In=20 The
For=20 The
DONNA H. =
VERNON,=20
Appellant CAC =
DISTRIBUTORS,=20
INC. f/k/a TIME ENERGY SYSTEMS SOUTHWEST, INC.,=20
Appellee
On =
Appeal from the=20
234th District Court Harris =
County,=20
Texas Trial =
Court Cause=20
No. 2003-18698
Appellant, Donna H. Vernon, =
appeals from=20
a judgment rendered in her favor against CAC Distributors, Inc. =
f/k/a Time=20
Energy Systems Southwest, appellees, for claims under the Fair =
Labor=20
Standards Act ("FLSA"). See 29 U.S.C.S. =A7=A7 201, 216 =
(LexisNexis=20
2007). This appeal concerns only the trial court's rulings on =
attorney's=20
fees and prejudgment interest; neither party challenges the amount =
awarded=20
as compensation for unpaid overtime wages. In three issues, Vernon =
asserts=20
that the trial court erred (1) by denying full recovery of =
reasonable and=20
necessary attorney's fees; (2) by admitting into evidence the =
parties'=20
settlement negotiations or, alternatively, by disallowing Vernon's =
settlement proposals as evidence while admitting into evidence =
CAC's=20
settlement proposals; and (3) by denying prejudgment interest. We =
conclude=20
that the trial court did not abuse its discretion by awarding =
attorney's=20
fees in an amount less than that requested by Vernon's attorney; =
by=20
admitting evidence in the bench trial about settlement =
negotiations for=20
the limited purpose of determining the reasonableness of the =
number of=20
hours worked by Vernon's attorney; or by denying prejudgment =
interest. We=20
also conclude that Vernon has not shown how she was harmed by the=20
exclusion of the documentary settlement evidence that she offered =
because=20
Vernon's attorney testified to the same matters that were in the =
excluded=20
documents. We affirm. Background From May to =
September=20
2001, Vernon worked for CAC as a non-exempt clerical employee =
earning=20
$11.50 per hour. Vernon claimed that when she worked more than 40 =
hours=20
per week, she was not fully compensated for some of the additional =
hours.=20
Vernon filed suit against CAC pursuant to section 216 of the FLSA =
claiming=20
she was owed $1,897.50 in overtime wages. See 29 U.S.C.S. =
=A7=20
216. In addition=20
to her claim for overtime wages, Vernon sought attorney's fees. =
Vernon's=20
counsel testified that he spent a total of 90 hours working on the =
case,=20
that a reasonable rate for this type of work in the Houston =
community is=20
$185 per hour, and that the "lodestar" amount determined from =
multiplying=20
these two numbers was $16,650. Although it did not dispute that =
$185 per=20
hour was a reasonable rate, CAC disputed the reasonableness of the =
number=20
of hours worked by Vernon's attorney, asserting that Vernon's =
attorney=20
behaved unreasonably in rejecting pretrial settlement offers by =
CAC that=20
offered reasonable compensation to Vernon. The documents admitted into =
evidence=20
identified as Defendant's Exhibits 97-101 and Plaintiff's Exhibit =
8 show=20
that CAC made repeated settlement offers to Vernon.
