“State law controls both the award of and the reasonableness of fees awarded where state law supplies the rule of decision.” Tech Pharmacy Servs., LLC v. Alixa Rx LLC, 298 F. Supp. 3d 892, 898 (E.D. Tex. 2017) (citing Mathis v. Exxon Corp., 302 F.3d 448, 461 (5th Cir. 2002)). Under Texas law, it is the movant that bears the burden of proof to show the reasonable fees they are owed. El Apple I, Ltd. v. Olivas, 370 S.W.3d 757, 760 (Tex. 2012) (citing Hensley v. Eckerhart, 461 U.S. 424, 437, 103 S. Ct. 1933, 76 L.Ed.2d 40 (1983) (applying substantive federal law because it is a federal cause of action, but also discussing Texas’s adoption of the lodestar method in other cases)). The movant may calculate their reasonable and necessary attorneys’ fees using either the lodestar method or the market value method. Id.; AMX Enters. v. Master Realty Corp., 283 S.W.3d 506, 515 (Tex. App.–Fort Worth 2009, no pet.). There are certain causes of action, which require the use of the lodestar calculation. City of Laredo v. Montano, 414 S.W.3d 731, 736 (Tex. 2013). However, even if it is not required, if the movant produces evidence of the lodestar calculation, courts typically apply the lodestar calculation. City of Laredo v. Montano, 414 S.W.3d 731, 736 (Tex. 2013).

Using the lodestar analysis, the computation of a reasonable attorneys’ fee award is a two-step process. El Apple I, 370 S.W.3d at 760, citing Dillard Dep’t Stores, Inc. v. Gonzales, 72 S.W.3d 398, 412 (Tex. App.–El Paso 2002, pet. denied). First, courts determine the reasonable hours spent by counsel and a reasonable hourly rate, and then multiply the two together to determine the base fee or lodestar. Id. , citing Gonzales, 72 S.W.3d at 412. Second, courts adjust the lodestar up or down based on certain relevant factors. Preston Expl. Co., LP v. GSP, LLC, No. CIV.A. H-08-3341, 2013 WL 3229678, at *3 (S.D. Tex. June 25, 2013) (citing La. Power & Light Co. v. Kellstrom, 50 F.3d 319, 324 (5th Cir.1995)); El Apple I, 370 S.W.3d at 76.

For Texas federal cases, the relevant lodestar factors are found in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974). The Johnson factors are: (1) the time and labor required; (2) the novelty and difficulty of issues; (3) the skill required; (4) the loss of other employment in taking the case; (5) the customary fee; (6) whether the fee is fixed or contingent; (7) the time limitations imposed by client or circumstances; (8) the amount involved and results obtained; (9) counsel’s experience, reputation, and ability; (10) case undesirability; (11) the nature and length of the relationship with the client; and (12) awards in similar cases. Gonzales, 72 S.W.3d at 412 (citing Johnson, 488 F.2d at 717–19). “If some of these factors are accounted for in the lodestar amount, they should not be considered when making adjustments.” Id. (citing Guity v. C.C.I. Enter., Co., 54 S.W.3d 526, 529 (Tex. App.–Houston [1st Dist.] 2001, no pet.). The lodestar is presumptively reasonable and should be modified only in exceptional cases. El Apple, 370 S.W.3d at 765.  The Texas Supreme Court noted that “exceptional circumstances may justify enhancements to the base lodestar, but no enhancements can be applied until the base lodestar is known.  Id. at 760.  

For Texas state cases, those factors are found in Arthur Andersen & Co. v. Perry Equip. Corp., 945 S.W.2d 812 (Tex. 1997).  The following non-exhaustive list of Anderson factors on the reasonableness of fees include: (1) the time and labor required, the novelty and difficulty of the questions involved, and the skill required to perform the legal service properly;(2) the likelihood that the acceptance of the particular employment will preclude other employment by the lawyer; (3) the fee customarily charged in the locality for similar legal services; (4) the amount involved and the results obtained; (5) the time limitations imposed by the client or by the circumstances; (6) the nature and length of the professional relationship with the client; (7) the experience, reputation, and ability of the lawyer or lawyers performing the services; and (8) whether the fee is fixed or contingent on results obtained or uncertainty of collection before the legal services have been rendered. Id. at 818. See also Tex. Disciplinary R. Prof. Conduct 1.04(b); El Apple I, 370 S.W.3d at 761. In its analysis of the lodestar method, the El Apple I Court acknowledged that it borrowed heavily from federal law and noted in appropriate cases, Texas courts should consider the far greater body of federal court experience with lodestar and fee shifting appropriate cases. El Apple I, 370 S.W.3d at 761.

The Andersen factors are not elements of proof, but rather general guidelines to be considered when determining the reasonableness of a fee. Bennigan’s Franchising Co. v. Team Irish, Inc., Civil Action No. 3:11–CV–0364–D, 2011 WL 5921540, at *3 (N.D. Tex. Nov. 28, 2011). Courts discussing the reasonableness of fees in connection with § 38.001 commonly reference, for example, the necessity of a fee. See, e.g., Long v. Griffin, 442 S.W.3d 253, 254–55 (Tex. 2014). “Many of these factors usually are subsumed within the initial calculation of hours reasonably expended at a reasonable hourly rate and should not be double-counted.” See Mid-Continent Cas. Co. v. Petroleum Sols., Inc., No. CV 4:09-0422, 2017 WL 6942658, at *5 (S.D. Tex. Sept. 21, 2017)  citing SCA Promotions, Inc. v. Yahoo! Inc., Civil Action No. 3:14-CV-957-O, 2016 WL 8223206, at *7 (S.D. Tex. Nov. 21, 2016) and Jason D.W. v. Houston Indep. Sch. Dist., 158 F.3d 205, 209 (5th Cir. 1998).

“[E]vidence of each of the Andersen factors is not required to support an award of attorney’s fees.” Arthur J. Gallagher & Co. v. Dieterich, 270 S.W.3d 695, 706 (Tex. App.—Dallas 2008, no pet.). “The court can also look at 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.” Jarvis v. Rocanville Corp., 298 S.W.3d 305, 318 (Tex .App.—Dallas 2009, pet. denied). “The lodestar method aims to provide a relatively objective measure of attorney’s fees,” and, to ensure this, trial courts “should obtain sufficient information to make a meaningful evaluation of the application for attorney’s fees.” El Apple I, 370 S.W.3d at 762.

Entitlement to Fees

 “Under Texas law, attorney’s fees are recoverable as a cost of collection only if authorized by statute or contract.” Tech Pharmacy Servs., LLC v. Alixa Rx LLC, 298 F. Supp. 3d 892, 899 (E.D. Tex. 2017) (first citing Richardson v. Wells Fargo Bank, N.A., 740 F.3d 1035, 1037 (5th Cir. 2014)) (and then citing In re Nalle Plastics Family Ltd. P’ship, 406 S.W.3d 168, 172 (Tex. 2013)). The Texas Civil Practice and Remedies Code 38.001 and the controlling written contract may entitle the prevailing  party to attorneys’ fees. See id.

The courts will first look to a party’s claim for damages according to the terms of the contract. Id.  at 899–900.  As an example of types of claims that are typically proved at trial as an element of damages,  the Advisory Committee Notes reference fees that are “sought under the terms of a contract.” Fed. R. Civ. P. 54(d), Advisory Committee Notes. However, the Advisory Committee Notes do not state that when a party is seeking damages under the terms of a contract, the party must always prove the attorneys’ fees at trial as an element of damages.  Id. As such, when a party is seeking attorneys’ fees under a contract, it is “[t]he language of the contract and the nature of the claim [that] are the dispositive factors concerning whether the fees are an element of damages or collateral litigation costs.” Richardson, 740 F.3d at 1039. The court looks to the language of the contract to determine whether the attorneys’ fees in this case are an element of damages or if they are collateral litigation costs. See id.

The contractual language is important to determine whether the claim is an element of damages- not whether the parties contemplated the possibility of a jury determining fees. See Fed. R. Civ. P. 54(d); Richardson, 740 F.3d at 1039. If the relevant agreement provides that the parties identified that attorneys’ fees “shall be in addition to any other relief that may be awarded,” and if additionally contemplated that the award may be sought “in a separate action,” such language indicates that the attorneys’ fees under the contract are expressly distinguished from the damages that a plaintiff  incurred from enforcing or interpreting the provisions of the contract.  Richardson, 740 F.3d at 1038. As such, “[t]he fees are not an ‘independent ground of recovery.’  Rather, they are costs of collection or costs incurred to” enforce or interpret the contract. Id. Because the attorneys’ fees are not compensation for the underlying harm, but are fees awarded for counsels’ services according to the terms of the controlling agreement, the attorneys’ fees are not an element of damages.  If the controlling agreement has such language, the request for attorneys’ fees must be made by motion according to the terms of Federal Rule of Civil Procedure 54.

