Isomeric Industries, Incorporated v. Triple Crown Resources, LLC ( 2023 )

Opinion issued October 19, 2023
In The
Court of Appeals
For The
First District of Texas
————————————
NO. 01-22-00768-CV
———————————
ISOMERIC INDUSTRIES, INCORPORATED, Appellant
V.
TRIPLE CROWN RESOURCES, LLC, Appellee
On Appeal from the 51st District Court
Irion County,1 Texas
Trial Court Case No. CV20-013
1
The Texas Supreme Court transferred this appeal from the Court of Appeals for the
Third District of Texas. See TEX. GOV’T CODE ANN. § 73.001 (authorizing transfer
of cases between courts of appeals). Under the Texas Rules of Appellate Procedure,
“the court of appeals to which the case is transferred must decide the case in
accordance with the precedent of the transferor court under principles of stare
decisis if the transferee court’s decision otherwise would have been inconsistent
with the precedent of the transferor court.” TEX. R. APP. P. 41.3. The parties have
not cited, nor has our own research revealed, any conflict between the precedent of
the Third Court of Appeals and that of this court on any relevant issue.
MEMORANDUM OPINION
Appellant Isomeric Industries, Incorporated (Isomeric) appeals from the trial
court’s summary judgment order awarding $75,363.98 in attorney’s fees and court
costs to appellee Triple Crown Resources, LLC (Triple Crown) in Isomeric’s suit to
foreclose on mineral liens. In one issue, Isomeric contends that the trial court abused
its discretion in awarding attorney’s fees to Triple Crown because its redacted billing
records precluded evaluation of the reasonableness and necessity of the fees and its
fees are facially unreasonable. We affirm.
Background
Triple Crown, a Texas-based oil and gas producer, hired Clearpoint
Chemicals LLC (Clearpoint) to provide materials and services to fracture its oil wells
located in Irion County between July 2019 and January 2020. Clearpoint contracted
with Isomeric to furnish certain chemicals in support of its services to Triple Crown.
Clearpoint invoiced Triple Crown for its materials and services, and Triple Crown
made eight payments to Clearpoint, with its final payment to Clearpoint having been
made on April 24, 2020. Triple Crown incurred no further charges from Clearpoint.
Isomeric subsequently made a demand on Clearpoint for payment of the
materials it had furnished to Clearpoint. Clearpoint did not tender payment. In July
2020, Isomeric filed a Notice of Statutory Lien on Mineral Property in the amount
2
of $647,466.62 against several of Triple Crown’s oil wells. Clearpoint later filed for
Chapter 11 bankruptcy.
On October 14, 2020, Isomeric sued Triple Crown seeking to foreclose on its
mineral liens. Triple Crown answered and counterclaimed, seeking a declaratory
judgment that Isomeric’s liens were invalid under Texas Property Code Section
56.043, and sought recovery of its attorney’s fees pursuant to Texas Property Code
Section 53.156 and Texas Civil Practice and Remedies Code Section 37.009.
Isomeric answered asserting a general denial to Triple Crown’s counterclaim.
On June 8, 2022, Triple Crown filed a traditional and no-evidence motion for
summary judgment arguing that Isomeric’s lien was invalid and could not be
foreclosed. It argued that it was entitled to traditional summary judgment on
Isomeric’s lien claim because the undisputed evidence showed that, in accordance
with Texas Property Code Chapter 56, (1) Triple Crown could not be liable for more
than the amount owed to Clearpoint at the time Isomeric sent notice of its lien; and
(2) at the time Isomeric sent its notice, Triple Crown had paid Clearpoint in full.
Triple Crown argued that it was also entitled to no-evidence summary judgment on
Isomeric’s claim because (1) Isomeric could present no evidence that Clearpoint
used its chemicals on the oil wells in question; and (2) even if it could present such
evidence, Isomeric failed to provide any evidence that Triple Crown owed money to
Clearpoint on the date of Isomeric’s notice. Triple Crown argued that it was entitled
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to recover $75,363.98 in attorney’s fees and court costs incurred in defending against
Isomeric’s invalid mineral lien pursuant to Texas Property Code Section 53.156.