Although Vernon requested an =
award for=20
prejudgment interest, the trial court's final judgment did not =
include an=20
award for prejudgment interest. The failure to include prejudgment =
interest in the final judgment was the result of the trial court's =
order=20
granting CAC's motion to modify the trial court's prior judgment =
that had=20
included an award of $682 for prejudgment interest. See =
Tex. R.=20
Civ. P. 329b(g). In her=20
first issue, Vernon asserts that the trial court erred by awarding =
an=20
amount less than was testified to by her attorney because (A) =
"Courts have=20
generally allowed full recovery of attorney's fees in FLSA cases," =
(B) no=20
expert testimony was presented in opposition to Vernon's =
attorney's=20
testimony, and (C) the evidence is factually insufficient to =
support the=20
trial court's finding of fact that 30 hours was reasonable and=20
necessary. The FLSA=20
mandates that reasonable and necessary attorney's fees and court =
costs be=20
awarded a prevailing plaintiff in an FLSA action. See 29 =
U.S.C.S.=20
=A7 216(b) ( A. General Recovery of =
Attorney's=20
Fees Vernon=20
asserts that the trial court was required to award the amount =
testified to=20
by Vernon's attorney because "[c]ourts have generally allowed full =
recovery of attorney's fees in FLSA cases." B.=20
Expert Testimony Vernon also=20
contends that the trial court was required to award the full =
amount of=20
attorney's fees requested because CAC did not present contrary =
expert=20
testimony. Although Vernon's attorney was the only witness who =
testified=20
on the matter of attorney's fees and his testimony was not =
contradicted by=20
an opposing expert, the trial court could have disregarded that =
testimony=20
because the attorney was an interested witness on the matter of =
the amount=20
of attorney's fees to be awarded by the trial court. See =
Ragsdale v.=20
Progressive Voters League, 801 S.W.2d 880, 882 (Tex. 1990) =
(citing=20
Cochran v. Wool Growers Central Storage Co., 140 Tex. =
184, 166=20
S.W.2d 904, 908 (1942) ("It is the general rule that the testimony =
of an=20
interested witness, such as a party to the suit, though not =
contradicted,=20
does no more than raise a fact issue to be determined by the=20
[fact-finder].")). Moreover, CAC presented evidence contrary to =
Vernon's=20
attorney's testimony that 90 hours of work were necessary to =
present the=20
case by admitting documents that showed reasonable settlement =
offers that=20
would have resulted in the need for fewer hours of work by the =
attorney,=20
and thus, the evidence by Vernon's attorney was not uncontradicted =
or=20
unimpeached. We note further that Vernon's attorney's testimony =
contained=20
inconsistencies concerning the time he spent on the case and was =
not=20
supported by written documentation for some of his claimed =
hours. C.=20
Factual Sufficiency of Evidence to Support Trial Court's=20
Findings Vernon=20
contends that the trial court erred because it "did not make any =
findings=20
of fact or conclusions of law as to why Plaintiff's requested =
attorney's=20
fees were not reasonable and necessary." Vernon further contends =
that the=20
district court's conclusion in its Findings of Fact and =
Conclusions of Law=20
that "30 hours of work by Plaintiff's counsel were reasonable and=20
necessary through trial and that $185.00/hour is a reasonable and=20
necessary hourly rate for Plaintiff's counsel" was error because =
it was=20
"not supported by the evidence and it was so contrary to the =
overwhelming=20
weight of the evidence as to be clearly wrong and unjust." See =
generally Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986) =
(cited by=20
Vernon for standard of review for factual insufficiency=20
claims). 1.=20
No Findings of Fact and Conclusions of Law Vernon=20
provides no argument and cites to no authority indicating how the =
court=20
erred in not including Findings of Fact or Conclusions of Law to =
explain=20
"why" it determined that 30 hours of work by Plaintiff's counsel =
were=20
