Luc J. Messier v. Katy Shuk Chi Lau Messier

Affirmed as Modified and Opinion filed January 27, 2015.

In The

Fourteenth Court of Appeals

NO. 14-13-00572-CV

LUC J. MESSIER, Appellant

V.

KATY SHUK CHI LAU MESSIER, Appellee

On Appeal from the 311th District Court

Harris County, Texas

Trial Court Cause No. 2009-45158

OPINION

Luc J. Messier appeals from the trial court’s order purporting to enforce and

clarify portions of the final decree of divorce between Luc and his ex-wife, Katy

Shuk Chi Lau Messier. The issues below and on appeal revolve around

community property stock options held in Luc’s name. A portion of these options

were awarded to Katy in the decree, and the principal dispute concerns whether

Luc was required to exercise the options upon Katy’s demand or, instead, was

entitled or required to use his own discretion in deciding when to execute them.

The trial court determined that the options had to be exercised on Katy’s demand

and issued an order providing for enforcement mechanisms. The trial court further

found that, in failing to exercise the options on Katy’s demand, Luc breached his

fiduciary duty to Katy, and the court awarded Katy attorney’s fees.

In four issues, Luc contends that the trial court erred in (1) construing the

decree as requiring Luc to exercise the options on Katy’s demand, (2) “clarifying”

the decree by adding detailed orders for Luc to perform and consequences for

failure to do so, (3) holding Luc breached his fiduciary duty, and (4) awarding

Katy her attorney’s fees. Because certain claims and issues have become moot

during the pendency of the appeal, we vacate the portions of the trial court’s order

that purport to clarify the divorce decree and that hold Luc breached his fiduciary

duty to Katy, and we dismiss those claims. Additionally, we modify the award of

Katy’s attorney’s fees. We affirm the trial court’s order as modified.

I. Background

The final decree was signed on February 11, 2011. Among other things, the

decree divided the marital estate and determined issues relating to the custody of

the children of the marriage.1 As part of the division of property, Katy was

awarded a 60% interest and Luc a 40% interest in a number of stock options that

Luc had earned through his employment during the marriage as a senior executive

for ConocoPhillips.2 Specifically, as to Luc’s share, the decree awarded him “[t]he

following ConocoPhillips Stock Option Awards, representing 40% of the

1

In a prior appeal from the decree, Katy, a native of Hong Kong, challenged the trial

court’s grant of permanent injunctions concerning international travel with the children. Messier

v. Messier, 389 S.W.3d 904, 905 (Tex. App.—Houston [14th Dist.] 2012, no pet.). This court

modified the decree to remove certain requirements that were not supported by the record, but

otherwise affirmed the travel restrictions and the decree. Id. at 911.

2

The decree confirmed certain other stock options were his separate property.

2

community portions from [Luc’s] employment, subject to all related tax liabilities

and withholdings . . . .” The decree then listed specific numbers of options from

among nine sets of options earned on particular days, for example: “16,320

options of the vested options attributable to the 40,800 options from the 02/08/07

award with an exercise price of $66.37.” In the portion of the decree awarding

property to Katy, it awarded her “[a] portion of the benefits, if any, received by

Luc . . . upon exercise of the following ConocoPhillips Stock Option Awards,

representing 60% of the community portions from [Luc’s] employment, subject to

all related actual tax liabilities and withholdings . . . .” It then listed nine sets of

options corresponding to the nine sets listed for Luc, for example, “24,480 options

of the vested options attributable to the 40,800 options from the 02/08/07 award

with an exercise price of $66.37.”

A subsequent section of the decree contained “Special Provisions Regarding

Stock Options.” This section stated in part:

The award to [Katy] of a portion of the community stock

options is subject to all of the terms, conditions and restrictions of the

Company’s Stock Incentive Plan . . . as well as other restrictions that

may be imposed by the Company, such as those designated in the

Company’s insider trading policy.

Pursuant to the terms of the Plans, the stock options awarded to

[Katy] cannot be assigned and/or transferred from [Luc] to [Katy] by

the Company. The parties acknowledge that (i) the stock options

awarded to [Katy] may be exercisable only by [Luc] (or [Luc’s] legal

representative or estate) and (ii) the exercise of the stock options may

be subject to restrictions by reason of [Luc’s] employment, including

but not limited to the applicable insider trading rules and regulations.

However, [Katy] shall have equitable ownership of the stock options

awarded to [Katy].

[Katy’s] stock options are subject to a constructive trust.

[Katy’s] rights in and to the stock options awarded to [Katy] herein,

and all benefits appurtenant thereto, shall inure to the benefit of

3

[Katy’s] heirs, executors and assigns. Similarly, [Luc’s] obligations

as set forth herein shall be binding on [Luc] and on [Luc’s] heirs,

executors, administrators and assigns. Upon the death of [Luc], any

stock options awarded to [Katy] which are still exercisable shall be

exercised by [Luc’s] executor or administrator, or by the person who

acquires such stock options by will or the laws of descent and

distribution, or otherwise by reason of the death of [Luc], as directed

by [Katy].

