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Practical recommendations on seeking attorney’s fees

On Behalf of | May 11, 2020 | Firm News

The Texas Supreme Court recently provided pointed guidance to litigants seeking attorney’s fees in a fee-shifting setting.

“In short, to secure an award of attorney’s fees from an opponent, the prevailing party must prove that (1) recovery of attorney’s fees is legally authorized, and (2) the requested attorney’s fees are reasonable and necessary for legal representation, so that such an award will compensate the prevailing party generally for its losses resulting from the litigation process.”(1)

But how exactly do attorneys go about ensuring their request for fees is approved? Below are some practical recommendations.

1. Plead for Attorney’s Fees Properly.
• Fees must be legally authorized by statute, contract, or common law.(2)
• Since a judgment must conform to the pleadings, a party who fails to plead specifically for attorney’s fees (like under the contract as opposed to under Chapter 38) may waive that claim for attorney’s fees.(3)

2. Meet the Conditions Precedent.
There may be several conditions precedent, but here are some common ones:
• Presentment.(4)
• Prevailing party: must prevail to fee shift.(5)
• Recovery of damages in addition to a mere liability finding.(6)

3. Disclose Expert Opinions.
Three methods of discovery:(7)
• Disclosure.
• Expert Report.
• Depositions.
• While those are the means by which a party can compel attorneys’ fees discovery in Texas state court practice, parties may agree by Rule 11 to exchange fee information (billing statements) or agree to stipulations on whether a particular rate or an amount is reasonable while preserving a global objection to the right to recover fees.
• A party does not waive the attorney-client privilege by designating its attorney as an expert on fees.(8) In re City of Dickinson, 568 S.W.3d 642, 649 (Tex. 2019).

4. Present Lodestar to Factfinder.
• The Lodestar method requires attorney testimony as to reasonable hours multiplied by reasonable rates, whether tried to a jury or the bench.(9)
• “[T]he fact finder’s starting point for calculating an attorney’s fee award is determining the reasonable hours worked multiplied by a reasonable hourly rate, and the fee claimant bears the burden of providing sufficient evidence on both counts.”(10)
• “Sufficient evidence includes, at a minimum, evidence of (1) particular services performed, (2) who performed those services, (3) approximately when the services were performed, (4) the reasonable amount of time required to perform the services, and (5) the reasonable hourly rate for each person performing such services.”(11)
• The established basis for proving the prevailing hourly rate is to present evidence demonstrating the prevailing market rate in the community for similar services by lawyers of reasonably comparable skill, experience, and reputation.(12)
• “[T]here is a presumption that the base lodestar calculation, when supported by sufficient evidence, reflects the reasonable and necessary attorney’s fees that can be shifted to the non-prevailing party.”(13)
• From the base lodestar calculation, a party may try to prove that the fees in the case justify either upward or downward departure. See number 8 below.
• “Only fees reasonable and necessary for the legal representation will be shifted to the non-prevailing party, and not necessarily the amount contracted for between the prevailing party and its attorney, as a client’s agreement to a certain fee arrangement or obligation to pay a particular amount does not necessarily establish that fee as reasonable and necessary.”(14)
• The Lodestar method applies even if the prevailing party did not have an hourly billing contract. In other words, the agreement applicable between the party and the lawyer does not dictate reasonableness. (15)
• The Lodestar method also applies to requests for attorney’s fees in the sanctions context.(16)