Triple Crown attached (1) the affidavit of Aleks Jovanovic, Triple Crown’s
Controller; (2) excerpts of Clearpoint invoices and Triple Crown checks; (3)
Isomeric’s notice of lien; (4) the declaration of Samuel S. Allen, Triple Crown’s lead
trial counsel; and (5) an itemized statement of legal services rendered by Jackson
Walker L.L.C. in the case.
Isomeric responded to Triple Crown’s summary judgment motion arguing that
(1) Triple Crown’s motion was moot because Isomeric had filed and recorded a
Release of Lien and therefore its lien was nonexistent; and (2) Triple Crown was not
entitled to its attorney’s fees because it wrongly withheld information from Isomeric,
its fees were unreasonable, and it presented insufficient evidence to support the
amount of requested attorney’s fees. Isomeric attached the affidavit of Kimberley B.
Kelly, Isomeric’s lead trial counsel, and accompanying exhibits.
Triple Crown replied to Isomeric’s summary judgment response arguing that
(1) its summary judgment motion was not moot because Isomeric had refused to
nonsuit its claims despite having released its lien; and (2) it was entitled to recover
its attorney’s fees under Property Code Section 53.156, because the requested fees
were reasonable and necessary, and Isomeric failed to present evidence
4
controverting Triple Crown’s attorney’s fees.2 Triple Crown attached Allen’s second
declaration and accompanying exhibits.
On August 4, 2022, Isomeric nonsuited its claims against Triple Crown.
The trial court held a hearing on Triple Crown’s motion. Allen argued that his
declaration and the attached billing records submitted with Triple Crown’s summary
judgment motion demonstrated that the hours spent on the case and the expenses
incurred were reasonable and necessary. He stated that the hours and fees incurred
consisted of two stages: (1) drafting the original answer and gathering and analyzing
the material evidence to prove that Isomeric’s lien was not valid, and (2) preparing
Triple Crown’s motion for summary judgment and reply brief.
On August 8, 2022, the trial court granted Triple Crown’s summary judgment
motion, declared Isomeric’s lien against Triple Crown invalid, and awarded
$75,363.98 in attorney’s fees and court costs to Triple Crown.
This appeal followed.
Standard of Review
We review a trial court’s award of attorney’s fees for an abuse of discretion.
See Fort Worth Transp. Auth. v. Rodriguez, 547 S.W.3d 830, 850 (Tex. 2018). A
trial court abuses its discretion when it acts in an arbitrary or unreasonable manner
2
In its reply brief, Triple Crown stated that it would provide the trial court with
unredacted versions of its attorney’s fee invoices for in camera review if the trial
court deemed it necessary.
5
without reference to guiding rules or principles. See Hill v. Shamoun & Norman,
LLP, 544 S.W.3d 724, 742 (Tex. 2018); Samlowski v. Wooten, 332 S.W.3d 404, 410
(Tex. 2011). Under this standard, we cannot reverse the trial court’s award merely
because we would have awarded a different amount of fees. See Samlowski, 332
S.W.3d at 410 (noting abuse of discretion standard of review insulates trial court’s
reasonable decisions from appellate second-guessing). “Further, courts are free to
look at the entire record, the evidence presented on reasonableness, the amount in
controversy, the common knowledge of the participants as lawyers and judges, and
the relative success of the parties to determine a reasonable fee.” McMahon v.
Zimmerman, 433 S.W.3d 680, 693 (Tex. App.—Houston [1st Dist.] 2014, no pet.);
see also Santos v. Tex. Enters., Inc., No. 03-09-00579-CV, 2010 WL 4054479, at *2
(Tex. App.—Austin Oct. 15, 2010, no pet.) (mem. op.).
Reasonable and Necessary Attorney’s Fees
Isomeric contends that the trial court abused its discretion in awarding Triple
Crown its requested attorney’s fees because Triple Crown failed to provide sufficient
evidence of the reasonableness and necessity of those fees, and the fees are facially
unreasonable. Triple Crown responds that it presented sufficient evidence of its fees,
which Isomeric did not controvert, and the trial court did not abuse its discretion in
determining that Triple Crown was entitled to recover its requested fees.
