Stewart A. Feldman and the Feldman Law Firm LLP v. KPMG LLP, KPMG LLP (Canada), Paul Ziff, Ziff Energy Group, Ltd., and Ziff Energy Management Corp.

Opinion issued May 1, 2014.

In The

Court of Appeals

For The

First District of Texas

————————————

NO. 01-12-00934-CV

———————————

STEWART FELDMAN AND THE FELDMAN LAW FIRM, LLP;

Appellants

V.

KPMG LLP, KPMG LLP (CANADA), PAUL ZIFF, ZIFF ENERGY

GROUP, LTD., AND ZIFF ENERGY MANAGEMENT CORPORATION,

Appellees

On Appeal from the 80th District Court

Harris County, Texas

Trial Court Case No. 2011-63255

OPINION

In this appeal, we consider whether the trial court erred in (1) dismissing the

plaintiff’s suit requesting a declaratory judgment that it could not be held liable to

the defendants in a pending lawsuit in Canada, and (2) awarding attorney’s fees to

a defendant obtaining the dismissal. We affirm.

BACKGROUND

In 2011, Paul Ziff, Ziff Energy Group, Ltd., and Ziff Energy Management

Corporation [collectively, “the Ziffs”] filed suit against KPMG, LLP (Canada) in a

Canadian court alleging accounting malpractice and professional liability. In

August 2011, KPMG (Canada) then filed a third-party claim against Feldman and

the Feldman Law firm [collectively, “Feldman”] seeking indemnity and

contribution in the event that KPMG (Canada) was held liable to the Ziffs.

Feldman failed to appear and KPMG (Canada) obtained a default judgment against

Feldman in September 2011.

In October 2011, after he was already in default in the Canadian court,

Feldman filed a suit against KPMG (Canada), its U.S. counterpart, KPMG, LLP

[collectively, “KPMG” unless specified as KPMG (Canada)] and the Ziffs.

Specifically, Feldman sought a declaratory judgment “under the Uniform

Declaratory Judgments Act (“UDHA”) decreeing that neither Paul Ziff, Ziff

Energy, Ziff Management, nor [KPMG] can bring an action against [him] in a

foreign country for claims that have long expired.”

KPMG answered, asserted a compulsory counterclaim against Feldman, and

requested the trial court to dismiss the suit “because a declaratory judgment is not

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available to resolve an issue when another action is pending that will adjudicate the

same issue between the parties.” The Ziffs also answered and filed a plea to the

jurisdiction, asserting, among other reasons, that the declaratory judgment should

be dismissed because of the pending suit in Canada.

Thereafter, Ziff settled its Canadian claims against KPMG (Canada) in

January 2012. Nevertheless, Feldman continued to pursue discovery in the Harris

County case “to ensure that the Plaintiffs are out of this matter once and for all and

to recover their costs.” The Ziffs then offered Feldman a mutual release, which

Feldman declined, continuing to pursue discovery. Feldman was not interested in

a mutual release in which each party would incur its own costs. Rather, he wanted

a “full release from liability, after which the parties could discuss costs incurred to

date.”

In January 2012, KPMG (Canada) filed a notice of nonsuit as to its

counterclaims against Feldman in the Harris County case. The nonsuit stated that

the counterclaim was moot “as a result of a settlement reached in the underlying

Calgary litigation.” An exhibit attached to the non-suit was a “Discontinuance” of

the third-party claim against Feldman in Canada. Soon thereafter, the Ziffs sent

Feldman both a mutual release, which Feldman again refused to sign, and a

unilateral release.

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Thereafter, the trial court granted the plea to the jurisdiction and dismissed

Feldman’s claims on February 28, 2012.

On March 9, 2012, the Ziffs filed a motion to modify the judgment to

include their attorney’s fees and costs. On April 18, 2012, the trial court denied

the Ziffs’ motion to modify, but instead, reinstated the case in part and set the case

for trial on the issue of the Ziffs’ request for attorney’s fees under the UDJA.

