Chaucer Corporate Capital, No. 2 Limited v. Village Contractors, Inc. et al

Filing 238

ORDER ON ATTORNEYS' FEES AND PREJUDGMENT INTEREST. (Signed by Judge Ewing Werlein, Jr) Parties notified.(kcarr, )

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
VILLAGE CONTRACTORS, INC.,
5

Plaintiff,

§
§

v.
TMDING FAIR IV, INC.,

CIVIL ACTION NO. H-09-2701

5
5
5

Defendant.
ORDER ON ATTORNEYSt FEES AND PREJUDGMENT INTEREST
Pending are the submissions and affidavits filed by Plaintiff
Village Contractors, Inc. ("Village") in support of its request for
$250.370.73 in

attorneys'

fees

and

an

award

of

18 percent

prejudgment interest on the $338,382.00 jury verdict returned in
its favor on April

13, 2011, following a three-day trial on

Village's claims for breach of contract and for violation of the
Prompt Payment to Contractors Act.

TEX. PROP.CODEANN. 5 28.001 et

seq. (West 2000) . Defendant Trading Fair IV, Inc. ("Trading Fair")
has filed briefs and a supporting affidavit in opposition to the
requests both for attorney's fees and for prejudgment interest.
In

this

interpleader action

Chaucer

Corporate

Capital,

Limited. Trading Fair's insurer, deposited insurance proceeds in
the amount of $338,382.00 into the registry of the Court based on
Village's and Trading Fair's conflicting claims to the insurance
proceeds arising out of a dispute over Village's repairs to Trading

Fair's hurricane-damaged roof.

Village and Trading Fair, as

claimants to the interpled funds, filed cross-claims asserting
their right to the funds. Prior to trial, both parties agreed that
any recovery on their substantive cross-claims would be paid, in
whole or in part, out of the interpled funds.

The jury awarded

Village the entire principal amount in the Court's registry on its
substantive claim.

The issues now presented are Village's claims

for interest and attorney's fees.
I. Attorney's Fees
"State law controls both the award of and the reasonableness
of fees awarded where state law supplies the rule of decision."
Walker IntrlHoldinqs, Ltd. v. Republic of Conqo, 415 F.3d 413, 415
(5th Cir. 2005) (citation omitted). Under Texas law, "reasonable"
attorney's fees are recoverable for a successful breach of contract
claim, see TEX. CIV. PRAC. & REM. CODE ANN.

§

38.001(8) (West 2008),

and for a successful claim under the Prompt Payment to Contractors
Act (the "Prompt Payment Act").
(West 2000).

TEX. PROP. CODEANN. § 28.005(b)

Although the decision whether to award fees to a

prevailing party is discretionary under the Prompt Payment Act, it
is mandatory under section 38.001.'

Furthermore, because both

See Bocauet v. Herrinq, 972 S.W.2d 19, 20-21 (Tex. 1998)
(holding that statutes providing "that a party 'may recover1"
attorney's fees are mandatory, whereas statutes providing "that the
court 'may' award attorney fees" are discretionary); and compare
TEX.CIV.PRAC. & REM.CODE § 38.00L ( "A person may recover reasonable

statutes measure fees recoverable by the reasonableness standard,
it is appropriate to consider Village's request pursuant to section
38.001. Cf. AMX Enters., L.L.P. v. Master Realty C o r ~ , 283 S.W.3d
.
506, 516 (Tex. App.--Fort Worth 2009, no pet.) (noting that the
contract sued upon authorized recovery of attorney's fees under
both the Prompt Payment Act and section 38.001, and deciding to
"focus our analysis on attorney's fees under section 38.001").
Both the Fifth Circuit and Texas courts apply substantially
the same method to calculate statutorily-awarded attorney's fees.
Mid-Continent Cas. Co. v. Chevron Pipe Line Co., 205 F.3d 222, 232
(5th Cir. 2000) ; see also Arthur Andersen

&

Corp. 945 S.W.2d 812, 818 (Tex. 1997).

First, the "lodestar"

amount

is

calculated, whereby

a

Co. v. Perry Eauip.

reasonable hourly

rate

is

multiplied by "the compensable hours from the attorneys' time
records, including only hours reasonably spent." Shipes v. Trinity
Indus., 987 F.2d 311, 319 (5th Cir. 1993) .

"[Tlhe requested fees

must bear a 'reasonable relationship to the amount in controversy
or to the complexity1 of the circumstances of the case."

Mid-

Continent, 205 F.3d at 232 (quoting Jerry Parks Eauip. Co. v. Se.
Eauip. Co., 817 F.2d 340, 344 (5th Cir. 1987)).

