Bacon-Tomsons, LTD., BRL Oil and Gas, L.L.C. and Ferrell Edwin Munson v. Chrisjo Energy, Inc., Jack M. Cline and Imperial Petroleum, Inc.

Opinion issued August 9, 2016
In The
Court of Appeals
For The
First District of Texas
————————————
NO. 01-15-00305-CV
———————————
BACON TOMSONS, LTD., BRL OIL AND GAS, L.L.C., AND FERRELL
EDWIN MUNSON, Appellants
V.
CHRISJO ENERGY, INC. AND JACK M. CLINE, Appellees
On Appeal from the 122nd District Court
Galveston County, Texas
Trial Court Case No. 12-CV-0428
MEMORANDUM OPINION
Appellants, Bacon Tomsons, Ltd., BRL Oil and Gas, L.L.C., and Ferrell
Edwin Munson (collectively “BTL”), sued appellees Chrisjo Energy, Inc. and Jack
M. Cline (collectively “Chrisjo”) for various claims, including fraud, conversion,
breach of the Texas Deceptive Trade Practices Act (“DTPA”), and violation of the
Texas Theft Liability Act (“TTLA”), arising out of the parties’ investment in a
pipeline facility. At trial, BTL nonsuited its DTPA and TTLA claims, and the trial
court granted a directed verdict on its remaining claims against Chrisjo, ordering
that BTL take nothing on those claims. The trial court then awarded Chrisjo
attorney’s fees under the TTLA as a “prevailing party.” In four issues on appeal,
BTL argues that (1) the trial court’s plenary power had expired before it entered
the order and judgment awarding Chrisjo’s attorney’s fees; (2) alternatively,
Chrisjo was not a “prevailing party” entitled to attorney’s fees under the TTLA;
(3) alternatively, Chrisjo did not properly segregate its evidence of TTLA
attorney’s fees; and (4) the trial court erred in concluding that BTL’s conversion
claim against Chrisjo was barred by the statute of limitations.
We affirm.
Background
In 2004, Chrisjo entered into an agreement with a third party, Mideast Gas
Systems, to develop an existing oil and gas pipeline in Plaquemines Parish,
Louisiana, and to construct an additional gas sales pipeline, a saltwater disposal
well, and metering stations (“Pipeline Facilities”). The Pipeline Facilities serviced
the Coquille Bay Field, which is located offshore along the coast of Louisiana.
Mideast retained a 25% interest in the Pipeline Facilities, and Chrisjo obtained a
75% interest in the Pipeline Facilities in exchange for raising $700,000 in capital.
2
BTL invested money through Chrisjo to purchase a portion of Chrisjo’s share in
the Pipeline Facilities, obtaining an 8.75% ownership interest in the Pipeline
Facilities. Chrisjo and BTL memorialized their agreement in a Private Placement
Memorandum (“PPM”), which provided that investors would be entitled to collect
a proportionate share of the fees paid for the transport of oil and gas through the
Pipeline Facilities. Chrisjo recorded an assignment of interest in the Plaquemines
Parish property records reflecting the investors’ ownership interest in the Pipeline
Facilities, including those of BTL. Chrisjo sent its investors, including BTL,
payments, statements, and tax documents reflecting the amount earned by each
investor based on those fees until 2008, when various problems with operating the
pipeline arose.
The investment in the Pipeline Facilities was never very profitable, and the
project was plagued by damage to the Coquille Bay Field caused by numerous
hurricanes and tropical storms in addition to other problems. In 2010, the operator
of the Coquille Bay Field, Imperial Petroleum (“Imperial”), expressed an interest
in purchasing the Pipeline Facilities to consolidate the ownership of the various
interests in the oil and gas field and to simplify its efforts to comply with certain
operating requirements set out by the state of Louisiana. In December 2010, the
majority of the investors in the Pipeline Facilities—all of the owners except
BTL—transferred their interests in the Pipeline Facilities to Imperial in exchange
3
for Imperial stock. Imperial made subsequent representations to the Securities and
Exchange Commission (“SEC”) that this sale gave it a 100% ownership interest in
the Pipeline Facilities and then eventually sold all of its interests in the Coquille
Bay Field to a third party.
On March 15, 2012, BTL filed suit against Chrisjo, Jack M. Cline, and
Imperial Petroleum.1 BTL alleged causes of action for fraud, negligent
misrepresentation, conversion, and breach of fiduciary duty, and it alleged
violations of the DTPA, the TTLA, and the Texas Securities Act. BTL argued that
Chrisjo misrepresented the nature of the interest conveyed by the PPM and led the
investors to believe that they were acquiring a property interest in the oil and gas
wells and the production from those wells on the existing lease in the Coquille Bay
Field in addition to the Pipeline Facilities. BTL further alleged that Chrisjo then
improperly transferred its interest in the Pipeline Facilities to Imperial Petroleum.
Specifically regarding the conversion claim, BTL alleged that “Defendant
Imperial has and continues to have wrongfully exercised dominion and control
over [BTL’s] interest in the Pipeline Facilities” and that “[t]he conversion by
Defendants Chrisjo, Cline and/or Imperial is, was and/or continues to be a
producing cause of Plaintiffs’ actual damages in excess of $140,000.”
1
Imperial Petroleum is not a party to this appeal.
4
Chrisjo answered with a general denial and asserted various affirmative
defenses, including the defense of limitations. Chrisjo also sought attorney’s fees
under the TTLA—Civil Practice and Remedies Code section 134.005—in its
second amended answer. Chrisjo later moved for leave to file a supplement to its
second amended answer seeking to add a claim for attorney’s fees under the
DTPA. The trial court did not immediately rule on this motion.
In August 2013, Chrisjo moved for summary judgment on the ground that
all of BTL’s claims against Chrisjo were barred by the applicable statutes of
limitations. The trial court denied the motion for summary judgment in October
2013.
The trial court conducted a bench trial on January 20 and 21, 2015. At the
start of the trial, the parties agreed on the record to submit the attorney’s fees
claims to the trial court based on affidavits and briefs at the conclusion of the trial.
BTL then nonsuited its TTLA claim, and Chrisjo argued that it was still entitled to
attorney’s fees. It reminded the trial court that it had sought leave to supplement its
pleadings with a claim for attorney’s fees under the DTPA, and it believed it was
entitled to those fees because “these claims were always groundless from the very
beginning.” BTL then stated that it was nonsuiting its DTPA claims. The trial court
stated that it would “take both issues under advisement” and rule at a later time.
5
Finally, Imperial failed to appear at trial, so BTL requested a post-answer default
judgment against Imperial.
At trial, Cline testified that Chrisjo obtained a 75% ownership interest in the
Pipeline Facilities in exchange for obtaining the necessary investment money, and
Mideast Gas Systems retained a 25% ownership interest in the Pipeline Facilities.
Approximately twenty investors, including BTL, invested money in the project.
Chrisjo filed an assignment of interests in the property records of Plaquemines
Parish reflecting that BTL held an 8.75% ownership interest in the Pipeline
Facilities. Cline testified that tropical storms and hurricanes damaged the field on
various occasions throughout the relevant time period, halting production for
extended periods of time.
