Fitzgerald v. SCHROEDER VENTURES II, LLC
2011 Tex. App. LEXIS 2522
| Tex. App. | 2011Background
- Schroeder Ventures II, LLC bought land from Pratt and Panzarella (as Trustee) under an earnest money contract with an attorney's fees provision.
- The contract provides that a prevailing party in any related legal proceeding may recover costs and reasonable attorney's fees from the non-prevailing party; the term 'prevailing party' is not defined.
- Schroeder Ventures assigned the buyers' rights and obligations under the contract.
- Schroeder Ventures sued for fraud and related torts; Fitzgerald, Pratt, and Panzarella sought attorney's fees under the contract.
- The jury found Fitzgerald, Pratt, and Panzarella not liable on all claims; take-nothing judgment in their favor; Schroeder Ventures recovered nothing.
- The trial court denied the contract-based attorney's fees under Intercontinental, and entered a take-nothing final judgment; plaintiffs appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Intercontinental apply to preclude fees? | Intercontinental not controlling for prevailing-party status when defendant prevails. | Intercontinental bars fees for non-damages-defendant defendants. | Intercontinental does not apply; contract allows fees to prevailing party. |
| Are Fitzgerald, Pratt, and Panzarella prevailing parties under the contract? | They prevailed by defeating all claims and obtaining a take-nothing judgment. | No meaningful relief under Intercontinental; status as prevailing party disputed. | Yes; they were prevailing parties under the contract and entitled to fees. |
| Does the contract cover non-contractual (tort) claims? | Contract language broadly applies to any proceeding related to the contract or transaction. | Only contractual claims fall within the provision. | The fees clause applies to the claims here, including tort claims arising from the transaction. |
Key Cases Cited
- Intercontinental Group P'ship v. KB Home Lone Star, L.P., 295 S.W.3d 650 (Tex. 2009) (prevailing-party analysis; damages required for meaningful relief)
- MBM Fin. Corp. v. The Woodlands Operating Co., L.P., 292 S.W.3d 660 (Tex. 2009) (American Rule; contracts may authorize fee shifting)
- Holland v. Wal-Mart Stores, Inc., 1 S.W.3d 91 (Tex.1999) (de novo review of legal questions involving statutory/contractual fees)
- Seagull Energy E & P, Inc. v. Eland Energy, Inc., 207 S.W.3d 342 (Tex.2006) (contract interpretation; plain-language fees clauses)
- Valence Operating Co. v. Dorsett, 164 S.W.3d 656 (Tex.2005) (contract interpretation; give effect to ordinary meaning)
- In re Lesikar, 285 S.W.3d 577 (Tex.App.-Houston [14th Dist.] 2009) (orig. proceeding; fee-shifting under contract analyzed)
- Bocquet v. Herring, 972 S.W.2d 19 (Tex.1998) (attorney's fees as part of nature of suit; standard of review)
- Ragsdale v. Progressive Voters League, 801 S.W.2d 880 (Tex.1990) (attorney's fees; American Rule exceptions)