Price v. Allstate Insurance

United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT July 7, 2006
Charles R. Fulbruge III
Clerk
No. 05-20394
Summary Calendar
JOE PRICE, ARETHA PRICE
Plaintiffs - Counter Defendants - Appellants
- Cross - Appellees
v.
ALLSTATE INSURANCE CO
Defendant - Counter Claimant - Appellee -
Cross - Appellant
JEFFREY A SHADWICK
Defendant - Appellee
--------------------
Appeal from the United States District Court
for the Southern District of Texas
USDC No. 4:03-CV-804
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Before KING, WIENER, and DeMOSS, Circuit Judges.
PER CURIAM:*
Joe and Aretha Price appeal from the district court’s order
granting Defendant Allstate Texas Lloyd Company’s motion to
enforce settlement agreement. The record shows that the Prices
brought suit against Allstate in state court when Allstate
refused to provide coverage for claimed damages under the Prices’
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
No. 05-20394
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homeowner’s insurance policy. Allstate removed the case to
federal court under the district court’s diversity jurisdiction.
The Prices’ attorney subsequently agreed with Allstate’s counsel
to settle the case and Allstate tendered payment, but the Prices
refused to execute the settlement papers, contending that they
had not agreed to a full and final settlement of all claims. The
Prices believed that the settlement amount was to cover only
damage to their home and excluded their claims for personal
property damage and additional living expenses. Allstate then
counterclaimed for breach of the settlement agreement, seeking
specific performance and an award of attorneys’ fees. The
district court granted the enforcement of the agreement but
denied Allstate’s request for fees.
The Prices argue that their counsel lacked authority to
settle their entire case and breached his fiduciary duty to them.
The record contains evidence of written communications between
the Prices, their attorney, and Allstate’s attorney discussing a
settlement contingent upon a full and final settlement of all
claims. The Prices’ counsel communicated Allstate’s final
settlement offer to Joe Price, who responded unconditionally that
counsel should accept the offer. Based on the record, including
testimony of the parties at an evidentiary hearing, the district
court did not reversibly err by holding that plaintiffs’ counsel
had authority to settle the entire case. See Cavallini v. State
Farm Mut. Auto Ins. Co., 44 F.3d 256, 266 (5th Cir. 1995); Walden
No. 05-20394
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v. Sanger, 250 S.W.2d 312, 316 (Tex. App. 1952); TEX. R. CIV. P.
11; see also Terrain Enter., Inc. v. Western Cas. and Sur. Co.,
774 F.2d 1320, 1322 (5th Cir. 1985).
Allstate cross-appeals from the district court’s denial of
its request for attorney’s fees. The Prices’s briefs contain no
response to Allstate’s cross-appeal on this issue. Under Texas
state law, a court has discretion to determine the amount of a
fee award but the award of reasonable fees is mandatory if a
party prevails on a breach of contract claim. See DP Solutions,
Inc. v. Rollins, Inc., 353 F.3d 421, 436 (5th Cir. 2003); TEX.
CIV. PRAC. & REM. CODE ANN. § 38.001. Allstate prevailed on its
claim for specific performance under the settlement agreement,
and the district court abused its discretion by denying the fee
request. See Kona Tech., Corp. v. Southern Pac. Transp. Co., 225
F.3d 595, 614 (5th Cir. 2000); Rasmusson v. LBC Petrounited,
Inc., 124 S.W.3d 283, 287 (Tex. App. 2002). Ordinarily, we would
remand to the district court so that it could determine the
amount of the fees to be awarded to Allstate. In this case, that
would simply increase the amount of the legal work that
Allstate’s counsel would be required to do and thereby increase
the fees that the Prices would be required to pay. We elect,
instead, to fix the amount of the fees and expenses to be awarded
to Allstate for all phases of this case, both in the district
court and on appeal, at $8,000.
No. 05-20394
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AFFIRMED IN PART; VACATED IN PART AND JUDGMENT RENDERED
AGAINST THE PRICES FOR ALLSTATE’S ATTORNEYS FEES IN THE AMOUNT OF
$8,000. The Prices shall bear the costs of this appeal. The
mandate shall issue forthwith.