Mr. W Fireworks v. Southwest Royalties, Inc. ( 2013 )

Opinion filed October 24, 2013
In The
Eleventh Court of Appeals
__________
No. 11-11-00262-CV
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MR. W FIREWORKS, Appellant
V.
SOUTHWEST ROYALTIES, INC., Appellee
On Appeal from the 70th District Court
Ector County, Texas
Trial Court Cause No. A-123,890
MEMORANDUM OPINION
In this appeal after remand, Mr. W Fireworks asserts that the trial court erred
by awarding attorney’s fees to Southwest Royalties, Inc. (SRI). We affirm.
Background
We summarized the facts and procedural history of the case in our earlier
opinion. See Mr. W Fireworks v. Southwest Royalty, Inc., No. 11-08-00168-CV,
2010 WL 3064412 (Tex. App.—Eastland Aug. 5, 2010, no pet.) (mem. op.). We
will briefly summarize the facts here to provide context for the issue involved in
the current appeal. SRI operates an oil and gas unit on property that is adjacent to
land owned by Mr. W. SRI uses a road that goes across Mr. W’s property to
access the wells in the unit. The drill site, a fence surrounding the drill site, the
access road to the drill site that goes across Mr. W’s property, and a short chain-
link fence running along the side of the access road have been in existence since
1974. Mr. W purchased its land in 2007. Later, a dispute arose between the
parties regarding the fence beside the access road. Mr. W planned to remove part
of the fence so that delivery trucks coming to its property would have more room
to turn around. In response, SRI installed a gate across the entrance to the access
road and locked the gate. SRI did not give Mr. W a key to the lock on the gate;
therefore, Mr. W was excluded from a portion of its property.
SRI filed this suit against Mr. W and obtained a temporary restraining order
to keep Mr. W from interfering with SRI’s use of the fence, the gate, and the road.
In its petition, SRI alleged alternative claims for relief. In part, SRI sought a
declaratory judgment that it had an easement for use of the access road for the
purpose of conducting oil and gas operations on the unit. SRI also sought to
recover attorney’s fees from Mr. W.
After a bench trial, the trial court entered a judgment in which it granted a
permanent injunction against Mr. W to prevent it from interfering with SRI’s use
and enjoyment of the access road, the fence, the gate, and the locking mechanism
on the gate. In the judgment, the trial court granted to SRI and its successors “an
exclusive easement for their exclusive use, enjoyment and maintenance of the
access road, its fence, gate, and its locking mechanism.” By its grant of the
exclusive easement, the trial court denied Mr. W access to the part of its property
that contained the road. The trial court awarded attorney’s fees to SRI. Mr. W
appealed from the trial court’s judgment to this court.
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In our earlier opinion, we concluded that the trial court had not abused its
discretion by enjoining Mr. W from interfering with SRI’s use of the road. Mr. W
Fireworks, 2010 WL 3064412, at *3. However, we also concluded that the
evidence did not support excluding Mr. W from access to the road. Id. We
affirmed the portion of the trial court’s judgment that allowed SRI to maintain a
fence surrounding the access road and a locked gate at the road’s entrance and the
portion of the judgment that enjoined Mr. W from interfering with SRI’s use and
enjoyment of the access road, and we reversed the portion of the trial court’s
judgment that enjoined Mr. W from interfering with the gate and locking
mechanism. We remanded the case to the trial court to modify its injunction to
ensure that Mr. W would have access to its entire tract, such as by providing that
Mr. W would have a key or combination to the gate’s lock or by allowing Mr. W to
place a second lock on the gate. Id. at *4. Because we had reversed a portion of
the trial court’s judgment, we also remanded the case for further consideration of
the attorney’s fee award. Id.
On remand, the trial court held a hearing. At the hearing, the parties
announced that they had agreed on the manner in which Mr. W would have access
to the part of its property that contained the road. The parties presented evidence
on the attorney’s fee issue. Following the hearing, the trial court entered a final
judgment after remand. In the judgment, and in accordance with our earlier
opinion and with the parties’ agreement, the trial court granted Mr. W access to its
entire tract. The trial court also granted an easement to SRI. The trial court
ordered that “[SRI], and its successors and assigns, are granted an easement for
their use, enjoyment and maintenance of the access road, its fence and gate, and the
gate locking mechanism maintained by [SRI] for so long as the unit agreement is
in effect.”