After a jury trial, the court entered a final judgment in which it “ORDERED,

ADJUDGED, AND DECREED that it is both equitable and just that the Ziff

Defendants recover their reasonable and necessary attorneys’ fees from the

Plaintiffs under the Declaratory Judgment Act.” Based on the jury verdict, the

judgment also awarded the Ziffs $36,952 in attorney’s fees, post-judgment interest,

plus contingent amounts available in the event of post-judgment appeals. This

appeal followed.

PROPRIETY OF DISMISSAL FOR WANT OF JURISDICTION

Standard of Review

A plea to the jurisdiction challenges a trial court’s authority to decide the

subject matter of a specific cause of action. See Tex. Dep’t of Parks & Wildlife v.

Miranda, 133 S.W.3d 217, 225–26 (Tex. 2004). Whether this authority exists turns

in the first instance on the content of the claimant’s live pleadings. Id. at 226. The

plaintiff has the initial burden of alleging facts that would affirmatively

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demonstrate the trial court’s jurisdiction to hear the cause. Id. (citing Tex. Ass’n of

Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 446 (Tex. 1993)). Mere unsupported

legal conclusions do not suffice. See Creedmoor–Maha Water Supply Corp. v. Tex.

Comm’n on Envtl. Quality, 307 S.W.3d 505, 515–16 & nn. 7 & 8 (Tex. App.—

Austin 2010, no pet.). We construe the pleadings liberally, taking them as true, and

look to the pleader’s intent. Miranda, 133 S.W.3d at 226. If the pleadings fail to

allege sufficient facts to affirmatively demonstrate the trial court’s jurisdiction but

also fail to affirmatively demonstrate incurable defects in jurisdiction, the issue is

one of pleading sufficiency, and the plaintiff should be afforded the opportunity to

amend. Id. at 226–27. If, on the other hand, the pleadings affirmatively negate the

existence of jurisdiction, then a plea to the jurisdiction may be granted without

allowing the plaintiff an opportunity to amend. Id. at 227.

We may also consider evidence that the parties have submitted and must do

so when necessary to resolve the jurisdictional issues. Bland Indep. Sch. Dist. v.

Blue, 34 S.W.3d 547, 555 (Tex. 2000). In fact, in a plea to the jurisdiction, a party

may present evidence to negate the existence of a jurisdictional fact alleged in the

pleadings, which we would otherwise presume to be true. Miranda, 133 S.W.3d at

227; Hendee v. Dewhurst, 228 S.W.3d 354, 367 (Tex. App.—Austin 2007, pet.

denied). How we review a trial court’s explicit or implicit determination of such a

challenge depends on whether the jurisdictional fact being challenged overlaps

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with the merits of the plaintiff’s claims. If the challenged jurisdictional fact

overlaps with the merits of the plaintiff's claims, the party asserting the plea to

the jurisdiction must overcome a traditional-summary-judgment-like burden and

conclusively negate that fact. See Miranda, 133 S.W.3d at 228; Hendee, 228

S.W.3d at 367. But if the challenged jurisdictional fact does not overlap the merits,

the fact issue may be resolved by the trial court when resolving the jurisdictional

issue, and its explicit or implicit fact finding (or failure-to-find) may be challenged

in the same manner as fact findings generally. Combs v. Entm’t Publ'ns, Inc., 292

S.W.3d 712, 719 (Tex. App.—Austin 2009, no pet.).

Our ultimate inquiry is whether the particular facts presented, as determined

by the foregoing review of the pleadings and any evidence, affirmatively

demonstrate a claim within the trial court’s subject-matter jurisdiction,

see Miranda, 133 S.W.3d at 226; Creedmoor–Maha, 307 S.W.3d at 513, 516 &

n.8, which is a question of law that we review de novo. See Miranda, 133 S.W.3d

at 226.

Analysis

Feldman argues that the trial court erred in dismissing its suit for want of

jurisdiction because there is a justiciable issue between the parties, the district

court is a court of general jurisdiction and may declare the legal rights and

obligations of the parties, and the case exceeds the amount in controversy required

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to maintain a suit in district court. Feldman further cites MBM Fin. Corp v.

