Texas Judiciary Online - HTML Opinion

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Opinion issued May=20 31, 2007

In = The

Court of=20 Appeals

For=20 The

First=20 District of Texas

NO. 01-05-00836-CV

__________

TRAVELERS=20 INDEMNITY COMPANY

OF = CONNECTICUT, Appellant

JESUS ESPINOSA, Appellee

On = Appeal=20 from the 61st District Court

Harris=20 County, Texas

Trial Court=20 Cause No. 2003-24700

MEMORANDUM=20 OPINION

In this=20 workers compensation case, Travelers Indemnity Company of = Connecticut=20 ("Travelers"), appellant, complains of the award of attorney's = fees after=20 its unsuccessful challenge of a Texas Workers Compensation = Commission=20 ("TWCC") ruling. In four issues, Travelers alleges that (1) the = trial=20 court lacked jurisdiction to order payment of attorney's fees in a = post-trial proceeding absent pleadings to support such relief, (2) = the=20 evidence was legally and factually insufficient to support the = award of=20 attorney's fees, and (3) the trial court erred in failing to = condition the=20 award of appellate attorney's fees on an unsuccessful appeal. We = reform=20 the judgment and, as reformed, affirm.

Factual and Procedural Background

Jesus = Espinosa, a=20 machinist, was injured in the course of his employment. After a = contested=20 case hearing, the TWCC ruled in his favor and found that he had = suffered a=20 compensable injury. Travelers, Espinosa's employer's insurance = carrier,=20 appealed to a TWCC appeals panel, and the panel affirmed the = hearing=20 officer's decision. Travelers then appealed to the district court. = In his=20 answer, Espinosa made a general denial and a plea for attorney's = fees. The=20 jury found in Espinosa's favor, and Espinosa filed a post-trial = motion for=20 approval of attorney's fees. The motion was supported by an = affidavit from=20 an attorney on the case as well as "time and expense details = reports." The=20 trial court signed an order approving the attorney's fees and = later=20 awarded them in a final judgment. Travelers challenges only the = award of=20 attorney's fees.

Jurisdiction

In issue=20 one, Travelers argues = that the=20 trial court lacked jurisdiction to order payment of attorney's = fees in a=20 post-trial proceeding absent pleadings to support such relief.=20 Specifically, Travelers = contends=20 that Espinosa failed to allege sufficient facts to support a claim = for=20 attorney's fees and the claim should have been in the form of a=20 counterclaim. Espinosa contends that no pleadings are necessary = because=20 the Labor Code makes an award for attorney's fees mandatory for = the=20 prevailing party.

In Texas, a=20 pleading is sufficient if it gives fair and adequate notice to the = opposing party, sufficient for that party to prepare a defense. = See=20 Greene v. Young, 174 S.W.3d 291, 300 (Tex. App.--Houston [1st = Dist.]=20 2005, pet. denied). Here, Travelers's lawsuit for judicial review = is part=20 of the comprehensive and exclusive statutory scheme established in = the=20 Act. See Tex. Lab. Code Ann. =A7 408.001(a); Payne v. = Galen=20 Hosp. Corp., 4 S.W.3d 312, 315 (Tex. App.--Houston [1st = Dist.] 1999),=20 aff'd, 28 S.W.3d 15 (Tex. 2000).

Travelers's=20 lawsuit is the appeal of a decision by a TWCC appeals panel, which = is=20 authorized by Chapter 410, Subchapter G of the Texas Labor Code. = Tex. Lab.=20 Code Ann. =A7=A7 410.301-.308 (Vernon 2006). The Act provides = that, in a suit=20 for "judicial review under Subchapter G, Chapter 410, of a final = decision=20 of the appeals panel regarding compensability . . . or the amount = of,=20 income . . . benefits," an insurance carrier "is liable for = reasonable and=20 necessary attorney's fees . . . as a result of the insurance = carrier's=20 appeal if the claimant prevails on an issue on which judicial = review is=20 sought by the insurance carrier . . . ." Id. =A7 = 408.221(c).=20 Otherwise, the claimant's attorney's fees are to be paid from the=20 claimant's recovery. Id. =A7 408.221(b). In either = circumstance,=20 "[a]n attorney's fee . . . for representing a claimant before the = . . .=20 court under this subtitle must be approved by the . . . = court."=20 Id. =A7 408.221(a).