5. Produce Billing Records.
• Contemporaneous billing records are not required but are “strongly encouraged to prove the reasonableness and necessity of requested fees when those elements are contested.”(17)
• “An attorney could, of course, testify to these details, but in all but the simplest cases, the attorney would probably have to refer to some type of record or documentation to provide this information. Thus, when there is an expectation that the lodestar method will be used to calculate fees, attorneys should document their time much as they would for their own clients, that is, contemporaneous billing records or other documentation recorded reasonably close to the time when the work is performed.”(18)
• “The party who seeks payment must keep records in sufficient detail that a neutral judge can make a fair evaluation of the time expended, the nature and need for the service, and the reasonable fees to be allowed.”(19)
• Evidence of the time spent on specific tasks is required.(20) Spent “a lot of time” or did “a lot of legal research” is devoid of substance.(21)
• The U.S. Court of Appeals for the 5th Circuit has excluded or reduced an award of attorney’s fees where the documentation was vague, general, and inadequate.(22)
• Where billing entries are “not illuminating as to the subject matter” or are “vague as to precisely what was done,” the court may be unable to determine whether the time was reasonably expended.(23)
• Litigants “take their chances” in submitting fee applications without adequate information for the court to determine the reasonableness of the hours expended.(24)
• Some federal courts express disfavor of block billing.(25)

6. Paralegal Fees.
Paralegal or legal assistant time may be recovered only if the following is proved:(26)
• Paralegal performed work traditionally done by attorney (not administrative or clerical);
• Paralegal is qualified to perform substantive legal work;
• Paralegal worked under the direction and supervision of an attorney;
• The nature of the legal work performed;
• Paralegal’s reasonable billing rate; and
• Paralegal’s hours reasonably expended on successful claims.

7. Exercise Billing Judgment.
• The movant’s expert must establish the exercise of billing judgment.(27)
• The movant should make a good faith effort to exclude from initial fee calculation hours “that are excessive, redundant, or otherwise unnecessary, just as a lawyer in private practice ethically is obligated to exclude such hours from his or her fee submission.”(28)
• “[A]ttorneys may not be compensated at their regularly hourly rates for time spent performing clerical tasks.”(29)

8. Enhancement: Fact Finder May Adjust Up or Down.
• “[W]e recognize that the base lodestar figure amounts for most of the relevant Arthur Andersen(30) considerations. And an enhancement or reduction of the base lodestar figure cannot be based on a consideration that is subsumed in the first step of the lodestar method.”(31)
• “If a fee claimant seeks an enhancement, it must produce specific evidence showing that a higher amount is necessary to achieve a reasonable fee award.”(32)
• If a fee opponent seeks a reduction, it bears the burden of providing specific evidence to overcome the presumptive reasonableness of the base lodestar figure.(33)

9. Segregate: Apportion Recoverable From Non-Recoverable on a Claim-by-Claim Basis and Perhaps on a Per-Defendant Basis; Account for Unsuccessful Claims.
• “Maintain billing time records in a manner that will enable a reviewing court to identify distinct claims.”(34)
• A plaintiff cannot generally recover fees for attorney time spent on claims on which the party did not prevail or even pursue at trial.(35)
• Apportionment (referred to also as “segregation”) is required on a claim-by-claim basis.(36)

10. Assist the Court in Properly Charging the Jury.
• Under certain statutes, a party may recover attorney’s fees after satisfying other legal requirements such as recovering actual damages.(37)
• In cases where additional elements must be proven and a fact question exists, those questions must be submitted to the jury.(38)
• The fact finder must determine the reasonable fees based on an instruction defining the base lodestar and potential adjustment of the lodestar depending on the specifics of the case.(39)
• In circumstances where fees are mandatory, an award of “zero” damages may be reversible error unless evidence was admitted that no fee was needed to assert or defend a claim.(40)
• Like trial fees, appellate fees must be substantiated with proper evidence.(41)

