Elsas v. Preston et al
ORDER granting in part and denying in part 90 Motion for Attorney Fees; plaintiff to re-file motion as set forth in the Order. Signed by Honorable David C. Bramlette, III on 1/4/2017 (ECW)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
NANCY ELSAS, Individually, as
personal representative of the
Estate of Louis Jacob Elsas II,
and as Trustee of the Residuary
Trust of the Louis Jacob Elsas II
Management Trust U/A, Sept. 28, 2011
CIVIL ACTION NO. 5:15-cv-28(DCB)(MTP)
MEMORANDUM OPINION AND ORDER
This cause is before the Court on the Plaintiff’s Motion for
Attorneys’ Fees and Costs (docket entry 90).
considered the plaintiff’s motion and the defendant’s response, the
parties’ memoranda and the applicable law, and being fully advised
in the premises, the Court finds as follows:
In its prior Order, the Court granted the plaintiff’s Motion
for Summary Judgment seeking damages from the defendant for breach
$500,000, the agreed-upon price for the defendant’s purchase of the
plaintiff’s mineral interests in Wilkinson County, Mississippi.
Because the purchase price was easily ascertained by reference to
the Purchase and Sale Agreement (“PSA”), and because such sum will
fully compensate the plaintiff for its loss under the terms of the
equitable remedy of specific performance.
The Court also ordered
the parties to brief the issue of attorneys’ fees and costs.
“The award of attorney’s fees in a diversity case is governed
by state law.”
Structural Metals, Inc. v. S&C Elec. Co., 590
Fed.Appx. 298, 304 (5th Cir. 2014)(citing Mathis v. Exxon Corp., 302
F.3d 448, 461 (5th Cir. 2002)).
In this case, the parties’ PSA
provides that its provisions “shall be governed by and construed in
accordance with the laws of the State of Texas.”
PSA, ¶ 11(a).
Texas law specifically provides for the recovery of attorneys’ fees
in breach of contract cases.
Tex. Civ. Prac. & Rem. Code §
In determining whether attorneys’ fees are reasonable, Texas
courts consider the following factors: “(1) the time and labor
required, novelty, and difficulty of the questions involved and the
skill required to properly perform the legal service properly; (2)
the likelihood ... that the acceptance of the particular employment
customarily charged in the locality for similar legal services; (4)
limitations imposed by the client or by the circumstances; (6) the
nature and length of the professional relationship with the client;
performing the services; and (8) whether the fee is fixed or
contingent on results obtained or uncertainty of collection before
the legal services have been rendered.”
Arthur Andersen & Co. v.
Perry Equip. Corp., 945 S.W.2d 812, 818 (Tex. 1997).
factors are referred to as the “Arthur Andersen factors.”
Federal law also provides factors for determining attorneys’
fees, referred to as the “Johnson factors,” as set forth in Johnson
v. Georgia Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir.
They are as follows:
(1) The time and labor required. Although hours claimed
or spent on a case should not be the sole basis for
determining a fee, Electronics Capital Corp. v. Sheperd,
439 F.2d 692 (5th Cir. 1971),they are a necessary
ingredient to be considered.
The trial judge should
weigh the hours claimed against his own knowledge,
experience, and expertise of the time required to
complete similar activities. If more than one attorney
is involved, the possibility of duplication of effort
along with the proper utilization of time should be
The time of two or three lawyers in a
courtroom or conference when one would do, may obviously
be discounted. It is appropriate to distinguish between
legal work, in the strict sense, and investigation,
clerical work, compilation of facts and statistics and
other work which can often be accomplished by non-lawyers
but which a lawyer may do because he has no other help
Such non-legal work may command a lesser
rate. Its dollar value is not enhanced just because a
lawyer does it.
(2) The novelty and difficulty of the questions. Cases
of first impression generally require more time and
effort on the attorney’s part. Although this greater
expenditure of time in research and preparation is an
investment by counsel in obtaining knowledge which can be
used in similar later cases, he should not be penalized
for undertaking a case which may “make new law.”
Instead, he should be appropriately compensated for
accepting the challenge.
(3) The skill requisite to perform the legal service
The trial judge should closely observe the
attorney’s work product, his preparation, and general
ability before the court. The trial judge’s expertise
gained from past experience as a lawyer and his
observation from the bench of lawyers at work become
highly important in this consideration.
