The State of Texas; The City of Garland, Texas; and the Transit Authority of Dallas MTA, Texas, Appellants v. Kevin Buchanan, Appellee
NO. 03-18-00120-CV
TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
March 27, 2019
HONORABLE TIM SULAK, JUDGE PRESIDING
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 98TH JUDICIAL DISTRICT NO. D-1-GN-16-005181
A jury found that Appellants the State of Texas; the City of Garland, Texas; and the Transit Authority of Dallas MTA, Texas, (collectively, the State) were entitled to prevail on their respective state, municipal, and transit-authority sales-tax claims against appellee Kevin Buchanan. The trial court rendered a judgment per the jury‘s verdict. However, the trial court‘s judgment did not award the State any attorney‘s fees. The State appeals that portion of the judgment, arguing that an award is mandatory. See
BACKGROUND
The State filed a lawsuit against Buchanan for delinquent sales- and use-tax liability in his capacity as the court-appointed receiver for a pizza restaurant, Brooklyn‘s Firewheel, LLC. See
At the close of evidence, the trial court submitted questions to the jury including the following: “What is a reasonable fee, if any, for the necessary services of the State‘s attorney, stated in dollars and cents?” The jury answered “0” to the question. The jury also answered “No” to the following question: “Did the Defendant, Kevin Buchanan, conclusively establish that the Certificate of the Comptroller of Public Accounts for Brooklyn‘s Firewheel, LLC, for the tax period, February 1, 2016 through July 31, 2016, admitted as Plaintiff‘s Exhibit 1, is incorrect?” See
DISCUSSION
In its first issue, the State contends that the jury lacked discretion, as a matter of law, to find that the State did not incur any reasonable and necessary attorney‘s fees because the State, as the prevailing party, was entitled to its fees under section
Buchanan responds that the State failed to preserve this complaint because it did not object to submission of the jury question on the issue of attorney‘s fees, which read: “What is a reasonable fee, if any, for the necessary services of the State‘s attorney, stated in dollars and cents?” (Emphasis added.) Specifically, Buchanan contends that the question‘s use of the conditioning language “if any” afforded the jury discretion to refuse to award any attorney‘s fees and instructed the jury that a fee award was not mandatory; therefore, he continues, the State cannot complain
The availability of attorney‘s fees under a particular statute is a question of law for the court and, therefore, a “jury‘s finding about the amount of reasonable attorney‘s fees is immaterial to the ultimate legal issue of whether such fees are recoverable under [a particular statute.]” Holland v. Wal-Mart Stores, Inc., 1 S.W.3d 91, 94 (Tex. 1999) (holding that party did not waive its contention that attorney‘s fees were not available under particular statute by failing to object to submission of jury question). “A jury can determine the amount of attorney‘s fees whether or not they can be recovered under the theory of law submitted to the jury,” id., which is what occurred here. Furthermore, the State asserted its claim that an award of fees is mandatory in its motion to disregard and alternative motion for new trial, which gave the trial court ample opportunity to rule on the availability of fees before an erroneous judgment was rendered. Id.
The supreme court has determined that statutes such as the one at issue, providing that a party “may recover” attorney‘s fees, are not discretionary. See In re Bent, 487 S.W.3d 170, 184 (Tex. 2016) (recognizing that section
In its second issue, the State contends that the jury‘s finding of zero reasonable and necessary attorney‘s fees is not supported by factually sufficient evidence. See Dow Chem. Co. v. Francis, 46 S.W.3d 237, 242 (Tex. 2001) (per curiam) (noting that when party attacks factual sufficiency of finding on which it had burden of proof, appellate court must consider and weigh all
The State‘s attorney testified about many of the Arthur Andersen factors that a jury may consider in determining reasonable attorney‘s fees, and the jury was instructed on those factors. See Arthur Andersen & Co. v. Perry Equip. Corp., 945 S.W.2d 812, 818 (Tex. 1997). For example, the State‘s attorney explained that State attorneys spent 270 hours on the case but that he was seeking payment for only 190.25 of them, which were the hours that he personally spent on the case. He testified about his experience and explained that the case required greater skill than usual and involved “novel” and difficult issues due in part to its unusual “posture” and Buchanan‘s “zealous” defense of what should have been “a simple accounting matter” because Buchanan had filed all the relevant returns but had simply not paid the amounts due. He explained that most sales-tax-delinquency cases get resolved by default judgments and that the State did not request a jury trial—Buchanan did—because jury trials typically require more preparation and expenditure of time. He also testified that his hourly rate of $250 is based on the skill that is required to handle cases of this type in Travis County and is equivalent to what similarly experienced attorneys in the area would charge. He supported his testimony with admitted exhibits. “Texas courts consistently hold that [an] attorney‘s testimony about his experience, the total amount of fees, and the reasonableness of the fees charged is sufficient to support an award.” Jeff Kaiser, P.C. v. State, No. 03-15-00019-CV, 2016 WL 1639731, at *5 (Tex. App.—Austin Apr. 20, 2016, pet. denied) (mem. op.).
In rebuttal, Buchanan—a board-certified, personal-injury trial lawyer with about twenty-five years’ experience—testified about “what I think would be a reasonable attorney‘s fee in this case.” He opined that 270 hours “is ridiculous.” He explained that he thought the State‘s attorney had “overprepar[ed] this case. . . . spending hours and hours and hours that don‘t need to be spent preparing for trial.” He further opined that this is a “simple, simple case“—that if he was unable to negate the delinquency certificate, the State would “win.” Buchanan testified that he believed the most important factor to consider was the amount in controversy, which was about $25,000—“Period, the end. It‘s my opinion in this case, the fees, if any, against me should not exceed the amount the [State] recovered, $25,000 and change.”
Essentially, Buchanan opined that the State‘s attorneys spent too many hours on the case; however, he did not contest that the State‘s attorneys spent some amount of hours on the case or contend that their hourly rate was too high. More importantly, he did not affirmatively testify that no attorney‘s services were needed or that any services provided were of no value. As a factual matter, a zero award for attorney‘s fees is proper only if the evidence (1) failed to prove (a) that any attorney‘s services were provided, or (b) the value of the services provided; or (2) affirmatively showed that no attorney‘s services were needed or that any services provided were of no value. Recognition Commc‘ns, Inc. v. American Auto. Ass‘n, Inc., 154 S.W.3d 878, 891 (Tex. App.—Dallas 2005, pet. denied).
“While the jury could have rationally concluded that a reasonable and necessary fee was less than the amount sought, an award of no fees was improper in the absence of evidence affirmatively showing that no attorney‘s fees were needed or that any services provided were of no
CONCLUSION
We reverse the portion of the trial court‘s judgment awarding the State no attorney‘s fees and remand the issue of attorney‘s fees for a new trial. We affirm the remainder of the judgment.
Thomas J. Baker, Justice
Before Justices Goodwin, Baker, and Smith
Affirmed in Part; Reversed and Remanded in Part
Filed: March 27, 2019