Cline testified that on March 6, 2009, he received an email informing him
that Imperial, the then-operator of the Coquille Bay Field, was suspending
payments of any and all pipeline fees due to problems that had arisen with the
Louisiana State Mineral Board Audit Committee. Cline stated that he provided
copies of this email to other investors, including BTL, and that he communicated
with both Imperial and officials with the state of Louisiana regarding the operation
of the Pipeline Facilities, but he was unable to obtain any kind of resolution.
Imperial expressed to Chrisjo and other investors an interest in purchasing
the Pipeline Facilities to consolidate the ownership and management of the
6
Coquille Bay Field and the Pipeline Facilities. Accordingly, Cline testified that
Imperial and Chrisjo, along with other owners of the Pipeline Facilities, signed an
agreement setting forth the terms of a stock transfer, allowing the owners to trade
their interest in the Pipeline Facilities to Imperial in exchange for Imperial stock.
This agreement allowed each party to elect to join the transfer or decline.
According to Cline and to the documents admitted at trial, on November 30,
2010, Chrisjo signed an asset purchase agreement (“APA”) with Imperial, back-
dated to be effective November 1, 2010, giving Chrisjo until December 31, 2010,
to send out questionnaires to all of the investors to obtain their consent to convey
the 75% interest in the Pipeline Facilities controlled by Chrisjo and its fellow
investors, including BTL’s 8.75% interest. Cline testified that Chrisjo sent out the
necessary information and questionnaires to investors, including BTL. Cline
testified that all of the investors, including Chrisjo and Mideast Gas Systems,
participated in the sale except for BTL. Regarding the transfer of Chrisjo’s and its
other investors’ interests, Cline testified that they transferred “[s]eventy-five
percent minus [BTL’s] interest.” Cline testified that, as far as he was aware, BTL
still owned its interest in the Pipeline Facilities. He also stated that Chrisjo lost
money on the Pipeline Facilities deal and never saw a return on its investment.
BTL’s attorney asked Cline whether the APA “conveyed” to Imperial a 75%
ownership interest in the Pipeline Facilities, which would necessarily have
7
included BTL’s interest, and Cline testified that the APA was not “a closing
instrument.” Under the terms of the APA, the closing was to take place on
December 31, 2010. Cline testified that Chrisjo and Imperial designated this
closing date because it “gave [Chrisjo] time to try to get the full 75 percent” and
that it had a verbal agreement with Imperial that Imperial would consummate the
deal even if Chrisjo could not get all of the investors to participate. Cline testified
that Chrisjo never represented to Imperial that it had obtained all of the investors’
consent to the sale, and Cline stated that he forwarded the questionnaires, including
BTL’s refusal to join, to Imperial “because [Imperial] had to make SEC filings.”
Cline also testified that neither he nor Chrisjo ever filed any deed or title
documents purporting to transfer BTL’s interest in the Pipeline Facilities to any
other party.
Cline also testified that, at the time of trial, the SEC was investigating
Imperial for wrongdoing and that the president of Imperial had also been indicted.
Chrisjo also presented accounting documents demonstrating that the money
invested by BTL and other investors was spent in development of the Pipeline
Facilities. Chrisjo also adduced evidence demonstrating that it had properly
disbursed all transportation fees owing to the owners of the Pipeline Facilities,
including BTL.
8
BTL did not present any documents at trial demonstrating the amount of
interest in the Pipeline Facilities actually conveyed at the closing in December
2010 between Chrisjo and Imperial. It did present a document, created by Imperial
and filed by Imperial with the SEC, in which Imperial claimed to have acquired
from Chrisjo its investors’ full 75% ownership in the Pipeline Facilities. This SEC
filing also contained some representations from a press release made by Imperial
that Imperial had sold its interest in the Coquille Bay Field, including the Pipeline
Facilities, to a third party.
Tom Elkins testified on behalf of Bacon Tomsons, Ltd. He testified that
Bacon Tomsons had invested $70,000 in the Pipeline Facilities and had received
less than $7,000 in return. Elkins testified that “early on” he understood that the
deal was to obtain an interest in the pipeline and did not include income from the
oil and gas production. Elkins testified that Bacon Tomsons did not receive any
distributions for transportation fees after 2008, and he did not know why the
distributions stopped. BTL presented evidence that the Coquille Bay Field had
produced oil and gas after that time, but Elkins also testified that he understood
that since 2009, “they barge it out of there rather than use[] a pipeline.” Elkins
agreed that Bacon Tomsons was not entitled to any transportation fees under its
interest in the Pipeline Facilities unless the pipeline was used to move the oil.
9
Regarding the sale of the Pipeline Facilities to Imperial, Elkins testified that
Bacon Tomsons received the information and questionnaire from Chrisjo and
elected not to participate in the sale. Elkins further testified that the third party
purchaser of the Coquille Bay Field eventually recognized Bacon Tomsons’
ownership interest in the Pipeline Facilities and contacted Elkins regarding
“litigation pending on the ownership of the pipeline that he had purchased from
Imperial. And he knew that I was one of the—or Bacon Tomsons was one of the
owners.”
Regarding the ownership of the Pipeline Facilities at the time of trial, Elkins
testified: “I’m not sure what’s happened. I think they’ve swapped and traded and
moved and shoved and diluted and—until nobody knows what’s going on
anymore.” Elkins testified that he understood the assignment of interest reflecting
Bacon Tomsons’ ownership interest in the Pipeline Facilities had been filed in the
Plaquemines Parish property records, that he had not examined the real property
records to determine whether any subsequent assignment had been filed
transferring Bacon Tomsons’ interest to someone else, and that he had not hired a
landman or title company to perform a title search or otherwise give an opinion
about who owned the Pipeline Facilities as of the time of trial.
Larry Porter testified as a representative of BRL Oil and Gas. BRL invested
$17,500 in the Pipeline Facilities after hearing of the opportunity from Elkins.
10
Porter testified that BRL received distributions of fee revenue from Chrisjo
through 2008, but that the total amount of money generated from the investment
was small—approximately $1,650. Porter also acknowledged that he would not be
entitled to transportation fees for any oil and gas produced from the Coquille Bay
Field unless it was moved through the pipeline. He testified that, at the time BRL
entered into the deal with Chrisjo, he did not consider the possibility that a barge
could be used to transport the oil and gas produced in the field.
BRL, like Bacon Tomsons, knew of Imperial’s proposed purchase of the
Pipeline Facilities and had elected not to participate. Porter testified that, as of
November 2011, he still believed BRL owned an interest in the pipeline. Porter
testified that at the time of trial he was not sure whether BRL owned an interest in
the Pipeline Facilities, but he could not affirmatively state that BRL did not own it.
Porter had no contact with the third-party purchaser of Imperial’s interest in the
Pipeline Facilities and only learned of Imperial’s representations that it owned and
subsequently sold a 100% ownership interest in the Pipeline Facilities as a result of
the underlying litigation. Porter testified that he had not performed a title search or
otherwise examined the property records in Plaquemines Parish to determine the
current ownership of the Pipeline Facilities because there was no oil or gas coming
through the pipeline so it was not worth the money to investigate.