(4) The preclusion of other employment by the attorney
due to acceptance of the case. This guideline involves
the dual consideration of otherwise available business
which is foreclosed because of conflicts of interest
which occur from the representation, and the fact that
once the employment is undertaken the attorney is not
free to use the time spent on the client’s behalf for
(5) The customary fee. The customary fee for similar
work in the community should be considered. It is open
knowledge that various types of legal work command
differing scales of compensation. At no time, however,
should the fee for strictly legal work fall below the $20
per hour prescribed by the Criminal Justice Act, 18
U.S.C.A. § 3006A(d)(1), and awarded to appointed counsel
for criminal defendants.
As long as minimum fee
schedules are in existence and are customarily followed
by the lawyers in a given community, they should be taken
(6) Whether the fee is fixed or contingent.
quoted to the client or the percentage of the recovery
agreed to is helpful in demonstrating the attorney’s fee
expectations when he accepted the case. But as pointed
out in Clark v. American Marine, supra,
[t]he statute does not prescribe the payment
of fees to the lawyers. It allows the award
to be made to the prevailing party. Whether
or not he agreed to pay a fee and in what
amount is not decisive.
litigant might agree to pay his counsel a
fixed dollar fee.
This might be even more
than the fee eventually allowed by the court.
Or he might agree to pay his lawyer a
percentage contingent fee that would be
greater than the fee the court might
ultimately set. Such arrangements should not
determine the court’s decision. The criterion
for the court is not what the parties agreed
but what is reasonable.
320 F.Supp. at 711. In no event, however, should the
litigant be awarded a fee greater than he is
contractually bound to pay, if indeed the attorneys have
contracted as to amount.
(7) Time limitations imposed by the client or the
circumstances. Priority work that delays the lawyer’s
other legal work is entitled to some premium.
factor is particularly important when a new counsel is
called in to prosecute the appeal or handle other matters
at a late stage in the proceedings.
(8) The amount involved and the results obtained. Title
VII, 42 U.S.C.A. § 2000e-5(g), permits the recovery of
damages in addition to injunctive relief. Although the
Court should consider the amount of damages, or back pay
awarded, that consideration should not obviate court
scrutiny of the decision’s effect on the law. If the
affecting a large class of an employer’s employees, the
attorney’s fee award should reflect the relief granted.
(9) The experience, reputation, and ability of the
Most fee scales reflect an experience
differential with the more experienced attorneys
receiving larger compensation. An attorney specializing
in civil rights cases may enjoy a higher rate for his
expertise than others, providing his ability corresponds
with his experience. Longevity per se, however, should
not dictate the higher fee.
If a young attorney
demonstrates the skill and ability, he should not be
penalized for only recently being admitted to the bar.
(10) The “undesirability” of the case.
attorneys face hardships in their communities because of
their desire to help the civil rights litigant.
NAACP v. Button, 371 U.S. 415, 443, 83 S.Ct. 328, 9
L.Ed.2d 405 (1963); Sanders v. Russell, 401 F.2d 241 (5th
Cir. 1968). Oftentimes his decision to help eradicate
discrimination is not pleasantly received by the
community or his contemporaries.
This can have an
economic impact on his practice which can be considered
by the Court.
(11) The nature and length of the professional
relationship with the client.
A lawyer in private
practice may vary his fee for similar work in the light
of the professional relationship of the client with his
office. The Court may appropriately consider this factor
in determining the amount that would be reasonable.
(12) Awards in similar cases. The reasonableness of a
fee may also be considered in the light of awards made in
similar litigation within and without the court’s circuit. ....
Id. at 717–19; abrogated by Blanchard v. Bergeron, 489 U.S. 87, 109
In Mid-Continent Cas. Co. v. Chevron Pipe Line Co., 205 F.3d
222 (5th Cir. 2000), the Fifth Circuit stated that because the
Arthur Andersen factors and Johnson factors involve “a similar
analysis, it has not been necessary for our court to decide whether
the Johnson factors control in Texas diversity cases.”
Id. at 232
(citing Atlantic Richfield Co. v. Manges, 702 F.2d 85, 87 (5th Cir.
1983)(additional citations omitted)).
The plaintiff relies on the Affidavit of its counsel (docket
entry 90, Exhibit 1) which identifies and attaches a contingency
agreed to represent Plaintiff and to pursue the lawsuit
herein for a percentage of the agreed upon consideration
at issue in the lawsuit or, if the Plaintiff prevails, an
amount of 35% of any recovery and/or any consideration to
be paid under the contract and to enforce said contract.
As such, if Plaintiff prevails in this action, the
attorneys would be entitled to a contingency fee interest
of $175,000.00 plus out of pocket expenses, in accordance
with said contract.
