OPINION
Crossed wires caused an on-site electrical transformer to blow, necessitating repairs and the use of a temporary trans *116 former while the blown transformer was out of commission. The manufacturing plant owner sued its electrical services company for breach of contract and breach of warranty. The trial court rendered judgment on the jury’s verdict favoring the owner. On appeal, Powell Electrical Systems, Inc. (“Powell”) asserts that (1) all of the damages awarded by the jury are contractually barred consequential damages, (2) because the damages are barred, Hewlett Packard Company (“HP”) is not entitled to attorney’s fees as a prevailing party, and (8) the liability questions that the trial court submitted erroneously conflate proper and improper theories of liability. In a cross-appeal, HP argues that the jury’s damages and attorney’s fees findings impermissibly reduce the awards to fifteen percent less than the amount conclusively established by the evidence and that it is entitled to appellate attorney’s fees.
We conclude that (1) most of the damages the jury awarded are direct damages, but the damages relating to loss of use are consequential damages, (2) the jury charge is proper, (3) HP did not establish the full amount of its damages as a matter of law and thus is not entitled to an increased award, (4) the jury’s take-nothing award for appellate attorney’s fees is not supported by legally sufficient evidence, and (5) in light of our reduction of HP’s damages, the jury’s award for attorney’s fees at trial must also be remanded. We therefore reverse the trial court’s judgment with respect to the award of damages pursuant to the jury findings on damage elements (d) and (e), relating to costs for loss of use, and reform the judgment accordingly. We reverse the trial court’s judgment with respect to the award of attorney’s fees at trial and on appeal and remand those issues. We affirm the trial court’s judgment in all other respects.
Background
HP owns a manufacturing facility in Houston with its own power substation. The substation uses a two-transformer system to power the facility. Powell designs, manufactures and installs electrical equipment. HP contracted with Powell to perform breaker retrofitting services at the substation. This process required Powell to remove breaker cables from the transformers’ breaker cabinets and then reconnect them when the work was completed. Powell failed to document how the breaker cables were placed before removing them and unintentionally crossed certain breaker cables when it reconnected them. The cross-phased breaker cables caused one of HP’s dual transformers, transformer B, to fail. As a result, HP incurred costs to repair transformer B and to obtain a temporary transformer for use while the repairs were made. HP brought this suit against Powell to recover for these costs.
After a trial on the merits, the jury found in favor of HP on its breach of contract and breach of express warranty claims against Powell, awarding HP $926,585.98 in damages and $163,526.24 for attorney’s fees. The damages awarded by the jury included the following elements:
(a) fault testing and removal of transformer B: $76,518.03;
(b) disposal of oil from transformer B: $17,067.80;
(c) repair of transformer B: $581,024.20;
(d) cost of temporary transformer less amount for which it was sold: $105,097.26;
(e) installation and testing of temporary transformer: $73,718.15; and
(f) reinstallation of transformer B: $73,160.54.
*117 The jury’s findings on damages and attorney’s fees are approximately fifteen percent less than the amount HP sought at trial, except that the jury refused to award any fees for an appeal. HP asked the trial court to enter judgment on the jury verdict in its favor but to award the full amount it sought. Powell asked the trial court to disregard the jury findings, asserting that the damages found are barred by the limitations of liability in the contract. The trial court denied both parties’ motions and rendered judgment on the verdict, reducing the total damages award to $876,810.61 to account for an offset and awarding pre- and post-judgment interest.
Contractual Limitation on Consequential Damages
Powell contends that the trial court erred in denying Powell’s motions to disregard the jury finding on damages. Powell argues that the damages found by the jury are consequential damages, which are barred under the terms of the parties’ contract. HP responds that the damages are direct damages, rather than consequential damages. The parties agree that their contract bars consequential damages but not direct damages. 1
A. Standard of Review
The dispute between the parties is whether the damages awarded in this case constitute direct or consequential damages under Texas law. We review such questions of law de novo.
In re Humphreys,
B. Applicable Law on Damages
1. Direct Damages
Direct damages are those damages that flow naturally
and necessarily
from the breach.
Arthur Andersen & Co. v. Perry Equip. Corp.,
Examples of direct damages can be found in our decision in
Tennessee Gas Pipeline.
In that case, a pipeline owner, Tennessee Gas Pipeline (“TGP”), sought to recover damages for Technip’s delayed and defective construction work on a pipeline.
Tennessee Gas Pipeline,
2. Consequential Damages
“Consequential damages” are those which result naturally,
but not necessarily,
from the breach.