11
Ferrell Munson also testified at trial. Munson personally invested $35,000 in
the Pipeline Facilities and received approximately $3,163.69 in return on his
investment. Munson testified at trial that he did not currently own an interest in the
Pipeline Facilities because “Mr. Cline sold it.” Munson based his belief that
Chrisjo sold his ownership interest in the Pipeline Facilities on the language in the
APA indicating that Chrisjo was transferring to Imperial a 75% ownership interest
in the Pipeline Facilities, which would necessarily have included Munson’s
interest. However, Munson had no personal knowledge regarding whether
Imperial’s purchase of the Pipeline Facilities finally closed under the terms of the
APA. Like Elkins and Porter, Munson never checked the property records in
Plaquemines Parish to identify the record owners of the Pipeline Facilities at the
time of trial. Munson did not know whether any oil or gas was being transported
through the pipeline at the time of trial.
Chrisjo moved for a directed verdict on BTL’s claims. The trial court did not
rule on the motion for directed verdict at that time. Chrisjo then presented its own
case, including the testimony of expert witness Charles Fife, who testified
regarding the nature of the transactions between Chrisjo and its investors and
between Chrisjo and Imperial.
At the close of trial on January 21, 2015, Chrisjo renewed its motion for
directed verdict and filed a bench brief on limitations, stating that it sought a
12
directed verdict on the basis that all of BTL’s claims against it were barred by the
respective statutes of limitations. Regarding BTL’s conversion claim, Chrisjo
argued that BTL’s claim had accrued in 2004 when the investors entered into the
PPM, and thus the two-year limitations period had run well in advance of BTL’s
filing suit in 2012. Regarding the claim of conversion arising out of the 2010
transfer of its interest in the Pipeline Facilities to Imperial, Chrisjo argued in its
supplemental bench brief on its motion for directed verdict that
the parties involved in this transaction [Imperial and Chrisjo]
understood that Chrisjo did not yet own 75% of the Pipeline, but was
going to attempt to acquire the interest in the next 30 days. This fact is
clearly evidenced by the closing date in the Purchase Agreement. Id.
at § 1.01. Defendants’ expert, Charles Fife, testified this is common in
the oil and gas industry so that the seller can lock the buyer into a
fixed price for the maximum interest that is desired to be sold. When
the entire interest is not acquired (as in this case), the closing is
modified or does not happen. Defendants testified that is what
happened here.
Furthermore, Chrisjo argued that any misrepresentations in the APA were
made by it to Imperial, not to BTL. And Chrisjo argued that neither the 2010 APA
nor the 2012 SEC filing supported BTL’s claim for conversion against Chrisjo
because
[Cline] testified that Chrisjo and Imperial never closed on the sale of
[BTL’s] interest and that [its] interests were never sold. Whether
Imperial (who is currently under investigation by the SEC for making
fraudulent statements) misrepresented to the SEC that it owned the
Coquille Pipeline or not, that alleged misrepresentation did not
transfer title away from [BTL]. Indeed, [BTL] remain[s] the current
owners of record as nothing has ever been filed in the deed records
13
transferring [BTL’s] interest to any other party. [BTL] admit[s] that
[it has] never performed a title search . . . and [does] not know
whether [it] still own[s] [its] interest in the Pipeline.
On February 11, 2015, Chrisjo filed its post-trial brief in support of its
request for a mandatory award of attorney’s fees in the amount of $52,353.95. It
argued that it was a prevailing party because BTL nonsuited claims, including its
DTPA and TTLA claims, to avoid an unfavorable ruling on the merits. Chrisjo also
attached evidence supporting its claim for attorney’s fees, including affidavits
regarding attorney’s fees, billing statements, and excerpts from the depositions of
Ferrell Munson, Thomas Elkins in his capacity as a representative for Bacon
Tomsons, and J. Larry Porter in his capacity as a representative for BRL Oil and
Gas.
In an affidavit attached as evidence to Chrisjo’s brief seeking attorney’s
fees, Chrisjo’s attorney averred that the $52,353.95 amount represented fees
expended in defending against BTL’s claims for breach of the DTPA and TTLA.
He stated that, “[t]o the extent possible, [Chrisjo has] properly segregated
recoverable from non-recoverable fees.” He further averred that all of the claims—
including those for violation of the TTLA and DTPA, conversion, and fraud—all
involved the same operative facts and shared common elements, stating,
As such, those discrete legal services that advance both recoverable
and non-recoverable claims are so intertwined that they cannot be
segregated. Similarly, to the extent services were rendered that were
necessary for all claims (e.g., requests for disclosures, proof of facts,
14
depositions of primary actors, and motions for summary judgment),
those services have been properly included as they are not disallowed
simply because they do double service.
The billing statements attached as evidence supporting Chrisjo’s claim for
attorney’s fees included itemized billing showing the initials of the person
performing a particular service, a brief description of the service, the time spent,
the hourly rate, and the amount billed. These bills were redacted to protect
confidential information, and they also reflected that Chrisjo had deleted numerous
discrete legal services that, according to the attorney’s affidavit, were not
applicable to the recoverable claims. Chrisjo did not present any evidence of the
total amount of attorney’s fees it incurred in defending against BTL’s suit.
On February 24, 2015, the trial court signed a post-answer default judgment
awarding BTL damages from Imperial.
On March 4, 2015, the trial court denied Chrisjo leave to file its supplement
to its second amended answer—the pleading which sought to add a claim for
attorney’s fees under the DTPA. The trial court ordered the supplemental answer
stricken, leaving Chrisjo’s claim for attorney’s fees under the TTLA as its only
claim for attorney’s fees.
Also on March 4, 2015, the trial court signed its “Order Granting [Chrisjo’s]
Motion for Directed Verdict.” It stated,
It appears to the Court, having considered all the evidence and
subsequent briefing in the case, and the reasonable inferences flowing
15
from it, in the light most favorable to [BTL], that the evidence is
insufficient as a matter of law to entitle [BTL] to recover against
[Chrisjo], and the Court is of the opinion that judgment should be
rendered in favor of [Chrisjo] as a matter of law.
It ordered that BTL “take nothing by this action” against Chrisjo. This order did
not address Chrisjo’s claims for attorney’s fees under the TTLA, and it did not
purport to be a final judgment.
On March 18, 2015, Chrisjo moved for entry of an award of attorney’s fees
and for entry of final judgment in light of the order on its motion for directed
verdict. The trial court held a hearing on that motion, in which BTL argued that no
further rulings were necessary because the March 4 order disposed of all remaining
issues.
On July 8, 2015, the trial court signed an order awarding attorney’s fees to
Chrisjo in the amount of $24,829.42 based on its finding that Chrisjo was a
prevailing party under the TTLA because BTL “nonsuited [its] Theft Act claims to
avoid an unfavorable ruling on the merits.” The trial court also awarded
conditional attorney’s fees in the event of a subsequent appeal.
Also on July 8, 2015, Chrisjo filed an amended motion for entry of final
judgment, and the trial court set a hearing to occur on August 5, 2015. On August
5, 2015, BTL filed objections and a response to Chrisjo’s motion for entry of a
final judgment again arguing, in part, that the March 4 order disposed of all
pending claims.
