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      <DIV class=3DSection1>
      <P class=3DMsoNormal style=3D"TEXT-ALIGN: center" =
align=3Dcenter><B><SPAN=20
      style=3D"FONT-SIZE: 18pt">IN THE SUPREME COURT OF =
TEXAS</SPAN></B></P>
      <P class=3DMsoNormal style=3D"TEXT-ALIGN: center" =
align=3Dcenter>&nbsp;</P>
      <P class=3DMsoNormal style=3D"TEXT-ALIGN: center" =
align=3Dcenter><SPAN=20
      style=3D"FONT-FAMILY: 'Courier =
New'">&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#95=
52;&#9552;&#9552;</SPAN></P>
      <P class=3DMsoNormal style=3D"TEXT-ALIGN: center" =
align=3Dcenter><SPAN=20
      style=3D"TEXT-TRANSFORM: uppercase">No. 06-0212</SPAN></P>
      <P class=3DMsoNormal style=3D"TEXT-ALIGN: center" =
align=3Dcenter><SPAN=20
      style=3D"FONT-FAMILY: 'Courier =
New'">&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#95=
52;&#9552;&#9552;</SPAN></P>
      <P class=3DMsoNormal style=3D"TEXT-ALIGN: center" =
align=3Dcenter><SPAN=20
      style=3D"FONT-SIZE: 14pt; TEXT-TRANSFORM: =
uppercase"></SPAN>&nbsp;</P>
      <P class=3DMsoNormal style=3D"TEXT-ALIGN: center" =
align=3Dcenter><SPAN=20
      style=3D"FONT-SIZE: 14pt; TEXT-TRANSFORM: uppercase">Jack N. =
Varner and=20
      Joyce L. Varner, Petitioners</SPAN></P>
      <P class=3DMsoNormal style=3D"TEXT-ALIGN: center" =
align=3Dcenter>&nbsp;</P>
      <P class=3DMsoNormal style=3D"TEXT-ALIGN: center" =
align=3Dcenter><SPAN=20
      style=3D"FONT-SIZE: 9.5pt">v.</SPAN></P>
      <P class=3DMsoNormal style=3D"TEXT-ALIGN: center" =
align=3Dcenter>&nbsp;</P>
      <P class=3DMsoNormal style=3D"TEXT-ALIGN: center" =
align=3Dcenter><SPAN=20
      style=3D"FONT-SIZE: 14pt; TEXT-TRANSFORM: uppercase">Jose L. =
Cardenas and=20
      Gloria Cardenas, Respondents</SPAN></P>
      <P class=3DMsoNormal style=3D"TEXT-ALIGN: center" =
align=3Dcenter>&nbsp;</P>
      <P class=3DMsoNormal style=3D"TEXT-ALIGN: center" =
align=3Dcenter><SPAN=20
      style=3D"FONT-FAMILY: 'Courier =
New'">&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#95=
52;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;=
&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9=
552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552=
;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#=
9552;</SPAN></P>
      <P class=3DMsoNormal style=3D"TEXT-ALIGN: center" =
align=3Dcenter><SPAN=20
      style=3D"TEXT-TRANSFORM: uppercase">On Petition for Review from=20
      the</SPAN></P>
      <P class=3DMsoNormal style=3D"TEXT-ALIGN: center" =
align=3Dcenter><SPAN=20
      style=3D"TEXT-TRANSFORM: uppercase">Court of Appeals for the =
Seventh=20
      District of Texas</SPAN></P>
      <P class=3DMsoNormal style=3D"TEXT-ALIGN: center" =
align=3Dcenter><SPAN=20
      style=3D"FONT-FAMILY: 'Courier =
New'">&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#95=
52;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;=
&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9=
552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552=
;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#=
9552;</SPAN></P>
