Austin Jockey Club, Ltd. v. Dallas City Limits Property Co., L.P. ( 2015 )

AFFIRM, and Opinion Filed June 5, 2015.
S In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-14-00114-CV
AUSTIN JOCKEY CLUB, LTD., Appellant
V.
DALLAS CITY LIMITS PROPERTY CO., L.P., Appellee
On Appeal from the 160th Judicial District Court
Dallas County, Texas
Trial Court Cause No. 08-11846
MEMORANDUM OPINION
Before Justices Bridges, Fillmore, and Brown
Opinion by Justice Fillmore
In two issues, appellant Austin Jockey Club, Ltd. (AJC) contends the trial court erred by
granting a declaratory judgment that AJC’s termination of a stock purchase agreement with
appellee Dallas City Limits Property Co., L.P. (DCL) was wrongful and ineffective and by
awarding attorney’s fees to DCL. We affirm the trial court’s judgment.
Factual Background
In August 2005, Longhorn Downs, Inc. was a wholly owned subsidiary of AJC. The sole
asset of Longhorn Downs was a Class 2 Racetrack License for horse racing (the License) issued
by the Texas Racing Commission (the Racing Commission). DCL entered into a Stock Purchase
Agreement (the DCL Agreement) to purchase all of the capital stock of Longhorn Downs (the
Stock) from AJC. 1 DCL paid AJC the purchase price of $1,500,000 for the Stock, and the Stock
was placed in an escrow account. A party wishing to hold and operate under a racetrack license
in Texas must have the approval of the Racing Commission, and the DCL Agreement required,
inter alia, approval by the Racing Commission of transfer of ownership of the Stock. 2 The DCL
Agreement required that DCL use its reasonable best efforts to obtain Racing Commission
approval of transfer of ownership of the Stock, and it also required that AJC use its reasonable
best efforts to assist DCL in obtaining that approval.
The parties initially thought the transfer of ownership of the Stock could be accomplished
in approximately one year. However, DCL encountered a number of difficulties during the
process of applying for Racing Commission approval of the transfer, including obtaining an
appropriate site for the prospective racetrack. When DCL procured an option to purchase a
suitable property, AJC requested that the Racing Commission place DCL’s application for
approval of transfer of ownership of the Stock on its agenda for decision. During the time
required for DCL’s application to come before the Racing Commission, however, DCL lost its
option on that property. 3 When the application was evaluated by the Racing Commission at a
September 15, 2009 hearing, it was denied. DCL understood it would have the opportunity to
reapply for approval. Dallas City Limits Prop., Co., L.P. v. Austin Jockey Club, Ltd., 376
S.W.3d 792, 795 (Tex. App.—Dallas 2012, pet. denied) (Dallas City Limits I). Indeed, the
Racing Commission noted in its denial that nothing prevented DCL from amending its
application and having it resubmitted by AJC at a later time. Dallas City Limits Prop. Co., L.P.
1
The Agreement was actually signed by DCL’s predecessor, Dallas City Limits, LLC, which subsequently assigned its rights under the
Agreement to DCL. We refer to DCL as the contracting party.
2
A racetrack license issued by the Racing Commission is not transferable. However, the capital stock of a licensee may be acquired with
prior approval of the Racing Commission. An individual, corporation, or unincorporated business association seeking to purchase the capital
stock of a licensee must submit for Racing Commission review information prescribed by statute relating to the purchaser’s qualifications to hold
a racetrack license. TEX. REV. CIV. STAT. ANN. art. 179e §§ 6.06, 6.12, 6.13(b) (West Supp. 2014).
3
DCL offered evidence its application to the Racing Commission was complete in October 2008. However, the hearing was not held until
September 2009.
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v. Austin Jockey Club, Ltd., 418 S.W.3d 727, 729 (Tex. App.—Houston [14th Dist.] 2013, pets.
denied) (Dallas City Limits II). But by letter dated November 6, 2009, AJC notified DCL that,
due to DCL’s “repeated failures” to “accomplish the fundamental tasks necessary to both effect a
transfer of the ownership of and preserve the License since it undertook that obligation,” AJC
was entitled to terminate the DCL Agreement. In that letter, AJC notified DCL that the DCL
Agreement was terminated. The same day, AJC and KTAGS Downs Holding Company, LLC
(KTAGS) entered into a stock purchase agreement (the KTAGS Agreement) for purchase of the
Stock. At a February 7, 2012 meeting of the Racing Commission, AJC presented KTAGS’s
application for transfer of ownership of the Stock, and the application was approved. Dallas City
Limits II, 418 S.W.3d at 731.