reasonable and necessary through trial. The rules of appellate =
procedure=20
require an appellant's brief to contain a "clear and concise =
argument for=20
the contentions made, with appropriate citations to authorities =
and to the=20
record." See Tex. R. App. P. 38.1(h); Bradt v. =
West, 892=20
S.W.2d 56, 69 (Tex. App.--Houston [1st Dist.] 1994, writ denied) =
(holding=20
that fact that brief contains authorities on conspiracy is not =
alone=20
sufficient to comprise "argument" necessary to keep from waiving =
cause of=20
action on appeal as both authorities and argument are required); =
Green=20
v. Kaposta, 152 S.W.3d 839, 841 (Tex. App.--Dallas 2005, no =
pet.)=20
(stating that "appellant's failure to present sufficient argument =
or=20
authority to support an issue waives that issue on appeal."). This =
sub-issue is therefore waived. See Bradt, 892 S.W.2d at=20
69. 2.=20
Finding not Supported by the Evidence Vernon=20
challenges the factual sufficiency of the evidence supporting the =
trial=20
court's finding that "30 hours of work by Plaintiff's counsel were =
reasonable and necessary through trial and that $185.00/hour is a=20
reasonable and necessary hourly rate for plaintiff's counsel." Vernon's=20
attorney's testimony was not uncontested, and the evidence could =
lead=20
reasonable minds to form different conclusions regarding =
reasonableness.=20
Cross-examination by CAC and evidence in the record indicates that =
Vernon=20
rejected CAC's first three settlement offers made within a =
two-week period=20
for $3,000, $5,000, and $5,500. Thirty hours at $185.00 per hour, =
a total=20
fee of $5,550, corresponds with Vernon's attorney's estimate of =
time=20
worked on the case before CAC's first offer of settlement, =
admitted for=20
the purpose of drawing "a line, or a mark in the time line, at =
which point=20
[CAC] believed any attorney's fees beyond that were unreasonable." =
By=20
awarding attorney's fees in an amount incurred only prior to the=20
settlement offers, the court implicitly found to be unreasonable =
any time=20
worked on the case beyond the offers. Moreover, as previously =
noted, the=20
trial court was within its discretion to find not credible =
Vernon's=20
attorney's testimony concerning the number of hours he claimed to =
have=20
worked. Vernon's attorney's testimony included what he called a =
guess,=20
failed to include written documentation of some of the claimed =
hours, and=20
contained inconsistencies. See In re W.E.R., 669 S.W.2d =
at=20
717. We cannot overturn the finding when sufficient =
evidence to=20
cause reasonable minds to disagree exists, as it does here. The =
finding is=20
not contrary to the great weight and preponderance of the =
evidence, and=20
thus is factually sufficient. See Cain, 709 S.W.2d at=20
176. We hold=20
that the trial court's finding of fact is supported by factually=20
sufficient evidence. In her=20
second issue, Vernon contends that the trial court erred by =
allowing=20
settlement proposals into evidence over her objections that the =
documents=20
were not admissible due to lack of relevancy and to their =
prohibition by=20
Rule 408 of the Rules of Evidence. A.=20
Relevancy Relevant=20
evidence is defined by Rule 401 of the Texas Rules of Evidence as=20
"evidence having any tendency to make the existence of any fact =
that is of=20
consequence to the determination of the action more probable or =
less=20
probable than it would be without the evidence." Tex. R. Evid. =
401. CAC's=20
evidence relating to settlement proposals was offered as evidence =
that the=20
90 hours spent on the case by Vernon's counsel was not reasonable. =
Specifically, CAC asserted that its settlement offers were more =
than=20
generous, as they were above the "cap" of liquidated damages =
imposed by=20
the FLSA. B.=20
Rule 408 Rule 408=20
states that an offer to settle or compromise a claim is not =
admissible to=20
show liability, the validity of the claim, or the amount of the =
claim.=20
Haney v. Purcell =
Co., 796=20
S.W.2d 782, 788 (Tex. App.--Houston [1st Dist.] 1990, writ =
denied). It=20