[Luc] shall account for taxes assessed on the exercised stock

options and shall cause the proceeds from the stock option exercise,

net of taxes assessed, to be transferred to [Katy]. [Katy] shall pay all

taxes related to any portion of benefits awarded to her herein by either

reporting the income and related withholdings on her return(s), or

reimbursing [Luc] for any taxes he is required to pay on amounts

awarded to her that are in excess of the related withholdings on her

portion.

When [Luc] exercises any option in which [Katy] has an

interest . . . , he will account to her by delivering the net proceeds.

The division of the options will be proportionate between [Luc’s]

separate property and the community property portions henceforth

owned jointly between [Luc] and [Katy], and the division of the

community property portions of the options shall be 60% to [Katy]

and 40% to [Luc].

In April 2012, Katy filed suit in the court of continuing jurisdiction after Luc

declined to exercise the stock options on her demand.3 In her Third Amended

Motion, her live pleading at the time of trial, Katy essentially contended that the

final decree unambiguously established rights and duties that Luc had failed to

follow. On that basis, she sought enforcement of the decree, damages for breach of

fiduciary duty, imposition of a fine among other relief for contempt, an accounting,

and declaratory judgment setting forth Luc’s obligations relating to the options. In

the alternative, she sought clarification of the decree.

3

Between the time the final decree issued and Katy filed the present action, the presiding

judge of the trial court retired and a new judge was appointed.

4

During a hearing on December 19, 2012, Luc testified that he believed that

under the final decree, he had a duty as the constructive trustee to use his discretion

in deciding when to exercise the options so as to maximize the benefit for Katy.

Luc introduced evidence that the options had increased significantly in value from

the time of Katy’s demand to the time of trial. Luc acknowledged, however, that at

least a part of his motivation in refusing to exercise the options upon Katy’s

demand was to prevent Katy from leaving the country with the children in

violation of travel restrictions placed upon her in the final decree. Katy presented a

financial expert who emphasized the significant differences between the financial

situations of Luc and Katy and suggested Katy had a more immediate need for

access to the options proceeds than did Luc.

The court signed an Order of Enforcement of Final Decree of Divorce and

Order of Clarification of Property Division on March 25, 2013. In the order, the

court held that Luc breached his fiduciary duty as constructive trustee of Katy’s

stock options by failing to exercise the options on her request. The order also

included declarations or clarifications requiring Luc to exercise within 24 hours the

options that Katy already had requested be exercised and imposing a fine of $5,000

a day for each business day that he failed to do so.4 The court further ordered Luc

to exercise any options requested by Katy no later than 10 a.m. on the first day

following the expiration of 48 hours from the receipt of written notice to exercise

the options. The order additionally included provisions governing the possibility

that requests may come during periods when Luc was prohibited from exercising

the options and provisions ensuring distribution of the proceeds to Katy.

In its order, the court further awarded Katy her “reasonable and necessary”

4

The section of the order in which the instructions appear is titled “Declaratory Judgment

& Clarification.”

5

attorney’s fees and costs of $59,198.75, plus additional amounts in the event Luc

filed an appeal.5 The court stated that the fees were “warranted for numerous

reasons including the delay caused by [Luc’s] refusal to exercise [options] upon

[Katy’s] request.” The court also stated that Luc had stipulated to the amount and

reasonableness of the fees. The court subsequently issued a set of 134 separately

numbered findings of fact and conclusions of law. Luc requested additional

findings. Among the findings, the court stated that Luc “did not have unlimited

discretion as to whether to exercise the stock options awarded to Katy” and he

breached his fiduciary duty and failed to comply with the decree when he refused

to exercise options as Katy requested. During oral argument before this court,

counsel representing both parties informed the court that Luc has exercised all of

the stock options that were the subject of this action and delivered the proceeds to

Katy.

II. The Mootness Doctrine

As stated, counsel for both parties have represented to this court that Luc

has, in fact, exercised all of the options assigned to Katy in the decree and

delivered the proceeds to her as per her request. In post-submission briefing,

Katy’s counsel has indicated acceptance of Luc’s performance and no intention to

pursue any further enforcement, claims, or remedies concerning the exercise of the

options and distribution of the proceeds. We cannot decide moot issues. See, e.g.,

Valley Baptist Med. Ctr. v. Gonzalez, 33 S.W.3d 821, 822 (Tex. 2000) (per curiam)

(holding appeal of trial court’s order became moot once appellant complied with

order and court of appeals was notified of compliance and court of appeals erred in

5

As will be discussed below, the order required the appellate fees to be paid the day after

a notice of appeal was filed for an appeal to the court of appeals and the day after the Texas

Supreme Court requested briefing if a petition for review was filed with that court. The appellate

fees were not made contingent on a successful defense by Katy. The amount for an appeal to the

court of appeals was set at $25,000, and the amount for a petition for review was set at $15,000.

6

issuing advisory opinion on merits of appeal).6 The question then becomes which,

if any, of Luc’s appellate issues still present live controversies requiring resolution

by this court. See Robinson v. Alief I.S.D., 298 S.W.3d 321, 324 (Tex. App.—

Houston [14th Dist.] 2009, pet. denied) (“The mootness doctrine precludes a court

from rendering an advisory opinion in a case where there is no live controversy.”);

Thompson v. Ricardo, 269 S.W.3d 100, 103 (Tex. App.—Houston [14th Dist.]

