Court of Appeals of Texas, Fifth District, Dallas
NET WORTH REALTY USA, LLC AND DALLAS METRO HOLDING, LLC., Appellants
IRMGARD DENNEY, Appellee
Appeal from the 191st Judicial District Court Dallas County,
Texas Trial Court Cause No. DC-18-03776
Justices Schenck, Reichek, and Nowell
A. NOWELL JUSTICE.
Worth Realty USA, LLC and Dallas Metro Holdings, LLC appeal
the trial court's order denying their motion seeking
attorney's fees under section 17.50(c) of the Deceptive
Trade Practices Act (DTPA) and Rule 13 of the Rules of Civil
Procedure. After they obtained summary judgment dismissing
Irmgard Denney's claims against them, Net Worth and
Dallas Metro filed a motion to recover their attorney's
fees arguing that Denney's claims were groundless and
brought in bad faith or groundless and brought for the
purpose of harassment. The trial court denied the motion and
questioned whether appellants had pleaded a claim for
attorney's fees under the DTPA. Appellants then filed a
motion to amend their counterclaim to add such a claim, but
they filed the motion after the deadline for amending
pleadings. The trial court denied the motion. In three issues,
Net Worth and Dallas Metro contend the trial court abused its
discretion by denying the motion to amend, and by denying
their claim for attorney's fees under the DTPA and under
Rule 13. We conclude the trial court did not abuse its
discretion and affirm.
purchased a house from IH Solutions, LLC on November 20,
2013. After moving in, she discovered several deficiencies in
the house that were not disclosed to her. IH Solutions bought
the house from Dallas Metro on April 5, 2013 and renovated it
before selling it to Denney. Dallas Metro owned the property
for less than two weeks before selling it to IH Solutions.
Dallas Metro purchased the house on March 26, 2013,
immediately listed it for sale through its affiliated
brokerage, Net Worth, and sold the house to IH Solutions.
April 15, 2015, Denney sued IH Solutions, Dallas Metro, Net
Worth, and several other defendants who had either owned or
performed renovations on the property. She alleged causes of
action for fraud, fraudulent inducement, negligent
misrepresentation, and civil conspiracy against all
defendants. She also alleged IH solutions violated the DTPA.
12, 2015, Dallas Metro and Net Worth filed an amended answer
and counterclaim requesting sanctions under Rule 13 against
Denney and her attorney. They alleged Denney's original
petition was groundless and brought in bad faith and
groundless and brought for the purpose of harassment. Denney
had not asserted a DTPA against them at the time Dallas Metro
and Net Worth filed their counterclaim for Rule 13 sanctions.
Almost two years later, Denney, represented by a new
attorney, filed a fourth amended petition in which she
alleged Dallas Metro and Net Worth violated the DTPA by
committing false, misleading, or deceptive acts, breaching an
express or implied warranty, and committing an unconscionable
action or course of action.
Metro and Net Worth did not amend their answer and
counterclaim in response to the fourth amended petition.
Rather, they filed a traditional and no-evidence motion for
summary judgment on Denney's DTPA claim. They alleged
Denney was not a consumer in a transaction with Dallas Metro
and Net Worth, she had no evidence they committed any of the
alleged DTPA violations, and Denney's DTPA claim was
barred by limitations. Denney requested and obtained a
continuance of the summary judgment hearing in order to
conduct discovery to respond to the motion.
months later, Dallas Metro and Net Worth filed an amended
motion for summary judgment attaching additional summary
judgment evidence and requesting attorney's fees under
DTPA section 17.50(c). They argued they had no role in the
transaction where Denney purchased the house and that
Denney's lawsuit against them was frivolous and likely
brought for the purpose of harassment. Denney argued in her
response that Dallas Metro and Net Worth did not plead for
attorney's fees under the DTPA and had not shown
entitlement to an award of fees under section 17.50(c).
trial court granted the amended motion for summary judgment
and dismissed Denney's claims against Dallas Metro and
Net Worth with prejudice on June 2, 2017. The court reserved
ruling on the request for attorney's fees and invited the
parties to file a motion for attorney's fees.
Metro and Net Worth filed a motion for attorney's fees on
August 9, 2017 based on section 17.50(c) of the DTPA and Rule
13. They alleged their amended answer and counterclaim filed
in 2015 gave Denney notice that her DTPA claim was groundless
and brought in bad faith or groundless and brought for the
purpose of harassment. They also alleged that Denney sought
to postpone the summary judgment hearing in order to conduct
an unreasonable and burdensome amount of discovery in an
effort to extort a settlement.
asserted in response that Dallas Metro and Net Worth had not
pleaded for attorney's fees under DTPA section 17.50(c),
had not overcome the presumption her pleading was filed in
good faith, she should not be punished for her former
attorney's conduct in signing the pleading, and sanctions
were not appropriate under Rule 13. Denny also requested an
evidentiary hearing and her attorney stated at the hearing he
was prepared to present evidence to rebut the claim for
sanctions. Dallas Metro and Net Worth did not offer any
evidence at the hearing, relying instead on the argument of
their counsel. The trial court denied the motion for
later, Dallas Metro and Net Worth filed a motion for leave to
amend their counterclaim to assert a claim for attorney's
fees under DTPA section 17.50(c). Denney objected because the
deadline for filing amended pleadings asserting a new cause
of action expired three months before Dallas Metro and Net
Worth sought leave to amend and their attempt to amend the
counterclaim after they had ...