Don't Risk Losing Your Attorney's Fees By Grant Nicar on October 29, 2020

I.          Introduction

      In April of 2019, the Texas Supreme Court issued a must read opinion on attorney’s fees, see generally Rohrmoos Venture v. UTSW DVA Healthcare, LLP, 578 S.W.3d 469 (Tex. 2019).[1]. The court clarified what evidence is required to support an award of attorney’s fees from the opposing party. Testimony about attorney experience, the total amount of fees, and the reasonableness of fees is no longer enough. Detailed records that list the work performed now appear to be required in most cases.  This article recaps the major takeaways from Rohrmoos and gives an update on recent Texas case law applying it.

II.        Rohrmoos v. UTSW DVA Healthcare, LLP

      In Rohrmoos, the court made clear what evidence is insufficient to support an award of attorney’s fees.[2]. General testimony on attorney experience, the total amount of fees, and the reasonableness of the fees are no longer enough.[3]. Detailed records that document the work performed appear to be needed in most cases.[4].

      The court described the procedure for proving up attorney’s fees as a two-step process. The first step is the base lodestar method calculation, which multiplies reasonable hours worked by a reasonable hourly rate.[5]. The lodestar calculation is where the detailed records come into play.[6]. At a minimum, the party claiming attorney’s fees must provide evidence of the following:

  • the specific services performed;
  •  who performed those services;
  • the approximate date and time those services were performed;
  • the reasonable amount of time required to perform those services; and
  • the reasonable hourly rate for each person who performed them.[7].

      The court clarified “contemporaneous records” are not required, but “strongly encouraged” attorneys to do so because of their value to the lodestar calculation—the idea being contemporaneous records are readily available for production, provide a basis for testimony on the reasonableness and necessity of the fees requested, and permit cross-examination.[8]. The amount determined by the base lodestar calculation is presumed to be a reasonable approximate value for the attorney’s fees.[9].

      The second step is to adjust the base lodestar calculation up or down as needed to reach a reasonable award of attorney’s fees.[10].  Any adjustment must be based on considerations articulated in Arthur Andersen & Co. v Perry Equipment Corp.[11].  But only some Arthur Andersen considerations are relevant.[12]. Specifically, only those not already incorporated into the base lodestar calculation.[13]. The following Arthur Andersen considerations are usually incorporated in the base lodestar calculation, and thus are unlikely to support any adjustment of it up or down:

  • the time and labor required, the novelty and difficulty of the questions involved, and the skill required to perform the legal service properly;
  • the fee customarily charged in the locality for similar legal services;
  • the amount involved and the results obtained;
  • the experience, reputation, and ability of the lawyer or lawyers performing the services; and
  • whether the fee is fixed or contingent on results obtained, and the uncertainty of collection before the legal services have been rendered.[14].

That leaves only the following Arthur Andersen considerations as being likely to support any adjustment of the base lodestar calculation:

  • the likelihood that acceptance of the particular employment will preclude other employment by the lawyer;
  • the time limitations imposed by the client or by the circumstances; and
  • the nature and length of the professional relationship with the client.[15].

      Thus, the grounds to support any adjustment of the amount determined by the base lodestar calculation will be extremely narrow in most cases. Detailed records about the work performed may be the only practical way to recover all reasonable and necessary attorney’s fees such that no work goes uncompensated. Regardless, the obvious take away is Rohrmoos will change the way attorneys work-up any case in which fee-shifting attorney’s fees may be awarded. The list that follows summarizes some statutes and law in which fee shifting attorney’s fees are authorized:

  • Texas Insurance Code Violations;[16]
  • Deceptive Trade Practices Act (DTPA) violations;[17]
  • Suit against parent-child relationship (SAPCR);[18]
  • Anti-SLAPP;[19]
  • Sanctions;[20]
  • Fraud in a real estate or stock transaction;[21]
  • Declaratory judgment;[22]
  • Fraudulent transfers;[23]
  • Breach of contract;[24]
  • Services rendered;[25]
  • Labor performed;[26]
  • Furnished material;[27]
  • Freight or express overcharges;[28]
  • Lost or damaged freight or express;[29]
  • Sworn account;[30]
  • Killed or injured livestock;[31]

III.       Attorney’s Fees Case Law Update

      Even though Rohrmoos was just delivered in April 2019, Texas appellate court opinions that apply it are growing quickly.  The immediate take away from these cases is clear.  Attorneys that do not document their work on a case in compliance with the standard articulated in Rohrmoos run the risk of losing fee awards.  Some of those cases are briefly summarized below.