Woodlands Operating Co., L.P., 292 S.W.3d 660, 668 (Tex. 2009) for the

proposition that a declaratory judgment is a proper vehicle for asserting a claim of

“non-liability” in a contract case. MBM Financial, however, is distinguishable

because the Canadian suit appears to be a claim for professional malpractice, i.e., a

tort claim. Under most circumstances, Texas courts should decline to exercise

jurisdiction in a case seeking a declaration of non-liability in a tort suit because to

do so deprives the potential plaintiff of the right to determine where and when to

file suit. See MBM Financial, 292 S.W.3d at 668; Abor v. Black, 695 S.W.2d 564,

566 (Tex. 1985).

However, even if the Canadian suit involves contract claims, we would still

find MBM Financial distinguishable. We agree that a declaratory judgment may be

used to assert a claim of non-liability in a contract case. See MBM Financial, 292

S.W.3d at 668. The issue presented here, however, is whether a declaratory

judgment may be used to assert a claim of non-liability in a contract case when

there is already a breach-of-contract case pending in another court. As such, this

case is distinguishable from MBM Financial, in which the plaintiff filed a breach-

of-contract case and, in the same suit, requested a declaration of non-liability to the

defendant. 292 S.W.3d at 663. The Supreme Court held that a declaration of non-

liability was an appropriate subject of a declaratory judgment in a contract case, as

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opposed to a tort case, because both parties suffer when a contract collapses and

there is no “real plaintiff” necessarily deserving of the right to choose the

jurisdiction. Id. at 668. However, the plaintiff could not recover attorney’s fees

when it had failed to recover damages on its breach-of-contract claim. Id. at 669–

70. There was no previously filed breach-of-contract lawsuit in MBM Financial;

merely a declaratory judgment request that was “tacked on” to the plaintiff’s own

breach-of-contract suit. As such, MBM Financial does not resolve the issue of

whether a district court should exercise jurisdiction over a declaratory judgment

action requesting a declaration of non-liability in a contract case when a breach-of-

contract case is already pending in another court.

The Ziffs and KPMG contend that this case is controlled by Texas Liquor

Control Board v. Canyon Creek Land Corp., 456 S.W.2d 891 (Tex. 1970). In

Canyon Creek, the plaintiffs filed a declaratory judgment seeking to prevent the

Texas Liquor Control Board from enforcing its interpretation of a statutory

provision in the Texas Liquor Control Act. Id. at 893. At the time the declaratory

judgment suit was filed, there were already two administrative license suspension

proceedings pending against the plaintiffs involving their alleged violation of the

same statute. Id. at 894. The supreme court noted that, “As a general rule, an

action for declaratory judgment will not be entertained if there is pending, at the

time it is filed, another action or proceeding between the same parties and in which

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may be adjudicated the issues involved in the declaratory action.” Id. at 895. The

court then concluded that “[i]n so far as plaintiffs are seeking a declaratory

judgment for the purpose of overturning the administrative interpretation of the

statute so that no further proceedings will be instituted against them, we hold that

the facts of these cases do not warrant an exercise of jurisdiction.” Id. at 896.

The Fourteenth Court of Appeals has addressed the issue raised in Canyon

Creek. See In re BP Oil Supply Co., 317 S.W.3d 915 (Tex. App—Houston [14th

Dist.] 2010, no pet.). In BP Oil, the dispute involved a contract between BP and

ConocoPhillips. Id. After an unsuccessful mediation, BP filed a breach-of-

contract action against ConocoPhillips in Delaware State court. Id. at 917–18.

Several hours later on the same day, ConocoPhillips filed an action in Harris

County seeking a declaratory judgment that it did not breach the contract involved.