Arthur Andersen,
Tennessee Gas Pipeline
also provides examples of consequential damages. We held that TGP could not recover for the cost of renting a backup generator after a power outage occurred, which TGP asserted would not have been necessary but for Technip’s premature dismantling of the existing backup generator before the new generator was fully operational.
Tennessee Gas Pipeline,
C. Analysis
We conclude that some of the damages awarded to HP are permitted direct damages and some are impermissible consequential damages.
1. Costs Relating to Transformer B: Damage Elements (a), (b), (c) & (f)
Damages that flow “naturally and necessarily” from a breach of the parties’ contract are those inherent in the
*119
nature of the breach of the obligation between the parties, as compared to those damages that flow “naturally but not necessarily” from the breach because they require the existence of some other fact (known or unknown) beyond the relationship between the parties.
Cf. Tennessee Gas Pipeline,
Here, the damages to transformer B are inherent in the nature of the breach of Powell’s contractual and warranty obligations to HP. Powell’s re-energizing of transformer B while the B-side breakers were cross-phased caused transformer B to fail, and the failure of transformer B necessitated its testing, removal, oil disposal, repair and reinstallation. No additional link in the causal chain was necessary to bring about the injury or damages. The parties can be “conclusively presumed to have foreseen” that Powell’s substandard performance would result in the failure of the transformer and that failure of a transformer would require HP to incur costs associated with repairing it.
Cf. Arthur Andersen,
We are not persuaded otherwise by Powell’s argument that direct damages in this case should be limited to the cost of uncrossing the wrongfully crossed cables or the difference between the value of Powell’s actual services and the value of the services as promised by Powell. As an initial matter, contrary to Powell’s narrow construction of the contract, the subject of the contract is Powell’s “Electrical Contractor work for [HP] related to the Willow Substation 34.5KV Breaker Retrofit,” which the evidence shows necessarily included temporarily unhooking the breaker cables from transformer B’s breaker cabinet and then putting them back. This does not appear to have been disputed at trial, and Powell’s own employee averred that “[t]he scope of the Powell/HP contract included the unlanding and relanding of the feeder cables to the circuit breakers.”
The contract expressly contemplates that testing and repair costs may be incurred as a result of defective performance by Powell.
3
See McKinney & Moore, Inc.,
*120
To support its contention that HP’s damages should be limited, Powell relies on
Reynolds Metals Co. v. Westinghouse Electric Corp.,
Powell asserts that
Reynolds
stands for the proposition that anything other than the difference in value between what was bargained for and what was re
*121
ceived constitutes consequential damages. We disagree with that characterization of Reynolds,
4
The application of the UCC measure of damages in
Reynolds
is understandable in light of the circumstances of the case: as the Fifth Circuit noted, the primary cause of Reynolds’s damages was the burning in the transformer (for which Reynolds could not recover due to limitations); the improper installation (for which Reynolds could recover) contributed to the damages only to the extent they could have been prevented by earlier discovery.
Id.
at 1076-77 and n. 6. The design defect, for which Reynolds could not recover, was a causal link that brought about Reynolds’s damages. Westinghouse’s improper installation of the detection system was one step removed.
See Reynolds,
The measure of damages used in Reynolds would not properly compensate HP under the circumstances of this case, where Powell’s breach of the contract and its warranties were the direct cause of HP’s damages. We hold that HP’s costs of repair to the unit that Powell serviced and destroyed are direct damages resulting from Powell’s breach.
2. Costs for Relating to Temporary Transformer: Damage Elements (d) & (e)
Powell suggests that all of HP’s damages constitute “loss of use” damages and are therefore consequential. While HP’s costs relating to the repair of transformer B are not loss of use damages, HP’s decision to install a temporary transformer and use it while transformer B was being repaired are lost use damages. Like lost profits, lost use damages are frequently, but not categorically, consequential in nature.
See Tennessee Gas Pipeline,
HP’s power substation is designed to run on a two-transformer system, but the evidence demonstrates that it can run with only one transformer for some period of time and that the ability to run on one transformer was a necessary part of Powell’s performance of its work under the contract pursuant to the parties’ agreed procedures for the work. We cannot conclude that Powell and HP may be “conclusively presumed to have foreseen” that Powell’s breach would necessitate the use of a temporary transformer.
See Arthur Andersen,
We overrule Powell’s first issue with respect to damage elements (a), (b), (c) and (f), and we sustain Powell’s first issue with respect to damages elements (d) and (e).