Procedural Background
DCL sued AJC, and AJC counterclaimed against DCL. A jury found AJC had breached
the DCL Agreement but DCL had not. The jury also found that (1) DCL had made a negligent
misrepresentation to AJC, but (2) AJC had unreasonably delayed in asserting its rights on that
basis and DCL had acted to its detriment in reliance on AJC’s delay, and (3) AJC was entitled to
$0 as compensation for the misrepresentation. The trial court entered a take-nothing judgment
against both parties.
DCL appealed the take-nothing judgment, contending the trial court erred by refusing to
allow a requested trial amendment and by failing to award DCL the remedy of specific
performance. AJC conditionally cross-appealed, challenging the trial court’s denial of its motion
for judgment notwithstanding the verdict and the trial court’s submission of DCL’s requested
jury issue on laches. We reversed the trial court’s judgment and remanded the case with
instructions to the trial court to:
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(1) allow DCL’s trial amendment seeking a declaratory judgment on the issue:
Austin Jockey Club’s termination of the Stock Purchase
Agreement was wrongful and ineffective[;]
(2) enter judgment on the jury’s verdict in light of that trial amendment; and
(3) make whatever award of attorney’s fees is appropriate.
Dallas City Limits I, 376 S.W.3d at 802. 4
Following remand, the trial court signed an order granting DCL leave to file a trial
amendment of its Third Amended Petition, its live pleading at trial. DCL amended its pleading
to add a cause of action seeking a declaratory judgment on the issue of whether AJC’s
termination of the DCL Agreement was wrongful and ineffective. The trial court signed an
amended final judgment in which it granted DCL declaratory judgment that AJC’s termination of
the DCL Agreement was wrongful and ineffective and granted judgment to DCL for its
attorney’s fees in the amount of $650,000. The trial court granted AJC a take-nothing judgment
as to all remaining claims brought by DCL and granted DCL a take-nothing judgment as to all
claims brought by AJC.
AJC filed this appeal. In two issues, AJC asserts the trial court erred by granting a
declaratory judgment that AJC’s termination of the DCL Agreement was wrongful and
ineffective and by awarding DCL attorney’s fees.
Declaratory Judgment
In its first issue, AJC contends that the trial court erred by granting a declaratory
judgment that AJC’s termination of the DCL Agreement was wrongful and ineffective. AJC
argues the evidence is legally and factually insufficient to support the trial court’s declaratory
judgment and the jury findings upon which it is based; AJC’s obligations under the DCL
4
The relationship between these parties has spawned a number of additional suits and administrative proceedings in forums across the
State. We address those proceedings only when necessary to resolve the appeal before us.
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Agreement are discharged due to failure of a condition precedent, Racing Commission approval
of transfer of ownership of the Stock to DCL; and DCL did not successfully challenge the
decisions of the Racing Commission which retained exclusive jurisdiction over the racetrack
license.
Standard of Review
We review orders, judgments, and decrees under the Uniform Declaratory Judgments Act
(UDJA) in accordance with the same standards we apply to other orders, judgments, and decrees.
TEX. CIV. PRAC. & REM. CODE ANN. § 37.010 (West 2015); Solar Soccer Club v. Prince of Peace
Lutheran Church of Carrollton, 234 S.W.3d 814, 820 (Tex. App.—Dallas 2007, pet. denied).
We review the trial court’s conclusions of law de novo. See BMC Software Belg., N.V. v.
Marchand, 83 S.W.3d 789, 794 (Tex. 2002). Conclusions of law are upheld if the judgment can
be sustained on any legal theory the evidence supports. See Stable Energy, L.P. v. Newberry,
999 S.W.2d 538, 547 (Tex. App.—Austin 1999, pet. denied). Conclusions of law may not be
reversed unless they are erroneous as a matter of law. Westech Eng’g, Inc. v. Clearwater
Constructors, Inc., 835 S.W.2d 190, 196 (Tex. App.—Austin 1992, no writ).
Legal and Factual Sufficiency of the Evidence
We first address AJC’s argument that the evidence is legally and factually insufficient to
support the trial court’s declaration and the jury’s findings upon which it is based. AJC
specifically contends the trial court should have disregarded the jury’s finding that DCL did not
breach the DCL Agreement. AJC acknowledges this Court “addressed the evidentiary
sufficiency issues in cross-points in the first appeal,” see Dallas City Limits I, 376 S.W.3d at
799-801 (evidence supported jury’s failure to find a breach by DCL of the DCL Agreement and
jury’s finding of breach by AJC of the DCL Agreement), but “re-asserts the arguments in the
alternative here.” We reject this argument and decline to revisit AJC’s sufficiency of the
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evidence complaint. See Hudson v. Wakefield, 711 S.W.2d 628, 630 (Tex. 1986) (questions of
law decided on appeal to a court of last resort govern the case throughout its subsequent stages).
