Enterprising Gals of Texas, L.L.C. D/B/A Wheel Repair Solutions v. Angelica Sprehe, Ryan Sprehe, and ARS Wheel Repair, Inc. ( 2018 )

COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH
NO. 02-17-00063-CV
ENTERPRISING GALS OF TEXAS, APPELLANT
L.L.C. D/B/A WHEEL REPAIR
SOLUTIONS
V.
ANGELICA SPREHE, RYAN APPELLEES
SPREHE, AND ARS WHEEL
REPAIR, INC.
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FROM THE 442ND DISTRICT COURT OF DENTON COUNTY
TRIAL COURT NO. 14-05411-393
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MEMORANDUM OPINION1
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Appellant Enterprising Gals of Texas, L.L.C. d/b/a Wheel Repair Solutions
(WRS) appeals from the take-nothing judgment the trial court rendered in favor of
appellees Angelica Sprehe, Ryan Sprehe, and ARS Wheel Repair, Inc. (ARS).
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See Tex. R. App. P. 47.4.
In two issues, WRS argues the trial court abused its discretion by denying its
fourth motion for continuance of the hearing on appellees’ summary judgment
motion and that insufficient evidence supports the amount of attorney’s fees the
trial court awarded to appellees because they failed to segregate their fees. We
affirm.
I. BACKGROUND
WRS is a business that provides wheel repair services. Angelica used to
be its account manager. In January 2014, she quit that job and along with her
husband, Ryan, started ARS. WRS then sued Angelica, Ryan, and ARS,
(collectively “Appellees”) alleging various claims related to Angelica’s departure
from WRS and opening of a competitor company with Ryan, including a claim
alleging violations of the Texas Theft Liability Act. See Tex. Civ. Prac. & Rem.
Code Ann. §§ 134.001–.005 (West 2011). Appellees moved for summary
judgment on all of Wheel Repair’s claims against them, and they also filed
counterclaims for their attorney’s fees.
The trial court set a hearing on the summary judgment motion for
September 29, 2016. On September 22, WRS filed a motion for continuance
requesting that the trial court continue the summary judgment hearing—its fourth
such request since appellees first moved for summary judgment nearly two years
earlier. This fourth motion for continuance was not verified, and WRS did not file
an affidavit explaining its need for further discovery. The trial court denied the
motion for continuance and granted appellees summary judgment on all of
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WRS’s claims. It then conducted a bench trial on appellees’ counterclaim for
attorney’s fees, which they sought under the Texas Theft Liability Act. See id.
§ 134.005(b). The trial court rendered judgment awarding appellees $89,884 in
reasonable and necessary attorney’s fees, as well as contingent fee awards of
$25,000 if WRS unsuccessfully appealed to this court, and another $25,000 if it
unsuccessfully appealed to the supreme court.
WRS appeals in two issues.
II. WRS’S MOTION FOR CONTINUANCE
In its first issue, WRS contends the trial court abused its discretion by
denying its fourth motion for continuance of the summary judgment hearing
because it needed to obtain additional discovery from appellees. We review a
trial court’s ruling on a motion for continuance for an abuse of discretion.
D.R. Horton-Tex., Ltd. v. Savannah Props. Assocs., L.P., 416 S.W.3d 217, 222
(Tex. App.—Fort Worth 2013, no pet.).
Here, the parties engaged in formal discovery prior to the summary
judgment hearing. In cases where that has occurred, when a party contends that
it has not had an adequate opportunity for discovery before a summary judgment
hearing, it must file either an affidavit explaining the need for further discovery or
a verified motion for continuance. See Tenneco Inc. v. Enter. Prods. Co.,
925 S.W.2d 640, 647 (Tex. 1996); see also Ford Motor Co. v. Castillo,
279 S.W.3d 656, 662 (Tex. 2009) (noting that the cases applying the rule in
Tenneco involved the situation where the parties had conducted formal discovery
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and sought a continuance in order to conduct additional discovery). Over the
course of a twenty-one-month period, WRS filed three prior motions for
continuance based on the need for additional discovery. At least two of these
were either verified or supported by an affidavit. The record reflects that the
fourth motion was not verified or supported by affidavit. Rule of civil procedure
251 states that no continuance shall be granted except for “sufficient cause
supported by affidavit, or by consent of the parties, or by operation of law.” 2 Tex.
R. Civ. P. 251. Applying rule 251, the trial court did not abuse its discretion by
denying WRS’s fourth motion for continuance.
We overrule WRS’s first issue.
III. THE TRIAL COURT’S ATTORNEY-FEE AWARD
In its second issue, WRS attacks the trial court’s attorney-fee award.
