OPINION
Nоrth Star Water Logic, LLC appeals from the trial court’s order denying North Star’s request for attorney’s fees after Ec-olotron, Inc. nonsuited its claims against North Star without prejudice. We affirm.
BACKGROUND
North Star, a water processing company, signed a contract with Ecolotron to lease electrocoagulation equipment used in water processing applications. North Star made monthly lease payments under the contract until the equipment was destroyed in a fire. Ecolotron promptly replaced the equipment, but the parties disagreed about whether the replacement equipment was of the same quality as the initial equipment. North Star made no lease payments for the remaining four months of the contract.
Ecolotron sued North Star to recover the unpaid lease amounts. North Star answered and asserted the affirmative defense of prior breach, contending that Eco-lotron breached the contract first by providing faulty equipment in violation of the contract’s warranty provision. North Star asserted no counterclaims.
The litigation proceeded for morе than a year, during which the parties appeared before the trial court several times on discovery disputes. In late 2014, Ecolo-tron moved for summary judgment and North Star moved for sanctions based on discovery abuse. The trial court denied Ecolotron’s motion for summary judgment and granted North Star’s motion for sanctions after a hearing on October 20, 2014. In its order granting sanctiоns, signed the same day, the trial court ordered that Ecolotron was “not to bring up or discuss or mention issues related to the cause of the fire in the [equipment] that is the subject of this suit; more precisely described in the court reporter’s record.” In line with its order granting sanctions, the trial court signed a second order on October 23, 2014, directing that Ecolotron would be prohibited from discussing or presenting evidence at trial that North Star contributed in any way to the failure of the equipment
Ecolotron nonsuited all of its claims against North Star on October 28, 2014— approximately two weeks before the November 10, 2014 trial setting. After Eco-lotron had nonsuited and the case had been dismissed, North Star filed a motion seeking its attorney’s fees. The trial court heard and denied North Star’s request for attorney’s fees. This appeal followed.
STANDARD OP REVIEW
Whether attorney’s fees are available under a particular statute is a question of law that we review de novo. Holland v. Wal-Mart Stores, Inc.,
Because the contract language is mandatory, we would typically review the trial court’s decision on whether to award fees under a de novo standard.... However, it is unclear in the existing caselaw whether the trial court’s determination of whether a particular party was a prevailing party should be reviewed under a de novo or abuse of discretion standard. In its two recent cases discussing prevailing parties in this context, the Texas Supreme Court did not state a standard of review, and its analysis does not clearly employ one standard or the other. Epps v. Fowler,351 S.W.3d 862 (Tex.2011); Intercont’l Group P’ship [v. KB Home Lone Star L.P.],295 S.W.3d 650 [ (Tex.2009) ]. We have found no court of appeals opinion squarely addressing this issue. Courts have stated inconsistent standards. Compare Johnson v. Smith, No. 07-10-00017-CV,2012 WL 140654 , at *2 (Tex.App.—Amarillo Jan. 18, 2012, no pet.) (‘Whether a party is entitled to recover attorney’s fees is a question of law for the trial court which we review de novo.”), with Intercont’l Group P’ship v. KB Home Lone Star LP,295 S.W.3d 668 (Tex.App.—Corpus Christi) (“Both parties agree that an award of attorneys’ fees is reviewed under an abuse of discretion standard.”), rev’d,295 S.W.3d 650 (Tex.2009). We note that in a very similar context, the allocation of court costs to the “successful party” under Texas Rule of Civil Procedure 131, the trial court has discretion in determining which party should receive costs, even though the rule is mandatory. See Tex.R. Civ. P. 131; Sterling Bank v. Willard M, L.L.C.,221 S.W.3d 121 , 125 (Tex.App.—Houston [14th Dist.] 2006, no pet.).
Id. Because our holding was the same regardless of which standard we employed, we did not determine the definitive standard of review at that time. Id.
