Janet Friedman v. Gail Rozzlle and Sun Harbour Cottages Unit 1 Owners' Association ( 2013 )

NUMBER 13-12-00779-CV
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI - EDINBURG
JANET FRIEDMAN, Appellant,
v.
GAIL ROZZLLE AND SUN HARBOUR COTTAGES
UNIT 1 OWNERS’ ASSOCIATION, Appellees.
On appeal from the 156th District Court
of Aransas County, Texas.
MEMORANDUM OPINION
Before Chief Justice Valdez and Justices Rodriguez and Garza
Memorandum Opinion by Justice Rodriguez
This is an appeal from a judgment granting summary judgments and awarding
attorney’s fees. By eight issues, which we have reorganized and renumbered, appellant
Janet Friedman challenges (1) the trial court’s declaration that a short-term rental
provision is void; and (2) the trial court’s award of attorney’s fees to appellees Gail Rozzlle
and the Sun Harbour Cottages Unit 1 Owners’ Association (the Association). We affirm.
I. BACKGROUND
Rozzlle, owner of a home in Sun Harbour Cottages Unit I (Sun Harbour) and
operator of a business that rented cottages there for nineteen years, filed a declaratory
judgment action against the Association and the homeowners in the Sun Harbour
subdivision, one of whom was Friedman. Rozzlle sought a determination of whether
section 11.3, the short-term rental provision of the Declaration of Covenants, Conditions,
and Restrictions (the Declaration) for Sun Harbour, should be enforced. Section 11.3
provides, in relevant part, the following: “The term of any lease of a SINGLE FAMILY
DWELLING may not be for a period of less than thirty (30) days, with no transient tenancy
or occupancy and no hotel purposes allowed.” Rozzlle claimed that the homeowners
consented to and waived any right to object to the use of the Sun Harbour cottages for
short-term rentals. She requested that the trial court declare section 11.3
unenforceable, void, and waived by the homeowners.
Friedman answered and filed a counter-claim against Rozzlle and a cross-claim
against the Association and all other homeowners, asserting that they had violated the
short-term rental provision. Friedman claimed that the homeowners “continued to offer
their properties for short-term rental in direct violation of the [2009] [J]udgment” and that
“[t]he Association[ ] has taken no steps to stop this ongoing violation.”1 She asserted
1
The referenced 2009 judgment was rendered in Friedman v. Sun Harbour Cottages Unit I
Owner’s Association, Nature’s Homes, LLC, Gail Rozzlle and Dal Rozzlle, Cause No. A-06-0175-CV-B, in
the 156th District Court, Aransas County, Texas. In that lawsuit, Friedman asserted fraud, DTPA, and
conspiracy claims against Rozzlle for, among other allegations not pertinent here, representing that the
cottages could be short-term rented. And she claimed that the Association “engaged in improper
procedures to secure a vote repealing the prohibition on short[-]term rentals and failed to abide by the
requirements set out in the [Declaration].” Friedman also requested a declaration that the amended
covenant passed by the Association “on April 25, 2008 which repealed the prohibition on short[-]term
2
that the “[d]efendants [we]re completely aware of the [2009] Judgment and its meaning.
The Association approved the form of the [2009] Judgment. The Association had the
duty to advise the Defendant Home Owners of its meaning and effect, and to enforce the
Restrictions.” Friedman sought sanctions and an injunction by her claim.
The Association filed its answer. As to Friedman’s allegations, it generally denied
her claims. The Association also filed a cross-claim against Friedman, seeking, under
section 37.004(a), a declaration as to whether it had a duty to enforce the Declaration’s
provisions. See TEX. CIV. PRAC. & REM. CODE ANN. § 37.004(a) (West 2008) (providing
that an interested person under a deed, will, written contract, or other writings constituting
a contract may have determined any question of construction or validity arising under the
instrument and obtain a declaration of the rights, status, or other legal relations
thereunder). And under section 37.009, the Association sought attorney’s fees. See id.
§ 37.009 (West 2008).
Rozzlle and Friedman filed their respective motions for partial summary judgment.
The trial court granted Rozzlle’s motion against all homeowners, including Friedman,
determining that section 11.3 should not be enforced because it had been waived and
rentals be declared void and that the Court enter an order prohibiting short[-]term rentals.” In response,
the Rozzlles and the Association filed counter-suits against Friedman.
The 2009 judgment sets out that, on the second day of trial, Friedman and the Rozzlles dismissed
all claims they had asserted or might have asserted between themselves with prejudice. And after the
dismissals, the trial court re-aligned the parties. The Association became the plaintiff/counterclaimant, and
Friedman became the defendant/counterclaimant. The 2009 judgment further reflects that, following a jury
trial, the trial court declared that: (1) the April 25 amendment to section 11.3 was “VOID for failure to obtain
at least 51% of the valid votes in favor of such amendment”; (2) the portion of section 11.3 filed with the
county clerk on October 3, 2001 had been in effect from that time until the date of the final judgment; and (3)
until a valid amendment was made to that section of the Declaration and filed of record, “not less than the
entire SINGLE FAMILY DWELLING may be rented or leased under one tenancy or subtenancy.” The trial
court also awarded the Association $10,000.00 on its claims against Friedman.
3
awarding Rozzlle her attorney’s fees. 2 The trial court denied Friedman’s motion for
partial summary judgment, which was based, in relevant part, on res judicata. The trial
court further found that its order disposed of all claims and causes of action in the lawsuit,
except for Friedman’s cross-claims against the Association and the remaining
homeowners.