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In the judgment after remand, the trial court awarded attorney’s fees to SRI.
The award included attorney’s fees in the amount of $9,255 for services rendered
through trial; attorney’s fees in the amount of $15,120 for services rendered
through the earlier appeal in this case; and, in the event of an unsuccessful appeal
of the judgment after remand, additional attorney’s fees in the amount of $7,500.
The trial court awarded the same amount of attorney’s fees for services rendered
through trial that it had awarded in its earlier judgment. In the earlier judgment,
the trial court awarded attorney’s fees in the amount of $10,000 in the event of an
unsuccessful appeal of the earlier judgment by Mr. W. Thus, the judgment after
remand increased the amount awarded for appellate attorney’s fees.
Issue on Appeal
In its sole issue, Mr. W challenges the trial court’s award of attorney’s fees
to SRI for two reasons. First, Mr. W contends that the trial court erred when it
awarded attorney’s fees because “this matter was not pled under an act which
would entitle [SRI] to fees, specifically the Uniform Declaratory Judgments Act.”
See TEX. CIV. PRAC. & REM. CODE ANN. § 37.001–.011 (West 2008). Second,
Mr. W contends that the trial court’s award of attorney’s fees was unreasonable.
Trial Court’s Award of Attorney’s Fees
The Uniform Declaratory Judgments Act (UDJA) allows for the recovery of
attorney’s fees. Under Section 37.009 of the UDJA, “the court may award costs
and reasonable and necessary attorney’s fees as are equitable and just.” Id.
§ 37.009. SRI requested declaratory relief on its easement claims in its petition. It
also sought to recover “reasonable and necessary attorney’s fees incurred in this
proceeding as are equitable and just.” SRI did not specifically refer to the UDJA
in its petition. However, SRI alleged that Mr. W or its predecessor granted SRI or
its predecessor an easement that covered the access road for the purpose of
conducting oil and gas operations. To support its easement allegations, SRI relied
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on the oil and gas lease and the unit agreement that governed operations on the
unit. At trial, SRI introduced copies of these documents. Article 11.1 of the unit
agreement, which was titled “Grant of Easements,” provided that “[t]he parties
hereto . . . grant to Working Interest Owners the right to use as much of the surface
of the land within the Unit Area as may reasonably be necessary for Unit
Operations.” Section 37.004(a) of the UDJA provides as follows:
A person interested under a deed, . . . written contract, or other
writings constituting a contract or whose rights, status, or other legal
relations are affected by a . . . contract . . . may have determined any
question of construction or validity arising under the instrument [or]
contract and obtain a declaration of rights, status, or other legal
relations thereunder.
SRI’s request for a declaratory judgment, which was based on the terms of the oil
and gas lease and the unit agreement, fell within the scope of declaratory relief
authorized by Section 37.004. Although SRI did not mention the UDJA in its
petition, SRI’s allegations provided fair notice that it was asserting a claim
governed by the UDJA. See Discovery Operating, Inc. v. BP Am. Prod. Co., 311
S.W.3d 140, 161–62 (Tex. App.—Eastland 2010, pet. denied) (Although the
plaintiff did not specifically refer to a statute in its petition, the facts alleged were
sufficient to give the defendant fair and adequate notice of a claim under the
statute.).
SRI requested the trial court to declare “the existence and validity of the
easement and to confirm, enforce and protect [SRI’s] use of the Road, including
the placement of a locked gate across the Road.” SRI’s request for declaratory
relief related directly to the validity and scope of the alleged easement for use of
the access road. Claims that relate to the validity and scope of easements may be
brought in declaratory judgment actions. Manning v. Enbridge Pipelines (E. Tex.)
L.P., 345 S.W.3d 718, 726 (Tex. App.—Beaumont 2011, pet. denied); Roberson v.
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City of Austin, 157 S.W.3d 130, 136–37 (Tex. App.—Austin 2005, pet. denied);
Steel v. Wheeler, 993 S.W.2d 376, 381 (Tex. App.—Tyler 1999, pet. denied).
