The Dallas/Fort Worth International Airport Board v. Inet Airport Systems, Inc. et al

Filing 286

Memorandum Opinion and Order granting 257 Motion for Attorney Fees filed by Inet Airport Systems, LLC., Inet Airport Systems, Inc. The court ORDERS that INET's second motion for attorney's fees be, and is hereby, granted, and t hat INET LLC have and recover from plaintiff its reasonable attorney's fees in the amount of One Million, Five Hundred Ninety Thousand, Eighty-Five and 23/100 Dollars ($1,590,085.23). (see order for further specifics) (Ordered by Judge John McBryde on 9/21/2017) (mpw)

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THE DALLAS/FORT WORTH
INTERNATIONAL AIRPORT BOARD,

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§
§

Plaintiff,

§
§

vs.

§

NO. 4:13-CV-753-A

§

INET AIRPORT SYSTEMS,
ET AL.,

INC.,

§
§
§

Defendants,

§
§

and

§
§

INET AIRPORT SYSTEMS,
ET AL.,

INC.,

§
§
§

Counterclaimants.

§

MEMORANDUM OPINION AND ORDER
Came on for consideration the second motion of
counterclaimants,

INET Airport Systems, Inc.

("INET Inc."), and

INET Airport Systems, LLC, as successor in interest to INET
Airport Systems, Inc.

("INET LLC"),

(collectively "INET") for

attorney's fees. The court, having considered the motion, the
response of plaintiff, The Dallas/Fort Worth International
Airport Board, the reply, the record, and applicable authorities,
finds that the motion should be granted.
I.
Background
On March 30, 2015, the court signed a memorandum opinion and
order granting in part and denying in part plaintiff's motion for

summary judgment and granting defendants' motion for summary
judgment.' Doc.' 85. Following the pretrial conference and
further briefing, the court narrowed the issues to be tried. On
June 8, 2015, the court heard evidence on those issues and, by
memorandum opinion and order signed June 16, 2015, the court
awarded INET LLC the sum of $318,189.40 for work performed under
the contract with plaintiff' and attorney's fees in the amount of
$975,539.34 for prevailing on its breach of contract claim
against plaintiff. Doc. 157. 4 A final judgment was signed that
same day. Doc. 158.
Plaintiff appealed and the Court of Appeals for the Fifth
Circuit reversed the grants of summary judgment and vacated the
court's judgment awarding damages and fees. Dallas/Fort Worth
Int'l Airport Bd. v. INET Airport Sys., Inc., 819 F. 3d 245

(5th

'At the time, defendants were !NET Airpmi Systems, Inc., Michael F. Colaco, and Hmiford Fire
Insurance Company.
'The "Doc.

" reference is to the number of the item on the docket in this action.

3

As recited in the memorandum opinion and order of June 16,2015, the eomi had long-ago
determined and plaintiff admitted that it owed either !NET Inc. or !NET LLC for work done pursuant to
the contract. There was no dispute that !NET Inc. signed the contract, performed the work thereunder,
and submitted its pay request to plaintiff. To the extent there were any prerequisites to the payment for
work done and release of the retainage, they had occurred. Doc. 157 at 7. Fmiher, by the time of trial,
!NET Inc. no longer existed but was succeeded by !NET LLC, which was entitled to recover the monies
owed by plaintiff. Doc. 157 at 7-8. And, one of the reasons plaintiff had not paid !NET Inc. or !NET LLC
was its contention that !NET Inc. had breached the contract between them. Doc. 152 at 76-77.
4

The memorandum opinion and order contains a discussion of the ways in which the comi was
repeatedly beset by entirely new arguments raised by plaintiff as the case was being prepared for trial.
Doc. 157 at3-6.
2

Cir. 2016). Plaintiff sought panel rehearing, which was denied.
Dallas/Fort Worth Int'l Airport Bd. v. INET Airport Sys., Inc.,
821 F.3d 643

(5th Cir. 2016). In so ruling, the Fifth Circuit

noted that issues inadequately briefed are considered abandoned.
821 F.3d at 644.
Although it reversed the court's summary judgment rulings
and final judgments, the Fifth Circuit vastly narrowed the issues
to be tried on remand. In particular, the Fifth Circuit held that
the court had "correctly concluded there was no dispute of
material fact regarding whether the plans and specifications were
defective and had to be changed for the Rooftop Units to function
properly.•