Appellees sought attorney’s fees only for their efforts in defending against WRS’s
claim under the Texas Theft Liability Act. During the bench trial, they offered
both documentary evidence and expert testimony regarding their incurred
attorney’s fees. WRS argues appellees failed to segregate their fees between
the amount they incurred related only to WRS’s Texas Theft Liability Act claim
from those they incurred relating to WRS’s other claims. Specifically, WRS
contends the trial court disposed of its Texas Theft Liability Act claim based upon
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WRS does not contend that appellees consented to the fourth motion for
continuance, and they do not establish that a continuance was required by
operation of law.
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a single paragraph in appellees’ summary judgment motion and implies that
appellees were thus entitled to recover only the fees they incurred for the drafting
of that single paragraph. WRS argues that because appellees failed “to
segregate the time that it took their attorneys to draft this single paragraph . . .
from all of the other work performed in this case,” insufficient evidence supports
the amount of the trial court’s fee award.
A. STANDARDS OF REVIEW
Whether attorney’s fees need to be segregated is a question of law that we
review de novo. See Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 312
(Tex. 2006); Prudential Ins. Co. v. Durante, 443 S.W.3d 499, 513 (Tex. App.—El
Paso 2014, pet. denied). But the extent to which claims can or cannot be
segregated is a mixed question of law and fact. See Chapa, 212 S.W.3d at 313;
Brinson Benefits, Inc. v. Hooper, 501 S.W.3d 637, 645 (Tex. App.—Dallas 2016,
no pet.).
A court’s decision to grant or deny attorney’s fees is reviewed under an
abuse of discretion standard, while the amount of attorney’s fees awarded is
reviewed under a legal-sufficiency standard. Huey-You v. Huey-You, No. 02-16-
00332-CV, 2017 WL 4053943, at *2 (Tex. App.—Fort Worth Sept. 14, 2017,
no pet.) (mem. op.); Am. Risk Ins. Co. v. Abousway, No. 14-13-00124-CV, 2014
WL 2767402, at *5 (Tex. App.—Houston [14th Dist.] June 17, 2014, no pet.)
(mem. op.); EMC Mortg. Corp. v. Davis, 167 S.W.3d 406, 418 (Tex. App.—Austin
2005, pet. denied). Because we review the amount of attorney’s fees awarded
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under a legal-sufficiency standard, if more than a scintilla of evidence supports
the award, the challenge must fail. Wal-Mart Stores, Inc. v. Canchola,
121 S.W.3d 735, 739 (Tex. 2003).
B. SUFFICIENT EVIDENCE OF SEGREGATION
Generally, parties seeking recovery of attorney’s fees are required to
segregate their fees between claims for which attorney’s fees are recoverable
and claims for which they are not. See Chapa, 212 S.W.3d at 311. But there is
an exception to this requirement: “when the causes of action involved in the suit
are dependent upon the same set of facts or circumstances and thus are
‘inter[t]wined to the point of being inseparable,’ the party suing for attorney’s fees
may recover the entire amount covering all claims.” Id. at 311 (quoting Stewart
Title Guar. Co. v. Sterling, 822 S.W.2d 1, 11 (Tex. 1991)). A common set of
underlying facts alone does not relieve a party of the duty to segregate its
attorney’s fees between recoverable and unrecoverable claims; “it is only when
discrete legal services advance both a recoverable and unrecoverable claim that
they are so intertwined that they need not be segregated.” Id. at 313–14.
Additionally, where a party is required to segregate its fees, it need not
present “more precise proof for attorney’s fees than for any other claims or
expenses.” Id. at 314. The party need not present separate time records for
each claim. See id.; State Farm Lloyds v. Hanson, 500 S.W.3d 84, 102 (Tex.
App.—Houston [14th Dist.] 2016, pet. denied). A party satisfies its burden to
segregate its attorney’s fees if it submits to the fact finder testimony from its
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attorney stating the percentage of fees that are recoverable and unrecoverable.
See Chapa, 212 S.W.3d at 314; Berryman’s S. Fork, Inc. v. J. Baxter Brinkmann
Intern. Corp., 418 S.W.3d 172, 202 (Tex. App.—Dallas 2013, pet. denied); see
also Anani v. Abuzaid, No. 05-16-01364-CV, 2018 WL 2926660, at *9 (Tex.
App.—Dallas June 7, 2018, no pet. h.) (mem. op.) (noting that “an opinion
assigning a percentage to recoverable and unrecoverable fees is sufficient” to
satisfy a party’s burden to segregate fees).
