Texas Electric Utility Construction Management, Ltd. v. InfraSource Underground Construction Services LLC ( 2010 )

NO. 12-09-00287-CV
IN THE COURT OF APPEALS
TWELFTH COURT OF APPEALS DISTRICT
TYLER, TEXAS
TEXAS ELECTRIC UTILITY
CONSTRUCTION, LTD., ' APPEAL FROM THE 145TH
APPELLANT
V. ' JUDICIAL DISTRICT COURT OF
INFRASOURCE UNDERGROUND
CONSTRUCTION ' NACOGDOCHES COUNTY, TEXAS
SERVICES, L.L.C.,
APPELLEE
MEMORANDUM OPINION
Texas Electric Utility Construction, Ltd. (“Texas Electric”) appeals from a
summary judgment granted in favor of InfraSource Underground Construction Services,
LLC (“InfraSource”). In its sole issue, Texas Electric contends that it is entitled to
“recover, as damages, attorney‟s fees and expenses it incurred in defending itself against
the claim of a third party that resulted from the wrongful act of [InfraSource].” We
affirm.
BACKGROUND
Nolan Holloway, a nonparty to this litigation, was a Texas Electric employee. He
later became employed by InfraSource and was injured while using an aerial lift bucket
vehicle known as a “rollagon.” The rollagon was owned by Texas Electric at the time of
his injury. Holloway sued Texas Electric. In turn, Texas Electric impleaded InfraSource
as a third-party defendant. Later, the third party claim against InfraSource was severed
from the main action. The Holloway suit was resolved in Texas Electric‟s favor, which
was appealed to this court. See generally Holloway v. Tex. Elec. Util. Constr., Ltd., 282
S.W.3d 207 (Tex. App.—Tyler 2009, no pet.).
After resolution of the Holloway suit, Texas Electric pursued the instant litigation,
that is, the severed claim against InfraSource. Texas Electric claimed that InfraSource
did not have permission to use the rollagon when Holloway was injured, and sued
InfraSource for conversion. As part of its damages, Texas Electric sought to recover,
from InfraSource, the attorney‟s fees it incurred defending itself in the Holloway
litigation. The parties filed competing motions for summary judgment.
InfraSource stipulated to liability on Texas Electric‟s conversion claim and the
loss of rental value damages in the amount of $10,000.00. The only contested issue then
was whether Texas Electric could recover, as damages, the attorney‟s fees it incurred in
defending the related, but distinct, Holloway lawsuit. Texas Electric argued that these
fees were recoverable because it would not have been sued if InfraSource had not
converted the rollagon. Ultimately, the trial court granted InfraSource‟s motion for
summary judgment and held it “is not at liberty to adopt a theory of recovery (i.e.
Plaintiff‟s claim for attorney‟s fees as damages) that has not been enacted by the
Legislature or adopted by the Texas Supreme court or the 12th Court of Appeals-Tyler.”
Texas Electric timely appealed.
ATTORNEY’S FEES AS DAMAGES
In its sole issue, Texas Electric contends that it may recover the attorney‟s fees it
incurred in defending itself in the earlier Holloway lawsuit under the so called “tort of
another” exception to the American rule on attorney‟s fees.
Standard of Review
Generally, we review a trial court‟s decision to either grant or deny attorney‟s fees
under an abuse of discretion standard. See Ridge Oil Co., Inc. v. Guinn Invs., Inc., 148
S.W.3d 143, 163 (Tex. 2004). However, the issue in the instant case is whether Texas
law recognizes a particular basis for the recovery of attorney‟s fees, which is a question
of law that we review de novo. See Holland v. Wal-Mart Stores, 1 S.W.3d 91, 94 (Tex.
1999).
Applicable Law
“Texas law distinguishes between recovery of attorney‟s fees as actual damages
and recovery of attorney‟s fees incident to recovery of other actual damages.” Haden v.