819 F.3d at 250. Further, it recognized that the

contract required each party to cooperate with the other. Id. at
250-51. Thus, the ultimate issue to be resolved on remand was
"which party prevented performance by failing to cooperate in
arriving at a solution once the parties discovered defects.• Id.
at 250. The court prepared a proposed verdict form in keeping
with the Fifth Circuit's directives. Doc. 184. Plaintiff raised
numerous objections, which the court overruled, pointing out the
narrow scope of the matters to be tried. Doc. 188.
The court made slight revisions to the proposed verdict form
and provided it to the parties by order signed June 27, 2017.
Doc. 209. Plaintiff again raised numerous objections in a 37 page

3

document filed June 29, 2017, Doc. 211, accompanied by a 65 page
appendix. Doc. 212. By order signed July 5, 2017, the court
overruled the objections and made minor changes to the verdict
form. Doc. 228. In particular, the court noted that plaintiff
relied on the "law of the case" in lodging its objections,
whereas the whole point of the court's proposed verdict form was
to adhere strictly to the law of the case as articulated by the
Fifth Circuit. Doc. 228 at 2-3.
Immediately prior to trial, plaintiff sought leave to file a
supplemental answer to assert the defense of payment,
representing that plaintiff had tendered to INET LLC "payment
which INET has accepted" and that "[plaintiff's] payment
constitutes full payment and discharge of any indebtedness owed
by [plaintiff] to INET." Doc. 171, Ex. A at 2, ' 3 . As INET
explained in its response to the motion,

it had not accepted any

payment from plaintiff. Doc. 175. The response recited the
lengthy history of plaintiff's attempts to manipulate the
proceedings and avoid paying INET its attorney's fees.

INET urged

the court to deny the motion on the grounds of undue delay, bad
faith, and prejudice. Id. The court denied the motion. Doc. 183.
On July 10 and 11, 2017, the court conducted a jury trial.
On July 11, 2017, the jury returned its verdict in favor of INET
Inc., finding that, after plaintiff and INET Inc. learned that

4

the plans and specifications were defective, plaintiff
intentionally conducted itself in such a way that it prevented
plaintiff and INET Inc. from reaching an agreement about how to
address the defects in the plans and specifications. Doc. 249. On
July 12, 2017, the court signed its order and final judgment
awarding INET LLC the sum of $395,974.13 5 plus post-judgment
interest thereon and dismissing with prejudice the claims
plaintiff had asserted. Docs. 255, 256.
On July 26, 2017, INET filed its second motion for
attorney's fees. Doc. 257. Plaintiff filed a document requesting
an opportunity for adversary submission on attorney's fees. Doc.
260. By order signed July 27, 2017, the court clarified that it
intended to determine the matter of attorney's fees based on
briefs and supporting affidavits or declarations and did not
anticipate taking oral testimony, although the matter might be
set for hearing if the court determined that a hearing would be
helpful. Doc. 261. Plaintiff filed its response to the motion,
Doc. 275, and appendix in support, Doc. 276. INET filed its reply
and appendix. Docs. 282, 283.

'The court found that the parties had stipulated or otherwise agreed that the total amounts !NET
Inc. had earned under the contract was $319, 189; that plaintiff admitted its obligation to pay that amount
for work done by !NET Inc., plus prejudgment interest. Plaintiff had tendered prejudgment interest in the
amount of$76,785.13 and the court concluded that such amount was appropriate to be included in the
award made to !NET LLC pursuant to its counterclaim against plaintiff. Doc. 255 at 4-5.
5

In the interim, plaintiff appealed from the judgment on the
jury's verdict. Doc. 263. The court determined that it would hold
the matter of attorney's fees in abeyance pending the appeal
since additional fees might be appropriate depending on the Fifth
Circuit's ruling. Doc. 284. After transmission of the record on
appeal, plaintiff filed a motion to dismiss its appeal, which was
granted. Doc. 285. Apparently, no agreement was reached as to the
award of attorney's fees.
II.
Merits of the Motion and Plaintiff's Opposition
Relying on the law of the case doctrine, as plaintiff once
did, and the waiver doctrine, INET contends that plaintiff cannot
now relitigate the propriety of the $975,539.34 initially awarded
as attorney's fees following the first trial in this action.
Plaintiff does not dispute that it did not raise on its first
appeal any issue regarding the propriety of the amount of the
award. Instead,

it urges that because the award was vacated, it

is, in effect, a nullity.
The law of the case doctrine is a complicated one that does
not seem to fit exactly the issue now before the court. See
Medical Ctr. Pharmacy v. Holder, 634 F.3d 830