Courts have long distinguished attorney’s fees from damages. See, e.g., Landa v. Obert, 45 Tex. 539, 544–45 (Tex.1876) (holding “that the decided weight of authority is against the proposition that the plaintiff has the right to claim his counsel fees … as a part of his damages”); Wm. Cameron & Co. v. Am. Surety Co. of N.Y., 55 S.W.2d 1032, 1035 (Tex. Comm’n App.1932) (noting that “[c]ounsel fees incurred in prosecuting a suit for or defending against a wrong are not ordinarily recoverable as actual damages”). Texas follows the American Rule, which provides that there can be no recovery of attorney’s fees unless authorized by contract or statute. Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 310–11 (Tex.2006). In accordance with that rule, the Legislature specifically designates when attorney’s fees may be recovered and, in doing so, distinguishes between fees and damages. Chapter 38 of the Texas Civil Practice and Remedies Code, the primary statute governing fees, allows a prevailing party to “recover reasonable attorney’s fees … in addition to the amount of a valid claim and costs, if the claim is for … an oral or written contract.” Tex. Civ. Prac. & Rem. Code Ann. § 38.001 (emphasis added).

To recover attorney’s fees under Chapter 38, a party must first prevail on the underlying claim and  recover damages. MBM Fin. Corp. v. Woodlands Operating Co., L.P., 292 S.W.3d 660, 666 (Tex. 2009). “The second requirement is implied from the statute’s language: for a fee recovery to be ‘in addition to the amount of a valid claim,’ the claimant must recover some amount on that claim.” Id. (emphasis in original); see also Shook v. Walden, 304 S.W.3d 910, 922 (Tex. App.—Austin 2010, no pet.), disapproved of on other grounds by In re Corral-Lerma, 451 S.W.3d 385 (Tex. 2014) (noting that the phrase “in addition to” suggests that the Legislature intended to differentiate between attorney’s fees, damages awarded for a valid claim, and costs).

Well-established case authority demonstrates the difference between compensation owed for an underlying harm and fees that may be awarded for counsel’s services. See, e.g., Huff v. Fid. Union Life Ins. Co., 312 S.W.2d 493, 501 (Tex. 1958) (holding that “attorney’s fees are not part of [a] demand or claim, but are in the nature of a penalty, or punishment for failure to pay a just debt”); Sherrick v. Wyland, 14 Tex. Civ. App. 299, 37 S.W. 345, 345 (1896, no writ) (noting that “fees of counsel, incurred in prosecuting a suit for or defending against a wrong, are not ordinarily recoverable as actual damages, because they are not considered proximate results of such wrong”).  The courts have  previously said that “suits cannot be maintained solely for the attorney’s fees; a client must gain something before attorney’s fees can be awarded.” MBM Fin., 292 S.W.3d at 663.

Even though attorneys’ fees are not typically viewed as compensatory damages, the notion that they can never be considered as such should not be entertained.  In re Nalle Plastics, 406 S.W.3d at 174–75 provides an example where Plaintiff’s underlying breach of contract suit against Nalle involved allegations of a failure to pay attorney’s fees for prior representation. While the attorney’s fees incurred in prosecuting the claim for attorneys’ fees by attorney Nalle would not constitute compensatory damages, the fees comprising the breach-of-contract damages are.  Accordingly, if the underlying suit concerns a claim for attorney’s fees as an element of damages, as with Porter’s claim for unpaid fees here, then those fees may properly be included in a judge or jury’s compensatory damages award. See, e.g., Akin, Gump, Strauss, Hauer & Feld, L.L.P. v. Nat’l Dev. & Research Corp., 299 S.W.3d 106, 111 (Tex. 2009) (holding that a party may recover damages for attorney’s fees paid in the underlying suit).

Segregation Requirement

Because attorney’s fees are recoverable only when authorized by statute or contract, a fee claimant must segregate attorney’s fees that are recoverable from those that are not. RSS MSBAM2014C17-TX HAH, LLC v. Houston Airport Hosp. LP, No. 01-21-00042-CV, 2024 WL 3995434, at *24 (Tex. App. Aug. 30, 2024) citing Kinsel v. Lindsey, 526 S.W.3d 411, 427 (Tex. 2017); Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 310–11 (Tex. 2006). When a lawsuit involves multiple parties, the fee claimant must also “segregate recoverable fees from those incurred by parties or on claims for which fees are not recoverable.” Clearview Props., L.P. v. Prop. Tex. SC One Corp., 287 S.W.3d 132, 143 (Tex. App.—Houston [14th Dist.] 2009, pet. denied); see also French v. Moore, 169 S.W.3d 1, 17 (Tex. App.—Houston [1st Dist.] 2004, no pet.) (“A party seeking attorney fees has a duty to segregate nonrecoverable fees from recoverable fees, and to segregate the fees owed by different parties.”).

The Texas Supreme Court has noted that “one approach trial courts have adopted instead of requiring retrospective itemizations by claim—allocating as a percentage of total fees the amount that likely would have been incurred even if the unrecoverable claims were not in the case—was entitled to the deferential review that factual determinations are ordinarily given by appellate courts.” Mid-Continent Cas. Co. v. Petroleum Sols., Inc., 2017 WL 6942658, at *14 (S.D. Tex. Sept. 21, 2017) (first citing Bear Ranch LLC v. Heartbrand Beef, Inc., Civil Action No. 6:12-CV-14, 2016 WL 3549483, at *4 (S.D. Tex. June 30, 2016) and then citing Tony Gullo Motors I, L.P., 212 S.W.3d at 314 & n.83)).

Texas law, however, recognizes that work on recoverable and unrecoverable claims may be “so intertwined” that they need not be segregated. Transcor Astra Grp. S.A. v. Petrobras Am., Inc., 650 S.W.3d 462, 482–83 (Tex. 2022) (“When the services for which the fees are incurred ‘advance both a recoverable and unrecoverable claim,’ such that the ‘fees are so intertwined that they need not be segregated.’”) (quoting Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d at 313-14. But intertwined facts do not make otherwise unrecoverable fees recoverable. Id. “[I]t 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.  In making this determination, “we [the courts]  do not look at the legal work as a whole but parse the work into component tasks, such as examining a pleading paragraph by paragraph to determine which ones relate to recoverable claims.” Clearview Props., 287 S.W.3d at 144; see Chapa, 212 S.W.3d at 313 (stating that when plaintiff’s attorneys were “drafting [plaintiff’s] pleadings relating to fraud, there is no question those fees were not recoverable”);  Chevron Phillips Chem. Co. LP v. Kingwood Crossroads, L.P., No. 09-14-00316-CV, 2017 WL 4182292, at *8 (Tex. App.—Beaumont Sept. 21, 2017, no pet.) (mem. op.) (reversing attorney’s fees award when unrecoverable fees for drafting paragraphs in petitions could be segregated); CA Partners v. Spears, 274 S.W.3d 51, 84 (Tex. App.—Houston [14th Dist.] 2008, pet. denied) (holding fee segregation required when claims for which fees were not recoverable required “drafting separate portions of [the appellee’s] pleading,” “separate legal research,” and “possibly separate discovery requests”); 7979 Airport Garage, L.L.C. v. Dollar Rent A Car Sys., Inc., 245 S.W.3d 488, 509 -510 (Tex. App.—Houston [14th Dist.] 2007, pet. denied) (determining that fees were unrecoverable for neither drafting paragraph of petition asserting claim for which fees were not recoverable nor for drafting two jury-charge questions related to that claim and reversing attorney’s fees award for failure to segregate those fees).[1]

The court and the  movant seeking attorney’s fees must determine if the same or substantially overlapping discrete legal services were required and used to pursue both claims, and whether any effort to segregate the work between the claims would be futile. Mid-Continent Cas. Co. v. Petroleum Sols., Inc., No. CV 4:09-0422, 2017 WL 6942658, at *15 (S.D. Tex. Sept. 21, 2017) (citing Bear Ranch, LLC v. Heartbrand Beef, Inc., No. 6:12-CV-14, 2016 WL 3549483, at *5 (S.D. Tex. June 30, 2016); cf. Tony Gullo Motors I, L.P., 212 S.W.3d at 313 (noting that claims may arise from intertwined facts but nonetheless be capable of segregation because not all of the plaintiff’s claims require the same research, discovery, proof or legal expertise).