The Association filed its motion for partial summary judgment, arguing that there
was no issue as to any material fact and that it was entitled to summary judgment as a
matter of law because the Declaration did not create or impose a duty on the Association
to enforce any of the Declaration’s conditions or covenants. The trial court entered
summary judgment for the Association, declaring that it had no such duty.
Friedman non-suited the remaining cross-defendants. And following an
evidentiary hearing on the Association’s request for attorney’s fees, the trial court
awarded attorney’s fees to the Association against Friedman. The trial court then
entered a final amended judgment reflecting the above rulings. Finally, it filed findings of
fact and conclusions of law related to the Association’s request for attorney’s fees.
On appeal, Friedman challenges the trial court’s declaration that section 11.3 is
void. She also contests the trial court’s award of attorney’s fees to Rozzlle and to the
Association. Friedman does not dispute the trial court’s declaration that the Association
had no duty to enforce violations of the Declaration.
II. SHORT-TERM RENTAL PROVISION
By issues one, two, and three, Friedman contends that the trial court erred in
granting Rozzlle summary judgment and declaring section 11.3 waived because (1)
2
Although the trial court granted Rozzlle summary judgment against all homeowners, only
Friedman appeals the judgment.
4
Rozzlle failed to include a copy of the Declaration in the summary judgment record; (2)
the Declaration contained a valid and enforceable anti-waiver provision; and (3) there
was a genuine issue of material fact regarding waiver of the short-term rental restriction.
A. The Summary Judgment Record
By her first issue, Friedman contends that the trial court erred in granting Rozzlle
summary judgment because Rozzlle did not attach a properly authenticated copy of the
Declaration to her motion for partial summary judgment. See TEX. R. CIV. P. 166a(c).
However, as discussed below, our review of the record reveals that the Declaration was
before the trial court in this summary judgment proceeding.
It is well settled that when both sides file summary judgment motions, all of the
summary judgment evidence on file is before the trial court. DeBord v. Muller, 446
S.W.2d 299, 301 (Tex. 1969); Martin v. Harris County Appraisal Dist., 44 S.W.3d 190, 193
(Tex. App.—Houston [14th Dist.] 2001, pet. denied); accord Guerra v. Am. Employers’
Ins. Co., No. 13-02-084-CV, 2003 WL 22025871, at *1 (Tex. App.—Corpus Christi Aug.
29, 2003, pet. denied) (mem. op.). And one party’s summary judgment proof can serve
as the alleged missing proof for the other party’s summary judgment motion. Seaman v.
Seaman, 686 S.W.2d 206, 210 (Tex. App.—Houston [1st Dist.] 1984, writ ref’d n.r.e.)
(determining that copy of an insurance policy attached to one party’s motion provided
proof to support the other party’s motion, which did not attach the policy).
Friedman filed her motion for summary judgment before Rozzlle filed her motion.
Friedman attached a copy of the Declaration as an exhibit to her motion. The trial court
heard Friedman’s motion with Rozzlle’s motion. The summary judgment evidence
included the Declaration. See DeBord, 446 S.W.2d at 301. Because Friedman’s
5
summary judgment proof could serve as the alleged missing document for Rozzlle’s
summary judgment motion, see Seaman, 686 S.W.2d at 210, the Declaration was before
the trial court for its review and consideration when it granted Rozzlle’s motion and denied
Friedman’s motion. This argument fails, and we overrule Friedman’s first issue.
B. The Anti-Waiver Provision
By her second issue, Friedman argues that the trial court erred in declaring section
11.3 waived because the deed provisions contained an anti-waiver provision. Friedman
presents this argument for the first time on appeal. The failure to raise the objection or
argument in the trial court waives the issue on appeal. See TEX. R. CIV. P. 166a(c)
(“Issues not expressly presented to the trial court by written motion, answer or other
response shall not be considered on appeal as grounds for reversal.”); City of Houston v.
Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex. 1979); see also Musgrove v.
Westridge Street Partners I, LLC, No. 02-07-281-CV, 2009 WL 976010, at *4 (Tex.
App.—Fort Worth April 9, 2009, pet. denied) (mem. op.) (per curiam) (“Like other
contractual provisions, nonwaiver provisions can be waived.”). We conclude that
Friedman has waived this argument. We overrule this second issue.
C. Waiver
By her third issue, Friedman contends that the trial court erred when it granted
partial summary judgment and then a final judgment declaring section 11.3 void because
Rozzlle failed to cite cases in her summary judgment motion that specifically addressed
waiver of restrictive covenants and, thus, failed to analyze the requirements of waiver set
out in such cases. Friedman argues that Rozzlle, therefore, did not establish that there
was no genuine issue of material fact as to waiver and that she was entitled to judgment
6
as a matter of law on that basis. We disagree.
1. Standard of Review and Applicable Law
Appellate courts in Texas review summary judgments de novo. Alejandro v. Bell,
84 S.W.3d 383, 390 (Tex. App.—Corpus Christi 2002, no pet.). In a traditional motion for
summary judgment, the movant has the burden of showing both that there is no genuine
issue of material fact and that she is entitled to judgment as a matter of law. TEX. R. CIV.
P. 166a(c); see Swilley v. Hughes, 488 S.W.2d 64, 67 (Tex. 1972); Ortega v. City Nat’l
Bank, 97 S.W.3d 765, 772 (Tex. App.—Corpus Christi 2003, no pet.).
Waiver is the intentional surrender of a known right or intentional conduct
inconsistent with claiming that right. Tenneco Inc. v. Enter. Prods. Co., 925 S.W.2d 640,
643–44 (Tex. 1996); Straus v. Kirby Court Corp., 909 S.W.2d 105, 108 (Tex.
