Travelers Indemnity Company of Connecticut v. Jesus Espinosa

Opinion issued May 31, 2007 In The Court of Appeals For The First District of Texas NO. 01-05-00836-CV __________ TRAVELERS INDEMNITY COMPANY OF CONNECTICUT, Appellant V. JESUS ESPINOSA, Appellee On Appeal from the 61st District Court Harris County, Texas Trial Court Cause No. 2003-24700 MEMORANDUM OPINION In this workers compensation case, Travelers Indemnity Company of Connecticut ("Travelers"), appellant, complains of the award of attorney's fees after its unsuccessful challenge of a Texas Workers Compensation Commission ("TWCC") ruling. In four issues, Travelers alleges that (1) the trial court lacked jurisdiction to order payment of attorney's fees in a post-trial proceeding absent pleadings to support such relief, (2) the evidence was legally and factually insufficient to support the award of attorney's fees, and (3) the trial court erred in failing to condition the award of appellate attorney's fees on an unsuccessful appeal. We reform the judgment and, as reformed, affirm. Factual and Procedural Background Jesus Espinosa, a machinist, was injured in the course of his employment. After a contested case hearing, the TWCC ruled in his favor and found that he had suffered a compensable injury. Travelers, Espinosa's employer's insurance carrier, appealed to a TWCC appeals panel, and the panel affirmed the hearing officer's decision. Travelers then appealed to the district court. In his answer, Espinosa made a general denial and a plea for attorney's fees. The jury found in Espinosa's favor, and Espinosa filed a post-trial motion for approval of attorney's fees. The motion was supported by an affidavit from an attorney on the case as well as "time and expense details reports." The trial court signed an order approving the attorney's fees and later awarded them in a final judgment. Travelers challenges only the award of attorney's fees. Jurisdiction In issue one, Travelers argues that the trial court lacked jurisdiction to order payment of attorney's fees in a post-trial proceeding absent pleadings to support such relief. Specifically, Travelers contends that Espinosa failed to allege sufficient facts to support a claim for attorney's fees and the claim should have been in the form of a counterclaim. Espinosa contends that no pleadings are necessary because the Labor Code makes an award for attorney's fees mandatory for the prevailing party. In Texas, a pleading is sufficient if it gives fair and adequate notice to the opposing party, sufficient for that party to prepare a defense. See Greene v. Young, 174 S.W.3d 291, 300 (Tex. App.--Houston [1st Dist.] 2005, pet. denied). Here, Travelers's lawsuit for judicial review is part of the comprehensive and exclusive statutory scheme established in the Act. See Tex. Lab. Code Ann. § 408.001(a); Payne v. Galen Hosp. Corp., 4 S.W.3d 312, 315 (Tex. App.--Houston [1st Dist.] 1999), aff'd, 28 S.W.3d 15 (Tex. 2000). Travelers's lawsuit is the appeal of a decision by a TWCC appeals panel, which is authorized by Chapter 410, Subchapter G of the Texas Labor Code. Tex. Lab. Code Ann. §§ 410.301-.308 (Vernon 2006). The Act provides that, in a suit for "judicial review under Subchapter G, Chapter 410, of a final decision of the appeals panel regarding compensability . . . or the amount of, income . . . benefits," an insurance carrier "is liable for reasonable and necessary attorney's fees . . . as a result of the insurance carrier's appeal if the claimant prevails on an issue on which judicial review is sought by the insurance carrier . . . ." Id. § 408.221(c). Otherwise, the claimant's attorney's fees are to be paid from the claimant's recovery. Id. § 408.221(b). In either circumstance, "[a]n attorney's fee . . . for representing a claimant before the . . . court under this subtitle must be approved by the . . . court." Id. § 408.221(a). Espinosa's pleading specifically requests the trial court to approve his reasonable attorney's fees. Espinosa's answer to Travelers's lawsuit stated, It was necessary for [Espinosa] to retain [counsel] . . . to represent [him] before the Commission and the court. [Espinosa] asks the court to approve [his] reasonable attorney's fees and to authorize [him] to pay his attorney the amount shown to be reasonable. This language follows section 408.221(a), requiring the trial court's approval. See id. Because Espinosa requested approval of his fees as required by the Act and Travelers's suit is governed by the Act, we conclude that Travelers had fair notice that Espinosa was seeking attorney's fees. See Dean Foods Co. v. Anderson, 178 S.W.3d 449, 453 (Tex. App.--Amarillo 2005, pet. denied) (concluding that, even though request for attorney's fees was only general in nature, it was reasonable to construe that claimant was seeking attorney's fees incurred in defending against carrier's suit for judicial review). We hold that Espinosa's request for attorney's fees in his answer to Travelers's lawsuit seeking to reverse the TWCC's finding was sufficient to place Travelers on notice that he was seeking attorney's fees under the Labor Code. We overrule issue one. Sufficiency In its second and third issues, Travelers argues that the evidence was legally and factually insufficient to support the award of attorney's fees. Travelers contends that, because Espinosa "offered no evidence or testimony during [the] 14-minute" hearing on attorney's fees, the trial court committed reversible error. The determination of reasonable attorney's fees is a question for the trier of fact. Stewart Title Guar. Co. v. Sterling, 822 S.W.2d 1, 12 (Tex. 1991). The amount of a fee award rests in the sound discretion of the trial court, and its judgment will not be reversed on appeal absent a clear abuse of discretion. Even though the appropriate standard of review is abuse of discretion, we may nevertheless review a fee award for sufficiency of the evidence. Id. at 11. This hybrid analysis requires a two-pronged inquiry: (1) Did the trial court have sufficient information upon which to exercise its discretion; and (2) if so, did the trial court err in its application of discretion? Id. The traditional sufficiency review comes into play with regard to the first