1. Rohrmoos Venture v. UTSW DVA Healthcare, LLP, 578 S.W.3d 469, 487 (Tex. 2019).
2. Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242, 252-53 (2010); In re Nat’l Lloyds Ins. Co., 532 S.W.3d 794, 809 (Tex. 2017)(orig. proceeding).
3. Intercont’l Grp. P’ship v. KB Home Lone Star, L.P., 295 S.W.3d 650, 659 (Tex. 2009).
4. Svoboda v. Thai, No. 01-17-00584-CV, 2019 WL 1442434, at *4-7 (Tex. App.—Houston [1st Dist.] Apr. 2, 2019, no pet.)(mem op.)(presentment is fact issue for jury when properly contested in pleadings and not established as a matter of law).
5. Intercont’l Grp. P’ship, 295 S.W.3d at 652 (holding that “plaintiff must prove compensable injury and secure an enforceable judgment in the form of damages or equitable relief”)); see also Rohrmoos, 578 S.W.3d at 486 (holding “defendant can obtain actual and meaningful relief, materially altering the parties’ legal relationship, by successfully defending against a claim and securing a take-nothing judgment on the main issue or issues in the case.”
6. Ortiz v. State Farm Lloyds, 589 S.W.3d 127, 135 (Tex. 2019)(recovery of attorneys’ fees under Tex. Ins. Code Ch. 541 “premised on an award of underlying ‘actual damages’”).
7. In Re Nat’l Lloyds Ins. Co., 532 S.W.3d at 814.
8. In re City of Dickinson, 568 S.W.3d 642, 649 (Tex. 2019).
9. Rohrmoos, 578 S.W.3d at 499, 501.
10. Id. at 498.
11. Id.
12. Id. at 492 (citing Blum v. Stenson, 465 U.S. 886, 895 n. 11 (1984)).
13. Rohrmoos, 578 S.W.3d at 499.
14. Id. at 487-488.
15. Id. at 499 n.10.
16. Nath v. Tex. Children’s Hosp., 576 S.W.3d 707, 710 (Tex. 2019)(“all fee-shifting situations require reasonableness”).
17. Rohrmoos, 578 S.W.3d at 502(emphasis in original).
18. Id. (citing El Apple I, Ltd. v. Olivas, 370 S.W.3d 757, 762 (Tex. 2012)).
19. Hensley v. Eckerhart, 461 U.S. 424, 441 (1983)(Burger, C.J., concurring).
20. Long v. Griffin, 442 S.W.3d 253, 255 (Tex. 2014).
21. See City of Laredo v. Montano, 414 S.W.3d 731, 736 (Tex. 2013).
22. See, e.g., La. Power & Light Co. v. Kellstrom, 50 F.3d 319, 326-327, 326 n. 11 (5th Cir. 1995)(per curiam)(vague entries are those that are “not illuminating as to the subject matter” or “vague as to precisely what was done”).
23. Leroy v. Houston, 906 F.2d 1068, 1079 (5th Cir. 1990).
24. Kellstrom, 50 F.3d at 327; Von Clark v. Butler, 916 F.2d 255, 259 & n.6 (5th Cir. 1990)(criticizing as “scanty and lacking in explanatory detail” entries such as “telephone call,” or “trial preparation,” or “travel to Beaumont to attend deposition,” without any identification whatsoever of the subject matter); Burke v. McDonald, 572 F.3d 51, 64 (5th Cir. 2009)(holding that ambiguous time entries such as “strategy meeting” and “telephone conference” provide “little, if any, basis for determining what work reflected in them was done to develop what claims”).
25. Barrow v. Greenville Indep. Sch. Dist., No. 3:00-CV-0913-D, 2005 WL 6789456, at *6 (N.D. Tex. Dec. 20, 2005), aff’d, 2007 WL 3085028 (5th Cir. 2007); Fralick v. Plumbers & Pipefitters Nat’l Pension Fund, No. 3:09-CV-0752-D, 2011 WL 487754, at *17 (N.D. Tex. Feb. 11, 2011)(“When time records are block billed, the court cannot accurately determine the number of hours spent on any particular task, and the court is thus hindered in determining whether the hours billed are reasonable.”).
26. El Apple I, 370 S.W.3d at 763.
27. Hensley, 461 U.S. at 434; Saizan v. Delta Concrete Prods. Co., 448 F.3d 795, 799 (5th Cir. 2006)). “Bald assertions regarding the exercise of billing judgment are insufficient.” (Fralick, 2011 WL 487754, at *13 (citing Saizan, 448 F.3d at 800 and Hopwood v. State of Tex., 236 F.3d 256, 279 (5th Cir. 2000)).
28. El Apple I, 370 S.W.3d at 762.
29. Rozell v. Ross-Holst, 576 F.Supp.2d 527, 540 (S.D.N.Y. 2008).
30. Arthur Andersen & Co. v. Perry Equip. Co., 945 S.W.2d 812 (Tex. 1997).
31. Rohrmoos, 578 S.W.3d at 500 n. 11 (employing the term “considerations” rather than “factors” to the familiar Arthur Andersen considerations because there are multiple considerations within some of the factors).
32. Id. at 501.
33. El Apple I, 370 S.W.3d at 760.
34. Hensley, 461 U.S. at 437.
35. Kinsel v. Lindsey, 526 S.W.3d 411, 427 (Tex. 2017); Horizon Health Corp. v. Acadia Healthcare Co., Inc., 520 S.W.3d 848, 884 (Tex. 2017); Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 313-14 (Tex. 2006); Walker v. U.S. Dep’t of Hous. & Urban Dev., 99 F.3d 761, 769 (5th Cir. 1996).
36. Horizon Health Corp. v. Acadia Healthcare Co., Inc., 520 S.W.3d 848, 884 (Tex. 2017).
37. See, e.g., Ashford Partners, Ltd. v. ECO Resources, Inc., 401 S.W.3d 35, 40 (Tex. 2012)(Chapter 38 requires claimant to recover damages in addition to prevailing on liability); Ortiz v. State Farm Lloyds, No. 17-1048, 2019 WL 2710032, at *5 (Tex. June 28, 2019)(recovery of attorneys’ fees under Texas Insurance Code Chapter 541 “premised on an award of underlying ‘actual damages’”).
38. Svoboda, 2019 WL 1442434, at *5-7 (reversible error not to submit presentment question to the jury where presentment was a contested fact issue).
39. Rohrmoos, 578 S.W.3d at 501.
40. Smith v. Patrick W.Y. Tam Trust, 296 S.W.3d 545, 548 (Tex. 2009)). The trial court can correct the error by directing jurors to return to the jury room and reform their answer before they are discharged. (Tex. R. Civ. P. 295).
41. Kinsel, 526 S.W.3d at 428; Hawkins v. Walker, 233 S.W.3d 380, 399 (Tex. App.—Fort Worth 2007, no pet.).