2008, no pet.) (“[I]f a judgment cannot have a practical effect on an existing

controversy, the case is moot and any opinion issued on the merits in the appeal

would constitute an impermissible advisory opinion.”).

As set forth above, Luc raises four issues in this appeal, contending the trial

court erred in (1) construing the decree as requiring Luc exercise the options on

Katy’s demand, (2) “clarifying” the decree by adding detailed orders for Luc to

perform as directed and consequences should he fail to do so, (3) holding Luc

breached his fiduciary duty, and (4) awarding Katy attorney’s fees. The attorney’s

fees issue clearly still presents a live controversy as Katy has not relinquished her

claim to the award and Luc has not conceded that he should have to pay the fees.

See Allstate Ins. Co. v. Hallman, 159 S.W.3d 640, 642-43 (Tex. 2005) (holding

that a dispute concerning attorney’s fees preserved a live controversy in an

otherwise moot appeal); Camarena v. Tex. Emp’t Comm’n, 754 S.W.2d 149, 150-

51 (Tex. 1988) (same). Similarly, the question of who possessed the right to

decide when the options would be exercised is likewise a live controversy because

in exercising the options and distributing the proceeds to Katy, Luc did not

concede that she had the right to demand he take these actions and, if Luc is correct

that he had the right to determine when to exercise the options, there would be no

6

Mootness is a jurisdictional issue, and we are required to review such issues even if not

raised by the parties. See M.O. Dental Lab v. Rape, 139 S.W.3d 671, 673 (Tex. 2004); Robinson

v. Alief I.S.D., 298 S.W.3d 321, 330 (Tex. App.—Houston [14th Dist.] 2009, pet. denied).

7

basis for awarding attorney’s fees to Katy. See Camarena, 754 S.W.2d at 151

(noting propriety of attorney’s fees award was in part dependent on success on the

merits). These two issues are, therefore, not moot and still need to be resolved in

this appeal.

However, because the trial court’s “clarifications” no longer have any

possible force or effect, given that the options have been exercised and proceeds

distributed to Katy’s satisfaction, the clarifications and the appellate issue

challenging them have been rendered moot. Likewise, because the only remedy

clearly provided based on the breach of fiduciary duty finding was the

clarifications, and they have no possible force or effect, the breach of fiduciary

duty issue is also rendered moot. Accordingly, we vacate the portions of the trial

court’s judgment that purport to clarify the divorce decree and that hold Luc

breached his fiduciary duty to Katy, and we dismiss Katy’s causes of action

seeking clarification and alleging breach of fiduciary duty. See Houston Mun.

Emps. Pension Sys. v. Ferrell, 248 S.W.3d 151, 153-54, 156-57 (Tex. 2007)

(vacating portions of court of appeals’ judgment and trial court’s order that became

moot after plaintiff nonsuited cause of action and dismissing that cause of action);

Daftary v. Prestonwood Mkt. Square, Ltd., 399 S.W.3d 708, 710 (Tex. App.—

Dallas 2013, pet. denied) (vacating portion of judgment awarding possession of

property and dismissing moot claim); Lawton v. Lawton, No. 01–12–00932–CV,

2014 WL 3408699, at *1, 5 (Tex. App.—Houston [1st Dist.] July 10, 2014, no

pet.) (mem. op.) (vacating portion of order granting summary judgment on moot

claims and dismissing those claims); McConnell v. State Farm Lloyds, No. 03-98-

00078-CV, 1999 WL 816736, at *5 (Tex. App.—Austin Oct. 14, 1999, pet.

denied) (not designated for publication) (vacating judgment on claim rendered

8

moot by change in the law and dismissing that claim).7

We will now proceed to consider the remaining live issues concerning the

trial court’s construction of the decree and award of attorney’s fees. See In re

Kellogg Brown & Root, Inc., 166 S.W.3d 732, 737 (Tex. 2005) (orig. proceeding)

(“A case is not rendered moot simply because some of the issues become moot

during the appellate process.”).

III. Construction of the Decree

In his first issue, Luc contends that the trial court erred in interpreting the

decree as requiring him to exercise the options on Katy’s demand. To the contrary,

Luc asserts that the decree afforded him the discretion to decide when to exercise

the options. As explained above, this issue still presents a live controversy as it

7

Luc asserts that issues two and three, concerning, respectively, the clarifications and

breach of fiduciary duty finding, also are relevant to the question of whether the trial court

properly awarded attorney’s fees to Katy. As will be discussed more fully below, because we

find the award of attorney’s fees is supported by the trial court’s determination that Katy had the

right to decide when the options would be exercised, we need not consider whether the award

was additionally supported by the clarifications or the breach of fiduciary duty finding. We

further note that attorney’s fees are generally not recoverable for breaches of fiduciary duties.

See Hollister v. Maloney, Martin & Mitchell LLP, No. 14–12–00529–CV, 2013 WL 2149823, at

*2 (Tex. App.—Houston [14th Dist.] May 16, 2013, no pet.) (mem. op.). Issues two and three

are therefore moot.