6
A. Applicable Law
Triple Crown requested its attorney’s fees from Isomeric pursuant to Texas
Property Code Section 53.156. That section provides, in relevant part, that “in any
proceeding to declare that any lien or claim is invalid or unenforceable in whole or
in part, the court shall award costs and reasonable attorney’s fees as are equitable
and just.” TEX. PROP. CODE § 53.156.
Texas follows the lodestar method to determine the amount of an award of
attorney’s fees.3 Rohrmoos Venture v. UTSW DVA Healthcare, LLP, 578 S.W.3d
469, 496 (Tex. 2019). The lodestar method requires the fact finder to determine
reasonable attorney’s fees by first determining the reasonable hours spent by counsel
in the case and the reasonable hourly rate for counsel’s work. See El Apple I, Ltd. v.
Olivas, 370 S.W.3d 757, 760 (Tex. 2012). The fee claimant must provide sufficient
evidence of both the reasonable hours worked and the reasonable hourly rate.
3
The lodestar method is a shorthand version of the Arthur Andersen considerations a
factfinder should consider when determining the reasonableness of a fee. Rohrmoos
Venture v. UTSW DVA Healthcare, LLP, 578 S.W.3d 469, 496 (Tex. 2019) (citing
Arthur Andersen & Co. v. Perry Equipment Corp., 945 S.W.2d 812, 818 (Tex. 1997)
listing factors as (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 contingent on results obtained or uncertainty of collection before the legal
services have been rendered)).
7
Rohrmoos, 578 S.W.3d at 498. Sufficient evidence includes, at a minimum, evidence
of (1) the nature of the work 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 id.; see also City of Laredo v. Montano, 414 S.W.3d
731, 736 (Tex. 2013) (per curiam) (“In El Apple, we said that a lodestar calculation
requires certain basic proof, including itemizing specific tasks, the time required for
those tasks, and the rate charged by the person performing the work.”). The fee
claimant must establish the reasonableness and necessity of its requested fees.
Rohrmoos, 578 S.W.3d at 488.
B. Analysis
Isomeric argues that there is insufficient evidence that Triple Crown’s fees
were reasonable and necessary because its heavily redacted billing records precluded
evaluation of the reasonableness and necessity of the award. It also argues that Triple
Crown’s fees were facially unreasonable given the minimal activity in the case.
To support its claim for attorney’s fees, Triple Crown attached two
declarations of its lead counsel, Samuel S. Allen, and accompanying exhibits, to its
summary judgment motion and reply brief. In his first declaration, Allen stated he
was familiar with the Arthur Andersen factors that courts consider in determining
the reasonableness of attorney’s fees. He stated that he personally performed,
8
observed, or supervised the performance of legal services for and on behalf of Triple
Crown. Allen stated that he, along with Jackson Walker partners Edwin Buffmire
and Ross Forbes, Jr., Jackson Walker associate Katie Brown, and Jackson Walker
employee Leo Gonzalez, performed the work in this lawsuit on behalf of Triple
Crown. Allen stated that the time spent on the tasks performed was reasonable and
necessary based on the novelty and difficulty of the issues and the skill required to
perform the legal services. Allen stated that the rates charged by Triple Crown’s
attorneys were reasonable and the procedural events of the case justified the fee
award sought by Triple Crown in defending against Isomeric’s lawsuit.
Allen attached redacted billing records reflecting that Triple Crown had
incurred $66,601.00 in attorney’s fees and $2,262.98 in costs between December
2020 and May 2022. A number of the specific tasks include descriptions such as
“Confer [redacted],” Receipt and Review of [redacted],” Prepare [redacted],” and
“Analyze [redacted]” while other descriptions include more detail such as “Confer
with S. Allen and prepare [redacted],” “Receipt and review of correspondence from
opposing counsel; correspondence with E. Buffmire [redacted]; replied to opposing
counsel; update and request [redacted],” “Finalized letter to opposing counsel and
transmitted with invoices and ledger,” and “Receipt and review of correspondence
from K. Kelly and contacted Buffmire [redacted].” Allen stated that Triple Crown
would likely incur $6,500.000 in additional attorney’s fees and costs to prepare a
9
summary judgment reply and prepare for and attend the hearing on its motion. To
his second declaration, Allen attached copies of (1) an email to Isomeric’s counsel
which included requested documentation of Clearpoint’s entire account with Triple
Crown and a ledger of Clearpoint’s balance, and (2) a letter to Isomeric’s counsel
forwarding invoices and payments between Clearpoint and Triple Crown reflecting
that Triple Crown did not owe money to Clearpoint at the time of Isomeric’s lien
notice.