In Dallas City Limits I, we concluded that “the evidence was sufficient to support the jury’s
finding that DCL did not breach the [DCL] Agreement” and that “there is more than a scintilla of
evidence supporting the jury’s finding that AJC breached the [DCL] Agreement.” Dallas City
Limits I, 376 S.W.3d at 800. We remanded the case to the trial court with instructions to allow
DCL’s trial amendment seeking a declaratory judgment and to enter judgment on the jury’s
verdict in light of the trial amendment; no new evidence was necessary or presented on remand.
The trial court’s declaratory judgment that AJC’s termination of the DCL Agreement was
wrongful and ineffective is consistent with the jury’s findings that DCL did not breach the DCL
Agreement and AJC did breach the DCL Agreement. See Outdoor Sys., Inc. v. BBE, L.L.C., 105
S.W.3d 66, 72 (Tex. App.—Eastland 2003, pet. denied) (landlord could not base a forfeiture on
breach of an obligation that does not exist in the lease).
Condition Precedent
AJC next argues that because Racing Commission approval was a condition precedent to
transfer of ownership of the Stock to DCL, ACL’s obligations under the DCL Agreement were
discharged by the absence of the condition precedent and, accordingly, its notification of the
termination of the DCL Agreement was neither wrongful nor ineffective. In support of this
argument, AJC contends that the Racing Commission’s denial of DCL’s application and
subsequent approval of sale of the Stock to KTAGS “invalidated the attempted transfer of the
Stock to DCL and “make[s] transfer of the [S]tock impossible.”
We question whether this complaint was raised either in the trial court or in connection
with the prior appeal. “Throughout trial, AJC had maintained the same request for declaratory
relief, i.e., it sought specific resolution of the question of whether a purported breach of the
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[DCL] Agreement by DCL justified AJC’s termination of the [DCL] Agreement.” Dallas City
Limits I, 376 S.W.3d at 797-98. Even after AJC non-suited its claim for declaratory relief, it
“continued to assert its claim that DCL breached the [DCL] Agreement by failing to use its best
efforts to obtain the Racing Commission’s approval” of transfer of ownership of the Stock. Id. at
798. This claim was AJC’s “consistent justification” for terminating the DCL Agreement:
“AJC’s live pleading included this allegation; AJC offered testimony throughout trial in an effort
to prove such a breach; and AJC requested submission of the purported breach by DCL to the
jury.” Id. This Court upheld the jury’s finding that DCL had not breached the DCL Agreement.
Id. at 800. In response to DCL’s complaint in the prior appeal that the trial court erred by failing
to award it the remedy of specific performance of the DCL Agreement, AJC asserted DCL was
not entitled to that remedy because the condition precedent of Racing Commission approval of
the transaction had not occurred and, therefore, AJC could not specifically perform the contract.
However, AJC did not argue at trial or in the prior appeal that a failure of a condition precedent
excused its performance under the DCL Agreement. Instead, AJC argued that failure to obtain
Racing Commission approval of the transfer of the Stock was a breach of the DCL Agreement.
Id. at 796 (“In short, AJC pleaded for a declaration that its termination of the [DCL] Agreement
was justified when DCL breached the [DCL] Agreement by failing to obtain the approval of the
Racing Commission.”).
Assuming, however, that AJC’s failure of a condition precedent argument is properly
before us on appeal, we are unpersuaded by the argument. AJC is correct that the Racing
Commission must provide prior approval of a transaction that involves the acquisition or transfer
of a pecuniary interest in a licensee. TEX. REV. CIV. STAT. ANN. art. 179(e) § 6.13(b). In
recognition of applicable law, the DCL Agreement provides the Stock will not be transferred to
DCL until approval of the Racing Commission has been obtained. However, DCL contends the
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DCL Agreement remains an executory contract because the time for satisfaction of the relevant
condition, Racing Commission approval of the transaction, has not yet expired. 5 When the
Racing Commission denied DCL’s application for transfer of ownership of the Stock, it
explicitly noted that nothing prevented DCL from amending its application and having it
resubmitted for consideration at a later hearing. See Dallas City Limits I, 376 S.W.3d at 795
(“DCL understood it would have the opportunity to reapply for [Racing Commission]
approval.”); see also Dallas City Limits II, 418 S.W.3d at 729.
It is noteworthy that AJC does not affirmatively contend DCL is precluded from
reapplying for Racing Commission approval of transfer of ownership of the Stock. Instead, AJC
asserts the Racing Commission approval of the sale of the Stock to KTAGS renders sale of the
Stock to DCL “impossible”. But belying this argument is the KTAGS Agreement itself which
“specifically stated that [DCL] claimed to have continuing rights under the [DCL Agreement]
and refused to consent to the release of the [Stock] from escrow.” Dallas City Limits II, 418
S.W.3d at 730. Further, the KTAGS Agreement provided, “The rights granted in this instrument
are subject to any rights, if any [sic], which may remain in [DCL] or its successors” pursuant to
the DCL Agreement. Id.