In post-submission briefing, Luc urges application of the collateral consequences

exception to the mootness doctrine. “The ‘collateral consequences’ exception has been applied

when Texas courts have recognized that prejudicial events have occurred ‘whose effects

continued to stigmatize helpless or hated individuals long after the unconstitutional judgment had

ceased to operate. Such effects were not absolved by mere dismissal of the cause as moot.’”

Gen. Land Office v. OXY U.S.A., Inc., 789 S.W.2d 569, 571 (Tex. 1990) (quoting Spring Branch

I.S.D. v. Reynolds, 764 S.W.2d 16, 19 (Tex. App.—Houston [1st Dist.] 1988, no writ)). Luc’s

arguments appear premised on the notion that the mootness of these issues would leave the trial

court’s order unchanged, including the finding of a breach of fiduciary duty. He makes no

argument that any disadvantage he perceives from the court’s order would persist even once the

portion of the order he complains about has been vacated. We find no merit in his argument.

See Reule v. RLZ Invs., 411 S.W.3d 31, 33 (Tex. App.—Houston [14th Dist.] 2013, no pet.)

(declining to apply collateral consequences exception where appellant failed to explain why

perceived disadvantage would persist after judgment was vacated).

9

pertains to the question of whether Katy is entitled to her attorney’s fees.

A trial court’s ruling on a motion for enforcement is reviewed under an

abuse of discretion standard; however, issues regarding interpretation of a divorce

decree are subject to de novo review on appeal. Shanks v. Treadway, 110 S.W.3d

444, 447 (Tex. 2003). The general rules regarding the construction of judgments

are applied. Id. “If the decree, when read as a whole, is unambiguous as to the

property’s disposition, the court must effectuate the order in light of the literal

language used.” Id. We agree with the trial court that the decree unambiguously

afforded Katy the right to determine when her portion of the options should be

exercised.

Luc’s primary argument is a negative one: at no point in the decree does it

expressly require him to exercise the options on Katy’s demand. The decree,

however, also is devoid of any express language authorizing or requiring Luc to

use his own discretion regarding when to exercise the options. Moreover, the

decree clearly awards certain of the options to Katy as her property and gives her

control over that property.

Luc acknowledged in his testimony that Katy’s options could be exercised

separately from his own options, even those awarded on the same day. 8 Indeed,

the decree culls out a specific number of options for Katy for each date on which

options were awarded to Luc. As explained in the decree, the ConocoPhillips

Stock Incentive Plan prevented transfer of ownership of the options themselves;

Katy could receive the proceeds only upon exercise. For this reason, the decree

awarded her “[a] portion of the benefits, if any, received by Luc . . . upon exercise

8

Luc suggests in his brief that “Katy can be assured that Luc’s decision to exercise

options will be made with the utmost consideration for time and price as he will be acting, in

part, for his own financial benefit, having been awarded 40% of the divisible options, with others

confirmed as his separate property.” But nothing in the record supports this assurance.

10

of the following . . . Awards,” and it described her ownership of the options as

“equitable ownership” and established a constructive trust over the options prior to

their exercise. Equitable ownership is commonly defined as “the present right to

compel legal title.” See, e.g., AHF-Arbors at Huntsville I, LLC v. Walker Cnty.

Appraisal Dist., 410 S.W.3d 831, 837 (Tex. 2012). The court, by awarding

equitable ownership, therefore intended to give Katy the right to direct when the

options would be exercised.9 The decree repeatedly describes the award to Katy as

“[t]he award to [Katy] of a portion of the community stock options” and “the stock

options awarded to [Katy].” It is clear that this was Katy’s property.

Luc insists that the creation of a constructive trust necessarily provided him

with the authority and discretion to determine when the options awarded to Katy

were to be exercised, but in doing so, he appears to misunderstand the nature of a

constructive trust.10 A constructive trust is imposed when one party holds property

that legally belongs to the other. See In re Marriage of Harrison, 310 S.W.3d 209,

214 (Tex. App.—Amarillo 2010, pet. denied) (“[C]onstructive trusts are used to

right a wrong or prevent unjust enrichment . . . .”). The scope and application of a

constructive trust is generally left up to the court imposing it. Baker Botts, L.L.P.

v. Cailloux, 224 S.W.3d 723, 736 (Tex. App.—San Antonio 2007, pet. denied).

There is no indication in the court’s creation of a constructive trust or the language

of the decree that gave Luc discretion to determine when to exercise the options.

9

Luc suggests that the fact Katy could not own the options as per the Stock Incentive

Plan means that the reference to her equitable ownership was a “contradiction in terms.” But it is

the very fact that she cannot legally own the options that apparently led the court to describe her

ownership as equitable. Moreover, the fact that she could not legally own them does not

necessarily mean she cannot control their exercise.

10

In his reply brief, Luc states without supporting citation that “imposition of a

constructive trust . . . vests in Luc the right to exercise the [options] at his discretion in Katy’s

best interest.” At trial and in his briefing, Luc emphasized that he has significant expertise

regarding his employer and the market value of its stock, and he asserts that the decree required

him to use his discretion in exercising the options in order to maximize the benefit to Katy.