Isomeric argues that Triple Crown’s evidence is insufficient because the
billing records are too heavily redacted to enable the trial court to determine the
reasonableness and necessity of the fees. In support of its argument, Isomeric relies
on three cases in which courts have concluded that redacted billing records prevented
the trial court from performing a meaningful evaluation of the reasonableness and
necessity of the requested fees because the records lacked specificity as to the tasks
performed by counsel. We examine those cases below.
In Brant Oilfield Management & Sales, Inc. v. Mountwest, Inc., 14-15-00240-
CV, 2016 WL 3574669 (Tex. App.—Houston [14th Dist.] June 30, 2016, no pet.)
(mem. op.), a contract dispute case, the appellant challenged the legal and factual
sufficiency of the evidence supporting the attorney’s fees awarded to appellee. See
id. at *4. At trial, a partner in appellee’s counsel’s firm testified about the
reasonableness and necessity of the attorney’s fees claimed by appellee, and
10
counsel’s redacted billing statements were admitted. See id. at *1. The partner
testified that he did not know specifics for each of the entries on the billing
statements, but that he knew generally what the attorneys did. See id. at *5. He
further testified that although he had an understanding of the discovery done in the
case, he had “not taken the time to do a deep dive and review those things.” Id. The
Fourteenth Court of Appeals concluded that although the billing statements
identified the case, the billing attorney, the dates, the number of hours, and the billing
rates, “they did not provide the required specificity as to the nature of the tasks
performed by each attorney.” Id. The court held that no legally sufficient evidence
supported the amount of attorney’s fees awarded by the trial court, and it reversed
and remanded for a redetermination of fees. See id.
Brant is distinguishable from the present case because the billing records in
that case had been redacted to remove the entire narrative. Here, by contrast, Triple
Crown’s redactions, which were made to protect privileged information, left the
billing attorney, hours spent, rate, and non-privileged portions of the narrative intact.
Courts, including this one, have found descriptions similar to those in Triple
Crown’s billing records to be sufficiently specific. See, e.g., Bailey v. Smith, 581
S.W.3d 374, 398 (Tex. App.—Austin 2019, pet. denied) (concluding that fee records
detailing specific amounts of time attorneys spent on tasks such as
“Drafting/Revising Documents,” “Reviewing/Research Background Info,”
11
“Conferring with AG Personnel,” and similar categories were sufficiently specific
to enable trial court to make meaningful evaluation of reasonableness of fees claimed
for each attorney on case); Med. Disc. Pharm., L.P. v. State, No. 01-13-00963-CV,
2015 WL 4100483, at *17 (Tex. App.—Houston [1st Dist.] July 7, 2015, pet. denied)
(mem. op.) (concluding time summary which identified timekeepers, hours devoted
to each activity, and description of activities that were divided into categories such
as “attend/appear at hearing,” “drafting/revising pleadings,” and
“reviewing/researching law,” was sufficiently specific because summary indicated
time each person spent on particular categories of tasks). Further, in contrast to the
partner’s testimony in Brant, Allen offered written testimony regarding his
familiarity with the billing records and his involvement in the tasks performed.