question. Id. We then proceed to determine whether, based on the elicited evidence, the trial court made a reasonable decision. Id. Stated inversely, we must conclude that the trial court's decision was neither arbitrary nor unreasonable. Id. In City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005), the supreme court re-examined the standard of review for legal-sufficiency challenges. "The final test for legal sufficiency," concluded the court, "must always be whether the evidence at trial would enable reasonable and fair-minded people to reach the verdict under review." Id. at 827. "[L]egal-sufficiency review in the proper light must credit favorable evidence if reasonable jurors could, and disregard contrary evidence unless reasonable jurors could not." Id. If the evidence "would enable reasonable and fair-minded people to differ in their conclusions, then jurors," and here, the trial court, as trier of fact, "must be allowed to do so." See id. As long as the evidence falls within the zone of reasonable disagreement, "[a] reviewing court cannot substitute its judgment for that of the trier-of-fact." Id. at 822. Although the reviewing court must "consider evidence in the light most favorable to the judgment, and indulge every reasonable inference that would support it[,] . . . if the evidence allows for only one inference, neither jurors nor the reviewing court may disregard it." Id. In determining factual sufficiency, this Court weighs all the evidence, both supporting and conflicting, and may set the finding aside only if it is so contrary to the overwhelming weight of the evidence as to be clearly wrong and manifestly unjust. Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986); Comm'n of Contracts v. Arriba Ltd., 882 S.W.2d 576, 582 (Tex. App.--Houston [1st Dist.] 1994, no writ). In an appeal from a bench trial, we may not invade the fact-finding role of the trial court, which alone determines the credibility of the witnesses, the weight to give their testimony, and whether to accept or reject all or any part of that testimony. Nordstrom v. Nordstrom, 965 S.W.2d 575, 580-81 (Tex. App.--Houston [1st Dist.] 1997, pet denied). An attorney's fee award under section 408.221 must be based on written evidence presented to the court. Tex. Lab. Code Ann. § 408.221(b); Transcont'l Ins. Co. v. Smith, 135 S.W.3d 831, 838 (Tex. App.--San Antonio 2004, no pet.). In approving an attorney's fee, the court shall consider (1) the time and labor required, (2) the novelty and difficulty of the questions involved, (3) the skill required to perform the legal services properly, (4) the fee customarily charged in the locality for similar legal services, (5) the amount involved in the controversy, (6) the benefits to the claimant that the attorney is responsible for securing, and (7) the experience and ability of the attorney performing the services. Tex. Lab. Code Ann. § 408.221(d) (Vernon 2006). The record shows that Espinosa retained the Barnes Law Firm to pursue the workers compensation action. Attached to Espinosa's Motion for Approval of Attorney's Fees and Expenses was an affidavit from Peggy M. Campbell, an associate with the firm. Campbell testified that the amount of attorney's fees expended in the case was $48,737.50 and $4,457.73 in expenses were incurred, for a total of $53,195.23. She further testified that the amount charged was necessary to pursue the case. Also attached to the motion were "time and expense details reports" from May 21, 2003 to May 31, 2005. The statements detail the professional services rendered, which included telephone conferences, preparation of legal documents, court appearances, legal research, and trial preparation for four attorneys in the firm. These reports show the services performed, the time spent on the matter, and the hourly rate charged for the services. Lastly, Espinosa attached an article from the Texas Lawyer entitled, "Charging More in 2004," which explained that "billing rates [were] up slightly at Texas firms." Campbell's affidavit, coupled with the supporting documentation, is legally sufficient evidence to establish these factors and support the trial court's fee award. Accordingly, we hold that the evidence is legally sufficient to support the order awarding attorney's fees and expenses. In issue three, Travelers contends that the evidence was factually insufficient to support the award of attorney's fees that were "excessive, duplicative and opportunistic." In response to Espinosa's Motion for Approval of Attorney's Fees and Expenses, Travelers filed an objection in which it complained that Espinosa's proposed attorney's fees were excessive and duplicative. Travelers did not present any evidence in support of its objection to the award of attorney's fees. Reviewing the record in light of the factors a trial court may consider in determining whether attorney's fees are reasonable, we conclude that the trial court was presented with factually sufficient evidence upon which to exercise its discretion. We overrule issues two and three. Appellate Attorney's Fees In its fourth issue, Travelers contends, and Espinosa agrees, that the trial court erred in failing to condition the award of appellate attorney's fees upon an unsuccessful appeal. A trial court may not penalize a party for taking a successful appeal. Sipco Serv's Marine v. Wyatt Field Serv., 857 S.W.2d 602, 607 (Tex. App.--Houston [1st Dist.] 1993, no writ). An unconditional award of an appellant's appellate attorney's fees is improper. Id. at 607-08. Therefore, the trial court must condition the award of appellate attorney's fees upon the appellant's unsuccessful appeal. Id. at 607. However, an unconditional award of appellate attorney's fees does not require reversal; instead, we may modify a trial court's judgment to make the award of appellate attorney's fees contingent upon the receiving party's success on appeal. Pao v. Brays Vill. E. Homeowners Ass'n, 905 S.W.2d 35, 38-39 (Tex. App.--Houston [1st Dist.] 1995, no writ). We sustain Travelers' fourth issue and reform the judgment. Conclusion We reform the judgment, and, as reformed, affirm the judgment of the trial court. George C. Hanks, Jr. Justice Panel consists of Justices Nuchia, Hanks, and Bland.