16
On August 7, 2015, the trial court signed its final judgment, incorporating
the post-answer default judgment against Imperial, the order granting a directed
verdict in favor of Chrisjo, and its ruling on Chrisjo’s claim for attorney’s fees
under the TTLA.
On August 11, 2015, BTL requested that the trial court file findings of fact
and conclusions of law, which the trial court never signed.
This appeal followed. BTL does not challenge the trial court’s ruling on any
of its causes of action except for its conversion claim against Chrisjo. BTL also
challenges the trial court’s award of attorney’s fees to Chrisjo as a prevailing party
under the TTLA.
Directed Verdict on Conversion Claim
In its fourth issue, BTL argues that the trial court erred in ruling that its
conversion claim was barred by limitations. We construe this as a complaint that
the trial court erred in granting Chrisjo’s motion for directed verdict on BTL’s
conversion claim.
A. Standard of Review
We review directed verdicts under the same legal-sufficiency standard that
applies to no-evidence summary judgments. City of Keller v. Wilson, 168 S.W.3d
802, 823–24 (Tex. 2005); see Merriman v. XTO Energy, Inc., 407 S.W.3d 244, 248
(Tex. 2013) (citing King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 750 (Tex.
17
2003)). We sustain a legal-sufficiency point when (1) there is a complete absence
of evidence regarding a vital fact, (2) rules of law or evidence preclude 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 scintilla, or (4) the evidence conclusively
establishes the opposite of the vital fact. Wilson, 168 S.W.3d at 810. We consider
the evidence in the light most favorable to the nonmovant, crediting evidence a
reasonable jury could credit and disregarding contrary evidence and inferences
unless a reasonable jury could not. Id. at 826. The nonmovant bears the burden to
identify evidence before the trial court that raises a genuine issue of material fact
as to each challenged element of its cause of action. See Johnson v. Brewer &
Pritchard, P.C., 73 S.W.3d 193, 206–07 (Tex. 2002).
A directed verdict is proper if a party “fails to present evidence raising a fact
issue essential to [its] right of recovery,” or if the party “admits or the evidence
conclusively establishes a defense to [its] cause of action.” Prudential Ins. Co. of
Am. v. Fin. Rev. Servs., Inc., 29 S.W.3d 74, 77 (Tex. 2000). We may affirm a
directed verdict on any ground that supports it. Exxon Corp. v. Breezevale Ltd., 82
S.W.3d 429, 443 (Tex. App.—Dallas 2002, pet. denied). However, if there is
evidence that raises a material fact issue on any theory of recovery, a directed
verdict is improper and the case must be reversed and remanded. See Cox v. S.
Garrett, L.L.C., 245 S.W.3d 574, 578 (Tex. App.—Houston [1st Dist.] 2007, no
18
pet.) (citing Szczepanik v. First S. Tr. Co., 883 S.W.2d 648, 649 (Tex. 1994) (per
curiam)).
Conversion is the unauthorized and unlawful assumption and exercise of
dominion and control over the personal property of another to the exclusion of, or
inconsistent with, the owner’s rights. Freezia v. IS Storage Venture, LLC, 474
S.W.3d 379, 386 (Tex. App.—Houston [14th Dist.] 2015, no pet.) (citing Waisath
v. Lack’s Stores, Inc., 474 S.W.2d 444, 446 (Tex. 1971)). The elements of a
conversion cause of action are that: (1) the plaintiff owned, had legal possession of,
or was entitled to possession of the property; (2) the defendant assumed and
exercised dominion and control over the property in an unlawful and unauthorized
manner, to the exclusion of and inconsistent with the plaintiff’s rights; (3) the
plaintiff made a demand for the property; and (4) the defendant refused to return
the property. Freezia, 474 S.W.3d at 386–87; Alan Reuber Chevrolet, Inc. v. Grady
Chevrolet, Ltd., 287 S.W.3d 877, 888 (Tex. App.—Dallas 2009, no pet.). A
plaintiff can recover for the conversion of personal property such as rental income.
See Freezia, 474 S.W.3d at 387 (citing Hoenig v. Tex. Commerce Bank, N.A., 939
S.W.2d 656, 664 (Tex. App.—San Antonio 1996, no writ)) (holding that plaintiff
can recover for conversion of rental income); see also Hernandez v. Sovereign
Cherokee Nation Tejas, 343 S.W.3d 162, 175 (Tex. App.—Dallas 2011, pet.
denied) (“[A]n action will lie for conversion of money when its identification is
19
possible and there is an obligation to deliver the specific money in question or
otherwise particularly treat specific money.”) (quoting Houston Nat’l Bank v.
Biber, 613 S.W.2d 771, 774 (Tex. Civ. App.—Houston [14th Dist.] 1981, writ
ref’d n.r.e.)). However, Texas does not recognize conversion claims for real
property. See Freezia, 474 S.W.3d at 386 (stating that conversion involves
unlawful exercise of control over personal property); Lucio v. John G. & Marie
Stella Kennedy Mem’l Found., 298 S.W.3d 663, 672 (Tex. App.—Corpus Christi
2009, pet. denied) (observing that Texas law does not recognize cause of action for
conversion of real property).
B. Analysis
Although Chrisjo stated that its motion for directed verdict was based on
arguments that all of BTL’s claims were barred by the applicable statute of
limitations, its motion also addressed the sufficiency of BTL’s evidence on its
conversion claim. It is unclear from BTL’s pleadings and evidence at trial whether
its conversion claim was based on an alleged conversion of BTL’s money invested
in the Pipeline Facilities, conversion of BTL’s ownership interest in the Pipeline
Facilities, or conversion of the transportation fees that owners of the Pipeline
Facilities were entitled to collect. Assuming without deciding that these property
interests are property that can be converted, we agree with Chrisjo that BTL failed
to provide any evidence of conversion.
20
Chrisjo argued that the only evidence presented by BTL to support the
conversion claim is insufficient because it did not demonstrate that BTL’s property
was ever actually transferred to Imperial or that Chrisjo otherwise assumed and
exercised dominion and control over the property in an unlawful and unauthorized
manner. Chrisjo also argued that BTL failed to provide any evidence, in the form
of a title search or other investigation of the real property records, identifying the
record owners of the Pipeline Facilities at the time of trial. The trial court granted
the motion for directed verdict, stating that it had considered all of the evidence
and briefing in the case and that it had determined “that the evidence is insufficient
as a matter of law.”