Espinosa's=20 pleading specifically requests the trial court to approve his = reasonable=20 attorney's fees. Espinosa's answer to Travelers's lawsuit=20 stated,

It was=20 necessary for [Espinosa] to retain [counsel] . . . to represent = [him]=20 before the Commission and the court. [Espinosa] asks the court to = approve=20 [his] reasonable attorney's fees and to authorize [him] to pay his = attorney the amount shown to be reasonable.

This=20 language follows section 408.221(a), requiring the trial court's = approval.=20 See id. Because Espinosa requested approval of his fees = as=20 required by the Act and Travelers's suit is governed by the Act, = we=20 conclude that Travelers had fair notice that Espinosa was seeking=20 attorney's fees. See Dean Foods Co. v. Anderson, 178 = S.W.3d 449,=20 453 (Tex. App.--Amarillo 2005, pet. denied) (concluding that, even = though=20 request for attorney's fees was only general in nature, it was = reasonable=20 to construe that claimant was seeking attorney's fees incurred in=20 defending against carrier's suit for judicial review). We hold = that=20 Espinosa's request for attorney's fees in his answer to = Travelers's=20 lawsuit seeking to reverse the TWCC's finding was sufficient to = place=20 Travelers on notice that he was seeking attorney's fees under the = Labor=20 Code.

We overrule=20 issue one.

Sufficiency

In its=20 second and third issues, Travelers argues that the evidence was = legally=20 and factually insufficient to support the award of attorney's = fees.=20 Travelers contends that, because Espinosa "offered no evidence or=20 testimony during [the] 14-minute" hearing on attorney's fees, the = trial=20 court committed reversible error.

The=20 determination of reasonable attorney's fees is a question for the = trier of=20 fact. Stewart Title Guar. Co. v. Sterling, 822 S.W.2d 1, = 12 (Tex.=20 1991). The amount of a fee award rests in the sound discretion of = the=20 trial court, and its judgment will not be reversed on appeal = absent a=20 clear abuse of discretion. Even though the appropriate standard of = review=20 is abuse of discretion, we may nevertheless review a fee award for = sufficiency of the evidence. Id. at 11. This hybrid = analysis=20 requires a two-pronged inquiry: (1) Did the trial court have = sufficient=20 information upon which to exercise its discretion; and (2) if so, = did the=20 trial court err in its application of discretion? Id. The = traditional sufficiency review comes into play with regard to the = first=20 question. Id. We then proceed to determine whether, based = on the=20 elicited evidence, the trial court made a reasonable decision.=20 Id. Stated inversely, we must conclude that the trial = court's=20 decision was neither arbitrary nor unreasonable. Id. In = City=20 of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005), the supreme = court=20 re-examined the standard of review for legal-sufficiency = challenges. "The=20 final test for legal sufficiency," concluded the court, "must = always be=20 whether the evidence at trial would enable reasonable and = fair-minded=20 people to reach the verdict under review." Id. at 827.=20 "[L]egal-sufficiency review in the proper light must credit = favorable=20 evidence if reasonable jurors could, and disregard contrary = evidence=20 unless reasonable jurors could not." Id. If the evidence = "would=20 enable reasonable and fair-minded people to differ in their = conclusions,=20 then jurors," and here, the trial court, as trier of fact, "must = be=20 allowed to do so." See id. As long as the evidence falls = within=20 the zone of reasonable disagreement, "[a] reviewing court cannot=20 substitute its judgment for that of the trier-of-fact." = Id. at=20 822. Although the reviewing court must "consider evidence in the = light=20 most favorable to the judgment, and indulge every reasonable = inference=20 that would support it[,] . . . if the evidence allows for only one = inference, neither jurors nor the reviewing court may disregard = it."=20 Id.

In=20 determining factual sufficiency, this Court weighs all the = evidence, both=20 supporting and conflicting, and may set the finding aside only if = it is so=20 contrary to the overwhelming weight of the evidence as to be = clearly wrong=20 and manifestly unjust. Cain v. Bain, 709 S.W.2d 175, 176 = (Tex.=20 1986); Comm'n of Contracts v. Arriba Ltd., 882 S.W.2d = 576, 582=20 (Tex. App.--Houston [1st Dist.] 1994, no writ). In an appeal from = a bench=20 trial, we may not invade the fact-finding role of the trial court, = which=20 alone determines the credibility of the witnesses, the weight to = give=20 their testimony, and whether to accept or reject all or any part = of that=20 testimony. Nordstrom v. Nordstrom, 965 S.W.2d 575, 580-81 = (Tex.=20 App.--Houston [1st Dist.] 1997, pet denied).