      Air Jireh Serv. Corp. v. Weaver & Jacobs Constructors, Inc. Evidence presented was insufficient to support award of attorney’s fees.[32]. Counsel testified that those who worked on the case expended significant hours preparing for and performing activities related to attending meetings, communicating with their client, investigating claims and defenses, drafting and filing pleadings, traveling for hearings, conducting legal research, investigating different names and associated entities of the defendant, reviewing and producing documents, and preparing for trial.[33]. But counsel did not present documents or records that showed how the hours worked were devoted to particular tasks.[34]. The court explained the testimony provided, though relevant, did not provide the specificity needed for the trial court to make a meaningful lodestar determination, because it could not discern how many hours each task required and whether that time was reasonable.[35].

      USAA Texas Lloyd’s Co. v. Griffith.  Evidence was sufficient to support award of attorney’s fees.[36]. Counsel prepared an itemized statement that detailed the work performed by each member of trial team and their hourly rates.[37]. At trial, the itemized statement was presented through expert testimony.[38]. The expert testified the hourly rates charged by those who worked on the case were reasonable, and discussed all of the Arthur Andersen considerations.[39]. Based on the records and expert testimony, the court concluded: “[t]he fees in this case for two years of work, including over ten oral depositions, numerous depositions on written questions, summary judgment proceedings, preparing for trial testimony of multiple experts on both sides, mediation, document review, and a trial, do not appear excessive . . . .”[40].

      Toledo v. KBMT Operating Co., LLC. Evidence was insufficient to support award of attorney’s fees.[41]. Counsel presented hourly billing invoices that detailed who performed what work, when it was performed, and the applicable hourly rates.[42]. Counsel also testified about the course of litigation, his professional experience, the hourly rates for those who worked on the case, and that the fees charged were customary, reasonable, and necessary.[43]. But the court concluded the invoices showed many attorneys who worked on the case billed a high number of hours for work performed on the same documents and briefs.[44]. The court emphasized counsel did not present evidence that explained why the layers of work performed by multiple attorneys was reasonable or necessary given the limited scope of the issue and the fact that the same issue was central to each stage of the litigation.[45]. Put differently, no evidence addressed why the attorneys who billed on the case were not “needlessly duplicating and revising each other’s work.”[46].

      Scott Pelley P.C. v. Wynne. Evidence presented was sufficient to support award of attorney’s fees.[47]. Counsel presented billing records which set forth applicable hourly rates, a description of the legal work performed, identified who performed the work, and included the date the work was performed.[48]. Counsel also presented expert testimony, which stated the hourly rates of $350 were usual and customary for similar work in the applicable geographical region and within the zone of reasonableness given the counsel’s extensive experience.[49].

      Interest of K.A.M.S. & K.A.S., Children. Evidence presented was insufficient to support award of attorney’s fees.[50]. Counsel testified both she and her paralegal worked extensively on the case, and that the fees requested were reasonable and necessary based on the complexity of the issues involved and work performed.[51]. Counsel did not present billing records, nor did she testify to hourly rates or the total number of hours worked.[52]. The court concluded counsel’s testimony lacked the substance required to uphold a fee award.[53].

      Janai v. Sanford Rose Associates International, Inc. Evidence presented was sufficient to support award of attorney’s fees.[54]. Counsel presented contemporaneous billing records and attorney affidavits that enumerated, analyzed, and applied each Arthur Andersen factor.[55]. The court concluded that evidence was “more than sufficient” to support the trial court’s attorney’s fees award.[56].

