Clotilde Eaker v. John E. Mangiameli, Joseph L. Mangiameli, Martin, and the Jole P. Eaker Irrevocable Trust

In The
Court of Appeals
Ninth District of Texas at Beaumont
__________________
NO. 09-19-00340-CV
__________________
CLOTILDE EAKER, Appellant
V.
JOHN E. MANGIAMELI, JOSEPH L. MANGIAMELI, AND THE JOLE P.
EAKER IRREVOCABLE TRUST, Appellees
__________________________________________________________________
On Appeal from the County Court at Law No. 2
Montgomery County, Texas
Trial Cause No. 17-30341
__________________________________________________________________
MEMORANDUM OPINION
Clotilde Eaker (Eaker or Plaintiff) sued John E. Mangiameli, Joseph L.
Mangiameli, James H. Stilwell, Martin, Earl and Stilwell, LLP, and the Jole P. Eaker
Irrevocable Trust relating to a mediated settlement agreement that was executed
between the parties. Eaker appeals the trial court’s final judgment rendered on
October 2, 2019, which incorporated by reference several summary judgment rulings
rendered by the trial court and otherwise rendered a final judgment in favor of John
1
E. Mangiameli (John), Joseph L. Mangiameli (Joseph), and the Jole P. Eaker
Irrevocable Trust (the Trust) (collectively Defendants or Appellees), and it awarded
attorney’s fees to the Defendants. 1 For reasons explained herein, we affirm.
Background
The Plaintiff’s mother was Jole P. Eaker, and Jole died in 2015. Before her
death, Jole executed a Last Will and Testament (dated May 7, 2014) (the Will), and
in 2001 Jole established the Jole P. Eaker Irrevocable Trust (the Trust). 2 According
to Plaintiff’s Petition (the Petition), 3 Joseph is a Co-Trustee of the Trust, and he was
named as Executor in the Last Will and Testament of Jole Piccoli Eaker which he
filed for Probate on February 2, 2015. In this case, Plaintiff alleged in her Petition
that Joseph filed an “Application for Probate of Copy of the Will as Muniment of
Title” in Cause No. 15-32277-P, In the Estate of Jole Piccoli Eaker, Deceased, in
the County Court at Law No. 2 of Montgomery County, Texas. Plaintiff further
alleged that on February 26, 2015, Maria Eaker Moreland (Jole’s other daughter)
1
The Final Judgment in this case also incorporated by reference the trial
court’s order of December 18, 2017, dismissing Eaker’s claims against James H.
Stilwell and Martin, Earl & Stilwell, LLP, and awarding $2,700.00 in attorneys’ fees
against Eaker. Eaker did not complain on appeal about that part of the judgment, and
therefore we will only discuss the claims against Stilwell and Martin, Earl &
Stilwell, LLP as necessary.
2
The Trust was established by a written Trust Agreement, and it was last
amended by a written amendment dated May 29, 2014.
3
Plaintiff’s Fifth Amended Petition For Declaratory Judgment was the live
petition before the trial court at the time the trial court granted the final judgment.
2
filed an “Objection to Application for Probate of Will As Muniment of Title[.]” On
August 11, 2015, Eaker filed an “Objection to Application for Probate of Will as
Muniment of Title.” In their Objections to the Application for Probate of the Will,
Eaker and her sister, Maria, alleged that their Mother lacked testamentary capacity
at the time she executed the Will, and according to her summary judgment filings,
Eaker claimed her Mother lacked testamentary capacity at the time she executed the
“Amendment to The Jole P. Eaker Irrevocable Trust” that was amended by Jole in
May of 2014. Neither Maria nor Eaker were named as beneficiaries under the
Amendment to the Trust. On July 29, 2016, Joseph, John (Joseph’s brother and Co-
Trustee of the Trust), Eaker, and Maria attended a mediation. The claims were settled
during the mediation, and the parties executed a written mediated “Settlement
Agreement and Release” (MSA) that outlined the terms of the settlement. 4
The MSA expressly stated that the parties agreed that Eaker would receive
the house located at 7082 Sandy Cove Lane, Willis, Texas 77318; Eaker and Maria
would receive the locked box currently held by John and all jewelry owned by Jole
at her death; the locked box would be delivered to the office of James Stilwell on or
before August 5, 2016; the Co-Trustees agreed to assign to Eaker a note owned by
4
According to the appellate record, Joseph and John were Jole’s
grandchildren and are Maria’s sons. According to Joseph’s deposition that was filed
in the record, the Trust was originally created by Jole in 2001 for Jole’s care, and
when she passed away in 2015, the Trust continued for the purpose of managing
Jole’s assets that were part of the Trust.
3
the Trust, which contains a promise by Maria and her husband to repay the Jole
Trust, 5 and they were to deliver the note to James Stilwell on or before August 5,
2016; the Co-Trustees were to use $200,000 to purchase an Annuity to be owned by
the Trust and Eaker would be the beneficiary under the annuity and Eaker was
supposed to pick the annuity company and the Co-Trustee will name Eaker’s
grandchildren as death recipients; Joseph shall probate the 2014 Will of Jole Piccoli
Eaker as muniment as soon as the Court can schedule it, and Maria agrees not to file
any claims against the Trust or estate; the Parties will dismiss their lawsuits against
each other with Prejudice and all fees will be borne by the party incurring the same;
and Jole’s Trust shall be continued for the sole purpose of holding the annuity
through Eaker’s death. The Co-Trustees also agreed in the MSA that they will not
sell or assign the annuity or change the death beneficiaries. The MSA further stated
that it would “supersede[] any trust language to the contrary.” And the MSA stated
the parties agreed to execute all documents “necessary to effectuate this agreement
and to cooperate in the exchange of any information required for the transfer of any
assets.”
According to the MSA, John and Joseph also agreed to release Eaker and
Maria of any current or future claims relating to the estate or trust(s) set up by Jole
5
According to the testimony of Defendants’ counsel, the note the Trust held
was a $500,000 note that Maria and her husband were repaying. The MSA assigned
the note to Eaker to provide her a continuous income stream.
4
except for the provisions in the MSA, and Eaker and Maria agreed to release John
and Joseph of any current or future claims relating to the estate or trust(s) set up by
Jole except for the provisions in the MSA. The parties further agreed that the MSA
is “final and binding on all parties and is not subject to revocation.”
On August 10, 2016, the trial court signed an order granting the Joint Motion
to Dismiss the Will and Trust Contest with Prejudice except for Joseph and John
Mangiameli’s Application to Probate Decedent’s May 2014 Will as a Muniment of
Title. The trial court also ordered that all costs, expenses, fees, including attorney’s
fees, for the Will and Trust Contest and Counterclaim be borne by the party incurring
the same. On September 30, 2016, Eaker’s counsel gave notice to defense counsel,
Stilwell, that Eaker had chosen an annuity.
According to Eaker, on May 14, 2017, she filed a motion for enforcement and
clarification of the MSA after she was “[u]nable to obtain any meaningful response
from the Mangiamelis regarding the purchase of an annuity[.]” Eaker alleged that
she did not receive information that the annuity had actually been purchased until
July 5, 2017, when Stilwell informed Eaker that the annuity had been purchased and
sent her a copy of the annuity contract that was dated February 8, 2017. According
to Eaker, on September 11, 2017, she received notification from a representative of
the annuity company that on February 6, 2017, the Mangiamelis and the Trust had
purchased the annuity (that Eaker had chosen) and that they purchased it “with the
5
intent of letting the funds grow for three years before taking any distributions[]” on
the advice of a representative of Principal Financial.