      <P class=3DMsoNormal style=3D"TEXT-ALIGN: center" =
align=3Dcenter>&nbsp;</P>
      <P class=3DMsoNormal style=3D"TEXT-ALIGN: center" =
align=3Dcenter><B>PER=20
      CURIAM</B></P>
      <P class=3DMsoNormal style=3D"TEXT-ALIGN: center" =
align=3Dcenter>&nbsp;</P>
      <P class=3DMsoNormal style=3D"TEXT-ALIGN: justify"><A=20
      name=3DQuickMark></A>&nbsp;</P>
      <P class=3DMsoNormal=20
      style=3D"TEXT-INDENT: 0.5in; LINE-HEIGHT: 200%; TEXT-ALIGN: =
justify">We=20
      recently held in <I>Tony Gullo Motors I, L.P. v. Chapa</I> that a=20
      prevailing party must segregate recoverable from unrecoverable =
attorney=92s=20
      fees in all cases. ___ S.W.3d ___, ___ (Tex. 2006). The court of =
appeals=20
      here correctly reversed and remanded for segregation; but as it =
defined=20
      recoverable fees too narrowly, we modify its judgment.</P>
      <P class=3DMsoNormal=20
      style=3D"TEXT-INDENT: 0.5in; LINE-HEIGHT: 200%; TEXT-ALIGN: =
justify">The=20
      Varners sold a ranch to the Cardenases in December 1997 in return =
for cash=20
      and a promissory note. The note provided for ten annual =
installments due=20
      each December. The Cardenases paid the first installment in =
December 1998,=20
      but no others. In response to the Varners=92 suit on the note, =
they alleged=20
      the ranch was 180 acres less than represented. Both parties added =
claims=20
      against the title insurer and its agents, which the trial court =
severed=20
      out. </P></DIV><SPAN=20
      style=3D"FONT-SIZE: 12pt; LINE-HEIGHT: 200%; FONT-FAMILY: 'Times =
New Roman'"><BR=20
      style=3D"PAGE-BREAK-BEFORE: auto" clear=3Dall></SPAN>
      <DIV class=3DSection2>
      <P class=3DMsoNormal=20
      style=3D"TEXT-INDENT: 0.5in; LINE-HEIGHT: 200%; TEXT-ALIGN: =
justify">After a=20
      bench trial, the trial court granted judgment for the Varners, but =
reduced=20
      the balance on the note to reflect a shortfall in acreage. The =
court of=20
      appeals reversed, granting the Varners the full balance because =
the=20
      Cardenases never pleaded mistake or requested reformation of the =
deed.=20
      <I>See </I>182 S.W.3d 380, 382-83. Neither party appeals that =
ruling.</P>
      <P class=3DMsoNormal=20
      style=3D"TEXT-INDENT: 0.5in; LINE-HEIGHT: 200%; TEXT-ALIGN: =
justify">The=20
      trial court also awarded the Varners $40,500 in attorney=92s fees =
for trial.=20
      The court of appeals reversed because the Varners had failed to =
segregate=20
      fees incurred in their suit on the note from fees incurred (1) =
pursuing=20
      claims against the title insurer, or (2) defending against the =
Cardenases=92=20
      counterclaim. <I>Id</I>. at 383-84. </P>
      <P class=3DMsoNormal=20
      style=3D"TEXT-INDENT: 0.5in; LINE-HEIGHT: 200%; TEXT-ALIGN: =
justify">In=20
      <I>Chapa</I>, we reestablished the rule that attorney=92s fees are =

      recoverable only if necessary to recover on a contract or =
statutory claim=20
      allowing them, and eliminated the exception for fees incurred =
solely on=20
