by Steven K. Hayes
Commercial litigation regularly includes a claim for attorney’s fees. The value of such a claim often approximates, or exceeds, the damage award. Despite the frequency and magnitude of these claims, one of the things I found during a three year (and ongoing) study about error preservation is that complaints related to fees were in the top four categories of error preservation decisions decided by the courts of appeals—and in 80 percent of the error preservation decisions related to attorney’s fees, courts of appeals held that error was not preserved because the complaints were not raised in the trial court at all. With so much potentially at stake, what explains the frequency with which error is waived concerning complaints about attorney’s fees?
The element-driven nature of a claim for fees, and the nature of complaints about fees which were waived, may help explain the frequency with which error is not preserved as to such complaints.
To answer why error is not preserved to such complaints, first consider the element-driven nature of claims for fees under Chapter 38 of the Texas Civil Practices and Remedies Code. To recover reasonable attorney's fees under Chapter 38 for a claim based on an oral or written contract, for example, (1) the claimant must be represented by counsel, (2) the claimant must present the claim to the opposing party, and (3) payment for the just amount owed must not have been tendered before the expiration of the thirtieth day after the claim is presented. The party seeking fees must plead and prove the foregoing; neither filing suit, nor alleging a demand in the pleadings alone can constitute presentment. But if the plaintiff pleads these elements, and the defendant wants to force the plaintiff to prove them, the defendant must specifically deny those elements. Furthermore, if a defendant wants to argue that the plaintiff’s demand was excessive (and thus ineffective), that alleged excessiveness is an affirmative defense the defendant must plead, prove, and obtain findings on, or it will waive the defense.
Next, consider the types of objections about fees which parties failed to preserve in the trial court. Here are a few I found in my study:
(1) a party’s failure to present the claim as required by the statute;
(2) a party’s inability to recover fees under TCPRC 38.001 against a partnership;
(3) a failure to segregate fees between claims on which fees are recoverable and those on which they are not;
(4) a complaint that the party did not incur fees, or that fees were excessive; and
(5) the method for calculating fees.
Notice that only one of the foregoing complaints really focused on what we classically think of as the reasonableness and necessity of fees. The remainder of these unpreserved complaints focus, for the most part, on the elements of, nuances concerning, and procedures governing a fee claim.
To avoid waiving error as to fees: treat a claim for fees as a standalone claim, with its own elements, proof, and procedure.
I think the relatively large number of error preservation decisions involving attorney’s fees, the high percentage of holdings that error was not preserved about those complaints, and the nature of unpreserved complaints about fees show that many folks fail to recognize that a claim for fees is a separate cause of action, with its own (often statutorily-dictated) elements. Failing to work up a fee claim just as we would any other cause of action can easily result in waiver of error—with a concomitant and significant adverse impact on the judgment.
You can find the foregoing study I mentioned on the Résumé page on my website at www.stevehayeslaw.com.
Steve Hayes is a solo appellate practitioner in Fort Worth, and serves on the DBA’s Admissions and Membership Committee. He can be reached at email@example.com.