Eaker then filed a Petition against the Mangiamelis and the Trust for breach
of contract, breach of fiduciary duty, gross negligence, and for a declaratory
judgment. Eaker alleged that the Mangiamelis breached the MSA by delaying the
purchase of the annuity and failing to establish regular monthly annuity benefit
payments (or distributions) to Eaker.6 Eaker alleged that the express terms of the
MSA are ambiguous as to whether she is to receive a benefit from the annuity, but
the intent of the parties going into that contract was that Eaker was to receive a
benefit of regular payments under the annuity. Eaker additionally and alternatively
sought specific performance requiring the Mangiamelis to instruct the annuity group
to pay her a monthly benefit payment under a five-year income and that she should
be reimbursed at least $1,200 each month from October 2016 to the date of the final
trial of the matter.
As to Eaker’s claims for breach of fiduciary duty and gross negligence, she
alleged that despite the Mangiamelis’ representations to her attorney through March
2017 that an annuity had not been purchased, she was not notified until July 5, 2017,
that the annuity had been purchased on February 6, 2017. Eaker further alleged that
6
Eaker’s claim for breach of the MSA is only as to the terms regarding the
annuity.
6
the Mangiamelis breached their fiduciary duty as trustees and acted with gross
negligence in the following ways:
they violated the duty of disclosure by failing to disclose the purchase
of the annuity to [Eaker] until several months after its purchase; they
violated the duty of candor by misrepresenting that they had not
purchased the annuity when in fact they had; they violated the duty to
refrain from self-dealing by failing to assign annuity payments to a
beneficiary other than themselves; and they violated their duty of
loyalty by depriving [Eaker] of any benefit from the annuity, needlessly
extending the administration of the trust, and using their power as
trustees to achieve their personal ends. These breaches of fiduciary duty
also constitute a breach of trust.
Eaker requested a clarification under the Uniform Declaratory Judgments Act
(UDJA) to the extent the MSA is ambiguous with respect to the Mangiamelis’ duties
in purchasing an annuity, which she alleged provides for a monthly benefit. Eaker
also sought attorney’s fees.
The Defendants filed a series of motions for partial summary judgment on
each of the claims. On January 14, 2019, the trial court granted the Defendants’
motion for partial summary judgment on Eaker’s claim for breach of the MSA. 7 On
February 1, 2019, the trial court granted the Mangiamelis’ and the Trust’s partial
7
On March 5, 2018, the trial court partially granted Eaker’s motion for
summary judgment to the extent that it found that the MSA was ambiguous because
it did not state the name of the annuitant or who would choose the annuity. The trial
court, however, granted partial summary judgment for Defendants on Plaintiff’s
breach of settlement agreement claim on March 15, 2018, but then on August 15,
2018, the trial court reversed and denied partial summary for Defendants on the
breach of settlement claim. After reconsideration, the trial court withdrew the
August 15, 2018 order with the January 14, 2019 order.
7
motion for summary judgment on Eaker’s claim for breach of fiduciary duty and
gross negligence. On the same date, the trial court also granted the Mangiamelis’
and the Trust’s partial motion for summary judgment on Eaker’s claim for
declaratory judgment and also denied Eaker’s cross-motion for summary judgment
on her claims for declaratory judgment. Eaker appealed all of these orders to this
Court, and this Court dismissed her appeal for lack of jurisdiction because the orders
were interlocutory and not yet final appealable orders.8
The trial court held a trial on the only remaining matter, attorney’s fees. On
October 2, 2019, the trial court signed a Final Judgment granting summary judgment
in favor of the Mangiamelis and the Trust on all of Eaker’s claims against them (and
incorporating the trial court’s orders granting partial motions for summary judgment
dated February 1, 2019, that entered take-nothing judgments against Eaker), and
ordering Eaker to pay the Mangiamelis and the Trust $84,250.60 in attorney’s fees
and $1,375.29 for the past completed appeal. Eaker appealed. On October 30, 2019,
the trial court signed findings of fact and conclusions of law regarding the attorney’s
fees, and the trial court noted that no findings and conclusions on the summary
judgment rulings were included because “[f]indings and [c]onclusions are not
appropriate for summary judgment rulings[.]”
8
See Eaker v. Mangiameli, No. 09-19-00036-CV, 2019 Tex. App. LEXIS
2464 (Tex. App.—Beaumont Mar. 28, 2019, no pet.) (mem. op.).
8
Appellate Issues
In her first three issues, Eaker argues that the trial court erred in granting
summary judgment in favor of Appellees on Eaker’s claims for breach of the MSA,
breach of fiduciary duty, gross negligence, and declaratory judgment. In her fourth
and fifth issues, Eaker argues the trial court erred in awarding Appellees attorney’s
fees under the UDJA and the Texas Trust Act and she argues that the Appellees
failed to segregate the attorney’s fees between “discrete legal work that is not
recoverable.”
Standard of Review and Applicable Law
We review grants of summary judgment de novo. Cantey Hanger, LLP v.
Byrd, 467 S.W.3d 477, 481 (Tex. 2015). The movant for a traditional motion for
summary judgment has the burden to establish that no genuine issues of material fact
exist and that movant is entitled to judgment as a matter of law. Tex. R. Civ. P.
166a(c); Nixon v. Mr. Prop. Mgmt. Co., Inc., 690 S.W.2d 546, 548 (Tex. 1985). If
the moving party produces evidence entitling it to summary judgment, the burden
shifts to the nonmovant to present evidence that raises a material fact issue. Walker
v. Harris, 924 S.W.2d 375, 377 (Tex. 1996). The trial court may consider all
competent evidence on file at the time of the summary judgment hearing. See Tex.
R. Civ. P. 166a; Lance v. Robinson, 543 S.W.3d 723, 732 (Tex. 2018).
9
In deciding whether there is a disputed material fact issue precluding summary
judgment, evidence favorable to the nonmovant will be taken as true. Nixon, 690
S.W.2d at 548-49. Every reasonable inference must be indulged in favor of the
nonmovant, and any doubts must be resolved in the nonmovant’s favor. Id. at 549.
Because the trial court’s orders in this case granting the partial summary judgments
do not specify the grounds for its summary judgments, we must affirm the summary
judgments if any of the theories presented to the trial court and preserved for
appellate review are meritorious. See Provident Life & Accident Ins. Co. v. Knott,
128 S.W.3d 211, 216 (Tex. 2003) (citing Cincinnati Life Ins. Co. v. Cates, 927
S.W.2d 623, 626 (Tex. 1996); Carr v. Brasher, 776 S.W.2d 567, 569 (Tex. 1989)).
Summary Judgment on Breach of Contract Claim
In her first issue, Eaker argues that the trial court erred in granting summary
judgment in favor of Appellees on Eaker’s claims for breach of the mediated
settlement agreement. Mediated settlement agreements are enforceable as contracts.
Tex. Civ. Prac. & Rem. Code Ann. § 154.071(a). We interpret settlement agreements
under ordinary contract interpretation principles. Sandt v. Energy Maint. Servs. Grp.
I, LLC, 534 S.W.3d 626, 642 (Tex. App.—Houston [1st Dist.] 2017, pet. denied).
The essential elements of a breach of contract cause of action are: “(1) the existence
of a valid contract; (2) the plaintiff performed or tendered performance as the
contract required; (3) the defendant breached the contract by failing to perform or
10
tender performance as the contract required; and (4) the plaintiff sustained damages
as a result of the breach.” USAA Tex. Lloyds Co. v. Menchaca, 545 S.W.3d 479, 501
n.21 (Tex. 2018).