Id. at 918. After determining that comity required that the Harris County court

defer to the earlier-filed Delaware court, the court noted that “ConocoPhillips’

non-liability declaratory judgment action is merely a mirror-image of the Delaware

breach-of-contract action[,]” and that “Texas public policy does not favor the

pursuit of a declaratory action when a previously filed liability action already

addresses the same issues.” Id. at 921. ConocoPhillips, however, argued that

MBM Financial controlled and that defensive declaratory judgments could be

maintained in breach-of-contract cases because there is no “real plaintiff,” thus no

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concern about depriving a plaintiff of its chosen jurisdiction. Id. at 921–22. The

court disagreed and distinguished MBM Financial by noting (1) that the case was

not one in which both parties were claiming breach-of-contract, thus BP, the only

party with claims for affirmative relief was the “real plaintiff,” and (2) that the

declaratory judgment in MBM was not the mirror image of a first-filed breach-of-

contract case in another state. Id. at 922. The court concluded that “MBM

Financial does not displace the first-filed rule or the plaintiff’s choice of forum in

a breach-of-contract action when the second-filed declaratory-judgment action is a

mirror image of the first-filed claim for affirmative relief.” Id.

This Court has also addressed the Canyon Creek issue. In Space Master

Int’l, Inc. v. Porta-Kamp Mfg. Co., 794 S.W.2d 944, 948 (Tex. App.—Houston

[1st Dist.] 1990, no writ), a dispute arose between Space Master and Porta-Kamp

Manufacturing over two contracts that were to be performed in Massachusetts and

New Jersey. Id. at 945. Porta-Kamp sued Space Master for breach of contract in

both of those jurisdictions. Id. While the Massachusetts and New Jersey lawsuits

were pending, Space Master filed suit in Texas seeking a declaratory judgment that

the contracts at issue were usurious. Id. Porta-Kamp filed a motion to dismiss,

which the trial court granted. Id. at 946. On appeal, Space Master argued that the

trial court had no authority to dismiss its suit for declaratory judgment, filed while

proceedings involving the same parties and issues were pending in the other courts.

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Id. Recognizing that declaratory judgment actions are neither legal nor equitable,

but instead, sui generis, this Court followed Canyon Creek, holding that a party

should not be allowed to use declaratory relief as a forum-shopping device where

the same parties and issues, i.e., breach-of-contract actions for money damages,

were pending in New Jersey state court and Massachusetts federal court, and where

the declaratory-judgment action alleged that those same contracts should not be

enforced because of usurious interest rates. Id. at 948. Accordingly, this Court

concluded that the trial court did not err in dismissing Space Master’s suit for

declaratory judgment and affirmed the trial court’s judgment. Id.

We conclude that this case is controlled by the holdings in Canyon Creek,

BP Oil, and Space Master. Here, it is undisputed that, at the time Feldman filed

suit,1 there was a suit pending involving the same parties2 and the same issues in

Canada. Indeed, Feldman’s suit “seek[s] a declaration under the Uniform

Declaratory Judgments Act (“UDJA”) decreeing that neither Paul Ziff, Ziff

1

Subject-matter jurisdiction is determined as of the date a suit is filed. See Grupo

Dataflux v. Atlas Global Group, L.P., 541 U.S. 567, 570, 124 S. Ct. 1920, 1924

(2004) (It has long been the case that “the jurisdiction of the court depends upon

the state of things at the time of the action brought.”)

2

KPMG (US) is not a party to the suit in Canada, but the claims that Feldman

asserts against it are exactly the same claims as those asserted against KPMP

(Canada). Furthermore, Canyon Creek also involved an extra party in the

declaratory judgment that was not present in the ongoing administrative

proceedings. See Canyon Creek, 456 S.W.2d at 893.

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Energy, Ziff Management nor KPMG can bring an action against [Feldman and his

law firm] in a foreign country for claims that have long expired.” As in BP Oil, the

Ziffs are the “true plaintiffs” in the Canadian suit because they have claims for

affirmative relief against KPMG (Canada).3 Feldman has no affirmative claim for

relief in either court, thus cannot be considered a “true plaintiff.” And, Feldman’s

declaratory judgment is a “mirror image” of the claims being adjudicated in

Canada. While the cross-claim against him in Canada seeks to hold him liable to

KPMG (Canada) in the event that KPMG (Canada) is held liable to the Ziffs, the

declaratory judgment seeks a decree that no such action will lie. To allow a

defensive declaratory judgment in this case, would not only deny the Ziffs their

choice of forum, it would force them to litigate in a jurisdiction chosen by a third-

party defendant against whom they have filed no claim for affirmative relief.