At trial, BTL presented no evidence that Chrisjo had assumed and exercised
dominion and control over the money invested in the Pipeline Facilities, its interest
in the Pipeline Facilities, or the transportation fees owing to it as owners of the
Pipeline Facilities in an unlawful and unauthorized manner, to the exclusion of and
inconsistent with BTL’s rights. See Alan Reuber Chevrolet, 287 S.W.3d at 888
(setting out elements of conversion). BTL presented no evidence that the money it
invested in the Pipeline Facilities was misused, and it provided no evidence
rebutting Chrisjo’s evidence accounting for all of the funds that were invested in
the project. In fact, BTL representatives testified that, as far as they were aware,
they still owned an interest in the Pipeline Facilities at the time of trial, and they
21
acknowledged that they never performed a title search or other examination of the
real property records to determine whether their ownership interest had ever been
transferred to Imperial. Elkins, Porter, and Munson each testified that they were
aware at or near the time of their 2004 investment that they were receiving only an
interest in the Pipeline Facilities; that they in fact received the only disbursements
of fees that they were entitled to under the terms of their assignment of interests;
and that, as far as they were aware, they still remained the record owners of their
interest in the Pipeline Facilities even though the Coquille Bay Field operators had
ceased using the pipeline in 2008. Elkins, Porter, and Munson all testified that they
received disbursements of transportation fees through 2008. Elkins testified that he
was aware that, after 2008, the Coquille Bay Field operator had been using barges
rather than the pipeline to move the oil and gas, and he agreed that the owners of
the Pipeline Facilities were not entitled to transportation fees unless the operator
used the pipeline.
Although the 2010 APA states that Chrisjo offered Imperial a 75%
ownership interest in the Pipeline Facilities, this document was not a title
instrument and did not serve to actually transfer any rights to the Pipeline
Facilities, and thus, necessarily, Chrisjo did not misappropriate any funds or fees
related to the Pipeline Facilities. The agreements between Chrisjo and Imperial
allowed for each investor to consider the terms of the offer and elect whether it
22
wanted to participate in the transaction. Cline testified that when BTL refused to
participate in the sale, under the terms of the APA the remaining owners
transferred their interests in the Pipeline Facilities and left BTL’s interests
undisturbed. Cline stated that Chrisjo never filed any documents transferring
BTL’s interest in the Pipeline Facilities. BTL presented no evidence contradicting
this testimony, nor did it present any evidence establishing that Chrisjo actually
transferred its ownership interest. Furthermore, any representations by Imperial in
its SEC filing that it owned a 100% ownership interest in the Pipeline Facilities are
irrelevant to BTL’s conversion claim against Chrisjo. Because BTL failed to
present any evidence raising a fact issue regarding whether Chrisjo had assumed
and exercised dominion and control over any personal property of BTL’s in an
unlawful and unauthorized manner, to the exclusion of and inconsistent with
BTL’s rights, the trial court’s directed verdict on the conversion claim was proper.
See Prudential Ins. Co., 29 S.W.3d at 77; see also Exxon Corp., 82 S.W.3d at 443
(holding that we may affirm directed verdict on any ground that supports it).
We overrule BTL’s fourth issue on appeal.
Jurisdiction of Trial Court to Enter August 7, 2015 Judgment
In its first issue, BTL argues that the trial court lacked jurisdiction to render
its July 8, 2015 order awarding attorney’s fees to Chrisjo and its August 7, 2015
final judgment because its plenary power had expired. BTL argues that the trial
23
court’s March 4, 2015 order granting Chrisjo’s motion for directed verdict was
“presumed final despite the pending request for attorneys’ fees as sanctions made
in [Chrisjo’s] post-trial brief filed before the judgment was signed.”
A. Legal Standard
There can be only one final judgment in this cause. See TEX. R. CIV. P. 301.
Generally, a judgment is final when it “actually disposes of all claims and parties
then before the court, regardless of its language, or it states with unmistakable
clarity that it is a final judgment as to all claims and all parties.” Lehmann v. Har–
Con Corp., 39 S.W.3d 191, 192–93 (Tex. 2001). An appellate court determines the
finality of a judgment by the language of the judgment. Id. at 199.
In the absence of a contrary showing in the record, a judgment rendered after
a conventional trial on the merits carries a presumption of finality. See Houston
Health Clubs, Inc. v. First Court of Appeals, 722 S.W.2d 692, 693 (Tex. 1986)
(orig. proceeding); N. E. Indep. Sch. Dist. v. Aldridge, 400 S.W.2d 893, 897–98
(Tex. 1966) (“When a judgment, not intrinsically interlocutory in character, is
rendered and entered in a case regularly set for a conventional trial on the merits,
no order for a separate trial of issues having been entered . . . it will be presumed
for appeal purposes that the Court intended to, and did, dispose of all parties
legally before it and of all issues made by the pleadings between such parties.”).
Otherwise, no such presumption arises. Lehmann, 39 S.W.3d at 199–200; see also
24
Aldridge, 400 S.W.2d at 898 (concluding, “in the absence of a contrary showing in
the record,” that judgment entered after case was set for conventional trial on the
merits was presumed final for purposes of appeal); Exxon Corp. v. Garza, 981
S.W.2d 415, 419 (Tex. App.—San Antonio 1998, pet. denied) (stating that
presumption of finality recognized in Aldridge “only applies . . . in the absence of a
contrary showing in the record”). “If there is any doubt as to the judgment’s
finality, then finality must be resolved by a determination of the intention of the
court as gathered from the language of the decree and the record as a whole, aided
on occasion by the conduct of the parties.” Vaughn v. Drennon, 324 S.W.3d 560,
563 (Tex. 2010) (per curiam) (quoting Lehmann, 39 S.W.3d at 203) (internal
quotation marks, bracketing, and capitalization omitted).
BTL argues, in part, that its nonsuit of its TTLA claim against Chrisjo
resolved Chrisjo’s related claim for attorney’s fees under the TTLA. Texas Rule of
Civil Procedure 162 provides:
At any time before the plaintiff has introduced all of his evidence
other than rebuttal evidence, the plaintiff may dismiss a case, or take a
non-suit, which shall be entered in the minutes. . . .
Any dismissal pursuant to this rule shall not prejudice the right
of an adverse party to be heard on a pending claim for affirmative
relief or excuse the payment of all costs taxed by the clerk. A
dismissal under this rule shall have no effect on any motion for
sanctions, attorney’s fees or other costs, pending at the time of
dismissal, as determined by the court.
25
TEX. R. CIV. P. 162. A plaintiff’s decision about which of its claims to pursue or
abandon does not control the fate of a nonmoving party’s independent claims for
affirmative relief. Villafani v. Trejo, 251 S.W.3d 466, 469 (Tex. 2008); Alan
Reuber Chevrolet, 287 S.W.3d at 887. Specifically, a plaintiff’s nonsuit cannot
extinguish a defendant’s counterclaim for costs and attorney’s fees. Villafani, 251
S.W.3d at 469; Alan Reuber Chevrolet, 287 S.W.3d at 887; see also Referente v.
City View Courtyard, L.P., 477 S.W.3d 882, 886 (Tex. App.—Houston [1st Dist.]
2015, no pet.) (holding that nonsuit “has no effect on any motion for attorney’s
fees or other costs pending at the time of dismissal”); Dean Foods Co. v. Anderson,
178 S.W.3d 449, 453 (Tex. App.—Amarillo 2005, pet. denied) (“A request for
attorney’s fees is a claim for affirmative relief.”).