App.—Houston [14th Dist.] 1995, writ denied). “[W]hen the facts and circumstances are
admitted or clearly established, the question becomes one of law.” Tenneco Inc., 925
S.W.2d at 643–44 (finding waiver was established as a matter of law in a summary
judgment proceeding). “A party’s express renunciation of a known right can establish
waiver. Silence or inaction, for so long a period as to show an intention to yield the
known right, is also enough to prove waiver.” Id. The elements of waiver are (1) an
existing right, benefit, or advantage held by a party; (2) the party’s actual knowledge of its
existence; and (3) the party’s actual intent to relinquish the right or intentional conduct
inconsistent with the right. Id.
Cases specific to restrictive covenants, such as those cited to this Court by
Friedman, develop the third element of waiver—the party’s actual intent to relinquish the
right or intentional conduct inconsistent with the right. See id. For example, Friedman
7
quotes the following from Sharpstown Civic Association, Inc. v. Picket:
[I]n order to support a waiver of residential restrictions the proposed use
must not be substantially different in its effect on the neighborhood from any
prior violation. To put it another way, the prior violation that has been
carried on without objection, if insignificant or insubstantial when compared
to the proposed or new use, will not support a waiver of the new and greater
violation.
679 S.W.2d 956, 958 (Tex. 1984); see Cox v. Melson-Fulsom, 956 S.W.2d 791, 794 (Tex.
App.—Austin 1997, no pet.) (“[T]o carry the burden of demonstrating waiver of restrictive
covenants, a party must prove that “the violations that existed were so extensive and
material as to reasonably lead to the conclusion that the restrictions had been
abandoned.”); see also Musgrove, 2009 WL 976010, at *3 (identifying the following
non-exhaustive factors to consider when evaluating waiver of restrictive covenants: “the
nature and severity of past violations relative to the restriction sought to be enforced, the
extent to which the person attempting to enforce the restriction relied on the restriction in
purchasing the property, and the number of properties subject to the restriction relative to
the number of violations”) (citations omitted)). And “[a] court may refuse to enforce a
restrictive covenant because of the acquiescence of the lot owners in such substantial
violations within the restricted area as to amount to an abandonment of the covenant or a
waiver of the right to enforce it.” Cowling v. Colligan, 158 Tex. 458, 461–62, 312 S.W.2d
943, 945 (1958). Finally,
[t]he failure of property owners to object to trivial violations does not
preclude enforcement of the covenant. On the other hand, an
abandonment or waiver finding should be sustained where the party
resisting enforcement of the covenant presents proof that the violations
then existing were so extensive and material as to reasonably lead to the
conclusion that the restrictions had been abandoned or waived.
Pebble Beach Prop. Owners’ Ass’n v. Sherer, 2 S.W.3d 283, 289–90 (Tex. App.—San
8
Antonio 1999, pet. denied); see Cox, 956 S.W.2d at 794.
2. Discussion
As to the first two elements of waiver, Friedman does not dispute that she had
actual knowledge of section 11.3 or that it provided for no short-term rental of the
cottages. See Tenneco Inc., 925 S.W.2d at 643–44. She challenges the sufficiency of
the evidence to support the third element; i.e., the homeowner’s “actual intent” to
abandon or waive the short-term rental restriction. See id. As to that element, the
summary judgment evidence shows that short-term rentals of properties at Sun Harbour
occurred without objection for over a decade. Friedman admitted she knew cottages
were being short-term rented when she first considered buying a cottage in 2001.
Friedman, herself, short-term rented a cottage, then short-term rented another cottage,
and then closed on her cottage. Friedman short-term rented her own cottage to a third
party before purchasing yet another cottage. Other homeowners testified that they, too,
had repeatedly short-term rented their cottages at Sun Harbour from 2001 to 2009 and
that they had seen Friedman’s cottage used on a short-term basis.
Friedman also knew Rozzlle had been handling short-term cottage rentals for
years. Friedman was aware of a sign advertising short-term rentals that had been in
place since at least 2001. The sign, which was still in place in 2009, had Rozzlle’s phone
number on it. The summary judgment evidence also shows that Friedman participated
in homeowners’ association meetings where the homeowners discussed short-term
rentals and where she interacted with other homeowners who were renting their cottages
short term.
We cannot conclude that the violations of section 11.3 that were carried on without
9
objection at Sun Harbour by homeowners, including Friedman, for at least ten years were
insignificant or insubstantial. See Picket, 679 S.W.2d at 958. Instead, the violations of
the short-term rental provision were extensive and material. See Sherer, 2 S.W.3d at
289–90. The homeowners’ acquiescence in these substantial violations of this provision
amounted to an abandonment of the provision or a waiver of the right to enforce it. See
Cowling, 312 S.W.2d at 945. The evidence established that Friedman engaged in
conduct inconsistent with claiming any right to enforce the short-term rental provision,
which is the third element of waiver. See Tenneco Inc., 925 S.W.2d at 643–44. Thus,
Rozzlle established that there was no genuine issue of material fact as to waiver and that
she was entitled to judgment as a matter of law on this basis. See TEX. R. CIV. P.
166a(c). The trial court did not err in granting Rozzlle summary judgment based on
waiver. Friedman’s third issue is overruled.