(5th Cir. 2011)

Rather, the waiver doctrine is applicable. It holds that an issue
that could have been, but was not, raised on appeal is forfeited

6

and may not be revisited by the district court on remand. Id. at
834. The waiver doctrine is a consequence not of a ruling by the
court of appeals, but of a party's inaction. Lindquist v. City of
Pasadena, 669 F.3d 225, 239 (5th Cir. 2012). "The doctrine
promotes procedural efficiency and 'prevents the bizarre result
that a party who has chosen not to argue a point on a first
appeal should stand better as regards the law of the case than
one who had argued and lost.'" Id. at 239-40

(citation omitted)

Here, as in Lindquist, plaintiff could have attacked the basis
for the court's award of attorney's fees as well as the
reasonableness, necessity, equity, and justice of the award, but
failed to do so. It cannot now raise arguments that could and
should have been raised on the first appeal.
Plaintiff's primary objection to an award of attorney's fees
to INET is the contention that § 271.153 of the Texas Local
Government Code does not create a right to recover attorney's
fees. This is the first time that plaintiff has raised the
argument. When the court first considered the award of attorney's
fees,

the parties were in accord that the provisions of § 271,153

governed. Doc. 157 at 8. Plaintiff's argument at the time was
that attorney's fees could only be awarded on INET's
counterclaim, citing§ 271.153 as "limiting recovery of fees to
those 'awarded in an adjudication brought against a local

7

governmental entity for breach of a contract.'" Doc. 13 0 at 6.
Plaintiff argued that the counterclaim fees must be segregated
from those incurred in defending against plaintiff's claims. Id.
Plaintiff reiterated its position in several additional filings
it made.
In its legal brief in support of its position on the legal
issues remaining to be resolved, plaintiff stated: "If INET LLC
is not successful in its breach of contract claim against
[plaintiff], then it is not entitled to recover attorneys' fees
from [plaintiff]. Tex. Lac. Gov't Code

§

271.153." Doc. 133 at 7.

In another filing, plaintiff said:
In the present case, "the Legislature specifically
designate[d] when attorney's fees may be recovered and,
in doing so, distinguishe[d] between fees and damages."
In re Nalle, 406 S.W.3d at 173. The Legislature has
provided that attorneys' fees may be recovered under
Tex. Local Gov't Code § 271.153 in connection with the
"balance due under the contract."
Doc. 154 at 5. And, in yet another filing, plaintiff explained:
Applying the rules of statutory construction to
the present case, it is clear that the Legislature's
intent under Tex. Local Gov't Code § 271.153 was to
allow recovery of attorneys' fees only for the fees
that are necessary for an adjudication for the "balance
due under the contract."
Moreover,
[t]he Legislative intent was to
limit damages recoverable to "those expressly allowed
under Subsection (a) (1) ." Under this subsection, the
only attorney's fees recoverable are fees that are
necessary for an adjudication for the "balance due
under the contract.•

8

Doc. 156 at 4. 6
The court is satisfied that the waiver doctrine precludes
its consideration of plaintiff's belated argument regarding the
applicability of

§

271.153. Even though INET has now incurred

additional fees for which it seeks an award, the legal argument
regarding applicability of Local Government Code

§

271.153 is the

same as it would have been at the time of the first appeal.
Lindquist precludes the argument.
Even if the argument were not precluded, the court finds it
to be without merit. Section 271.153 provides, in pertinent part:
(A) Except as provided by Subsection (c), the total
amount of money awarded in an adjudication brought
against a local governmental entity for breach of a
contract subject to this subchapter is limited to the
following:
(1) the balance due and owed by the local
governmental entity under the contract as it
may have been amended, including any amount
owed as compensation for the increased cost
to perform the work as a direct result of
owner-caused delays or acceleration;
(2) the amount owed for change orders or
additional work the contractor is directed to
perform by a local governmental entity in
connection with the contract;
(3) reasonable and necessary attorney's fees
that are equitable and just; and

6

As the court explained in its memorandum opinion and order awarding attorney's fees, !NET
had to defeat plaintiffs breach of contract claim in order to recover and, thus, was entitled to fees
incurred in defending against plaintiffs breach of contract claim. Doc. 157 at 8-10 (citing cases).
9

(4) interest as allowed by law, including
interest as calculated under Chapter 2251,
Government Code.