B. Analysis
Here, Chrisjo’s request for attorney’s fees was not, as BTL suggests, based
on a motion for sanctions. BTL pleaded a cause of action for violations of the
TTLA, and Chrisjo filed an answer denying the claim and asserting a claim for
attorney’s fees pursuant to the TTLA. On the day of trial, prior to presenting its
case-in-chief, BTL nonsuited its TTLA claim, and Chrisjo argued at trial and in a
post-trial motion and briefing that it was entitled to “prevailing party” attorney’s
fees because BTL had nonsuited the TTLA claim to avoid an unfavorable ruling on
the merits. At the beginning and close of evidence at trial, the parties agreed on the
26
record that they would submit evidence and briefing on the issue of attorney’s fees
to the trial court post-trial. Thus, at the time BTL non-suited its TTLA claim,
Chrisjo had a pending claim for attorney’s fees. See Villafani, 251 S.W.3d at 469.
BTL argues that Chrisjo’s pending “request for sanctions” was not a claim
for affirmative relief that was independent of BTL’s nonsuited claim; however,
Texas courts have held that “[a]n affirmative claim, stated in an answer, for
recovery of attorney’s fees for preparation and prosecution of a defense constitutes
a counterclaim.” In re C.A.S., 128 S.W.3d 681, 686 (Tex. App.—Dallas 2003, no
pet.); In re Frost Nat’l Bank, 103 S.W.3d 647, 650 (Tex. App.—Corpus Christi
2003, no pet.); see also Villafani, 251 S.W.3d at 469 (holding that “a plaintiff’s
nonsuit cannot extinguish a defendant’s counterclaim for costs and attorney’s
fees”); Nolte v. Flournoy, 348 S.W.3d 262, 267 (Tex. App.—Texarkana 2011, pet.
denied) (claim for attorney’s fees included in defendant’s answer was considered
to be counterclaim seeking affirmative relief). A defendant’s claim for attorney’s
fees under the TTLA is one that can survive past the resolution of the plaintiff’s
claim. See, e.g., Epps v. Fowler, 351 S.W.3d 862, 866 (Tex. 2011) (stating that
“prevailing party” may include defendant who successfully defends against claim
and that defendant may still be “prevailing party” after plaintiff’s nonsuit under
some circumstances); Arrow Marble, LLC v. Estate of Killion, 441 S.W.3d 702,
706 (Tex. App.—Houston [1st Dist.] 2014, no pet.) (recognizing that “[c]ourts
27
have held that the phrase ‘prevailing party’ in section 134.005(b) of the TTLA
includes both a plaintiff successfully prosecuting a theft suit and a defendant
successfully defending against one” and analyzing effect of dismissal of plaintiff’s
claim on defendant’s status as “prevailing party”). We conclude that Chrisjo’s
claim for attorney’s fees here was a claim for affirmative relief that was not
disturbed by BTL’s nonsuit.
BTL also argues that even if the request for attorney’s fees was an
independent claim for affirmative relief, the March 4 order was still final under the
Aldridge presumption. See Aldridge, 400 S.W.2d at 898 (holding that judgments
rendered after conventional trial on merits carry presumption of finality). However,
the record here rebuts any presumption of finality. See, e.g., Vaughn, 324 S.W.3d
at 563 (stating that presumption of finality applies “unless a trial court orders a
separate trial to resolve a specific issue”); Aldridge, 400 S.W.2d at 898 (presuming
judgment following setting for trial on merits is final “in the absence of a contrary
showing in the record”).
The trial court’s March 4 order does not purport to be a judgment—much
less a final judgment—and it does not contain any language demonstrating that it
was intended to be final: it does not state that it is a final judgment or intended to
be appealable; it does not incorporate the trial court’s previous post-answer default
judgment against Imperial Petroleum; and it does not contain a “Mother Hubbard”
28
clause disposing of claims not specifically mentioned. Rather, the March 4 order is
styled as an “Order Granting Defendant’s Motion for Directed Verdict,” and the
language of the order granted Chrisjo’s motion for directed verdict and disposed
only of the issues addressed in that motion. It does not address or dispose of
Chrisjo’s pending claim for attorney’s fees or award costs. Accordingly, it was not
final. See Epps, 351 S.W.3d at 868 (holding that nonsuit does not affect any
pending claim for affirmative relief or motion for attorney’s fees or sanctions);
Lehmann, 39 S.W.3d at 192–93 (holding that judgment is final for purposes of
appeal “if and only if either it . . . actually disposes of all claims and parties then
before the court, regardless of its language, or it states with unmistakable clarity
that it is a final judgment as to all claims and all parties”).2 The trial court
continued to accept briefing from the parties and enter orders until it rendered its
August 7, 2015 judgment, entitled “Final Judgment,” that incorporated all of its
previous rulings and finally disposed of all of the claims of all of the parties.
We conclude that the March 4 order was not a final judgment. That order
granted Chrisjo’s motion for a directed verdict, but did not address the pending
2
BTL also argues that any agreement by the parties to try attorney’s fees after
March 4, 2015 could not extend the trial court’s jurisdiction beyond the limits
provided by Rule of Civil Procedure 329b and that Chrisjo’s post-judgment
motions would not have extended the trial court’s plenary power to encompass the
July 8, 2015 order awarding attorney’s fees and the August 7, 2015 final
judgment. Because we conclude that the March 4, 2015 order was not final and
that the final judgment was rendered on August 7, 2015, when the trial court
finally disposed of all claims and all parties, we need not address these
contentions.
29
claim for attorney’s fees. The trial court rendered its final judgment on August 7,
2015, as that was a judgment that finally disposed of all claims and parties.
Accordingly, the trial court retained jurisdiction to render its order granting
attorney’s fees and its August 7 judgment.
We overrule BTL’s first issue.
Award of Attorney’s Fees
In its second and third issues, BTL argues that the trial court erred in
awarding Chrisjo attorney’s fees under the TTLA.
A. Standard of Review
The availability of attorney’s fees under a particular statute is a question of
law that we review de novo. Arrow Marble, 441 S.W.3d at 705. TTLA section
134.005(b) provides that “[e]ach person who prevails in a suit under this chapter
shall be awarded court costs and reasonable and necessary attorney’s fees.” TEX.
CIV. PRAC. & REM. CODE ANN. § 134.005(b) (West Supp. 2015); Arrow Marble,
441 S.W.3d at 705. The award of fees to a prevailing party in a TTLA action is
mandatory. Arrow Marble, 441 S.W.3d at 705 (citing Bocquet v. Herring, 972
S.W.2d 19, 20 (Tex. 1998)). Although the TTLA does not define the phrase
“prevailing party,” Texas courts, including this Court, have held that both a
plaintiff successfully prosecuting a theft suit and a defendant successfully
defending against one can be considered prevailing parties under the TTLA. Arrow
30
Marble, 441 S.W.3d at 706; see Epps, 351 S.W.3d at 866–70 (construing written
contract to give meaning to term “prevailed” and setting out circumstances under
which defendant may be considered to have prevailed).
A defendant is generally not a prevailing party when the plaintiff nonsuits its
claims without prejudice. Epps, 351 S.W.3d at 869; BBP Sub I LP v. DiTucci, No.
05-12-01523-CV, 2014 WL 3743669, at *3 (Tex. App.—Dallas July 29, 2014, no
pet.) (mem. op.) (applying reasoning in Epps to claim for attorney’s fees under
TTLA). However, the supreme court in Epps looked with disfavor upon “nonsuits
that are filed to circumvent unfavorable legal restrictions or rulings” and held that
“a defendant may be a prevailing party when a plaintiff nonsuits without prejudice
if the trial court determines, on the defendant’s motion, that the nonsuit was taken
to avoid an unfavorable ruling on the merits.” 351 S.W.3d at 870; Referente, 477
S.W.3d at 886; DiTucci, 2014 WL 3743669, at *3.