Attorney’s fees Under Section 38.001
Powell’s argument that HP cannot recover attorney’s fees under Section 38.001 of the Civil Practices and Remedies Code
*122
is predicated on Powell prevailing on its first issue in its entirety, such that HP recovers no damages. Because we conclude HP is entitled to recover some damages, we also conclude that attorney’s fees are authorized under Section 38.001.
5
Tex.Civ. Prac. & Rem.Code Ann. § 38.001(8) (West 2008);
see also Green Int’l, Inc. v. Solis,
We overrule Powell’s second issue.
Jury Charge
The trial court’s jury charge contained broad form liability questions for breach of contract and breach of warranty.
6
Powell argues that these broad form questions impermissibly commingled valid and invalid theories of liability.
See Crown Life Ins. Co. v. Casteel,
A. Standard of Review
We review a challenge to the trial court’s jury charge under an abuse of discretion standard.
Tex. Dep’t of Hum. Servs. v. E.B.,
If we determine that the jury charge was erroneous, we must then consider whether the error requires reversal.
See, e.g., Transcon. Ins. Co. v. Crump,
B. The Jury Charge Was Not Erroneous
A trial court errs by submitting to the jury theories of liability that are not legally viable — e.g., liability theories that have not been pled, are not supported by the legally sufficient evidence, or are not supported by operative law.
See
Tex.R.Civ. P. 277 (requiring that the trial court submit issues that are raised by the pleadings and the evidence);
Casteel,
1. Question 1: Breach of Contract
Powell argues that HP advanced eleven theories of contract liability at trial, reciting the eleven breaches listed in HP’s petition. Powell argues that some of these theories were valid and some were invalid. Powell points to evidence in the record of three alleged breaches other than the cross-phasing of the breakers: Powell’s failure to properly connect internal CT wires, to keep its work site clean, and to live up to its contractual obligations after transformer B failed.
HP responds that Powell’s argument inaccurately equates “theories of liability” with factual allegations, when the term is properly understood to relate to causes of action such as breach of contract or breach of warranty. HP asserts that the two liability questions submitted only a single theory of liability, each of which was supported by several factual bases. HP points out that the Supreme Court of Texas has “limited [its] holdings in
Casteel
and
Harris County
to submission of a broad-form question incorporating multiple theories of liability or multiple damage elements.”
Bed, Bath & Beyond, Inc. v. Urista,
We conclude that HP’s evidence relating to Powell’s failure to properly connect CT
*124
wires, keep its work site clean, and provide assistance after transformer B failed did not result in the submission of invalid theories of liability. In reaching this conclusion, we look to the distinction recognized by the Supreme Court of Texas in
Columbia Rio Grande Healthcare, L.P. v. Hawley,
In
Bush,
the medical center argued on appeal that the court improperly submitted invalid theories of liability because some of the specific acts of negligence pled by the plaintiff were not supported by evidence.
Bush,
In
Hawley,
the trial court submitted a broad-form jury question on negligence and included in the charge an instruction that the defendant-hospital acted “through its employees, agents, nurses and servants.” The trial court denied the hospital’s request that the jury be instructed not to consider the acts of a particular defendant-doctor, Dr. Valencia, in determining whether the hospital was negligent because Dr. Valencia was an independent contractor for whose conduct the hospital could not be held liable.
Hawley,
Comparing the issue presented in Haw-ley to the issue presented in Bush, the supreme court observed that in both cases, “negligence was the only theory of liability submitted.” Id. at 864. The court distinguished the two cases on the ground that the hospital in Hawley was complaining “because the charge affirmatively told the jury that the hospital acted through its employees, agents, nurses, and servants and allowed the jury to speculate whether Dr. Valencia was an agent of the hospital”; it was not complaining of “the failure to instruct the jury that it should not consider specific acts of negligence.” Id. The court then observed that, considering the question and the instruction together, the trial court’s charge “submitted four negligence questions,” one for each set of actors identified in the instruction. Id.
Here, Powell did not request an instruction that the jury not consider its failure to properly connect CT wires, keep its work site clean, and provide assistance after the transformer failed in determining whether it breached the contract. Because “Question 1” submitted only a single theory of liability and the trial court did not otherwise instruct the jury to consider erroneous matters, we conclude that the trial court did not err by submitting an invalid theory of liability in “Question 1.”