However, “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. “[T]o meet a party’s burden to segregate its attorney[‘s] fees, it is sufficient to submit to the fact-finder testimony from a party’s attorney concerning the percentage of hours related to claims for which fees are not recoverable.” Sustainable Texas Oyster Res. Mgmt., L.L.C. v. Hannah Reef, Inc., 623 S.W.3d 851, 872 (Tex. App.—Houston [1st Dist.] 2020, pet. denied) (citing RM Crowe Prop. Servs. Co., L.P. v. Strategic Energy, L.L.C., 348 S.W.3d 444, 453 (Tex. App.—Dallas 2011, no pet.); Chapa, 212 S.W.3d at 314 & n.83;  and Young v. Dimension Homes, Inc., No. 01-14-00331-CV, 2016 WL 4536407, at *10 (Tex. App.—Houston [1st Dist.] Aug. 30, 2016, no pet.) (mem. op.) (“[A]n attorney can satisfy his evidentiary burden by presenting evidence of unsegregated attorney’s fees and a rough percentage of the amount attributable to the claims for which fees are not recoverable.”)(emphasis supplied).

The need to segregate attorney’s fees is a question of law, and the extent to which claims can or cannot be segregated is a mixed question of law and fact. Chapa, 212 S.W.3d at 312–13 (“how hard something was to discover and prove, how strongly it supported particular inferences or conclusions, how much difference it might make to the verdict, and a host of other details that include judgment and credibility questions about who had to do what and what it was worth” may render extent to which certain claims are subject to segregation a mixed question of law and fact (emphasis supplied). When a fee claimant fails to properly segregate the attorney’s fees, the appellate court will  remand the issue to the trial court for reconsideration. Kinsel, 526 S.W.3d at 428; Chapa, 212 S.W.3d at 314.

Attorneys Fees Are Recoverable for these Claims Under Texas Law.

Here is a non-exhaustive list of civil claims and statutes that allow the recovery of attorney’s fees under Texas law:

• Contract or Statute: Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 311 (Tex. 2006) (A party may recover attorney’s fees only when permitted by statute or contract).

• Breach of Contract: Ventling v. Johnson, 466 S.W.3d 143, 154 (Tex. 2015); Green Int’l, Inc. v. Solis, 951 S.W.2d 384, 390 (Tex. 1997) (To recover reasonable and necessary attorney’s fees under section 38.001, a party must prevail on a breach-of-contract claim and recover damages).

• Breach of Written Contract: Franklin v. Chatto, No. 02-23-00265-CV, 2024 WL 4377498, at *12 (Tex. App.—Fort Worth Oct. 3, 2024, no pet. h.) (interpreting Chapter 38 to authorize an award of attorneys’ fees when a party “successfully prosecutes a claim founded on … written contracts”; attorney’s fees are recoverable under breach of contract claims). 

• Breach of Oral Contract: Bair Chase Prop. Co., LLC v. S & K Dev. Co., 260 S.W.3d 133, 145 (Tex. App.—Austin 2008, pet. denied) (under Tex. Civ. Prac. & Rem. Code, §38.001, attorneys’ fees are recoverable for breach of written and oral contract; an award of attorney’s fees to a plaintiff recovering on a valid claim founded on a written or oral contract is mandatory, while a determination of the amount of a reasonable fee award is up to the trial court’s discretion) (emphasis supplied).  

• No Discretion: Trevino v. City of Pearland, 531 S.W.3d 290, 297 (Tex. App.—Houston [14th Dist.] 2017, no pet.) (Under section 38.001, the trial court has no discretion to deny attorney’s fees if there is proof of reasonable and necessary fees) (emphasis supplied).

• Liberally Construed: Tex. Civ. Prac. & Rem. Code Ann. § 38.005 (“This chapter shall be liberally construed to promote its underlying purposes.”)(emphasis supplied).

• Declaratory relief: Sustainable Texas Oyster Res. Mgmt., L.L.C. v. Hannah Reef, Inc, 623 S.W.3d 851, 872 (Tex. App.—Houston [1st Dist.] 2020, pet. denied) (claim for declaratory relief, for which attorney’s fees were recoverable).

• Indemnity: Odd Bergs Tankrederi A/S v. S/T Gulfspray, 650 F.2d 652, 654 (5th Cir. 1981) (Since the indemnitee is required to defend an action by an injured party because of the wrongdoing of the indemnitor and the indemnitor will be liable for any judgment, it is reasonable to require the indemnitor to bear the legal expenses necessarily incurred in that defense).

• Unconscionability in consumer lease: Tex. Bus. & Comm. Code Ann. § 2A.108(d) (shall be awarded to prevailing lessee, or to lessor if lessee is found to have brought or maintained groundless action).

• Enforce payment on instrument: Tex. Bus. & Com. Code Ann. § 3.305(e) (If instrument includes a statement under Tex. Bus. & Com. Code Ann. § 3.305, holder or transferee who is liable under statement to issuer, but who is not seller of goods or services, shall be entitled to full indemnity from seller for any liability incurred by holder or transferee that results from issuer’s claims or defenses against seller, plus reasonable attorney fees).

• Against issuer for wrongful dishonor, repudiation of obligation to pay, or demand presented under letter of credit: Tex. Bus. & Com. Code Ann. § 5.111(e) (Prevailing party may recover reasonable attorney fees and litigation expenses).

• Lost, stolen, or destroyed documents of title: Tex. Bus. & Com. Code Ann/ § 7.601(a) (Bailee may recover reasonable attorney fees and costs).

• By owner of property covered under forged, materially false, or groundless financing statement: Tex. Bus. & Com. Code Ann. § 9.5185(d) (successful Plaintiff may recover reasonable attorney fees and court costs).

• Covenants not to compete: Tex. Bus. & Com. Code Ann. § 15.51(c) (Fees to party defending action to enforce covenant are permissive, not mandatory).

• DTPA violation involving an annuity: Tex. Bus. & Com. Code Ann. § 17.49(h) (Plaintiff may recover actual damages, attorney fees, and court costs).

• Deceptive trade practices: Tex. Bus. & Com. Code Ann. § 17.50(c), (d)(Must be awarded to prevailing consumer. Prevailing defendant  must be awarded reasonable and necessary attorney fees if suit is found to be groundless in fact or law or brought in bad faith or for the purpose of harassment).

• Fraudulent transfer: Tex. Bus. & Com. Code Ann. § 24.013 (Court may award reasonable attorney fees and costs).

• Fraud in real-estate or stock transaction: Tex. Bus. & Com. Code Ann. § 27.01(e)(Party defrauded by false representation or false promise regarding real estate or stock may recover attorney fees, expert witness fees, and costs).

• Collection of civil penalty for violation of telephone-solicitation laws: Tex. Bus. & Com. Code Ann. § 302.302(c), (d)(Plaintiff bringing suit may recover attorneys’ fees, court costs, investigation costs, witness fees, and deposition expenses).

• Violation of Consumer Protection Against Computer Spyware Act: Tex. Bus. & Com. Code Ann. § 324.055(h) (Prevailing plaintiff is entitled to court costs, reasonable attorneys’ fees, reasonable expert fees, and other reasonable costs of litigation).

• Action to inspect records: Tex. Bus. Orgs. Code Ann. § 21.222(a) (Shareholder may recover any costs or expenses, including attorneys’ fees, incurred in enforcing right to examine records).

• Derivative proceedings: Tex. Bus. Org. Code Ann. § 21.561(a), (b)(1), (2) (Court may order corporation to pay prevailing party expenses, including attorneys’ fees, if court finds proceeding resulted in a substantial benefit to corporation. Tex. Bus. Org. Code Ann. § 21.561(b)(1). Plaintiff must pay if proceedings were instituted or maintained without reasonable cause or for an improper purpose. Tex. Bus. Org. Code Ann. § 21.561(b)(2)).

• Redemption of withdrawing partner’s interest:  Tex. Bus. Org. Code Ann. § 152.609(e) (Court may assess damages, including share of continuing business’s profits, expert fees, and expenses, and reasonable attorneys’ fees).