In Person v. MC-Simpsonville, SC-1-UT, LLC, 03-20-00560-CV, 2021 WL
3816332 (Tex. App.—Austin Aug 27, 2021, no pet.) (mem. op.), involving a breach
of a guaranty agreement, the Austin Court of Appeals examined the redacted billing
records and attorney testimony offered in support of appellee’s requested attorney’s
fees to determine whether the evidence was legally sufficient to calculate a
reasonable fee award using the lodestar method. See id. at *8. The court noted that
“[i]t is not improper to redact billing records to preserve attorney-client privileged
communications before offering them into evidence.” Id. The court, however, stated
[W]hile some of the billing entries in the record showed with reasonable
clarity the types of tasks that were performed, the redactions eliminated
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virtually all specificity about those tasks and therefore largely
prevented a meaningful evaluation of their reasonableness and
necessity. For example, the majority of entries on the redacted billing
records show only that an attorney or other legal professional had a
telephone conference with somebody about something, emailed
somebody about something, discussed something with somebody,
reviewed something, researched something, drafted something,
coordinated something, or worked on something.
Id. at 9. The court concluded that the redacted billing records admitted in evidence
were insufficient to allow the trial court to evaluate the reasonableness and necessity
of hours worked that gave rise to nearly a quarter million dollars of attorney’s fees.
See id. The court also considered the testimony of two of appellee’s attorneys offered
in support of the requested fees. See id. One of the attorneys testified only that “she
was familiar with the correspondence in the case, the pleadings, discovery, the
motions, the hearings and I’ve reviewed the fees statements.” Id. The other attorney
testified that “[t]he work performed by me and those with my law firms was
reasonable and necessary for prosecuting plaintiff’s claims in this case, and all of the
work was prudently and efficiently performed. . . . I have spent 200 hours performing
legal work on this case. In my opinion, all of this work was reasonable under the
circumstances and appropriate and efficiently performed.” Id. The court concluded
that the testimony was “too general” to allow the trial court to determine whether the
hours worked were reasonable and necessary. Id.
Person is distinguishable from the present case in two respects. First, the
attorneys in Person testified in very general terms that they were familiar with the
13
“pleadings, discovery, the motions, the hearings” and “spent 200 hours performing
legal work on this case.” Id. Here, by contrast, Allen testified that he personally
performed, observed, or supervised the performance of the legal services in this case.
Second, appellants’ counsel in Person testified in some detail that in his opinion the
attorney’s fees requested by appellee were neither reasonable nor necessary. See id.
at *7. The court noted that, with this contrary evidence, the presumption of
reasonableness disappeared. See id. In this case, Isomeric did not offer any evidence
to contravene Triple Crown’s evidence submitted in support of its attorney’s fees.
See Robertson v. Emanuel-Johnson, No. 01-20-00198-CV, 2021 WL 5773880, at *4
(Tex. App.—Houston [1st Dist.] Dec. 7, 2021, pet. denied) (mem. op.) (“An
attorney’s affidavit can sufficiently establish reasonable attorney’s fees on a motion
for summary judgment, but the nonmovant may submit an affidavit challenging the
reasonableness of the fees, creating a fact issue precluding summary judgment.”);
Triton 88, L.P. v. Star Elec., L.L.C., 411 S.W.3d 42, 64 (Tex. App.—Houston [1st
Dist.] 2013, no pet.) (“An attorney’s affidavit constitutes expert testimony that will
support an award of attorney’s fees in a summary judgment proceeding. . . . [T]he
presumption of reasonableness remains in effect when there is no evidence
submitted to challenge the affidavit proof of the summary judgment movant.”).
In McGibney v Rauhauser, 549 S.W.3d 816 (Tex. App.—Fort Worth 2018,
pet. denied), a defamation case, the Fort Worth Court of Appeals concluded that
14
there was insufficient evidence to support the trial court’s award of the entire amount
of attorney’s fees sought by the appellee and that the fees awarded were not
reasonable. See id. at 821. The court noted that some of the entries on the attorney’s
billing records were so heavily redacted that the trial court could not have had
sufficient evidence to determine that the entire amount was reasonable. See id. The
court further noted that appellee’s own evidence demonstrated, among other things,
(1) that a portion of the fees awarded included a charge for legal work related not
only to a different case but also one in which appellee was not a party, (2) appellee’s
attorney billed for research on matters wholly unrelated to the suit, (3) “a
troublesome pattern of heavy front-loading of legal work” that was “premature and
of questionable reasonableness in the early stages of the lawsuit,” and (4) that
numerous hours were devoted to reviewing not only the rulings or holdings of
particular cases but also the entire records of those cases, including cases outside of
the court’s jurisdiction. Id. at 823–25. McGibney, in which the billing records
affirmatively disproved reasonableness, is inapposite.