Tex. Loc. Gov't Code §271.153(a).
When chapter 271 of the Local Government Code (the "Act")
containing the provisions regarding adjudication of claims
arising under written contracts with local governmental entities,
including § 271.153, was first enacted, § 271.153 did not include
subsection (3) regarding attorney's fees. Rather, § 271.159 was
titled "NO RECOVERY OF ATTORNEY'S FEES" and provided:
Attorney's fees incurred by a local governmental entity
or any other party in the adjudication of a claim by or
against a local governmental entity shall not be
awarded to any party in the adjudication unless the
local governmental entity has entered into a written
agreement that expressly authorizes the prevailing
party in the adjudication to recover its reasonable and
necessary attorney's fees by specific reference to this
section.
Act of June 17, 2005, 79th Leg., R.S., 2005 Tex. Sess. Law Serv.
Ch. 604, eff. Sept. 1, 2005. Effective June 18, 2009, § 271.159
was repealed and§ 271.153(a) was amended to include as
subsection (3)

•reasonable and necessary attorney's fees that are

equitable and just." Act of June 19, 2009, 81st Leg., R.S., 2009
Tex. Sess. Law Serv. Ch. 1266. The contract at issue was signed
after the 2009 amendments took effect.
The court is to construe a statute as a whole, rather than
viewing individual provisions in isolation. City of Dallas v. TCI
10

West End, Inc., 463 S.W.3d 53, 55 (Tex. 2015). In doing so, the
court presumes that the Legislature selected the statute's
language with care, choosing each word for a purpose. Id. The
court must not interpret a statute in a manner that renders any
part of it meaningless or superfluous. Crosstex Energy Servs.,
L.P. v. Pro Plus, Inc., 430 S.W.3d 384, 390 (Tex. 2014). And, the
court gives weight to changes in language since it presumes that
deletions are intentional and that lawmakers enact statutes with
complete knowledge of existing law. Entergy Gulf States, Inc. v.
Summers, 282 S.W.3d 433, 443

(Tex. 2009).

"It is, of course,

axiomatic that the deletion of language better indicates the
Legislature's intent to remove its effect, rather than to
preserve it." Id.
Here, as noted, the Legislature chose to repeal the
provision stating that attorney's fees could only be recovered in
very limited circumstances as provided in a written contract
between the parties. Instead, the Legislature enacted a provision
allowing an award of "reasonable and necessary attorney's fees
that are equitable and just."
Plaintiff argues that attorney's fees may only be awarded
against it if another statutory provision authorizes the award.
That interpretation, however, would violate the rules of
statutory construction. Chapter 271 of the Local Government Code

11

addresses the adjudication of claims under written contracts with
local governmental entities. Each section of the chapter deals
with a different subject. Waiver of immunity is addressed by
§

271.152, whereas

§

271.153 addresses limitations on the amount

of money that can be awarded in a lawsuit for breach of contract
brought against a local governmental entity. Plaintiff's
construction would render

§

271.152 superfluous or meaningless.

The Supreme Court has held that the "subject to the terms and
conditions" phrase in

§

271.152 incorporates the other provisions

of the Act to define the scope of its waiver of immunity. Zachry
Constr. Corp. v. Port of Houston Auth., 449 S.W.3d 98, 108 (Tex.
2013). Thus, the waiver does not extend to tort suits,
or allow recovery beyond that permitted under

§

§

271.157,

271.153. Id.

Section 271.153 does not limit the scope of the waiver of
immunity as to attorney's fees by requiring that attorney's fees
must be authorized by other law. It only limits the waiver (or
defines its scope) by requiring that attorney's fees be
reasonable and necessary, equitable and just.
In addition, the court is to consider the provisions of
§

271.153 as a whole. Clearly, subsection (3)

is distinguishable

from subsection (4). The only limitation on attorney's fees is
that they be "reasonable and necessary," "equitable and just."
The limitation on interest, however,

12

is that it be "as allowed by

law." Attorney's fees are not limited to those "allowed by law."
And, indeed, this is how Texas courts have interpreted the
provision. See Sharyland Water Supply Corp. v. City of Alton, 354
S.W.3d 407, 412-13 & n.5 (Tex. 2011) (noting that

§

271.153 was

amended in 2009 to additionally allow for reasonable and
necessary attorney's fees that are equitable and just); City of
Willow Park v. E.S. & C.M.,

Inc., 424 S.W.3d 702, 711 (Tex.