• Redemption of transferee’s partnership interest: Tex. Bus. Orgs. Code Ann. § 152.612(c) (Court may assess expert fees and expenses and reasonable attorneys’ fees against partnership).

• Sanctions for frivolous pleadings and claims: Tex. Civ. Prac. & Rem. Code Ann. § 9.012(e)(3) (Raised by motion of party or by court’s own motion). Tex. Civ. Prac. & Rem. Code Ann. § 9.012(a)

• Sanctions for frivolous pleadings and motions: Tex. Civ. Prac. & Rem. Code Ann. § 10.002(c) (Raised by motion of party or by court’s own motion). Tex. Civ. Prac. & Rem. Code Ann. § 10.002(a),(b).

• Dismissal of suit under Texas Citizens Participation Act: Tex. Civ. Prac. & Rem. Code Ann. § 27.009(a)(1) (If court orders dismissal, it must award costs and reasonable attorneys’ fees incurred in defending against suit).

• Dismissal of compulsory counterclaim under Texas Citizens Participation Act: Tex. Civ. Prac. & Rem. Code Ann. § 27.009(c) (If court orders dismissal of compulsory counterclaim and finds that counterclaim was frivolous or solely intended for delay, court may award reasonable attorneys’ fees incurred in defending against counterclaim).

• Motions to dismiss: Tex. Civ. Prac. & Rem. Code Ann. § 30.021 (Prevailing party in motion to dismiss may recover attorneys’ fees and costs, but does not apply to the state or other governmental entities).

• Collection of a judgment: Tex. Civ. Prac. & Rem. Code Ann. § 31.002(e) (Judgment creditor may be awarded costs and attorneys’ fees. Costs and attorneys’ fees are mandatory if judgment creditor is successful in obtaining turnover relief).

• Declaratory judgment: Tex. Civ. Prac. & Rem. Code Ann. § 37.009 (Court may award equitable and just fees and costs).

• Sworn account: Tex. Civ. Prac. & Rem. Code Ann. § 38.001(b)(7) (allows person to recover reasonable attorneys’ fee in addition to the amount awarded on plaintiff’s sworn account claim).

• Oral or written contract: Tex. Civ. Prac. & Rem. Code Ann. § 38.001(b)(8) (attorneys’ fees and costs recoverable in addition to the amount awarded on plaintiff’s breach of oral and written contract).

• Suit after rejected settlement offer: Tex. Civ. Prac. & Rem. Code Ann. § 42.004(a) (Rejecting party liable for litigation costs if judgment is significantly less than rejected settlement offer).

• Illegal wiretap or interception of electronic communication: Tex. Civ. Prac. & Rem. Code Ann. § 123.004(5) (Court may award reasonable attorneys’ fees and costs).

• Theft: Tex. Civ. Prac. & Rem. Code Ann. § 134.005(b) (Recoverable from person committing theft or from parent or other person who has the duty of control over a child who commits theft).

• Arbitration Award: Tex. Civ. Prac. & Rem. Code Ann. § 171.048(c) (mandatorily awarded by arbitrator if included in agreement to arbitrate or provided by law).

• Suit Against an unauthorized insurer or unauthorized person on a contract, agreement, or arrangement of insurance for failure to pay under terms of insurance contract, agreement, or arrangement: Tex. Ins. Code Ann. § 101.202(a) ( reasonable attorneys’ fees available if insurer or person failed to pay after 30-day notice period and failure to pay was vexatious and without reasonable cause. Failure to defend action is prima facie evidence that refusal to pay was unreasonable or vexatious). Tex. Ins. Code Ann. § 101.202(b).

• Violation of stay imposed by receivership court: Tex. Ins. Code Ann. § 443.008(k) (any willful violation of a stay may recover actual damages, including attorneys’ fees and costs).

• Receiver’s recovery of transferred property: Tex. Ins. Code Ann. § 443.207(d)(3) (If receiver successfully proves a claim to property or any part of property, receiver is entitled to recover judgment for costs, including attorneys’ fees).

• Unfair competition or practices: Tex. Ins. Code Ann. § 541.152 (Reasonable attorneys’ fees may be recovered by prevailing plaintiff if that party provides 60 days’ written notice stating specific complaint and amount of actual damages and expenses, including amount of attorney fees incurred. Tex. Ins. Code Ann. § 541.154.  Attorneys’ fees recoverable if court finds suit was groundless and brought in bad faith or for the purpose of harassment. Tex. Ins. Code Ann. § 541.153. Court may limit attorneys’ fees if trier of fact finds damages substantially similar to or less than a settlement offer. Tex. Ins. Code Ann. § 541.159.

• Failure to pay valid claim promptly: Tex. Ins. Code Ann. § 542.060(a),(c) (If suit is filed, attorneys’ fees are taxed as court costs. Tex. Ins. Code Ann. § 542.060(b)).

Attorneys’ Fees Are Not Recoverable For these Claims Under Texas Law.

Attorneys’ fees are not recoverable for the following civil claims under Texas common law: 

• Negligence: Gulf States Utilities Co. v. Low, 79 S.W.3d 561, 568 (Tex. 2002) (No statute provides for the recovery of attorneys’ fees in a negligence action).

• Fraud: Haden v. David J. Sacks, P.C., 332 S.W.3d 503, 519 (Tex. App.—Houston [1st Dist.] 2009, pet. denied) (“Attorneys’ fees are not recoverable as actual damages in fraud cases.”)

• Breach of Fiduciary Duty: Musquiz v. Marroquin, 124 S.W.3d 906, 913 (Tex. App.—Corpus Christi-Edinburg 2004, pet. denied) attorneys’ fees may not be awarded for a breach of fiduciary duty claim).

• Civil Conspiracy: Palacios v. Patel, No. 02-18-00119-CV, 2018 WL 2728441, at *4 (Tex. App.—Fort Worth June 7, 2018, no pet.) (mem. op.) (attorneys’ fees not recoverable for civil conspiracy).

• Tortious Interference: Friend v. Friend, No. 02-15-00166-CV, 2016 WL 7240596, at *2 (Tex. App.—Fort Worth Dec. 15, 2016, no pet.) (mem. op.) (attorneys’ fees not recoverable for tortious interference).

• Trespass to Try Titles:  I-10 Colony, Inc. v. Lee, 393 S.W.3d 467, 477 (Tex. App.—Houston [14th Dist.] 2012, pet. denied) (attorneys’ fees not recoverable in trespass-to-try-title action).

• Trespass to Try Title: Tex. Prop. Code Ann. § 22.001–.045 (Vernon 2000) (attorneys’ fees not recoverable under statutes governing trespass to try title).

• Garnishment Actions: Henry v. Ins. Co. of N. Am., 879 S.W.2d 366, 369 (Tex. App.—Houston [14th Dist.] 1994, no writ) (garnishment actions are not among the claims for which attorneys’ fees may be awarded pursuant to Section 38.001).

Billing Statements 

The submission of bills is an appropriate form of evidence to support a fee award, although they are not always necessary. Tech Pharmacy Servs., LLC v. Alixa Rx LLC, 298 F. Supp. 3d 892, 902 (E.D. Tex. 2017); Playboy Enters., Inc. v. Sanchez–Campuzano, No. M-01-226, 2012 WL 12877432, at *4 (S.D. Tex. Apr. 19, 2012) (citing Air Routing Int’l Corp. (Canada) v. Britannia Airways, Ltd., 150 S.W.3d 682, 692 (Tex. App.–Houston [14th Dist.] 2004, no pet.; El Apple I, 370 S.W.3d at 763; City of Laredo, 414 S.W.3d at 736. If bills are submitted, redaction is acceptable as long as the Court can meaningfully review the fee request. See Long, 442 S.W.3d at 255 (first citing El Apple I, 370 S.W.3d at 764; and then Randolph v. Dimension Films, 634 F.Supp.2d 779, 800 (S.D. Tex. 2009). Accordingly, the bills should provide proof of “the nature of the work, who performed the services and his rate, approximately when the services were performed, and the number of hours worked.” Brant Oilfield Mgmt. & Sales, Inc. v. Mountwest, Inc., No. 14-15-00240-CV, 2016 WL 3574669, at *5 (Tex. App.–Houston [14th Dist.] June 30, 2016, no pet.); accord Randolph, 634 F.Supp.2d at 800. Further, bills should be excluded as evidence if the redacted entry does “not provide sufficient information to classify and evaluate the activities and hours expended.” Randolph, 634 F.Supp.2d at 800. 

