Houston Court of Appeals Rules on Issue of Segregation of Attorneys Fees
In a memorandum opinion in October 2022, the Houston 14th Court of Appeals re-affirms the standards for proving attorneys fees in Texas litigation where some claims are entitled to an award of attorneys fees and other claims are not. The court stated as follows:
“In Texas, each party generally must pay its own attorney’s fees unless a statute or contract authorizes fee-shifting. Rohrmoos Venture v. UTSW DVA Healthcare, LLP, 578 S.W.3d 469, 483–84 (Tex. 2019). Here, the UDJA provides for discretionary fee-shifting. See Tex. Civ. Prac. & Rem. Code Ann. § 37.009. When fee-shifting is authorized, the factfinder must determine the reasonable hours worked multiplied by a reasonable hourly rate. Rohrmoos, 578 S.W.3d at 498. We presume this base lodestar calculation is the reasonable and necessary amount of attorney’s fees to be shifted to the opposing party, so long as the amount is supported by sufficient evidence. Id. at 499. Sufficient evidence includes evidence of: “(1) particular services performed; (2) who performed those services; (3) approximately when the services were performed; (4) the reasonable amount of time required to perform the services; and (5) the reasonable hourly rate for each person performing such services.” Id. at 498.
The fee claimant bears the burden of proving the reasonableness of the amount awarded. Id. at 484. If the opposing party wants to reduce the amount of attorney’s fees awarded, that party must provide specific evidence to overcome the presumption of reasonableness. Id. at 501.
Because attorney’s fees are recoverable only when provided for by statute or the parties’ contract, a fee claimant must segregate attorney’s fees that are recoverable from those that are not. Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 310, 313–14 (Tex. 2006). When “discrete legal services” that advance both a recoverable and unrecoverable claim are intertwined, they need not be segregated. Id. at 313–14. When segregation is required, attorneys do not have to keep separate time records for each claim. Id. at 314. Rather, an attorney’s opinion that a certain percentage of the total time was spent on the claim for which fees are recoverable will suffice. Id.
The need to segregate attorney’s fees is a question of law, and the extent to which certain claims can or cannot be segregated is a mixed question of law and fact. Id. at 312–13. When a fee claimant fails to properly segregate attorney’s fees, we may remand the issue to the trial court for reconsideration. Kinsel v. Lindsey, 526 S.W.3d 411, 428 (Tex. 2017).
Read the opinion by clicking here: Lederer v. Lederer.