D. Release
Friedman complains by her fourth issue that the trial court erred by granting partial
summary judgment and final judgment to Rozzlle on the issue of release because the
release documents contained in the summary judgment record are unsigned. 3 Having
concluded that Rozzlle established waiver and that waiver supported the trial court’s
judgment, we need not address the fourth issue that challenges another summary
judgment ground that Rozzlle brought in her motion, as it is not dispositive of this appeal.
See TEX. R. APP. P. 47.1 (stating that an appellate court must address every issue
3
We note that in its original summary judgment the trial court “ordered, adjudged, and decreed”
that the homeowners, including Friedman, waived section 11.3 of the Declaration, making that section void
and unenforceable. However, when the trial court incorporated this prior ruling into its amended final
judgment, it “ordered, adjudged, and decreed” that section 11.3 was “void and shall be of no further force
and effect,” without mentioning waiver as a basis for its determination. Arguably, release could have been
another basis for the trial court’s ruling. See Bradley v. White, 990 S.W.2d 245, 247 (Tex. 1999).
10
necessary for final disposition of appeal); see also Bradley v. White, 990 S.W.2d 245, 247
(Tex. 1999) (“When a trial court's order granting summary judgment does not specify the
grounds relied upon, the reviewing court must affirm summary judgment if any of the
summary judgment grounds are meritorious.”).
E. Res Judicata
By her fifth issue, Friedman claims that the trial court erred when it concluded that
the 2009 Judgment in Friedman v. Sun Harbour Cottages Unit I Owner’s Association,
Nature’s Homes, LLC, Gail Rozzlle and Dal Rozzlle, Cause No. A-06-0175-CV-B, filed in
the 156th District Court, Aransas County, Texas, was not res judicata as to Rozzlle.4 In
response, Rozzlle asserts that she was not in privity with the Association in the prior
lawsuit and, therefore, the 2009 Judgment does not bind her. We agree with Rozzlle.
“Generally, persons are not bound by a judgment in a suit to which they were not
parties.” Mayes v. Stewart, 11 S.W.3d 440, 449 (Tex. App.—Houston [14th Dist.] 2000,
pet. denied) (citing Armstadt v. U.S. Brass Corp., 919 S.W.2d 644, 652 (Tex. 1996)); see
TEX. CIV. PRAC. & REM. CODE ANN. § 37.006(a) (West 2008). However, the doctrine of
res judicata creates an exception to that rule by forbidding a second suit arising out of the
same subject matter of an earlier suit by those in privity with the parties to the original suit.
Armstadt, 919 S.W.2d at 652–53; see Getty Oil Co. v. Ins. Co. of N. Am., 845 S.W.2d 794,
799 (Tex. 1992) (quoting Barr v. Resolution Trust Corp., 837 S.W.2d 627, 631 (Tex.
1992)). To establish privity, one of the following must be proven: (1) the non-party had
control over the first action even though she was not a party; (2) the non-party’s interests
4
Friedman also claims, without argument and without citation to the record or to authority, that res
judicata prevents summary judgment in favor of the Association. We conclude that this argument is
inadequately briefed. See TEX. R. APP. P. 38.1(i).
11
were fully represented in that first action; or (3) the non-party is a successor in interest to
a piece of property for which rights and/or claims were decided in a prior lawsuit. 5
Armstadt, 919 S.W.2d at 653; Benson v. Wanda Petroleum Co., 468 S.W.2d 361, 363
(Tex. 1971).
In the prior lawsuit, Friedman asserted fraud, DTPA, and conspiracy claims
against Rozzlle, which related to, among other things, the short-term rental of properties
at Sun Harbour. Friedman also sought an injunction. In response, Rozzlle filed
counter-claims against Friedman. However, on the second day of trial, Friedman and
Rozzlle dismissed their claims against each other with prejudice. The remaining parties
were re-aligned, and the Association became the plaintiff and Friedman became the
defendant.
The summary judgment evidence in this case shows that when Rozzlle was
dismissed from the prior lawsuit, she was excluded from the courtroom. The
Association’s lawyer had agreed to represent the Association and the individual
defendant owners, except for Rozzlle. Friedman points us to no evidence, and we find
none, supporting the control theory of privity or the interests-represented theory of privity
in this case. See Armstadt, 919 S.W.2d at 653; Benson, 468 S.W.2d at 363. Based
on our de novo review, we cannot conclude that Rozzlle was in privity with the parties to
the prior suit, such that the doctrine of res judicata applied. Instead, we conclude that the
trial court did not err in determining that the 2009 Judgment in the prior lawsuit was not res
judicata as to Rozzlle. We overrule Friedman’s fifth issue.
5
The subsequent-purchaser theory of privity is not applicable here because there is no allegation
that Rozzlle subsequently purchased property, the rights of which were litigated in the prior lawsuit. See
Armstadt v. U.S. Brass Corp, 919 S.W.2d 644, 653 (Tex. 1996); Benson v. Wanda Petroleum Co., 468
S.W.2d 361, 363 (Tex. 1971).
12
III. ATTORNEY’S FEES
By her sixth and seventh issues, Friedman challenges the portion of the trial
court’s summary judgment that awards attorney’s fees to Rozzlle. In her eighth issue,
Friedman complains of the trial court’s award of attorney’s fees to the Association
following a bench trial.
A. Standard of Review and Applicable Law
We review a trial court's decision to award or not award attorney's fees in a
declaratory judgment action for an abuse of discretion. Ridge Oil Co. v. Guinn Invs., Inc.,
148 S.W.3d 143, 163 (Tex. 2004); see TEX. CIV. PRAC. & REM. CODE ANN. § 37.009;
Montemayor v. Ortiz, 208 S.W.3d 627, 662–63 (Tex. App.—Corpus Christi 2006, pet.
denied) (op. on reh’g). To determine whether a trial court abused its discretion, we must
decide “whether the trial court acted without reference to any guiding rules or principles; in
other words, whether the act was arbitrary or unreasonable.” Worford v. Stamper, 801
S.W.2d 108, 109 (Tex. 1990) (per curiam).