In Eaker’s Motion for Summary Judgment, she argued, among other things,
that the trial court should grant summary judgment declaring that the MSA is
unambiguous and that it provided that once the annuity was purchased, the annuity
will provide periodic payments to Eaker and within a reasonable time of the
execution of the MSA. But Eaker also argued in the alternative that the trial court
should grant summary judgment declaring that the MSA is ambiguous only as to
whether the annuity will provide periodic payments to Eaker, as to when the annuity
will provide periodic payments to Eaker, and how the annuity should be structured
to provide periodic payments to Eaker.
In their Response to Plaintiff’s Motion for Summary Judgment and Cross-
Motion for Partial Summary Judgment, Defendants argued that they were entitled to
a partial summary judgment on Eaker’s claim for breach of the MSA because they
complied with the terms of the MSA and the MSA is unambiguous. Appellees
attached evidence to their response and cross-motion, which included a copy of the
MSA and an Acknowledgement of Delivery from Principal Financial Group dated
February 8, 2017, evidencing the Trust had purchased an annuity and that the Trust
was the owner of the fixed deferred annuity contract that was issued by Principal
11
Life Insurance Company in the amount of $200,000, it was for the benefit of the
annuitant Clotilde Eaker, and it was issued on February 6, 2017, with the primary
beneficiary designation noted as “Madison McKelvy[,] Great-grandchildren[.]” The
evidence further established that it was the annuity Eaker had chosen, and that it had
a three-year deferral period that ended February 5, 2020, with an initial guaranteed
interest rate of 1.60. Also attached to the response and cross-motion for partial
summary judgment was an Affidavit of John Mangiameli where he averred in
relevant part that he is Co-Trustee of the Trust and:
[t]he July 29, 2016 settlement agreement provided that in addition to
certain specific assets to be received by my Aunt, that she would select
an annuity for the [Trust] to purchase for $200,000; that my brother and
I as Co-Trustees would purchase the annuity; that the Trust would own
and hold the annuity; and that the annuity would name Aunt [Eaker]’s
grandchildren as death beneficiaries. Once [Eaker] selected the annuity
she desired and provided the necessary information identifying it, that
my brother and I as Co-Trustees purchased the exact annuity she picked
out.
....
[] Taken term-by-term, each term of the agreement was performed:
A. As Co-Trustees, Joseph and I used $200,000 to purchase an
Annuity.
B. The Annuity is owned by the Trust.
C. [Eaker] picked the annuity company (and Joseph and I even
let [Eaker] pick the exact annuity she wanted).
D. Joseph and I, as Co-Trustees of my grandmother’s trust,
named [Eaker]’s grandchildren as death recipients.
[] Further, if you look at the settlement terms in paragraph G, those
terms have also been fully complied with. Specifically,
12
A. Jole’s Trust has been continued for the purpose of holding the
annuity through [Eaker]’s death.
B. Joseph and I as Co-Trustees have not sold or assigned the
annuity.
C. Joseph and I as Co-Trustees have not changed the death
beneficiaries.
[] There has been no breach of the settlement agreement.
[] The settlement agreement is unambiguous about what it says.
It specifies the WHO (who would buy the annuity, who would own the
annuity, who would be death beneficiaries).
It specifies the WHAT (an annuity picked out by Plaintiff from the
myriads of annuity products available on the market).
It specifies WHERE (it would be held by the Trust, for Plaintiff’s life).
It specifies WHY (in settlement and resolution of the parties’ disputes).
It specifies HOW MUCH ($200,000).
It specifies WHICH ONE (the annuity company selected by Plaintiff).
It specifies WHAT KIND (an annuity, selected by Plaintiff).
It specifies HOW MANY (one annuity).
[] It is unambiguous that the settlement agreement required my brother
Joseph and me as Co-Trustees to buy an annuity. It is also unambiguous
that the settlement agreement specified that additional documents
would need to be executed—like the contract for the annuity. The
settlement agreement does not say when [Eaker] would make her
selection—and knowing that she was selecting the annuity of her
choosing from the entire universe of the wide variety of different
annuities available in the marketplace, there was not a need for a
deadline. The settlement agreement also did not say what the timing
and payout of the annuity would look like, because there was no way
to know that until [Eaker] selected the annuity she wanted, and that
annuity’s terms would govern the timing and amount of any annuity
payouts. The settlement agreement did not specify how the annuity
should be structured—but that does not make it ambiguous! Because
[Eaker] was picking the annuity she wanted, there was not a need for
the settlement agreement to specify that. The fact that the settlement
agreement is silent about how the annuity would work is intentional and
13
it was written that way because [Eaker] was getting to choose an
annuity with a structure she liked.
[] In fact, [Eaker] picked the annuity, my brother and I as Co-Trustees
bought it, and the contract for the annuity [Eaker] picked contains the
terms and conditions and timing for payouts from the annuity.
Another exhibit to Defendant’s Response to Plaintiff’s Motion for Summary
Judgment and Cross-Motion for Partial Summary Judgment included an email from
Patrick Rogan with Capital One (Plaintiff’s broker) wherein Rogan advised the
parties that the annuity selected by Plaintiff has a three-year period where there are
penalties if payments are received during that time.
In Eaker’s Response in Opposition to Defendants’ Motion for Summary
Judgment, she incorporated her arguments from her Motion for Summary Judgment
and argued that Defendants breached the MSA because under the plain language of
the MSA, Defendants were to purchase an annuity that provided monthly payments
to Eaker, and they purchased an annuity that allowed for no annuity distributions for
the three-year penalty period provided for in the annuity contract. Eaker cited to
Black’s Law Dictionary and caselaw in support of her contention that the plain
meaning of “annuity” is “periodic payments[.]” She also argued that the Defendants
also failed to perform under the MSA because although Defendants purchased an
annuity that designates Eaker as the annuitant, the annuity contract provides
payments to the owner of the annuity contract (here, the Defendants), not the
14
annuitant. Eaker also stated in her response that under the terms of the MSA she was
to pick the annuity company, not the exact annuity for the Trust to purchase.
Defendants filed a Reply in Support of Defendants’ Cross-Motion for Partial
Summary Judgment wherein they argue that every element of the MSA has been
complied with, Eaker has failed to prove any breach as a matter of law and did not
raise a genuine issue of material fact as to breach, that no part of the MSA requires
Defendants to pay Eaker “monthly periodic payments[,]” that the annuity contract
Eaker chose allows for periodic payments to Eaker after a three-year penalty period,
which was advised by “Plaintiff’s broker with Capital One.” In support of these
arguments, Defendants referred to the exhibits attached to their cross-motion for
partial summary judgment.
Was the MSA Ambiguous?
Whether a contract is ambiguous is a question of law for the court to decide
and is subject to de novo review. See Progressive Cty. Mut. Ins. Co. v. Kelley, 284
S.W.3d 805, 808 (Tex. 2009); Bowden v. Phillips Petroleum Co., 247 S.W.3d 690,
705 (Tex. 2008). To determine whether a contract is ambiguous, a court looks at the
contract as a whole and considers the circumstances at the time of agreement. See
Sadler Clinic Ass’n, P.A. v. Hart, 403 S.W.3d 891, 895 (Tex. App.—Beaumont
2013, pet. denied) (citing Columbia Gas Transmission Corp. v. New Ulm Gas, Ltd.,
940 S.W.2d 587, 589 (Tex. 1996)); see also Med. Towers, Ltd. v. St. Luke’s
15
Episcopal Hosp., 750 S.W.2d 820, 823 (Tex. App.—Houston [14th Dist.] 1988, writ
denied) (Evidence of circumstances surrounding the execution of an unambiguous
contract may be considered to help the court evaluate the parties’ intent). “A contract
is ambiguous when its meaning is uncertain and doubtful or is reasonably susceptible
to more than one interpretation.” See Heritage Res., Inc. v. NationsBank, 939 S.W.2d
118, 121 (Tex. 1996). Generally, when a contract is ambiguous, a grant of summary
judgment is improper because interpretation of the contract will be a fact issue. See
Coker v. Coker, 650 S.W.2d 391, 394 (Tex. 1983). That said, simply because a
contract may be silent on some aspect of performance does not necessarily mean the
contract is ambiguous. See Sifuentes v. Carrillo, 982 S.W.2d 500, 504 (Tex. App.—
San Antonio 1998, pet. denied). If a contract is silent then “the question is not one
of interpreting the language but rather one of determining its effect.” Id.; Med.
