Asta Partners, LLC and Asta Gold 1, LLC v. Velumani Palaniswamy ( 2021 )

In the
Court of Appeals
Second Appellate District of Texas
at Fort Worth
___________________________
No. 02-20-00371-CV
___________________________
ASTA PARTNERS, LLC AND ASTA GOLD 1, LLC, Appellants
V.
VELUMANI PALANISWAMY, Appellee
On Appeal from the 462nd District Court
Denton County, Texas
Trial Court No. 17-1244-431
Before Sudderth, C.J.; Bassel and Womack, JJ.
Memorandum Opinion by Justice Bassel
MEMORANDUM OPINION
I. Introduction
This is a case in which a founding co-manager—Appellee Velumani
Palaniswamy (Velu)—siphoned funds from Appellants Asta Partners, LLC and Asta
Gold 1, LLC from 2009 to 2015. Appellants then sued Velu, 1 alleging claims for
theft, conversion, breach of contract, breach of fiduciary duty, fraud, and malice and
seeking loss-of-use damages, prejudgment interest, and attorneys’ fees. The claims
were resolved piecemeal via a summary judgment, a jury trial, and a bench trial. The
trial court granted summary judgment for Appellants on their claims for theft,
conversion, and breach of contract. The damages related to those claims were tried to
a jury, as well as the claims for breach of fiduciary duty, fraud, and malice. After both
sides rested in the jury trial, the trial court granted Appellants’ motion for a directed
verdict on their breach-of-fiduciary-duty claim; the jury found no fraud or malice and,
following the agreed-to mitigation-of-damages instruction that was included in the
jury charge, awarded Appellants $130,100 as damages for theft, conversion, and
breach of contract. The trial court held a bench trial on prejudgment interest, loss-of-
use damages, and attorneys’ fees and awarded Appellants $52,040 in attorneys’ fees
1
Appellants initially sued Velu; Velu’s wife, Selvi Palaniswamy; and Kannan
Kalimuthu but nonsuited Kalimuthu six months later. Appellants amended their
petition to sue only Velu and Selvi, but prior to the start of the jury trial, Appellants
nonsuited their claims against Selvi in exchange for a stipulation that “any amounts
withdrawn from any Asta account by [Velu], per checks written to Selvi [were] to be
treated just as if he [had written] the checks himself.”
2
for the trial proceedings and $0 for prejudgment interest. The trial court’s final
judgment included only the jury’s damages award, the award of trial attorneys’ fees,
and a statement that no prejudgment interest was awarded; thus, the judgment
omitted any reference to the claim for loss-of-use damages and to the directed verdict
on the breach-of-fiduciary-duty claim. Appellants filed a motion to correct the
judgment so that it would reference the directed verdict on the breach-of-fiduciary-
duty claim. Within that motion, they also sought a judgment notwithstanding the
verdict (JNOV) on the damages award, asking the trial court to disregard the jury’s
finding that Appellants could have avoided $102,563.73 of the damages for theft,
conversion, and breach of contract by exercising reasonable care and claiming that
they conclusively proved $232,663.73 in damages. But the trial court denied the
motion.
On appeal, Appellants raise five issues contending that the trial court erred by
denying their JNOV and by not awarding the full amount of damages that they claim
were conclusively proven; that the trial court abused its discretion by failing to award
the full amount of proven attorneys’ fees and any appellate attorneys’ fees,
prejudgment interest, and loss-of-use damages; and that the trial court abused its
discretion by failing to amend the judgment to include the directed verdict on the
breach-of-fiduciary-duty claim. Based on the analyses below for Appellants’ first,
second, fourth, and fifth issues, we hold that the trial court did not err or abuse its
discretion because
3
• the jury charge specifically allowed the jury to reduce the damages by the
amount that the jury found Appellants could have avoided by the
exercise of reasonable care, regardless of the discovery date of the
breach; thus, sufficient evidence supported the jury’s answer to the
mitigation instruction;
• the general principles of equity governing prejudgment interest did not
warrant an award of prejudgment interest under the facts here;
• Appellants failed to conclusively establish that they had incurred loss-of-
use damages based on their pleadings; and
• the ruling on the directed verdict merged into the trial court’s judgment.
But because the trial court’s findings of fact reflect that the trial court failed to follow
the two-step lodestar method for calculating trial attorneys’ fees and because the trial
court failed to award any appellate attorneys’ fees despite that Appellants were entitled
to an award of appellate attorneys’ fees, we sustain Appellants’ third issue and reverse
and remand solely for a redetermination of trial attorneys’ fees and for the trial court
to determine the amount of appellate attorneys’ fees.
4
II. Background
Asta Partners, LLC and Asta Gold 1, LLC were formed in 20082 by an initial
group of twenty members—consisting of family, friends, and relatives of Velu and
Selvi and Ramasamy Eswaran (Samy) and his wife—who pooled together over
$400,000 and purchased a building the following year. The members agreed to have a
property-management company manage the building’s day-to-day operations and
selected Vintage Realty to serve as the property manager. Vintage Realty held the
checkbook for Asta Gold.
Velu and Samy served as Appellants’ initial co-managers, but Velu served as the
point person. Although Samy was authorized to sign checks on Appellants’ account
at PointBank and had equal online access to the account, Velu held the only
checkbook for Asta Partners and was the only one with access to the QuickBooks®
for Asta Partners. Vintage sent profit-and-loss reports only to Velu. Dale Downing
served as the CPA who prepared Appellants’ tax returns, but he did not serve as a
bookkeeper; instead, Velu was in charge of the bookkeeping and supplied Downing
with the financial statements that he prepared on QuickBooks.®
2
Each LLC had its own Company Agreement. The Company Agreements
contained virtually the same provisions, except that the Company Agreement for Asta
Partners contains Sections 6.04 through 6.10, dealing with managers; Asta Gold’s
Company Agreement omits those sections. The parties focus on the Asta Partners’
Company Agreement. We therefore also reference singularly to that Company
Agreement.
5
According to the Company Agreements, the members were entitled to annual
financial statements. In 2009, Samy and other members started asking Velu for the
financial statements. Velu gave excuses for why he could not provide the financials.
Samy continued to ask Velu quarterly for financial statements for the following six
years but did not take any additional steps despite receiving no financial statements
from Velu. Samy became concerned only when PointBank called him in June 2015
and told him that the prior year’s taxes had not been paid.
The following month, the members received an email from Velu in which he
stated that he had loaned money to himself from Appellants and that he would pay it
back with nominal interest. Velu did not state the amount that he had taken.
In August 2015, Velu turned over Appellants’ financial statements to Samy.3
The amount calculated from QuickBooks® that Velu had turned over showed that he
had taken $155,000, but a calculation that was made at a later date using Velu’s
personal bank statements showed that he had taken $232,000.
After Velu failed to repay the money, Appellants filed the underlying suit
alleging claims for theft, conversion, breach of contract, breach of fiduciary duty,
fraud, and malice and seeking actual damages, loss-of-use damages, prejudgment
interest, and attorneys’ fees. As noted above, the trial court granted summary
3
After receiving the financial information from Velu, Samy and fellow member
Maha Sengottiyan went to PointBank and removed Velu from the account and added
Sengottiyan’s name to the account; Sengottiyan also replaced Velu as a co-manager.
6
judgment in favor of Appellants on their claims for theft, conversion, and breach of
contract.
During the jury trial on the damages for the theft, conversion, and breach-of-
contract claims, Velu agreed that from 2009 to 2015, he had taken over $412,000 out
of Appellants’ accounts by check and transferred it to his account, listing the
transactions on the financial statements as “loan to others.”4 From the $412,000, he
made annual tax payments and a $25,000 payment back to Asta Partners. He
admitted that he had not paid back $232,663.73—an amount that Appellants’ attorney
said reflected a deduction for the $25,000 payment.
Velu agreed that he should not have made the loans to himself because they
were prohibited by the Company Agreement. Velu testified that Samy did not know
about the loans and that July 2015 was the first time that Velu had told the members
that he had taken money. Even Velu’s wife, who was a member, did not know that
her husband had stolen money from Appellants. 5
Samy testified that he did not know prior to Velu’s July 2015 email that Velu
had taken money from Appellants. Samy said that he had asked Velu quarterly for the
financial statements because he wanted to know the amount they were saving and the
4
However, the 2011 tax return reflected a loan to Velu.
5
Selvi testified that Velu had a job traveling to India and was not paid for two
years of work and that she believes he took the money because he was ashamed that
he could not provide for his family. Selvi did not believe that Velu had intended to
hurt anyone.
7
return on investment. Samy agreed that he could have gone to the bank during the
2009 to June 2015 time frame and looked at the bank statements, but the withdrawals
would not have been identified as loans to Velu or “loans to others.”6 Samy admitted
that the tax returns did note a loan to members. Samy knew who served as
Appellants’ accountant, but he never asked Downing to provide a copy of the tax
returns from 2009 to 2015. Samy also admitted that he had met the account manager
at Vintage and could have called her and asked to receive the property-management
reports. Samy testified that he should have looked at the tax returns, the financials,
and Vintage’s reports from 2009 to 2015 but that he had trusted Velu 100%. Samy
agreed that under the Company Agreement, it was his job as a co-manager to look at
those documents.
During cross-examination, defense counsel questioned Samy about how long
he should have waited for financial information from Velu before seeking to obtain
the information from other sources:
Q. How many years do you think somebody has to deny you basic
financial information before you are failing to use ordinary care to call
Vintage, who knew you were a manager and you could get the
information from, Dale Downing, who knew you were the manager and
you could get information from, or PointBank, who knew you were the
manager and you could get information from?
