The AIM Group, Inc. v. Larry Golden--Appeal from 189th District Court of Harris County

Opinion issued February 15, 2007

In The

Court of Appeals

For The

First District of Texas

NO. 01-05-00683-CV

__________

THE AIM GROUP, INC., Appellant

V.

LARRY GOLDEN, Appellee

On Appeal from the 189th District Court

Harris County, Texas

Trial Court Cause No. 03-CV-03449

MEMORANDUM OPINION

After a bench trial in this case involving overtime pay under the Fair Labor and Standards Act ("FLSA"), the trial court awarded appellee, Larry Golden, his overtime pay and attorney's fees. See 29 U.S.C.A. 207(a) (West 2005). In its sole point of error, appellant, The AIM Group, Inc. ("AIM"), contends that the trial court erred when it allowed testimony from Golden's attorney despite his failure to "disclose the general substance of the mental impressions and opinions of his expert on attorney's fee." We affirm.

Golden sued AIM, his employer, under the FLSA in an attempt to recover unpaid overtime wages. (1) Golden also sought damages for the attorney's fees that he incurred pursuing his claim. In response to AIM's pretrial request for disclosures concerning the attorney's fees, Golden responded that his attorney, Peter Costea,

may testify about the Plaintiff's attorney's labor and services in the preparation and litigation of this case, the necessity of same, and the reasonableness of the charges for his labor and services in this case. He may additionally testify that $185.00/hour is a reasonable and necessary fee for the Plaintiff's attorney's services and labor in this case.

Golden did not supplement this disclosure before trial.

At trial, Costea testified to his attorney's fees. Before he testified, AIM objected because of Golden's "failure or refusal to disclose" the general substance of the expert's mental impressions and his failure to produce all documents, reports, and data compilations, and materials prepared by Costea in anticipation of his testimony. The trial court overruled the objections, and Costea testified that he met with Golden, reviewed and summarized the depositions, and prepared the legal argument. Costea also testified that he has litigated over 50 FLSA cases throughout the past 14 years, in addition to preparing approximately 30 appeals. He stated that his hourly rate was $185 and that he had worked a total of 101 1/2 hours on Golden's case, totaling $18,777.50 in attorney's fees. On cross-examination, Costea admitted that, within 30 days prior to trial, Golden had not furnished AIM with an amended response to its request for disclosure that included the number of hours that Costea had worked on the case. See Tex. R. Civ. P. 193.5. AIM admitted into evidence Costea's summary of the work performed in preparation of the case.

AIM also sought attorney's fees, and, having disclosed his prior billing to Golden by way of supplemental responses, AIM's attorney, Douglas Boyer, testified to his overall experience as well as his services in the case. He stated that he charged $225 per hour for his work on the case and that he had expended 86 hours in preparation for trial, totaling $19,350--more than Golden sought.

The trial court awarded Golden $25,772.50 in overtime pay, $18,777.50 in attorney's fees incurred in the district court, and additional fees for appeal.

In its sole point of error, AIM asserts that the trial court erred in allowing Costea's expert testimony regarding his attorney's fees. Specifically, AIM asserts that, because Golden did not provide AIM with Costea's mental impressions and opinions and because Golden did not amend his original response to AIM's request for disclosure, the trial court erred in allowing Costea's testimony. AIM does not challenge the award of overtime pay to Golden.

Standard of Review

Whether to admit or exclude evidence is within the trial court's sound discretion. Nat'l Liab. & Fire Ins. Co. v. Allen, 15 S.W.3d 525, 527 (Tex. 2000). A trial court's exclusion of an expert who has not been properly designated can be overturned only upon a finding of abuse of discretion. Mentis v. Barnard, 870 S.W.2d 14, 16 (Tex. 1994). To determine whether a trial court abused its discretion, we must decide whether the trial court acted without reference to any guiding rules or principles. Garcia v. Martinez, 988 S.W.2d 219, 222 (Tex. 1999). The test is whether the trial court's action was arbitrary or unreasonable in light of all the circumstances of the case. Lewis v. W. Waste Indus., 950 S.W.2d 407, 410 (Tex. App.--Houston [1st Dist.] 1997, no writ).

A person seeking to reverse a judgment based on evidentiary error needs to prove that the error probably resulted in an improper judgment. McCraw v. Maris, 828 S.W.2d 756, 758 (Tex. 1992). Reversible error does not usually occur in connection with evidentiary rulings unless the appellant can demonstrate that the whole case turns on the particular evidence admitted or excluded. Benavides v. Cushman, 189 S.W.3d 875, 879 (Tex. App.--Houston [1st Dist.] 2006, no pet.). FLSA Attorney's Fees

AIM objected to the trial court's admission of Costea's testimony on the ground that Costea had not disclosed the general subject of his mental impressions and opinions with a brief summary of the basis for them, as required by the Texas Rules of Civil Procedure. Tex. R. Civ. P. 194.2(f)(3). Specifically, AIM contested the fact that it was not furnished with Costea's mental impressions as they related to the "Johnson factors," (2)

which are to be used in determining the reasonableness of attorney's fees. See Hensley v. Eckerhart, 461 U.S. 424, 430-33, 103 S. Ct. 1933, 1937-39 (1983) (noting that the standards set forth in Johnson "are generally applicable in all cases in which Congress has authorized an award of fees to a 'prevailing party'"). AIM further objected that Golden had not provided an amended response that included a summary of the hours that Costea spent on the case in response to AIM's request for disclosure. The trial court overruled the objections.

