Opinion
NO. 01-18-00178-CV
12-04-2018
KKR RV'S, LLC D/B/A AMERICAN DREAM VACATIONS, Appellant v. KEVIN D. ANDERSON, Appellee
On Appeal from the 234th District Court Harris County, Texas
Trial Court Case No. 2016-78350
MEMORANDUM OPINION
A rental travel-trailer suffered a tire blowout, and the company that leased the trailer sued its customer for the repair costs caused by the blowout. After a bench trial, the trial court entered judgment in the company's favor, but the court did not award the entire relief that the company requested. The company appeals, contending that the trial court erred in:
(1) limiting its pecuniary damages to $2,000; and
(2) denying its request for attorney's fees despite awarding damages. We reverse the portion of the trial court's judgment denying reasonable and necessary attorney's fees and remand for a new trial on the fee issue. We affirm the remainder of the judgment.
BACKGROUND
Kevin Anderson leased a two-wheeled travel trailer from KKR RV's LLC, which does business as American Dream Vacations. While Anderson was on the road, one of the trailer's tires blew out. American Dream sued Anderson for breach of the parties' lease agreement, alleging that he was responsible for the blowout and the resulting damage to the trailer. American Dream sought to recover its repair costs and the attorney's fees that it incurred in bringing the suit.
Anderson filed a general denial and counterclaimed, alleging that American Dream violated the Deceptive Trade Practices Act and breached the implied warranties of fitness and good and workmanlike performance. He also sought his attorney's fees.
The parties tried their claims to the bench. American Dream and Anderson disputed the cause of the blowout. American Dream introduced four invoices documenting its repair costs. Based on the company's invoices, American Dream's owner, Bart Bonham, testified that its total repair costs were $3,037.50 once charges other than its actual damages were discounted.
Counsel for each party testified as to their client's reasonable and necessary attorney's fees. American Dream's lawyer testified that it had incurred $7,845 in fees. Anderson's lawyer testified that he had incurred $6,075 in fees. Both opined that their fees in the event of an appeal would amount to $7,500. Neither side controverted the other's testimony as to attorney's fees.
After the parties rested, the trial court questioned counsel about the applicability of a provision of the lease agreement limiting liability to $2,000. American Dream contended that the provision was inapplicable to these damages; Anderson contended otherwise. In taking the case under advisement, the trial court expressed uncertainty as to the applicability of the liability limitation. The trial court requested post-trial briefs, proposed judgments, and proposed findings of fact and conclusions of law.
The trial court subsequently rendered a final judgment that Anderson take nothing on his claims against American Dream and that American Dream recover $2,000 in pecuniary damages from Anderson. The judgment denied American Dream's request for attorney's fees.
The trial court entered its judgment on January 25, 2018. American Dream contends that it did not receive notice of the judgment till March 6. It requested and received an extension of time to appeal and appealed. See TEX. R. APP. P. 26.3.
DISCUSSION
I. Pecuniary Damages
American Dream contends that the trial court erred in awarding $2,000 in damages rather than the $3,037.50 that it contends that the evidence established. American Dream argues that the trial court's award is based on the limitation-of-liability clause in the lease agreement but that this provision is inapplicable as a matter of law under the circumstances.
Anderson responds that American Dream has not preserved this issue for appellate review. The trial court's judgment does not specify a basis for the $2,000 award, and there are no findings of fact or conclusions of law. Thus, Anderson reasons, American Dream has failed to demonstrate that the trial court erred.
A. Applicable law
The courts of appeals are courts of review. Parties generally must secure a ruling from the trial court as a prerequisite to review. TEX. R. APP. P. 33.1(a)(2)(A).
We look to the trial court's written order to identify the grounds that may be used to support its judgment, not oral comments made from the bench. Shahin v. Mem'l Hermann Health Sys., 527 S.W.3d 484, 487 (Tex. App.—Houston [1st Dist.] 2017, pet. denied). Nor are comments made by the trial court at the end of a bench trial a substitute for findings of fact and conclusions of law. In re W.E.R., 669 S.W.2d 716, 716 (Tex. 1984) (per curiam); Ifiesimama v. Haile, 522 S.W.3d 675, 684 (Tex. App.—Houston [1st Dist.] 2017, pet. denied); see also Cherokee Water Co. v. Gregg Cty. Appraisal Dist., 801 S.W.2d 872, 878 (Tex. 1990) (trial court's prejudgment letter to parties explaining ruling was not finding of fact and not competent evidence of basis for judgment). In the absence of findings of fact and conclusions of law, the trial court's judgment implies all fact findings necessary to support it, and we must affirm the judgment if it can be upheld on any legal theory. W.E.R., 669 S.W.2d at 717; George v. Jeppeson, 238 S.W.3d 463, 468 (Tex. App.—Houston [1st Dist.] 2007, no pet.). When, as here, the record includes a reporter's record of the trial, the appellant must show that the trial court's judgment cannot be affirmed on any theory raised by the evidence. George, 238 S.W.3d at 469. When a judgment may have been based on a ground that is not challenged on appeal, we generally must affirm. Fletcher v. Dep't of Fam. & Protective Servs., 277 S.W.3d 58, 64-65 (Tex. App.—Houston [1st Dist.] 2009, no pet.); Hagberg v. City of Pasadena, 224 S.W.3d 477, 481 (Tex. App.—Houston [1st Dist.] 2007, no pet.).
