Tech Pharmacy Services, LLC v. Alixa Rx LLC et al
MEMORANDUM OPINION AND ORDER. Plaintiff's Motion for Entry of Final Judgment and Award of Damages, Fees, and Interest (Dkt. # 395 ) is hereby GRANTED in part. Signed by District Judge Amos L. Mazzant, III on 3/8/2018. (rpc, )
United States District Court
EASTERN DISTRICT OF TEXAS
TECH PHARMACY SERVICES, LLC
ALIXA RX LLC, GOLDEN GATE
NATIONAL SENIOR CARE LLC d/b/a
GOLDEN LIVINGCENTERS, and
FILLMORE CAPITAL PARTNERS, LLC
CIVIL ACTION NO. 4:15-CV-766
MEMORANDUM OPINION AND ORDER
Pending before the Court is Plaintiff Tech Pharmacy Services, LLC’s (“Tech Pharmacy”)
Motion for Entry of Final Judgment and Award of Damages, Fees, and Interest (Dkt. #395). After
reviewing the relevant pleadings and motion, the Court finds the motion should be granted in part.
Tech Pharmacy filed suit against Defendants Alixa Rx LLC, Golden Gate National Senior
Care LLC d/b/a Golden LivingCenters, Fillmore Capital Partners, LLC, Fillmore Strategic
Investors, LLC, and Fillmore Strategic Management, LLC (collectively, “Defendants”) asserting
claims for patent infringement, breach of contract, fraud, equitable estoppel, and misappropriation
of trade secrets. In September 2017, the parties proceeded to trial on these issues and the jury
found that Defendants breached the 2009 Confidentiality Agreement (“2009 Agreement”) and
awarded Tech Pharmacy fifteen million dollars in damages.
Because Tech Pharmacy prevailed on its breach of contract claim, the Court submitted the
issue of attorneys’ fees to the jury.1 The jury found that Tech Pharmacy’s reasonable attorneys’
Based on representations and agreements by the parties, the Court bifurcated the trial to determine liability first and
subsequently determine attorneys’ fees and exemplary damages, if necessary.
fees and expenses for their necessary services was two million dollars. Subsequently, on October
31, 2017, Tech Pharmacy submitted a motion for attorneys’ fees arguing that the appropriate
means requesting attorney fees was via motion practice rather than submission to the jury (Dkt.
#386). On December 22, 2017, the Court granted Plaintiff’s motion and awarded Plaintiff
$7,304,454.15 in attorney’s fees (Dkt. #394).
On January 29, 2018, Plaintiff filed a Motion for Entry of Final Judgment and Award of
Damages, Fees, and Interest (Dkt. #395). On February 15, 2018, Defendants filed their response
(Dkt. #398). On February 26, 2018, Plaintiff filed its reply (Dkt. #399).
In its motion, Plaintiff seeks entry of a final judgment including the following:
A finding of liability against Defendants, jointly and severally, for breach of
contract in the amount of $15,000,000;
An award of attorney’s fees in the amount of $7,304,454.15;
Reasonable and necessary post-trial and appellate attorneys’ fees in an amount to
Prejudgment and postjudgment interest; and
An award of Plaintiffs’ costs.
(Dkt. #395). Defendants take issue with two of the Plaintiff’s requests: (1) the inclusion of
attorney’s fees as part of the judgment, and (2) the inclusion of prejudgment interest on attorney’s
fees. The Court addresses each issue in turn.
Inclusion of Attorney’s Fees as Part of the Judgment
Plaintiff requests that the Court include attorney’s fees in the final judgment. Defendants
respond that “attorney’s fees and costs are to be considered separate from and ancillary to the
judgment.” (Dkt. #398 at p. 2) (emphasis in original) (citing C&H Nationwide, Inc. v. Thompson,
903 S.W.2d 315, 325 (Tex. 1994)). In its reply, Plaintiff concedes that “while the Court can
exclude attorney’s fees from a final judgment when the fee amount remains to be adjudicated at
the time final judgment is entered, there is no reason to exclude that portion of fees already decided
by the Court.” (Dkt. #399 at pp. 1–2) (emphasis in original).
“The understanding that ‘judgment’ includes an attorney’s fees award is well-established
under Texas law.” Pesole v. Health Care Serv. Corp., 277 F. Supp. 3d 866 (N.D. Tex. 2017)
(citing 2 William V. Dorsaneo III, Texas Litigation Guide § 22.116 (2017) (including sample form
for attorney’s fees for use when drafting judgment); id. § 131.05 (describing how a ‘judgment
may also include an award for attorney’s fees through the appellate process’)). Further, “Texas
courts have similarly described ‘judgment’ as including attorney’s fees.” Id. (citing Sharifi v.
