Home Comfortable Supplies, Inc. v. Joshua Cooper, Travis Bonner, Cooper & Carville, Inc., 544 S.W.3d 899

Cooper and Bonner formed Paragon Worldwide, Ltd. (limited partnership) with Home Comfortable Supplies (Zhao) controlling 97%; Cooper and Bonner held small interests and management roles under written agreements (Management Agreement, Partnership Agreement, General Partner agreement).
Zhao/Home Comfortable Supplies allegedly refused to provide financial records or access to bank accounts, failed to make promised capital contributions, locked Paragon out, seized Paragon’s tangible assets, and transferred use of assets to New Star (formed by Zhao’s wife).
Cooper and Bonner sued for multiple claims including breach of contract, fraudulent inducement, breach of fiduciary duty, and conversion; trial court found liability and awarded actual damages, punitive damages to each company, and attorneys’ fees.
On appeal the defendants challenged only punitive damages and the award of attorneys’ fees; they did not challenge liability or the award of actual damages.
The appellate court held there was legally sufficient evidence that actual damages arose from tortious conduct (fraud/fiduciary breach) and thus punitive damages were supportable, but it reversed the attorneys’ fees award because plaintiffs failed to segregate recoverable from nonrecoverable fees.
The case was remanded for a new trial or reassessment solely on attorneys’ fees; the remainder of the judgment (liability, actual damages, punitive damages) was affirmed.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether punitive damages were improperly awarded	Cooper/Bonner argued actual damages included tort losses (fraud, fiduciary breach) supporting punitive damages	Zhao/Home Comfortable argued actual damages were only contractual (breach of Management Agreement), which cannot support punitive damages	Affirmed: evidence could support that actual damages flowed from torts (fraud/breach of fiduciary duty), so punitive damages permissible
Whether attorneys' fees award was improper for lack of segregation	Cooper/Bonner argued the fees were intertwined with successful claims and thus segregation was unnecessary	Zhao/Home Comfortable argued plaintiffs failed to segregate fees for claims where fees are unrecoverable and failed to preserve the complaint on appeal	Reversed as to fees: the fee award must be reversed and remanded because plaintiffs failed to segregate recoverable from nonrecoverable fees; preservation and appellate briefing were adequate to raise the issue

McGalliard v. Kuhlmann, 722 S.W.2d 694 (Tex. 1986) (unchallenged factual findings bind appellate court)
City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (legal-sufficiency review standards)
Formosa Plastics Corp. USA v. Presidio Eng'rs & Contractors, Inc., 960 S.W.2d 41 (Tex. 1998) (fraudulent inducement tort damages may be recoverable even for economic losses subsumed by a contract)
Manges v. Guerra, 673 S.W.2d 180 (Tex. 1984) (punitive damages available for breach of fiduciary duty)
Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299 (Tex. 2006) (party seeking attorneys' fees must segregate fees attributable solely to nonrecoverable claims)
CA Partners v. Spears, 274 S.W.3d 51 (Tex. App.-Houston [14th Dist.] 2008) (extent to which fees are segregable is mixed fact-law question)