Fuhrmann v. C & J Gray Investments Partners, Ltd.

          On Appeal from the 59th Judicial District Court Grayson County, Texas Trial Court Cause No. CV-13-0203.

          Before Justices Whitehill, Partida-Kipness, and Pedersen, III

          MEMORANDUM OPINION

          BILL PEDERSEN, III JUSTICE.

         Todd M. Fuhrmann, Bridgette Kirkpatrick, Karen E. Derrick, and Melvin McDaniel appeal a summary-judgment order that awarded attorney's fees in favor of C & J Gray Investments Partners, Ltd. (C & J Gray), the appellee. We affirm.

         BACKGROUND

         This case involves approximately 212 acres of land in Grayson County (the Property) and the associated mineral estate.^[1] C & J Gray sued appellants and Speir Investments, Ltd., seeking a declaratory judgment to quiet title. Alternatively, it pled a cause of action for slander of title. Appellants filed a counterclaim and requested a declaratory judgment that ownership of the mineral estate vested in them. They also asserted a trespass to try title claim against C & J Gray. The parties filed competing motions for summary judgment regarding (i) the ownership of the mineral estate, and (ii) objections to some of the summary-judgment evidence. The district court overruled appellants' objections to C & J Gray's summary-judgment evidence, denied appellants' motion for summary judgment, granted C & J Gray's motion for summary judgment, and declared, among other relief, that title and ownership of the entire mineral estate of the Property is currently vested in C & J Gray.

         Appellants appealed the district court's order. We dismissed their appeal for lack of jurisdiction. See Fuhrmann v. C & J Gray Invs. Partners, Ltd. (Fuhrmann I), No. 05-14-00298-CV, 2014 WL 2048583, at *1 (Tex. App.-Dallas May 14, 2014, no pet.) (mem. op.). C & J Gray then dismissed its claims against Speir Investments and filed a motion for partial summary judgment on its claim for attorney's fees under the Declaratory Judgments Act (DJA). See Tex. Civ. Prac. & Rem. Code Ann. §§ 37.001-.011 (the DJA). In support of its request for attorney's fees, C & J Gray submitted an affidavit of its counsel, Scott Pelley, who testified as an expert witness.^[2] Pelley averred that $51, 000 was a reasonable and necessary amount of fees "incurred in both the prosecution and the defense of this declaratory judgment action." However, at the hearing on the motion for summary judgment, C & J Gray, through the argument of counsel, withdrew its request for $5, 100 in attorney's fees because those fees were related to the trespass to try title and slander of title claims, essentially conceding its summary judgment evidence included fees that were not recoverable. The court granted C & J Gray's motion and awarded it $45, 900 in attorney's fees-i.e., the difference between $51, 000 and $5, 100-plus contingent fees on appeal.

         Appellants appealed the district court's judgment, which at that point had become final. This Court reversed the judgment in part and affirmed it in part. See Fuhrmann v. C & J Gray Invs. Partners, Ltd. (Fuhrmann II), No. 05-15-01387-CV, 2016 WL 7217252, at *1, *12 (Tex. App.- Dallas Dec. 13, 2016, pet. denied) (mem. op.). We held that, under the circumstances, the district court could properly consider, and award, C & J Gray attorney's fees under the DJA. Id. at *10. However, we reversed the portion of the court's judgment awarding C & J Gray attorney's fees, based on the fact that its summary-judgment evidence did not conclusively establish that C & J Gray incurred $45, 900 in attorney's fees relating to the declaratory judgment claims or that such fees and costs were reasonable and necessary. Id. at *11-12. We remanded the issue of fees for further proceedings. Id. at *1, *12.

         On remand in the district court, C & J Gray filed a "First Amended Motion on Remand for Partial Summary Judgment on Attorney's Fees." The amended motion was a traditional motion for partial summary judgment. See Tex. R. Civ. P. 166a(c). It sought attorney's fees of $88, 428.79, plus a conditional fee award of $15, 000 in the event of an appeal to this Court and an additional $10, 000 in the event of an appeal to the Texas Supreme Court. C & J Gray's supporting evidence included an affidavit from Pelley. According to C & J Gray, this affidavit is identical to Pelley's affidavit submitted in support of C & J Gray's original motion for partial summary judgment, except that the Pelley affidavit in support of the amended motion for partial summary judgment contains additional averments regarding the segregation of fees.

         Appellants then filed an "Amended Answer and Response and Objection" to C & J Gray's amended partial summary-judgment motion. In support of this response, appellants filed an affidavit of their counsel, Richard H. Kelsey, who also testified as an expert witness. Kelsey criticizes the Pelley affidavit and avers that it "fails to conclusively show that the attorney's fees requested are reasonable and necessary."

         On March 20, 2018, the district court signed an order that granted C & J Gray's amended motion for partial summary judgment and awarded its requested fees, as set forth above.^[3]Appellants filed a motion for reconsideration, which the court denied. This appeal followed.

         ANALYSIS

         Appellants raise seven issues, each of which asserts a reason that the district court purportedly erred in granting C & J Gray's amended motion for partial summary judgment. We review a trial court's summary judgment ruling de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005).