does not require exclusion when the evidence is offered for =
another=20
purpose. See Tex. R. Evid. 408. The evidence was offered =
for the=20
"exclusive purpose," according to CAC, of aiding the court in =
determining=20
the reasonableness of Vernon's attorney fees. We cannot conclude =
that the=20
trial court abused its discretion by determining that Rule 408 =
does not=20
prohibit the admission of the settlement negotiations on the =
limited=20
matter of the reasonableness of the number of hours worked by the=20
attorney. See id. C. =
Conclusion We hold that the trial court =
did not=20
abuse its discretion by concluding that CAC's evidence of =
settlement=20
negotiations was relevant to determining the amount of attorney =
fees that=20
were reasonable and necessary. Within her=20
second issue, Vernon alternatively contends that the trial court =
erred by=20
refusing to admit her documentary evidence concerning =
negotiations.=20
A Vernon has=20
not explained in her brief to this court how the trial court's =
failure to=20
admit the documents that contained her settlement offers probably =
caused=20
the rendition of an improper judgment. See Melendez, 998 =
S.W.2d=20
at 274 (citing McCraw v. Maris, 828 S.W.2d 756, 757-58 =
(Tex.=20
1992)). The record shows that the trial court sustained CAC's =
objections=20
on the grounds of relevancy to Vernon's Exhibits 9, 10, 11, and =
12, and=20
excluded those exhibits from evidence, but included the exhibits =
as part=20
of the appellate record. The record also shows that Vernon's =
attorney=20
testified without objection to the same facts that were included =
within=20
the excluded exhibits. We overrule=20
Vernon's second issue. In her=20
third issue, Vernon asserts that the trial court erred by denying=20
prejudgment interest. We review a trial court's decision to award =
or deny=20
prejudgment interest for abuse of discretion. See Purcell =
Constr. Inc.=20
v. Welch, 17 S.W.3d 398, 402 (Tex. App.--Houston [1st Dist.] =
2000, no=20
pet.) (citing Marsh v. Marsh, 949 S.W.2d 734, 744 (Tex.=20
App.--Houston [14th Dist.]1997, no writ)). The FLSA=20
permits the recovery of liquidated damages in an amount equal to =
the owed=20
overtime pay. See 29 U.S.C.S. =A7 216(a). Prejudgment =
interest is=20
already included in an award for liquidated damages. See=20
Reeves v. Int'l. Tel. & Tel. Corp., 705 F.2d 750, 751 =
(5th=20
Cir. 1983) (citing Brooklyn Savings Bank v. O'Neil, 324 =
U.S. 697,=20
715-16, 65 S. Ct. 895, 906 (1945) (stating that in suit under =
section 216=20
of the FLSA, interest is not recoverable as part of judgment =
because=20
liquidated damages compensate for delay in payment of sums due)). =
Here,=20
the trial court's award includes liquidated damages in an amount =
equal to=20
the owed overtime pay, thereby effectively including compensation =
for=20
prejudgment interest. See id. Vernon=20
contends that, except for the Fifth Circuit, "all other federal =
courts of=20
appeals that have entertained this issue have ruled that =
prejudgment=20
interest is available in an FLSA action." We affirm. Elsa Alcala Justice Panel consists of Justices =
Alcala, Hanks,=20
and Price. 1. The remainder=20
of the awards by the trial court concerning attorney's fees for an =
appeal=20
to the Court of Appeals, a petition and appeal to the Texas =
Supreme Court,=20
post-judgment interest, and costs of court have not been =
challenged on=20
this appeal.=20
2. The Johnson factors include: (1) =
time and=20
labor required; (2) the novelty and difficulty of the questions; =
(3) the=20
level of skill required; (4) the effect on other employment by the =
attorney; (5) the customary fee; (6) whether the fee is fixed or=20
contingent; (7) time limitations imposed by the client or the=20
circumstances; (8) the amount involved and the results obtained; =
(9) the=20
experience, reputation, and ability of the attorney; (10) the=20
"undesirability" of the case; (11) the nature and length of the =
attorney's=20
relationship with the client; and (12) awards in similar cases.=20
Johnson v. Ga Highway Express, Inc., 488 F.2d 714, 717-19 =