The relevant portion of the FLSA states, "The court in such action, shall, in addition to any judgment awarded to the plaintiff or plaintiffs, allow a reasonable attorney's fee to be paid by the defendant, and costs of the action." 29 U.S.C.A. 216(b) (West 1998). The language of the statute is mandatory; that is, a prevailing plaintiff must be awarded reasonable attorney's fees and costs in actions brought under the FLSA. See Purcell v. Seguin State Bank & Trust Co., 999 F.2d 950, 961 (5th Cir. 1993).

In determining the reasonableness of attorney's fees, the fact finder must be guided by a specific standard. This standard is substantially similar under both federal law and state law. See id. (setting out the federal standard); Arthur Andersen v. Perry Equip. Corp., 945 S.W.2d 812, 818 (Tex. 1997) (setting out the state standard and citing to Tex. Disciplinary R. Prof'l Conduct 1.04, reprinted in Tex. Gov't Code Ann., tit. 2, subtit. G app. A (Vernon 1998) (Tex. State Bar R. art. X, 9)).

However, because federal law provides a very specific framework for analyzing the reasonableness of attorney's fees under statutes like the FLSA, the federal framework must be followed in determining and reviewing the reasonableness of attorney's fees under section 216. See Hensley, 461 U.S. at 430-33, 103 S. Ct. at 1937-39; Guity v. C.C.I. Enter. Co., 54 S.W.3d 526, 528 (Tex. App.--Houston [1st Dist.] 2001, no pet.). In Hensley, the Court noted that the standards set forth in that opinion "are generally applicable in all cases in which Congress has authorized an award of fees to a 'prevailing party.'" Hensley, 461 U.S. at 433, 103 S. Ct. at 1939 n.7. Congress has mandated the award of attorney's fees to a prevailing party in FLSA claims. See 29 U.S.C.A. 216(b) (West 1998).

To calculate reasonable attorney's fees, the fact finder should multiply the number of hours worked by the attorney's hourly rate. Purcell, 999 F.2d at 961. Both the number of hours and the hourly rate must be reasonable. Id. The resulting amount is commonly referred to as the "lodestar" figure. After calculating the lodestar amount, "the district court can adjust the amount upward or downward to account for the well-established Johnson factors." Id. (citing Johnson, 488 F.2d at 717-19). If some of the factors are accounted for in the lodestar amount, they should not be considered when making adjustments. Shipes v. Trinity Indus., 987 F.2d 311, 320 (5th Cir. 1993).

In this case, the trial court found that AIM violated the FLSA and awarded Golden unpaid overtime wages. Pursuant to section 216(b) of the FLSA, the judgment also included reasonable and necessary attorney's fees. AIM argues that Texas Rule of Civil Procedure 193.6 required that Costea's testimony regarding attorney's fees be excluded. It asserts that the trial court abused its discretion in allowing Costea to testify and that his testimony was "harmful" because he had not timely informed AIM of the number of hours that he had worked on the case and had not replied to the request for disclosure with reference to the "Johnson factors." AIM asserts that these failures related to the substance of the testimony because Costea could have testified to a different number of hours for the case than the amount he actually worked.

Federal case law is illustrative and guides us when we examine expert testimony in FLSA cases. It is well established that, although a trial court may receive evidence relating to attorney's fees, it is not required to hear such evidence if it deems it unnecessary. See Montalvo v. Tower Life Bldg., 426 F.2d 1135, 1149-50 (5th Cir. 1970) (citing Day & Zimmerman, Inc. v. Reid, 168 F.2d 356, 361 (8th Cir. 1948)). Because a trial court has firsthand knowledge of the proceedings before it, that court is qualified to "place a value on [the attorney's] services without opinion evidence of an expert witness on the subject." Id. at 1150. Here, the trial court presided over the matter for over one year. The trial court held all the hearings, ruled on all motions, tried the case, and was familiar with the documents and evidence underlying the claims.

Furthermore, AIM's argument fails to show that the judgment turned on the testimony admitted. See Benavides, 189 S.W.3d at 879. Attorney's fees are automatically awarded to a prevailing plaintiff in a FLSA case for unpaid overtime wages. See Guity, 54 S.W.3d at 528. Therefore, Costea's testimony regarding attorney's fees was not "controlling on a material issue." See Mentis, 870 S.W.2d at 16. Although his disclosures may not have conformed with the Rules of Civil Procedure, AIM's case was not unfairly prejudiced by Golden's failure to timely amend the disclosures, and the trial court did not err in allowing Costea's testimony. This is evidenced by the fact that AIM's attorney, Boyer, testified about his own fees for this case, stating that he expended 86 hours in preparation for trial, which is comparable to Costea's 101 hours. Further, Boyer's fees, including the appeal, total $45,850, while Costea's fee total is considerably lower at $31,727.50. Also, AIM's cross-examination of Costea was not hindered by the fact that it was unaware of the hours Costea worked until the previous day. Accordingly, we hold that the trial court did not abuse its discretion in allowing Costea's expert testimony. We overrule AIM's sole point of error.

We affirm the judgment of the trial court.

George C. Hanks, Jr.

Justice

Panel consists of Justices Taft, Alcala, and Hanks.

1. Section 216(b) of the Fair Labor Standards Act gives state courts jurisdiction to hear cases involving suits for overtime pay. 29 U.S.C.A. 216(b) (West 2005).

2. The "Johnson factors" include: (1) the time and labor required; (2) the novelty and difficulty of the questions; (3) the level of skill required; (4) the effect on other employment by the attorney; (5) the customary fee; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8) the amount involved and the results obtained; (9) the experience, reputation, and ability of the attorney; (10) the "undesirability" of the case; (11) the nature and length of the attorney's relationship with the client; and (12) awards in similar cases. Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir. 1974).