Further, even though the first-filed proceeding in this case was filed in

Canada, and the cases in BP Oil and Space Master involved first-filed proceedings

in other states, we see no reason to treat the cases differently. “Because Canada is

a sister common-law jurisdiction, American courts have consistently deferred to

Canadian courts under the comity principle.” Caddel v. Clairton Corp., 105 B.R.

366, 366 (N.D. Tex. 1989); see also Fleeger v. Clarkson Co., Ltd., 86 F.R.D. 388,

3

And, as noted by the supreme court in MBM Financial, in a tort suit there is a true

plaintiff. 292 S.W.3d at 668. Here, the Ziffs are the true plaintiffs on their

professional liability tort claims.

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393 (N.D. Tex. 1980) (“Indeed, the Court is aware of no case in which an

American court has refused to defer to Canada.”). Although Feldman argues that

the Canadian court has no personal jurisdiction over him and the claims against

him in Canada have long since expired, he chose not to appear in Canada to assert

those defenses.

Based on the foregoing, we conclude that the trial court did not err in

dismissing Feldman’s claims for declaratory relief. We overrule Feldman’s first

issue on appeal.

ATTORNEY’S FEES

In his second issue on appeal, Feldman contends the trial court erred by

awarding attorney’s fees to the Ziffs because (1) the trial court lacked jurisdiction

to do so; (2) the fees were not equitable and just; (3) the trial court “pushed the jury

toward a fee award”; (4) Feldman was the prevailing party; and (5) the Ziffs failed

to segregate their fees. We will address each argument respectively.

Applicable Law

In “any proceeding” under the UDJA, “the court may award costs and

reasonable and necessary attorney’s fees as are equitable and just.” TEX. CIV.

PRAC. & REM. CODE ANN. § 37.009 (Vernon 2008). The UDJA “entrusts attorney

fee awards to the trial court’s sound discretion, subject to the requirements that any

fees awarded be reasonable and necessary, which are matters of fact, and to the

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additional requirements that fees be equitable and just, which are matters of law.”

Bocquet v. Herring, 972 S.W.2d 19, 21 (Tex. 1998). “Unreasonable fees cannot be

awarded, even if the court believed them just, but the court may conclude that it is

not equitable or just to award even reasonable and necessary fees.” Id. Further, the

award of attorney’s fees is not dependent on a finding that the party “substantially

prevailed.” Barshop v. Medina Cnty. Underground Water Conservation Dist., 925

S.W.2d 618, 637 (Tex. 1996). Instead, a trial court may award attorney’s fees to a

non-prevailing party as are equitable and just. State Farm Lloyds v. C.M.W., 53

S.W.3d 877, 894 (Tex. App.—Dallas 2001, pet. denied). Thus, the attorney’s fees

provision grants the trial court broad discretion to (i) afford all parties the

opportunity to request fees; (ii) decline to award fees; and (iii) allow an award only

when reasonable, necessary, equitable, and just.

Jurisdiction to Award Fees

Feldman argues that, by having the case dismissed for lack of jurisdiction

and then seeking an award of attorney’s fees, the Ziffs have attempted “to game the

system” and “have it both ways.” The Ziffs respond, arguing that trial courts have

the power to award attorney’s fees under Section 37.009 even when the trial court

has dismissed the plaintiff’s request for a declaratory relief for lack of jurisdiction.

We agree with the Ziffs.

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Under section 37.009, a trial court may exercise its discretion to award

attorneys’ fees to the prevailing party, the nonprevailing party, or neither.