      separate but arguably intertwined claims. ___ S.W.3d at ___. In =
this case,=20
      we agree with the court of appeals that fees incurred pursuing the =
title=20
      insurer cannot be collected from the Cardenases =97 suing third =
parties was=20
      not necessary for the Varners to collect on their note.</P>
      <P class=3DMsoNormal=20
      style=3D"TEXT-INDENT: 0.5in; LINE-HEIGHT: 200%; TEXT-ALIGN: =
justify">But we=20
      disagree that fees defending against the Cardenases=92 =
counterclaim must be=20
      segregated too. By asserting a shortfall in acreage as a defense =
and=20
      counterclaim, the Cardenases sought to reduce the amount collected =
on the=20
      note; to collect the full amount, the Varners had to overcome this =

      defense. As their attorney=92s efforts to that effect were =
necessary to=20
      recover on their contract, they are recoverable. <I>See id</I>. at =
___;=20
      <SPAN style=3D"TEXT-TRANSFORM: uppercase">Tex. Civ. Prac. &amp; =
Rem. Code=20
      </SPAN>=A7 38.001(8).</P></DIV><SPAN=20
      style=3D"FONT-SIZE: 12pt; LINE-HEIGHT: 200%; FONT-FAMILY: 'Times =
New Roman'"><BR=20
      style=3D"PAGE-BREAK-BEFORE: auto" clear=3Dall></SPAN>
      <DIV class=3DSection3>
      <P class=3DMsoNormal=20
      style=3D"TEXT-INDENT: 0.5in; LINE-HEIGHT: 200%; TEXT-ALIGN: =
justify">The=20
      Varners raise two additional issues. First, the trial court denied =
any=20
      attorney=92s fees for post-judgment foreclosure or appeal, and the =
court of=20
      appeals affirmed because no evidence was offered regarding a =
reasonable=20
      fee for those services. <I>See </I>182 S.W.3d at 383. The Varners =
cite no=20
      such evidence, but ask us to change Texas procedure to allow =
post-judgment=20
      fees to be determined after appeal by remand to the trial court. =
We=20
      decline the invitation to allow two trials on attorney=92s fees =
when one=20
      will do. <I>See Int=92l Sec. Life Ins. Co. v. Spray</I>, 468 =
S.W.2d 347, 349=20
      (Tex. 1971) (requiring proof of appellate fees in initial =
trial).</P>
      <P class=3DMsoNormal=20
      style=3D"TEXT-INDENT: 0.5in; LINE-HEIGHT: 200%; TEXT-ALIGN: =
justify">Second,=20
      the court of appeals reversed the trial court=92s assessment of =
prejudgment=20
      interest on the entire note balance beginning December 15, 1998. =
<I>See=20
      </I>182 S.W.3d at 384-85. As the note did not waive notices =
regarding=20
      acceleration, interest ran on unpaid installments only until =
acceleration=20
      occurred. <I>See</I><I> Holy Cross Church of God in Christ v. =
Wolf</I>, 44=20
      S.W.3d 562, 566 (Tex. 2001). The Varners concede the judgment was=20
      erroneous because the Cardenases did not default in 1998, but =
argue we=20
      should change =931998=94 to =931999=94 as a clerical error. While =
they make a=20
      persuasive case that acceleration itself was uncontested, they =
point to no=20
      pleading, evidence, or stipulation as to when acceleration =
occurred. Thus,=20
      we cannot determine as a matter of law when interest began to run =
on the=20
