Phoneternet, LLC and Adam Alfia v. Drawbridge Design

Affirm in part, Reverse and Render in part; Opinion Filed July 3, 2018.
In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-17-00890-CV
PHONETERNET, LLC AND ADAM ALFIA, Appellants
V.
DRAWBRIDGE DESIGN, Appellee
On Appeal from the County Court at Law No. 4
Dallas County, Texas
Trial Court Cause No. CC-16-04591-D
MEMORANDUM OPINION
Before Justices Lang, Myers, and Stoddart
Opinion by Justice Lang
Phoneternet, L.L.C. and Adam Alfia appeal the trial court’s judgment in favor of
Drawbridge Design and against Alfia, in his individual capacity, and Phoneternet, L.L.C., jointly
and severally, for breach of contract in the amount of $5,504.00 and $12,000.00 in attorney fees.
In two issues on appeal, Phoneternet L.L.C. and Alfia argue the trial court erred in denying their
motion for new trial because (1) the trial court erred in granting judgment against Alfia in his
individual capacity and (2) the trial court erred in holding Phoneternet, L.L.C. liable for attorney
fees. We decide against appellants on their first issue and in favor of them on their second issue.
Accordingly, the trial court’s judgment is affirmed in part and reversed and rendered in part.
I. Factual and Procedural Background
Kimberlie Miller, the owner and sole proprietor of Drawbridge Design, testified that after
obtaining Adam Alfia’s approval she created and emailed to Adam Alfia a written estimate,
referred to as a “service estimate,” for Drawbridge Design to perform design services. Alfia signed
and dated the service estimate and “returned it back” to Miller. Then, Miller began performing
work. Alfia’s signature did not reference any representative capacity for any entity. At the time
Miller sent the service estimate to Alfia regarding the design services, Miller testified she believed
she was providing the service estimate to Alfia personally. Alfia testified that when he “entered
into the service estimate [he] signed,” he was not signing the service estimate in his individual
capacity. According to Alfia, he signed the service estimate on behalf of Maestro, which is a
“personal assistant service” and a “DBA of Phoneternet, LLC.”
The service estimate was admitted into evidence at trial. It is undisputed this service
estimate is the contract that is the subject of this litigation. The service estimate is a one page
document on Drawbridge Design’s letterhead set out in the form of a memorandum. It is addressed
“To: Adam Alfia.” Under Alfia’s name, the word “Maestro” appears, and under the word
“Maestro” an address appears. At the bottom of the service estimate, the words “[a]pproved by”
appear above a signature line. The signature line shows Alfia’s signature. “Maestro” does not
appear on the signature line. The words “Phoneternet, L.L.C.” do not appear anywhere on the
service estimate.
Following a bench trial, the trial court rendered judgment for Drawbridge Designs against
Alfia, individually, and Phoneternet, L.L.C. (d/b/a/ as “Maestro”), jointly and severally, in the
amount of $5,504.00 in damages and attorney’s fees in the amount of $12,000.00. Appellants then
filed a motion for new trial that was denied by operation of law.
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II. Standard of Review
We review a trial court's denial of a motion for new trial and award of attorney’s fees under
an abuse of discretion standard. El Dorado Motors, Inc. v. Koch, 168 S.W.3d 360, 368 (Tex.
App.—Dallas 2005, no pet.). Under this standard, we may not overrule the trial court's decision
unless the trial court acted unreasonably or in an arbitrary manner, without reference to guiding
rules or principles. Beaumont Bank, N.A. v. Buller, 806 S.W.2d 223, 226 (Tex. 1991). “A trial
court does not abuse its discretion if some evidence of a substantive and probative character exists
to support the trial court’s decision.” In re S.E.K., 294 S.W.3d 926, 930 (Tex. App.—Dallas 2009,
pet. denied).
Review of a trial court's action under the abuse of discretion standard is a question of
law. Id. Legal and factual sufficiency of the evidence are relevant factors to consider when
determining whether the trial court abused its discretion. Pickens v. Pickens, 62 S.W.3d 212, 214
(Tex. App.—Dallas 2001, pet. denied); Dunn v. Dunn, 177 S.W.3d 393, 396 (Tex. App.—Houston
[1st Dist.] 2005, pet. denied).
III. Denial of Motion for New Trial
A. Applicable Law
It is well-settled that the law does not presume agency. Sw. Bell Media, Inc. v. Trepper,
784 S.W.2d 68, 71 (Tex. App.—Dallas 1989, no writ). When an agent seeks to avoid personal
liability on a contract he signs, it is his duty to disclose that he is acting in a representative capacity
and the identity of his principal as “the person dealt with is not bound to inquire whether or not
the agent is acting as such for another.” Trepper, 784 S.W.2d at 71–72; see also Wright Grp.
Architects-Planners, P.L.L.C. v. Pierce, 343 S.W.3d 196, 201 (Tex. App.—Dallas 2011)
(concluding “[i]t was not [appellee’s] duty to inquire or discover the principal for whom
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[appellant] allegedly acted”); see also Latch v. Gratty, Inc., 107 S.W.3d 543, 546 (Tex. 2003) (per
curiam). “When an individual signs a contract without indicating that he is signing in a
representative capacity, he is liable on the contract.” Pierce, 343 S.W.3d at 201. “If [a] contract
clearly shows on its face that it is the obligation of the person who signed it, parol evidence is
inadmissible to show that the person intended only to bind his principal.” Id at 200.