B. Analysis
In the judgment, the trial court awarded $2,000 in pecuniary damages to American Dream without stating a rationale for the amount it awarded or adopting findings of fact or conclusions of law. Thus, American Dream's contention as to the trial court's ostensible interpretation of the lease agreement presents nothing for review. See TEX. R. APP. P. 33.1(a)(2)(A).
American Dream contends that we may infer from the trial court's oral comments that its judgment rests on the lease agreement's provision limiting liability. While the trial court raised the applicability of this provision, it did not rule on its applicability or indicate how it was inclined to rule on this issue, if at all.
The trial court could have awarded a lesser amount of damages than the amount sought by American Dream based on the contested evidence presented at trial. American Dream, however, has expressly disclaimed any challenge to the sufficiency of the evidence in its briefing. Because American Dream has not challenged this alternative ground for the trial court's judgment, we must affirm the trial court's judgment as to the amount of damages. See Fletcher, 277 S.W.3d at 64-65; Hagberg, 224 S.W.3d at 481.
American Dream responds that, through no fault of its own, it did not receive timely notice of the trial court's judgment; this, in turn, prevented it from requesting findings of fact and conclusions of law or moving for a new trial before the expiration of the trial court's plenary power. But in civil nonjury cases like this one, complaints as to legal or factual insufficiency of the evidence—including complaints that the damages found are inadequate—may be raised for the first time on appeal. TEX. R. APP. P. 33.1(d); Office of Atty. Gen. of Tex. v. Burton, 369 S.W.3d 173, 175 (Tex. 2012) (per curiam).
We overrule American Dream's first issue.
II. Attorney's Fees
American Dream contends that the trial court erred in denying its request for attorney's fees. It requests that we render judgment in its favor for the full amount of fees it sought based on the uncontroverted testimony of its attorney.
Anderson contends that this fee issue was not preserved for review. He further contends that American Dream was not entitled to its fees because its pretrial demand for repair costs was excessive and American Dream should have proceeded pro se in justice court to avoid this expense.
A. Error preservation
American Dream requested attorney's fees in its petition. At trial, its attorney testified as to its fees. After trial, American Dream included the fees that it had incurred through trial in its proposed judgment and discussed these fees in its supporting brief. This suffices to preserve for review American Dream's challenge to the trial court's complete denial of fees. See TEX. R. APP. P. 33.1(a); Elliott v. Kraft Foods N. Am., 118 S.W.3d 50, 55 (Tex. App.—Houston [14th Dist.] 2003, no pet.) (challenge to trial court's denial of fees preserved by fee request at trial and inclusion of fees in proposed judgment).
B. Applicable law
We review a trial court's decisions on the award of attorney's fees for an abuse of discretion. Fort Worth Transp. Auth. v. Rodriguez, 547 S.W.3d 830, 850 (Tex. 2018). A trial court abuses its discretion if its decision as to fees is arbitrary or unreasonable or if it makes its decision without regard to guiding legal principles or supporting evidence. Bocquet v. Herring, 972 S.W.2d 19, 21 (Tex. 1998).
Under Chapter 38 of the Civil Practice and Remedies Code, a party that prevails in a contract suit and recovers damages is entitled to an award of attorney's fees. See Intercont'l Grp. P'ship v. KB Home Lone Star, 295 S.W.3d 650, 653 (Tex. 2009). The trial court has no discretion to deny attorney's fees when a party presents uncontroverted evidence of its fees and their reasonableness. Ventling v. Johnson, 466 S.W.3d 143, 154 (Tex. 2015). Though the trial court has discretion as to the amount of fees to award, it cannot deny their recovery altogether under these circumstances. Id.
Parties may agree by contract to a fee-recovery standard that differs from Chapter 38's. Intercont'l Grp. P'ship, 295 S.W.3d at 653. When they do so, any fee claim is governed by the terms of their contract. See id.; Peterson Grp. v. PLTQ Lotus Grp., 417 S.W.3d 46, 60 (Tex. App.—Houston [1st Dist.] 2013, pet. denied).
