Sunday, November 1, 2009

Caveat Counsel: Cursory Attorney's Fee Testimony Found Insufficient


Message to the Plaintiff's bar from higher realms above: Be careful how you go about proving up reasonable and necessary attorney's fees in a contingency fee case. Just establishing the existence of a contingency fee contract and a few resume items will not do.


Attorney's Fees

In its first issue, O&B asserts that the evidence is legally insufficient to support an award of attorney's fees. The jury was asked to determine “a reasonable fee for the necessary services" of appellees' attorney and awarded $3,350. O&B argues the evidence is insufficient to show that amount was reasonable and necessary.

Appellees' attorney's testimony in support of attorney's fees was very brief. After stating where he went to law school, counsel testified that he had been practicing law for eight years, “was familiar with rates . . . charged by attorneys," and had spent about 172 hours on the case. He explained that he had a contingent fee contract with the appellees that provided he would receive one-third of any recovery as his fee.

This evidence is insufficient to support an award of attorney's fees.

The jury was asked to award reasonable and necessary attorney's fees, but appellees did not provide sufficient evidence for the jury to evaluate what was reasonable and necessary.

A contingent fee agreement alone is not a sufficient basis to determine an appropriate fee award. See Arthur Andersen & Co. v. Perry Equip. Corp., 945 S.W.2d 812, 818-19 (Tex. 1997); San Antonio Credit Union v. O'Connor, 115 S.W.3d 82, 105-06 (Tex. App.-San Antonio 2003, pet. denied).

That a plaintiff and his attorney agree on a fee does not establish that such a fee is reasonable and appropriate to shift to the defendant. Arthur Andersen, 945 S.W.2d at 818. Rather, a plaintiff must request a specific amount of fees, not a percentage of the damages, and must show that the amount requested is reasonable and necessary. See id. at 819; Castle Tex. Prod. Ltd. P'ship v. Long Trusts, 134 S.W.3d 267, 278-79 (Tex. App.-Tyler 2003, pets. denied); San Antonio Credit, 115 S.W.3d at 106.

Factors to consider when determining if a fee request is reasonable are:

(1) the time and labor required, the novelty and difficulty of the questions involved, and the skill required to perform the legal service properly;

(2) the likelihood . . . that the acceptance of the particular employment will preclude other employment by the lawyer;

(3) the fee customarily charged in the locality for similar legal services;

(4) the amount involved and the results obtained;

(5) the time limitations imposed by the client or by the circumstances;

(6) the nature and length of the professional relationship with the client;

(7) the experience, reputation, and ability of the lawyer or lawyers performing the services; and

(8) whether the fee is fixed or contingent on results obtained or uncertainty of collection before the legal services have been rendered.

Arthur Andersen, 945 S.W.2d at 818 (quoting Tex. R. Disciplinary P. 1.04, reprinted in Tex. Gov't Code Ann., tit. 2, subtit. G app. A-1 (Vernon 2005) (alteration in original)).

Counsel's bare testimony of the name of his law school, his years practicing, and the hours he worked on the case does not establish that any particular fee is reasonable. Indeed, though he testified he is familiar with the rates attorneys charge, he did not specify to which attorneys he was referring and never stated that their fees are reasonable. Further, he did not request a specific amount of fees, instead testifying that appellees had agreed to pay him a percentage of their recovery. [2]

We conclude that this evidence is legally insufficient to give the jury a basis for determining that any amount of attorney's fees was reasonable and necessary. See Arthur Andersen, 945 S.W.2d at 819; see also San Antonio Credit, 115 S.W.3d at 106-07 (rendering take nothing judgment on attorney's fees claim, noting claimant relied on contingent fee and did not present evidence “that a specific amount of money was a reasonable attorney's fees award"). We sustain O&B's first issue.

O and B Farms, Inc.v. Black (Tex.App.- Houston [14th Dist.] Oct. 29, 2009)(Yates) (fraud and civil conspiracy claims award of attorney's fees, exemplary damages reversed) (breach of contract damages proven)(contingency fee contract insufficient to establish reasonable attorney's fees) (detrimental reliance as element of fraud cause of action)
Justice Brock Yates
Before Chief Justice Hedges, Justices Brock Yates and Frost
14-08-00595-CV O and B Farms, Inc., and B and O Farms, LLC v. Eldon Jay Black, Kevin Lee
Donahoo, Thomas David Horrell, Jr., Charles Richard Weeks, Ronald Russell Swisshelm, and Casey Ross Gray
Appeal from 220th District Court of Hamilton County
Trial Court Judge: Hon. James E. Morgan

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