The Texas Attorney’s Fee Blog*
In the musical Fiddler on the Roof, Teyve opens the play extolling the virtues of tradition and then spends the remainder struggling with and lamenting the erosion of those traditions. A similar scene has unfolded in Texas over the years with respect to the prosecution of attorneys’ fee claims. To Teyve’s likely chagrin, the “traditional method” for evidencing recoverable attorneys’ fees is dead—the Texas Supreme Court having put a proverbial nail in that coffin last year—and the lower courts are embracing the new standard. Texas attorneys should understand how times have changed.
Historically in Texas, attorneys could prove up attorneys’ fees by either the “traditional method” or the lodestar method.
Under the “traditional method,” the attorney proved up his or her fees by testifying to some, but not necessarily all, of the Arthur Andersen factors and merely stating that his or her total fees sought were reasonable and necessary. See Arthur Andersen & Co. v. Perry Equipment Corp., 945 S.W.2d 812, 818 (Tex. 1997). Arguably, this eliminated the need to testify about hours billed, rates charged, and specific tasks performed (although one might give general descriptions of work performed). Moreover, there was arguably no requirement to submit one’s detailed billing records.
Under lodestar, on the other hand, one must detail the hours spent on specific tasks and rates charged as well as proffer testimony regarding the Arthur Andersen or Johnson factors. See Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974).
The ability to prove up one’s attorneys’ fees in either of these two way led to substantial confusion by both courts and counsel, which led to traps for the unwary. We spend eight pages in our latest paper trying to explain the difference between the two methods, the benefits of each, how to prove up fees under each, and issues with each, including one section entitled “Beware Electing Lodestar without Knowing It.” See John Bridger & David Kirby, Prosecuting and Defending Attorneys’ Fees in Texas, at 40–48 (May 10, 2019).
Without struggle or lament, the Texas Supreme Court effectively killed (or, perhaps more correctly, administered the Coup de Grace to) the “traditional method” in Rohrmoos Venture v. UTSW DVA Healthcare, LLP. See 578 S.W.3d 469 (Tex. 2019). While following binding precedent is expected, it doesn’t always work out in practice. For a discussion regarding the confusion that still reigns concerning the Texas Supreme Court’s modification of the rules for segregating fees pronounced in Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299 (Tex. 2006), see Section I of our paper.
However, here, the lower courts seem to have embraced this simple, straightforward, bright-line standard. See, e.g., Jardon v. Pfister, No. 08-17-00183-CV, 2019 Tex. App. LEXIS 10918, *52–60 (Tex. App.—El Paso December 17, 2019, no pet. h.); Goehrs v. U.S. Specialty Ins. Co., NO. 14-18-00240-CV, 2019 Tex. App. LEXIS 11218, *13–16 (Tex. App.—Houston [14th Dist.] December 31, 2019, no pet. h.) (mem. op.); Shouldice v. Van Hamersveld, NO. 09-18-00355-CV, 2020 Tex. App. LEXIS 622, *14–19 (Tex. App.—Beaumont January 23, 2020, no pet. h.) (mem. op.).
In Jardon, the El Paso Court of Appeals held that the Father’s attorney failed to meet Rohrmoos Venture’s requirement to use lodestar by giving a general narrative of time spent supplemented by two exhibits: an Attorneys’ Fees Summary (four lines) and a “breakdown” of time described in his narrative (a chart, which is quoted in the decision, showing total hours worked per month by attorney and by paralegal with a summation of the overall total hours multiplied by hourly rates). See 2019 Tex. App. LEXIS 10918, *52–60. When asked on cross-examination for a further breakdown of his time, counsel responded: “Don’t need one. Don’t have one.” [Note: A really bad answer.] Fortunately, as Rohrmoos Venture was decided during the pendency of the appeal, the El Paso Court of Appeals remanded the case for a redetermination of the Father’s attorneys’ fees.
In Goehrs v. U.S. Specialty Ins. Co., despite offering a 12 page attorneys’ fees affidavit (which was controverted by Goehrs’ attorney), the Houston Fourteenth Court of Appeals also found that U.S. Specialty Insurance Company’s counsel failed to meet the lodestar standard in Rohrmoos Venture. The insurer’s counsel’s testimony provided only a narrative stating total hours, rates, and generally what his team did. The court specifically noted that this evidence “did not present time records or otherwise substantiate the specific tasks performed, the time required for those tasks, and the rate charged by each person performing the work.” 2019 Tex. App. LEXIS 11218, at *17. Once again, the prevailing counsel was saved by remand.
Do not be fooled by the line in Rohrmoos Venture that contemporaneous billing records are not required, merely “strongly encouraged.” See 578 S.W. 3d at 502. You better have some record that details all the work that you are seeking. You push the envelope of what is acceptable at your own risk.
Finally, lodestar applies not only to your pre-trial and trial fees, but also to your appellate fees. See Shouldice, 2020 Tex. App. LEXIS 622 at *17–18. While counsel provided his invoices and a summary sheet, which together had the necessary lodestar information, he did not provide any analysis of the number of expected hours or tasks necessary to conduct or defend an appeal. The court merely mentioned this and did not elucidate what would suffice.
So, what practice pointers do we derive from these cases:
- Do not attempt to prove up your attorneys’ fees by the “traditional method.”
- Comply fully with the lodestar standard. For a good discussion of the loadstar standard see either Rohrmoos Venture, 578 S.W. 3d at 497–501 or our paper at Section H.3.
- Always keep and introduce detailed contemporaneous billing records.
- Conversely, object early and often (right down to the last post-trial motion) if your opposing party attempts to use the traditional method or fails to follow lodestar.
*The Texas Attorney’s Fee Blog is intended to be a periodic update for Texas litigators with respect to prosecuting and defending attorney’s fee claims.