Emil Brasel v. Manhattan Homeowners Association

Opinion issued June 19, 2014

In The

Court of Appeals

For The

First District of Texas

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NO. 01-13-00655-CV

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EMIL BRASEL, Appellant

V.

MANHATTAN HOMEOWNERS ASSOCIATION, Appellee

On Appeal from County Civil Court at Law No. 3

Harris County, Texas

Trial Court Case No. 976666

MEMORANDUM OPINION

Appellee, Manhattan Homeowners Association (“MHA”), sued appellant,

Emil Brasel, for violations of a deed restriction. The jury determined that Brasel

committed five out of twenty alleged violations and awarded MHA a portion of its

requested attorneys’ fees through trial. The trial court granted MHA’s motion for

judgment notwithstanding the verdict, awarding it the full amount of requested trial

attorneys’ fees. In two issues on appeal, Brasel argues the trial court erred by

granting the judgment notwithstanding the verdict.

We reverse and render.

Background

Brasel is a resident of The Manhattan Condominium, a mid-rise apartment

building in Houston, Texas. In 2010, MHA filed suit against Brasel for violating

deed restrictions on excessive noise. MHA alleged 20 to 25 violations within a

two-year period.

After MHA obtained a default judgment against him from the justice court,

Brasel appealed to a county court at law. Following a three-day trial, the jury

determined that Brasel had committed five of the alleged violations. The jury was

also required to determine the amount of attorneys’ fees. No objections were

raised to the question in the charge concerning attorneys’ fees. MHA had

requested the jury to award $32,994.50 in attorneys’ fees through trial along with

fees for post-trial motions and appeals. Instead, the jury awarded $2,133 in

attorneys’ fees through trial along with fees for post-trial motions and appeals.

Following trial, MHA filed a motion for judgment notwithstanding the

verdict. MHA argued it should be awarded the full amount of the trial attorneys’

fees requested. The trial court agreed and rendered judgment, including awarding

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MHA $34,884.50 in trial attorneys’ fees along with fees for post-trial motions and

appeals.

Standard of Review

We review the grant or denial of a motion for judgment notwithstanding the

verdict under a legal-sufficiency standard. Williams v. Dardenne, 345 S.W.3d 118,

123 (Tex. App.—Houston [1st Dist.] 2011, pet. denied). When a party that bore

the burden of proof at trial seeks a judgment notwithstanding the verdict, it must

show that the record establishes as a matter of law a proposition that contradicts

the jury’s finding. Henry v. Masson, 333 S.W.3d 825, 849 (Tex. App.—Houston

[1st Dist.] 2010, no pet.). “A trial court may not properly disregard a jury’s

negative finding and substitute its own affirmative finding unless the evidence

conclusively establishes the issue.” Id. The evidence only conclusively establishes

an issue when (1) there is complete absence of a vital fact; (2) the rules of law or

evidence preclude according weight to the only evidence offered to prove a vital

fact; (3) the evidence offered to prove a vital fact is no more than a scintilla; and

(4) the evidence conclusively establishes the opposite of a vital fact. City of Keller

v. Wilson, 168 S.W.3d 802, 810 & n.16 (Tex. 2005); Rosenblatt v. Freedom Life

Ins. Co. of Am., 240 S.W.3d 315, 319 (Tex. App.—Houston [1st Dist.] 2007, no

pet.).

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In applying the legal-sufficiency standard, we must credit evidence that

supports the judgment if reasonable jurors could credit that evidence, and we must

disregard contrary evidence unless reasonable jurors could not disregard that

evidence. City of Keller, 168 S.W.3d at 827. Accordingly, we review the evidence

in the light most favorable to the verdict, but disregard all contrary evidence that a

reasonable jury could have disbelieved. Ysleta Indep. Sch. Dist. v. Monarrez, 177

S.W.3d 915, 917 (Tex. 2005) (citing City of Keller, 168 S.W.3d at 812). If the

evidence falls within the zone of reasonable disagreement, we may not invade the

role of the fact-finder, 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. City of Keller, 168 S.W.3d at 822.

Analysis

In his first issue, Brasel argues the trial court erred by granting a motion for

judgment notwithstanding the verdict on attorneys’ fees incurred through trial 1

because the fees were not established as a matter of law. In his second issue,

Brasel argues the trial court erred by granting a motion for judgment

notwithstanding the verdict on attorneys’ fees because the jury charge modified the

law on the determination of attorneys’ fees.

1

The judgment’s award of post-trial attorneys’ fees is not at issue in this appeal.