Towers, Ltd., 750 S.W.2d at 822. Similarly, a mere lack of clarity does not create an
ambiguity; nor does an ambiguity arise merely because the parties to the agreement
offer different interpretations of the agreement. DeWitt Cty. Elec. Coop., Inc. v.
Parks, 1 S.W.3d 96, 100 (Tex. 1999). “[A]n ambiguity does not exist simply because
the parties interpret a [contract] differently.” Gilbert Tex. Constr., L.P. v.
Underwriters at Lloyd’s London, 327 S.W.3d 118, 133 (Tex. 2010) (citing Am. Mfrs.
Mut. Ins. Co. v. Schaefer, 124 S.W.3d 154, 157 (Tex. 2003)). If a contract as written
can be given a clear and definite legal meaning, then it is not ambiguous as a matter
16
of law. Id. (citing Progressive Cty. Mut. Ins. Co. v. Sink, 107 S.W.3d 547, 551 (Tex.
2003); Grain Dealers Mut. Ins. Co. v. McKee, 943 S.W.2d 455, 458 (Tex. 1997)).
To the extent Eaker argues on appeal that the section of the MSA regarding
the purchase of the annuity is ambiguous, we disagree. We find that the MSA was
unambiguous as it expressly provided that the Co-Trustees will use $200,000 to
purchase an Annuity that shall be owned by the Trust, Eaker will pick the annuity
company, and the Co-Trustee will name Eaker’s grandchildren as death recipients.
Defendants attached uncontroverted evidence to their summary judgment motion
showing that the Trust purchased a $200,000 annuity from the company chosen by
Eaker and further that the actual annuity was chosen by Eaker, that it was owned by
the Trust and that it named Eaker as the annuitant and Eaker’s only grandchild as
the death beneficiary. Although the MSA is silent as to how and when the annuity
payments to the annuitant would begin under the annuity, the parties agreed that
Eaker would choose the annuity contract for the Trust to purchase and that the Trust
would own the annuity. The specific terms and conditions of the annuity are in the
annuity contract selected by Eaker.
Eaker bore the burden to establish a genuine issue of material fact regarding
whether Appellees performed under the MSA. Eaker does not allege there is a breach
of the annuity contract, she only alleges that Defendants breached the MSA. In her
response to Appellees’ motion for summary judgment on Eaker’s claim for breach
17
of the MSA and on appeal, Eaker alleges that Appellees breached the MSA by
purchasing an annuity that did not allow for monthly annuity distributions to Eaker
for the first three years. The MSA required the Trust to purchase a $200,000 annuity,
with the annuity company picked by Eaker, the Trust would own the annuity, and
that the death beneficiaries would be Eaker’s grandchildren. The MSA did not
specify when any specific periodic payments would begin but instead stated that
“[t]he parties agree to execute all documents necessary to effectuate this
agreement[,]” which would allow for the terms of the annuity contract to provide the
details of the annuity terms. The Defendants presented evidence that the annuity the
Trust purchased was the actual annuity chosen by Eaker. Eaker has failed to create
a genuine issue of a material fact that Appellees failed to comply with the terms of
the MSA as to the annuity. We overrule issue one.
Summary Judgment on Breach of Fiduciary Duty and Gross Negligence Claims
In issue two, Eaker argues that the trial court erred in granting summary
judgment in favor of Appellees on Eaker’s claims for breach of fiduciary duty and
gross negligence. Specifically, Eaker bases both claims on Joseph Mangiameli’s
testimony that Eaker argues is an “outright admission[]” of the existence of a
fiduciary duty, and she asserts that the Mangiamelis’ asserted in their Answer a
request for a limitation of liability as Trustees and that such “estop[]s the Defendants
to deny the existence of the trust as creating [a] fiduciary relationship between the
18
parties.” According to Eaker, the Mangiamelis’ position as Trustees at the very least
creates an informal fiduciary relationship.
To prevail on a claim for breach of fiduciary duty, a plaintiff must prove the
existence of the fiduciary relationship and a breach of that duty by the defendant,
which caused damages to the plaintiff or benefit to the defendant. Jordan v. Lyles,
455 S.W.3d 785, 792 (Tex. App.—Tyler 2015, no pet.) (op. on reh’g). A fiduciary
relationship exists between a trustee and the trust beneficiary, and the trustee must
not breach or violate this relationship. Herschbach v. City of Corpus Christi, 883
S.W.2d 720, 735 (Tex. App.—Corpus Christi 1994, writ denied). A fiduciary owes
his principal a high duty of good faith, fair dealing, honest performance, and strict
accountability. In re Estate of Miller, 446 S.W.3d 445, 455 (Tex. App.—Tyler 2014,
no pet.).
To establish a fiduciary relationship, Eaker must prove a relationship between
the parties involving “a high degree of trust and confidence . . . prior to, and apart
from[]” the MSA. See Schlumberer Tech. Corp. v. Swanson, 959 S.W.2d 171, 176-
77 (Tex. 1997). A fiduciary duty generally “arises from the relationship of the parties
and not from the contract.” Manges v. Guerra, 673 S.W.2d 180, 183 (Tex. 1984).
Defendants’ motion for partial summary judgment alleged that there is only a
contractual relationship between the Defendants and Eaker, Eaker was not and is not
a beneficiary of the Trust, and therefore, they owed no fiduciary duty to Eaker.
19
Defendants also argued they were entitled to summary judgment on Eaker’s claim
for gross negligence:
[The MSA] only established a contractual relationship between [Eaker]
and Defendants and not a fiduciary relationship or legal duty between
them and the Annuity Contract did not establish a contractual
relationship, fiduciary relationship, or legal duty between them.
Eaker argued in her response to the motion for partial summary judgment that
Joseph Mangiameli “testified that he acted throughout in his capacity as a Trustee,
and that the annuity purchased was, in his view and contemporaneous understanding,
to benefit Plaintiff, with her grandchildren as her death beneficiaries.” Eaker
attached to her response an excerpt of Joseph’s deposition testimony wherein he
testified as follows:
Q. (By [Plaintiff’s Counsel]) Does that -- to do what’s right to the trust,
does that also include [Eaker]?
A. The trust is set up for [Eaker]’s long term benefit.
Q. Okay. Does that fiduciary duty, does that go to [Eaker]?
A. It goes to what’s in the best interest of the trust and what’s in the
best interest for the long-term benefit.
Q. And does that benefit also include [Eaker]?
A. It is set up for the benefit of -- as I understand it, it is set up as a --
as how it stands now, it’s now the benefit for her long-term -- it’s a
long-term benefit for her.
Q. Okay. So, that does include [Eaker]?
A. Long-term, yes.
Eaker argued that this testimony constitutes an “outright admission[] of the existence
of a fiduciary duty” owed to Eaker by a person acting as a Trustee and that the
20
testimony creates a fact issue fatal to Defendants’ motion for summary judgment on
Eaker’s claims for breach of fiduciary duty and gross negligence.
