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Austex Tree Service, Inc. v. UniFirst Holdings, Inc.

Court of Appeals of Texas, First District

June 27, 2019

AUSTEX TREE SERVICE, INC., Appellant
v.
UNIFIRST HOLDINGS, INC., Appellee

          On Appeal from the County Court at Law No 1 Travis County, Texas [1] Trial Court Case No. C-1-CV-16-009675

          Panel consists of Chief Justice Radack and Justices Goodman and Countiss.

          MEMORANDUM OPINION

          JULIE COUNTISS, JUSTICE

         Appellant, Austex Tree Service, Inc. ("Austex"), challenges the trial court's judgment, entered after a bench trial, in favor of appellee, UniFirst Holdings, Inc. ("UniFirst"), in UniFirst's suit on a sworn account against Austex. In four issues, Austex contends that the trial court erred in awarding UniFirst liquidated damages, pre-judgment interest, reasonable trial attorney's fees, and unconditional appellate attorney's fees.

         We modify the trial court's judgment and affirm as modified.

         Background

         UniFirst sued Austex on a sworn account. In its amended petition, UniFirst alleged that it sold Austex "one or more items of goods, wares, merchandise, or services" under an agreement between the parties. UniFirst also alleged that Austex defaulted in making its required payments to UniFirst and brought suit against Austex for breach of contract, unjust enrichment, and fraud. UniFirst sought damages of $21, 214.39, the principal balance owed on the account. This amount included liquidated damages of $13, 873.83, as provided under the parties' agreement. Unifirst also requested an award of pre-judgment interest, reasonable attorney's fees, costs of court, and post-judgment interest.

         UniFirst originally obtained a default judgment against Austex. But the parties entered into an agreed order to set aside the default judgment and reinstate the case after Austex filed a bill of review.

         Austex then filed a general denial, asserting various affirmative defenses, including that the liquidated-damages provision in the parties' agreement constituted an unlawful penalty.

         At trial, Michael Ron Ferguson, the general manager for UniFirst in Austin, Texas, testified that UniFirst provides uniform rental services for its clients and weekly laundering services for those uniforms. Ferguson also testified that UniFirst entered into a customer service agreement to perform uniform rental and laundering services for Austex. Their agreement was entered into evidence without objection and included, among other provisions, a sixty-month term, and the following liquidated-damages provision:

If Customer breaches or terminates this Agreement before the expiration date for any reason (other than for UniFirst's failure under the performance guarantees described above), Customer will pay UniFirst, as liquidated damages and not as a penalty (the parties acknowledging that actual damages would be difficult to calculate with reasonable certainty) an amount equal to 50 percent of the average weekly amounts invoiced in the preceding 26 weeks, multiplied by the number of weeks remaining in the current term. These damages will be in addition to all other obligations or amounts owed by Customer to UniFirst, including the return of Standard Merchandise or payment of replacement charges, and the purchase of any Non-Standard Merchandise items as set forth herein.

         Ferguson testified that UniFirst used this formula to determine that Austex owed it $13, 873.83 in liquidated damages-except that UniFirst only had invoices from twenty weeks, instead of twenty-six weeks, to use for its average due to Austex's premature termination of the parties' agreement. Ferguson also testified that UniFirst sought damages for unreturned uniforms in the amount of $4, 233.77 and for "past due receivables" for services rendered that were never paid in the amount of $3, 106.79.

         Regarding the liquidated-damages provision, Ferguson testified that if he had to calculate UniFirst's actual damages, the amount would easily be "equal to or more" than the amount resulting from the liquidated-damages calculation acknowledged by the parties under the agreement. He explained that an account becomes more profitable later in its term due to the expenses associated with starting up a new account, such as buying new uniforms and other start-up expenses, which are "front-loaded."

         Regarding UniFirst's record-keeping of invoiced amounts and uniform inventory, Ferguson testified that UniFirst keeps accurate records tracking how many uniforms are retained at any given time by its customers. So, if a client fails to pay or cancels service, Ferguson would be able to ascertain the amount owed and the replacement cost for any unreturned uniforms from his records.

         Bill Malone, Jr., UniFirst's attorney, testified that the following attorney's fees in this case were reasonable and necessary: $7, 071.46 for work performed leading up to the trial court's judgment, an additional $8, 000.00 if an appeal was taken to an intermediary court of appeals, an additional $4, 000.00 if there was a petition for review filed in the Texas Supreme Court, and an additional $4, 000.00 if a petition for review was granted in the Texas Supreme Court. In support of these proposed fees, Malone testified that he (1) had been licensed to practice law in Texas since 1981, primarily practicing in Travis County and surrounding areas; (2) was familiar with the usual and customary attorney's fees charged by attorneys for work of this nature of "collection-type" of litigation; (3) provided the following legal services: evaluating the claims, drafting the petition, obtaining a default judgment, pursuing post-default-judgment collection procedures, negotiating reinstatement of the case after Austex filed a bill of review, obtaining discovery, preparing for trial, and trial of the case; (4) spent "a minimum of seven hours" on the case, "not includ[ing] the post-judgment procedures that were taken," for litigation, trial preparation, and conducting the trial; and (5) he typically charges $300.00 hour for his time, although he had a contingency-fee arrangement for "one-third of what [was] collected" in this case.

         The trial court took the case under advisement and ultimately entered a judgment in favor of UniFirst on August 31, 2017, as follows:

The Court, after considering the pleadings, evidence, and argument of counsel, finds that Defendant Austex . . . is indebted to [UniFirst] in the sum of $21, 214.39, plus legal interest of $10, 064.34, and that [UniFirst] should recover a reasonable attorney's fee, which the Court finds to be $7, 071.46.
. . . .
It is further ORDERED that [UniFirst] recover from [Austex] $8, 000.00 if an appeal to the Court of Appeals is made, $4, 000.00 if a petition for review to the Texas Supreme Court is made, and $4, 000.00 if a petition for review is granted by the Texas Supreme Court.

         Austex filed a motion for new trial, which was denied by operation of law.

         Standard of Review

         Where findings of fact and conclusions of law are not requested or filed after a non-jury trial, we imply that the trial court made all findings necessary to support its judgment. BMC Software Belgium, N.V. v. Marchand,83 S.W.3d 789, 795 (Tex. 2002). But when the record includes the reporter's and clerk's records, these implied findings are not conclusive and may be challenged for legal and factual sufficiency. Id.; Roberson v. Robinson, 768 S.W.2d 280, 281 (Tex. 1989). We apply the same standard of review as that applied in the review of jury findings. Robinson, 768 S.W.2d at 281. The ...


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