6
However, Sengottiyan, who replaced Velu as co-manager, agreed at trial that
other than two cash withdrawals that Velu had made—one in 2009 and one in 2014—
totaling $6,000, the rest of the funds taken could have been discovered by looking at
the bank statements. Velu withdrew the rest of the money via checks written to
himself.
8
How many years do you have to not get information before
you’re not using ordinary care as a manager to get the information?
A. I never suspected him, so that’s why I didn’t make an attempt.
But because the other members were asking for financials, my wife was
asking for the financial details, so I was insisting we need to do that
because I’m also a co[-]manager. I was repetitively asking.
Q. And so as the co[-]manager, if Velu’s not -- in other words, if
Velu’s not responsive to the members, there’s someone else who can be.
It was you, right?
A. Correct. Correct.
....
Q. And at any point in time, you could have gone to PointBank
and said, I want to get all the statements that you have for this account,
I’m a signatory, and they would have given it to you, correct?
A. That’s correct.
Q. And you didn’t do that in 2009, correct?
A. Yes.
Q. 2010, correct?
A. Yes.
Q. Or any time before 2015?
A. Correct.
....
Q. So you ignored your responsibilities as the manager because --
A. I won’t say ignored.
Q. -- because you were treating him like a friend; is that it?
9
A. More than a friend.
Q. So you ignored your responsibilities outlined in the
[C]ompany [A]greement to maintain the records, to maintain the assets,
and you just relied on him and didn’t do your job?
A. You cannot say I didn’t do it. I was asking for that detail[],
and he was delaying it. So -- but I could have [taken the] extra step to go
find out, if I had suspected. I did not suspect him [of] doing that.
Samy made excuses about how his work schedule prevented him from
obtaining Appellants’ financial information but admitted that he could have contacted
Downing via email and that he “should have done it, but [he] didn’t do it.”
During the trial, a chart was admitted that listed the amounts taken by Velu
from 2009 to 2015. The chart showed that Velu had taken $73,000 in 2009 and
$57,100 in 2010, for a total of $130,100. The chart further showed that the total
amount taken by Velu during the 2009 to 2015 time frame—after deducting the taxes
paid and his $25,000 repayment—was $232,663.73.
At the conclusion of the evidence, the trial court granted Appellants’ motion
for a directed verdict on their breach-of-fiduciary-duty claim. The jury considered
Appellants’ claims for fraud and malice and damages for theft, conversion, and breach
of contract. The jury found no fraud or malice and returned a verdict for Appellants
in the amount of $130,100 for the theft, conversion, and breach-of-contract claims.
10
A bench trial was later held on two dates, and the trial court heard evidence
and argument on attorneys’ fees, loss-of-use damages, and prejudgment interest.7 The
parties also filed briefs on the same issues. The trial court rendered a judgment on the
jury’s damages for the theft, conversion, and breach-of-contract claims; awarded trial
attorneys’ fees of $52,040; and awarded $0 prejudgment interest.
III. Damages Found by the Jury
In their first issue, Appellants argue that the trial court erred when it failed to
award what Appellants characterize as “the full amount of the damages” for the theft,
conversion, and breach-of-contract claims—$232,663.73—notwithstanding the jury’s
verdict that reduced that amount. Because, as explained below, (1) the jury charge
specifically allowed the jury to consider the time before Appellants discovered the
stealing in reducing the damages to only $130,100, and because (2) some evidence
supports the jury’s finding that Appellants could have avoided incurring $102,563.73
by exercising reasonable care, the trial court did not err by not altering the jury’s
damage award.
A. Standard of Review
A trial court may disregard a jury’s verdict and grant a JNOV if a directed
verdict would have been proper. Tex. R. Civ. P. 301; Fort Bend Cnty. Drainage Dist. v.
Sbrusch, 818 S.W.2d 392, 394 (Tex. 1991). We review the grant or denial of a motion
A more detailed summary of the bench trial is set forth within the discussion
7
of Appellants’ second, third, and fourth issues.
11
for JNOV under a legal-sufficiency standard. Tanner v. Nationwide Mut. Fire Ins., 289
S.W.3d 828, 830 (Tex. 2009); Pointe W. Ctr., LLC v. It’s Alive, Inc., 476 S.W.3d 141, 150
(Tex. App.—Houston [1st Dist.] 2015, pet. denied). Therefore, because failure to
mitigate damages is an affirmative defense, Zimmerman Truck Lines, Inc. v. Pastran, 587
S.W.3d 847, 862 (Tex. App.—El Paso 2019, no pet.), Appellants must show that no
evidence supports the jury’s mitigation finding, see Graham Cent. Station, Inc. v. Peña, 442
S.W.3d 261, 263 (Tex. 2014).
We may sustain a legal-sufficiency challenge—that is, a no-evidence
challenge—only when (1) the record bears no evidence of a vital fact, (2) the rules of
law or of evidence bar the court 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. Shields
v. Ltd. P’ship v. Bradberry, 526 S.W.3d 471, 480 (Tex. 2017); see also Ford Motor Co. v.
Castillo, 444 S.W.3d 616, 620 (Tex. 2014) (op. on reh’g); Uniroyal Goodrich Tire Co. v.
Martinez, 977 S.W.2d 328, 334 (Tex. 1998) (op. on reh’g). In determining whether
legally sufficient evidence supports the finding under review, we must consider
evidence favorable to the finding if a reasonable factfinder could and must disregard
contrary evidence unless a reasonable factfinder could not. Cent. Ready Mix Concrete
Co. v. Islas, 228 S.W.3d 649, 651 (Tex. 2007); City of Keller v. Wilson, 168 S.W.3d 802,
807, 827 (Tex. 2005). We indulge “every reasonable inference deducible from the
12
evidence” in support of the challenged finding. Gunn v. McCoy, 554 S.W.3d 645, 658
(Tex. 2018).
Anything more than a scintilla of evidence is legally sufficient to support a
finding. Cont’l Coffee Prods. Co. v. Cazarez, 937 S.W.2d 444, 450 (Tex. 1996); Leitch v.
Hornsby, 935 S.W.2d 114, 118 (Tex. 1996); see also 4Front Engineered Sols., Inc. v. Rosales,
505 S.W.3d 905, 909 (Tex. 2016) (“The evidence is legally sufficient if . . . there is
more than a scintilla of evidence on which a reasonable juror could find the fact to be
true.”). Scintilla means a spark or trace. Scintilla, Black’s Law Dictionary (11th ed.
2019). More than a scintilla exists if the evidence rises to a level that would enable
reasonable and fair-minded people to differ in their conclusions. Rocor Int’l, Inc. v.
Nat’l Union Fire Ins., 77 S.W.3d 253, 262 (Tex. 2002); Merrell Dow Pharms., Inc. v. Havner,
953 S.W.2d 706, 711 (Tex. 1997). On the other hand, when the evidence offered to
prove a vital fact is so weak that it creates no more than a mere surmise or suspicion
of its existence, the evidence is no more than a scintilla and, in legal effect, is no
evidence. King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751 (Tex. 2003); Kindred v.
Con/Chem, Inc., 650 S.W.2d 61, 63 (Tex. 1983).
Without an objection to the jury charge, we review evidentiary sufficiency in
light of the charge submitted. Romero v. KPH Consolidation, Inc., 166 S.W.3d 212, 221
(Tex. 2005) (citing Wal-Mart Stores, Inc. v. Sturges, 52 S.W.3d 711, 715 (Tex. 2001)).
13
B. The Charge
The following damages question, which Appellants did not object to, contains a
mitigation instruction:
During closing argument, Velu’s counsel walked the jury through Question 2.
He pointed to the Company Agreement and Samy’s duties as a co-manager under that
agreement. He then told the jury that they would get to decide how long it was
reasonable for Samy to wait before he did his job and suggested that they conclude
that he should have waited no longer than one year.
C. Relevant Trial Exhibits
The unobjected-to chart that follows sets forth the dates, the check numbers,
and the amounts taken by Velu:
14
15
16
The “Company Agreement of Asta Partners, LLC” was also admitted into
evidence, and the jury heard testimony about Samy’s duties as co-manager. Those
duties included, among others,
(a) entering into, making, and performing contracts, agreements, and
other undertakings binding the Company that may be necessary,
appropriate, or advisable in furtherance of the purposes of the Company
and making all decisions and waivers thereunder, including a
Fundamental Business Transaction;
(b) opening and maintaining bank and investment accounts and
arrangements, drawing checks and other orders for the payment of
money, and designating individuals with authority to sign or give
instructions with respect to those accounts and arrangements;
(c) maintaining the assets of the Company in good order; [and]
....
(h) selecting, removing, and changing the authority and
responsibility of lawyers, accountants, and other advisers and
consultants[.]
D. Analysis
The crux of Appellants’ argument on appeal—that the jury could not have
reduced the damages from the $232,633.73 net total shown on Appellants’ chart—
goes to the mitigation instruction. Appellants spend a full page of their brief stating
what Velu was required to show in order to establish mitigation and citing cases on
this topic. They argue that the jury could have only considered whether Appellants
exercised reasonable care in avoiding damages after July 2015, when they actually
discovered Velu’s stealing. This is an attack on the scope of the trial court’s
17
mitigation instruction within the damages question. Yet, Appellants did not object
during the charge conference to the submission of the mitigation instruction, which
does not so limit the jury’s consideration of mitigation. Because Appellants did not
object to the mitigation instruction contained in the damages question, we must
examine the sufficiency of the evidence in light of the charge as given. See id.; Bayer
Corp. v. DX Terminals, Ltd., 214 S.W.3d 586, 604 (Tex. App.—Houston [14th Dist.]