Thus, SRI’s easement claims were the proper subject of a declaratory judgment
action. Contrary to Mr. W’s first contention, SRI pleaded a claim that allowed for
a recovery of attorney’s fees.
In the judgment after remand, the trial court increased the amount of
appellate attorney’s fees awarded. Mr. W does not challenge the sufficiency of the
evidence to support the amounts awarded for trial and appellate fees. However,
Mr. W contends that the award of attorney’s fees was improper in light of our
earlier opinion. Because we reversed part of the judgment that was in SRI’s favor
and because we remanded the attorney’s fee issue for further consideration, Mr. W
argues that the award of attorney’s fees was unreasonable. Mr. W states in its brief
that “[it] believes this award violates the spirit of this Court’s remand, and that fees
should be assessed against the party incurring same.” Mr. W also states that “this
award flies in the face of the Original Opinion and Mandate” and that, “[h]ad this
Court believed that the first award of fees was reasonable, there would have been
no remand.”
We remanded the attorney’s fee issue to the trial court because the decision
to grant or to deny attorney’s fees in a declaratory judgment action is a matter that
is within the discretion of the trial court. An award of attorney’s fees will not be
reversed on appeal absent a clear showing that the trial court abused that
discretion. Oake v. Collin Cnty., 692 S.W.2d 454, 455 (Tex. 1985). In the
exercise of its discretion in a declaratory judgment action, the trial court may
award attorney’s fees to the prevailing party, may decline to award attorney’s fees
to either party, or may award attorney’s fees to the nonprevailing party, regardless
of which party sought declaratory relief. Brookshire Katy Drainage Dist. v. Lily
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Gardens, LLC, 333 S.W.3d 301, 313 (Tex. App.—Houston [1st Dist.] 2010, pet.
denied).
Because an award of attorney’s fees under the UDJA is committed to the
discretion of the trial court, we review the award under an abuse of discretion
standard. Bocquet v. Herring, 972 S.W.2d 19, 21 (Tex. 1998); Amaro v. Wilson
Cnty., 398 S.W.3d 780, 789 (Tex. App.—San Antonio 2011, no pet.). The fees
must be reasonable and necessary, as well as equitable and just. Bocquet, 972
S.W.2d at 21; Amaro, 398 S.W.3d at 789. Whether the fees are reasonable and
necessary are questions of fact, whereas whether the fees are equitable and just are
questions of law. Bocquet, 972 S.W.2d at 21; Amaro, 398 S.W.3d at 789. A trial
court abuses its discretion when it rules arbitrarily, unreasonably, or without regard
to guiding legal principles. Goode v. Shoukfeh, 943 S.W.2d 441, 446 (Tex. 1997).
It is also an abuse of discretion to rule without supporting evidence that is factually
sufficient. Bocquet, 972 S.W.2d at 21; Amaro, 398 S.W.3d at 789. Therefore, in
reviewing an award of attorney’s fees under the UDJA, we must determine
whether the trial court abused its discretion by awarding fees when there was
insufficient evidence that the fees were reasonable and necessary or when the
award was inequitable or unjust. Bocquet, 972 S.W.2d at 21; Amaro, 398 S.W.3d
at 789.
SRI’s counsel gave detailed testimony on the attorney’s fee issue at the
hearing after remand. He testified as to the reasonableness and necessity of the
fees that SRI incurred. His testimony provided sufficient evidentiary support for
the amounts of trial and appellate attorney’s fees awarded by the trial court.
Considering the issues involved in this case, and also considering the evidence, we
cannot conclude that the trial court’s award of attorney’s fees was inequitable or
unjust. The award of attorney’s fees was not an abuse of discretion. Mr. W’s sole
issue on appeal is overruled.
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This Court’s Ruling
We affirm the judgment of the trial court.
TERRY McCALL
JUSTICE
October 24, 2013
Panel consists of: Wright, C.J.,
McCall, J., and Judge Herod.1
Willson, J., not participating.
1
Steven R. Herod, Judge, 91st District Court, Eastland, sitting by assignment.
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