11

Luc additionally points to language in the decree providing that “[w]hen [he]

exercises any option in which [Katy] has an interest . . . , he will account to her by

delivering the net proceeds” as indicating he was to exercise his discretion in

determining when to exercise her options. This language, however, merely

reiterates the fact that only Luc could legally perform the mechanical process of

exercising the options and describes what must happen once he performs that

function. It does not suggest that he had the right to determine when the options

were exercised.

Next, Luc points to decree language providing that Katy had a right to direct

the exercise of any remaining options upon Luc’s death. Luc relies on this

language to argue that, in parallel fashion, the decree would have expressly

authorized Katy to direct the exercise of any remaining options during Luc’s

lifetime if the trial court had intended to create such a right. However, as discussed

above, the decree clearly gave Katy the right to exercise her options during Luc’s

lifetime. The additional language regarding who had control of the options in the

event of Luc’s death may have been included simply to prevent any confusion

should Luc die before the options were exercised.

The trial court did not err in holding that the decree unambiguously gave

Katy the right to determine when the options assigned to her would be exercised.

Accordingly, we overrule Luc’s first issue.

IV. Attorney’s Fees & Expenses

In his fourth issue, Luc challenges the trial court’s award of $59,198.75 in

attorney’s fees, costs, and expenses. We review a trial court’s decision to grant

attorney’s fees under an abuse of discretion standard, but we review the amount of

attorney’s fees awarded under a legal sufficiency standard. Am. Risk Ins. Co. v.

Abousway, No. 14–13–00124–CV, 2014 WL 2767402, at *5 (Tex. App.—Houston

12

[14th Dist.] June 17, 2014, no pet.) (mem. op.).

Luc raises numerous sub-issues related to this award, and we have grouped

them into the following categories for discussion purposes: (1) the award was in

error because Katy did not succeed on her contempt claim, (2) the evidence is

legally insufficient to support the award, (3) there is no legal or factual basis for

the award of expert fees, (4) Katy failed to properly segregate fees for causes of

action on which fees are recoverable from those for which they are not, and (5) the

award of appellate fees was in error for multiple reasons. We will address each set

of arguments in turn, finding merit in some but not all.

A. Contempt Claim

We begin with Luc’s assertion that Katy was not entitled to recover

attorney’s fees because the trial court did not hold Luc in contempt. The gist of the

argument appears to be that (1) the trial court did not hold Luc in contempt; (2)

therefore, it must have granted Katy judgment based on her breach of fiduciary

duty cause of action; and (3) attorney’s fees generally cannot be recovered on a

claim for breach of fiduciary duty. See Hollister v. Maloney, Martin & Mitchell

LLP, No. 14–12–00529–CV, 2013 WL 2149823, at *2 (Tex. App.—Houston [14th

Dist.] May 16, 2013, no pet.) (mem. op.).

Katy pleaded generally for attorney’s fees and pleaded several grounds that

could potentially support an award of attorney’s fees, including a declaratory

judgment action and enforcement and clarification of the decree. In making the

award, the court did not state the basis for its decision but stated that “[t]he award

of attorneys’ fees to [Katy] is warranted for numerous reason[s] including the

delay caused by [Luc’s] refusal to exercise upon [Katy’s] request, options

equitably owned by [Katy].” This language links the award to the necessity of

filing the enforcement action. A trial court may award reasonable attorney’s fees

13

in an enforcement or clarification action. See Tex. Fam. Code § 9.014; McKnight

v. Trogdon-McKnight, 132 S.W.3d 126, 132 (Tex. App.—Houston [14th Dist.]

2004, no pet.). Although the trial court did not provide Katy with all of the relief

she requested related to the enforcement action (i.e., the trial court did not hold Luc

in criminal contempt), it did order Luc to exercise the options as Katy had

previously directed and turn the proceeds over to her. Contempt is not the only

available remedy in a suit to enforce a divorce decree. See generally Tex. Fam.

Code §§ 9.001-.014. Because Katy was required to file suit in order to enforce her

right to determine when the stock options were to be exercised, the trial court did

not abuse its discretion in awarding attorney’s fees to Katy. See Tex. Fam. Code §

9.014; Pahlavan v. Ghods, No. 14-02-00585-CV, 2003 WL 21981819, at *1-2

(Tex. App.—Houston [14th Dist.] Aug. 21, 2003, no pet.) (mem. op.).11

Regardless of whether the trial court held Luc in criminal contempt, Katy

nonetheless was required to pursue the lawsuit after Luc refused to exercise the

options upon her demand and deliver the proceeds to her.12

11

See also John J. Sampson & Harry L. Tindall, et. al, Sampson & Tindall’s Texas

Family Code Annotated 140 (2014) (“Before passage of [section 9.014] there was no provision

for the recovery of attorney’s fees against an uncooperative party after a divorce. Thwarting the

order of the court elicited no punitive consequences, even when a party was found to be the

wrongdoer. This section now makes clear that the award of attorney’s fees is appropriate in such

a fact situation.”).

12

At least one court of appeals has observed that Section 9.014 does not expressly require

that the trial court find a party as the prevailing party before awarding attorney’s fees to that

party. See In re S.E.C., No. 05–08–00781–CV, 2009 WL 3353624, at *3 (Tex. App.—Dallas

Oct. 20, 2009, no pet.) (mem. op.). “Rather, by its express language, the statute’s only

requirements are that the award be ‘reasonable’ and in connection with a proceeding to enforce a

decree of divorce or annulment providing for a division of property.” Id.