2006, pet. denied); see also Swank v. Sverdlin, 121 S.W.3d 785, 802 (Tex. App.—
Houston [1st Dist.] 2003, pet. denied) (“We are not authorized to evaluate the
sufficiency of the evidence under calculations different from those the jury were
instructed to employ.”). 8
8
In their reply brief, Appellants state that the language in the charge is from
Texas Pattern Jury Charge 115.8 and then proceed to discuss comment 1 to the
instruction:
That the Pattern Jury Charge committee believed this language required
the defendant to show that the damages were increased as a result of the
plaintiff’s action or inaction after the damages were inflicted is made
clear by the comments to the instruction. According to the Committee,
the instruction is used when “the evidence raises a question about the
plaintiff’s failure to mitigate damages after the defendant’s actionable
conduct” and requires that the “defendant must offer evidence showing
not just the plaintiff’s lack of care but also the amount by which the
damages were increased by such failure to mitigate.” [State Bar of Tex.,
Texas Pattern Jury Charges: Business, Consumer, Insurance & Employment PJC
115.8 cmt. 1 (2018).] In other words, the Committee believes that this
language requires the evidence to satisfy the conditions of Texas law
regarding mitigation of damages, as outlined by [Appellants] in [their]
Appellants’ Brief and which [Velu] agrees is “a correct statement of the
law.”
18
Here, examining the sufficiency of the evidence in light of the charge as given,
the jury was free to choose which amounts from the chart to include in its damages
award. The jury was also required to follow the mitigation instruction and to exclude
any amount that Appellants could have avoided by the exercise of reasonable care.
Based on these instructions, the jury found damages of $130,100, which represents
the total of the amounts taken by Velu in 2009 ($73,000) and in 2010 ($57,100).
Essentially, [Velu] urges this Court to repudiate the Pattern Jury
Charge Committee’s work and declare that this instruction does not
properly capture Texas law but instead allows for the reduction of
damages for any reasons whatsoever. This instruction was not meant to
be and is not a blank check for the jury to simply reduce the damages to
be awarded to the plaintiff. [Velu] argues that the charge allows the jury
to reduce the damages based on the theory that it could have found that
[Appellants] should have discovered [Velu’s] misconduct before it actually
did. This is not evidence of the failure to mitigate damages, as [Velu]
effectively concedes, is not what this instruction allows, and is not what
this [c]ourt should interpret the Pattern Jury Charge instruction to allow.
Appellants thus attempt to distinguish between pre-actionable versus post-
actionable conduct and argue that the mitigation instruction was not applicable to the
damages here. But as pointed out above, Comment 1 specifically states, “If the
evidence raises a question about the plaintiff’s failure to mitigate damages after the
defendant’s actionable conduct, an instruction on mitigation should be included with
the damages question.” Id. (emphasis added). It does not limit the instruction to a
failure to mitigate after discovery of the actionable conduct. Based on the arguments
that Appellants raise on appeal, they should have objected during the charge
conference in the trial court that the mitigation instruction was not properly limited in
time, but they did not do that. Instead, without raising any objection, Appellants let
the unlimited mitigation instruction remain in the charge. As we concluded above, it
is Appellants’ failure to object that prevents us from looking behind the charge that
was given.
19
The jury implicitly determined that after repeated requests of Velu to provide
the financials and no forthcoming reports, Samy should not have waited more than
two years to obtain the financial information from other sources. The testimony at
trial confirmed that the stolen funds could have been identified if Samy had requested
the bank statements from PointBank or had accessed the statements or the canceled
checks online. Moreover, it was Samy’s job as a co-manager to maintain the assets of
the company in good order, and he could not maintain the funds in the bank account
without reviewing the financial documents. Instead, he asked Velu quarterly for
financial statements for six years, received nothing, and took no further action despite
having direct access to the bank account, the accountant, and the property-
management company.
Appellants argue that because they did not learn of the theft until the summer
of 2015 and immediately took steps to remove Velu from control of its finances, there
is no evidence that anything Appellants did constituted a lack of reasonable care. But
“[t]he mitigation standard is that of ordinary care—what an ordinary prudent person
would do in the same or similar circumstances.” See Pulaski Bank & Tr. Co. v. Tex.
Am. Bank/Fort Worth, N.A., 759 S.W.2d 723, 736 (Tex. App.—Dallas 1988, writ
denied). Here, more than a scintilla of evidence supports that an ordinary prudent
person acting as a co-manager with specific duties under the Company Agreement
would not have waited more than two years to seek financial information from the
LLC’s bank, accountant, or property-management company when no financial
20
information was being supplied after repeated requests to the other co-manager. See
id. (“It takes no special expertise to discern that it was unwise to allow Lab
Management to continue to withdraw money that did not belong to it.”).
Based on the testimony and evidence presented, we conclude that the jury’s
determination—that Appellants should not recoup more than $130,100 (the total of
the amounts taken by Velu in 2009 and 2010) because they failed to exercise
reasonable care—is supported by more than a scintilla of evidence. See Cont’l Coffee
Prods., 937 S.W.2d at 450; Leitch, 935 S.W.2d at 118; see also Pulaski Bank & Tr. Co., 759
S.W.2d at 736 (holding that bank could not recover the funds attributable to its failure
to mitigate). And having concluded that the evidence is sufficient to support the
jury’s damage award, we hold that the trial court did not err by leaving the jury’s
damage award unchanged. Cf. Mundheim v. Lepp, No. 05-19-01490-CV, 2021 WL
1921122, at *7 (Tex. App.—Dallas May 13, 2021, pet. filed) (mem. op.) (“Having
found the evidence sufficient to support the complained-of jury findings, we conclude
[that] the trial court did not err [by] denying the [appellants’] motion for judgment
notwithstanding the verdict and motion for new trial.”). We overrule Appellants’ first
issue.
IV. Attorneys’ Fees Awarded by the Trial Court
In their third issue, Appellants argue that the amount of attorneys’ fees
awarded by the trial court “was improper and ought to be corrected” by this court.
Appellants challenge the legal and factual sufficiency of the trial court’s award of trial
21
attorneys’ fees in the amount of $52,040—which was calculated by applying the
contracted-for 40% contingency fee to the jury’s damages award of $130,100—and
the trial court’s failure to award any appellate attorneys’ fees. As discussed below, the
trial court’s findings of fact demonstrate that it did not follow the lodestar method of
calculating trial attorneys’ fees but relied solely on the contingency-fee arrangement,
which was error. Additionally, the trial court abused its discretion by not awarding
appellate attorneys’ fees because case law mandates that if an award of trial attorneys’
fees is mandatory under an authorizing statute, then an award of appellate attorneys’
fees is likewise mandatory if proof of reasonable fees is presented. See Ventling v.
Johnson, 466 S.W.3d 143, 154 (Tex. 2015).
A. Standard of Review
We review a trial court’s award of attorneys’ fees for an abuse of discretion. El
Apple I, Ltd. v. Olivas, 370 S.W.3d 757, 761 (Tex. 2012). A trial court abuses that
discretion if it acts arbitrarily, unreasonably, or without regard to guiding legal
principles, or if its decision is not supported by legally or factually sufficient evidence.
See Bocquet v. Herring, 972 S.W.2d 19, 21 (Tex. 1998); see also Beaumont Bank, N.A. v.
Buller, 806 S.W.2d 223, 226 (Tex. 1991) (explaining that legal and factual sufficiency of
the evidence are relevant factors in determining whether the trial court abused its
discretion).
22
B. Applicable Law
The Texas Supreme Court laid out the framework for determining attorneys’
fees in Rohrmoos Venture v. UTSW DVA Healthcare, LLP:
[T]he lodestar method as we presented it in El Apple applies for
determining the reasonableness and necessity of attorney’s fees in a fee-
shifting situation:
Under the lodestar method, the determination of what
constitutes a reasonable attorney’s fee involves two steps.
First, the [factfinder] must determine the reasonable hours
spent by counsel in the case and a reasonable hourly rate
for such work. The [factfinder] then multiplies the number
of such hours by the applicable rate, the product of which
is the base fee or lodestar. The [factfinder] may then adjust
the base lodestar up or down (apply a multiplier), if relevant
factors indicate an adjustment is necessary to reach a
reasonable fee in the case.
370 S.W.3d at 760 (citations omitted). Thus, the fact[]finder must first
determine a base lodestar figure based on reasonable hours worked
multiplied by a reasonable hourly rate. Id. In a jury trial, the jury should
be instructed that the base lodestar figure is presumed to represent
reasonable and necessary attorney’s fees, but other considerations may
justify an enhancement or reduction to the base lodestar; accordingly,
the fact[]finder must then determine whether evidence of those
considerations overcomes the presumption and necessitates an
adjustment to reach a reasonable fee. Id. at 765; see also Perdue[ v. Kenny
A. ex rel. Winn], 559 U.S. [542,] 558–59, 130 S. Ct. [1662, 1676–77
(2010)] (suggesting that adequate appellate review is only feasible when
the fact[]finder makes reasonably specific findings as to each step of the
fee determination). Arthur Andersen lists relevant considerations that may
justify an adjustment, but . . . considerations already incorporated into
the base calculation may not be applied to rebut the presumption that
the base calculation reflects reasonable and necessary attorney’s fees. See
Arthur Andersen[ & Co. v. Perry Equip. Corp.], 945 S.W.2d [812,] 818 [(Tex.