Under the Texas Uniform Declaratory Judgments Act (the Act), “the court may
award costs and reasonable and necessary attorney's fees as are equitable and just.”
TEX. CIV. PRAC. & REM. CODE ANN. § 37.009; Allstate Ins. Co. v. Hallman, 159 S.W.3d 640,
643 (Tex. 2005); Potter, 230 S.W.3d at 466. The reasonable and necessary
requirements are questions of fact to be determined by the factfinder, but the equitable
and just requirements are questions of law for the trial court to decide. Ridge Oil, 148
S.W.3d at 161. Under an abuse of discretion standard, legal and factual insufficiency
are relevant factors in assessing whether the trial court abused its discretion. See
Beaumont Bank v. Buller, 806 S.W.2d 223, 226 (Tex. 1991); In re Driver, 895 S.W.2d 875,
13
877 (Tex. App.—Texarkana 1995, no writ); D.R. v. J.A.R., 894 S.W.2d 91, 95 (Tex.
App.—Fort Worth 1995, writ denied) (op. on reh'g); Mai v. Mai, 853 S.W.2d 615, 618 (Tex.
App.—Houston [1st Dist.] 1993, no writ). Relevant to this case,
[w]hen an appellant attacks the legal sufficiency of an adverse
finding on an issue for which it did not have the burden of proof, the
appellant must demonstrate that there is no evidence to support the
adverse finding. City of Keller v. Wilson, 168 S.W.3d 802, 810 (Tex. 2005);
Croucher v. Croucher, 660 S.W.2d 55, 58 (Tex. 1983). Such a no-evidence
challenge will be sustained only if: (1) there is a complete absence of
evidence of a vital fact; (2) the court is barred by rules of law or of evidence
from giving weight to the only evidence offered to prove a vital fact; (3) the
evidence offered to prove a vital fact is no more than a mere scintilla; or (4)
the evidence establishes conclusively the opposite of a vital fact. City of
Keller, 168 S.W.3d at 810; King Ranch, Inc. v. Chapman, 118 S.W.3d 742,
751 (Tex. 2003) (quoting Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d
706, 711 (Tex. 1997)). In conducting a legal sufficiency review, we review
the evidence presented at trial in the light most favorable to the jury's verdict
and indulge every reasonable inference that would support it, crediting
favorable evidence if reasonable jurors could and disregarding contrary
evidence unless reasonable jurors could not. Del Lago Partners, Inc. v.
Smith, 307 S.W.3d 762, 770 (Tex. 2010); City of Keller, 168 S.W.3d at 822,
827.
Editorial Caballero, S.A. de C.V. v. Playboy Enters., Inc., 359 S.W.3d 318, 328–29 (Tex.
App.—Corpus Christi 2012, pet. denied).
As to our review of the attorney’s fees awarded to the Association, findings of fact
in a bench trial have the same force and dignity as a jury’s verdict. Catalina v. Blasdel,
881 S.W.2d 295, 297 (Tex. 1994). When, as in this case, a complete reporter’s record is
filed, the trial court’s fact-findings may be reviewed for legal and factual sufficiency under
the same standards as jury verdicts—the standards set out above. Ortiz v. Jones, 917
S.W.2d 770, 772 (Tex. 1996) (per curiam); Catalina, 881 S.W.2d at 297.
Appellate courts review a trial court’s challenged conclusions of law as legal
questions. BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex. 2002).
14
Accordingly, courts of appeals apply a de novo standard. In re Humphreys, 880 S.W.2d
402, 404 (Tex. 1994). An appellant may not challenge a trial court’s conclusions of law
for factual sufficiency. BMC Software, 83 S.W.3d at 794. However, appellate courts
determine the correctness of the trial court’s legal conclusions drawn from the facts. Id.
If a court of appeals determines that a conclusion of law is not correct, but the trial court
rendered the proper judgment, the incorrect conclusion of law does not require reversal.
Id. In other words, in reviewing challenges to a trial court’s conclusions of law, a court of
appeals sustains the judgment on any legal theory supported by the evidence. See
Vasquez v. Vasquez, 973 S.W.2d 330, 331 (Tex. App.—Corpus Christi 1998, pet.
denied).
B. Rozzlle’s Attorney’s Fees
By her sixth issue, Friedman argues that because of the arguments set forth in her
first, second, and third issues, the trial court erred when it awarded Rozzlle attorney’s
fees. Having overruled the first three issues, we conclude that Friedman has no support
for this argument, and we overrule Friedman’s sixth issue.
Friedman asserts, in her seventh issue, that a genuine issue of material fact as to
the reasonableness of the requested fees precluded the award of attorney’s fees to
Rozzlle. Friedman complains that the evidence provided by Rozzlle’s trial counsel in
support of Rozzlle’s request for attorney’s fees is “wholly conclusory and unsupported by
facts or analysis to justify the dollar amounts requested.” See Transcont’l Ins. Co. v.
Briggs Equip. Trust, 321 S.W.3d 685, 692–93 n.1 (Tex. App.—Houston [14th Dist.] 2010,
no pet.) (providing that a challenge to the conclusory nature of summary judgment
evidence may be raised for the first time on appeal); Branton v. Wood, 100 S.W.3d 645,
15
648 (Tex. App.—Corpus Christi 2003, no pet.) (same).