Any further reference to attorneys’ fees in this case concerns the fees incurred

through trial.

4

Ordinarily, the determination of the reasonableness and amount of attorneys’

fees is a question of fact that is left within the sound discretion of the trier of fact.

See Ragsdale v. Progressive Voters League, 801 S.W.2d 880, 881 (Tex. 1990).

Similarly, the testimony of an interested witness under normal circumstances “does

no more than raise a fact issue to be determined by the” trier of fact. Id. at 882. In

some circumstances, however, such testimony must be taken as true as a matter of

law. Id. For testimony concerning attorneys’ fees, such testimony is established as

a matter of law when the testimony “is not contradicted by any other witness, or

attendant circumstances, and the same is clear, direct and positive, and free from

contradiction, inaccuracies, and circumstances tending to cast suspicion thereon.”

Id. These have become known as the Ragsdale factors. See Smith v. Patrick W.Y.

Tam Trust, 296 S.W.3d 545, 548 (Tex. 2009). The Ragsdale factors do not render

all uncontradicted testimony as established as a matter of law. Ragsdale, 801

S.W.2d at 882. Uncontradicted testimony cannot be established as a matter of law

“if it is unreasonable, incredible, or its belief is questionable.” Smith, 296 S.W.3d

at 547–48.

MHA argued to the trial court in its motion for judgment notwithstanding

the verdict that it had satisfied the Ragsdale factors. It argued, accordingly, that it

had established its attorneys’ fees as a matter of law and should have been awarded

the full amount sought. The trial court agreed. We must disagree.

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The Supreme Court of Texas’s opinion in Smith controls this case. In Smith,

the owner of a shopping center sued a tenant, ultimately seeking $215,391.50 in

damages and $47,438.75 in attorneys’ fees. Id. at 546. The jury awarded $65,000

in damages but no attorneys’ fees. Id. The trial court rendered judgment,

awarding $65,000 in damages and $7,500 in attorneys’ fees through trial. Id. at

546–47. The court of appeals, relying on Ragsdale, determined that attorneys’ fees

had been established as a matter of law and awarded the full fees. Id. at 547.

The Supreme Court of Texas re-emphasized its holding in Ragsdale that not

all uncontradicted interested testimony is established as a matter of law. Id. (citing

Ragsdale, 801 S.W.2d at 882). Instead, the court held that a relevant inquiry in the

determination was the “amount involved and the results obtained.” Id. at 548

(citing Arthur Andersen & Co. v. Perry Equip. Corp., 945 S.W.2d 812, 818 (Tex.

1997)). Applying this consideration to the facts of Smith, the court held that “the

fee, though supported by uncontradicted testimony, was unreasonable in light of

the amount involved and the results obtained, and in the absence of evidence that

such fees were warranted due to circumstances unique to this case.” Id. Critical to

the court’s inquiry was the fact that the owner of the shopping center sought

$215,000 in damages but only obtained $65,000. As a result, “[t]hose fees, even

though supported by uncontradicted testimony, may not be awarded as a matter of

law.” Id.

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The facts of this case are, for the purposes of our analysis, no different from

the facts of Smith. MHA alleged 20 to 25 violations of the deed restrictions on

excessive noise, seeking $200 in statutorily-capped damages for each violation.

See TEX. PROP. CODE ANN. § 202.004(c) (Vernon 2007). The jury only found five

violations, however, resulting in a judgment of $1,000 out of a potential $4,000 to

$5,000 in damages. Considering the amount involved and the results obtained,

then, we hold MHA’s attorneys’ fees were not established as a matter of law. See

id.; see also Farrar v. Hobby, 506 U.S. 103, 104, 113 S. Ct. 566, 574 (1992)

(“Indeed, ‘the most critical factor’ in determining the reasonableness of a fee

award ‘is the degree of success obtained.’”).

MHA’s argument in its brief for why the attorneys’ fees should be

determined to be established as a matter of law is unpersuasive. As an initial

matter, MHA makes a number of unsupported contentions on what formed the

basis for the jury’s award of attorneys’ fees. See TEX. R. APP. P. 38.1(i) (requiring

briefs to support arguments with citations to record). MHA suggests, “[T]he first

question discussed [by the jury in its deliberations] was not even part of the court’s

charge. ‘All this so they can fight over a thousand dollars?’” MHA further

suggests that the jury’s verdict “was grounded in a desire to send a message to the

litigants,” and yet somehow—perhaps through inadvertence—the jury “sent [it] to

the wrong party.”