Affidavits

“Generally, the reasonable hourly rate for a particular community is established through affidavits of other attorneys practicing there.” Protradenet, LLC v. Predictive Profiles, Inc., No. 6:18-CV-38-ADA, 2022 WL 2078032, at *2 (W.D. Tex. June 9, 2022) (citing Tollett v. City of Kemah, 285 F.3d 357, 368 (5th Cir. 2002) (Plaintiff’s affidavit deemed sufficient evidence to support reasonableness of attorneys’ fees); Stancu v. Hyatt Cor./Hyatt Regency, Dallas, No. 3:17-cv-675, 2018 WL 5084912, at *5 (N.D. Tex. Oct. 18, 2018) (relying on only an attorney affidavit in determining reasonableness of rates);  Systemforward Am., Inc. v. Pick-A-Lock, Inc., No. SA-07-CA-126-OG, 2008 WL 11411853, at *3 (W.D. Tex. Jan. 14, 2008) (using a single attorney affidavit to determine reasonableness of attorney rate).

The affidavit or declaration of Plaintiff’s attorney is sufficient evidence to support award of attorneys’ fees to support Plaintiff’s claim for fees. See Juarez v. H & K Steel Erectors Enterprises, LLC, No. 4:22-CV-00169-O-BP, 2023 WL 2611038, at *2 (N.D. Tex. Mar. 23, 2023); Fuhrmann v. C & J Gray Invs. Partners, Ltd., No. 05-18-00683-CV, 2019 WL 3798181, at *4 (Tex. App. Aug. 13, 2019) (Plaintiff’s attorney’s uncontroverted affidavit as to number of hours that he worked, nature of work performed, his hourly rate, and segregation of recoverable and unrecoverable fees was sufficient to support plaintiff’s request for attorney’s fees submitted in support of summary judgment motion). 

In Texas state courts, a fee applicant is not required to provide evidence supporting the reasonableness of the requested hourly rates by referencing rates billed and paid in similar lawsuits, nor is more than an affidavit from the attorney performing the work necessary. However, such may be required for an attorneys’ fee award under federal law.  See, e.g., Blum v. Stenson, 465 U.S. 886, 895 n.1 (1984). Texas law requires only enough information within the lodestar framework to meaningfully assess whether the tasks and hours were reasonable and necessary. Mid-Continent Cas. Co. v. Petroleum Sols., Inc., No. CV 4:09-0422, 2017 WL 6942658, at *10 (S.D. Tex. Sept. 21, 2017) citing Long, 442 S.W.3d at 255 and El Apple I, 370 S.W.3d at 763; Hovanec v. Midwest Underground, Inc., Case No. 4:14–cv–409, 2015 WL 4082863, at *2 (E.D. Tex. June 23, 2015) (documentation to show reasonable hourly rate may take the form of an affidavit); but see SCA Promotions, Inc. v. Yahoo! Inc., Civil Action No. 3:14-CV-957-O, 2016 WL 8223206, at *7 (S.D. Tex. Nov. 21, 2016) (“… the burden is on the fee applicant to produce satisfactory evidence—in addition to the attorney’s own affidavits—that the requested rates are in line with those prevailing in the community….” (quoting Blum, U.S. at 895 n.11)). “Sufficient evidence includes, at a minimum, evidence ‘of the services performed, who performed them and at what hourly rate, when they were performed, and how much time the work required.’ ” Long v. Griffin, 442 S.W.3d 253, 254–55 (Tex. 2014)  citing El Apple I, 370 S.W.3d at 764. The billing invoices provided by a law firm typically and adequately constitute such evidence.

As stated previously, “[I]t is sufficient to submit to the fact-finder testimony  from a party’s attorney concerning the percentage of hours that related solely to a claim for which fees are not recoverable.” RM Crowe Prop. Co. v. Strategic Energy, L.L.C., 348 S.W.3d 444, 453 (Tex. App.–Dallas 2011, no pet.) (citing Tony Gullo Motors, 212 S.W.3d at 314 (“an opinion would have sufficed stating that, for example, 95 percent of their drafting time would have been necessary even if there had been no fraud claim.”(emphasis supplied)); Rialto Capital Advisors, LLC v. Lewis, No. 1:11-CV-698, 2013 WL 1701590, at *5 (E.D. Tex. Apr. 18, 2013) (citing Tex. Commerce Bank v. New, 3 S.W.3d 515, 517–18 (Tex. 1999); Chaparral Texas, L.P. v. W. Dale Morris, Inc., No. CIV.A. H-06-2468, 2009 WL 455282, at *8 (S.D. Tex. Feb. 23, 2009) amended, No. CIV.A. H-06-2468, 2009 WL 1810125 (S.D. Tex. June 23, 2009) (“Federal courts applying Chapa have used a percentage formula to reduce fees when the prevailing party did not adequately segregate time spent on successful and unsuccessful claims.”); Bear Ranch, 2016 WL 1588312, at *5 (in a breach of contract and post contract fraud claims, court noted that any attempt to segregate discovery work and trial work between contract and fraud claims would be futile; court required plaintiff to segregate fees relating to calculation of non-recoverable fraud damage model, portion of jury charge preparation for fraud and any fees for plaintiffs that were not a party to the controlling contract, and then was ask to propose a percentage of the remaining amount that it believed would have been incurred absent the unrecoverable claim); see also ATOM Instrument Corp. v. Petroleum Analyzer Co., L.P., 969 F.3d 210, 217 (5th Cir. 2020), as revised (Sept. 17, 2020) (citing Berryman’s S. Fork, Inc. v. J. Baxter Brinkmann Int’l Corp., 418 S.W.3d 172, 202 (Tex. App.—Dallas 2013, pet. denied)) (“To meet a party’s burden to segregate its attorneys’ fees, it is sufficient to submit to the fact-finder testimony from a party’s attorney concerning the percentage of hours” related to claims for which fees are not recoverable).

Determination of Reasonable Rates

In calculating an award of fees, courts must determine the “number of hours reasonably expended on the litigation” and then multiply them by a reasonable hourly rate. Hensley v. Eckerhart, 461 U.S. 424, 433(1983); accord Arbor Hill Concerned Citizens Neighborhood Ass’n v. Cnty. of Albany, 522 F.3d 182, 184 (2d Cir. 2008) (noting that a “reasonable hourly rate” is “what a reasonable, paying client would be willing to pay”); accord La. Power & Light Co. v. Kellstrom, 50 F.3d 319, 324 (5th Cir.), cert. denied, 516 U.S. 862 (1995).

In calculating an award of attorneys’ fees for the prevailing party,  the court must determine a reasonable rate, basing its decision on the ‘prevailing market rates in the relevant community.’ ” League of United Latin Am. Citizens No. 4552 (LULAC) v. Roscoe Indep. Sch. Dist., 119 F.3d 1228, 1234 (5th Cir. 1997) ” The “burden is on the applicant to produce satisfactory evidence … that the requested rates are in line with those prevailing in the community for similar services by lawyers of reasonably comparable skill, experience and reputation.” Blum, 465 U.S. at 895 n.11 (emphasis supplied); accord Farbotko v. Clinton Cnty., 433 F.3d 204, 208 (2nd Cir. 2005). The Fifth Circuit “has interpreted rates ‘prevailing in the community’ to mean what it says, namely that district courts are required to consider the local rates for similar work “in the community.” McClain v. Lufkin Indus., Inc., 649 F.3d 374, 381 (5th Cir. 2011). The relevant community is the judicial district in which the litigation occurred—here, Houston, in the Southern District of Texas. Bear Ranch, 2016 WL 3549483, at *5.

In the context of a motion for fees under § 38.001, courts employ a rebuttable presumption that the usual and customary fees are reasonable, see § 38.003, and may take judicial notice of the usual and customary attorneys’ fees and of the contents of the case file without receiving further evidence in a proceeding before the Court. See Tex. Civ. Prac. & Rem. Code Ann. § 38.004; Hartis v. Century Furn. Indus., Inc., 230 S.W.3d 723, 737-38 (Tex. App.—Houston [14th Dist.] 2007, no pet.) (“When a contract case is tried without a jury, the trial court may take judicial notice of (1) the contents of the file to estimate the work involved; and (2) the customary fee for the claim involved, which is presumed to be reasonable.”).