1997)]; cf. Perdue, 559 U.S. at 553, 130 S. Ct. [at 1673]; [City of] Burlington[
v. Dague], 505 U.S. [557,] 562–63, 112 S. Ct. 2638[, 2641 (1992)]; Blum[ v.
Stenson], 465 U.S. [886,] 898–900, 104 S. Ct. 1541[, 1548–50 (1984)].
23
General, conclusory testimony devoid of any real substance will not
support a fee award. Thus, a claimant seeking an award of attorney’s
fees must prove the attorney’s reasonable hours worked and reasonable
rate by presenting sufficient evidence to support the fee award sought.
See Long[ v. Griffin], 442 S.W.3d [253,] 255–56 [(Tex. 2014)]; [City of Laredo
v.] Montano, 414 S.W.3d [731,] 736–37 [(Tex. 2013)]; El Apple, 370
S.W.3d at 763–64. Sufficient evidence includes, at a minimum, evidence
of (1) particular services performed, (2) who performed those services,
(3) approximately when the services were performed, (4) the reasonable
amount of time required to perform the services, and (5) the reasonable
hourly rate for each person performing such services. See El Apple, 370
S.W.3d at 762–63.
578 S.W.3d 469, 501–02 (Tex. 2019).
C. Evidence Presented
Appellants’ attorney, Mike Yanof, testified that he had twenty-two years of
experience as a trial and appellate specialist and that he was a partner with the
Lenahan Law Firm. Yanof explained that he was hired in this case because the
originating attorney was not a trial specialist and wanted him to take over the case as
there were pending Rule 91a motions seeking dismissal of the case. See Tex. R. Civ. P.
91a. He said that Appellants’ goal was to be made whole and that they wanted their
attorneys to determine how much Velu had taken because they had no idea of the
amount as the numbers of how much had been taken differed widely. Yanof testified
that the total of the funds taken was in dispute until the Sunday night before trial and
that, although it was very difficult to put the pieces of the puzzle together, the amount
in controversy was ultimately determined to be $232,000.
24
Yanof testified that his hourly rate of $575 was a reasonable rate that is
customarily and routinely charged in the DFW area. He said that he had seen rates of
$450 to $800 per hour for twenty-year attorneys. Yanof stated that he was not asking
for an upward departure from the actual time spent on the case, which was billed in
0.1 increments, times $575 per hour. Yanof testified that the case was handled on a
contingency-fee contract but that he had not factored that into the fees sought.
A ledger reflecting attorneys’ fees based on the time spent on various tasks—
without regard to the contingency-fee agreement—was admitted into evidence. 9 The
hours are not totaled on the exhibit, but our summation of the hourly entries reveals
that 588.4 hours were spent.10 Multiplying the 588.4 hours by the hourly rate of $575
results in $338,330 for total attorneys’ fees through the date of the bench trial. Yanof
testified that the time spent for each of the tasks listed on the exhibit represented
reasonable and necessary hours and fees for the case.
When asked whether he had segregated fees in the billing, Yanof testified,
I did. Well, let me clarify. I segregated fees for liability. There were
different claims in this case and individual causes of action, and the
discrete tasks that I did for the individual causes of action when I took
9
The exhibit was admitted over the following responses from Velu’s attorney:
“I have objections to the sufficiency of the evidence to support the attorneys’ fees,
but not to . . . that[;] that is a true and correct chart of the fees that they have
calculated,” and “on the attorneys’ fees, I have several arguments[,] . . . but those, I
think, are objections to the evidence, not to the exhibits.”
10
Yanof testified that the only estimates on the chart were for the bench trial
held on October 23, 2019, but he explained that based on how long the hearing had
lasted, he had underestimated those amounts.
25
over the case and particularly when I amended the petition, the research
I did for the fraud, breach of fiduciary duty, and conversion claims, I
segregated those fees out and at times I just did not bill them at all. But
for amending the petition and for the initial research, I noted that I was
exempting those out of the fees in [the fees exhibit].
When it came to damages, I did not segregate fees because there
[was] one set of damages. They were intertwined. All of the damages
were intertwined regardless of the claims. That’s evidenced by the fact
that there was ultimately a single damage question submitted to the jury,
and it was not tied to particular claims. And we never had a damage
model that was separate for different claims.
And so the damages were inextricably intertwined, . . . and they
could not be separated out.
He explained that getting paid for this case would be difficult because, “for
starters, it’s a contingency[-]fee case tied to collecting the judgment.” Yanof said that
what “makes it a little more unique is that there’s serious collectibility issues.” He said
that he had information that there may be funds to collect the judgment but that it
might take going to India to collect the assets.11
Yanof testified that he had given Appellants value based on “[f]irst and
foremost, the result.” He explained that after taking over the case while Rule 91a
motions to dismiss were pending, he positioned the case to obtain a summary
judgment on the theft, conversion, and breach-of-contract claims and ensured that he
would recover attorneys’ fees. Yanof also made sure that the firm had only twenty-
When Yanof retook the stand during rebuttal, Velu’s attorney questioned him
11
on the collectibility of the judgment. Yanof testified that he understood that he could
get a charging order on Velu’s interest in the LLC and that he knew that Velu had
“stuff of value.”
26
plus-year attorneys working on the case because associates tend to bill for excessive
research, while two twenty-plus-year partners did “what [was] absolutely essential on
the case to position it to place [their] clients in the best position.” Yanof opined that
his firm had obtained “a very good result” for Appellants and had obtained hundreds
of pages of records, “many of which [were from accounts that] Velu [had] not
agree[d] in his deposition . . . were his bank accounts.”
When asked whether taking this case precluded him from taking other work,
Yanof said, “It potentially did.” He then explained that he serves as the “med-mal go-
to person” in the firm and that he had turned down a number of med-mal cases while
working on this case because “it was not realistic to take any med-mal case that would
need to be filed in the next five months” due to the time that it takes to prescreen and
obtain experts to review that type of case. Additionally, Yanof said that all other cases
stood still while he was working on this case and that this case kept him from moving
the firm’s other cases.
When asked about the nature, length, and professional relationship with
Appellants, Yanof stated this is a one-time lawsuit. As a result, Yanof said that there
is no expectation that Appellants will have other litigation, so there was no discounted
fee as there is when dealing with a volume client or an institutional client that
provides him with “lots of work.”
Yanof was also asked about his experience with appellate matters. Yanof
cataloged his experience in handling appeals for twenty years at the various levels,
27
including the Texas Supreme Court and various circuit courts. Yanof opined that
$575 per hour is a reasonable rate for appellate work “here”—in this area. Yanof
estimated that an appeal to the Second Court of Appeals would take 50 hours12 at
$575 per hour for a total of $28,750. Yanof estimated that filing a petition for review
in the Texas Supreme Court would take 30 hours13 at $575 per hour for a total of
$17,250. Yanof estimated that filing a brief on the merits in the Texas Supreme Court
would take 80 hours14 at $575 per hour for a total of $46,000.
Velu’s attorney, Samuel B. Burke, cross-examined Yanof. Yanof confirmed
that Appellants had contracted for a 40% contingency-fee agreement, so 40% is all
that Appellants are obligated to pay his firm. When asked what percentage of the trial
preparation was necessary because of the fraud and exemplary-damages claims, Yanof
testified that he did not attribute any time to those causes of action because the trial
came down to damages, and the damages were the same for every cause of action.
12
Yanof broke down the 50 hours as follows: 10 hours to designate portions of
the record and review the entire record, including the jury trial; 25 hours to research
issues to be raised in the briefs and to draft any reply; 10 hours to prepare for oral
argument; and 5 hours to travel and to give the oral argument.
13
Yanof broke down the 30 hours as follows: 5 hours to research for the
petition for review and 20 hours to draft the response to the petition for review, but
he did not account for the remaining 5 hours.
14
Yanof broke down the 80 hours as follows: 10 hours to research; 30 hours to
draft the brief; 30 hours to prepare for oral argument; and 10 hours to travel and to
give the oral argument.
28
Burke offered rebuttal testimony on the issue of Appellants’ attorneys’ fees.
Burke, who had been licensed for 21 years, testified that a reasonable rate in this case
in this locality is between $400 and $450 and that a rate of $575 is excessive and is not
consistent with the market.
Burke stated that the initial disclosure that was served on March 31, 2017,
sought $216,298.44 in damages. Burke testified that the case was mediated in August
and that approximately 500 hours of attorney time had been spent on the case since
the mediation. The net result of that work was an increase in damages from $216,000
to $232,000. Burke opined, “That’s not reasonable[,] and it’s not necessary.”
Burke further critiqued the type of work that the attorneys had performed.
Burke pointed out that Appellants used attorneys with an hourly rate of $575 to go
through canceled checks and calculate the amount that Velu had stolen.
Burke mentioned the contingency-fee agreement and said that if Appellants
had not had a contingency-fee agreement and had instead been paying $575 per hour,
“they wouldn’t have had their $575-an-hour lawyer counting checks. They’d have
done it a different way, and you wouldn’t have this excessive legal bill here.” Burke
suggested to the trial court,
If you simply want to compensate [Appellants] for what they were out --
in other words, what it cost them to get here -- it’s $52,000, and they are
saying a reasonable and necessary fee is $338,000. In my experience,
that’s not true and it’s not reasonable and necessary[] and it’s certainly
not in Denton County in a case like this.
29
Burke further testified that a reasonable and necessary fee in this case is “somewhere
between $22,000, which is about what had been incurred up to the point of
mediation, and $52,000, which is what these people actually will owe Mr. Yanof based
on his 40 percent contingency fee.”