Steen Auto., LLC, 370 S.W.3d 126, 134 (Tex. App.—Dallas, 2012, no pet.); Long v. Griffin, 442
S.W.3d 253, 254 (Tex. 2014)).
As such, the Court finds that including attorney’s fees in the judgment is appropriate in this
Whether Plaintiff is Entitled to Prejudgment Interest on Its Attorney’s Fees
Plaintiff argues that “Texas law also allows Tech Pharmacy to recover prejudgment interest
on attorney’s fees that the prevailing party has paid to its counsel before judgment.” (Dkt. #395
at p. 4). Conversely, Defendants aver that Texas law prohibits the recovery of prejudgment interest
on attorney’s fees. However, if the Court allows prejudgment interest on attorney’s fees paid prior
to entry of judgment, Defendants contend “Plaintiff has made no showing whatsoever as to any
amount of attorney’s fees actually paid prior to judgment.” (Dkt. #398 at p. 9).
In Hervey v. Passero, the Texas Supreme Court held that “[a]n award of pre-judgment
interest on attorney’s fees is contrary to the clear language of article 5069–1.03.”2 658 S.W.2d
148, 149 (Tex. 1983). The Fifth Circuit, relying on Hervey, stated that “under Texas law
prejudgment interest is never allowed on awards of attorney fees.” Enserch Corp. v. Shand
Morahan & Corp., 952 F.2d 1485, 1500 (5th Cir. 1992).
Despite such rulings, numerous Texas appellate court recognize an exception to this rule.
Specifically, these courts allow an award of prejudgment interest on attorney’s fees that are paid
prior to judgment. See Alma Inv., Inc. v. Bahia Mar Co-Owners Assoc., Inc., 497 S.W.3d 137, 146
(Tex. App.—Corpus Christi 2016, no pet.); Nova Cas. Co. v. Turner Constr., 335 S.W.3d 698, 706
(Tex. App.—Houston [14th Dist.] 2011, no pet.); Williams v. Colthrust, 253 S.W.3d 353, 362
(Tex. App.—Eastland 2008, no pet.); A.V.I. Inc. v. Heathington, 842 S.W.2d 712, 717 (Tex.
App.—Amarillo 1992, writ denied). Conversely, several appellate courts decline to recognize
such an exception. See Power Reps, Inc. v. Cates, No 1-13-00856-CV, 2015 WL 4747215, at *22
(Tex. App.—Houston [1st Dist.] Aug. 11, 2015, no pet.); Sentinel Integrity Sol. Inc. v. Mistras
Grp., Inc., 414 S.W.3d 911, 931 (Tex. App.—Houston [1st Dist.] 2013, pet. denied); Carbona v.
CH Med., Inc., 266 S.W.3d 675, 688 (Tex. App.—Dallas 2008, no pet.); Moore v. Bank Midwest,
N.A., 39 S.W.3d 395, 406 n.10 (Tex. App.—Houston [1st Dist.] 2001, pet. denied); Cushman &
Wakefield, Inc. v. Fletcher, 915 S.W.2d 538, 547 (Tex. App.—Dallas 1995, writ denied); Berry
Prop. Mgmt., Inc. v. Bliskey, 850 S.W.2d 644, 670 (Tex. App.—Corpus Christi 1993, writ dism’d
by agr.). Without making a determination as to whether such an exception is permissible, the
Court finds an award of prejudgment interest on attorney’s fees in this case is unwarranted.
Since the Texas Supreme Court’s ruling, article 5069–1.03 has been repealed.
Assuming arguendo the aforementioned exception applies in this case, the Court finds that
Plaintiff failed to provide the Court with evidence illustrating the amount of fees paid, if any, prior
to entry of judgment. To support its argument that Tech Pharmacy paid attorney’s fees prior to
judgment, Plaintiff relies on invoices attached to its Motion for Attorney’s Fees (Dkt. #386,
Exhibit 2). Although some of the invoices make reference to “payments/adjustments,” Plaintiff
fails to provide evidence that Tech Pharmacy made these payments, and if so, the date of such
payments. Stated differently, the invoices are insufficient to establish the date and amount of
payments made by Tech Pharmacy for attorney’s fees. As such, the Court finds Plaintiff is not
entitled to prejudgment interest on its attorney’s fees.
It is therefore ORDERED that Plaintiff’s Motion for Entry of Final Judgment and Award
of Damages, Fees, and Interest (Dkt. #395) is hereby GRANTED in part.
SIGNED this 8th day of March, 2018.
AMOS L. MAZZANT
UNITED STATES DISTRICT JUDGE
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?