“The Court may also exercise its own expertise and judgment in evaluating the reasonableness of the rate.” New York Pizzeria, 2017 WL 1313759, at * 5 (citing Carroll v. Sanderson Farms, Inc., 2014 WL 549380, at *7 (S.D. Tex. 2014)); In re Marriage of C.A.S. & D.P.S., 405 S.W.3d 373, 387 (Tex. App.—Dallas 2013, no pet.) (stating that trial court need not hear evidence on every relevant factor to determine reasonable attorneys’ fees and holding that the court can look at the entire record and use the common knowledge of participants as lawyers and judges to decide reasonable fee); see also, NSEW Holdings LLC v. Wells Fargo Bank, N.A., 4:15–cv–828, 2017 WL 1030313, at *7 (E.D. Tex. Mar. 17, 2017); Hilton v. Exec. Self-Storage Assoc., Inc., No. H-06-2744, 2009 WL 1750121, at *9 (S.D. Tex. June 18, 2009); Kondos v. Allstate Lloyds, No. CIV.A. 1:03-CV-1440, 2005 WL 1004720, at *18 (E.D. Tex. Apr. 25, 2005); C.M. Asfahl Agency v. Tensor, Inc., 135 S.W.3d 768, 802 (Tex. App.–Houston [1st Dist.] 2004, no pet.); Aquila Sw. Pipeline, Inc. v. Harmony Expl., Inc., 48 S.W.3d 225, 241 (Tex. App.–San Antonio 2001, pet. denied); Matthiessen v. Schaefer, 897 S.W.2d 825, 827 (Tex. App.–San Antonio 1994), rev’d on other grounds, 915 S.W.2d 479 (Tex. 1995) ); Mesa Petroleum Co. v. Coniglio, 629 F.2d 1022, 1030 (5th Cir. 1980).

“To determine reasonable rates, the district court considers the attorneys’ regular rates as well as prevailing rates.” Protradenet, LLC v. Predictive Profiles, Inc., No. 6:18-CV-38-ADA, 2022 WL 2078032, at *2 (W.D. Tex. June 9, 2022) (citing Louisiana Power & Light Co. v. Kellstrom, 50 F.3d 319, 328 (5th Cir. 1995). “When an attorney’s customary billing rate … is within the range of prevailing market rates, the court should consider this rate when fixing the hourly rate to be allowed.” Id. “An attorney’s requested hourly rate is prima facie reasonable when he requests that the lodestar be computed at his or her customary billing rate, the rate is within the range of prevailing market rates [,] and the rate is not contested.” In re Heartland Payment Sys., Inc. Customer Data Sec. Breach Litig., 851 F. Supp. 2d 1040, 1087 (S.D. Tex. 2012) citing La. Power & Light Co. v. Kellstrom, 50 F.3d 319, 328 (5th Cir. 1995) (emphasis supplied).

Court’s Determination of Reasonable Rates in Dallas Fort Worth Area

Courts presiding over commercial litigation matters have determined the following hourly rates charge by the partners, associates and paralegals are reasonable rates within the Dallas Fort Worth legal community for a commercial litigation matter:

• Advanced Physicians, S.C. v. Connecticut Gen. Life Ins. Co., No. 3:16-CV-02355-G-BT, 2021 WL 6428370, at *4 (N.D. Tex. Dec. 17, 2021. J. Rutherford) (finding $537.00 and $862.00 for complex litigation attorneys from full-service law firm reasonable rates for the Dallas – Fort Worth legal community).
• Architectural Granite & Marble, LLC v. Pental, No. 3:20-CV-295-L-BK, 2023 WL 2825699, at *3 (N.D. Tex. Jan. 19, 2023) (finding hourly attorney fee rates between $300 – $575 for attorneys to be reasonable for the Dallas – Fort Worth legal community).
• Cortes-Castillo v. One Time Constr. Tex. LLC, No. 3:21-CV-2093-BH, 2023 WL 5826976, at *3 (N.D. Tex. Sept. 8, 2023) (finding hourly rate of $440.00 for attorney licensed in 2012 and hourly rate of $485.00 for attorney licensed in 2009 to be reasonable for the Dallas – Fort Worth legal community).
• Fessler v. Porcelana Corona de Mexico, S.A. de C.V, No. 4:19-cv-00248, 2020 WL 1974246, at *6 (E.D. Tex. April 24, 2020) (finding hourly rates of $695 and $675 reasonable).
• Hardy v. SDM Hosp., LLC, No. 20-CV-3157-S-BK, 2022 WL 272718, at *6 (N.D. Tex. Jan. 10, 2022), report and recommendation adopted, No. 3:20-CV-3157-S-BK, 2022 WL 271751 (N.D. Tex. Jan, 28, 2022) (finding hourly rate of $525.00 for attorney licensed in 1993 to be reasonable for the Dallas – Fort Worth legal community).
• Hizar v. Heflin, 672 S.W.3d 774, 801 (Tex. App.—Dallas 2023, pet. denied) (lead counsel stated she was familiar with the customary charges for attorney’s fees practicing in Collin County for work relating to this type of lawsuit. She set out the hourly rates charged by her and two associate attorneys in this matter and concluded the hourly rates charged were reasonable hourly rates given each attorney’s experience level. She also concluded the rates charged were the usual and customary rates for the same or similar services rendered by attorneys with similar experience, qualifications, and reputations in Collin County, Texas. Valent also stated that she considered all of the Arthur Andersen factors when preparing the affidavit and assessing the reasonableness and necessity of the fees charged and requested. During her trial testimony, Valent expounded on the opinions included in her affidavit. She reiterated the hourly rates charged by her and her associates and testified that her law firm had billed 102.7 hours from the inception of the case through trial. She testified that the fees requested were reasonable and necessary because of “the extensive discovery disputes in this case, and defendants’ refusal to produce documents and several hearings we had to have in that regard.” She also explained the other tasks counsel were required to engage in to successfully prosecute the case. Those tasks included responding to discovery, producing documents, preparing a docket control order, preparing for trial before the original trial date, responding to Roofmasters’ intervention, conducting additional discovery related to the intervention, responding to motions filed by opposing counsel, preparing the Heflins’ motion to enforce sanctions and for default judgment, and preparing for and participating in trial. The billing records admitted into evidence confirmed the rates charged and hours worked on the case, included detailed descriptions of the work done, and corroborated Valent’s testimony. The appellate court  concluded the evidence showed the reasonable hours worked by the Heflins’ legal team and the reasonable hourly rates of that team. The evidence was, therefore, legally sufficient to support the amount of fees awarded).
• Mary Kay, Inc. v. Keller, No. 3:20-CV-3675-X, 2023 WL 4089428, at *2 (N.D. Tex. June 19, 2023) (finding hourly rate of $556.32 for partners and average hourly rate of $342.97 for associates to be reasonable).
• Mai v. Art Inst. of Dallas Aii, LLC, No. 3:23-CV-1275-D, 2023 WL 8005315, at *2 (N.D. Tex. Nov. 17, 2023) (hourly rate of $535.00 for partner and an hourly rate of $395.00 for associate deemed reasonable if not below market for Dallas-Fort Worth legal community).
• Michaels Stores Procurement Co., Inc. v. DMR Constr., Inc., No. 3:18-CV-1436-B, 2019 WL 399074, at *2 (N.D. Tex. Jan. 31, 2019) (finding hourly attorney fee rates between $375-675 and $225 for paralegals to be reasonable for Dallas -Fort Worth legal community).
• Solferini as Tr. of Corradi S.p.A. v. Corradi USA, Inc., No. 4:18-CV-293-ALM, 2021 WL 5415293, at *7 (E.D. Tex. Nov. 19, 2021) ($650 for partner, $475 for associate, and $300 for paralegal deemed reasonable.  Court notes that the Sherman Division covers some parts of the city of Dallas. For example, a small portion of Dallas is included in Collin County, a county in the Sherman Division. Seewww.collincountytx.gov/living/Documents/CollinArea.pdf. Further, the Office of Personnel Management designates the Sherman Division (located in Grayson County) to be in the Dallas-Fort Worth locality pay area. Thus, the Sherman Division’s pay scale for court employees is based on the Dallas-Fort Worth area. See OPM, Policy, Data, Oversight, https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/2021/locality-pay-area-definitions/#TX-OK.
• Virtual Chart Sols. I, Inc. v. Meredith, No. 4:17cv546, 2020 WL 1902530, at *19 (E.D. Tex. Jan. 13, 2020), adopted, 2020 WL 896674 (E.D. Tex. Feb. 25, 2020) (finding the requested rates of $595.00 for partner reasonable “withing the prevailing market rate for attorneys handling this type of litigation in North Texas”).