D. Trial Court’s Findings and Conclusions on Attorneys’ Fees
The trial court made the following findings of fact and conclusions of law
related to attorneys’ fees:
6. The [c]ourt finds that a significant portion of the attorneys’ fees
sought by [Appellants] were excessive and that a significant part of the
work performed by [Appellants’] counsel was not reasonable or
necessary.
7. The [c]ourt finds that for significant portions of the work
performed by [Appellants’] counsel $575.00 per hour was not a
reasonable hourly rate.
8. The [c]ourt finds the reasonable amount necessary to
compensate [Appellants] for the fees actually incurred was $52,040.00.[15]
9. The [c]ourt finds the total hourly fees requested by
[Appellants] were unreasonable and excessive given the nature of the
claim and the size of the recovery.
15
The final judgment states how the amount of trial attorneys’ fees was
calculated:
Accordingly, after the jury trial concluded, [Appellants] and [Velu]
appeared before the [c]ourt and presented evidence, authorities, and
arguments regarding the award of attorneys’ fees to [Appellants], . . . and
the [c]ourt having consider[ed] same and the pleadings and records on
file in this [lawsuit] found that [Appellants] should be awarded their
attorneys’ fees in the amount of $52,040.00 (40% of the jury verdict of
$130,100.00)[.]
30
CONCLUSIONS OF LAW
....
5. The fees requested by [Appellants] in excess of $52,040.00 were not
reasonable or necessary[] and were excessive.
E. Analysis of Award of Trial Attorneys’ Fees
As set forth above, Appellants presented evidence that two attorneys who
charged $575 per hour had spent 588.4 hours working on the case, for a total of
$338,330 in trial attorneys’ fees. The chart that they presented contains evidence of
(1) the particular services performed, (2) who performed the services, (3) when the
services were performed, and (4) the time required to perform the services. Yanof
testified to the reasonableness of the hourly rate and the time spent on the case.
Burke challenged the reasonableness of the hourly rate, stating that it was significantly
higher than the usual $400 to $450 that was reasonable for similar attorneys in the
area, and challenging whether it was necessary to use partner-level attorneys to go
through checks and bank statements to determine how much Velu had stolen from
Appellants. The evidence presented thus informed the trial court of the time spent on
specific tasks and enabled the trial court to meaningfully review the requested fees.
The trial court’s findings of fact demonstrate that the trial court found
Appellants’ trial attorneys’ $575 hourly rate to be unreasonable for “significant
portions of the work [that they] performed.” The trial court’s findings, however, do
not demonstrate that the trial court determined what a reasonable rate should be for
31
such work. Instead, the trial court, as reflected in the final judgment, chose to
calculate Appellants’ trial attorneys’ fees based solely on the contingency-fee
agreement of 40% of the damages awarded by the jury. The award of trial attorneys’
fees based on this calculation cannot stand.
As set forth in Rohrmoos, the factfinder must first perform a lodestar calculation
based on reasonable hours worked multiplied by a reasonable hourly rate. 578 S.W.3d
at 501. We have no indication that the trial court determined the reasonable hours
worked or a reasonable hourly rate. The trial court instead skipped this step and
relied solely on the contingency-fee agreement. A contingency-fee agreement,
however, is only one factor that is considered when calculating the lodestar and
cannot be the only factor used to determine attorneys’ fees. See Arthur Andersen, 945
S.W.2d at 818–19 (holding that although “[a] contingent fee may indeed be a
reasonable fee from the standpoint of the parties to the contract,” it is not “in and of
itself reasonable for purposes of shifting that fee to the defendant”); State Office of Risk
Mgmt. v. Olivas, 509 S.W.3d 499, 508 (Tex. App.—El Paso 2016, no pet.) (stating that a
contingency-fee agreement is a factor for a court to consider in making a fee award,
but it cannot be the only factor).
Even if we presume that the trial court made a base lodestar calculation, the
trial court was not allowed under the second step of the lodestar method to reduce
the calculation based on the contingency-fee agreement. See Rohrmoos, 578 S.W.3d at
501 (stating that the Arthur Andersen considerations, such as the existence of a
32
contingency-fee agreement, already incorporated into the base calculation may not be
applied to rebut the presumption that the base calculation reflects reasonable and
necessary attorneys’ fees); cf. City of Burlington, 505 U.S. at 562–63, 566–67, 112 S. Ct.
at 2641, 2643–44 (disallowing an enhancement for contingency-fee agreement because it
would likely duplicate in substantial part considerations already subsumed in the base
lodestar calculation, as “[t]he risk of loss in a particular case (and, therefore, the
attorney’s contingent risk) . . . is ordinarily reflected in the lodestar—either in the
higher number of hours expended to overcome the difficulty, or in the higher hourly
rate of the attorney skilled and experienced enough to do so”).
Based on the evidence presented, Appellants may not have been entitled to
recover all of their requested attorneys’ fees, but they were statutorily entitled to their
reasonable attorneys’ fees incurred. See generally Tex. Civ. Prac. & Rem. Code Ann.
§§ 38.001(b)(8) (permitting award of attorneys’ fees for successful breach-of-contract
claim), 134.005 (permitting award of attorneys’ fees for successful claim under the
Texas Theft Liability Act). We conclude that the trial court’s award of trial attorneys’
fees based solely on the contingency-fee agreement is without reference to the guiding
principles set forth in Rohrmoos and is legally insufficient. See 578 S.W.3d at 501. We
therefore hold that the trial court abused its discretion by awarding trial attorneys’ fees
of $52,040. Accordingly, we sustain the portion of Appellants’ third issue challenging
the amount of trial attorneys’ fees.
33
F. Analysis of Award of No Appellate Attorneys’ Fees
Appellants also argue within their third issue that the trial court’s failure to
award them appellate attorneys’ fees is both legally and factually insufficient. Velu’s
brief does not respond to Appellants’ argument regarding appellate attorneys’ fees.
When, as here, trial attorneys’ fees are mandatory under a statute, then appellate
attorneys’ fees are also mandatory when proof of reasonable fees is presented. See
Ventling, 466 S.W.3d at 154. Here, Appellants provided opinion testimony about the
services that they reasonably believed would be necessary to defend the appeal and
the hourly rate for those services. Even if the trial court determined that the hourly
rate of $575 was not reasonable, the trial court had no discretion to determine that
Appellants were not entitled to any conditional appellate attorneys’ fees. Because the
trial court’s failure to award appellate attorneys’ fees is without reference to the
guiding principles set out in Ventling, we hold that the trial court abused its discretion
by failing to award Appellants their appellate attorneys’ fees. See DaimlerChrysler Motors
Co. v. Manuel, 362 S.W.3d 160, 198–99 (Tex. App.—Fort Worth 2012, no pet.)
(remanding case for a new trial concerning the amount of reasonable and necessary
appellate attorney’s fees because the trial court had awarded none despite such fees
being mandatory under Section 38.001). We therefore sustain the remaining portion
of Appellants’ third issue challenging the trial court’s failure to award appellate
attorneys’ fees.
34
V. Zero Prejudgment Interest Awarded by the Trial Court
In their fourth issue, Appellants argue that the trial court abused its discretion
by failing to award prejudgment interest. As explained below, any prejudgment
interest award in this suit could only be based on general principles of equity,
according to which the trial court did not abuse its discretion by denying prejudgment
interest under the facts presented.
A. Law on Prejudgment Interest
This court has previously summarized the law on prejudgment interest:
An award of prejudgment interest advances two ends: 1) achieving full
compensation to plaintiffs; and 2) expediting both settlements and trials.
The two legal sources for a prejudgment interest award are 1) general
principles of equity, and 2) an enabling statute. The enabling statute,
Texas Finance Code [S]ection 304.104, only applies to wrongful death,
personal injury, and property damage cases. Where no statute controls
the award of prejudgment interest, the decision to award prejudgment
interest is left to the sound discretion of the trial court, which should
rely upon equitable principles and public policy in making this decision.
Citizens Nat’l Bank v. Allen Rae Invs., Inc., 142 S.W.3d 459, 486–87 (Tex. App.—Fort
Worth 2004, no pet.) (op. on reh’g) (footnotes omitted).
B. Applicable Findings of Fact and Conclusions of Law
The trial court made the following finding of fact and conclusions of law
related to prejudgment interest:
5. Further, the [c]ourt finds an offer of settlement was tendered by
[Velu] exceeding the amount of the judgment before the [suit] began.
....
35
CONCLUSIONS OF LAW
....
3. Prejudgment interest is “compensation allowed by law as
additional damages for lost use of the money due as damages during the
lapse of time between the accrual of the claim and the date of
judgment.” Cavnar v. Quality-Control Parking, Inc., 696 S.W.2d 549, 552
(Tex. 1985) (citing McCormick, Damages § 50 (1935)).
4. No pre[]judgment interest is recoverable by [Appellants].
C. Evidence Regarding Settlement Offer
The record reflects that on April 7, 2016, Appellants demanded that Velu and
Selvi pay $206,500 within 10 days after receiving the demand letter. On May 12, 2016,
Velu and Selvi made an offer of settlement. In the letter that Velu’s counsel sent to
Appellants’ then-attorney, Velu and Selvi asked Appellants’ members to agree to
accept (1) a transfer of Velu’s and Selvi’s membership interests in the two entities
(stating that the “book value” of their interests was $110,000); (2) the payment that
they previously made in the amount of $25,000; and (3) an additional payment in the
amount of $14,000. The settlement offer further states, “If this offer is acceptable,
please provide direction regarding to whom [Velu’s] and Selvi[’s] membership
interests should be assigned and to whom the additional $14,000.00 payment should
be made.” Thus, the total amount of the settlement offer (calculated using the book
value stated in the letter) was $149,000. The offer was not accepted.