According to the record, section 2.05 of the Trust provides that the
beneficiaries of the Trust are John and Joseph Mangiameli, their wives, and their
descendants, but it expressly states the beneficiaries “shall not include my daughter,
Maria [] or my daughter Clotilde Eaker or her descendants.” The fact that the
Defendants were trustees under the Trust agreement does not create a fiduciary duty
to Eaker under the MSA agreement. According to the record, the Trust continues to
exist as the owner of the annuity. The mediated settlement agreement was just that,
a mediated settlement agreement between parties who held adverse interests in
certain underlying claims that were resolved by virtue of the settlement agreement.
The MSA is a contract between the Mangiamelis (who were Co-Trustees of the
Trust), the Trust, and Eaker. It did not alter the terms of the Trust agreement or create
any additional fiduciary responsibilities of the Trustees under the Trust agreement.
Rather, the MSA was a binding settlement agreement between the parties thereto
and it provided that the Trust would purchase an annuity to be chosen by Eaker, and
that the Trust would own the annuity. We conclude that the Trust’s purchase of the
annuity for Eaker does not make Eaker a beneficiary of the Trust. We note that Eaker
has not challenged the terms of the annuity, and she has not attempted to set aside
the settlement agreement in its entirety. Rather, she seeks to enforce the agreement,
21
but contends the Defendants breached the agreement in failing to purchase an
annuity that provided immediate payments to her.
Based on our review of the entire excerpt of Joseph’s deposition attached to
Eaker’s response to Defendants’ motion for summary judgment, we do not agree
with Eaker that the excerpt shows an “outright admission[],” nor does it create a fact
issue that the Mangiamelis as Trustees owed Eaker a fiduciary duty. In fact, Joseph
testified as to the relationship as follows:
Q. (By Plaintiff’s Counsel) And so, the annuity is -- you consider the
annuity then to be an investment for the trust assets; is that right?
A. It -- it is an investment.
Q. And that would be for the benefit of the trust; is that correct?
A. . . . [I]t is set up to be a long-term benefit.
Q. But I know you’ve testified to that previously.
A. For [Eaker]. So, it is an investment of the trust. And as co-trustee
of the trust, we have a fiduciary responsibility to ensure that we are
fiscally responsible.
Q. Okay. To [Eaker]?
A. To the trust.
Q. But not to [Eaker]?
A. To the trust.
Joseph further testified that Eaker had not received benefits from the annuity because
a financial advisor advised that under the annuity contract “there’s a period of time
that it -- you get a maximum interest rate during the holding period and if you touch
money during that holding period [it] is unwise because there’s less money there to
grow.”
22
We also disagree with Eaker’s argument that the settlement agreement created
an informal fiduciary relationship between the Defendants and Eaker. A fiduciary
relationship is an extraordinary one and will not be lightly created. Hoggett v. Brown,
971 S.W.2d 472, 488 (Tex. App.—Houston [14th Dist.] 1997, pet. denied). “It is
well settled that ‘not every relationship involving a high degree of trust and
confidence rises to the stature of a fiduciary relationship.’” Meyer v. Cathey, 167
S.W.3d 327, 330 (Tex. 2005) (quoting Schlumberger Tech. Corp., 959 S.W.2d at
176-77). “A person is justified in placing confidence in the belief that another party
will act in his or her best interest only where he or she is accustomed to being guided
by the judgment or advice of the other party, and there exists a long association in a
business relationship, as well as personal friendship.” Hoggett, 971 S.W.2d at 488.
As to business transactions, courts are hesitant to create informal fiduciary
relationships. Gregan v. Kelly, 355 S.W.3d 223, 228 (Tex. App.—Houston [1st
Dist.] 2011, no pet.). “Courts review a variety of facts for determining whether an
informal fiduciary relationship exists.” Id. “The existence of the fiduciary
relationship is to be determined from the actualities of the relationship between the
persons involved.” Thigpen v. Locke, 363 S.W.2d 247, 253 (Tex. 1962). In reviewing
the relationship between the parties, one factor we consider is whether the party
claiming to be owed a fiduciary relationship justifiably placed special confidence in
the other party to act in his best interest. See Trostle v. Trostle, 77 S.W.3d 908, 914-
23
15 (Tex. App.—Amarillo 2002, no pet.) (To establish a fiduciary relationship,
evidence must demonstrate the plaintiff actually relied on the purported fiduciary
“for moral, financial, or personal support or guidance.”); see also Lee v. Hasson, 286
S.W.3d 1, 14-15 (Tex. App.—Houston [14th Dist.] 2007, pet. denied) (same). An
informal fiduciary relationship requires proof that, because of a close or special
relationship, the plaintiff “is in fact accustomed to be guided by the judgment or
advice” of the other. Thigpen, 363 S.W.2d at 253.
Eaker has not shown that she relied upon or was accustomed to being guided
by the judgment or advice of the Mangiamelis in either the selection of the annuity
or the annuity company, and the fact that Eaker and the Mangiamelis were parties to
the MSA that provided that the Mangiamelis purchase an annuity does not in and of
itself create an informal fiduciary relationship. Eaker was represented by her own
attorney in the negotiation of the settlement agreement, and she has failed to raise a
fact issue on the existence of a fiduciary relationship or an informal fiduciary
relationship with respect to the MSA.
Eaker’s gross negligence claim appears to be dependent upon her allegation
that a fiduciary duty exists. As we have already explained, the MSA did not create a
fiduciary relationship between the parties to the MSA and the Defendants did not
owe a fiduciary duty to Eaker under the MSA. We reject Eaker’s argument that there
was an “informal fiduciary relationship” under the MSA. We conclude that the trial
24
court did not err in granting Appellees’ motion for partial summary judgment on
Eaker’s tort claims for breach of fiduciary duty and gross negligence. We overrule
issue two.
Summary Judgment as to Declaratory Judgment Claims
In issue three, Eaker argues that the trial court erred in granting summary
judgment in favor of Appellees on Eaker’s claims for declaratory judgment. On
appeal, Eaker argues that her “requests for declaratory relief involve aspects of this
justiciable controversy that can be resolved by a declaration[]” and that the trial court
should have declared the amount of the annuity benefits, the time for performance
(the time the Mangiamelis were to purchase the annuity and the time that the monthly
payments are scheduled to begin), and that the MSA is a modification/extension of
the Trust because “the Mangiamelis believed that the Trust was continued for
[Eaker]’s benefit.”
We first address Eaker’s argument that the trial court erred in dismissing her
declaratory action requesting a declaration as to the amount of annuity benefits and
time of performance. In construing a contract, courts may not rewrite the agreement
or add to its language. Garza v. Villarreal, 345 S.W.3d 473, 480 (Tex. App.—San
Antonio 2011, pet. denied) (citing Schaefer, 124 S.W.3d at 162). Accordingly, the
trial court did not err in granting Appellees’ partial motion for summary judgment
on Eaker’s claims for declaratory judgment on those grounds. As for Eaker’s
25
argument that the trial court erred in dismissing her declaratory judgment requesting
a declaration that the MSA is a modification/extension of the Trust, we disagree. A
declaration that the settlement agreement modified and extended the Trust was not
supported by the facts or law. We overrule issue three.
