Texastek Company Ltd. v. Dan Maitran--Appeal from Co Civil Ct at Law No 1 of Harris County

Affirmed and Memorandum Opinion filed November 3, 2005

Affirmedand Memorandum Opinion filed November 3, 2005.

In The

Fourteenth Court of Appeals

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NO. 14-04-01150-CV

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TEXASTEK COMPANY, LTD., Appellant

V.

DAN MAITRAN, Appellee

On Appeal from the County Civil Court at Law No. 1

Harris County, Texas

Trial Court Cause No. 788,388

M E M O R A N D U M O P I N I O N

In this case involving claims of breach of contract and violations of the Deceptive Trade Practices Act (ADTPA@),[1] the property management company, appellant Texastek Company, Ltd., challenges only the award of attorney=s fees to its former tenant, appellee Dan Maitran. Concluding the fee was not excessive, we affirm.

Factual and Procedural Background

Beginning in 1997, Texastek, a property management partnership comprised of Clement H.S. Chang and his wife, leased space in a shopping center to Maitran. In 2000, Chang filed a lawsuit for Maitran=s eviction and obtained a writ of possession and judgment against Maitran in the amount of $2,445.23 for past due rent, late charges, plumbing costs, and costs of suit.

Chang and Maitran then entered into a second three-year lease agreement under which Chang, as trustee/landlord, agreed to release the prior judgment as fully and finally paid provided Maitran timely paid the rent. Under the lease, Maitran, as Afurther rental,@ agreed each month to pay one-twelfth of his pro-rata share of the property taxes. He also agreed to pay an additional water bill when the monthly bill for the entire shopping center exceeded $150. Finally, Maitran posted a new security deposit of $750. The lease expired on September 30, 2003.

During the course of the second lease, disagreements arose regarding the amount Maitran owed for property taxes. In February 2003, Maitran sued Texastek alleging breach of the lease, as well as violations of the Texas Property Code and the DTPA. Maitran specifically alleged Texastek had overcharged and incorrectly calculated Maitran=s pro-rata share of the common area maintenance and property taxes. Maitran alleged an unspecified amount of economic damages and mental anguish damages and prayed for treble damages under the DTPA. He also sought attorney=s fees under the DTPA and Texas Civil Practice and Remedies Code section 38.001.[2]

On September 4, 2003, Chang notified Maitran that deficiencies for the 2001 and 2002 property taxes were being applied against Maitran=s security deposit. Chang further informed Maitran the remaining portion of the security deposit Awill pay for [the] 2003 deficiency property tax to be known in October, 2003.@

On September 25, 2003, five days before the lease expired, Chang sent Maitran a statement indicating Maitran owed $8,374.76 for water use. Chang demanded payment by September 30, 2003.

In October 2003, Texastek counterclaimed against Maitran, alleging breach of the lease contract. In an amended counterclaim, Texastek subsequently prayed for $8347.76 in damages and Aat least@ $5,000 in attorney=s fees.

In December 2003, while the present case was pending, Chang filed an application for writ of garnishment based on the previous judgment against Maitran on the breach of contract action arising from the first lease. Chang alleged Maitran still owed $1,605.23 from the previous judgment, despite the release agreement in the second lease.

The case was tried to a jury, which found both parties breached the lease agreement, Texastek failed to return the security deposit, and Texastek engaged in a false, misleading, or deceptive act or practice. The jury found $644.08 in damages for Maitran and noted the following on the verdict form (jury=s notes bolded):

Amount overcharged for pro rata share of taxes 0

Amount overcharged for pro rata share of water bills 0

Amount seized for application for writ of garnishment 19408

Amount for the security deposit 45000

The jury found $600.00 in damages for Texastek and noted the following on the verdict form (jury=s notes bolded):

Amount for pro rata share of taxes taken out of security deposit

Amount for pro rata share of water bills 60000

Finally, the jury found $8,500 was a reasonable fee for Maitran=s attorney for preparation and trial. It found zero dollars as a reasonable fee for appeal to the court of appeals and appeal to the supreme court.

Texastek filed a motion for judgment notwithstanding the verdict on the issue of attorney=s fees, arguing Maitran did not qualify as a prevailing party because he received a net gain of only $44.08 in damages. The trial court rendered judgment on the verdict, and Texastek then filed a motion for new trial, arguing, inter alia, the trial court Aabused its discretion in awarding attorney=s fees to Plaintiff in the sum of Eight Thousand Five Hundred Dollars ($8,500.00) when the jury found plaintiff's damages to be only Six Hundred Forty four Dollars and Eight Cents ($644.08).@ The motion was overruled by operation of law.[3]

Discussion

In its first point of error, Texastek contends the trial court erred in failing to grant its JNOV motion and entering judgment in favor of Maitran for attorney=s fees. In its second point of error, Texastek contends the trial court abused its discretion by awarding Maitran $8,500 in attorney=s fees when the jury found Maitran=s damages were only $ 644.08. Texastek does not discuss these issues separately and does not renew its trial court JNOV argument that Maitran was not entitled to any attorney fees because he was not the Aprevailing party.@[4] Instead, the gravamen of Texastek=s appellate argument is that the attorney=s fee award is excessive given Maitran=s net recovery of only $44.08.