      Lozoyya Construction, Inc. v. H&E Equipment Services, Inc. Evidence presented was insufficient to support award of attorney’s fees.[57]. Counsel only presented evidence of attorney’s fees by way of two attorney affidavits.[58]. The first affidavit stated the hourly rate for the work performed and divided the work into separate categories, specifically: (1) seven hours to study a motion to dismiss, to evaluate the appropriate case law, and to draft a letter to opposing counsel . . .  (2) twenty-three hours to review a motion to dismiss, to prepare and file a response to the motion, to create affidavits in support of the motion, and to identify supporting case law . . . and (3) nine hours to prepare for and participate in the hearing on the motion dismiss . . . .”[59]. The second affidavit used the same categories as the first to describe the work performed, but tweaked the entries.[60]. Specifically, the second affidavit: (1) increased the time spent to perform the work described in the first category from seven to 8.8 hours, but decreased the hourly rate for that time; (2) increased the time spent to perform the work described in the second category from twenty-three hours to 25.2 hours, but decreased the hourly rate for that time; and (3) increased the time spent to perform the work described in the third category from nine hours to eleven hours, and added costs incurred for travel expenses.[61]. The court was critical of the affidavits, and noted they were “deficient” for several reasons.[62]. The court took issue with the fact that counsel did not segregate the total time between various tasks; did not specify when the work was performed; described the work too generally, which suggested some of the work might have been “duplicative;” did not explain the changes in the two affidavits regarding the time spent on work performed or the hourly rate; and did not include any actual billing records to help explain the decencies.[63]. The court concluded affidavits thus, “lack[ed] the substance required to uphold a fee award and are insufficient.”[64].

      Welch v. Christus Good Shepard Medical Ctr.-Marshall. Evidence presented was insufficient to support award of attorney’s fees.[65]. Counsel attempted to present evidence via live testimony.[66]. Counsel testified the law firm spent 105 hours on working on the case, a medical malpractice dispute, for a total fee of $23,452.00.[67]. That they had been practicing “medical malpractice defense for a year now.” [68]. And that the hours and fees were reasonable and necessary in defending a “case such as this.”[69]. And that, in general, in order to defend a medical malpractice case, time is generally spent reviewing the pleadings, filing pleadings, reviewing extensive medical records, researching medical literature, conferring with our clients, conferring with plaintiff, reviewing plaintiff’s expert report, researching plaintiff’s expert, and preparing and drafting objections to the expert report.[70]. The court explained, even if the attorney’s testimony was construed as setting forth the work performed on the case at hand, it was still deficient.[71]. The reason being, it did not set forth who performed the services; when they were performed; the reasonable amount of time required to perform the services; or the hourly rate for each person performing the services.[72]. The court concluded the testimony “did not meet the minimum evidence required” to support an attorney fee award.[73].

IV.       Conclusion

      In the past, most litigants have been able prove-up attorney’s fees with little documentation and preparation. Those days are over. Appellate courts are scrutinizing and remanding cases where attorney’s overlook or underestimate the Rohrmoos analysis. Don’t take this aspect of your case for granted. It just might cost you your attorney’s fees.

Endnotes and Citations

[1] See Rohrmoos Venture v. UTSW DVA Healthcare, LLP, 578 S.W.3d 469 (Tex. 2019).

[2] See Rohrmoos, 578 S.W.3d at 498.

[3] Id.

[4] Id. at 503 ("billing records are strongly encouraged to prove the reasonableness and necessity of requested fees . . . .").

[5] Id. at 498.

[6] See id.

[7] Id. at 498.

[8] Rohrmoos, 578 S.W.3d at 502.

[9] Id. at 498.

[10] Id. at 500-01.

[11] Id. at 500, n.11.

[12] Id. (citing Arthur Andersen & Co. v. Perry Equip. Corp., 945 S.W.2d 812, 818 (Tex. 1997)).

[13] Rohrmoos, 578 S.W.3d at 500, 501.