See Barshop, 925 S.W.2d at 637 (award of attorneys’ fees in declaratory judgment

action is not dependent on finding that party “substantially prevailed”). Moreover,

the statute does not require a judgment on the merits of the dispute as a prerequisite

to a fee award. See Castro v. McNabb, 319 S.W.3d 721, 736 (Tex. App.—El Paso

2009, no pet.) (“Our determination that the trial court lacked jurisdiction to render

the specific declarations sought does not change the nature of the proceedings

below. Because this was a proceeding under the [UDJA], the trial court properly

exercised jurisdiction under Section 37.009 to award attorney’s fees to

[appellee].”); see also Zurita v. SVH-1Partners, Ltd., No. 03-10-00650-CV, 2011

WL 6118573, *8 (Tex. App.—Austin Dec. 8, 2011, pet. denied) (not designated

for publication) (same).4 Thus, we conclude that the trial court had the power to

award attorney’s fees under Section 37.009 even though it had dismissed

Feldman’s claim for declaratory relief for lack of jurisdiction.

4

Feldman relies on Utica Lloyd’s of Tex. v. Mitchell, 138 F.3d 208, 210 (5th Cir.

1998), in which the Court stated that “[a]lthough the [UDJA] expressly provides

for attorney’s fees, it functions solely as a procedural mechanism for resolving

substantive controversies which are already within the jurisdiction of the courts.”

However, Feldman cites this language out of context. The Fifth Circuit was not

deciding whether attorney’s fees were appropriate when a Texas state court

dismisses a declaratory judgment. Rather, it was holding that the UDJA was not

the “substantive law” of Texas, but rather, was procedural, and could not be used

as a basis for an award of attorney’s fees in a diversity case in federal court. See

id.

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Equitable and Just

Whether the awarded fees are “equitable and just” is a question of law.

Bocquet, 972 S.W.2d at 21. In a declaratory judgment case, we review a trial

court’s award of attorney’s fees for an abuse of discretion. Id. It is an abuse of

discretion for a trial court to rule arbitrarily, unreasonably, or without regard to

guiding legal principles. Id .We must view the evidence in the light most favorable

to the trial court’s ruling, indulging every presumption in its favor. Approach

Resources I, L.P. v. Clayton, 360 S.W.3d 632, 639 (Tex. App.—El Paso 2012, no

pet.).

Feldman argues that the trial court abused its discretion in holding that the

attorney’s fees were equitable and just because “[t]he parties controlling the

Canadian litigation manipulated the outcome of that suit [by settling and offering

releases] and were then allowed to come into the Harris County court and claim

there was no subject matter jurisdiction because the Canadian case was settled and,

therefore, there was no justiciable controversy to be decided in the declaratory

judgment action.” However, Feldman fails to acknowledge that the plea in

abatement was also based on the pendency of the Canadian proceeding at the time

the declaratory judgment was filed, not merely because the Canadian suit

subsequently settled.

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And, there were circumstances in this case that the court could have

determined supported an equitable and just award of attorney’s fees to the Ziffs.

For example, the Ziffs filed their lawsuit against KPMG in Canada. The Ziffs

never asserted a claim against Feldman in the Canadian suit; Feldman was brought

into that suit as a third-party defendant by KPMG, not the Ziffs. Once KPMG

cross-claimed against Feldman, rather than answer and defend the suit by asserting

a lack of personal jurisdiction in the Canadian court, Feldman chose to bring suit in

Texas to avoid having to appear in Canada. In effect, Feldman sought to transfer

the case from the Ziffs’ chosen venue, even though the Ziffs never asserted a claim

against him. Finally, when the Ziffs offered Feldman a release for a liability they

had never asserted against him, he refused to accept it unless they agreed to pay his

attorney’s fees. Accordingly, the trial court could have concluded that the

declaratory judgment was an attempt at forum shopping by Feldman so that he

would not have to appear in Canada and could recover his attorney’s fees here in

the declaratory judgment action. Under these circumstances, we cannot say that

the trial court’s award of attorney’s fees to the Ziffs was an abuse of discretion.

Trial Court “Pushed the Jury Toward a Fee Award”?

Before trial, the trial court instructed Feldman that the trial was only as to

the amount of attorney’s fees, not the Ziffs’ entitlement to fees. The trial court

warned Feldman to refrain from arguing that the Ziff were not entitled to the fees

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because the issue of the Ziffs’ entitlement to the fees was a matter of law for the

court. The Court further warned Feldman that if he made such an argument, the

court would have to instruct the jury that the Ziffs’ fees were recoverable.