Affidavit, p. 1.
Costs (out of pocket expenses), unlike attorneys’ fees, are
governed by federal law.
See Versata Software, Inc. v. Internet
Brands, Inc., 902 F.Supp.2d 841, 862 (E.D. Tex. 2012)(“Rule 54(d)
of the Federal Rules of Civil Procedure provides that an award of
costs ‘should be allowed to the prevailing party.’
determination is a procedural matter governed by the Federal Rules
of Civil Procedure, federal law applies, not state law, even if the
underlying cause of action arose under state law.”)(citations
The plaintiff sets forth, in an Affidavit, court
($148.00 and $150.00), for a total of $1,030.65, which the Court
finds to be reasonable.
As for attorneys’ fees, the Court finds that the plaintiff has
failed to address the eight relevant Arthur Andersen factors and
the twelve relevant Johnson factors for this Court to consider when
determination, a contingent fee contract alone is not enough to
support an award.
Arthur Andersen, 945 S.W.2d at 818-19; Fluorine
On Call, Ltd. v. Fluorogas Ltd., 380 F.3d 849, 867 (5th Cir.
2004)(finding that district court abused its discretion in awarding
“such a vast amount of fees” and remanding the attorneys’ fee award
to the district court).
Similarly, in Baxter v. Crown Petroleum Partners, 2000 WL
269747 (N.D. Tex. Mar. 10, 2000), the district court for the
Northern District of Texas held that a contingency fee agreement is
reasonableness of the attorneys’ fee award.
Id. at *7.
district court further explained:
... “There is authority for the suggestion that a
contingent fee contract should not be considered in
determining reasonable attorneys fees, except to
establish the employment of counsel and the purpose for
which counsel were employed.” Beck v. Northern Natural
Gas Co., 170 F.3d 1018, 1024 (10th Cir. 1999)(internal
quotations omitted)(emphasis added). “What a plaintiff
may be bound to pay and what an attorney is free to
collect under a fee agreement are not necessarily
measured by the “reasonable attorney fee” that a
defendant must pay pursuant to a court order.” Venegas
v. Mitchel, 495 U.S. 82, 89 (1990)(emphasis added). “The
fact that [Vodicka] agreed to a one-third contingency fee
arrangement with his client does not determine the amount
of attorneys fees [Vodicka] may recover. The recovery of
attorneys fees is provided for by statute, the amount of
which must be found by the trier of fact and must be
supported by the evidence.”
Rauscher Pierce Refsnes,
Inc. v. Koenig, 794 S.W.2d 514, 516 (Tex.App.-Corpus
Christi 1990, writ denied).
The U.S. Supreme Court does not allow the trial court to
enhance the lodestar figure to compensate the attorney
for the contingent fee arrangement between plaintiff and
attorney where the attorney should have received a higher
figure due to the contingent fee agreement.
Burlington v. Daque, 505 U.S. 557, 564 (1992); see also
Rutherford v. Harris County, 197 F.3d 173, 193 (5th Cir.
It seems logical that this Court is likewise
disallowed from reducing the lodestar figure to be in
line with the contingent fee agreement between the
attorney and plaintiff. Plaintiffs are entitled to a
reasonable attorneys’ fee pursuant to Texas Civil
Practice and Remedies Code Chapter 38. This Court will
consider the contingency fee agreement between Plaintiffs
and Mr. Vodicka under the Johnson factors but will not
reduce the fee awarded based on that factor alone.
Id. (emphasis in original).
Because the plaintiff did not address the relevant factors,
including those relevant to the lodestar determination, nor present
the types of evidence needed by the Court to make its determination
as to the reasonableness of attorneys’ fees, the plaintiff’s motion
must be denied without prejudice, with leave to re-file.
keeping with its previous Order requiring briefing, the Court
grants the plaintiff fourteen days to file its motion and brief,
and the defendant shall have an equal amount of time to respond.
Any rebuttal shall be filed within seven days of the defendant’s
Attorneys’ Fees and Costs (docket entry 90) is granted in part and
denied in part as follows:
The plaintiff’s Motion for Costs is GRANTED, and costs in the
amount of $1,030.65 shall be awarded at such time as the issue of
attorneys’ fees is decided and Final Judgment is entered;
The plaintiff’s Motion for Attorneys’ Fees is DENIED WITHOUT
PREJUDICE, the plaintiff shall re-file her motion, and the parties
submit their briefs as outlined above.
SO ORDERED, this the 4th day of January, 2017.
/s/ David Bramlette
UNITED STATES DISTRICT JUDGE
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