At trial, the jury was instructed that AJC’s failure to comply with the DCL Agreement
was excused if DCL previously failed to comply with a material obligation of the DCL
Agreement that was not excused. The jury found that AJC’s failure to comply with the DCL
5
DCL argues that not only does it have the ability to reapply to the Racing Commission for approval of transfer of ownership of the Stock,
it also has the valuable contractual right under the DCL Agreement to “sell its interest to a third party.” The DCL Agreement provides:
Section 9.3 Assignability. This Agreement shall be binding upon, and shall be enforceable by and inure to the benefit
of, the parties hereto and their respective heirs, legal representatives, successors and assigns; provided, however, that this
Agreement may not be assigned (except by operation of law) by any party without the prior written consent of the other
parties, and any attempted assignment without such consent shall be void and of no effect, except that, nothwithstanding
the foregoing, Buyer may assign this Agreement, the Closing Documents and any agreement contemplated hereunder or
thereunder to any Affiliate of Buyer that is under common control with Buyer without the consent of any other party to this
Agreement.
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Agreement was not excused by the conduct of DCL. The trial court’s declaratory judgment that
AJC’s termination of the DCL Agreement was wrongful and ineffective is consistent with the
jury’s finding that AJC’s failure to comply with the DCL Agreement was not excused by the
conduct of DCL. We reject AJC’s argument that the Racing Commission’s denial of DCL’s
application was a failed condition precedent which excused AJC from its contractual obligations.
Exclusive Jurisdiction
AJC further contends the trial court’s declaratory judgment that its termination of the
DCL Agreement was wrongful and ineffective was erroneous because the Racing Commission
has exclusive jurisdiction to determine ownership of a racetrack license and DCL has not
“successfully challenged” the Racing Commission’s denial of its application or approval of
KTAGS’s application for transfer of ownership of the Stock. Therefore, according to AJC, it is
excused from its obligations under the DCL Agreement and was permitted to seek another buyer
of the Stock. As discussed above, we reject AJC’s argument that the Racing Commission’s
denial of DCL’s application was a failed condition precedent which excused AJC from its
contractual obligations. We additionally note that neither the Racing Commission’s denial of
DCL’s application, “which explicitly invited a cure,” nor the DCL Agreement itself forecloses a
subsequent application. See Dallas City Limits II, 418 S.W.3d at 735. Moreover, this Court
previously rejected AJC’s argument that the Racing Commission’s approval of sale of the Stock
to KTAGS rendered DCL’s appeal moot:
Although Racing Commission approval is necessary to obtaining licensee status,
it has no direct bearing on DCL’s contractual right to purchase the Stock. Both
parties represent to this Court that the stock purchase agreement between AJC and
KTAGS is expressly subject to the contract rights of DCL. Thus, the approval of
KTAGS by the Commission means nothing so long as DCL possesses a superior
contractual right to the Stock.
Dallas City Limits I, 376 S.W.3d at 796 (footnote omitted); see also Dallas City Limits II, 418
S.W.3d 727, 735 & n.9. (“Nothing in the Racing Commission’s approval of the stock transfer to
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KTAGS purports to supersede the parties’ respective contract rights or indicates that the
[Racing] Commission will no longer consider an application for approval of a stock transfer to
[DCL].”). Thus, any failure by DCL to challenge the Racing Commission’s denial of its
application or approval of KTAGS’s application is of no moment in this appeal.
Conclusion
The purpose of the UDJA is “to settle and to afford relief from uncertainty and insecurity
with respect to rights, status, and other legal relations . . . .” TEX. CIV. PRAC. & REM. CODE ANN.
§ 37.002(a) (West 2015). Under section 37.004(a) of the UDJA, “[a] person . . . whose rights,
status, or other legal relations are affected by a . . . contract . . . may have determined any
question of construction or validity arising under the . . . contract . . . and obtain a declaration of
rights, status, or other legal relations thereunder.” TEX. CIV. PRAC. & REM. CODE ANN.
§ 37.004(a) (West 2015). The issue of the validity of AJC’s purported termination of the DCL
Agreement has “been at the forefront of the case throughout its development.” Dallas City
Limits I, 376 S.W.3d at 798. DCL clearly “contend[ed] that AJC terminated the [DCL]
Agreement without authority, and, as a result, the termination should be given no legal effect,”
id. at 798 n.7, and DCL asked the trial court to declare the legal effect of the jury’s findings on
AJC’s termination of the [DCL] Agreement. Id. at 798.