Attorney Fee Lodestar Calculation Presumed to Be Reasonable and Necessary.

The “lodestar” amount for attorneys’ fees—what the Fifth Circuit has characterized as presumptively reasonable fees, League of United Latin Am. Citizens No. 4552 (LULAC) v. Roscoe Indep. Sch. Dist., 119 F.3d 1228, 1232 (5th Cir. 1997)—“is the product of reasonable hours times a reasonable rate.” City of Burlington v. Dague, 505 U.S. 557, 559 (1992); accord Arbor Hill Concerned Citizens Neighborhood Ass’n v. Cnty. of Albany, 522 F.3d 182, 183 (2d Cir. 2008) (noting that the lodestar method is presumptively reasonable and necessary); see also  Rohrmoos Venture v. UTSW DVA Healthcare, LLP, 578 S.W.3d 469, 498 (Tex. 2019). This base lodestar calculation, when supported by sufficient evidence, reflects presumptively reasonable and necessary attorneys’ fees.  Id. at 499.

Generally, “[t]he reasonable hourly rate is the rate a paying client would be willing to pay.” Arbor Hill, 522 F.3d at 190. Where, as here, “a sophisticated client pays attorneys’ fees that it does not know it will necessarily recover, the rate paid is presumptively reasonable.” Wells Fargo Bank v. Konover, Civ. No. 3:05-CV-1924 (AWT), 2014 WL 3908596, at *6 (D. Conn. Aug. 8, 2014) (citing Blanchard v. Bergeron, 489 U.S. 87, 93 (1989); see Crescent Publ’g Grp. v. Playboy Enters., 246 F.3d 142, 144 (2d Cir. 2001) (“[A]ny evidence of the actual billing arrangement between [the party seeking fees] and its counsel should be considered a significant, though not necessarily controlling, factor in the determination of what fee is ‘reasonable’ ”) (emphasis supplied); Diamond D Enters. USA, Inc. v. Steinsvaag, 979 F.2d 14, 19 (2d Cir. 1992) (“[W]hen a contract provides that in the event of litigation the losing party will pay the attorneys’ fees of the prevailing party, the court will order the losing party to pay whatever amounts have been expended by the prevailing party, so long as those amounts are not unreasonable.”) (emphasis supplied).

There is a strong presumption of the reasonableness of the lodestar amount. See Perdue v. Kenny A., 559 U.S. 542, 552 (2010). “However, after calculating the lodestar, a district court may enhance or decrease the amount of attorney’s fees based on the relative weights of the twelve factors set forth in” Johnson v. Georgia Highway Exp., Inc., 488 F.2d 714 (5th Cir. 1974). Black v. SettlePou, P.C., 732 F.3d 492, 502 (5th Cir. 2013). Because the lodestar is presumed to be reasonable, it should be modified only in exceptional cases. Watkins v. Fordice, 7 F.3d 453, 457 (5th Cir. 1993) citing  City of Burlington v. Dague, 505 U.S. 557, 561 (1992).

Billing Judgment

The party seeking fees has “the burden of showing…that the attorneys exercised billing judgment.” Tech Pharmacy Servs., LLC v. Alixa Rx LLC, 298 F. Supp. 3d 892, 905–06 (E.D. Tex. 2017) citing Black v. SettlePou, P.C., 732 F.3d 492, 502 (5th Cir. 2013) citing Saizan v. Delta Concrete Prods. Co., Inc., 448 F.3d 795, 799 (5th Cir. 2006); see also El Apple I, 370 S.W.3d at 762–63. Billing judgment is defined as “documentation of the hours charged and of the hours written off as unproductive, excessive, or redundant.” Saizan v. Delta Concrete Prods. Co., 448 F.3d 795, 799 (5th Cir. 2006); see also El Apple I, 370 S.W.3d at 762–63. (emphasis supplied).  Any “‘excessive, duplicative, or inadequately documented time should be eliminated from an attorney’s fee award.’” Montano v. Orange Cty., Tex., No. 1:13-cv-611, 2015 WL 11110631, at *4 (E.D. Tex. Apr. 24, 2015); see also El Apple I, 370 S.W.3d at 762–63. “‘The hours surviving this vetting process are those reasonably expended on the litigation.’” Id.; see also El Apple I, 370 S.W.3d at 762–63.

If evidence of billing judgment is not submitted, an attorney  fee award should be reduced accordingly by a percentage intended to substitute for the exercise of billing judgment. Id.  The proper remedy for omitting evidence of billing judgment does not include a denial of fees but, rather, a reduction of the award by a percentage intended to substitute for the exercise of billing judgment.” The Fifth Circuit has stated however, “[t]he most critical factor in determining a fee award is the ‘degree of success obtained.’” Singer v. City of Waco, Tex., 324 F.3d 813, 829 (5th Cir. 2003).

Block Billing

Block billing is the practice of including “the total daily time spent working on a case, rather than itemizing the time expended on specific tasks.” Tech Pharmacy Servs., LLC v. Alixa Rx LLC, Inc. 98 F. Supp. 3d 892, 905 (E.D. Tex. 2017) citing Fralick v. Plumbers & Pipefitters Nat’l Pension Fund, No. 3:09-CV-0752-D, 2011 WL 487754, at *4 (N.D. Tex. Feb. 11, 2011) (citing Glass v. United States, 335 F.Supp.2d 736, 739 (N.D. Tex. 2004)). The underlying concern with block billing is that the information provided will be so general that it will not be sufficient documentation to determine if the number of hours billed by counsel is reasonable. See Permian Power Tong, Inc. v. Diamondback E & P, LLC, 550 S.W.3d 642, 664 (Tex. App.–Tyler 2017) judgment set aside on other grounds, opinion not vacated sub nom., 2017 WL 2824311 (Tex. App.–Tyler June 30, 2017); Humphrey v. United Way of Tex. Gulf Coast, 802 F.Supp.2d 847, 864 (S.D. Tex. 2011). “If the applicant’s documentation of the hours claimed is vague or incomplete, the district court may reduce or eliminate those hours.” League of United Latin Am. Citizens # 4552 v. Roscoe Indep. Sch. Dist., 119 F.3d 1228, 1233 (5th Cir. 1997).

The use of block billing, inclusion of administrative tasks, inclusion of traveling time, redundant billing, and a multitude of people working on the same matters all constitute a lack of billing judgment.  See Protradenet, LLC v. Predictive Profiles, Inc., No. 6:18-CV-38-ADA, 2022 WL 2078032, at *4 (W.D. Tex. June 9, 2022.   “[I]f a party does not object to particular billing entries as inadequately documented, the court is not obligated sua sponte to sift through fee records searching for vague entries or block billing. It is a common practice for courts to address only those potentially inadequate entries brought to the court’s attention.” See KeyCorp v. Holland, No. 3:16-cv-1948, 2017 WL 606617, at *22 (N.D. Tex. Feb. 15, 2017). As such, the Court will only consider the entries that were specifically raised or are relevant to the issues raised.

Courts have reduced  an attorney’s fee award by 5%, 10%, and 20%,  because the prevailing party failed to exercise billing judgment.  See Champion v. ADT Sec. Servs., No. 2:08–CV–417–TJW, 2010 WL 4736908, at *6 (E.D. Tex. Nov.16, 2010) (5% reduction for lack of billing judgment); percentage; Coe v. Chesapeake Expl., LLC, No. 2:09-CV-290-TJW, 2011 WL 4356728, at *3 (E.D. Tex. Sept. 15, 2011), aff’d sub nom. Coe v. Chesapeake Expl., L.L.C., 695 F.3d 311 (5th Cir. 2012) (5% billing reduction); Saizan v. Delta Concrete Prod. Co.,  448 F.3d 795, 800 (5th Cir. 2006) (District Court neither committed clear error by finding a failure to provide evidence of billing judgment nor abused its discretion by imposing 10% billing judgment reduction in the lodestar); Devices, Inc. v. Senior Operations, Inc., No. 3–08–CV–1264–BD, 2009 WL 5171746, at *1 (N. D. Tex. Dec.29, 2009) (“[A]fter giving consideration to the relevant Arthur Andersen factors, particularly the degree of success achieved by plaintiff, the court determines that a twenty percent fee reduction is appropriate.”).