A number of the billing records in this case are, indeed, heavily redacted. See
Canadian Real Estate Holdings, LP v. Karen F. Newton Revocable Tr., 05-20-
00747-CV, 2022 WL 4545572, at *4 (Tex. App.—Dallas Sept. 29, 2022, no pet.)
(mem. op.) (noting when attorney’s invoices are offered as evidence, they are
15
routinely redacted to protect attorney–client and work-product privileges).4
However, billing records are not required to prove that requested fees are reasonable
and necessary. See Rohrmoos, 578 S.W.3d at 502. The proper inquiry is not whether
Triple Crown’s billing records were excessively redacted but, rather, whether the
evidence, as a whole, satisfied the minimum evidentiary requirements to support the
fee award. See El Apple, 370 S.W.3d at 762–63; Rohrmoos, 578 S.W.3d at 498; see
also Fiamma Statler, LP v. Challis, No. 02-18-00374-CV, 2020 WL 6334470, at
*16 n.21 (Tex. App.—Fort Worth Oct. 29, 2020, pet. denied) (mem. op.) (“[T]he
operative question is whether the trial court had sufficient evidence to exercise its
discretion, not whether the billing records were or were not redacted.”). Here, the
trial court presided over this case for nearly two years, reviewed Triple Crown’s
counterclaim, summary judgment motion, reply brief, and two attorney declarations
with supporting documentation, including the redacted billing records, and
considered counsel’s arguments at the hearing on Triple Crown’s motion. As noted
above, Isomeric did not present any evidence controverting Triple Crown’s
evidence in support of its requested fees. Triton 88, 411 S.W.3d at 64 (noting
4
Isomeric does not assert that any of the redacted material was not privileged. As
previously noted, Triple Crown offered unredacted versions of the billing records
to the trial court for in camera review in its reply brief and at the hearing on its
summary judgment motion.
16
affidavit supporting award of attorney’s fees is presumed reasonable unless it is
rebutted with controverting evidence).
Isomeric also argues that Triple Crown’s attorney’s fees are facially
unreasonable in light of the minimal activity in the case. Specifically, Isomeric
argues that Triple Crown’s only activity in this case consisted of filing its answer
and counterclaim, sending correspondence to Isomeric’s counsel, and filing its
motion for summary judgment. It further asserts that Triple Crown incurred
substantial fees when there was no activity in the case. We find this argument
unavailing. The filing of a counterclaim and summary judgment motion necessarily
includes time spent preparing and drafting the pleading and motion as well as other
tasks such as conducting legal research and analyzing issues. “Trial courts are
considered experts on the reasonableness of attorney’s fees” and “[t]rial judges can
[also] draw on their common knowledge and experience as lawyers and as judges”
in evaluating fee requests. Dimension Homes, Inc. v. Young, No. 01-19-00247-CV,
2020 WL 4457960, at *4 (Tex. App.—Houston [1st Dist.] Aug. 4, 2020, no pet.)
(mem. op.); McMahon, 433 S.W.3d at 693. Here, the trial court judge could have
drawn on her own experience as a lawyer and judge in determining that the tasks
performed and fees incurred by Triple Crown to obtain resolution of Isomeric’s
lawsuit were not unreasonable. See Dimension Homes, 2020 WL 4457960, at *4;
McMahon, 433 S.W.3d at 693.
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Taken together, we conclude that there is sufficient evidence that the
attorney’s fees incurred by Triple Crown to avoid a judgment of nearly $650,000
sought by Isomeric were reasonable and necessary, and that Triple Crown’s fees are
not facially unreasonable. The trial court did not abuse its discretion in awarding
these fees. Accordingly, we overrule Isomeric’s issue.
Conclusion
We affirm the trial court’s judgment.
Amparo Guerra
Justice
Panel consists of Justices Goodman, Rivas-Molloy, and Guerra.
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