A TOUR OF THE PROOF NECESSARY TO ESTABLISH AND REBUT CLAIMS FOR ATTORNEYS’ FEES

Woodhaven Partners, Ltd. v. Shamoun & Norman, LLP
Dallas Court of Appeals, No. 05-11-01718-CV (January 30, 2014)
Justices FitzGerald, Lang, and Myers (Opinion)
In a case in which a law firm filed suit against its clients for non-payment of fees and the clients responded with a variety of counterclaims, the Court of Appeals undertook an extensive analysis of the nature and quality of evidence necessary to prove or to rebut claims for attorneys’ fees. The trial court granted summary judgment in favor of the law firm, and the clients appealed, arguing among other things that the trial court erred in striking their lay witness affidavit attacking the reasonableness of the law firm’s fees, that they had raised a question of fact that should have prevented summary judgment on the law firm’s sworn account claim, and that the law firm’s proof of attorneys’ fees was insufficient. But the Court of Appeals largely affirmed the trial court’s judgment. It held that the affidavit of a lay witness client is not competent evidence to rebut the reasonableness and necessity of attorneys’ fees, that a non-specific “sworn general denial” is insufficient to defeat summary judgment on a suit on a sworn account, and that the law firm’s evidence proving up attorneys’ fees was sufficient despite extensive redactions of its invoices.

The Court of Appeals first considered whether a client’s affidavit disputing the reasonableness and necessity of legal fees was competent summary judgment evidence. The engagement letter between the law firm and the client stated that “[r]easonable and necessary legal services shall be those which [the client] and [the firm] decide are reasonable and necessary to perform the Engagement.” And the client-affiant testified that he had reviewed the invoices for the legal services at issue and that he did not believe all of the legal services for which the clients were billed were reasonable and necessary. But the Court of Appeals affirmed the trial court’s exclusion of this testimony, holding that “Texas law is clear that ‘[t]he issue of reasonableness and necessity of attorney’s fees requires expert testimony.’” As a result, lay witness testimony by a non-lawyer on this issue is not competent, admissible summary judgment evidence.

Next, the Court considered whether the trial court erred in granting summary judgment for the law firm on the firm’s suit on a sworn account. The law firm had supported its motion for summary judgment with an affidavit from attorney C. Gregory Shamoun declaring that, after all just and lawful offsets, payments, and credits were applied, the firm was owed legal fees in the amount specified in the affidavit. In response, the clients denied they were “indebted for the amount alleged” and denied “the sworn account made the basis of Plaintiff’s Forth Amended Petition.” The Court of Appeals affirmed the trial court’s judgment that the clients’ response was basically a “sworn general denial” and did not constitute a proper denial of the sworn account.

The Court of Appeals also examined the sufficiency of the law firm’s summary judgment evidence proving up its claims for attorneys’ fees. The law firm submitted two affidavits of attorney Shamoun, which attached itemized attorneys’ fees invoices with some entries redacted and stated that the legal services reflected in the invoices were provided to the clients pursuant to their engagement agreements or were reasonable and necessary attorneys’ fees recoverable under section 38.001 of the Texas Civil Practice & Remedies Code. The clients argued that Shamoun had failed to establish a foundation for testifying as to the work performed by the law firm, but the Court of Appeals disagreed. They also argued that the law firm had failed to prove up the amount of damages and attorneys’ fees “given the redacted state of its attorney fee billings.” But the appeals court again disagreed, noting that “Texas law does not require detailed billing records or other documentary evidence as a prerequisite to awarding attorneys’ fees. . . . It has consistently been held that an attorney’s testimony about his experience, the total amount of fees, and the reasonableness of the fees charged is sufficient to support an award.”

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