Complex commercial litigation is time consuming, risky, and resource draining. Attorney’s fees are a significant factor in determining whether to pursue a claim. Legal strategy and case management decisions often are influenced by whether the opposing party has a contractual or statutory right to recover legal fees. Attorney’s fees also play a role in deciding whether to settle a case and when. Sometimes cases end up going to trial because both sides have so much invested in attorney’s fees that neither side can afford to settle on a reasonable basis.

Given the significant costs of litigation, properly preserving the right to recover attorney’s fees is essential and begins in advance of a suit filing.

In Texas, the right to recover an award of attorney’s fees frequently is based on Chapter 38 of the Texas Civil Practice & Remedies Code. Chapter 38 allows an award of attorney’s fees on multiple types of claims, including claims for breach of contract.[1]  The procedural requirement of “presentment” must be satisfied as a condition to recover attorney’s fees and in general, cannot be waived or avoided.[2] Presentment requires the party seeking attorney’s fees to establish the following:

• plead and prevail on a claim for which recovery of attorney’s fees is permitted under section 38.001;
• be represented by an attorney;
• present the claim to the opposing party or its agent; and
• demonstrate that the opposing party did not tender payment within thirty days after the claim was presented.[3]

Courts strictly construe the presentment requirement; it is typically required even where the other party does not object to the failure to prove presentment.[4]

Although the presentment requirements are straightforward, some of the procedural steps may be missed in real life situations. For example, if there is a rush to file a suit, a plaintiff may skip presentment of the claim by failing to make a pre-suit demand. If this missed step is not caught and timely cured, a plaintiff could prevail at trial months or years down the road yet end up losing their claim for recovery of attorney’s fees. Several years ago, Shields Legal represented a client on the losing side of a summary judgment motion in a contract case. When the winning plaintiff attempted to prove-up its legal fees under Chapter 38, our team objected due to the lack of evidence of presentment of the claim.  The trial court agreed that the plaintiff had not satisfied the procedural requirements of Chapter 38 and denied recovery of the fees. The plaintiff was stunned to have won the case with no ability to recoup the legal fees it had incurred.  The unexpected denial of plaintiff’s attorney’s fees paved the way for a settlement avoiding a cross-appeal of the summary judgment ruling.

The right to recover attorney’s fees under Chapter 38 of the Texas Civil Practice & Remedies Code is valuable and must be preserved. Establishing proper presentment or the lack of proper presentment of a claim for attorney’s fees is the key to successfully obtaining or defeating an award under Chapter 38.

[1] Tex. Civ. Prac. & Rem. Code § 38.001.

[2] See Canine, Inc. v. Golla, 380 S.W.3d 189, 193 (Tex. App.—Dallas 2012, pet. denied) (citing Jim Howe Homes, Inc. v. Rogers, 818 S.W.2d 901, 905 n. 3 (Tex. App.—Austin 1991, no writ) (party seeking the award of attorney’s fees holds the burden to plead and prove presentment of the claim was made).

[3] 1/2 Price Checks Cashed v. United Auto. Ins. Co., 344 S.W.3d 378, 383, 54 Tex. Sup. Ct. J. 1264 (Tex. 2011) (citations omitted).

[4] See Jim Howe Homes, Inc. v. Rogers, 818 S.W.2d 901, 905 (Tex. App.—Austin 1991, no writ.) (“Because [the plaintiff] submitted no evidence that she presented her claim to the [defendant], we may not deem in favor of a judgment finding presentment.”)