App.-Fort Worth 2014, pet. denied); City of Pearsall v. Tobias,
No. 04-16-00815-CV, 2017 WL 3495137, at *7-8

(Tex. App.-San

Antonio Aug. 16, 2017, no pet. h.).
The court is not persuaded by plaintiff's arguments in this
regard. It says that the purpose of the Act as a whole •is to
waive immunity.• Doc. 275 at 4. The purpose of the waiver is to
bring fairness to business relationships between contractors and
local government entities. City of Willow Park, 424 S.W.3d at
707. Accordingly, the Supreme Court of Texas has interpreted the
Act to allow damages as stated in

§

271.153 without the

requirement that they be provided for in the contract between the
parties or otherwise. Zachry, 449 S.W.3d at 112 & n. 66.

(The

dissent had vigorously argued that the statute permitted an award
of damages only if provided for or contemplated by the contract.
449 S.W.3d at 130 (Boyd, J., dissenting).)

If attorney's fees had

to be authorized by some other statutory provision,

13

§

271. 153 (a) (3) would be meaningless since there does not appear

to be any such statute.' See. e.g., City of Corinth v. NuRock
Dev.,

Inc., 293 S.W.3d 360, 370

(Tex. App.-Fort Wort 2009, no

pet.) (Tex. Civ. Prac. & Rem. Code

§

38.001 does not apply to

governmental entities).
The cases plaintiff relies upon do not cause the court to
believe that its argument should prevail. Both GLF Constr. Corp.
v. Dallas Area Rapid Transit Auth., No. 3:10-CV-2197-P, 2012 WL
12882077 (N.D. Tex. Sept. 7, 2012), and Dallas Area Rapid Transit
v. Agent Sys., Inc., No. 02-12-00517-CV, 2014 WL 6686331 (Tex.
App.-Fort Worth Nov. 26, 2014, pet. denied), concern
§

271.153 (a) (4), which clearly limits interest to that "as

allowed by law." That restriction is not included in the
attorney's fees provision,

§

271.153 (a) (3). And, County of

Galveston v. Triple B Servs., LLP, 498 S.W.3d 176 (Tex.
App.-Houston [1't Dist.] 2016, pet. denied), contains a
discussion of a similar, but distinguishable, statute, Tex. Loc.
Gov't Code

§

262.007, which does not have the same statutory

history or parallel language to the Act. For the reasons
discussed, supra, the court is persuaded that a Texas court

'The Legislature would have known this at the time it amended the Act. Entergy, 282 S.W.3d at
443.

14

considering§ 271.153(a) (3), would allow the award of attorney's
fees in a case like this one.
Although plaintiff now argues that there has been no
determination of INET's claim for breach of contract, the breach
has been established as a matter of law. The jury found that
plaintiff breached the contract first.

It is undisputed that

plaintiff did not pay to INET the amounts due and owing under the
contract because of its contention that INET had breached the
contract. Plaintiff belatedly tendered to INET two checks for the
amount due and owing, but INET still had to persuade the jury
that plaintiff had first breached the contract to be able to
prevail on its own breach of contract claim. As the Supreme Court
has noted, an unaccepted settlement offer has no force and
creates no lasting right or obligation. Campbell-Ewald Co. v.
Gomez, 136 S. Ct. 663, 666

(2016). Plaintiff could not cut off

INET's rights by making a tender that was not accepted.
Plaintiff has not objected to the reasonableness of the fees
incurred by INET and the court is satisfied that the amount
claimed is reasonable and that the fees were necessarily incurred
by INET. The court also finds that the award it contemplates is
equitable and just. The history of the litigation is replete with
instances of plaintiff repeatedly making arguments that had
already been rejected, raising new arguments at the last minute,

15

and filing numerous motions and other papers designed to cause
INET to incur additional attorney's fees and to delay the outcome
of the proceedings. Plaintiff would not have had a legitimate
reason for complaining about the reasonableness, necessity,
equity or justice of the award even had it chosen to contest the
amount sought.
The court ORDERS that INET's second motion for attorney's
fees be, and is hereby, granted, and that INET LLC have and
recover from plaintiff its reasonable attorney's fees in the
amount of One Million, Five Hundred Ninety Thousand, Eighty-Five
and 23/100 Dollars ($1,590,085.23)
SIGNED September 21, 2017.

16