However, when Feldman was being questioned as an expert witness on

attorney’s fees, he was asked why he was there, and he responded as follows:

I’m here to—it’s a good question why I’m here today. This is like

man bites dog situation. I’m here to testify to attorney’s fees.

Offering an opinion on attorney’s fees that were incurred by the Ziff

parties. Even though we won the underlying litigation, even though

we’re vindicated in the underlying litigation.

Counsel for the Ziffs objected, and the trial court sustained the objection, stating

“[t]he objection is sustained, that’s not relevant . . . . The only issue is the amount

of reasonable and necessary attorney’s fees, not whether or not they are

recoverable. They are recoverable for you to determine what is reasonable and

necessary.” Thereafter, Feldman repeatedly attempted to argue that he had

“prevailed” in the lawsuit and should not have to pay attorney’s fees, and each

time, the trial court sustained an objection to the relevancy of such testimony

instructed the jury to disregard it.

On appeal, appellant argues that the trial court’s rulings “improperly

nudged” the jury toward an award of fees. Essentially, Feldman argues that the

trial court had prematurely determined that the fees were equitable and just and

that its rulings led the jury to believe that they must award some amount as

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reasonable and just. However, Feldman cites no case to support his position that

the trial court’s “equitable and just” decision must be made after the jury

determines an amount that is “reasonable and necessary.” The case Feldman relies

on, Ridge Oil Co., Inc. v. Guinn Investments, Inc., 148 S.W.3d 143, 162 (Tex.

2004), merely holds that even after a jury determines an amount that is reasonable

and necessary, the trial court has the authority to lower that amount because it is

not, as a matter of law, equitable and just. The trial court’s rulings correctly stated

that the issue of whether Feldman was a “prevailing party” was irrelevant because

that goes to whether the award is “equitable and just,” which is a legal issue and

not for the jury’s consideration. See Bocquet, 972 S.W.2d at 21. Furthermore, the

trial court’s statements to the jury were made after the trial court warned Feldman

not to get into the issue of whether he was a prevailing party. As such, we cannot

agree that the trial court’s statements to the jury nudged it toward finding

reasonable and necessary fees.

Prevailing Party

Feldman also argues that he was the “prevailing party” in the declaratory

judgment action because, by filing the suit, he obtained releases from both the Ziffs

and KPMG. We disagree. Feldman did not obtain any of the declaratory relief he

requested; he was not a prevailing party. Indeed, the Ziffs and KPMG “prevailed”

because they successfully had Feldman’s claims dismissed. In any event, an award

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of attorney’s fees is not dependent on a finding that the party “substantially

prevailed.” Barshop, 925 S.W.2d at 637. Thus, the trial court had the discretion to

award fees to the Ziffs even if they were not a “prevailing party.”

Failure to Segregate Fees

Finally, Feldman argues that the Ziffs failed to segregate their fees “between

those legal services performed in defending against the declaratory judgment

action and those services that merely furthered the position of the Ziff entities.”

However, there was evidence from the Ziffs’ attorney that, “One hundred percent

of our time on this case was responding to this case alone. That was it. We didn’t

represent anybody else, we didn’t work on anybody else’s claims.”

In Lindley v. McKnight, 349 S.W.3d 113, 136 (Tex. App.—Fort Worth

2011, no pet.), the plaintiff argued that the defendant was not entitled to recover

attorney’s fees related to their unsuccessful motions to transfer venue that they had

filed in the declaratory judgment action. In refusing to require the defendant to

segregate out those portions of the fees it noted that all of the services provided by

the defendant’s attorney were incidental to its defense of the plaintiff’s declaratory

judgment claim even if the service did not affect the ultimate resolution of the

claim. Id. The same is true here. Thus, no segregation of fees was required.

Having disposed of each issue related to the trial court’s award of attorney’s

fees to the Ziffs, we overrule Feldman’s second issue on appeal.

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CONCLUSION

We affirm the trial court’s judgment.

Sherry Radack

Chief Justice

Panel consists of Chief Justice Radack and Justices Massengale and Huddle.

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