In support of her request for attorney’s fees, Rozzlle attached her attorney’s
affidavit to her motion for summary judgment. The affidavit set out the following:
I am the attorney of record for Gail Rozzlle, Plaintiff in this cause of action,
involving numerous defendants, including Janet Friedman. The majority of
the time I have spent on this file involves matters pertaining to Janet
Friedman. Legal services provided through this firm with regard to the
claims pertaining to Janet Friedman only include but are not limited to
telephone conferences with our clients, with witnesses, with various pro se
parties, with attorneys for other parties and with counsel for Defendant
Friedman; preparation of Plaintiff’s petition; letters to client; preparation of
disclaimers; letters to other defendants regarding disclaimer; review of
depositions in prior lawsuit; telephone conferences and letters to court
manager regarding trial setting; attendance at docket control conference;
conferences with client regarding claims’ receipt and review of counterclaim
from Friedman; preparation of answer to counterclaim; preparation of
Motion to appoint mediator; preparation of Request for Disclosure; receipt
and review of Motion for Partial Summary Judgment from Defendant
Friedman; preparation and filing of response to Friedman’s Motion for
Partial Summary Judgment; conferences with co-counsel regarding Motion
for Partial Summary Judgment from Friedman; attendance at mediation;
preparation for trial; preparation of draft of jury questions; preparation of trial
exhibits; preparation for pretrial conference; attend pretrial conference;
attend docket call; preparation of Plaintiff’s Motion for Summary Judgment;
anticipated preparation of reply to Friedman’s response to Plaintiff’s Motion
for Summary Judgment.
Based upon the above description of legal services provided to Gail Rozzlle
with regard to the Janet Friedman matter only, a reasonable and necessary
attorney’s fee through entry of judgment is the sum of $37,447.34. For
representation through appeal to the Court of Appeal an additional
attorney’s fee in the amount of $12,500.00; for representation at the petition
for review stage in the Supreme Court of Texas an additional attorney’s fee
of $5,000.00; for representation at the merits briefing stage in the Supreme
Court of Texas an additional attorney’s fee of $12,500.00; for
representation through oral argument and the completion of proceedings in
the Supreme Court of Texas an additional attorney’s fees of $7,500.00
would be reasonable and necessary.
Friedman argues that Rozzlle’s counsel failed to provide any testimony or other
evidence to support his conclusion that any of the amounts identified in his affidavit would
16
be reasonable attorney’s fees. We disagree.
An attorney’s testimony about the reasonableness of his or her own fees is
not like other expert witness testimony. Although rooted in the attorney’s
experience and expertise, it also consists of the attorney’s personal
knowledge about the underlying work and its particular value to the client.
The testimony is similar to that of a property owner whose personal
knowledge qualifies him to give an opinion about his own property’s value.
The attorney’s testimony is not objectionable as merely conclusory because
the opposing party, or that party’s attorney, likewise has some knowledge of
the time and effort involved and if the matter is truly in dispute, may
effectively question the attorney regarding the reasonableness of his fee.
Garcia v. Gomez, 319 S.W.3d 638, 641 (Tex. 2010) (citations omitted). Evaluating the
conclusory nature of an attorney’s affidavit filed in support of an attorney’s fees request,
the Garcia Court held that “[w]hile the attorney’s testimony lacked specifics, it was not,
under these circumstances, merely conclusory.”6 Id. We reach the same conclusion in
this case.
First, counsel’s affidavit does not lack specifics as to the legal services counsel
provided. Even if the affidavit lacked specific facts or analysis to justify the dollar
amounts requested as argued by Friedman, we would still conclude that under these
circumstances, it is not merely conclusory. See id. The affidavit explained that counsel
was Rozzlle’s attorney of record. It provided counsel’s personal knowledge of the
6
The affidavit filed in Garcia v. Gomez stated the following:
My name is Ronald Hole. I’m an attorney practicing in Hidalgo County, doing
medical-malpractice law/litigation. I have done it since 1984. For a usual and customary
case like this these fees for handling it up to the point of dismissal, the reasonable and
necessary attorney’s fees for handling that is 12,200 dollars.
If the case is appealed to the Court of Appeals, the reasonable fee for handling the
matter at the Court of Appeals would be 8,000 dollars. If a Petition for Review is filed at
the Supreme Court, an additional fee of 5,000 dollars would be reasonable for handling the
matter of the Petition for Review and our brief or briefs on the merit. Petition granted by
the Supreme Court then adds an additional 6,000 dollars. That would be a reasonable fee
for handling the matter at that stage.
319 S.W.3d 638, 741 (Tex. 2010).
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lawsuit by listing the underlying work he performed in this lawsuit, most of which was done
on matters pertaining to Friedman. The affidavit also set forth the reasonable fee for that
work and the reasonable fee for any anticipated appeal. Friedman lodged no objections
to Rozzlle’s affidavit in the trial court, and she filed nothing to controvert it. See TEX. R.
CIV. P. 166a(c) (explaining that a summary judgment respondent “may file and serve
opposing affidavits or other written response”); see also Garcia, 319 S.W.3d at 641.
We conclude that this uncontroverted affidavit is not conclusory. Rather, it is
proper summary judgment evidence, and Rozzlle showed there was no genuine issue of
material fact as to the reasonableness of her fee request. See TEX. R. CIV. P. 166a(c).
Based on this determination, the trial court did not abuse its discretion in awarding Rozzlle
reasonable attorney’s fees, including appellate fees, in the amount requested by Rozzlle.