David J. Sacks, P.C., 222 S.W.3d 580, 597 (Tex. App.—Houston [1st Dist.] 2007), rev’d
in part on other grounds, 263 S.W.3d 919 (Tex. 2008). When recovering attorney fees
incident to other actual damages, a party may generally recover them only as provided by
statute or contract. Gulf States Utils. Co. v. Low, 79 S.W.3d 561, 567 (Tex. 2002); see
also Turner v. Turner, 385 S.W.2d 230, 233 (Tex.1965). Attorney‟s fees are ordinarily
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not recoverable as actual damages in and of themselves. Haden, 222 S.W.3d at 597; see
also McCall v. Tana Oil & Gas Corp., 82 S.W.3d 337, 344 (Tex. App.—Austin 2001),
rev’d on other grounds, 104 S.W.3d 80 (Tex. 2003); G.R.A.V.I.T.Y. Enter., Inc. v. Reece
Supply Co., 177 S.W.3d 537, 546 (Tex. App.—Dallas 2005, no pet.). However, in
Turner, the supreme court discussed, without expressly adopting, an exception to the
general rule that attorney‟s fees are not available as actual damages. Id. at 234. That
rule, known as the “tort of another” exception, provides as follows:
(1) The damages in a tort action do not ordinarily include compensation
for attorney fees or other expenses of the litigation.
(2) One who through the tort of another has been required to act in the
protection of his interests by bringing or defending an action against a
third person is entitled to recover reasonable compensation for loss of
time, attorney fees and other expenditures thereby suffered or incurred
in the earlier action.
Restatement (Second) of Torts § 914 (1979).
Texas intermediate appellate courts are divided on whether section 914(2) is the
law in Texas. Compare Naschke v. Gulf Coast Conference, 187 S.W.3d 653, 655 (Tex.
App.—Houston [14th Dist.] 2006, pet. denied) (declining to adopt “tort of another”
exception in section 914(2)); Peterson v. Dean Witter Reynolds, Inc., 805 S.W.2d 541,
549 (Tex. App.—Dallas 1991, no writ); Cupples Coiled Pipe, Inc. v. Esco Supply Co.,
591 S.W.2d 615, 619 (Tex. Civ. App.—El Paso 1979, writ ref'd n.r.e.); Dalton Steamship
Corp. v. W.R. Zanes & Co., 354 S.W.2d 621, 624 (Tex. Civ. App.—Fort Worth 1962, no
writ) with Lesikar v. Rappeport, 33 S.W.3d 282, 306 (Tex. App.—Texarkana 2000, pet.
denied) (adopted “tort of another” exception under Restatement section 914(2)); Estate of
Arlitt v. Paterson, 995 S.W.2d 713, 721 (Tex. App.—San Antonio 1999, pet. denied),
overruled on other grounds, Belt v. Oppenheimer, Blend, Harrison & Tate, Inc., 192
S.W.3d 780 (Tex. 2006); Standard Fire Ins. Co. v. Stephenson, 963 S.W.2d 81, 90-91
(Tex. App.—Beaumont 1997, no pet.); Baja Energy, Inc. v. Ball, 669 S.W.2d 836, 839
(Tex. App.—Eastland 1984, no writ); Powell v. Narried, 463 S.W.2d 43, 46 (Tex. Civ.
App.—El Paso 1971, writ ref'd n.r.e.).
Recently, the Texas Supreme Court clarified its earlier opinion in Turner and
stated that “we need not and do not address whether the [„tort of another‟] exception set
out in section 914(2) of the Second Restatement should be adopted as Texas law.” Akin,
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Gump, Strauss, Hauer & Feld, L.L.P. v. Nat’l Dev. and Research Corp., 299 S.W.3d
106, 119 (Tex. 2009).
Discussion
In this case, it is uncontroverted that Texas Electric owned the rollagon when
Holloway was injured and that Holloway‟s use of the rollagon resulted from
InfraSource‟s conversion of it. Thus, Texas Electric urges that we adopt the “tort of
another” exception in section 914(2), which it contends would support its recovery of the
attorney‟s fees it incurred in defending the Holloway suit. However, “[b]ecause we are
bound to follow the existing laws of the State, we are not at liberty to adopt a theory of
recovery that has not been enacted by the Legislature or adopted by the Texas Supreme
Court.” See Naschke, 187 S.W.3d at 655. The “tort of another” exception is such a
theory. See id. Therefore, Appellant‟s sole issue is overruled.
DISPOSITION
We affirm the judgment of the trial court.
JAMES T. WORTHEN
Chief Justice
Opinion delivered June 30, 2010.
Panel consisted of Worthen, C.J., Griffith, J., and Hoyle, J.
(PUBLISH)
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