Luc cites one case in support of his argument, Preston v. Preston, No. 04-03-00333-CV,

2004 WL 1835765 (Tex. App.—Houston [14th Dist.] Aug. 18, 2004, no pet.) (mem. op.). In

Preston, we determined that the four-year statute of limitations governing breach of fiduciary

duty causes of action applied where a constructive trust had been created rather than the two-year

statute which generally governs suits to enforce the property. Id. at *2. We addressed the breach

of fiduciary duty cause of action, however, as an action “to enforce the divorce decree.” Section

14

B. Sufficiency of the Evidence

Luc next challenges the sufficiency of the evidence to support the

reasonableness of the attorney’s fees awarded. We will reverse a determination of

the reasonableness of attorney’s fees on the basis of a legal sufficiency challenge

only if there is no evidence to support it. See Redwine v. Wright, No. 14–10–

00030–CV, 2010 WL 5238572, at *2 (Tex. App.—Houston [14th Dist.] Dec. 16,

2010, no pet.) (mem. op.). Factors that a factfinder should consider when

determining the reasonableness of a fee include: the time, labor and skill required

to properly perform the legal service; the novelty and difficulty of the questions

involved; the customary fees charged in the local legal community for similar legal

services; the amount involved and the results obtained; the nature and length of the

professional relationship with the client; and the experience, reputation and ability

of the lawyer performing the services. Arthur Andersen & Co. v. Perry Equip.

Corp., 945 S.W.2d 812, 818 (Tex. 1997). The trial court does not need to hear

evidence on each factor but can consider 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. In re

Marriage of C.A.S. & D.P.S., 405 S.W.3d 373, 387 (Tex. App.—Dallas 2013, no

pet.); Hagedorn v. Tisdale, 73 S.W.3d 341, 353 (Tex. App.—Amarillo 2002, no

pet.).

Luc begins by assailing the trial court’s statement in its order and in its

findings of fact and conclusions of law that Luc had stipulated to the

reasonableness of Katy’s fees. The supposed stipulation occurred when, toward

the end of the trial, Katy’s counsel began his testimony in support of fees:

9.014 authorizes trial courts to award reasonable attorney’s fees in a proceeding to enforce a

decree. Nothing in Preston restricts this authority.

15

[Luc’s counsel]: Your Honor, I will stipulate that if he testifies, he

will testify that the amount that he’s claimed here [apparently

indicating Exhibit M150, which was a billing statement] is his fees in

connection with this matter.

[Katy’s counsel]: That’s correct. And my fees, [expert] fees, which

have been paid through my firm. My fees, [expert] fees through my

firm and [co-counsel’s] fees. So if I understand the stipulation, he’s

stipulating not that they be paid, but that the rates and amounts

charged are reasonable and necessary.

[Luc’s counsel]: I stipulate that’s what you’re going to testify to.

[Katy’s counsel]: All right. Well, do you stipulate to my qualifications

and rate?

[Luc’s counsel]: Yes.

[Katy’s counsel]: All right. And [co-counsel’s]?

[Luc’s counsel]: All your experts, yes.

[Katy’s counsel]: Very good. I would offer Exhibit M150, fees that

were incurred solely for this enforcement.

....

[Luc’s counsel]: May I see it? Your honor, we have no objection to

this as the testimony he would give. We do object to paying fees.

Although it is not entirely clear exactly how broad the stipulation was

intended to be, at a minimum, Luc’s counsel stipulated to Katy’s counsel’s

qualifications and rate and that Katy’s counsel’s would testify that “the rates and

amounts charged [were] reasonable and necessary.” At the conclusion of this

exchange, the trial court admitted the detailed billing statement, and Katy’s counsel

further testified that “all of the actions on the [statement] were taken and all of the

fees were reasonable and necessary in and around Harris County for similarly

complex cases for similarly qualified lawyers.” Luc’s counsel did not ask any

questions or present any opposing evidence regarding fees. In addition to its

statement regarding the stipulation, the court further specifically found that the

attorney’s fees awarded were reasonable given the experience and expertise of

16

counsel and the circumstances presented in the case.

On appeal, Luc contends that the stipulation regarding what Katy’s counsel

would testify to was insufficient to support the award of fees because it was only

an admission regarding what counsel would say and not an agreement the fees

were reasonable and necessary. While this much is true, having stipulated to

Katy’s counsel’s qualifications and that he would provide testimony supporting the

reasonableness of his fees (without the necessity of actually having to provide such

testimony), and having failed to contest the evidence of fees, Luc’s counsel

essentially conceded that there was at least some evidence to support the

reasonableness of the fees. At the time, Luc’s counsel expressed concern only

about whether Luc would be required to pay the fees, not about the reasonableness

of the fees charged. Moreover, Katy’s counsel then went on to testify as to the

reasonableness of the fees and provide a detailed billing statement and a contract

showing services provided, time spent, and amount charged. The trial court was

entitled to and—according to its findings and conclusions—did consider the entire

