law-attorneys-fees-fee-factors | Houston attorneys fee case law | attorney fee litigation |
Attorneys' Fees Appeals | Fee Factors | Reasonableness of Fee Award
In his second issue, Alsheikh asserts the evidence is legally insufficient to support the trial court's award
of $100,000 in attorneys' fees to Arabian.
Alsheikh v. Arabian National Sipping Corp. (Tex.App.- Houston [1st Dist.] Apr. 2, 2009)(Alcala)
(res judicata defense, attorney's fees fee factors)
AFFIRM TC JUDGMENT: Opinion by Justice Alcala
Before Chief Justice Radack, Justices Alcala and Hanks
01-08-00007-CV Jawad Alsheikh v. Arabian National Shipping Corporation
Appeal from 269th District Court of Harris County
Trial Court Judge: Hon. John Thomas Wooldridge
In general, the reasonableness of attorneys' fees is question of fact. City of Garland v. Dallas Morning
News, 22 S.W.3d 351, 367 (Tex. 2000). In an appeal from a bench trial, we may not invade the
fact-finding role of the trial court, who 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. Volume Millwork,
Inc. v. W. Houston Airport Corp., 218 S.W.3d 722, 730 (Tex. App.--Houston [1st Dist.] 2006, pet.
A party can recover reasonable attorneys' fees if he prevails and recovers damages on a cause of
action for which recovery of attorneys' fees is permitted. See Tex. Civ. Prac. & Rem. Code Ann. §
38.001 (Vernon 2008); Green Int'l, Inc. v. Solis, 951 S.W.2d 384, 390 (Tex. 1997). The grant or denial
of attorneys' fees is within the trial court's sound discretion, and we will not reverse the court's ruling
regarding attorneys' fees unless there is a clear abuse of discretion. Ryan v. Abdel-Salam, 39 S.W.3d
332, 337 (Tex. App.--Houston [1st Dist.] 2001, pet. denied).
When reviewing the reasonableness of an award for attorneys' fees, a court should consider the
(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
(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.
Arthur Andersen & Co. v. Perry Equip. Corp., 945 S.W.2d 812, 818 (Tex. 1997) (citing Tex. Disciplinary
R. Prof'l Conduct 1.04). Attorneys' fees must bear some reasonable relationship to the amount in
controversy, but the amount of damages awarded is only one factor in determining the reasonableness
of a fee award. USAA County Mut. Ins. Co. v. Cook, 241 S.W.3d 93, 103 (Tex. App.--Houston [1st Dist.]
2007, no pet.). We examine each of these factors separately.
1. Time, Labor, Novelty, Difficulty, and Skill
The first factor requires that we examine the time and labor required, the novelty and difficulty of the
questions involved, and the skill required to perform the legal service properly. Kennedy, Arabian's trial
attorney, did not testify about the exact number of hours expended on this case or the rate charged.
Kennedy did testify that the "efforts required to overcome the delay tactics in this case" were significant:
I cut my teeth doing collection work on behalf of the Resolution and Trust Corporation, the FDIC. I have
pursued debtors for a long time. I've seen all kinds of tricks tried in order to avoid payment of debts.
Frankly, I've seen all of the tricks that were tried in this case at separate times. I've never seen anyone
try them all together in one lawsuit. That is a significant factor for why the attorney fees are high in this
case. That includes the forum shopping found by the bankruptcy court when the bankruptcy was filed
on the eve of the last trial setting.
2. Affect [Effect] on Other Employment
The record is silent concerning the second factor, which pertains to evidence of the likelihood that the
acceptance of the particular employment will preclude other employment by the lawyer.
3. Fee Charged in Locality
The third factor is the fee customarily charged in the locality for similar legal services. Kennedy did not
testify about the exact number of hours expended on this case or the rate charged to reach the hourly
estimate of $80,000. Nevertheless, the trial court was permitted to "take judicial notice of the usual and
customary attorney's fees and of the contents of the case file without receiving further evidence," Tex.
Civ. Prac. & Rem. Code Ann. § 38.004 (Vernon 2008), because the award of attorneys' fees in this
case arose under Texas Civil Practice and Remedies Code section 38.001. See id. § 38.001 (allowing
recovery of attorneys' fees when claim is based on written contract); Valdez v. Valdez, 930 S.W.2d 725,
732-33 (Tex. App.--Houston [1st Dist.] 1996, no writ) (holding section 38.004 only applies to claims
under section 38.001).
4. Amount Involved and Results Obtained
The fourth factor relates to the amount involved and the results obtained. This case involved Arabian's
attempt to collect on two notes in the principal amounts of $87,239.85 and $66,855.88, plus interest.
Kennedy obtained a judgment for Arabian in the amount of $302,176.59 plus post-judgment interest.