A party prevailing on a DTPA claim is entitled to Areasonable and necessary@ attorney=s fees. Tex. Bus. & Com. Code Ann. ' 17.50(d) (Vernon 2002). Similarly, under Texas Civil Practice and Remedies Code section 38.001, a prevailing party is entitled to Areasonable@ attorney=s fees. Tex. Civ. Prac. & Rem. Code Ann. ' 38.001 (Vernon 1997).

The reasonableness of attorney fees is generally a question of fact for the jury=s determination. Bocquet v. Herring, 972 S.W.2d 19, 21 (Tex. 1998); Manon v. Tejas Toyota, Inc., 162 S.W.3d 743, 751 (Tex. App.CHouston [14th Dist.] 2005, no pet.). Attorney=s fees must be reasonable relative to the amount in controversy, but one does not determine reasonableness by the application of a mechanical formula. See Star Houston, Inc. v. Kundak, 843 S.W.2d 294, 299 (Tex. App.CHouston [14th Dist.] 1992, no writ). Moreover, the amount in controversy, or Aamount in dispute,@ takes into account the amount of any counterclaim, rather than only the amount of the claim or the net recovery. See Houston Lighting & Power Co. v. Russo Props., Inc., 710 S.W.2d 711, 715 (Tex. App.CHouston [1st Dist.] 1986, no writ) (looking at counterclaim as well as claim); see also Building Concepts, Inc., v. Duncan, 667 S.W.2d 897, 904B05 (Tex. App.CHouston [14th Dist.] 1992, no writ) (holding fee not excessive, although plaintiffs did not have a net recovery).

In reviewing the reasonableness of attorney=s fees, an appellate court looks to the entire record and considers the testimony, amount in controversy, nature of the case, and our common knowledge and experience as lawyers and judges. See Star Houston, Inc., 843 S.W.2d at 299. We examine all the evidence in the record to determine whether sufficient evidence supports the award, remitting only if some portion is so factually insufficient or so against the great weight and preponderance of the evidence as to be manifestly unjust. See id. (citing Pope v. Moore, 711 S.W.2d 622, 624 (Tex. 1986)).

Although Maitran pleaded mental anguish damages as well as economic damages, he did not in his pleadings specify the dollar amount he was seeking. Also, the opening statements and closing arguments are not part of the record. Texastek, however, prayed for $8,347.76 in damages and Aat least@ $5,000 in attorney=s fees. There was testimony indicating Chang believed Maitran owed either approximately $594.00 ($650.00 minus $56.00 garnished from Maitran=s bank account) or $299.02 in unpaid property taxes.

By the time of trial, Maitran had paid his first attorney $2,500 and his trial attorney, James Overstreet, $4,000. Overstreet testified he was familiar with the usual, ordinary, and customary charges for similar services rendered in a case like the present case. In his opinion, $200 per hour was a usual, ordinary, and customary charge for a case like this. Chang, in fact testified he agreed to pay his attorney $200 per hour and added, AI think it should be more.@

According to Overstreet, the present case involved both discovery and mandated mediation. Although Overstreet did not testify about the total hours he or Maitran=s first attorney expended on the case, Overstreet testified he had reviewed the first attorney=s file, and found her fee of $2,500 was reasonable. At $200 per hour, Overstreet=s bill of $4,000 would have represented twenty hours of work. Overstreet estimated an additional ten hours for trial, for a total of $8,500 in attorney=s fees through trial. Texastek did not introduce any evidence on attorney=s fees, and, in its cross-examination of Overstreet, did not challenge the reasonableness of the fee.[5]

Having considered the amount in controversy, the uncontroverted testimony $200.00 per hour constituted a reasonable fee for the type of work, the number of total hours implicitly expended at such a fee, and the nature of the case, we conclude the jury=s award of $8,500 was not excessive. Accordingly, we overrule Texastek=s two points of error.

Conclusion

Having overruled Texastek=s two points of error, we affirm the judgment of the trial court.

/s/ John S. Anderson

Justice

Judgment rendered and Memorandum Opinion filed November 3, 2005.

Panel consists of Chief Justice Hedges and Justices Anderson and Mirabal.[6]

[1] See Tex. Bus. & Com. Code Ann. '' 17.46, .50 (Vernon 2002 & Supp. 2004).

[2] Tex. Civ. Prac. & Rem. Code Ann. ' 38.001 (Vernon 1997).

[3] See Tex. R. Civ. P. 329b(c).

[4] In McKinley v. Drozd, the supreme court held a net recovery is not necessary to support an award of attorney=s fees under either the predecessor of Texas Business and Commerce Code section 17.50 (DTPA) or the predecessor of Texas Civil Practice and Remedies Code section 38.001. 685 S.W.2d 7, 9, 11 (Tex. 1985).

[5] Texastek=s cross-examination was limited to reviewing the amounts charged, eliciting the authority for the attorney=s fees, and eliciting the observation a party had to prevail in order to be entitled to fees.

[6] Senior Justice Margaret Garner Mirabal sitting by assignment.