See Buller, 806 S.W.2d at 226. We overrule Friedman’s seventh issue.
C. The Association’s Attorney’s Fees
1. Necessary Fees
By her eighth issue, Friedman challenges the evidence supporting the trial court’s
findings of fact and conclusions of law that the fees requested by the Association were
“necessary” for the representation of the Association at each stage of the proceeding.
Friedman argues that the evidence does not support a finding that fees were necessary to
the prosecution of an action under the Act. Instead, she contends that the Association
was simply performing legal work in defense of her claim and not for the prosecution of its
declaratory judgment claim. Friedman bases her argument, in part, on the fact that the
Association did not assert a claim under the Act until after she and Rozzlle had made
claims against the Association.
18
Friedman claims that by its counter-suit, the Association was attempting to recover
attorney’s fees by “repackaging” its defense to her claims as a declaratory judgment
action. See Etan Indus., Inc. v. Lehmann, 359 S.W.3d 620, 624 (Tex. 2011) (per curiam)
(“We have held that simply repleading a claim as one for a declaratory judgment cannot
serve as a basis for attorney’s fees . . . .”). “When a claim for declaratory relief is merely
“tacked onto” statutory or common-law claims that do not permit fees, allowing the UDJA
to serve as a basis for fees ‘would violate the rule that specific provisions should prevail
over general ones.’” Id. (quoting MBM Fin. Corp. v. Woodlands Operating Co., 292
S.W.3d 660, 669 (Tex. 2009)).
Friedman cross-claimed against the Association in this suit, seeking only to hold
the Association liable for failing to enforce one restriction of the Declaration. Her
pleadings and motion, as they relate to the Association, involved only section 11.3. She
alleged nothing about a duty to enforce any other provision in the Declaration. In the
Association’s request for declaratory relief, however, it requested a ruling under section
37.004 that it had no general or overall duty to enforce any of the conditions and
covenants imposed by the Declaration. See TEX. CIV. PRAC. & REM. CODE ANN. §
37.004(a).
The supreme court has determined that a counter-claim that seeks relief in an
ongoing relationship by interpretation of a contract that would have the effect of settling all
future disputes as to the obligation of the parties may well go beyond an opponent’s claim
for specific relief. BHP Petroleum Co., Inc. v. Millard, 800 S.W.2d 838, 841–42 (Tex.
1990) (per curiam); see Cont’l Homes of Tex., L.P. v. City of San Antonio, 275 S.W.3d 9,
20–21 (Tex. App.—San Antonio 2008, pet. denied); Indian Beach Prop. Owners’ Ass’n v.
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Linden, 222 S.W.3d 682, 702 (Tex. App.—San Antonio 2007, no pet.). In Indian Beach,
a case that involved both the enforcement of a specific restriction and a counterclaim for a
declaration interpreting the restrictions, the San Antonio Court explained the following:
Although Linden and B.J.’s counterclaim appears to be nothing more
than a denial of Indian’s cause of action, because it involves the
interpretation of deed restrictions, Linden and B.J. have stated a cause of
action on which they could recover benefits, compensation, or relief if Indian
abandoned or failed to establish its cause of action.
222 S.W.3d at 702.
As in BHP Petroleum and Indian Beach, the Association’s claim went beyond a
mere defense to Friedman’s claims. See BHP Petroleum, 800 S.W.2d at 841–42; Indian
Beach, 222 S.W.3d at 702. It brought a new claim, seeking a declaration of rights
independent of Friedman’s claims. See BHP Petroleum, 800 S.W.2d at 841–42; Indian
Beach, 222 S.W.3d at 702; see also Flagship Hotel, Ltd. v. City of Galveston, 117 S.W.3d
552, 566 & n.8 (Tex. App.—Texarkana 2003, pet. denied). We cannot conclude that the
Association “repackaged” its defense in an attempt to obtain attorney’s fees or that it
merely “tacked” its claim on to Friedman’s claims that did not permit fees. See Lehmann,
359 S.W.3d at 624. For even had Friedman nonsuited her cross-claim, the Association
could have pursued its request for a declaration that it had no general duty to enforce the
conditions and covenants of the Declaration. See Indian Beach, 222 S.W.3d at 702. In
addition, the interpretation of the Declaration requested by the Association would have
the effect of settling future disputes as to the duty of the Association to enforce all
restrictions, which would go well beyond Friedman’s claim for specific relief related to
section 11.3. See BHP Petroleum, 800 S.W.2d at 841–42.
Based on the above, we conclude that the Association asserted a cause of action
20
cognizable under section 37.004 of the Act. See TEX. CIV. PRAC. & REM. CODE ANN. §
37.004(a). As such, the trial court had the discretion to award attorney’s fees under
section 37.009.7 See id. at § 37.009.
2. Legal Sufficiency Challenge
Friedman also asserts by her eighth issue that the Association is not entitled “to
recover appellate attorney’s fees of any kind because the evidence in support of such
appellate fees was wholly conclusory and without factual predicate.” We construe this
issue as a challenge to the legal sufficiency of the evidence to support the trial court’s
award of appellate attorney’s fees to the Association, specifically the reasonableness of
the award. See Ridge Oil, 148 S.W.3d at 161.
Generally, a trial court may award conditional attorneys' fees for an unsuccessful
appeal. See Keith v. Keith, 221 S.W.3d 156, 169 (Tex. App.—Houston [1st Dist.] 2006,
no pet.) (“The trial court's award of attorney's fees may include appellate attorney's
fees.”). “However, there must be evidence of the reasonableness of fees for appellate
work to support the award of appellate attorney's fees.” Id. Here, the trial court
conditionally awarded the Association $15,000.00 for an appeal to the court of appeals,
$7,500.00 for an appeal to the supreme court, and $15,000.00 if the supreme court
granted a petition for review.