An=20 attorney's fee award under section 408.221 must be based on = written=20 evidence presented to the court. Tex. Lab. Code Ann. =A7 = 408.221(b);=20 Transcont'l Ins. Co. v. Smith, 135 S.W.3d 831, 838 (Tex.=20 App.--San Antonio 2004, no pet.). In approving an attorney's fee, = the=20 court shall consider (1) the time and labor required, (2) the = novelty and=20 difficulty of the questions involved, (3) the skill required to = perform=20 the legal services properly, (4) the fee customarily charged in = the=20 locality for similar legal services, (5) the amount involved in = the=20 controversy, (6) the benefits to the claimant that the attorney is = responsible for securing, and (7) the experience and ability of = the=20 attorney performing the services. Tex. Lab. Code Ann. =A7 = 408.221(d) (Vernon=20 2006).

The record=20 shows that Espinosa retained the Barnes Law Firm to pursue the = workers=20 compensation action. Attached to Espinosa's Motion for Approval of = Attorney's Fees and Expenses was an affidavit from Peggy M. = Campbell, an=20 associate with the firm. Campbell testified that the amount of = attorney's=20 fees expended in the case was $48,737.50 and $4,457.73 in expenses = were=20 incurred, for a total of $53,195.23. She further testified that = the amount=20 charged was necessary to pursue the case. Also attached to the = motion were=20 "time and expense details reports" from May 21, 2003 to May 31, = 2005. The=20 statements detail the professional services rendered, which = included=20 telephone conferences, preparation of legal documents, court = appearances,=20 legal research, and trial preparation for four attorneys in the = firm.=20 These reports show the services performed, the time spent on the = matter,=20 and the hourly rate charged for the services. Lastly, Espinosa = attached an=20 article from the Texas Lawyer entitled, "Charging More in 2004," = which=20 explained that "billing rates [were] up slightly at Texas firms."=20

Campbell's=20 affidavit, coupled with the supporting documentation, is legally=20 sufficient evidence to establish these factors and support the = trial=20 court's fee award. Accordingly, we hold that the evidence is = legally=20 sufficient to support the order awarding attorney's fees and=20 expenses.

In issue=20 three, Travelers contends that the evidence was factually = insufficient to=20 support the award of attorney's fees that were "excessive, = duplicative and=20 opportunistic."

In response=20 to Espinosa's Motion for Approval of Attorney's Fees and Expenses, = Travelers filed an objection in which it complained that = Espinosa's=20 proposed attorney's fees were excessive and duplicative. Travelers = did not=20 present any evidence in support of its objection to the award of=20 attorney's fees.

Reviewing=20 the record in light of the factors a trial court may consider in=20 determining whether attorney's fees are reasonable, we conclude = that the=20 trial court was presented with factually sufficient evidence upon = which to=20 exercise its discretion. We overrule issues two and = three.

Appellate Attorney's Fees

In its=20 fourth issue, Travelers contends, and Espinosa agrees, that the = trial=20 court erred in failing to condition the award of appellate = attorney's fees=20 upon an unsuccessful appeal.

A = trial=20 court may not penalize a party for taking a successful appeal. = Sipco=20 Serv's Marine v. Wyatt Field Serv., 857 S.W.2d 602, 607 (Tex. = App.--Houston [1st Dist.] 1993, no writ). An unconditional award = of an=20 appellant's appellate attorney's fees is improper. Id. at = 607-08.=20 Therefore, the trial court must condition the award of appellate=20 attorney's fees upon the appellant's unsuccessful appeal. = Id. at=20 607. However, an unconditional award of appellate attorney's fees = does not=20 require reversal; instead, we may modify a trial court's judgment = to make=20 the award of appellate attorney's fees contingent upon the = receiving=20 party's success on appeal. Pao v. Brays Vill. E. Homeowners=20 Ass'n, 905 S.W.2d 35, 38-39 (Tex. App.--Houston [1st Dist.] = 1995, no=20 writ).
We sustain = Travelers' fourth issue and reform the judgment.

Conclusion

We reform=20 the judgment, and, as reformed, affirm the judgment of the trial=20 court.

George C.=20 Hanks, Jr.

Justice

Panel = consists of=20 Justices Nuchia, Hanks, and Bland.

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