At the outset of the bench trial, the trial court agreed to take judicial notice of
the jury trial and to consider all the previously admitted evidence. During the jury
36
trial, Samy had testified that Velu and Selvi each owned a 5.5% interest (or 11% total)
in Appellants. The Company Agreement calls for a member’s interest to be
determined as follows:
14.07 Determination of Fair Value. The “Fair Value” of a
Membership Interest shall be the amount that would be distributable to
the Member holding such interest in the event that the assets of the
Company were sold for cash and the proceeds, net of liabilities, were
distributed to the holders of all Membership Interests pursuant to this
Agreement. In the event that the Fair Value of a Membership Interest is
to be determined under this Agreement, the Members shall select a
qualified independent appraiser to make such determination, and the
Members shall make the books and records available to the appraiser for
such purpose. The determination of Fair Value made by such appraiser
shall be final, conclusive, and binding on the Company, all Members,
and all Assignees of a Membership Interest.
Velu’s counsel questioned Samy about valuing a member’s interest and
referenced the Company Agreement:
[By Defense Counsel:] So, generally speaking, Article 14 deals with buy-
out of [a] membership interest, correct?
A. Correct.
Q. And it deals with several different scenarios, death of a
member, bankruptcy of a member, insufficient surplus, other members’
options to purchase, and then it has Sections 14.06, 14.07, and 14.08,
which deal with an exercise of an option to purchase. Do you see that?
A. Yes, I see it.
Q. Okay. And Section 14.07 deals with how we’re going to value
a member’s interest, correct?
A. Correct.
37
Q. Okay. And it has a definition of fair value. It says[, “]The fair
value of a membership interest shall be [the] amount that would be
distributed to the member holding such interest in the event that the
assets of the company were sold for cash and the proceeds net of
liabilities were distributed to the holders of all membership interests
pursuant to this agreement.[”]
Have I read that correctly?
A. Yes.
....
Q. Well, so you knew in 2015 that Velu had taken money in
breach of the [C]ompany [A]greement, correct?
A. Correct.
Q. Okay. And there were actually some discussions about
applying his membership interest to the debt, correct?
A. There may have been.
Q. Okay. And so those conversations should have referenced
the [C]ompany [A]greement and followed those provisions. Do you
agree with that?
A. No. We rejected his claim about submitting his shares
because we are focused on getting the money back that he has taken.
We never admitted about using his shares.
Q. You have refused to use this procedure?
A. No. We are focused on getting the money he has taken.
Q. Okay. So in . . . the summer of 2015, what were the value of
the company assets?
A. That requires an appraisal, so . . . I don’t know.
Q. Did you request an appraisal?
38
A. We did not.
....
Q. Do you have any idea how much an appraisal in 2015 would
have cost the company?
A. I don’t know.
Q. Have you investigated that at all?
A. We never thought about appraising.
Velu put on valuation evidence through Greg Johnson—a commercial real
estate broker, a real estate developer, and an investor. Johnson testified that he was
qualified to value the property owned by Appellants. For the building owned by
Appellants, Johnson reviewed the rent roll, analyzed the tenant types, and performed
a calculation using the net operating income of $175,000 and a 7% cap rate 16 to come
up with a purchase price of $2.5 million. To make sure that the $2.5 million was a
realistic number of “what the market would have paid,” Johnson reviewed actual sales
16
Johnson explained the cap rate as follows:
[I]n the real estate world, we shorten that to cap rate. It’s actually
capitalization rate. Essentially, what that means is if you paid cash for
the property, that’s what your return on investment would be every . . .
year.
So, for example, a 7 percent cap rate -- there’s a mathematical
formula to determine what’s the value of the property. You take the net
income and you divide that by 7 percent, and that will give you the value
of what you could pay for it. If you paid cash, that would mean you
would get 7 percent return on your money every year that the rent stayed
the same.
39
and noted that the cap rates ranged “from 6.4ish up into the mid 8’s.” After looking
at comparable sales, Johnson testified that the sales price “would have been a little
north of the $2.5 million.” Johnson said, “I felt like if somebody said, [‘]Can you sell
this building for $2.5 million,[’] I’d put my name on it and say, [‘]Yes.[’]”
The evidence during the jury trial also showed that Appellants’ sole debt was
the loan from PointBank for the mortgage on the building. A chart was admitted into
evidence showing that the outstanding amount on the loan around the time of Velu’s
settlement offer was $1,145,181.25. 17
Using the sales price determined by Johnson and the outstanding amount on
the loan as shown on the loan chart, Velu’s attorney in his appellate brief calculated
Velu’s and Selvi’s membership interest as follows:
$2,500,000.00 Value of the property if sold for cash
($1,145,181.00) Less mortgage on the property
$1,354,819.00 Value of asset net of liability that could be distributed
x .11 Velu and Selvi’s interest as a percentage
$ 149,030.09 Value of Velu and Selvi’s joint membership interest
During the bench trial, Velu’s attorney argued, “The uncontradicted evidence at
trial was that the value of that interest was $146,000[,18 which is] an amount in excess
of what the jury awarded.” He explained that this differs from the book-value offer,
Velu’s brief uses the amount remaining as of May 31, 2016, instead of the
17
amount remaining as of May 2, 2016, which was closer in time to the date of the offer.
The May 2, 2016 amount was $1,148,839.36 and would have valued Velu and Selvi’s
joint membership interest at $148,627.67.
It is not clear why Velu’s attorney used $146,000 instead of $149,000.
18
40
but “if you take the equity, the fair value, then the value of that interest was $146,000.
It’s the equity in the real property plus the $14,000 in the bank account times 11
percent, $146,000.” In addition to Velu’s and Selvi’s membership interests, their
settlement offer also included the $25,000 that they had previously paid and an
additional $14,000, thus bringing the settlement offer to over $188,000.
D. Analysis
Here, Appellants agree that there is no statute allowing for the recovery of
prejudgment interest for the claims on which they prevailed. Thus, the trial court was
permitted to rely on equitable principles and public policy in deciding whether to
award prejudgment interest.
In making the decision not to award prejudgment interest, the trial court heard
evidence on the various values placed on Velu’s and Selvi’s membership interests.
Because the Company Agreement specified that “fair value” was to be used in
calculating the value of a membership interest, the trial court could have determined
that Appellants had thwarted the process of determining the fair value by not
requesting an appraisal pursuant to the terms of the Company Agreement. The trial
court could have further determined that Velu’s May 2016 settlement offer—whether
using either the book value of the membership interests as stated in the offer of
settlement ($110,000) or the value of the membership interests calculated using the
sales price as determined by Johnson ($149,000) and the remaining loan balance from
the loan chart, plus applying the additional $25,000 prior payment and the $14,000
41
cash payment—exceeded the amount that the jury awarded Appellants for damages.
Either total—the $149,000 and the $188,000—constitute more than a scintilla of
evidence to support the trial court’s decision that it was equitable to deny
prejudgment interest because Appellants had rejected a settlement offer that exceeded
the $130,100 in damages awarded by the jury. See Hameed Agencies (pvt) Ltd. v. J.C.
Penney Purchasing Corp., No. 11-05-00140-CV, 2007 WL 431339, at *6–7 (Tex. App.—
Eastland Feb. 8, 2007, pet. denied) (mem. op.) (considering settlement offer that
exceeded appellant’s recovery in affirming trial court’s decision not to award
prejudgment interest in contract dispute).
Appellants rely on a case from this court to argue that there is no authority
authorizing the trial court to deprive them of equity-based prejudgment interest based
on their refusal to accept a settlement offer. See AMX Enters., L.L.P. v. Master Realty
Corp., 283 S.W.3d 506 (Tex. App.—Fort Worth 2009, no pet.) (op. on reh’g). The
prejudgment interest in AMX Enterprises, however, was awarded based on an enabling
statute—the Prompt Payment to Contractors Act. Because the case was decided
under an enabling statute—not general principles of equity—and did not discuss
whether settlement offers can be considered in determining whether to award
prejudgment interest according to equitable principles, AMX Enterprises is thus
distinguishable.19
Moreover, after AMX Enterprises, this court remanded a breach-of-contract
19
case for the trial court to recalculate the correct amount of prejudgment interest
42
In their reply brief, Appellants argue for the first time that Velu’s offer to settle
the claim did not include “the actual production of funds to pay the amount due”
because Velu offered only an ownership interest; and as a result, “the alleged ‘offer’ is
not a ‘tender’ triggering this rule [preventing any prejudgment interest from
accruing].”20 An “appellant may file a reply brief addressing any matter in the
appellee’s brief,” see Tex. R. App. P. 38.3, but “[t]he Texas Rules of Appellate
Procedure do not allow an appellant to include in a reply brief a new issue in response
to some matter pointed out in the appellee’s briefs but not raised by the appellant’s
original brief.” Jennings v. Jennings, 625 S.W.3d 854, 868–69 (Tex. App.—San Antonio
2021, pet. filed); Dall. Cnty. v. Gonzales, 183 S.W.3d 94, 104 (Tex. App.—Dallas 2006,
pets. denied) (op. on reh’g). Appellants waived this contention by raising it for the
first time in their reply brief. See Pineridge Assocs., L.P. v. Ridgepine, LLC, 337 S.W.3d
461, 472 n.10 (Tex. App.—Fort Worth 2011, no pet.).
Having held that there is more than a scintilla of evidence to support the trial
court’s decision to award $0 prejudgment interest under these facts, we hold that the
“[b]ecause neither party ha[d] briefed what date should apply, and because appellants
claim that they are entitled to the tolling of the accrual of interest while a settlement
offer was open.” See Dall. Area Rapid Transit v. Agent Sys., Inc., No. 02-12-00517-CV,
2014 WL 6686331, at *16 (Tex. App.—Fort Worth Nov. 26, 2014, pet. denied) (mem.
op.).