B. Application of the Law to the Facts
In their first issue, appellants assert “the trial court erred in entering judgment against Alfia
individually” because “there is essentially no evidence in the record showing Alfia as the proper
party” to the service estimate. In this case, Alfia signed the service estimate using his name and
did not insert a company or corporate name showing he was an agent. Drawbridge Design was not
bound to “inquire or discover” the principal for whom Alfia allegedly acted. See Pierce, 343
S.W.3d at 201; see also Trepper, 784 S.W.2d at 71–72, See also Lake v. Premier Transp., 246
S.W.3d 167, 171 (Tex. App.—Tyler 2007, no pet.). We conclude on its face the service estimate
shows Alfia did not sign in a representative capacity. Therefore, the trial court did not err in
concluding Adam Alfia, individually, was liable to Drawbridge Design. We decide against
appellants on their first issue.
IV. Attorney Fees
A. Applicable Law
Texas follows the American Rule, which provides that litigants may recover attorneys' fees
only if specifically provided for by statute or contract. See Epps v. Fowler, 351 S.W.3d 862, 865
(Tex. 2011); Choice! Power, L.P. v. Feeley, No. 01-15-00821-CV, 2016 WL 4151041, at *8 (Tex.
App.—Houston [1st Dist.] Aug. 4, 2016, no pet. h.). Section 38.001 of the Texas Civil Practice
and Remedies Code authorizes an award of attorneys' fees for certain enumerated classes of claims
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brought by a “person” against “an individual or corporation.” See TEX. CIV. PRAC. & REM. CODE
ANN. § 38.001 (West 2015); Choice!, 2016 WL 4151041, at *8. Under the plain language
of section 38.001, a trial court cannot order limited liability partnerships (L.L.P.), limited liability
companies (L.L.C.), or limited partnerships (L.P.) to pay attorneys' fees. See Choice!, 2016 WL
4151041, at *11 (section 38.001 does not permit recovery against an L.P.); Alta Mesa Holdings,
L.P. v. Ives, 488 S.W.3d 438, 452–55 (Tex. App.—Houston [14th Dist.] 2016, pet. denied) (section
38.001 does not permit recovery against an L.L.C.). The availability of attorneys' fees under a
particular statute is a question of law for the court. See Fleming & Assocs., L.L.P. v. Barton, 425
S.W.3d 560, 574 (Tex. App.—Houston [1st Dist.] 2014, pet. denied).
B. Application of the Law to the Facts
In their second issue, appellants argue “limited liability companies such as Phoneternet,
LLC cannot be held liable for attorney fees” and therefore they “request[] the court set aside the
award of fees against [Phoneternet LLC].” Drawbridge Design does not dispute that Phoneternet
L.L.C. is a limited liability company. Rather, it argues that because the court “awarded fees against
both the LLC and Alfia, jointly and severally” the trial court “did not act unreasonably when
entering judgment for attorneys’ fees against both [a]ppellants.” However, Drawbridge Design
does not cite any case law to support its contention and we find none. We conclude section 38.001
of the Texas Civil Practice and Remedies Code does not permit recovery of attorney fees against
a limited liability company. See Alta Mesa Holdings, 488 S.W.3d 438, 452–55. The trial court
erred in awarding attorney’s fees against Phoneternet, L.L.C. We decide in favor of appellants on
their second issue.
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V. Conclusion
For the above reasons, we conclude the trial court did not err by not granting the motion
for new trial as to Adam Alfia’s liability in his individual capacity. The judgment against Alfia in
his individual capacity as to the damages and attorney’s fees awarded is affirmed. However, we
conclude the trial court erred in not granting the motion for new trial as to the award of attorney
fees to Drawbridge Design against Phoneternet, L.L.C. Accordingly, we reverse the award of
attorney’s fees in Drawbridge Design’s favor against Phoneternet L.L.C. and render a judgment
that Drawbridge Design recover no attorney fees against Phoneternet, L.L.C. In all other respects
the trial court’s judgment is affirmed.
/Douglas S. Lang/
DOUGLAS S. LANG
JUSTICE
170890F.P05
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Court of Appeals
Fifth District of Texas at Dallas
JUDGMENT
PHONETERNET, LLC AND ADAM On Appeal from the County Court at Law
ALFIA, Appellants No. 4, Dallas County, Texas
Trial Court Cause No. CC-16-04591-D.
No. 05-17-00890-CV V. Opinion delivered by Justice Lang. Justice
Myers and Stoddart participating.
DRAWBRIDGE DESIGN, Appellee
In accordance with this Court’s opinion of this date, the judgment of the trial court
against Adam Alfia in his individual capacity as to the damages and attorney’s fees awarded is
AFFIRMED. We REVERSE that portion of the trial court's judgment that awards attorney’s
fees in Drawbridge Design’s favor against Phoneternet, L.L.C. We RENDER a judgment that
Drawbridge Design recover no attorney fees against Phoneternet, L.L.C. In all other respects,
the trial court's judgment is AFFIRMED.
Judgment entered this 3rd day of July, 2018.
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