The reasonableness of attorney's fees ordinarily is an issue for the factfinder. Smith v. Patrick W.Y. Tam Tr., 296 S.W.3d 545, 547 (Tex. 2009). Thus, an appellate court usually cannot render a judgment for an amount of fees as a matter of law. See id. at 547-49. In particular, when a party obtains substantially less relief than it sought, this circumstance casts doubt on the reasonableness of the amount of fees. See id. at 548-49. When a factfinder erroneously awards no fees, but the amount of fees requested are not proved as a matter of law, the appellate court must reverse and remand for a new trial as to fees. Midland W. Bldg. v. First Serv. Air. Conditioning Contractors, 300 S.W.3d 738, 739 (Tex. 2009) (per curiam).
C. Analysis
American Dream requested attorney's fees under Chapter 38 and under a fee provision in the lease agreement. The fee provision provides that in the event of any breach, the lessee "shall be liable" for "reasonable attorney's fees." This provision is materially like Chapter 38. By its use of the language "shall" as to liability for fees and "reasonable" with respect to their amount, the lease agreement makes an award mandatory if the lessor prevails but leaves the amount to the factfinder's discretion. See Intercont'l Grp. P'ship, 295 S.W.3d at 652-56 (interpreting fee provision providing that "reasonable" fees "shall" be awarded). Thus, whether considered under the lease agreement or the statute, the trial court had no discretion to deny American Dream's request for attorney's fees. See Ventling, 466 S.W.3d at 154. While the trial court had discretion as to the amount of fees to award, it erred in denying their recovery altogether under these circumstances. See id.
In response, Anderson contends that the trial court was entitled to deny the fee request entirely because American Dream made a pretrial demand for more than twice the amount of damages it sought at trial. Relying on Findlay v. Cave, Anderson argues that the trial court reasonably could have found that the pretrial demand was so excessive as to negate American Dream's contractual enforcement of the fee provision. See 611 S.W.2d 57, 58 (Tex. 1981).
The excessive-demand doctrine applies when a creditor has refused tender of the amount that the debtor claims is due or has clearly indicated that tender of this amount would be refused. U. Servs. Auto Ass'n v. Hayes, 507 S.W.3d 263, 279 (Tex. App.—Houston [1st Dist.] 2016, pet. granted, judgm't vacated w.r.m.). The record does not contain any evidence that Anderson tendered any amount to American Dream before trial. Anderson did not plead the doctrine in his answer. And, as a matter of law, a demand is not excessive merely because it is greater than the amount sought from or awarded by the factfinder. Id. at 278; see, e.g., Standard Constructors v. Chevron Chem. Co., 101 S.W.3d 619, 628 (Tex. App.—Houston [1st Dist.] 2003, pet. denied) (demand for $531,424 not excessive even though party later sought only $97,784 at trial); Panizo v. Young Men's Christian Ass'n of Greater Houston Area, 938 S.W.2d 163, 169 (Tex. App.—Houston [1st Dist.] 1996, no writ) (demand for $125,000 not excessive even though jury only awarded $1,000 on contract claim). The dispositive issue as to an excessive-demand defense is whether the claimant acted unreasonably or in bad faith. Hayes, 507 S.W.3d at 279. Anderson neither addresses the degree of excessiveness nor directs us to any evidence in the record about it.
Anderson further contends that we should affirm the trial court's denial of fees because American Dream could and should have filed its contract suit in justice court, rather than the district court. Doing so, Anderson posits, would have allowed the parties to proceed pro se and thereby avoid attorney's fees.
Anderson does not cite authority that directly supports this argument. A corporation need not be represented by an attorney in justice court. TEX. GOV'T CODE § 27.031(d). But attorneys can and do represent clients, including corporations, in justice court. See TEX. R. CIV. P. 500.4(a)(3), (b)(3). Thus, a suit in the justice court would not require American Dream to forgo representation. In addition, any appeal from the justice court would have resulted in trial de novo in the county or district court. See TEX. CIV. PRAC. & REM. CODE §§ 51.001-.002; TEX. R. CIV. P. 506.3. We therefore reject Anderson's contention that American Dream's attorney had to testify as to why suit was filed in district court with the aid of counsel, rather than in justice court without counsel, for his fee testimony to be legally sufficient.
American Dream's evidence as to its fees was uncontradicted. Nevertheless, American Dream recovered substantially less in actual damages than it sought at trial, and on appeal it has prevailed only in part. Thus, we remand the issue to the trial court for a new trial on the amount of American Dream's reasonable attorney's fees. See Midland, 300 S.W.3d at 739; Smith, 296 S.W.3d at 548-49.
CONCLUSION
We reverse the portion of the trial court's judgment denying American Dream's request for attorney's fees and remand this cause to the trial court for a new trial as to the amount of American Dream's reasonable and necessary attorney's fees at trial and on appeal. We affirm the remainder of the trial court's judgment.
Jane Bland
Justice Panel consists of Chief Justice Radack and Justices Jennings and Bland.