      entire note rather than just unpaid installments. </P>
      <P class=3DMsoNormal=20
      style=3D"TEXT-INDENT: 0.5in; LINE-HEIGHT: 200%; TEXT-ALIGN: =
justify">Accordingly,=20
      without hearing oral argument, we modify the court of appeals=92 =
judgment to=20
      the extent it required segregation of fees the Varners incurred =
defending=20
      against the Cardenases=92 counterclaim, and as modified affirm. =
<I>See=20
      </I><SPAN style=3D"TEXT-TRANSFORM: uppercase">Tex. R. App. =
P</SPAN>.=20
      59.1.</P>
      <P class=3DMsoNormal=20
      style=3D"LINE-HEIGHT: 200%; TEXT-ALIGN: justify">&nbsp;</P>
      <P class=3DMsoNormal=20
      style=3D"LINE-HEIGHT: 200%; TEXT-ALIGN: justify"><B></B>&nbsp;</P>
      <P class=3DMsoNormal=20
      style=3D"LINE-HEIGHT: 200%; TEXT-ALIGN: justify"><B>OPINION =
DELIVERED:</B>=20
      March 2, 2007</P>
      <P class=3DMsoNormal=20
      style=3D"LINE-HEIGHT: 200%; TEXT-ALIGN: justify">&nbsp;</P>
      <P class=3DMsoNormal=20
      style=3D"LINE-HEIGHT: 200%; TEXT-ALIGN: justify">&nbsp;</P>
      <P class=3DMsoNormal=20
      style=3D"LINE-HEIGHT: 200%; TEXT-ALIGN: justify">&nbsp;</P>
      <P class=3DMsoNormal=20
      style=3D"LINE-HEIGHT: 200%; TEXT-ALIGN: =
justify">&nbsp;</P></DIV></TD></TR></TBODY></TABLE></BODY></HTML>

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sans-serif
}
.buttonTanUnused {
	PADDING-RIGHT: 1pt; PADDING-LEFT: 1pt; FONT-WEIGHT: normal; FONT-SIZE: =
9pt; PADDING-BOTTOM: 1pt; MARGIN: 1pt; COLOR: #576a9d; PADDING-TOP: 1pt; =
BACKGROUND-COLOR: #fff5d7; font-face: Tahoma, Arial, Helvetica, =
sans-serif
}
.TextLargeBlue {
	FONT-WEIGHT: bold; FONT-SIZE: 12pt; COLOR: #000099; LINE-HEIGHT: =
normal; FONT-STYLE: normal; FONT-FAMILY: Tahoma, Arial, Helvetica, =
sans-serif; TEXT-ALIGN: left
}
.DocketHeaderTitle {
	FONT-WEIGHT: bold; FONT-SIZE: 14pt; COLOR: black; LINE-HEIGHT: normal; =
FONT-FAMILY: Tahoma, Arial, ' Helvetica', sans-serif; TEXT-ALIGN: center
}
.TextLargeBlack {
	FONT-WEIGHT: bold; FONT-SIZE: 11pt; COLOR: black; LINE-HEIGHT: normal; =
FONT-STYLE: normal; FONT-FAMILY: Tahoma, Arial, Helvetica, sans-serif; =
TEXT-ALIGN: left
}
.TextLargeBlackcenter {
	FONT-WEIGHT: bold; FONT-SIZE: 11pt; COLOR: black; LINE-HEIGHT: normal; =
FONT-STYLE: normal; FONT-FAMILY: Tahoma, Arial, Helvetica, sans-serif; =
TEXT-ALIGN: center
}
.TextBlue {
	FONT-WEIGHT: normal; FONT-SIZE: 10pt; COLOR: #000099; LINE-HEIGHT: =
normal; FONT-FAMILY: Tahoma, Arial, Helvetica, sans-serif
}
A.TextBlue {
	FONT-WEIGHT: normal; FONT-SIZE: 10pt; COLOR: #000099; LINE-HEIGHT: =
normal; FONT-FAMILY: Tahoma, Arial, Helvetica, sans-serif; =
TEXT-DECORATION: none
}
.TextRed {
	FONT-WEIGHT: normal; FONT-SIZE: 12pt; COLOR: red; LINE-HEIGHT: normal; =
FONT-FAMILY: Tahoma, Arial, Helvetica, sans-serif
}
.TextHidenGray {
	FONT-SIZE: 0pt; COLOR: #ebebe1; LINE-HEIGHT: normal; FONT-FAMILY: =
Tahoma, Arial, Helvetica, sans-serif; TEXT-ALIGN: left
}
.Time {
	FONT-WEIGHT: bold; FONT-SIZE: 10px; COLOR: red; LINE-HEIGHT: 4em; =
FONT-FAMILY: Arial, Helvetica, sans-serif; TEXT-ALIGN: center
}

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