(5th=20
Cir. 1974). If some of the factors are accounted for in the =
lodestar=20
amount, they should not be considered when making adjustments. =
Shipes=20
v. Trinity Indus., 987 F.2d 311, 320 (5th Cir. 1993).=20
3. Vernon cites several examples where a =
court has=20
awarded all requested attorney's fees. See Burnley v. =
Short, 730=20
F.2d 136 (4th Cir. 1984); Bonnette v. California Health and =
Welfare=20
Agency, 704 F.2d 1465 (9th Cir. 1983); Hodgson v. Miller =
Brewing=20
Co., 457 F.2d 221 (7th Cir. 1972); Soler v. G & U, =
Inc.,=20
801 F. Supp. 1056 (S.D.N.Y. 1992).=20
4. For=20
example, Vernon's attorney testified as follows: (1) He=20
testified that he had worked 90 hours to prepare the case through =
trial.=20
When asked to produce time sheets, he provided Exhibit 200, which =
totals=20
approximately 86.5 hours of work since March 10, 2004. When asked =
if the=20
hours on the sheet would add up to approximately 90, he said "it =
may be=20
more, it may be less. . . . I have taken out the amount of time =
that I=20
spent on the reinstatement and the amount of time that I spent on =
the=20
collective action." (2) He said=20
he did not have records with him regarding time spent on the case =
prior to=20
March 10, 2004, but, "guessed" he spent 30 hours prior to August =
5, 2003,=20
conferring with his client, filing the petition, filing a set of=20
interrogatories, filing requests for production and for =
disclosure, and=20
responding to a request for disclosure. He added 4-5 hours between =
that=20
date and March 10, 2004 for responding to discovery requests. =
Vernon's=20
attorney had no time sheets with him to support his oral testimony =
regarding his guess of 30 hours.=20
5. Having determined that the trial court =
could have=20
rejected Vernon's attorney's testimony under an assessment of =
credibility,=20
we do not reach the alternative assertion whether the trial court =
could=20
have properly taken judicial notice of the reasonable and =
customary=20
attorney's fees in determining the lodestar amount.=20
6. The trial court labeled this statement a =
conclusion=20
of law. However, reasonableness of attorney's fees is properly an =
issue=20
for the fact-finder, and thus a finding of fact. See Guity v. =
C.C.I.=20
Enter. Co., 54 S.W.3d 526, 528 (Tex. App.--Houston [1st =
Dist.] 2001,=20
no pet.).=20
7. Though the reporter's record here does =
not include=20
the entire trial, it is complete regarding the topic of attorney's =
fees,=20
the sole issue we are called upon to review in the trial court's =
findings=20
of fact and conclusions of law.=20
8. On appeal, appellant has not challenged =
the trial=20
court's award by asserting that it abused its discretion in =
determining=20
the award of attorney's fees. We note that the federal courts =
generally=20
review the amount of an award for attorney's fees under section =
216(b) of=20
the FLSA for an abuse of discretion. Hedrick v. Hercules, =
Inc.,=20
658 F.2d 1088, 1097 (5th Cir. 1981) (citing Copper Liquor, =
Inc. v.=20
Adolph Coors Co., 624 F.2d 575, 581 (5th Cir. 1980) (stating =
that=20
attorney's fees under section 216(b) of the FLSA "must be upheld =
unless a=20
clear abuse of discretion is found"); Johnson 9. "Any employer who violates the provisions =
of=20
section 206 or section 207 of this title shall be liable to the =
employee=20
or employees affected in the amount of their unpaid minimum wages, =
or=20
their unpaid overtime compensation, as the case may be, and in an=20
additional equal amount as liquidated damages." 29 U.S.C.S. =A7 =
216(a).=20
10. Vernon also asserts that the settlement =
offers=20
were not admissible under the FLSA because no Johnson =
factor=20
calls for the use of settlement negotiations in adjusting the =
lodestar=20
amount up or down. However, the court did not use the =
Johnson=20
factors to change the lodestar amount. See Johnson, 488 =
F.2d at=20
717-19.=20
11. 12. 13. The Honorable Frank C. Price, former =
Justice,=20
Court of Appeals, First District of Texas at Houston, sitting by=20
assignment.