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Forest Hills Improvement Association, Inc. v. Flaim

Court of Appeals of Texas, Ninth District, Beaumont

September 19, 2019

FOREST HILLS IMPROVEMENT ASSOCIATION, INC., Appellant
v.
RICHARD FLAIM, ET UX, Appellees

          Submitted on May 14, 2019

          On Appeal from the 1A District Court Jasper County, Texas Trial Cause No. 33266

          Before McKeithen, C.J., Kreger and Horton, JJ.

          MEMORANDUM OPINION

          CHARLES KREGER JUSTICE

         Forest Hills Improvement Association, Inc. (the Association) filed a declaratory judgment action against Richard Flaim and his wife (the Flaims) to enforce a setback provision included in the recorded deed restrictions for the subdivision. The Association appeals the trial court's denial of its attorney's fees in this declaratory judgment action. We affirm the trial court's judgment.

         Background

         This matter is before us for a second time. See Forest Hills Improvement Association, Inc. v. Flaim, No. 09-15-00478-CV, 2017 WL 5179968, at *1 (Tex.App.-Beaumont Nov. 9, 2017, no pet.) (mem. op.). In 2001, the Flaims obtained permission from the Association to pour a concrete slab that extended within approximately two feet of their rear property line, on which to park a boat. See id. at *1. Some years later, the Association denied the Flaims' request to construct a carport over the slab. See id. The Flaims ultimately constructed the carport without the written or express approval of the Association. See id at *2. The Association filed a declaratory judgment action against the Flaims seeking to enforce a setback provision in the deed restrictions for the Flaims' property. See id. at *1–2. The Association also sought its attorney's fees pursuant to section 37.009 of the Texas Civil Practices and Remedies Code. See id. at *5; see also Tex. Civ. Prac. & Rem. Code Ann. § 37.009 (West 2015).

         In the initial appeal, the Association challenged the legal and factual sufficiency of the evidence to support the trial court's findings of fact and conclusions of law underlying the theory that it waived its right to enforce the deed restrictions against the Flaims. See Forest Hills, 2017 WL 5179968, at *2. We reversed and remanded with instructions that the trial court: (1) render an appropriate declaratory judgment consistent with our opinion that the Flaims' carport, as constructed, violated the setback provisions of the deed restrictions; (2) grant any relief, injunctive or otherwise, appropriate to the ordered declaration; and (3) consider the Association's claim for attorney's fees. See id. at *5.

         The Association's president testified in the hearing on remand about the attorney fees the Association paid for counsel. The trial court admitted the bills for the Association's legal fees into evidence. The Association's counsel testified the firm's fees were reasonable and necessary, and the Flaims stipulated that the Association's attorney fees were reasonable. The Flaims presented no evidence at the hearing. However, the homeowners argued that requiring them to pay the Association's attorney's fees would be very burdensome because they are elderly, on a fixed income and suffer from various medical problems. Notably, the testimony reports that Mr. Flaim suffers from early onset of dementia.

         In its final declaratory judgment, the trial court denied the Association's claim for attorney's fees, determining that "each party shall bear their respective attorney['s] fees[,]" but ordered the Flaims to pay all court costs. Subsequently, the trial court issued separate findings of fact and conclusions of law. The trial court's findings of fact state that the Association filed a declaratory judgment action pursuant to section 37.001 of the Texas Civil Practices and Remedies Code, and the Association's recovery of attorney's fees is not mandatory. See Tex. Civ. Prac. & Rem. Code Ann. §§ 37.001, 37.009 (West 2015). The trial court's conclusions of law stated that attorney's fees "on a Petition for Declaratory Judgment are discretionary[,]" and the parties "should bear their respective attorney's fees." The Association complains on appeal that there is no evidence, or alternatively, that the great weight and preponderance of the evidence does not support the "finding" that each party shall bear its respective attorney's fees, and the "finding is an abuse of discretion[.]"[1]

         Analysis

         We review an award or denial of attorney's fees under the Declaratory Judgments Act for an abuse of discretion. See Preston State Bank v. Willis, 443 S.W.3d 428, 434 (Tex.App.-Dallas 2014, pet. denied) (citation omitted). The trial court has broad discretion in determining whether to award fees in a declaratory judgment action, and we will not reverse a trial court's decision absent a clear showing of an abuse of discretion. See Oake v. Collin Cty., 692 S.W.2d 454, 455 (Tex. 1985) (citations omitted).

         In a declaratory judgment action, "the court may award costs and reasonable and necessary attorney's fees as are equitable and just." Tex. Civ. Prac. & Rem. Code Ann. § 37.009; see also Bocquet v. Herring, 972 S.W.2d 19, 20 (Tex. 1998). The Declaratory Judgments Act employs the word "may" in the statute, which "affords the trial court a measure of discretion in deciding whether to award attorney fees or not." Bocquet, 972 S.W.2d at 20 (citations omitted). Attorney's fee awards in declaratory judgment actions are entrusted to the trial court's discretion, "subject to the requirements that any fees awarded be reasonable and necessary, which are matters of fact, and to the additional requirements that fees be equitable and just, which are matters of law." Id. at 21. A trial court may not rule arbitrarily or without reference to guiding legal principles, and it may not rule without supporting evidence. Id. (citations omitted).

         A court may determine that even fees shown to be reasonable and necessary should not be awarded if such an award would not be equitable and just. Id.; Kings River Trail Ass'n, Inc. v. Pinehurst Trail Holdings, L.L.C., 447 S.W.3d 439, 451–52 (Tex.App.-Houston [14th Dist.] 2014, pet. denied) (citations omitted). Whether it is "equitable and just" to award less in attorney's fees than a jury found was reasonable and necessary is not a fact question, as such a determination is not susceptible to direct proof; instead, it is a question of "fairness in light of all the circumstances." Ridge Oil Co. v. Guinn Investments, Inc., 148 S.W.3d 143, 162 (Tex. 2004); Anglo-Dutch Petroleum Int'l, Inc. v. Greenberg Peden, P.C., 522 S.W.3d 471, 494 (Tex.App.-Houston [14th Dist.] 2016, pet. denied); see also In re Estate of Kuykendall, 206 S.W.3d 766, 772 (Tex.App.-Texarkana 2006, no pet.) ("The trial court's decision whether to award attorney's fees in a declaratory judgment case depends on the court's conclusion whether it is just and equitable to do so under all the circumstances of the case, not on the quantum of proof as to the amount incurred or the reasonableness and necessity of such fees."). Even if stipulated or the evidence is uncontroverted that the attorney's fees incurred are reasonable and necessary, a court may decide it ...


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