Attorney’s Fees
In issue four, Eaker argues the trial court erred in awarding attorney’s fees
under section 37.009 of the Uniform Declaratory Judgments Act and section 114.064
of the Texas Trust Act. According to Eaker, the attorney’s fees awarded under
section 37.009 of the UDJA “were not equitable and just, due to the Mangiamielis’
and Stilwell’s misrepresentations [to] the Court regarding the purchase of the
annuity, and, otherwise, continual delay and obfuscation tactics[,]” and that if this
Court overturns the summary judgment on her declaratory judgment claim this Court
must also overturn the attorney’s fees awarded. She also asserted at trial and on
appeal that the Mangiamelis are not entitled to attorney’s fees under the Texas Trust
Act because she did not bring a claim under the trust provisions of the Texas Property
Code. In issue five, Eaker argues the trial court erred in awarding attorney’s fees
because the Mangiamelis and the Trust “fail[ed] to segregate between discre[]te
legal work that is not recoverable[.]” Eaker specifically argues that despite the trial
court’s finding otherwise, the Defendants did not properly segregate fees and that
the Mangiamelis cannot recover for work related to any cause of action that is not
26
recoverable and for the discrete legal work that related to claims that are not
recoverable. According to Eaker, under Chapter 38 a successful defendant cannot
recover attorney’s fees on a motion for summary judgment on a breach of contract
claim, and attorney’s fees are not recoverable for time spent on the motion for
summary judgment relating to breach of fiduciary duty and gross negligence because
those are common law torts.
Generally, in Texas, each party must pay its own attorney’s fees. Rohrmoos
Venture v. UTSW DVA Healthcare, LLP, 578 S.W.3d 469, 483 (Tex. 2019). There
are certain circumstances, however, in which the prevailing party can recover fees
from the opposing party. Id. at 484; In re Nat’l Lloyds, Ins. Co., 532 S.W.3d 794,
809 (Tex. 2017) (orig. proceeding) (“Texas follows the American rule on attorney’s
fees, which provides that, generally, ‘a party may not recover attorney’s fees unless
authorized by statute or contract.’”) (quoting Wheelabrator Air Pollution Control,
Inc. v. City of San Antonio, 489 S.W.3d 448, 453 n.4 (Tex. 2016)). When shifting of
attorney’s fees is authorized whether by statute or contract, the party seeking the fee
award must prove that the requested attorney’s fees are reasonable and necessary.
Rohrmoos Venture, 578 S.W.3d at 484.
In reviewing the sufficiency of the attorney-fee evidence in this case, the
lodestar analysis applies, as it does in “any situation in which an objective
calculation of reasonable hours worked times a reasonable rate can be employed” to
27
determine the amount of attorney’s fees to be awarded in a fee-shifting scenario. Id.
at 497-98. The factfinder’s “starting point” for calculating an award of attorney’s
fees is “determining the reasonable hours worked multiplied by a reasonable hourly
rate,” and the party seeking recovery of attorney’s fees bears the burden of providing
sufficient evidence on both counts. Id. at 498; El Apple I, Ltd. v. Olivas, 370 S.W.3d
757, 760 (Tex. 2012) (stating that first step of lodestar analysis involves determining
reasonable hours spent by counsel and reasonable hourly rate, then multiplying
number of hours by rate to get base lodestar and that second step of analysis involves
adjusting base amount up or down “if relevant factors indicate an adjustment is
necessary to reach a reasonable fee in the case[]”). “This base lodestar figure should
approximate the reasonable value of legal services provided in prosecuting or
defending the prevailing party’s claim through the litigation process.” Rohrmoos
Venture, 578 S.W.3d at 498. “[T]here is a presumption that the base lodestar
calculation, when supported by sufficient evidence, reflects the reasonable and
necessary attorney’s fees that can be shifted to the non-prevailing party.” Id. at 499.
“Sufficient evidence includes, at a minimum, evidence of (1) particular
services performed, (2) who performed those services, (3) approximately when the
services were performed, (4) the reasonable amount of time required to perform the
services, and (5) the reasonable hourly rate for each person performing such
services.” Id. at 502. Obtaining such evidence requires “itemizing specific tasks”
28
and “the time required for those tasks[.]” Id. at 495 (quoting City of Laredo v.
Montano, 414 S.W.3d 713, 736 (Tex. 2013) (per curiam)).
In rare circumstances, the lodestar figure may be adjusted upward or
downward, but only if specific evidence overcomes the presumption of
reasonableness and shows that the adjustment is necessary to achieve a reasonable
fee award. Id. at 501-02. The lodestar figure may not be adjusted based on
considerations that are already inherently subsumed within the lodestar calculation.
Id. at 501. The lodestar calculation already takes into account several considerations
including,
“the time and labor required,” “the novelty and difficulty of the
questions involved,” “the skill required to perform the legal service
properly,” “the fee customarily charged in the locality for similar legal
services,” “the amount involved,” “the experience, reputation, and
ability of the lawyer or lawyers performing the services,” “whether the
fee is fixed or contingent on results obtained,” “the uncertainty of
collection before the legal services have been rendered,” and “results
obtained.”
Id. at 500 (quoting Arthur Andersen & Co. v. Perry Equip. Corp., 945 S.W.2d 812,
818 (Tex. 1997) (sub. op. on denial of reh’g).
Section 114.064 of the Texas Trust Act provides that “[i]n any proceeding
under this code the court may make such award of costs and reasonable and
necessary attorney’s fees as may seem equitable and just.” See Tex. Prop. Code Ann.
§ 114.064. In any proceeding under the UDJA, the court “may award costs and
reasonable and necessary attorney’s fees as are equitable and just.” Tex. Civ. Prac.
29
& Rem. Code Ann. § 37.009. The UDJA “entrusts attorney fee awards to the trial
court’s sound discretion, subject to the requirements that any fees awarded be
reasonable and necessary, which are matters of fact, and to the additional
requirements that fees be equitable and just, which are matters of law.” Bocquet v.
Herring, 972 S.W.2d 19, 21 (Tex. 1998). A trial court abuses its discretion in
awarding fees under the UDJA if there is insufficient evidence that the fees were
reasonable and necessary. See id.A party seeking attorney’s fees must “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). For a time, the Texas Supreme Court
recognized an exception to this rule when “the same set of facts or circumstances”
were intertwined to the point of being inseparable. Stewart Title Guar. Co. v.
Sterling, 822 S.W.2d 1, 11 (Tex. 1991). But in Tony Gullo Motors I, L.P. v. Chapa,
the Court modified the exception such that when a party incurs attorney’s fees related
to a claim on which fees are unrecoverable, the party must segregate the recoverable
from the unrecoverable fees. Chapa, 212 S.W.3d at 313-14. In Chapa, the prevailing
party asserted a DTPA claim (fees recoverable) and a fraud claim (fees not
recoverable). Id. at 304. By way of example, the Court pointed out that the attorney’s
time in drafting the portion of the pleadings or the jury charge related to the fraud
claim were not recoverable and had to be segregated. Id. at 313. While claims may
30
depend on the same facts, “that does not mean they all required the same research,
discovery, proof, or legal expertise.” Id. Nonetheless, the Court cautioned that courts
should not require precise allocation of fees to one claim or another and agreed that
some services (such as standard discovery, depositions of primary actors, discovery
motions and hearings) might be necessary regardless of the number of claims
asserted. Id. However,
if any attorney’s fees relate solely to a claim for which such fees are
unrecoverable, a claimant must segregate recoverable from
unrecoverable fees. Intertwined facts do not make tort fees recoverable;
it is only when discrete legal services advance both a recoverable and
unrecoverable claim that they are so intertwined that they need not be
segregated.
Id. at 313-14.