With the issue squarely before us nоw, we determine that a mixed standard applies. See Referente v. City View Courtyard, L.P.,
Analysis
North Star contends: (1) it was entitled to its attorney’s fees for successfully defending the suit, as stipulated in the contract between the parties; and (2) an award of fees was proper “based upon the
I. North Star did not Timely Present a Claim for Attorney’s Fees
Texas Rule of'Civil Procedure 162’ provides that a plaintiff may nonsuit at any time before introducing all of his evidence other than rebuttal evidence. Tex.R. Civ. P. 162. “The plaintiff’s right to take a nonsuit is unqualified and absolute as long as the dеfendant has not made a claim for affirmative relief.” BHP Petroleum Co. v. Millard,
Téxas adheres to the American Ruie with respect to attorney’s fees, meaning litigants may recover аttorney’s fees only if specifically provided for by statute or contract. Id. at 865. At the time of Ecolotron’s nonsuit, North Star had no pending claims for affirmative relief and had not pleaded a’ claim for attorney’s fees pursuant to the parties’ contract.
Moreover, an award of attorney’s fees pursuant to statute would not have been appropriate. In its original answer, North Star included a section called “Attоrneys’ Fees” that requested attorney’s fees under Chapters 37 and 38 of the Texas Civil Practice and Remedies Code. As discussed below, however, North Star could not recover under either Chapter 37 or Chapter 38 without asserting an affirmative claim for relief. North Star did not do so.
Chapter 37 of thé Texas Civil Practice and Remedies Code — the Uniform Declaratory Judgments Act (“UDJA”) — allows the trial court to award reasonable attorney’s fees. See Tex. Civ. Prac. & Rem. Code Ann. §§ 37.001, 37.009 (Vernon
Likewise, Chаpter 38 of the Téxas Civil Practice and Remedies Code provides that “[a] person may recover reasonable attorney’s fees ... if the claim is for ... an oral or written contract.” Tex. Civ. Prac. & Rem.Code Ann. § 38.001(8) (Vernon 2015). “Chapter 38 does not provide for recovery of attorneys’ fees by defendants who' only defend against a plaintiffs contract claim and do not. рresent their own contract claim.” Polansky,
II. No Fee Entitlement Based on Contract
Even if North Star had preserved its claim for attorney’s fees under the contract, the trial court did not abuse its discretion by denying the requested attorney’s fees.
Section 3.08 of the contract between North Star and Ecolotron provided:
3.08 Attorney Fees and Expenses for Enforcement. Reasonable attorney’s fees and expenses incurred by a Party in successfully prosecuting or defending a suit under this Lease against the other Pаrty, or the other Party’s estate, will be recoverable by the successful Party in such action.
North Star contends, based on Ecolotron’s nonsuit without prejudice, that it has successfully defended the suit under section 3.08 of the contract. The contract does not define “successful Party” or otherwise provide any guidance for determining whether a party successfully prosecutes or defends a suit.
As an initial matter, North Star contends that “the Lease Agreement sets out a different standard [than] that of the ‘prevailing party
North Star’s contention that it successfully defended the suit is premised on Eco-lotron’s nonsuit without prejudice shortly after the trial court granted sanctions and excludеd certain evidence. In Epps v. Fowler, the Texas Supreme Court considered whether a defendant is a prevailing party entitled to attorney’s fees when the plaintiff nonsuits a claim without prejudice.
In contrast, the court noted, a nonsuit without-prejudice works no such change in the parties’ legal relationship. Id. at 869. Therefore, a defendant generally is not considered a prevailing party when the plaintiff nonsuits a claim without prejudice. See id.