record, the particular circumstances of the case, and the common knowledge of the

participants as lawyers and judges. See In re Marriage of C.A.S. & D.P.S., 405

S.W.3d at 387; Hagedorn, 73 S.W.3d at 353. The evidence is sufficient to support

the trial court’s award of attorney’s fees.13

C. Expert Fees

Luc further challenges the award of expert fees in the amount of $27,090.76

13

Luc specifically mentions that the billing statements contained a few entries for an

associate attorney and a paralegal. The evidence was sufficient to support these fees as well. As

discussed, Luc’s counsel stipulated that Katy’s counsel was qualified and would testify regarding

the reasonableness of the charged fees. Katy’s counsel also testified in support of the

reasonableness and necessity of the amounts contained within the billing statement. The charged

rates were listed in the attorney-client contract that was admitted into evidence, and the trial

judge was permitted to take her own knowledge into account regarding the case and the practice

of law.

17

on the grounds that there is no legal or factual basis for the award.14 Generally

speaking, the fee of an expert witness constitutes an incidental expense in

preparation for trial and is not recoverable as costs. In re Weisinger, No. 14-12-

00558-CV, 2012 WL 3861960, at *2-3 (Tex. App.—Houston [14th Dist.] Sept. 6,

2012, orig. proceeding) (mem. op.); see also Stanley Stores, Inc. v. Chavana, 909

S.W.2d 554, 563 (Tex. App.—Corpus Christi 1995, writ denied) (holding the trial

court erred in making an equitable award of expert witness fees absent statutory

authorization). As we explained in Weisinger, expert fees have been awarded

under certain provisions of the Family Code, such as chapters 6 (governing suits

for dissolution of marriage) and 106 (concerning suits affecting the parent-child

relationship). Each of the cited chapters, however, contains provisions permitting

courts to award expenses in addition to costs and attorney’s fees. See Tex. Fam.

Code §§ 6.708 (authorizing court to award attorney’s fees, costs, and expenses in a

divorce action), 106.001 (authorizing award of costs in SAPCR), 106.002

(authorizing award of attorney’s fees in SAPCR). In contrast, chapter 9,

subchapter A, governing enforcement actions such as this, only authorizes the

award of attorney’s fees and costs. Id. §§ 9.013 (authorizing award of costs in an

enforcement action), 9.014 (authorizing award of attorney’s fees in an enforcement

action). Indeed, section 9.013 expressly states that costs may be awarded in such

actions “as in other civil cases.” Because expert fees are neither attorney’s fees nor

costs, and because chapter 9, subchapter A does not allow an award of expenses in

an enforcement action, the trial court erred in awarding Katy her expert witness

fees.15 Accordingly, we modify the trial court’s judgment to decrease the award of

14

The expert fees were included as a line item in the billing statement by Katy’s attorney

that was admitted into evidence. In her briefing to this court, Katy does not offer any rebuttal to

Luc’s arguments concerning expert fees.

15

In dicta in In re Slanker, 365 S.W.3d 718, 720 (Tex. App.—Texarkana 2012, orig.

proceeding), the Sixth Court of Appeals interpreted dicta in another court of appeals’ opinion,

18

fees and costs by $27,090.76.

D. Segregation

Next, Luc argues that Katy failed to properly segregate the fees expended in

regards to causes of action on which attorney’s fees are recoverable, such as the

enforcement action, from those expended on causes of action for which fees are

generally not recoverable, such as breach of fiduciary duty. Absent a contract or

statute, trial courts do not have inherent authority to require one party to pay

another party’s attorney’s fees; thus, claimants generally are required to segregate

fees between claims for which they are recoverable and claims for which they are

not. Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 311 (Tex. 2006).

However, when discrete legal services advance both a recoverable and

unrecoverable claim, the resulting fees are considered “intertwined” and need not

be segregated in order to be recovered. Id. at 313-14; Alief I.S.D. v. Perry, 440

S.W.3d 228, 245 (Tex. App.—Houston [14th Dist.] 2013, pet. denied). Still, if any

attorney’s fees relate solely to a claim for which fees are unrecoverable, a claimant

must segregate the recoverable from the unrecoverable fees. Chapa, 212 S.W.3d

at 313; Perry, 440 S.W.3d at 246.

The party seeking to recover attorney’s fees has the burden of demonstrating

that fee segregation is not required. Westergren v. Nat’l Prop. Holdings, L.P., 409

S.W.3d 110, 138 (Tex. App.—Houston [14th Dist.] 2013), aff’d in part, rev’d in

part on other grounds, No. 13-0801, 2015 WL 123099 (Tex. 2015). Here, when

the trial court rejected Luc’s segregation argument, the court had before it the

Parliament v. Parliament, 860 S.W.2d 144, 147 (Tex. App.—San Antonio 1993, writ denied), as

recognizing that expert witness fees were authorized in enforcement actions. We do not agree

with this reading of the Parliament analysis, wherein the court was merely presenting and

rejecting a party’s argument. Regardless, as dicta from a sister court, the discussion in In re

Slanker is not precedential. See generally Walden v. Affiliated Computer Servs., Inc., 97 S.W.3d

303, 330 n.22 (Tex. App.—Houston [14th Dist.] 2003, pet denied).