         Before examining appellants' issues, we begin by summarizing the Texas Supreme Court's recent decision in Rohrmoos Venture v. UTSW DVA Healthcare, LLP, which addressed the evidentiary standards for shifting attorney's fees. S.W.3d, No. 16-0006, 2019 WL 1873428 (Tex. Apr. 26, 2019). To secure an award of attorney's fees from an opponent, the prevailing party must prove that: (1) recovery of fees is legally authorized, and (2) the requested fees are reasonable and necessary, so that the award will compensate the prevailing party generally for its losses resulting from the litigation process. Id. at *11.

         "[T]he lodestar method . . . applies for determining the reasonableness and necessity of attorney's fees in a fee-shifting situation." Id. at *22 (citing El Apple I, Ltd. v. Olivas, 370 S.W.3d 757, 760 (Tex. 2012)). This method involves a two-step inquiry in determining what constitutes a reasonable attorney's fee. Id. First, the fact-finder "'must determine the reasonable hours spent by counsel in the case and a reasonable hourly rate for such work.'" Id. (quoting El Apple, 370 S.W.3d at 760). The fact-finder "'then multiplies the number of such hours by the applicable rate, the product of which is the base fee or lodestar.'"^[4] Id. (quoting El Apple, 370 S.W.3d at 760). The claimant bears the burden of proving the reasonable hours worked and the reasonable hourly rate. Id. at *20.

         The fact-finder "'may then adjust the base lodestar up or down (apply a multiplier) if relevant factors indicate an adjustment is necessary to reach a reasonable fee in the case.'"^[5] Id. at *22 (quoting El Apple, 370 S.W.3d at 760). However, the base calculation is presumed to reflect the reasonable and necessary attorney's fees, and considerations already incorporated into this calculation may not be used to rebut this presumption. Id. The claimant who seeks an upward adjustment must produce "specific evidence" showing the necessity of same, and the opponent who seeks a downward adjustment must produce "specific evidence to overcome the presumptive reasonableness of the lodestar figure." Id. at *21.

         A. Procedural Issues

         Turning to the merits of this appeal, we first consider two arguments raised by appellants that do not neatly fit within their seven issues. We will construe these arguments as included in appellants' second issue, which contends that they "were denied their right to trial by jury." See Tex. R. App. P. 38.1(f) ("The statement of an issue or point will be treated as covering every subsidiary question that is fairly included."); id. R. 38.9 (stating that "substantial compliance" with Rule 38 is sufficient); Dallas Cty. v. Crestview Corners Car Wash, 370 S.W.3d 25, 57 (Tex. App.-Dallas 2012, pet. denied) ("We look to the issues and the arguments and authorities in appellant's brief to determine the grounds presented for appellate review and will consider all issues fairly raised.").

         First, appellants refer to the statement in C & J Gray's amended motion for partial summary judgment that such motion "is providing additional evidence of the segregation of fees for work that is recoverable under the [D]A] and for work that is not." Based on this statement, appellants urge that C & J Gray used "the wrong procedure" on remand because it did not file a "new" summary-judgment motion with "new" evidence. To the contrary, C & J Gray's amended motion superseded its original motion, Gibson v. Park Cities Ford, Ltd., 174 S.W.3d 930, 932 (Tex. App.-Dallas 2005, no pet.), and was therefore "new."

         Second, appellants contend that the amended motion's request that "the Court . . . determine the amount of reasonable attorney's fees that [C & J Gray] is entitled to recover under the [D]A]" is not a statement of the "specific grounds therefore," as is required by Rule 166a(c) of the Texas Rules of Civil Procedure. Tex.R.Civ.P. 166a(c). We conclude that the foregoing request by C & J Gray was sufficient to comply with the rule.

         We overrule appellants' second issue to the extent it is based on the foregoing procedural arguments.

         B. Legal Authority for Fee Award

         Appellants' third issue contends that "[a] declaratory judgment decreeing title will not support an award of attorney's fees." As support, appellants rely on authority holding that "when the trespass-to-try-title statute governs the parties' substantive claims . . . [the plaintiff] may not proceed alternatively under the Declaratory Judgments Act to recover [its] attorney's fees." Coinmach Corp. v. Aspenwood Apartment Corp., 417 S.W.3d 909, 926 (Tex. 2013) (citation and internal quotation marks omitted). Appellants also made this argument in Fuhrmann II, in which they claimed that C & J Gray was required to bring a claim for trespass to try title or to quiet title, rather than a claim for declaratory relief, and thus it failed to show it was entitled to recover attorney's fees. See 2016 WL 7217252 at *10. We noted that appellants did not raise this argument until their motion for new trial, which they filed after the district court granted C & J Gray's summary-judgment motion. Id. Under this circumstance, we held that the court could properly consider, and award, C & J Gray attorney's fees under the DJA. Id. Although we reversed the fee award on the basis that C & J Gray's summary-judgment evidence did not conclusively establish the amount of fees incurred or that such fees were reasonable and necessary, the scope of our remand was limited to these particular issues, as opposed to whether C & J Gray's attorney's fees were recoverable under the DJA. See id. at *11-12 ("We . . . remand the cause to the trial court for further proceedings consistent with this opinion.").^{[6] ...}