Courts make the determination of whether a plaintiff nonsuited in order to
avoid an unfavorable ruling “based upon inferences drawn from the course of
events in the lawsuit.” Epps, 351 S.W.3d at 870 (“[C]ourts should rely as far as
possible on the existing record and affidavits, and resort to live testimony only in
rare instances.”). “A number of factors may support an inference that a plaintiff has
nonsuited in order to avoid an unfavorable ruling,” including the timing of the
nonsuit, the plaintiff’s unexcused failure to obtain discovery of evidence that might
31
disprove its claim, or the existence of other procedural obstacles, such as the
inability to join necessary parties. Id. at 870–71; Referente, 477 S.W.3d at 886. The
supreme court also stated:
On the other hand, as we have noted, it is reasonable to presume that
the parties did not intend to encourage continued litigation when
discovery reveals previously unknown flaws in the plaintiff’s claims.
Accordingly, evidence that the suit was not without merit when filed
may indicate that the defendant has not prevailed and is therefore not
entitled to attorney’s fees.
Epps, 351 S.W.3d at 871.
“[W]hether a party nonsuited to avoid an unfavorable ruling is a question of
fact,” and “the trial court’s finding on that issue may be challenged on the ground
that it is not supported by sufficient evidence.” Referente, 477 S.W.3d at 885.
“Accordingly, we will review the trial court’s determination under Epps for an
abuse of discretion, deferring to factual findings that are supported by some
evidence, but reviewing legal questions de novo.” Id. at 886.
B. Prevailing Party
In its second issue, BTL argues that the trial court erred in awarding Chrisjo
attorney’s fees because Chrisjo was not a prevailing party under the TTLA.
Specifically, it argues that it nonsuited its TTLA claim without prejudice and that
the evidence was legally and factually insufficient to establish that it nonsuited to
avoid an unfavorable ruling on the merits. Chrisjo argues that the timing of the
32
nonsuit and the evidence adduced at trial support a conclusion that BTL nonsuited
its TTLA claim to avoid an unfavorable ruling on the merits.
Here, the trial court found that BTL took the nonsuit to avoid an unfavorable
ruling on the merits. The record indicates that BTL filed its TTLA claim in March
2012 and nonsuited it at trial in January 2015, thereby requiring Chrisjo to expend
effort and attorney’s fees in defending against that claim for nearly three years.
BTL took its nonsuit on the day the bench trial began, but it did not nonsuit its
related claim for conversion, which does not allow for the recovery of attorney’s
fees. When Chrisjo reminded the trial court that it still had pending claims for
attorney’s fees under the DTPA as well, BTL nonsuited its DTPA claim, but did
not nonsuit its related fraud claims, which did not allow for the recovery of
attorney’s fees. BTL provided no explanation for its decision to nonsuit the TTLA
and DTPA claims but not the related conversion and fraud claims.
Furthermore, the evidence at trial demonstrated that BTL failed to procure
evidence that would have demonstrated whether Chrisjo misused or
misappropriated any funds or other property interests. The TTLA “permits a civil
cause of action for damages against a party who commits theft via any of the
numerous methods defined under the Texas Penal Code.” Cluck v. Mecom, 401
S.W.3d 110, 117 (Tex. App.—Houston [14th Dist.] 2011, pet. denied); see TEX.
CIV. PRAC. & REM. CODE ANN. § 134.003 (“A person who commits theft is liable
33
for the damages resulting from the theft.”); id. § 134.002(2) (defining “theft” as
unlawful appropriation of property or unlawfully obtaining services as defined in
Texas Penal Code chapter 31).
As with BTL’s claim for conversion, neither the pleadings nor the evidence
clearly states whether BTL’s theft claim was based on Chrisjo’s alleged theft of
BTL’s money invested in the Pipeline Facilities, theft of the transportation fees, or
theft of some other interest in the Pipeline Facilities. Assuming, without deciding,
that these complaints can properly form the basis of a TTLA claim, BTL failed to
obtain any of the evidence necessary to support its claim that Chrisjo committed
theft of BTL’s funds or other interest in the Pipeline Facilities. According to
Cline’s testimony and other evidence adduced by Chrisjo, the money invested by
BTL was used according to its agreed purpose in developing the Pipeline Facilities
and Chrisjo properly recorded BTL’s interest in the Pipeline Facilities in the
Plaquemines Parish property records. Chrisjo also presented evidence that all
transportation fees were properly dispersed and that no documents that transferred
BTL’s interest in the Pipeline Facilities were ever executed or recorded. BTL
offered no explanation for this failure to obtain actual proof of the ownership of the
Pipeline Facilities, other than Munson’s testimony that he did not believe hiring a
title company was worth the money. None of the BTL representatives explained
why they were unable to review the property records themselves. Thus, the record
34
contains evidence of BTL’s unexcused failure to complete discovery of evidence
that could support entry of an adverse judgment—i.e., evidence from the property
records demonstrating that BTL still owned property that was the subject of its
theft claim. See Epps, 351 S.W.3d at 871. Accordingly, the timing of the nonsuit
and other inferences drawn from the course of events in the lawsuit support the
trial court’s finding. See id. at 870.
BTL also argues that Chrisjo failed to establish that the TTLA claim was
meritless when filed and, thus, did not establish that BTL nonsuited to avoid an
unfavorable ruling on the merits. BTL relies on the fact that its claim survived
Chrisjo’s motion for summary judgment on limitations grounds. However, BTL’s
argument that its TTLA claim was not time barred is not the equivalent of evidence
that its suit was “not without merit when filed” but was subsequently revealed to
have unknown flaws. See id. at 871. BTL presented no evidence or argument
demonstrating that it conducted appropriate discovery of the TTLA claim that
revealed flaws in its suit. On the contrary, the evidence in the record demonstrates
that BTL’s TTLA claim against Chrisjo was meritless and that BTL had in its
possession—prior to its filing of suit—the information it needed to determine that
Chrisjo did not commit theft.
BTL asserted that Chrisjo committed civil theft or conversion by misusing
its investment in the Pipeline Facilities and by selling its interest in the Pipeline
35
Facilities to Imperial, but BTL presented no evidence that such misuse or improper
sale ever occurred. Elkins, Porter, and Munson each testified that they were aware
at or near the time of their 2004 investment that they were receiving only an
interest in the Pipeline Facilities; that they in fact received the only disbursements
of fees that they were entitled to under the terms of their assignment of interests;
and that, as far as they were aware, they still remained the record owners of their
interest in the Pipeline Facilities even though the Coquille Bay Field operators had
ceased using the pipeline in 2008. Elkins, Porter, and Munson all testified that they
received disbursements of transportation fees through 2008. Elkins testified that he
was aware that since 2008 the Coquille Bay Field operator had been using barges
rather than the pipeline to move the oil and gas, and he agreed that the owners of
the Pipeline Facilities were not entitled to transportation fees unless the operator
used the pipeline facilities. As discussed above, BTL presented no evidence to
support its conversion claim against Chrisjo, and it does not challenge the trial
court’s take-nothing judgment on all of its remaining claims.