5. Time Limitations
The record is silent concerning the fifth factor, which is the time limitations imposed by the client or by
6. Nature and Length of Professional Relationship
The sixth factor pertains to the nature and length of the professional relationship with the client. The
vice president of Arabian testified that Arabian used a different attorney in Alsheikh I, then hired
Kennedy's law firm to handle the current suit, which was filed in February of 2007.
7. Experience, Reputation, and Ability of Lawyer
The seventh factor considers the experience, reputation, and ability of the lawyer or lawyers performing
the services. Kennedy testified that he practices commercial litigation and has been licensed by the
State of Texas since 1989.
8. Type of Fee
The eighth factor considers the type of fee involved. Kennedy testified that a reasonable fee on an
hourly basis would be $80,000. Arabian's vice-president testified that Arabian agreed to pay Kennedy a
1/3 contingency fee. Kennedy testified that a 1/3 contingency fee would be reasonable in this case.
On appeal, Alsheikh complains that Kennedy did not testify about time spent
on the case, the novelty and difficulty of the legal questions involved, or several other of the Arthur
Andersen factors. We note that time spent working on the case is only one consideration for the first
Arthur Andersen factor, and that Kennedy did explain that the case was more difficult and
time-consuming than most other cases because of delay tactics employed by Alsheikh. In addition,
evidence need not be submitted to support every factor. See Bank of Tex. v. VR Elec., Inc., No.
01-07-00308-CV, 2008 WL 5455692, at *12-13 (Tex. App.--Houston [1st Dist.] Dec. 31, 2008, pet. filed)
(holding evidence of attorneys' fees sufficient despite failure of evidence to address each Arthur
Anderson factor); McAlester Fuel Co. v. Carpenter, No. 01-07-00653-CV, 2009 WL 417301, at *6 (Tex.
App.--Houston [1st Dist.] Feb. 19, 2009, no pet. h.) (mem. op.) (holding absence of evidence for two
factors does not render evidence insufficient).
Alsheikh also complains that Kennedy's testimony was conclusory because Kennedy stated he took the
Arthur Andersen factors into consideration without identifying underlying facts to support the eight
factors. While testifying, Kennedy identified each factor and stated he took these factors into
consideration in forming his opinions. As set forth above, Kennedy did testify to most of the factors from
Arthur Andersen. We conclude Kennedy's testimony is not conclusory because he did provide facts to
support most of the Arthur Andersen factors and based his opinions on his experience and knowledge
of the practice of law in Harris County. See Tex. Commerce Bank v. New, 3 S.W.3d 515, 517-18 (Tex.
1999) (noting affidavit testimony in support of attorneys' fees was not conclusory and was legally
sufficient where attorney testified he was duly licensed attorney, he was familiar with usual and
customary attorneys' fees in locality, and, based on his knowledge of services rendered, fee in dispute
was reasonable); State & County Mut. Fire Ins. Co. v. Walker, 228 S.W.3d 404, 409 (Tex. App.--Fort
Worth 2007, no pet.) (finding attorney's testimony not conclusory where "attorney testified about his
professional experience and background and described the work he had performed and the amount of
time spent on the case").
Finally, Alsheikh asserts that a contingent fee may never be reasonable basis for a court's award of
attorneys' fees. Alsheikh cites Arthur Andersen, in which the Texas Supreme Court states, "[W]e cannot
agree that the mere fact that a party and a lawyer have agreed to a contingent fee means that the fee
arrangement is in and of itself reasonable for purposes of shifting that fee to the defendant." Arthur
Andersen, 945 S.W.2d at 818-19. We agree with the Texas Supreme Court that the existence of a
contingency-fee arrangement does not, by itself, make the fee reasonable for purposes of fee shifting.
However, when the Arthur Andersen factors are met, the award of attorneys' fees on a contingent basis
may be appropriate. See Transcon. Gas Pipeline v. Texaco, 35 S.W.3d 658, 675-76 (Tex.
App.--Houston [1st Dist.] 2000, pet. denied) (holding award of attorneys' fees on contingency basis was
reasonable based on Arthur Andersen factors); see also VingCard A.S. v. Merrimac Hospitality Sys.,
Inc., 59 S.W.3d 847, 870 (Tex. App.--Fort Worth 2001, pet. denied) (same).
Considering all of the record evidence in a light most favorable to the verdict and indulging every
reasonable inference from that evidence in support of the verdict, legally sufficient evidence exists to
uphold the reasonableness of attorneys' fees. See Tex. Commerce Bank, 3 S.W.3d at 517-18; Bank of
Tex., 2008 WL 5455692, at *12-13; State & County Mut. Fire Ins. Co., 228 S.W.3d at 409. We overrule
Alsheikh's second issue.
We affirm the judgment of the trial court.