AJC’s position in this appeal is based on the flawed proposition that it was entitled to
give notice of its termination of the DCL Agreement because DCL allegedly failed to perform
under that agreement in a timely manner. See id. at 799 (“AJC charges DCL breached the [DCL]
Agreement by not performing in a timely manner.”). The jury rejected this contention and found
no breach of the DCL Agreement by DCL. This Court remanded the case with instructions that
the trial court allow DCL’s trial amendment seeking a declaration that AJC’s termination of the
DCL Agreement was wrongful and ineffective and enter judgment on the jury’s verdict in light
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of that trial amendment. Id. at 802. There having been no finding of a breach of the DCL
Agreement by DCL, there was no basis for AJC’s purported termination of the DCL Agreement.
On remand, the trial court concluded AJC’s purported termination of the DCL Agreement was
wrongful, and consequently, ineffective.
On this record, the trial judge’s conclusions of law that AJC wrongfully terminated the
DCL Agreement and that the termination was ineffective are consistent with the jury’s findings
that (1) DCL did not breach the DCL Agreement and AJC did breach the DCL Agreement, and
(2) AJC’s failure to comply with the DCL Agreement was not excused by the conduct of DCL.
We conclude the trial court’s conclusions of law are not erroneous as a matter of law. See
Westech Eng’g, Inc., 835 S.W.2d at 196 (conclusions of law may not be reversed unless they are
erroneous as a matter of law); see also Dallas Morning News v. Bd. of Trs. of Dallas Indep. Sch.
Dist., 861 S.W.2d 532, 536 (Tex. App.—Dallas 1993, writ denied) (appellate court reviews trial
court’s conclusions of law to determine whether the trial court correctly drew the legal
conclusions from the facts). Accordingly, the trial court did not err by granting the declaratory
judgment, and we resolve AJC’s first issue against it.
Attorney’s Fees
In Dallas City Limits I, we indicated that “because we are remanding the case for further
proceedings, we also remand the issue of attorney’s fees. Both parties pleaded to recover their
fees. Any entitlement to fees will depend upon the trial court’s resolution of issues on remand.”
Dallas City Limits I, 376 S.W.3d at 801–02. We also noted in our prior opinion that “DCL had
sought recovery of attorney’s fees under both chapter 38 and chapter 37 of the Texas Civil
Practice and Remedies Code.” Id. at 801, n.9.
The trial court’s amended final judgment awarded DCL its attorney’s fees in the amount
of $650,000. In its second issue, AJC contends the trial court erred by awarding attorney’s fees
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to DCL because DCL was not entitled to attorney’s fees under either chapter 38 or chapter 37 of
the civil practice and remedies code. AJC argues that DCL was not entitled to attorney’s fees
under chapter 38 because it did not prevail on a breach of contract claim and recover damages,
noting that the trial court’s amended final judgment ordered that AJC receive a take nothing
judgment on all claims brought by DCL other than its claim for declaratory relief. AJC argues
that DCL was not entitled to attorney’s fees under chapter 37 because the award of fees is not
reasonable and necessary or equitable and just, as required by chapter 37, and is not supported by
sufficient evidence.
Chapter 38 as a Basis for Award of Attorney’s Fees
The trial court’s amended final judgment did not explicitly indicate whether the award of
attorney’s fees to DCL was made pursuant to chapter 38 or chapter 37 of the civil practice and
remedies code. However, AJC correctly argues that DCL was not entitled to attorney’s fees
under chapter 38 because it did not prevail on a breach of contract claim and recover damages.
See MBM Fin. Corp. v. Woodlands Operating Co., 292 S.W.3d 660, 670 (Tex. 2009) (party
recovering no damages on breach of contract claim cannot recover attorney’s fees under section
38.001(8) of the civil practice and remedies code); see also Hodges v. Rajpal, No. 05-13-01413-
CV, 2015 WL 870729, at *11 (Tex. App.—Dallas Feb. 27, 2015, no pet.). Accordingly, we must
determine whether the trial court’s award of attorney’s fees to DCL may be sustained under the
provisions of chapter 37.
Reasonable and Necessary Attorney’s Fees Under Chapter 37
In open court during trial, the parties’ stipulated:
The remaining litigants have agreed that a reasonable and necessary attorneys
[sic] fee through trial on any cause of action where attorneys [sic] fees may be
recoverable would be $650,000. And that is for each side.