Accordingly, we cannot conclude that the trial court abused its discretion in
concluding that Chrisjo was a prevailing party under the TTLA. See Referente, 477
S.W.3d at 885–86.
We overrule BTL’s second issue.
36
C. Segregation of Fees
In its third issue, BTL argues, in the alternative, that Chrisjo did not properly
segregate its attorney’s fees for defending against the TTLA claim.
A prevailing party entitled to attorney’s fees is required to “segregate fees
between claims for which they are recoverable and claims for which they are not.”
Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 311 (Tex. 2006); Arrow
Marble, 441 S.W.3d at 709. “The need to segregate attorneys’ fees is a question of
law, while the extent to which claims can or cannot be segregated is a mixed
question of law and fact.” Penhollow Custom Homes, L.L.C. v. Kim, 320 S.W.3d
366, 374 (Tex. App.—El Paso 2010, no pet.). “The award of attorney’s fees
generally rests in the sound discretion of the trial court.” El Apple I, Ltd. v. Olivas,
370 S.W.3d 757, 761 (Tex. 2012) (citing Ragsdale v. Progressive Voters League,
801 S.W.2d 880, 881 (Tex. 1990) (per curiam)).
BTL argues that Chrisjo “failed to properly segregate recoverable from non-
recoverable attorney’s fees” because the affidavits and billing statements “fail to
adequately segregate the fees attributable to defense of [BTL’s] TTLA claims,
which were based entirely on the sale of the Pipeline Facilities to Imperial in
November 2010, from fees incurred in defending [BTL’s] fraud, negligent
misrepresentation, DTPA, Texas Securities Act, statutory stock fraud, conversion
and breach of fiduciary duty claims.” BTL asserts that “many of the time records
37
included in the fee affidavit pertain to claims based on misrepresentations made at
the time of [BTL’s] original investment and the interpretation of the PPM, which
are not relevant in the least to the TTLA claims.”
Chrisjo argues that it properly segregated its attorney’s fees incurred in
defending against the TTLA claim. When it submitted its evidence on attorney’s
fees to the trial court, Chrisjo was seeking attorney’s fees under both the DTPA
and the TTLA. Chrisjo submitted billing statements that showed only certain
discrete legal services were included in its calculation of recoverable attorney’s
fees. Its attorney presented an affidavit in which he averred that, “[t]o the extent
possible, [Chrisjo has] properly segregated recoverable from non-recoverable fees”
and that Chrisjo’s defense against the TTLA and DTPA claims involved the same
operative facts and essentially identical analysis as its defense against the related
conversion and fraud claims.
Chrisjo disagrees with BTL’s argument that its TTLA claim was “based
entirely on the sale of the Pipeline Facilities to Imperial in November 2010,” and
thus none of Chrisjo’s attorney’s fees incurred in addressing any theft allegations
arising out the original 2004 investment were proper. We agree with Chrisjo that
BTL’s pleadings and the other record evidence indicate that BTL accused Chrisjo
generally of theft and conversion, among other causes of action, relating to
Chrisjo’s conduct beginning in 2004 and continuing until 2010.
38
BTL further complains that Chrisjo could not reasonably claim that discrete
legal services contained in the attorney’s fees calculation were all necessary to
address the TTLA claim. Chrisjo stated that “those discrete legal services that
advance both recoverable and non-recoverable claims are so intertwined that they
cannot be segregated” and that those identified legal services “were necessary for
all claims (e.g., requests for disclosures, proof of facts, depositions of primary
actors, and motions for summary judgment),” and so were included in its request
for fees because “they are not disallowed simply because they do double service.”
See Chapa, 212 S.W.3d at 313 (“Requests for standard disclosures, proof of
background facts, depositions of the primary actors, discovery motions and
hearings, voir dire of the jury, and a host of other services may be necessary
whether a claim is filed alone or with others. To the extent such services would
have been incurred on a recoverable claim alone, they are not disallowed simply
because they do double service.”). However, the court in Chapa stated that while
attorneys do not “have to keep separate time records” when they draft petitions or
provide other services that advance both recoverable and nonrecoverable claims, it
is still appropriate to provide “an opinion . . . that, for example, 95 percent of their
drafting time would have been necessary even if there had been no
[nonrecoverable] claim.” Id. at 314. Chrisjo provided no such evidence regarding
the percentage of its attorney’s work that would have been necessary for certain
39
discrete legal services even if no nonrecoverable claims had been advanced,
arguing instead that all of those remaining services would have been necessary to
address the recoverable claims.
However, BTL’s argument that Chrisjo failed to identify the percentage of
those discrete legal services that were attributable solely to the TTLA claim
ignores the role of the trial court as a fact finder here and the standard of review for
evaluation of the sufficiency of the evidence. See id. (“But when, as here, it cannot
be denied that at least some of the attorney’s fees are attributable only to claims for
which fees are not recoverable, segregation of fees ought to be required and the
jury ought to decide the rest.”); Kim, 320 S.W.3d at 374 (holding that extent to
which claims can or cannot be segregated is mixed question of law and fact); see
also El Apple, 370 S.W.3d at 763–64 (holding that evidence is sufficient to support
amount of attorney’s fees awarded when claimant presented evidence of services
performed, who performed them and at what hourly rate, when they were
preformed, and how much time work required). The appropriate question here is
whether the evidence was sufficient to support the trial court’s award of
$24,829.42 as TTLA attorney’s fees.
Chrisjo did segregate its attorney’s fees by eliminating from its claim the
fees attributable to services rendered on nonrecoverable claims, and it sought
$52,353.95, based on its attorney’s affidavit that the remaining services were
40
essentially all necessary to defend against the TTLA and DTPA claims. The trial
court considered this evidence—including detailed, itemized billing statements that
set out the exact tasks performed, the people who performed the tasks and their
hourly rates, and the amount of time involved—and, after determining that Chrisjo
was not entitled to any fees under the DTPA because of the stricken supplemental
pleading, awarded Chrisjo less than half of the fees its sought, or $24,829.42. Thus,
the trial court impliedly found not credible the attorney’s testimony that “those
discrete legal services that advance both recoverable and non-recoverable claims
are so intertwined that they cannot be segregated,” and awarded less than the full
requested amount of fees. See El Apple, 370 S.W.3d at 763–64; see also Messier v.
Messier, 458 S.W.3d 155, 166–67 (Tex. App.—Houston [14th Dist.] 2015, no pet.)
(holding that, in determining amount of attorney’s fees, trial court “can consider
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”).
Accordingly, we conclude that Chrisjo presented segregated evidence of its
attorney’s fees, and the trial court did not abuse its discretion in considering the
record and determining the amount of the award here. El Apple, 370 S.W.3d 763–
64; Messier, 458 S.W.3d at 166–67.
We overrule BTL’s third issue on appeal.
41
Conclusion
We affirm the judgment of the trial court.
Evelyn V. Keyes
Justice
Panel consists of Justices Keyes, Brown, and Huddle.
42