The trial court admitted appellees’ attorneys’ billing statements into
evidence at the bench trial. These statements reflected the total number of hours
appellees’ attorneys billed on this case, the tasks each attorney performed and
amount of time spent performing those tasks, and the attorneys’ respective
hourly rates. In addition, appellees’ expert, Eric Haas, testified concerning
appellees’ incurred fees. Haas testified that he had reviewed appellees’
attorneys’ billing statements and that appellees’ attorneys had incurred a total of
492 hours on this case, but they had cut some of that time before billing
appellees. Taking into account the time their attorneys had cut, appellees had
been billed a total of $142,694.70 in attorney’s fees.
After testifying to appellees’ total incurred fees, Haas acknowledged that
appellees sought to recover only the fees they incurred that were related to
WRS’s Texas Theft Liability Act claim. He testified that 80% of the total fees
appellees incurred were “directly related to, intertwined with the claim for theft of
trade secrets under the Texas Theft Liability Act.” Haas also explained the basis
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of his 80% figure. According to him, the whole case centered around WRS’s
factual allegations that its trade secrets had been stolen. Given that central
focus, Hass testified, appellees’ defense “involved not only evaluating what the
alleged trade secrets were and the alleged damages resulting from those trade
secrets, but also the other facts and circumstances surrounding” the alleged
trade-secrets theft. This included
an evaluation and discovery conducted with respect to how the trade
secrets were allegedly obtained, with respect to whether trade
secrets even existed, with respect to whether trade secrets, if they
existed, had been appropriately held or maintained, and also with
respect to the allegation that there was damage from the alleged
theft.
Haas also testified that in reaching his 80% figure, he “took out time that was
incurred with respect to other matters that would not be recoverable.” And Haas
further testified that his opinion was that $25,000 was a reasonable estimate of
the fees appellees would incur in the event WRS appealed to this court and that
an additional $25,000 was a reasonable estimate of fees that would be incurred if
it appealed to the supreme court.
Haas’ uncontroverted testimony showed that in reaching his 80% figure, he
had excluded all fees that appellees incurred solely on unrecoverable claims.
And he testified that although the 80% figure included fees incurred on both
recoverable and unrecoverable claims, the work related to the recoverable claims
was so intertwined with the work related to the unrecoverable claims that it could
not be segregated. This testimony sufficiently satisfied appellees’ burden to
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segregate their fees in this case. See Berryman’s S. Fork, 418 S.W.3d at 202
(holding that party met its burden to segregate its fees by presenting an affidavit
from its attorney stating in part that 80% of party’s incurred fees were
recoverable and that attorney’s activities were so intertwined that they could not
be segregated by task); Lawrence v. Kinser, No. 05-10-00173-CV, 2011 WL
6318025, at *7 (Tex. App.—Dallas Dec. 15, 2011, no pet.) (mem. op.) (holding
party met its burden to segregate unrecoverable claims and to show that
segregation of intertwined claims was unnecessary where its attorney testified as
to (1) the total amount of fees his client incurred; (2) the amount incurred solely
on unrecoverable claims; and (3) the amount incurred on both recoverable and
unrecoverable claims but which were so intertwined that they could not be
segregated).
C. SUFFICIENT EVIDENCE OF AMOUNT
Having concluded that appellees’ fees were sufficiently segregated, we
turn briefly to consider WRS’s argument that insufficient evidence supports the
amount of fees the trial court awarded. As outlined above, appellees presented
uncontradicted evidence of the total number of hours their attorneys billed them
in this case and the hourly rates applicable for each attorney whose time was
billed, and they presented evidence that their attorneys had billed them a total of
$142,694.70. They presented uncontradicted evidence that 80% of the hours
their attorneys billed in this case was directly related to and intertwined with
WRS’s Texas Theft Liability Act claim. They presented uncontradicted evidence
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that 80% of the total sum they had been billed amounted to approximately
$114,000. And they presented uncontradicted evidence that a reasonable
estimate of the amount of fees they would incur as a result of WRS appealing to
this court and to the supreme court was $25,000 for each appeal. We conclude
appellees presented more than a scintilla of evidence supporting the trial court’s
ultimate award to appellees of $89,884 in incurred attorney’s fees, $25,000 in
conditional attorney’s fees for an appeal to this court, and an additional $25,000
in conditional attorney’s fees for an appeal to the supreme court. Therefore,
WRS’s challenge to the sufficiency of the amount awarded must fail. See
Canchola, 121 S.W.3d at 739.
We overrule WRS’s second issue.
IV. CONCLUSION
Having overruled all of WRS’s issues, we affirm the trial court’s judgment.
See Tex. R. App. P. 43.2(a).
/s/ Lee Gabriel
LEE GABRIEL
JUSTICE
PANEL: GABRIEL, PITTMAN, and BIRDWELL, JJ.
DELIVERED: July 26, 2018
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