At trial, James Stilwell, defense counsel who represented all Defendants,
testified that it would be equitable and just for the trial court to award the Defendants
their reasonable and necessary attorney’s fees. Stilwell testified that the Defendants
had “no wrongdoing” and had “performed all aspects of the settlement,” and that
equity and justice should not require them to bear the fees involved. Stilwell also
stated that Eaker filed at least five amended pleadings with “an ever-changing
moving target of allegations” to which the Defendants had to respond. Defendant’s
Exhibit 1, an Attorney’s Fees Chart and Segregation of Fees, and Exhibit 3,
Stilwell’s resume, were admitted into evidence without objection. Defendant’s
Exhibit 2, Stilwell’s invoices for the case, was offered into evidence. Plaintiff’s
31
counsel objected to Defendant’s Exhibit 2, arguing that Eaker did not bring a cause
of action against the Defendants under the Texas Property Code and there is no basis
for recovery of attorney’s fees, that the attorney’s fees are not equitable and just
under the UDJA or the Texas Trust Code, that the attorney’s fees are not reasonable
and necessary under the UDJA or the Texas Trust Code, and that the attorney’s fees
are not properly segregated and included attorney’s fees that were not recoverable.
Exhibit 2 was admitted at trial over Plaintiff’s objections.
Stilwell testified that the Defendants pleaded two different bases for
attorney’s fees in this suit. The attorney’s fees were sought under section 37.009 of
the Texas Civil Practice and Remedies Code (the UDJA) and also section 114.064
of the Texas Property Code (the Texas Trust Act), and the Defendants argued that
Exhibit 2 would support either theory for a recovery of fees. Exhibit 2 included
invoices throughout the case that noted which fees related to which claims, itemized
the legal tasks, who completed the task, and the time and fee for the task.
Stilwell testified with respect to the factors that are required to be considered
related to the reasonableness and necessity of his fees: time and labor involved, the
novelty and difficulty of the questions involved, and the skill required to perform the
legal services properly. Stilwell testified to his hourly rate, his associates’ hourly
rate, and his staff’s hourly rate, and explained their level of experience and that they
charge for actual time expended at rates that are reasonable for the jurisdiction.
32
According to Stilwell, the time and labor for the services have been documented on
the invoices and summarized on exhibits admitted. Stilwell explained the substantive
issues involved in the case and how that affected hourly rates charged. According to
Stilwell, the hourly rates charged by him, his associates, and staff are reasonable for
each person’s respective skill level and in line with what is customarily charged
locally. Stilwell testified that the fees were reasonable and necessary in light of the
following: that Eaker was unsuccessful in her claims, Eaker should not have brought
the specific claim in the first place, Eaker sued not only Stilwell’s clients but also
him and his law firm, the fact that the court already awarded fees for Stilwell and his
firm’s defense in a Rule 91A hearing for plaintiff bringing a baseless cause of action
“is a factor that the court should be aware of in understanding the kinds of claims
that have been brought and the lengths that [Eaker] went to in bringing them[,]” that
Eaker brought “what felt like a never ending set of changes in the petition. . . . [a]nd
every time we got claims knocked out on summary judgment, there were a new
round of claims thrown into the lawsuit [].” Stilwell testified that Maria and Eaker
sued his clients in two prior suits, that this was the third lawsuit, and that Eaker has
filed a fourth matter, and that (except for a courtesy discount he gave his clients that
he has also extended to Eaker in asking for fees) he did not change his rates. Stilwell
testified that his resume which was admitted into evidence reflects his honors,
education, and experience. According to Stilwell, it is his opinion that the reasonable
33
fee for the necessary services and expenses that the Defendants incurred in the case
through trial was $86,883.10 and that the reasonable fees and necessary services and
expenses the Defendants incurred in the court of appeals for the past premature
appeal on which the Defendants prevailed was $1,735.29. Stilwell also testified to
the following potential additional reasonable and necessary fees: $15,000 if a party
files a petition for review to the Supreme Court, $15,000 if merit briefings are
granted by the Texas Supreme Court, and $10,000 if oral argument are granted by
the Texas Supreme Court.
As to segregation of fees, Stillwell testified as follows:
[I]t is my testimony that the invoices in Exhibit 2 contain work
that is either on claims for which recovery is allowed in this case, the
declaratory judgment act and the trust act, or is for discrete legal
services advancing both recoverable and unrecoverable claims, not
requiring segregation. Save and except for those matters denoted in the
invoices in my handwriting in red ink and the invoices that I have line-
itemed in Exhibit 1 which were for tasks on matters for which fees
cannot be recovered and were not also advancing the declaratory
judgment act claim.
And additionally, the green ink items that are recoverable but are
separately categorized because they related to a premature appeal
before the court of appeals which has been completed in favor of my
clients.
So the various iterations of the plaintiff’s petition in this matter
contain both breach of contract claims and other claims but also sought
as many as 15 different declarations about the very same contract. The
task described on the invoices in some instances were necessary for the
declarations in the declaratory judgment had been the sole claim in the
suit. And there were other claims in discrete tasks that are identified in
the invoices that were for the contract claim but also advance the
defense of one or more of the declarations sought in the petition. A good
34
example of that would be the depositions that were taken of my client
and the depositions of the annuity contract representative in this case.
Had the sole claims in the case been on the declaratory judgment,
we would have had to take those depositions and the time would have
been recoverable and the fact that there were also matters discussed by
the plaintiff in the case relating to the breach of contract claims does
not make them unrecoverable. I would have had to attend the
depositions whether there was a breach of contract claim or not, and I
could not have known in advance exactly what time in the deposition
[plaintiff’s counsel] would have been asking breach of contract claims
or matters that were only on breach of contract and not also related to
the declaratory judgment act.
The supreme court in the Chapa case said very specifically that
depositions are among those items that frequently advance both a[n]
unrecoverable and recoverable claim and which can be recovered under
the standard of the court.
On cross-examination, Stilwell further testified:
There are some [of] the services that are described in Exhibit 2 which
were solely on the declaratory judgment. And a good example[] of that,
where I think there were three options for summary judgment on the
declaratory judgment action case. Those were solely on declaratory
judgment. They didn’t advance multiple causes of action, straight up,
just on declaratory judgment, absolutely recoverable under the Chapa
standard.
Second, there were discrete services that were outlined in Exhibit
2 that advanced the work on the declaratory judgment case, but they
have also advanced the defense of the breach of contract case. . . . And
so they are also those items in Exhibit 2 which I have not segregated
out because the Chapa standard said specifically that you do not need
to segregate out.
Stilwell testified he segregated out fee entries in red ink solely for the breach of
contract claim and did not ask for recovery of those fees, but that he sought recovery
for matters on both breach of contract and declaratory judgment as allowed under
Chapa—advancing both a claim for which attorney’s fees are recoverable and a
35
claim for which attorney’s fees are not recoverable. Stilwell explained that he also
conservatively segregated out entries having to do with breach of fiduciary duty and
gross negligence even though his opinion was that he could recover those fees as
well under the Texas Trust Act.
After Eaker presented no evidence at trial as to her claim for attorney’s fees
for her UDJA claim, the trial court granted Defendants’ motion for a directed verdict
and ruled that Plaintiff should take nothing on her claim for attorney’s fees under the
UDJA.
The trial court entered findings of fact and conclusions of law regarding the
attorney’s fees. In a bench trial, such findings and conclusions have the same force
and dignity as a jury’s verdict. See Anderson v. City of Seven Points, 806 S.W.2d
791, 794 (Tex. 1991). The trial court’s Findings of Fact and Conclusions of Law
included the following regarding attorney’s fees, in relevant part:
FINDINGS OF FACT:
....
[] Both Plaintiff and Defendant[s] requested recovery of their attorneys’
fees under the UDJA (specifically, Texas Civil Practice and Remedies
Code, Section 37.009).
[] Plaintiff did not put on any evidence or regarding the amount,
reasonableness, or necessity of any attorney’s fees incurred by Plaintiff.
[] Defendants also plead[ed] for recovery of attorneys’ fees under Texas
Trust Act (codified in the Texas Property Code) section 114.064.