[14] Id. at 501-01.

[15] See id. at 494, 500-01.

[16] Tex. Ins. Code §§ 541.152, 542.060.

[17] Tex. Bus. & Comm. Code § 17.50(d).

[18] Tex. Fam. Code § 106.002.

[19] Tex. Civ. Prac. & Rem. Code § 27.009; see also H.B. 2730 (effective. Sept. 1, 2019).

[20] Tex. Civ. Prac. & Rem. Code § 10.004(c); see also Nath v. Texas Children’s Hosp., 576 S.W.3d 707, 709.

(Tex. 2019) (applying Rohrmoos to claim for attorney’s fees as sanction).

[21] Tex. Bus. & Comm. Code § 27.01(e).

[22] Tex. Civ. Pac. & Rem. Code § 37.009.

[23] Tex. Bus. & Comm. Code § 24.013.

[24] Tex. Civ. Prac. & Rem. Code §§ 38.001(a), 38.002.

[25] Id.

[26] Id.

[27] Id.

[28] Id.

[29] Id.

[30] Tex. Civ. Prac. & Rem. Code §§ 38.001(a), 38.002.

[31] Id.

[32] Air Jireh Serv. Corp. v. Weaver & Jacobs Constructors, Inc., No. 13-15-00180-CV, 2019 WL 3023315, at *7.

(Tex. App.—Corpus Christi July 11, 2019, no pet. h.).

[33] Air Jireh Serv. Corp., 2019 WL 3023315, at *7.

[34] Id.

[35] Id.

[36] USAA Texas Lloyd’s Company v. Griffith, No. 13-17-00337-CV, 2019 WL 2611015, *15 (Tex. App.—Corpus Christi June 26, 2019, no pet.) (mem. op.).

[37] Griffith, 2019 WL 2611015, at *14.

[38] Id.

[39] Id.

[40] Id. at *15.

[41] Toledo v. KBMT Operating Co., LLC, 09-17-00265-CV, 2019 WL 2455270, at *1 (Tex. App.—Beaumont June 13, 2019, no pet.) (mem. op., not designated for publication).

[42] Toledo, 2019 WL 2455270, at *4.

[43] Id. at *2.

[44] Id.

[45] Id. at *4.

[46] Id.

[47] Scott Pelley P.C. v. Wynne, 578 S.W.3d 694, 705 (Tex. App.—Dallas 2019, no pet.).

[48] Wynne, 578 S.W.3d at 705.

[49] Id.

[50] Interest of K.A.M.S. & K.A.S., Children, 14-18-00015-CV, 2019 WL 3562391 (Tex. App.—Houston [14th Dist.] Aug. 6, 2019, no pet. h.).

[51] Interest of K.A.M.S., 2019 WL 3562391 at *11.

[52] Id.

[53] Id.

[54] Janai v. Sanford Rose Associates Int’l, Inc., No. 05-18-01079-CV, 2020 WL 728428, at *15 (Tex. App.—Dallas Feb. 13, 2020, pet. denied) (mem. op.).

[55] Janai, 2020 WL 728428, at *15.

[56] Id.

[57] Lozoya Constr., Inc. v. H&E Equip. Services, Inc., No. 11-19-00287-CV, 2020 WL 1467268, at *10 (Tex. App.—Eastland Mar. 26, 2020, pet. denied) (mem. op.).

[58] Lozoya Constr., Inc., 2020 WL 1467268, at *9.

[59] Id.

[60] Id.

[61] Id. at 10.

[62] Id.

[63] Id.

[64] Id.

[65] Welch v. Christus Good Shepherd Med. Ctr.-Marshall, No. 06-19-00089-CV, 2020 WL 1696086, at *7 (Tex. App.—Texarkana Apr. 8, 2020, no pet.) (mem. op.).

[66] See Welch, 2020 WL 1696086, at *6.

[67] Id.

[68] Id.

[69] Id.

[70] Id. at *7.

[71] Id.

[72] Id.

[73] Id.

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