PHYLIS J. SPEEDLIN
has been driven by an unwavering desire to aid others as a nurse, lawyer, judge, arbitrator, or mediator. She was a lawyer for nearly 37 years, with three years as a Bexar County District Court judge and 10 years as a justice on the 4th Court of Appeals in San Antonio, where she wrote more than 1,300 opinions. Speedlin served as president of the San Antonio Bar Association, chair of the San Antonio Bar Foundation Advisory Committee, and chair of the Community Justice Pro Bono Committee. Along with Judge Karen Pozza, she was cofounder and chair of the Community Justice Program, for which she was honored with the American Bar Association’s Harrison Tweed Outstanding Pro Bono Award and the State Bar of Texas Judge Merrill Hartman Pro Bono Judge Award.

CARLOS R. SOLTERO
represents plaintiffs and defendants in civil litigation matters including commercial disputes, trade secrets/non-competes, malpractice, constitutional litigation, personal injury, and wrongful death cases. Soltero is certified in personal injury trial law by the Texas Board of Legal Specialization. He is a director of the Texas Board of Legal Examiners and the Mexican American Legal Defense and Education Fund.

GRETA McFARLING
practices with Chasnoff | Stribling, a boutique law firm in San Antonio focusing on business and coverage litigation. She spent 13 years as a staff attorney for the 4th Court of Appeals in San Antonio prior to joining Chasnoff | Stribling. McFarling received her J.D. from St. Mary’s University School of Law.

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