Rosehurst Homeowners Association v. Hughes Natural Gas, Inc. and Real Provencher
01-14-00601-CV
Tex. App.Apr 2, 2015Background
- Final divorce decree divided ConocoPhillips stock options: 60% to Katy (wife) and 40% to Luc (husband), describing Katy as having "equitable ownership" and a right to receive proceeds upon exercise. The plan terms prevented direct assignment of options, so decree addressed proceeds and accounting.
- Katy sued to enforce the decree after Luc initially refused her demand to exercise certain options and deliver net proceeds; trial court found Luc breached fiduciary duties, ordered exercise, imposed fines, and awarded Katy attorney fees (including appellate fees and expert fees).
- At or near trial counsel stipulated to counsel qualifications and that counsel would testify the fees and rates were reasonable; detailed billing statements were admitted into evidence.
- During the appeal some issues became moot because Luc later exercised the options and delivered proceeds; the court vacated portions of the trial court order that remedied issues now moot.
- The appellate court reviewed: (1) decree construction (who controls timing of exercise), (2) whether trial court lawfully awarded attorney fees (sufficiency, segregation, expert fees), and (3) whether appellate fees should be unconditional or contingent and when interest accrues.
Issues
| Issue | Plaintiff's Argument (Messier/Katy) | Defendant's Argument (Luc/Messier) | Held |
|---|---|---|---|
| Whether decree requires Luc to exercise options on Katy's demand (timing control) | Decree gives Katy equitable ownership and the right to direct when her assigned options be exercised | Luc says decree gives him discretion to time exercises to maximize value | Court: decree unambiguous that Katy may direct when her portion is exercised; overruled Luc's challenge |
| Whether trial court's clarifications and breach-of-fiduciary findings remain reviewable | Katy seeks enforcement and clarification; breach finding supports fee award | Luc argues clarification and breach findings unnecessary and now moot | Court: those portions rendered moot by Luc's compliance; vacated/dismissed those parts |
| Sufficiency and recoverability of attorney and expert fees; segregation requirement | Katy: counsel stipulation, billing statements, and testimony suffice; fees intertwined with enforcement claims | Luc: stipulation insufficient; expert fees not recoverable; failed to segregate unrecoverable fees | Court: evidence sufficient to support reasonable attorney fees; expert fees are not recoverable in enforcement action so reduced award by expert-fee amount; segregation not required because claims and services were intertwined |
| Award of appellate fees: amount, contingency, due date, and interest accrual | Katy: entitlement to appellate fees related to enforcement; fees shown as incurred for enforcement | Luc: insufficient evidence for appellate-fee amount; award must be contingent on success; award cannot accrue interest from trial court date | Court: modified award by subtracting expert fees, made appellate-fee awards contingent on Katy's success on appeal, and clarified that interest does not accrue until appellate judgment issues |
Key Cases Cited
- Valley Baptist Med. Ctr. v. Gonzalez, 33 S.W.3d 821 (Tex. 2000) (mootness doctrine prohibits advisory opinions)
- Shanks v. Treadway, 110 S.W.3d 444 (Tex. 2003) (interpretation of judgments: unambiguous decrees must be enforced according to literal language)
- AHF–Arbors at Huntsville I, LLC v. Walker Cnty. Appraisal Dist., 410 S.W.3d 831 (Tex. 2012) (equitable ownership and constructive trust concepts)
- Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299 (Tex. 2006) (fee-recovery and segregation principles)
- Apache Corp. v. Dynegy Midstream Servs., Ltd. P’ship, 214 S.W.3d 554 (Tex.App.—Houston [14th Dist.] 2006), rev’d in part on other grounds, 294 S.W.3d 164 (Tex. 2009) (when appellate fees become final for interest accrual)
- In re Ford Motor Co., 988 S.W.2d 714 (Tex. 1998) (courts may modify unconditional appellate-fee awards to make them contingent on success)
- Baker Botts, L.L.P. v. Cailloux, 224 S.W.3d 723 (Tex.App.—San Antonio 2007) (constructive trust scope and remedies)
- Watts v. Oliver, 396 S.W.3d 124 (Tex.App.—Houston [14th Dist.] 2013) (appellate fees and timing/interest issues)