At the bench trial on attorney’s fees, the Association’s counsel, after being duly
7
To the extent this contention could be construed as a segregation-of-fees argument, Friedman
did not object on that basis at trial and has not preserved that issue for our review. See Green Int'l, Inc. v.
Solis, 951 S.W.2d 384, 389 (Tex. 1997) (providing that a party opposing a request for attorney’s fees must
properly preserve for appellate review a contention that the fee claimant failed to segregate the fees
sought); Cullins v. Foster, 171 S.W.3d 521, 535–36 (Tex. App.—Houston [14th Dist.] 2005, pet. denied)
(explaining that a segregation issue is generally preserved by objection during testimony offered in support
of attorney's fees or an objection to the jury question on attorney's fees); Cont’l Dredging, Inc. v.
De–Kaizered, Inc., 120 S.W.3d 380, 397 (Tex. App.—Texarkana 2003, pet. denied) (op. on reh’g) (same).
21
sworn, see Banda v. Garcia, 955 S.W.2d 270, 272 (Tex. 1997) (per curiam) (setting out
that the general rule is that an attorney's statements must be under oath to constitute
evidence), testified as a witness on the issue of his trial and appellate attorney's fees.
Counsel explained that in 1973 he received his license “to practice law before the Texas
Supreme Court and all other courts in the state.” He stated that he is board-certified in
civil trial and personal injury, but confines his practice to civil trial work. Counsel testified
as to his fee rate and the fee rates of other lawyers and legal assistants who worked on
the case. He testified that the fees assessed through trial were reasonable for work of
the nature involved in this lawsuit. Counsel expressed his opinion that the amount of
reasonable appellate fees would be: (1) $15,000.00 for successful representation of the
Association to the court of appeals; (2) $7,500.00 to file a petition or reply to one in the
Texas Supreme Court; and (3) $15,000.00 to respond if the supreme court grants a
petition. Trial counsel also testified as to each of the Arthur Anderson factors. See
Arthur Andersen & Co. v. Perry Equipment Corp., 945 S.W.2d 812, 818 (Tex. 1997)
(providing a non-exclusive list of eight factors for the factfinder to consider when
determining the reasonableness of a fee, including: “(1) the time and labor required, the
novelty and difficulty of the questions involved, and the skill required to perform the legal
service properly; (2) the likelihood . . . that the acceptance of the particular employment
will preclude other employment by the lawyer; (3) the fee customarily charged in the
locality for similar legal services; (4) the amount involved and the results obtained; (5) the
time limitations imposed by the client or by the circumstances; (6) the nature and length of
the professional relationship with the client; (7) the experience, reputation, and ability of
the lawyer or lawyers performing the services; and (8) whether the fee is fixed or
22
contingent on results obtained or uncertainty of collection before the legal services have
been rendered.”); see also TEX. DISCIPLINARY R. PROF'L CONDUCT 1.04, reprinted in TEX.
GOV'T CODE ANN., tit. 2, subtit. G app. A (providing the same non-exhaustive list of factors
to consider when addressing whether attorney's fees are reasonable and necessary).
Acknowledging that counsel for the Association testified as to the amounts it
sought to recover as appellate attorney’s fees, Friedman now complains that the
evidence is insufficient to support those fees because the Association’s counsel failed to
state the number of hours it would take to appeal the suit, the type of work, the difficulty of
the work, or any other factual bases for his appellate fee request. Friedman does not
support her argument with any law requiring the reversal of an appellate attorney's fees
award due to the absence of this specific testimony, and we will not impose such a
requirement. See Keith, 221 S.W.3d at 170 (citing George Pharis Chevrolet, Inc. v.
Polk, 661 S.W.2d 314, 318 (Tex. App.—Houston [1st Dist.] 1983, no writ) (holding that the
complained-of deficiency concerning number of hours spent and reasonable hourly rate
goes only to the weight of evidence and is not of such a magnitude that would render it
insufficient as a matter of law)). The Association’s counsel testified without objection
regarding appellate attorney’s fees. Friedman’s attorney, who had some knowledge of
the time and effort involved, cross-examined him. See Garcia, 319 S.W.3d at 641. If
the matter was truly in dispute, Friedman’s counsel could have effectively questioned the
Association’s attorney regarding the reasonableness of his fees. See id. He did not.
Reviewing the evidence presented at trial in the light most favorable to the trial
court’s judgment and indulging every reasonable inference that would support it, we
conclude that the Association produced more than a scintilla of evidence to support the
23
appellate attorney's fees awarded to the Association. See Smith, 307 S.W.3d at 770;
City of Keller, 168 S.W.3d at 810, 822, 827; Editorial Caballero, 359 S.W.3d at 328–29.
We further conclude that the trial court did not abuse its discretion when it awarded the
Association appellate fees after finding that the legal services performed for the
Association were reasonable and necessary and after it concluded that they were
equitable and just. See Ridge Oil Co., 148 S.W.3d at 163; see also TEX. CIV. PRAC. &
REM. CODE ANN. § 37.009; Montemayor, 208 S.W.3d at 662–63.
We overrule Friedman’s eighth issue.
IV. CONCLUSION
We affirm the judgment of the trial court.
NELDA V. RODRIGUEZ
Justice
Delivered and filed the 21st
day of November, 2013.
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