Appellants appear to ignore that Velu’s settlement offer included a prior
20
payment of $25,000 and an offer to pay $14,000 in cash.
43
trial court did not abuse its discretion by denying prejudgment interest. We overrule
Appellants’ fourth issue.
VI. Zero Loss-of-Use Damages Awarded by the Trial Court
In their second issue, Appellants argue that the trial court erred by rejecting
their claim for compensatory damages for loss of use of the money taken by Velu and
that we should reverse and render judgment to include an award of those damages.
As discussed below, Appellants failed to conclusively establish that they had incurred
loss-of-use damages for allegedly not being able to prepay the mortgage.
A. Standard of Review
A trial court’s findings of fact have the same force and dignity as a jury’s
answers to jury questions. Anderson v. City of Seven Points, 806 S.W.2d 791, 794 (Tex.
1991). As with jury findings, a trial court’s fact-findings on disputed issues are not
conclusive, and, when the appellate record contains a reporter’s record, an appellant
may challenge those findings for evidentiary sufficiency. Catalina v. Blasdel, 881
S.W.2d 295, 297 (Tex. 1994); Super Ventures, Inc. v. Chaudhry, 501 S.W.3d 121, 126
(Tex. App.—Fort Worth 2016, no pet.). We review the sufficiency of the evidence
supporting challenged findings using the same standards that we apply to jury
findings. Catalina, 881 S.W.2d at 297.
Additionally,
[i]n a bench trial, the trial court is the factfinder and sole judge of the
credibility of the witnesses. McGalliard v. Kuhlmann, 722 S.W.2d 694, 696
(Tex. 1986). “Accordingly, the trial court may consider all the facts and
44
circumstances in connection with the testimony of each witness and
accept or reject all or part of that testimony.” Hailey v. Hailey, 176
S.W.3d 374, 383 (Tex. App.—Houston [1st Dist.] 2004, no pet.). The
trial court may believe one witness, disbelieve others, and resolve
inconsistencies in any testimony. McGalliard, 722 S.W.2d at 697. “An
appellate court may not substitute its judgment for the trial court’s
assessment of witnesses’ testimony in a bench trial.” Hailey, 176 S.W.3d
at 383.
12636 Rsch. Ltd. v. Indian Bros., Inc., No. 03-19-00078-CV, 2021 WL 417027, at *5
(Tex. App.—Austin Feb. 5, 2021, no pet.) (mem. op.).
B. Law on Omitted Findings
A recent case from the Austin Court of Appeals demonstrates how appellate
courts handle omitted, unrequested findings and their practical effect on the court’s
holding:
[W]hile [appellant] may have satisfied his burden with respect to the
elements of existence of and breach of the duty, it does not necessarily
follow that he is entitled to relief from that grievance. Texas law affords
an aggrieved individual several remedies for breach of fiduciary duty. . . .
In this case, as compensation for the breach of fiduciary duties,
[appellant] sought an additional $71,778.40 in damages. [Appellant]
derives this sum from evidence of monies Garcia obtained while
operating Active Euroworks and from his theory that “all of the profits
and payments would have been split between Garcia and [appellant]”
had Garcia not breached his fiduciary duty by opening and operating the
competing enterprise. However, the district court made no finding
regarding Garcia’s profits from the operation of Active Euroworks.
Moreover, [appellant] presumes that all of Garcia’s profits were made
while the two men were still partners, but the district court made no
finding regarding the date the partnership ended. Nor did either party
specifically request any findings regarding the alleged breach of fiduciary
duty or any profit Garcia might have made while operating Active
Euroworks. As an appellate court, we must assume that any omitted,
unrequested findings support the judgment. See Tex. R. Civ. P. 299;
Roberson v. Robinson, 768 S.W.2d 280, 281 (Tex. 1989); Williams v. Milliger,
45
352 S.W.2d 794, 795 (Tex. App. 1961, writ ref’d n.r.e.) (“It is implied in
support of the judgment that the court found against the defendant on
this issue since the court made no specific finding on such issue and
none was requested.”). In other words, we must infer that the district
court concluded: (1) that the fiduciary relationship had already ended
when Garcia began earning profits from Active Euroworks, (2) that
[appellant] was not harmed by Garcia’s operation of Active Euroworks,
or (3) that [appellant] simply failed to prove any damages incurred.
Dandachli v. Active Motorwerks, Inc., No. 03-19-00494-CV, 2021 WL 3118437, at *6
(Tex. App.—Austin July 23, 2021, no pet.) (mem. op.).
C. Law on Loss-of-Use Damages
No rigid rule applies when determining loss-of-use damages. Canyon Vista Prop.
Owners Ass’n, Inc. v. Laubach, No. 03-11-00404-CV, 2014 WL 411646, at *5 (Tex.
App.—Austin Jan. 31, 2014, no pet.) (mem. op.). Instead, factfinders must consider
the particular circumstances of the plaintiff and the facts of each case in assessing
loss-of-use damages. Id.The Texas Supreme Court has set forth the following broad parameters on
loss-of-use damages:
As with all consequential damages, the availability of loss-of-use damages
is necessarily circumscribed by common[ ]sense rules. To begin with,
the damages claimed may not be “too remote.” This is not to say they
must be “the usual result of the wrong,” but they must be foreseeable
and directly traceable to the tortious act. The damages also must not be
speculative. Although mathematical exactness is not required, the
evidence offered must rise above the level of pure conjecture.
Moreover, the damages may not be awarded for an unreasonably long
period of lost use. Whether framed as a duty of mitigation or a doctrine
of avoidable consequences, the principle is the same: A plaintiff may not
recover loss-of-use damages for a period longer than that reasonably
needed to replace the personal property. That principle compels a
46
plaintiff’s diligence in remedying his loss and deters an opportunistic
plaintiff from dilly-dallying at the expense of the defendant. After all,
the role of actual damages is to place the plaintiff in his rightful position,
not the position he wishes to acquire.
J&D Towing, LLC v. Am. Alt. Ins. Corp., 478 S.W.3d 649, 677 (Tex. 2016) (citations
omitted).
D. What the Record Shows
Appellants pleaded for loss-of-use damages as follows:
27. As a result of [Velu’s] breaches of the [c]ontracts, [Appellants] and
[their] other members suffered damages, including [Appellants’] losing
use of said funds to pay down the mortgage on the property, pay taxes,
and reduce the principal on the loan.
....
30. As a result of [Velu’s] conversion of the property,
[Appellants] lost the use of those monies for [their] business purposes,
including, but not limited to, paying down the mortgage on the property,
paying taxes, and reducing the principal on the loan so as to reduce
interest paid on the mortgage over time.
....
34. [Appellants have] sustained damages as a result [of Velu’s
theft], including loss of property[] and loss of use of property.
....
46. As a result of [Velu’s] breach of fiduciary duty, theft, and
fraud, and [Velu’s] breach of contract and conversion, [Appellants] and
[their] other members have suffered actual damages in the form of lost
income and revenues of at least $350,000, interest on lost use of this
amount, and other damages.
47
During the jury trial, Sengottiyan testified that he believed the net revenue from
2009 to 2014 “was going towards paying off the loan” and that he trusted that Velu
was paying down the mortgage with net revenue; in other words, without using the
exact wording, it appears that Sengottiyan believed that they were prepaying the
mortgage. At the time of the jury trial, Appellants’ account had “roughly close to
$200,000.” Sengottiyan was asked on cross-examination what Appellants had done
with the money, and he said that a majority of members had voted “to pay the excess
amount towards the loan.” When asked what amount was applied to the loan and
when, Sengottiyan testified that he did not remember the exact details; he said, “I can
tell you we paid one time $50,000 and another time 35-some-thousand. I don’t
remember the exact numbers, but we can look at the accounts and tell you.” Upon
further questioning to pinpoint the timing of the payments, Sengottiyan testified, “I
think both of them were made either in 2017, I think.” On redirect, Sengottiyan
agreed that since 2015, during the time that he and Samy had been co-managers, “at
times, [they had] paid net revenues towards the mortgage to pay down the mortgage.”
The sole finding that the trial court made on this issue was that “the interest
[Appellants] sought to recover w[as] damages for the loss of the use of money.” The
trial court’s judgment does not award loss-of-use damages.
48
E. Analysis
In their opening brief, Appellants raise legal arguments to show that Texas
allows recovery of loss-of-use damages,21 that Appellants had a “right to this award of
damages,” and that neither the trial court nor Velu presented a viable basis for
denying Appellants an award of loss-of-use damages. They rely on their chart
showing an interest calculation 22 on the $130,100 damages found by the jury, but they
set forth no evidence to show that they conclusively proved during the bench trial
that the stolen money would have been used to pay down the mortgage. Instead,
Appellants state that they conclusively established their “right to this award of
damages” and then set forth the following two sentences:
Sengottiyan testified that during the time when [Velu] was the primary
managing member, the expectation was that the net revenues were being
used to reduce the loan on the building. Both Sengottiyan and [Samy]
testified that after Sengottiyan replaced [Velu] as co-managing member
of [Appellants], the use of accumulated revenue was discussed with
[Appellants’] members, and the funds were used to pay down the
principal of the mortgage[—]a claim born[e] out by the mortgage
account records. [Record references omitted.]
21
On appeal, Velu does not challenge that Texas recognizes loss-of-use
damages as a measure of damages for claims of theft and conversion. For purposes
of our analysis, we therefore assume that such damages were available to Appellants if
properly proven.