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Nowhere in its brief does MHA explain how it is capable of divining the

thought process of all of the jurors during their private deliberations. At any rate,

any such proof is not a part of the record. See Carlisle v. Philip Morris, Inc., 805

S.W.2d 498, 501 (Tex. App.—Austin 1991, writ denied) (“It is elementary that . . .

an appellate court may not consider matters outside the appellate record.”).

Moreover, MHA did not raise before the trial court or on appeal any claim of jury

misconduct and there has been no determination by the trial court of such. See

TEX. R. APP. P. 33.1(a) (establishing requirements for preservation of issue to

present on appeal). Accordingly, we have no basis for concluding that the jury’s

determinations are the result of anything other than the proper execution of the

jury’s duties to weigh the evidence and make determinations of credibility.

MHA presents arguments in its brief on how its expert testimony on

attorneys’ fees was clear and free from contradiction as well as not contradicted by

any other witness. See Ragsdale, 801 S.W.2d at 882. Even assuming these

arguments are correct, however, Ragsdale also requires the testimony to be “free

from contradiction, inaccuracies, and circumstances tending to cast suspicion

thereon.” See id. It is upon this third factor—“circumstances tending to cast

suspicion thereon”—that we have determined the testimony was not established as

a matter of law. See id. As in Smith, we find the fees awarded to MHA by the trial

court were not established as a matter of law.

8

For this factor, MHA argues the holding from Smith does not apply because

this factor “has been always understood to compare the amount of damages

involved to the results obtained—not the number of counts that went to the jury.”

We find no justification for this argument. Nothing in the case law suggests we

can consider only damages and not the number of complaints in determining the

plaintiff’s degree of success. See Rosenblatt, 240 S.W.3d at 323 (considering

number of successful claims in determining evidence was not free from suspicion).

Even if that were true, MHA’s recovery against Brasel was statutorily-capped at

$200 per day of violation. See TEX. PROP. CODE ANN. § 202.004(c). Accordingly,

MHA’s recovery of damages was correlated to the number of alleged violations on

which it prevailed.

MHA further argues that it would be unfair to allow a litigant to “purposely

run up attorneys’ fees and then argue that his opponent did not recover enough to

justify the fees incurred.” MHA correctly points out that the evidence at trial

established that all of the pretrial discovery conducted in this case was initiated by

Brasel and that a significant portion of MHA’s attorneys’ fees were incurred in

responding to this discovery. MHA argues that, because it was Brasel’s “fault”

that MHA incurred the attorneys’ fees for pretrial discovery, MHA should be

entitled as a matter of law to recover the totality of its attorneys’ fees.

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MHA sued Brasel, and Brasel engaged in discovery in his defense of the

suit. It was Brasel’s right to engage in discovery. See TEX. R. CIV. P. 190–215

(establishing rules for pretrial discovery in civil cases). MHA did not seek or

obtain sanctions against Brasel for engaging in any improper conduct. See TEX. R.

CIV. P. 215. Moreover, the record shows that Brasel successfully defended at least

75% of the alleged excessive noise violations. MHA has not argued, let alone

proved, that Brasel would have successfully defended these claims without the

discovery in which the parties engaged. Accordingly, MHA has failed to establish

at trial or on appeal that Brasel “purposely r[a]n up attorneys’ fees” as opposed to

engaged in legitimate and beneficial discovery.

The facts of this case, then, are that MHA sued Brasel. Brasel engaged in

discovery. One effect of Brasel’s engaging in discovery was that MHA had to

incur attorneys’ fees. Evidence obtained from the discovery process was used at

trial. The jury ultimately found in favor of Brasel for three quarters of the alleged

violations. From this, MHA would have us craft a rule removing from the jury’s

province the determination of what amount of fees are reasonable when a mixed

verdict is delivered and, instead, forcing the defendant to pay the full amount of

attorneys’ fees when the plaintiff obtains any amount of recovery. We decline this

invitation.

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The record does not establish as a matter of law that MHA was entitled to its

full award of attorneys’ fees. Accordingly, the trial court erred by granting the

judgment notwithstanding the verdict on the matter. We sustain Brasel’s first

issue. Because Brasel’s second issue would not entitle him to any relief greater

than we are already granting, we do not need to reach it. See TEX. R. APP. P. 47.1

(requiring appellate courts to address every issue raised and necessary to final

disposition of the appeal).

Conclusion

We reverse the trial court’s judgment notwithstanding the verdict on

attorneys’ fees and render a judgment conforming to the jury’s award of attorneys’

fees.

Laura Carter Higley

Justice

Panel consists of Chief Justice Radack and Justices Higley and Brown.

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