19

parties’ pleadings, the evidence presented on the substantive issues in the case, the

testimony of Katy’s counsel, and Katy’s counsel’s billing statements. All of

Katy’s causes of action involved essentially the same allegations regarding the

same facts and sought essentially the same ultimate relief: exercise of the options

as she directs and disbursement of the proceeds to her. Even if segregation were

required in this case, Katy’s counsel testified that the billing statements admitted

into evidence represented “fees that were incurred solely for this enforcement.”

Luc’s counsel did not object, cross-examine Katy’s counsel regarding this

statement, or present any evidence contradicting this representation. For the

foregoing reasons, Luc’s segregation arguments are without merit.

E. Appellate Fees

Lastly, Luc raises several complaints regarding the trial court’s award of

appellate fees to Katy. The court awarded Katy $25,000 in the event of an appeal

to an intermediate court of appeals and $15,000 in the event a petition for review

was filed with the Texas Supreme Court. Luc specifically complains that the

award was not supported by sufficient evidence, was not conditioned on Katy’s

success on appeal, and was ordered to be paid the day after appeal was perfected,

and that Katy was awarded post-judgment interest accruing on the amount of

appellate fees from the date of the trial court’s order.

(i) Sufficiency of the Evidence

We generally review a trial court’s award of appellate attorney’s fees for an

abuse of discretion. See, e.g., Law Offices of Windle Turley, P.C. v. French, 164

S.W.3d 487, 493 (Tex. App.—Dallas 2005, no pet.). To be proper, there must be

evidence of the fees’ reasonableness pertaining to appellate work. State and

County Mut. Fire Ins. Co. ex rel. S. United Gen. Agency of Tex. v. Walker, 228

S.W.3d 404, 410 (Tex. App.—Fort Worth 2007, no pet.). Luc acknowledges that

20

at trial, Katy’s lead counsel testified that if the case were appealed, the amounts

awarded by the court were reasonable for attorneys with similar experience to

himself and his co-counsel. Luc asserts, however, that this statement was too

conclusory and unsupported by other evidence. The statement, however, was not

made in a vacuum. As discussed above, Luc’s counsel stipulated to the

qualifications and rate charged by Katy’s counsel, billing statements were admitted

into evidence showing the work done on trial of the case, and the judge herself

would have been familiar with the complexity of the case, the size of the record,

and potential issues on appeal. This evidence was sufficient to support the trial

court’s award of appellate attorney’s fees.

(ii.) Unconditional Award

Next, Luc complains that the award of appellate fees was not conditioned on

Katy’s success in the appeal. A trial court may not grant a party an unconditional

award of appellate attorney’s fees because to do so could penalize a party for

taking a meritorious appeal. In re Ford Motor Co., 988 S.W.2d 714, 721 (Tex.

1998); Watts v. Oliver, 396 S.W.3d 124, 135 n.3 (Tex. App.—Houston [14th Dist.]

2013, no pet.). However, an unconditional award of attorney’s fees for appeal 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. Keith v. Keith, 221 S.W.3d 156, 171 (Tex. App.—Houston [1st Dist.]

2006, no pet.). Accordingly, we will modify the trial court’s award of appellate

fees in the present case to make it contingent on Katy’s success on appeal.

(iii.) Date Due and Accrual of Interest

Lastly, Luc complains that the trial court ordered him to pay Katy’s

appellate fees within a day after she perfected her appeal in an intermediate

appellate court or sought review in the Texas Supreme Court and provided that

21

post-judgment interest would begin to accrue on the amount awarded for appellate

fees as of the date the trial court entered its judgment. We have previously

explained that, because an award of appellate fees depends on the outcome of the

appeal, it is not a final award until the appeal is concluded and the appellate court

issues its judgment; thus, the fees would not be due and interest on those fees

should not begin to accrue until the appellate court issues its judgment. See Watts,

396 S.W.3d at 134-35 (citing Apache Corp. v. Dynegy Midstream Servs., Ltd.

P’ship, 214 S.W.3d 554, 566–67 (Tex. App.—Houston [14th Dist.] 2006), rev’d in

part on other grounds, 294 S.W.3d 164 (Tex. 2009), and Protechnics Int’l, Inc. v.

Tru–Tag Sys., Inc., 843 S.W.2d 734, 736 (Tex. App.—Houston [14th Dist.] 1992,

no writ)). Accordingly, we further modify the trial court’s judgment to clarify that

payment of the fees is not due and interest on the fees does not begin until the

appellate court issues its judgment. See id.

V. Conclusion

We vacate the portions of the trial court’s order that purport to clarify the

divorce decree and that hold Luc breached his fiduciary duty to Katy, and we

dismiss those causes of action. Additionally, we modify the amount awarded as

attorney’s fees and costs by subtracting $27,090.76 from the amount awarded. We

further modify the trial court’s award of appellate fees to make such fees

contingent on Katy’s success on appeal and to clarify that payment of the fees is

not due and interest on the fees does not begin to accrue until the appellate court

issues its judgment. We affirm the remainder of the trial court’s order.

/s/ Martha Hill Jamison

Justice

Panel consists of Justices Boyce, Jamison, and Donovan.

22