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See Herschbach v. City of Corpus Christi, 883 S.W.2d 720, 734 (Tex. App.—Corpus Christi
1994, writ denied) (A “stipulation” is “an agreement, admission, or concession made in a judicial
proceeding by the parties or their attorneys, respecting some matter incident thereto.”) (quoting
Nat’l Union Fire Ins. Co. of Pittsburgh, P.A. v. Martinez, 800 S.W.2d 331, 334 (Tex. App.—El
Paso 1990, no writ)). However, at the hearing on DCL’s motion for entry of judgment following
remand, AJC’s counsel stated AJC was withdrawing its stipulation regarding attorney’s fees:
I’m being told that I need to do this, so I’m going to do it. It is [AJC’s] position
that that stipulation was entered into when [DCL] did not have a pleading that
they are now asking the Court to grant the [trial] amendment on. Therefore,
[AJC] withdraw[s] the stipulation, to the extent that has effect.
Neither the trial judge nor opposing counsel responded to the statements of AJC’s counsel.
AJC argues on appeal that DCL’s trial amendment, amending its pleading to include a
claim for declaratory judgment, provided good cause for AJC’s withdrawal of the stipulation. “It
is true that all the intended circumstances must be considered in construing a stipulation,
including the state of the pleadings.” St. Paul Guardian Ins. Co. v. Luker, 801 S.W.2d 614, 619
(Tex. App.—Texarkana 1990, no writ); see also Mann v. Fender, 587 S.W.2d 188, 202 (Tex.
Civ. App.—Waco 1979, writ ref’d n.r.e.) (intention of parties in a trial stipulation is for
determination of the court from language used in the entire agreement “in the light of the
surrounding circumstances, including the state of the pleadings, the allegations therein, and the
attitude of the parties in respect of the issues”) (quoting Tex. Indem. Ins. Co. v. Dunn, 221
S.W.2d 922, 924 (Tex. Civ. App.—Waco 1949, no writ)).
“The modification or rescission of a stipulation rests in the discretion of the trial court
and is not reviewable on appeal in the absence of an abuse of that discretion.” Westridge Villa
Apartments v. Lakewood Bank & Trust Co., 438 S.W.2d 891, 895 (Tex. Civ. App.—Fort Worth
1969, writ ref’d n.r.e.) (quoting 53 Tex. Jur. 2d § 26, p. 348); see also Uvalde Cnty. Appraisal
Dist. v. F.T. Kincaid Estate, 720 S.W.2d 678, 681 (Tex. App.—San Antonio 1986, writ ref’d
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n.r.e.) (stipulations may be modified or withdrawn at discretion of the trial court). A trial court
abuses its discretion when it acts in an arbitrary or unreasonable manner, or if it acts without
reference to any guiding rules or principles. Downer v. Aquamarine Operators, Inc., 701 S.W.2d
238, 241–42 (Tex. 1985).
The UDJA authorizes a court to “award costs and reasonable and necessary attorney’s
fees as are equitable and just.” TEX. CIV. PRAC. & REM. CODE ANN. § 37.009 (West 2015); see
also City of Lorena v. BMTP Holdings, L.P., 409 S.W.3d 634, 646 (Tex. 2013). Whether
attorney’s fees are reasonable and necessary under the UDJA are questions of fact. Bocquet v.
Herring, 972 S.W.2d 19, 21 (Tex. 1998). An award of attorney’s fees under the UDJA is
committed to the discretion of the trial court, and we review the award under an abuse of
discretion standard. Id.; see also Oake v. Collin Cnty., 692 S.W.2d 454, 455 (Tex. 1985) (grant
or denial of attorney’s fees in declaratory judgment action lies within discretion of trial court,
and its judgment will not be reversed on appeal absent a clear showing it abused that discretion).
The record does not reflect, and AJC does not assert on appeal, that the trial court granted
AJC leave to withdraw its stipulation. See Martinez, 800 S.W.2d at 334 (appellant’s statements
to trial court construed as agreement or stipulation within the contemplation of rule 11 of the
rules of civil procedure, and appellant failed to obtain leave of court to withdraw the stipulation).
The record confirms AJC merely announced its purported withdrawal of the stipulation “to the
extent that has effect,” without seeking a ruling from the trial court granting or denying leave for
withdrawal of the stipulation. AJC has not preserved a complaint on appeal that the trial court
abused its discretion by failing to grant it leave to withdraw its stipulation. See TEX. R. APP. P.
33.1(a) (to preserve complaint for appellate review, a party must make the complaint to the trial
court by timely request, objection, or motion).