Other Miscellaneous Points

Paralegal fees:  Paralegal fees can be recovered “only to the extent that the paralegal performs work traditionally done by an attorney.” Coe v. Chesapeake Expl., LLC, No. 2:09-CV-290-TJW, 2011 WL 4356728, at *4 (E.D. Tex. Sept. 15, 2011), aff’d sub nom. Coe v. Chesapeake Expl., L.L.C., 695 F.3d 311 (5th Cir. 2012) (citing Allen v. U.S. Steel Corp., 665 F.2d 689, 697 (5th Cir.1982)).

“When obtaining payment for work done by paralegals or legal assistants, Texas courts have required more information.” Mid-Continent Cas. Co. v. Petroleum Sols., Inc., No. CV 4:09-0422, 2017 WL 6942658, at *5 (S.D. Tex. Sept. 21, 2017) citing El Apple I, 370 S.W.3d at 763. This information includes:  (1) the qualifications of the legal assistant to perform substantive legal work; (2) that the legal assistant performed substantive legal work under the direction and supervision of an attorney; (3) the nature of the legal work performed; (4) the legal assistant’s hourly rate; and (5) the number of hours expended by the legal assistant. Id. (first citing All Seasons Window and Door Mfg., Inc. v. Red Dot Corp., 181 S.W.3d 490, 504 (Tex. App.—Texarkana 2005, no pet.) and then citing Multi–Moto Corp. v. ITT Commercial Fin. Corp., 806 S.W.2d 560, 570 (Tex. App.—Dallas 1990, writ denied)).

Clerical Work: “[P]urely clerical or secretarial tasks should not be billed at a paralegal rate, regardless of who performs them.” Missouri v. Jenkins by Agyei, 491 U.S. 274, 288 n. 10 (1989). Likewise, when an attorney performs clerical work it is not recoverable at an attorney’s rate. See Johnson, 488 F.2d at 717; Davis v. Crawford, No. 11-22-00307-CV, 2024 WL 4628565, at *10 (Tex. App. Oct. 31, 2024) (Entries involving clerical work are not recoverable under Texas law citing Clary Corp. v. Smith, 949 S.W.2d 452, 469 (Tex. App.—Fort Worth 1997, pet. denied.); see also Black v. SettlePou, P.C., No. 3:10-CV-1418-K, 2014 WL 3534991, at *6 (N.D. Tex. July 17, 2014) (“Clerical work is not recoverable in an award of attorneys’ fees. The Court agrees with SettlePou that hours spent drafting cover letters to the court, calendaring deadlines, filing appearance forms, ordering transcripts, reorganizing case materials, and filing notices of address change are not compensable because they are clerical in nature.”); see also Tow v. Speer, No. CV H-11-3700, 2015 WL 12765414, at *9 (S.D. Tex. Aug. 17, 2015)( clerical work includes indexing documents, assemble notebooks, and making copies).

However, drafting motions, reviewing filings, preparing exhibits, and preparing email responses to the Court are “legal in nature not clerical.” Tejero v. Portfolio Recovery Assocs. LLC, No. AU-16-CV-767-SS, 2018 WL 1612856, at *5 (W.D. Tex. Apr. 2, 2018), rev’d on other grounds and remanded sub nom. Tejero v. Portfolio Recovery Assocs., L.L.C., 955 F.3d 453 (5th Cir. 2020).

“[A]ttorneys may not charge their standard hourly rates for purely clerical or secretarial tasks.” Mid-Continent Cas. Co., 2017 WL 6942658, at *12 (citing Tow v. Speer, Civil Action No. H–11–3700, 2015 WL 12765414, at *8 (S.D. Tex. Aug. 17, 2015)). “‘There is no precise test for determining whether a task is legal or clerical.’” City of San Antonio, Tx. v. Hotels.com, L.P., 5–06–CV-381–OLG, 2017 WL 1382553, at *6 (W.D. Tex. Apr. 17, 2017) (quoting Malick v. NCO Fin. Servs., Inc., No. CIV.A. H–14–1545, 2015 WL 4078037, at *5 n. 4 (S.D. Tex. July 6, 2015)). Some courts have found legal work may include tasks such as assisting with depositions and document production, preparing subpoenas, conducting factual investigation, and compiling data. See Malick v. NCO Fin. Servs., Inc., No. Civ.A. H–14–1545, 2015 WL 4078037, at *5 n. 4 (S.D. Tex. July 6, 2015). Other courts have concluded that tasks such as “reviewing and calendaring deadlines, printing, copying, and filing documents, drafting cover letters, ordering transcripts, organizing and updating materials and binders, loading and organizing computer databases, redacting and assembling exhibits, and transmitting documents[ ]” constitutes non-compensable clerical work. Hotels.com, 2017 WL 1382553, at *7 (citing cases). “The approach in this circuit is that neither attorneys nor legal assistants may recover a fee award for clerical work.” Tow, 2015 WL 12765414, at *8 (citing cases). “At a minimum, attorneys may not charge their standard hourly rates for purely clerical or secretarial tasks.” Id.

Duplicative Work: “Work that is duplicative of the efforts of lead counsel—e.g., where non-lead counsel is merely monitoring appointed lead counsel’s representation …, or where multiple firms, in their efforts to become lead counsel, filed complaints and otherwise prosecuted the early stages of litigation—will not normally be compensated.” Tow v. Speer, No. CV H-11-3700, 2015 WL 12765414, at *8 (S.D. Tex. Aug. 17, 2015) citing In re Cendant Corp. Sec. Litig., 404 F.3d 173, 191 (3d Cir. 2005); see also, Preston Exploration Co., LP v. GSP, LLC, No. Civ. A. H–08–3341, 2013 WL 3229678, at *9 (S.D. Tex. June 25, 2013) (reducing fees because multiple firms performed work that could have been more efficiently handled by a single firm); Peak Technical Servs., Inc. v. Land & Sea Eng’g, LLC, No. Civ. A. H–10–1568, 2012 WL 3234203, at *7 (S.D. Tex. Aug. 6, 2012) (reducing fees due to duplication because two law firms worked on the case and some of the hours billed were solely attributable to coordination efforts between the firms).

Attorney Travel Time: Texas courts have allowed the recovery of travel time for attorneys.  See Wilkerson v. Atascosa Wildlife Supply, 307 S.W.3d 357, 360 (Tex. App.–San Antonio 2009, no pet.) (Travel time recovery affirmed); In re Babcock & Wilcox Co., 526 F.3d 824, (5th Cir. 2008) citing Henry v. Webermeier, 738 F.2d 188, 194 (7th Cir. 1984)) (“[W]hen a lawyer travels for one client he incurs an opportunity cost that is equal to the fee he would have charged that or another client if he had not been traveling.”); Prestwood v. Settle, No. 03-07-00111-CV, 2008 WL 537159, at *6-8 (Tex. App.–Austin Feb. 28, 2008, pet. denied) (mem. op.) (allowing inclusion of full travel time in the attorneys’ fee award); Mid-Continent Cas. Co., 2017 WL 6942658, at *14 (S.D. Tex. Sept. 21, 2017) (“Many courts permit attorneys to recover fees for travel time, although often times at 50% of the attorney’s rate in the absence of documentation that any legal work was accomplished during travel time.”).

Failure to segregate among defendants. On a final note, not segregating between defendants is a  common mistake made by attorneys pursuing a claim for attorney’s fees.  For example, what happens when the plaintiff sues two defendants and wins or prevails  as to one and loses as to the other? Or, what happens when you have one defendant that is a party to a written contract and one party is not a party to that same written contract.  The answer is you must segregate between defendants; just as you have to segregate time among recoverable and non-recoverable claims.

The general rule bears repeating –  the one seeking attorney’s fees must segregate the claims justifying the fees from those that do not, and present evidence only as to those in which fees may be awarded. Clements, 891 S.W.2d at 281 (Tex. App. 1994). An exception is when the fees incurred are “in connection with claims arising out of the same transaction and are so interrelated that their ‘prosecution or defense entails proof or denial of essentially the same facts.’” Id. at 11 (citing  Flint & Assoc. v. Intercontinental Pipe & Steel, Inc., 739 S.W.2d 622, 624–25 (Tex. App.—Dallas 1987, writ denied)).

---

[1] Unrecoverable fees are not rendered recoverable “merely because they are nominal.” Chapa, 212 S.W.3d at 313. The party seeking recovery of attorney’s fees must show that segregation is not required. Sustainable Tex. Oyster Res. Mgmt., L.L.C. v. Hannah Reef, Inc., 623 S.W.3d 851, 872 (Tex. App.—Houston [1st Dist.] 2020, pet. denied).