Identifying an exception to the general rule, the court held that “a defendant may be a prevailing party when a plaintiff nonsuits without prejudice if the trial court determines, on the defendant’s motion, that the nonsuit was taken to avoid an unfavorable ruling on the merits.” Id. at 870. The supreme court identified sеveral factors that may support an inference that a plaintiff nonsuited to avoid an unfavorable ruling: (1) a plaintiffs nonsuit after a defendant files a motion for summary judgment; (2) a plaintiffs failure to respond to requests for admission or other discovery that, could support an adverse judgment; (3) a plaintiffs failure to timely identify experts or other critical witnesses; and (4) the existence of other procedural obstacles that could defeat the plaintiffs claim, such.as an inability to join necessary parties. Id. at 870-71; see also Referente,
At the conclusion of the hearing on North Star’s motion for attorney’s fees, the trial court denied North Star’s request for fees, stating:'
THE COURT: Here is the deal. The contract says “successful,” The definition you handed me, not the highlightedportion you gave me but above that, it says “successful” is defined as having the correct result. In my mind they had a valid claim, based on what I know about this case, and it sounds like they ran into, I guess, scenarios they weren’t prepared for in bringing it in terms of expense. The case law you handed me, Epps, requires that I make some kind of finding as to why they nonsuited it, whether or not it was to avoid an unfavorable ruling. I don’t see that as being the reasоn. So based on the contract definition of “success,” given the facts as I know them and the Epps[] case, I don’t think that they have triggered either of these to owe the attorney’s fees so I’m going to deny the claim or the motion. And that ought to provide a record enough for any appellate purposes, I guess.
North Star did not request findings of fact or conclusions of lаw after the trial court denied its motion.
Ecolotron nonsuited its claims approximately one week after the trial court signed orders limiting Ecolotron’s ability to introduce certain evidence pertaining to North Star’s prior breach affirmative defense, and approximately two weeks before trial. The orders did not impose death penalty sanctions and did not prohibit Eco-lotron from presenting evidence at trial regarding North Star’s failure to make payments under the contract. Moreover, the trial court specifically noted that Eco-lotron had a valid claim — a factor weighing against the award of attorney’s fees.
Additionally, in finding that Ecolo-tron did not nonsuit to avoid an unfavorable outcome, the trial court fоund, that Ecolotron “ran into, I guess, scenarios they weren’t prepared for in bringing it in terms of expense.” This finding is supported by Ecolotron’s counsel’s statements during the attorney’s fees hearing that “we have a very small company and we have to make money and we couldn’t be there for the depositions and we made a strategic and financial decision to nonsuit the сase and try it again on another day,” and “[fit’s been a very expensive case for a very small plaintiff.” As the supreme court stated in Epps, trial courts should rely on live testimony only in rare instances. Id at 870. But where, as here, the plaintiff is not put on notice that attorney’s fees are at issue — and therefore that the plaintiffs reason for nonsuiting may be at issue— until after the nonsuit has occurred, the plaintiff has had no cause to introduce evidence explaining that a nonsuit was taken for a reason other than to avoid an unfavorable outcome.
Under these circumstances, the trial court did not err by basing its decision, in part, on counsel’s statements during the attorney’s fees hearing that there were monetary reasons behind the nonsuit. Based on the foregoing, the trial court’s denial of attorney’s fees was within the zone of reasonable disagreement, and we conclude the trial court did not abuse its discretion in denying North Star’s requested attorney’s fees.
Conclusion
Having overruled North Star’s issues, we affirm the judgment of the trial court.
Notes
. Ecolotron argued in its motion for summary judgment that North Star employees had improperly connected the equipment to a generator, causing the equipment to catch fire.
. It was undisputed that the equipment burned, but Ecolotron contended there was no evidence of a defect with the equipment that would support North Star’s breach of warranty argument.
. In its original answer, North Star included a section titled. "Attorneys’ Fees” that stated in its entirety: "[North Star] seeks,attorneys’ fees under Tex. Civ. Prac. & Rem.Code Chapters 37 and 38 as Plaintiff Breached the Contract.” North Star did not file a counterclaim for attorney’s fees pursuant to the contract. See, e.g., Referente,
. It is unlikely that North Star could have asserted a UDJA claim from a purely defensive position. See BHP Petroleum Co.,
. Nor would such a claim deprive Ecolotron of its absolute right to nonsuit. See BHP Petroleum Co.,
. We review de novo the legal question of whether a suit had an arguable basis in law. See Referente, 477 S.W.3d at 886. Like the trial court, we conclude that Ecolotron's suit had an arguable basis in law,