22
For disposition of this issue, we need not address the correctness of the
interest rates used, but we note that the various interest charts that Appellants
reference have different totals: Plaintiffs’ Exhibit 14 shows the total interest as
$73,535.38 (though adding the yearly interest column produces a total of $78,048.23),
while Plaintiff’s Exhibit – Hearing Ex. 1 shows the total interest as $78,045.
49
Velu points out the following shortcomings in Appellants’ theory that the
stolen money would have been used to pay down the mortgage because Appellants
had made additional mortgage payments “at times” after Velu was removed as co-
manager:
No context was ever provided by [Appellants] for why any payments on
[their] mortgage “at times” were actually made and then comparing these
circumstances with those that existed during the relevant times at issue
in this lawsuit. Stated another way, [] Appellants failed to show that the
circumstances allegedly warranting payment “at times” on the mortgage
existed at any time when Velu is accused of any wrongdoing, thus
allegedly supporting the circumstantial inference that additional
payments would have been made as well. Indeed, there is no evidence
of the amount [Appellants] would have had in available cash had Velu
not taken the $130,100.00; no evidence of how many alleged payments
would have been made; how much each such alleged payment would
have been; or when each such alleged payment would have been made.
Myriad questions abound with regard to Appellants’ theory making it
nothing more than unsubstantiated innuendo. For example, how much
did [Appellants] have at all times? Did the amount exceed $200,000.00?
Even if [they] did, did [Appellants] have other debts that [they] needed
to pay with this money? Did [they] need to keep a cash reserve for any
secured loans to be sufficiently collateralized? What condition was the
economy in during the time in question? Was saving for contingencies
more important than paying off debt? Were there other opportunities
that would yield a greater investment return than retiring the subject
mortgage? [Appellants] failed to provide any context whatsoever to
prove the findings that were made were clearly wrong and unjust.
Another problem with [Appellants’] theory is that it is totally
dependent on the self-serving testimony of its current managers. . . .
[Appellants’] witnesses provided no documentary evidence that
supported their assertion that [Appellants] intended to use excess cash to
pay down [Appellants’] mortgage. Further, the general disinterest of
[Appellants’] co-manager, Samy, and [Appellants’] failure to use
reasonable care to avoid [their] injuries, undermines the testimony of
[Appellants’] managers that there was a plan to pay down the mortgage.
Additionally, undermining their credibility is the lack of clear recollection
50
of the mortgage principal payments that [Appellants] made since Velu’s
removal. Finally, a fact[]finder could infer from the testimony at trial
that the mortgage payments made by [Appellants] were made not as part
of a preexisting plan but to bolster [Appellants’] claim for consequential
damages.
Appellants filed a reply brief attacking Velu’s arguments, describing them as
“newly-minted theories.” Without citing any authority, Appellants imply that Velu
was limited to raising the same arguments that he raised in the trial court because “[t]o
the extent they do anything, the [t]rial [c]ourt’s findings of fact and conclusions of law
(drafted by [Velu]) point to those theories [that he raised in the trial court].”
Appellants further contend that “[nowhere] in the factual findings does the [t]rial
[c]ourt criticize the evidence presented by [Appellants] as being insufficient to carry
[their] burden of proof on this issue.” Appellants, however, failed to seek additional
findings from the trial court on this issue. As an appellate court, we must assume that
any omitted, unrequested findings support the judgment, and we must assume from
the trial court’s decision to award $0 for loss-of-use damages that the trial court
determined that Appellants had failed to conclusively establish their burden on these
damages. See Tex. R. Civ. P. 299; Roberson, 768 S.W.2d at 281; Williams, 352 S.W.2d at
795.
Appellants also argue in their reply brief that this court cannot imply a finding
regarding the credibility of Appellants’ witnesses’ testimony. Yet, we must defer to
the trial court’s credibility determinations and cannot substitute our judgment for the
trial court’s assessment of witnesses’ testimony in a bench trial. See 12636 Rsch., 2021
51
WL 417027, at *5. Here, the trial court’s judgment awarding $0 for loss-of-use
damages implies that it did not find Appellants’ witnesses’ testimony credible; thus, we
defer to that decision on the credibility of Appellants’ witnesses’ testimony.
Appellants’ reply brief further contends that Velu urges this court to apply a
higher burden than Texas law requires by asserting that Appellants had to prove that
money taken by Velu would have been used to pay down the mortgage. Appellants
argue that they are required to establish their damages with “reasonable certainty,” not
mathematical precision, and that they need only show “a reasonably foreseeable use of
funds wrongfully” taken. Reasonable certainty, however, is not the question; the
question is one step removed: it is whether Appellants credibly proved that they had
incurred loss-of-use damages. Based on the limited testimony provided, which
amounted to mere conjecture, Appellants failed to conclusively establish that they had
incurred loss-of-use damages.
Within this same argument, Appellants contend that “[r]equiring proof that the
money would have been used in a certain way imposes an impossible burden on
[Appellants].” Appellants, however, were the ones who pleaded that they had “lost
the use of those monies for . . . business purposes, including, but not limited to,
paying down the mortgage on the property.” Moreover, the burden was not an
impossible one as the trial court could have believed Appellants’ witnesses’ testimony;
it simply chose not to.
52
Appellants’ final reply is that “[Velu]’s claim that the proof consists solely of
‘self-serving’ testimony is incorrect.” Appellants point to bank records, arguing that
they show that funds in Appellants’ possession after Velu was removed from handling
money were used to prepay the mortgage debt. Such evidence of prepaying the
mortgage in 2016 and 2017, however, does not conclusively establish that Appellants
had any intention of prepaying the mortgage in 2009 to 2010—the initial years after
the LLCs were formed.
After reviewing the record under the required standard of review and analyzing
the arguments raised, we conclude that Appellants’ legal sufficiency challenge fails.
For Appellants to prevail on their claim for loss-of-use damages, they had the burden
to conclusively establish their entitlement to interest for the loss of use of the stolen
money. Appellants’ evidence on loss-of-use damages was not conclusive; the
testimony about after-the-fact uses of the money seven to eight years after the money
was stolen amounted to mere conjecture as to how any net revenue would have been
used in 2009 and 2010. Neither Samy nor Sengottiyan testified that there were general
meetings of the members during 2009 and 2010 in which they voted to pay down the
mortgage; the only testimony was that Sengottiyan “believed” that the net revenue
was being used to pay down the mortgage from 2009 to 2015.
Accordingly, we hold that Appellants failed to conclusively prove that they
suffered any loss-of-use damages, and thus the trial court did not err by determining
that Appellants should be awarded $0 for loss-of-use damages. Cf. Wiese v. Pro Am
53
Servs., Inc., 317 S.W.3d 857, 863–64 (Tex. App.—Houston [14th Dist.] 2010, no pet.)
(holding that there was no legally sufficient evidence proving appellee’s loss-of-use
damages where appellee failed to provide competent evidence that it was entitled to
recover loss-of-use damages consisting of lost profits); Automek, Inc. v. Orandy, 105
S.W.3d 60, 65 (Tex. App.—Houston [1st Dist.] 2003, no pet.) (stating that “[w]ithout
any evidence, an award for damages for loss of use must be based upon conjecture
and is thus impermissible” and holding that the evidence was legally insufficient to
hold that appellee had suffered loss-of-use damages). We overrule Appellants’ second
issue.
VII. Breach-of-Fiduciary Ruling Not Explicit in Judgment
As mentioned above, at the conclusion of the evidence in the jury trial,
Appellants moved for a directed verdict on both the existence of a fiduciary duty
owed to Appellants by Velu and Velu’s breach of that duty. The trial court granted
the motion for directed verdict. After the final judgment was rendered, Appellants
filed a motion to correct the final judgment, requesting the trial court to “identify this
cause of action or ruling in the [f]inal [j]udgment,” but the trial court denied the
motion.
In their fifth issue, Appellants request this court to modify the final judgment
to reflect that the trial court granted a directed verdict in their favor on their breach-
of-fiduciary-duty claim. Concluding that there was no abuse of discretion, we decline
to do so. See Deutsch v. Hoover, Bax & Slovacek, L.L.P., 97 S.W.3d 179, 194 (Tex.
54
App.—Houston [14th Dist.] 2002, no pet.) (stating that the trial court’s interlocutory
ruling granting a directed verdict on the entire breach-of-fiduciary-duty claim merged
into the trial court’s final judgment). See generally Wagner v. Edlund, 229 S.W.3d 870,
879 (Tex. App.—Dallas 2007, pet. denied) (stating that appellate courts review the
denial of a motion to modify, correct, or reform a judgment for an abuse of
discretion). The record reflects that the jury charge sought to have the jury assess
damages solely for theft, conversion, and breach of contract; there was no question
asking the jury to assess damages related to the breach-of-fiduciary-duty claim, and
there were no objections to the charge. Thus, there was no damage award for the
breach of fiduciary duty. Accordingly, we overrule Appellants’ fifth issue.
VIII. Conclusion
Having sustained Appellants’ third issue because the trial court failed to follow
the steps set out in Rohrmoos for calculating trial attorneys’ fees and because the trial
court failed to award any appellate attorneys’ fees despite that Appellants were entitled
to an award of appellate attorneys’ fees, we reverse and remand for a new trial solely
on attorneys’ fees. Having overruled Appellants’ first, second, fourth, and fifth issues,
we affirm the remainder of the trial court’s judgment.
/s/ Dabney Bassel
Dabney Bassel
Justice
Delivered: November 4, 2021
55