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Further, we cannot conclude the trial court abused its discretion by awarding DCL
$650,000 as reasonable and necessary attorney’s fees. AJC specifically stipulated that, on “any
cause of action where attorney’s fees may be recoverable,” $650,000 was reasonable and
necessary. DCL sought attorney’s fees at the time AJC entered into the stipulation. AJC did not
limit its stipulation to a specific cause of action pleaded by DCL (for example, breach of
contract), or to a cause of action pleaded by DCL at the time of the stipulation. AJC instead
stipulated to the reasonable and necessary amount of attorney’s fees for any cause of action
where attorney’s fees may be recovered. Indeed, the amount of attorney’s fees awarded by the
trial court was the amount AJC stipulated was reasonable and necessary. 6
Sufficiency of Evidence Supporting Award of Attorney’s Fees Under Chapter 37
AJC further argues that “[n]o evidence—or if the stipulation is considered, no factually
sufficient evidence” was presented to the trial court to assist the trial court in determining the
[attorney’s] fees that would be reasonable and necessary to pursue solely [DCL’s] new claim for
declaratory relief.” Therefore, we review the award of attorney’s fees to DCL under the UDJA
to determine whether the trial court abused its discretion by awarding fees because there was
insufficient evidence that the fees were reasonable and necessary. See Bouquet, 972 S.W.2d at
21.
In evaluating the legal sufficiency of the evidence to support a finding, we view the
evidence in the light most favorable to the verdict, indulging every reasonable inference
supporting it. City of Keller v. Wilson, 168 S.W.3d 802, 822 (Tex. 2005). We “must credit
favorable evidence if reasonable jurors could, and disregard contrary evidence unless reasonable
jurors could not.” Id. at 827. The final test is whether the evidence would enable reasonable and
6
We note the final judgment was amended by the trial court “[i]n accordance with the Opinion of the Court of Appeals, the jury’s verdict
and the stipulations of the parties made during trial.”
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fair-minded people to reach the verdict under review. Id. Anything more than a scintilla of
evidence is legally sufficient to support a challenged finding. Formosa Plastics Corp. USA v.
Presidio Eng’rs & Contractors, 960 S.W.2d 41, 48 (Tex. 1998). In a factual sufficiency review,
we view all the evidence in a neutral light and set aside the finding only if it is so contrary to the
overwhelming weight of the evidence as to be clearly wrong and unjust. Cain v. Bain, 709
S.W.2d 175, 176 (Tex. 1986); see also Morris v. Wells Fargo Bank, N.A., 334 S.W.3d 838, 842
(Tex. App.—Dallas 2011, no pet.).
A stipulation “constitutes a binding contract between the parties, may be used to limit or
exclude the issues to be tried, and even obviates the need for proof on the litigable issue.”
ExxonMobil Corp. v. Valence Operating Co., 174 S.W.3d 303, 311 (Tex. App.—Houston [1st
Dist.] 2005, pet. denied); see also Adkison v. Adkison, No. 12-06-00077-CV, 2007 WL 259550,
at *8 (Tex. App.—Tyler Jan. 31, 2007, no pet.) (mem. op.) (stipulation obviated the need for
proof on the issue of appellate attorney’s fees). “A stipulation constitutes some evidence of the
reasonableness of requested attorneys’ fees.” Hall v. Hubco, Inc., 292 S.W.3d 22, 33 (Tex.
App.—Houston [14th Dist.] 2006, pet. denied).
We are unpersuaded by AJC’s assertion that there is legally and factually insufficient
evidence to support the trial court’s finding of $650,000 as the amount of DCL’s reasonable and
necessary attorney’s fees. The parties’ stipulation was some evidence of the reasonableness and
necessity of attorney’s fees and obviated the need for proof on the issue of reasonableness and
necessity of DCL’s attorney’s fees. See id. The trial court had before it the stipulation
comprising evidence of reasonable and necessary attorney’s fees, and the record contains no
controverting evidence that the fees were unreasonable or unnecessary. See Jackson v. Barrera,
740 S.W.2d 67, 68–69 (Tex. App.—San Antonio 1987, no writ) (appellate record reflected trial
court had before it stipulations comprising evidence on attorney’s fees and there was no
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controverting evidence that the fees were unreasonable, unnecessary, or excessive; amount of
fees awarded was supported by legally and factually sufficient evidence). On this record, there
was sufficient evidentiary support for the amount of reasonable and necessary attorney’s fees
awarded by the trial court, and therefore we cannot conclude the trial court abused its discretion
on the basis that there was legally or factually insufficient evidence to support the award. See id.
(“When there is some evidence to support the award [of attorney’s fees], it will not be disturbed
absent an abuse of discretion.”).
Equitable and Just Attorney’s Fees Under Chapter 37
AJC also argues the trial court’s award of attorney’s fees to DCL is not equitable and just
under the UDJA because DCL’s trial amendment was requested after the evidence at trial was
closed. In the underlying trial, after the close of evidence, each party moved orally for a directed
verdict on various claims of the opponent. Dallas City Limits I, 376 S.W.3d at 796. Counsel for
AJC announced AJC was non-suiting its declaratory judgment claim. Id. Counsel for DCL
objected, stating “[w]e’re entitled to a declaration that we did not breach, and that [AJC’s] notice
of termination is ineffective,” and requested a trial amendment to “assert the inverse of [AJC’s]
declaratory judgment action, since that issue was already before the [trial court], and has been
tried by consent, because it was part of the pleadings” and was not a surprise and would not
prejudice AJC. Id. at 796–97. The trial court denied DCL’s subsequent written motion renewing
its request for a trial amendment. Id. at 797. On appeal, we concluded DCL’s requested trial
amendment did not assert a new cause of action, the factual premise of the declaration DCL
sought “was always before the jury,” and the trial amendment did not surprise or prejudice AJC.