Cf. Bush,
2. Question 2: Breach of Warranty
The breach of warranty question proposed by Powell submitted breach of express warranty as a single jury finding, not segmented by particular factual basis or theories, but it included an instruction restating the express warranty provided under the parties’ contract. To the extent Powell argues that the trial court erred in refusing to include its breach of warranty instruction, Powell does not demonstrate how its proposed instruction would have prevented the jury from considering any improperly submitted theory of liability or why the instruction was otherwise necessary. Nor does Powell point to any evidence in the record that might have caused the jury to find a breach of warranty based on conduct and that would have been excluded under Powell’s proposed instruction. We conclude the trial court was within its discretion in declining to submit Powell’s proposed instruction.
See Bush,
Cross-Appeal on Amount of Damages and Fees Awarded
On cross-appeal, HP argues that the jury impermissibly reduced the amount of damages and attorney’s fees by fifteen percent, 7 under a comparative fault theory. HP argues that it established the amount of its damages and attorney’s fees as a matter of law, and the trial court should have disregarded the juries’ answers on these issues and rendered judgment notwithstanding the verdict for the full amounts proven. Powell responds that the jury awarded less damages than HP claimed because HP failed to establish that all of its damages resulted from Powell’s breach, and that the jury awarded less attorney’s fees than HP claimed because HP failed to prove that all of the fees sought were reasonable and necessary. We reverse and remand the issue of attorney’s fees in light of our reduction of the damages award and because the jury’s take-nothing award on appellate attorney’s fees is not supported by legally sufficient evidence.
A. Standard of Review
Powell raises a legal sufficiency challenge to the jury’s damage and attorneys’ fee findings. When a party attacks the legal sufficiency of an adverse finding on an issue on which it has the burden of proof, the party must demonstrate on appeal that the evidence establishes, as a matter of law, all vital facts in support of the issue.
Dow Chem. Co. v. Francis,
B. HP Did Not Conclusively Prove the Amount of Its Damages
HP contends that the proper amount of its damages award is conclusively established by the invoices it submitted. HP points to no other evidence as establishing its right to damages in the amount claimed. The invoices may establish that HP spent the amounts shown in the invoices relating to transporting and repairing transformer B, but they do not establish HP’s right to recover all of the amounts expended as a matter of law. As Powell notes, there was evidence from which the jury could have concluded that Powell did not proximately cause all of these costs. There is evidence in the record tending to show that transformer B was fifteen years old, had experienced pri- or faults, was not properly maintained, and had pre-existing damage or deterioration. There is also evidence in the record that the useful life of a transformer like transformer B is twenty to twenty-five years on average, as well as evidence that the repairs and replacement of parts in transformer B may have left the transformer a better condition than it had been before the failure.
The trier of fact is given broad discretion to award damages within the range of evidence presented at trial.
Duggan v. Marshall,
Here, the jury could reasonably have concluded that approximately fifteen percent of the repairs to the transformer was the result of pre-existing damage to the transformer or was attributable to preexisting deterioration in the value of the transformer. The jury also may have reasonably concluded that not all of the costs expended by HP were necessary to put HP in the position it would have been in but for Powell’s breach, based on the evidence that the replacement of certain of transformer B’s parts resulted in an im
*127
provement upon the pre-failure condition of the transformer.
Cf. Mesquite Elks Lodge No. 2404 v. Shaikh,
Thus, the range of evidence presented to the jury could reasonably allow it to find some but not all of the repair costs paid by HP were the proximate result of Powell’s breach. Because the jury’s award falls within this range, “[w]e are not permitted to disregard the jury’s damages award on the basis that the jury’s reasoning in arriving at its figure is unclear.”
Duggan,
C. HP Did Not Conclusively Prove the Amount of Its Attorney’s fees, But Established Its Right to Some Attorney’s fees
The jury awarded attorney’s fees of $163,526.24 for preparation and trial and $0 for an appeal to the court of appeals. HP argues that the trial court should have disregarded these findings and awarded $192,383.81 for preparation and trial and $50,000 for an appeal to the court of appeals because HP’s evidence conclusively proved these amounts as its reasonable and necessary attorney’s fees through the submission of bills and attorney testimony. Powell responds that it disputed the amount of fees requested by HP, that HP’s fee segregation evidence was “incredible on its face,” that HP’s own counsel admitted that the requested fees included amounts that would result in a double recovery if court costs were separately awarded, and that the reasonableness and necessity of the fees is a question of fact within the purview of the jury.
An award of attorney’s fees must be supported by evidence that the fees were both reasonable and necessary.
*128
See Stewart Title Guar. Co. v. Sterling,
1. Attorney’s Fees for Preparation and Trial
Here, HP’s bills and attorney testimony establish the amount HP paid its attorneys but do not conclusively establish that this amount was reasonable and necessary.
