In most cases, Plaintiff proves his attorney’s fees by offering expert testimony. Failure to timely designate Plaintiff’s attorney as an expert witness may result in exclusion of the expert attorney fee testimony unless the party can show good cause or lack of unfair surprise. Usually, the party’s trial attorney is qualified the give expert testimony, but an attorney who has not worked on the case may testify, if that attorney establishes that they are knowledgeable about the case and work involved and testifies that they reviewed the file including pleadings, discovery, time sheets, and discuss the case with the trial attorney. A recent Dallas Court of Appeals opinion on this subject is Arthur Gallagher v. Dieterich (Oct. 2008). In Gallagher, the Dallas Court noted that evidence of each of the Anderson factors is not required to support the award of attorney’s fees, and the expert is not required to have personal knowledge of the matters about which the attorney testifies. In this case, the attorney testified that he reviewed the former attorney’s file, his level of experience, the type of work he did not the case, the number of hours worked and the billing rate and testified that the fees were reasonable and necessary. The appellate court concluded that that testimony was sufficient to support the attorney’s fees award.
Also useful is what’s called the Lode Star calculation, under which the determination of what constitutes reasonable attorney’s fees is a two-step process:
- The court determines the number of hours spent and the hourly rate and multiplies them.
- Then the Lode Star figure can be adjusted upward or downward, using the Johnson or Anderson factors.
Importantly, when a prevailing Plaintiff seeks attorney’s fees under Chapter 38, attorney’s fees are mandatory. The Texas Supreme Court has held that in a suit on sworn account, an award of no attorney’s fees is improper. In Smith v. Patrick above, the Supreme Court of Texas said that if an award is proper under sec. 38.001(8), the court has no discretion to not award attorney’s fes. A mandatory fee award is also mandatory under certain insurance code actions, property code actions, the Texas DTPA, the Probate Code, and under the Texas Debt Collection Act. Under the Debt Collection Act, a finding that Plaintiff’s suit was brought in bad faith or for the purpose of harassment, attorney’s fees for the Defendant are mandatory. Awards are discretionary, however, under the Declaratory Judgment Act, suits affecting a parent-child relationship, motor vehicle claims under the Property Code and other. Pre-Judgment interest is not allowed on attorney’s fees. Usually the award should be to the party, not directly to the attorney. The fees award should assess fees against the party, not against that party’s attorney.
As a defense to payment of fees, Defendant is not liable for Plaintiff’s attorney’s fees if, after Plaintiff presented its claim, Defendant timely tendered payment for the just amount owed but Plaintiff refused to accept it. Fees are also not recoverable if Plaintiff made an excessive demand and Defendant must affirmatively plead and prove that Plaintiff’s demand was excessive and must request and obtain findings on the essential elements of an excessive demand.
There is no requirement that the demand for payment be made prior to the time suit is filed see Palestine Water, above.
Attorney’s fees are also recoverable under theories of equity, known as the common-fund doctrine, or the attorney’s fees as damages theory. Under the common-fund doctrine, those who receive the benefits of a lawsuit should bear the fair share of the expenses. When a few succeed in securing a benefit for the group, the entire group should then share the cost of securing the benefit. Under the attorney’s fees as damages theory, Plaintiff may recovery attorney’s fees as actual damages event thought there is not statutory or contractual basis for recovery such as malicious prosecution cases, or legal malpractice cases.
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*The foregoing is not intended to provide specific legal advice, but instead only as a generalized discussion
Sam Emerick has over 35 years
experience in Commercial Collections Law,
Factoring Litigation and Wills, Trusts & Probate