Id. at 797–98. We reversed the trial court’s judgment and remanded to the trial court with
instructions to allow DCL’s trial amendment pleading for declaratory relief, and to sign a new
judgment based on the jury’s findings in light of the trial amendment. Id. at 799. After remand,
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the trial court signed an amended final judgment in which the trial court granted judgment in
favor of DCL, declaring that AJC’s termination of the Agreement was wrongful and ineffective.
Whether the fees are equitable and just are questions of law. Bocquet, 972 S.W.2d at 21.
Matters of equity and the responsibility for just decisions are addressed to the trial court’s
discretion, and we review the trial court’s award of equitable and just attorney’s fees under an
abuse of discretion standard. Id.; see also In re C-Span Entm’t, Inc., 162 S.W.3d 422, 428 (Tex.
App.—Dallas 2005, orig. proceeding [mand. denied]) (“Matters of equity are committed to the
trial court’s discretion.”). “Whether it is ‘equitable and just’ to award attorney’s fees depends,
not on direct proof, but on the concept of fairness, in light of all the circumstances of the case.”
Approach Res. I, L.P. v. Clayton, 360 S.W.3d 632, 639 (Tex. App.—El Paso 2012, no pet.).
“A trial court’s grant or denial of attorney’s fees in a declaratory judgment action . . . will
not be reversed on appeal unless the complaining party clearly shows the trial court abused its
discretion.” State Farm Lloyds v. C.M.W., 53 S.W.3d 877, 893–94 (Tex. App.—Dallas 2001,
pet. denied). The fact that DCL’s trial amendment was requested after the evidence was closed
is not dispositive of entitlement to attorney’s fees because the factual premise of the declaration
DCL sought “was always before the jury” and had AJC not non-suited its claim for declaratory
relief after the evidence was closed, DCL would have had the opportunity to be awarded the
same relief sought by its trial amendment. Dallas City Limits I, 376 S.W.3d at 797–98
(“Throughout the trial, AJC had maintained the same request for declaratory relief, i.e., it sought
specific resolution of the question of whether a purported breach of the [DCL] Agreement by
DCL justified AJC’s termination of the [DCL] Agreement.”). Further, there is nothing in the
record before us to suggest that the trial court’s award of attorney’s fees to DCL as the prevailing
party, based upon stipulation of the parties as to the correct amount of attorney’s fees, was
inequitable or unjust. Because there is no indication in the record that the trial court’s award of
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attorney’s fees was arbitrary or unreasonable, we conclude the trial court did not abuse its
discretion. See Ridge Oil Co., Inc. v. Guinn Invs., Inc., 148 S.W.3d 143, 163 (Tex. 2004); see
also Save Our Springs Alliance, Inc. v. Lazy Nine Mun. Util. Dist., 198 S.W.3d 300, 319 (Tex.
App.—Texarkana 2006, pet. denied) (“Because reasonable minds can differ concerning whether
the attorney’s fees are just and equitable, we cannot say the trial court abused its discretion in
awarding such fees . . . .”).
Conclusion
We are unpersuaded by AJC’s arguments that the trial court’s award of attorney’s fees to
DCL under chapter 37 of the civil practice and remedies code is not reasonable and necessary,
equitable and just, or supported by sufficient evidence. Accordingly, we resolve AJC’s second
issue against it.
Conclusion
Having resolved AJC’s issues against it, we affirm the trial court’s judgment.
/Robert M. Fillmore/
ROBERT M. FILLMORE
JUSTICE
140114F.P05
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S
Court of Appeals
Fifth District of Texas at Dallas
JUDGMENT
AUSTIN JOCKEY CLUB, LTD., Appellant On Appeal from the 160th Judicial District
Court, Dallas County, Texas,
No. 05-14-00114-CV V. Trial Court Cause No. 08-11846.
Opinion delivered by Justice Fillmore,
DALLAS CITY LIMITS PROPERTY CO., Justices Bridges and Brown participating.
L.P., Appellee
In accordance with this Court’s opinion of this date, the judgment of the trial court is
AFFIRMED.
It is ORDERED that appellee Dallas City Limits Property Co., L.P. recover its costs of
this appeal from appellant Austin Jockey Club, Ltd.
Judgment entered this 5th day of June, 2015.
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