See Garcia,
Because we have meaningfully reduced the amount of HP’s damages on appeal, we must reverse the attorney’s fees award and remand for a determination of attorney’s fees.
See Barker v. Eckman,
2. Attorney’s fees for Appeal
For the same reasons, we conclude that HP has not established that the amount of such reasonable and necessary attorney’s fees on appeal is $50,000 as a matter of law. Because the jury determined that the amount HP was entitled to recover on its claims was less than that calculated by HP, the jury could also reasonably have determined that the value assigned by HP’s counsel to its services, at trial and on appeal, was too high in light of the results obtained.
See Smith,
Because HP did not prove the amount of its attorney’s fees on appeal as a matter of law, but the jury’s award of no attorney’s fees for appeal is not supported by legally sufficient evidence, we remand the issue of HP’s appellate attorney’s fees for new trial.
9
See Smith,
Conclusion
We reverse the trial court’s judgment with respect to the award of damages pur *130 suant to the jury findings on damage elements (d) and (e) and reform the judgment to award damages in the amount of $697,995.20 (the previous award of $876,810.61 minus $105,097.26 and $73,718.15) plus pre- and post-judgment interest at the rates stated in the judgment. We reverse the trial court’s judgment with respect to the award of attorney’s fees and remand for new trial on the amount of HP’s reasonable and necessary attorney’s fees at trial and on appeal. We affirm the trial court’s judgment in all other respects.
Notes
. The “Warranty” provisions of the contract provide:
IN NO EVENT WILL EITHER PARTY BE RESPONSIBLE TO THE OTHER FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF THIS WARRANTY. ...
The "Indemnification and Remedies” provisions of the contract provide:
NEITHER PARTY SHALL BE LIABLE FOR ANY CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT LIMITATION, LOST PROFITS AND UNLIQUIDATED INVENTORY), INDIRECT, SPECIAL OR PUNITIVE DAMAGES EVEN IF THE OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES....
. In
McKinney,
the Fourteenth Court of Appeals held that extra expenses incurred under a construction contract were direct damages because they were contemplated in a contract provision that required the defendant to reimburse the plaintiff for damage occurring dur
*118
ing work on project that were caused by negligence or fault of defendant or its agents.
McKinney & Moore, Inc. v. City of Longview,
No. 14-08-006280CV,
. Pursuant to its warranty, Powell promises in the contract to "pay for damages to other work” resulting from a breach of its warranty. Additionally, the contract contains provisions specifically identifying for which costs HP will reimburse Powell and for which costs it will not. Under these provisions HP must reimburse Powell for:
h. Fees for laboratory testing required by the Contract Documents, (if applicable), except those related to defective or nonconforming Work.
[[Image here]]
k. Costs of repairing or correcting work damaged or non-conforming Work executed by [Powell], Subcontractors or Suppliers, provided such damage or non-conforming Work was not caused by the negligence or failure to fulfill a specific responsibility of [Powell.]
HP will not reimburse Powell for:
f. Costs due to the negligence or failure to fulfill specific responsibility of [Powell], Subcontractors and suppliers or anyone di *120 rectly or indirectly employed by any of them or for whose acts any of them may be liable.
. We note that Texas law distinguishes between consequential damages at common law and consequential damages under the UCC, which governs contracts for the sale of goods.
Wolf Hollow I, L.P. v. El Paso Mktg., L.P.,
. As discussed below, we reverse and remand the jury's award of attorney’s fees on other grounds.
. Question 1 asked, "Did Powell fail to comply with the Contract?” The jury answered, "Yes.” Question 2 asked, "Did Powell fail to comply with an express warranty?” The jury answered, “Yes.”
. The fifteen percent reduction does not apply to the jury award for attorney’s fees on appeal, which was $0.
. This case is distinguishable from
Ragsdale v. Progressive Voters League,
. HP requested only that the Court reverse and render in its appellant's brief, but requested remand on the limited issue of attorney’s fees in its reply brief. At trial, HP preserved its right to request remand through a motion for new trial on this issue. Under these circumstances, we conclude that Rule 43.3 authorizes this Court to remand the issue of appellate attorney's fees for new trial. Tex.R.App. P. 43.3 (“When reversing a trial court judgment, the court must render the judgment that the trial court should have rendered, except when: (a) a remand is necessary for further proceedings or (b) the interests of justice require a remand for another trial.”);
see also Majeed v. Hussain,
No. 03-08-00679-CV,