1, 386, 745.96 in attorney's fees based on their breach of contract claim for litigation expenses.

         Final Judgment and Motion for New Trial

         The trial court signed a final judgment incorporating both the jury's findings on the litigation expenses and the trial court's attorney's fees award. Hall and Dietzmann then filed a motion for new trial, which the trial court granted.

         Mandamus Proceedings

         Davenport challenged the order granting new trial by filing a petition for a writ of mandamus in this court. This court conditionally granted mandamus relief in part, concluding that the reasons stated in the order granting a new trial were not sufficiently specific. In re Davenport, No. 04-14-00666-CV, 2015 WL 1089679, at *4 (Tex. App.-San Antonio March 11, 2015, orig. proceeding). This court directed the trial court to vacate its order granting a new trial and to issue a new order specifying its reasons for disregarding the jury verdict. Id. In response, the trial court signed a second order granting a new trial, which Davenport challenged by filing another petition for a writ of mandamus in this court. This time we denied mandamus relief. In re Davenport, No. 04-15-00231-CV, 2015 WL 6510955, at *1 (Tex. App.-San Antonio Oct. 28, 2015, orig. proceeding).

         Davenport subsequently filed a mandamus petition in the Texas Supreme Court, again challenging the granting of a new trial. Davenport argued the trial court abused its discretion in disregarding the jury's finding that the contingency fee agreement did not allow Hall and Dietzmann to recover ownership interests in WECO and WAD as attorney's fees, and in determining that the agreement unambiguously allowed Hall and Dietzmann to recover an ownership interest in WECO and WAD as attorney's fees. In re Davenport, 522 S.W.3d 452, 455 (Tex. 2017) (orig. proceeding). The supreme court agreed with Davenport, concluding that the agreement unambiguously stated that Hall and Dietzmann were not entitled to recover ownership interests in the companies as attorney's fees. Id. at 454, 459. In conditionally granting mandamus relief, the supreme court directed the trial court to vacate both of its new trial orders and to render a final judgment consistent with its opinion. Id. at 459.

         Motion to Render Judgment and Amended Judgment

         Returning to the trial court, Hall and Dietzmann filed a motion to effectuate the supreme court's opinion and render judgment. The trial court granted the motion and signed an amended judgment, which vacated the new trial orders and awarded Hall and Dietzmann essentially the same relief as the initial judgment. The amended judgment ordered that Hall and Dietzmann recover from Davenport (1) $226, 795.01 in damages for unpaid litigation expenses, (2) $1, 386, 745.96 in attorney's fees incurred in the trial court, and (3) conditional appellate attorney's fees in the event Davenport pursued an ...


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