36
[] Defendants put on the testimony of James H. Stilwell, and offered 3
exhibits which were admitted (invoices, a fees summary chart, and the
CV/resume of James H. Stilwell) supporting Defendants’ attorneys’
fees claim. Stilwell’s testimony, in conjunction with the three exhibits
addressed each of the factors set forth in Tex. Disc. R. Prof’l Conduct
1.04(b) and Arthur Anderson & Co. v. Perry Equip. Corp., 945 S.W.2d
812 (Tex. 1997).
[] Defendants also offered evidence through Stilwell’s testimony and
the invoices and fees-summary-chart exhibits regarding the segregation
out of attorneys’ fees for discrete legal tasks solely for causes of action
for which fees are not recoverable. Defendants also offered evidence
through testimony and the invoices and fees summary chart exhibits
regarding the discrete legal tasks which were either for causes of action
for which fees are recoverable, or which advanced claims or defenses
on both recoverable and non-recoverable causes of action.
[] Defendants segregated the fees for which they sought recovery.
[] The testimony and evidence supported the reasonableness, necessity,
and amount of the attorneys’ fees incurred through trial and for a past
completed, premature appeal filed by Plaintiff which Defendants were
successful in having dismissed. The testimony and evidence also
supported the reasonableness, necessity, and amount of attorneys’ fees,
if required, to be incurred on appeal at various stages of appeal.
[] Based on the testimony and evidence, Defendants’ attorneys’ fees for
defending the UDJA claims herein and defending the proceeding
involving the Co-Trustees and Trust are both reasonable and necessary.
[] Defendant Co-Trustees and the Trust incurred $86,883.10 in
reasonable and necessary attorneys’ fees through time of trial.
[] Defendant Co-Trustees and the Trust incurred $1,375.29 in
reasonable and necessary attorneys’ fees for a past, premature appeal
filed by Plaintiff, which Defendants were successful in having
dismissed.
....
37
[] Defendants provided testimony regarding why awarding attorneys’
fees to Defendants would be equitable and just in this matter, including
the fact that this is the third lawsuit that [Eaker] or her sister has brought
against Joseph and John Mangiameli over Jole Eaker’s estate and trust;
that Jole Eaker did not want [Eaker] to handle Jole’s estate or trust; that
Jole did want John and Joseph to handle her estate and trust; that John
and Joseph as Co-Trustees fully complied with the terms of the
mediated Settlement Agreement and did not breach it; and that [Eaker]
brought an ever-changing set of claims in this lawsuit (including against
her opposing counsel and her opposing counsel’s law firm), modifying
her claims each time Co-Trustees John & Joseph had motions for
summary judgment pending. Additionally, although Plaintiff had not
received any payouts from the annuity purchased by the Trust as of the
time of trial, as reflected in one of Plaintiff’s exhibits, the annuity
advisor recommended no payouts for a 3 year period which has not
fully elapsed; and Plaintiff received other compensation in the
settlement beyond any future annuity payouts, including a house,
assignment of her of a sizeable note held by the Trust providing her an
income stream, and personal property. Defendants prevailed on all
claims.
[] It is equitable and just to award recovery of reasonable and necessary
attorneys’ fees to Defendants and would not be equitable or just to
award recovery of attorneys’ fees to Plaintiff.
[] Defendants requested recovery of their costs of court and should
recover same.
[] After Plaintiff had rested its case-in-chief, Defendants moved for a
Directed Verdict on Plaintiff’s claims for recovery of attorneys’ fees,
which Motion was granted.
[] The court reduced the amount of reasonable and necessary attorney
fees requested a[s] follows, as the court finds that these amounts were
solely applicable to the resolution of the breach of contract claim.
a. 11/26/18: $1,330.00
b. 11/27/18: $1,470.00
c. 11/27/18: $175.00
d. 11/27/18: $12.50
e. 11/30/18: $275.00
38
f. 11/30/18: $700.00
CONCLUSIONS OF LAW
....
[] Section 37.009 of the UDJA allows the Court to award costs and
reasonable and necessary attorneys’ fees as are equitable and just.
[] The Court may give a fee award to either party in a UDJA case. MBM
Fin. Corp. v. Woodlands Oper. Co., 292 S.W.3d 660, 669 (Tex. 2009).
....
[] Texas Property Code Section 114.064 (part of the Texas Trust Act)
provides that in any proceeding under the Trust Act, the Court may
award costs and reasonable and necessary attorneys’ fees as are
equitable and just.
[] Plaintiff’s claims against the Co-Trustees and Trust are proceedings
under the Trust Act. See Hatchar v. Hatchar, 153 S.W.3d 138, 141-144
(Tex. App.—San Antonio, 2004) (Awarding fees under Section
114.064 of the Texas Property Code in a case involving allegations
regarding breach of fiduciary duty by a trustee); and Lyco Acquisition
1984 Ltd. Partnership v. First Nat’l Bank, 860 S.W.2d 117, 120 (Tex.
App.—Amarillo, 1993) (Awarding fees under Section 114.064 of the
Texas Property Code in a case involving a negligence claim and a
conversion claim against a bank acting as a trustee and finding such
claims against the trustee constituted a proceeding under the Trust Act
for which fees could be awarded).
[] Tony Gullo Motors, I, L.P. v. Chapa, 212 S.W.3d 299, 313-14 (Tex.
2006) specifies that attorneys’ fees must be segregated between time on
claims for which fees can be recovered, and time on claims for which
fees cannot be recovered; and also provides that when legal services
advance both a recoverable and unrecoverable claim those fees need
not be segregated.
[] Defendants segregated the fees for which they sought recovery.
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[] It is equitable and just to award reasonable and necessary attorney[’]s
fees and costs to Defendants.
[] Plaintiff did not offer any evidence or provide any witness testimony
to support recovery of any attorneys’ fees incurred by Plaintiff,
including providing no testimony and no exhibits as to the amount of
fees incurred by Plaintiff.
[] A Directed Verdict (or Motion for Judgment in a non-jury trial) is
proper when the evidence does not raise a fact issue on a material issue
in the suit. []
[] After Plaintiff had rested its case-in-chief, Defendants moved for a
Directed Verdict (also called a Motion for Judgment in a non-jury trial)
on Plaintiff’s claims for recovery of attorneys’ fees, which Motion was
proper and granted.
To the extent Eaker argues that the Defendants are not entitled to attorney’s
fees under Chapter 38, Stilwell testified at trial that the Defendants were not seeking
recovery of attorney’s fees under Chapter 38. Also, to the extent that Eaker argues
that the Defendants are not entitled to recover attorney’s fees under the Texas Trust
Act in the Property Code, Stilwell testified that the $86,883.10 in fees was
reasonable and necessary and just and equitable attorney’s fees and that such amount
did not include any amount under the Texas Trust Act although he believed the
Defendants were entitled to those fees. The trial court in its findings found that
Defendant Co-Trustees and the Trust incurred that amount in reasonable and
necessary attorney’s fees through time of trial, and then adjusted that downward. On
this record, we conclude there was sufficient evidence to support the attorney’s fees
that the trial court awarded, that the fees were equitable and just and reasonable and
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necessary under Chapter 37, and the trial court did not abuse its discretion in
awarding Defendants the attorney’s fees. Also, because there was sufficient evidence
that Defendants properly segregated their fees, the trial court did not err in awarding
the fees. We overrule issues four and five.
Having overruled all of Appellant’s issues, we affirm the trial court’s
judgment.
AFFIRMED.
_________________________
LEANNE JOHNSON
Justice
Submitted on June 25, 2021
Opinion Delivered October 28, 2021
Before Kreger, Horton and Johnson, JJ.
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