In determining

whether hours expended are excessive, the Court may look to "the
entire record" and may "view the matter in the light of the
attorney's fees . . . . " ) with TEX. PROP CODE § 28.005(b) ("[Tlhe
court may award costs and reasonable attorney's fees as the court
determines equitable and just.").

testimony, the amount in controversy, the nature of the case, and
our common knowledge and experience as lawyers and judges."
(quoting Jerry Parks, 817 F.2d at 344) .

Id.

The party seeking

attorney's fees bears the burden of proving the reasonableness of
the time expended and the hourly rate, and further must segregate
fees between claims for which they are recoverable and those for
which they are not. Tony Gullo Motors I, L.P. v. C h a ~ a ,
212 S.W.3d
299, 310-14 (Tex. 2006).
Once the lodestar amount is set, it may then be adjusted
upward or downward based on any of the twelve factors listed in
Johnson v. Georsia Hishway E X D ~ ~ S S ,
Inc., 488 F.2d 714, 717-19 (5th
Cir. 1974), that have not already been considered in calculating
the lodestar amount.
A.

Shi~es,
987 F.2d at 320.2

Lodestar
Village's request for $250,370.73 in attorney's fees is based

upon hourly rates of $150.00 both for its lead attorney, a senior
associate at her firm, and her co-counsel Bryan C. Mitchell, and an

The Johnson factors are: (1) the time and labor required;
(2) the novelty and difficulty of the issues; (3) the skill
required to perform the legal services properly; (4) the preclusion
of other employment by the attorney; (5) the customary fee charged
for those services in the relevant community; ( 6 ) whether the fee
is fixed or contingent; (7) the time limitations imposed by the
client or circumstances; (8) the amount involved and the results
obtained; (9) the experience, reputation, and ability of the
attorney; (10) the undesirability of the case; (11) the nature and
length of the professional relationship with the client; and
(12) the awards in similar cases. Johnson, 488 F.2d at 717-19.

hourly rate of $60.00 for paralegal services.

Village submitted

with its request a spreadsheet summarizing its attorneysr time
spent, showing a total of

1,376.2 attorney hours and 617.4

paralegal hours, which, multiplied by their respective rates and
added together, total $243,474.00 (Village later modified or
revised the claim to $242,500.00)
.

The difference between the

$243,474.00 sum and the requested amount of $250,370.73 is not
explained, but a review of the invoices and itemized time entries
attached to Village's request reveals that Village also included in
its attorney's fees request non-taxable expenses, such as postage,

fax, and long distance charges. The Court finds that these items,
evidently totaling $6,896.73, represent "expenses of litigationIU3
which "make up the overhead of a law practice."
Intercontinental Pipe

&

Flint

&

Assocs. v.

Steel, Inc., 739 S.W.2d 622, 626-27 (Tex.

App.--Dallas 1987, writ denied) .

Under the lodestar method the

Court is to consider only the reasonable hourly rate multiplied by
the number of hours reasonably expended, not additional expenses
such as these . 4

See Shenandoah Assocs. v. J & K Props., Inc., 741 S.W.2d
470, 487 (Tex. App.--Dallas 1987, writ denied) (holding that
charges for "delivery services . . . travel; long distance calls;
bond premiums; postage" and other charges were "expenses of
litigation that are not recoverable . . . under the Texas general
rule and authorities").

Indeed, under Texas law, such overhead expenses are already
presumed to be "considered in setting hourly billing rates and
d,
reasonable fees," see i . which would make their recovery in
addition to reasonable fees double-counting. See Kimberly-Clark

Although Village's claimed hourly rates are not challenged and
the Court finds they are reasonable, Trading Fair does challenge as
excessive the number of hours claimed by Village's

counsel.

Village includes not only hours reasonably spent on its breach of
contract and Prompt Payment Act claims in the instant case. but
also on: (1) litigation with third parties (its sub-contractor,
Mobile Dry Force, LLC, and additionally a landlord to whom Village
asserts it could not pay rent because of Trading Fair's breach of
the contract); (2) litigation with Trading Fair in a related case
in Texas state court; and (3) services relating to a number of noncontractual claims along with its contractual claim.
1.

Third-Party Litiqation Attorney's Fees

Under Texas law, a plaintiff may recover attorney's fees and
other reasonable expenses incurred in third-party litigation as an
element of damages if the plaintiff proves that "such damages are
the natural and proximate consequence of the defendant's wrongful
conduct,
damages."

i.e . ,

when

those

expenses

represent

consequential

Great Am. Ins. Co. v. AFS/IBEX Fin. Servs., Inc., 612

Coro. v. Factory Mut. Ins. Co., No. C-09-312, 2008 WL 1958998, at
*10 (N.D. Tex. Apr. 30. 2008) (rejecting request for non-taxable
costs in addition to reasonable attorney's fees (citing Flint, 739
S.W.2d at 626-27; S ~ a r k sv. Baxter. 854 F.2d 110, 115 (5th Cir.
1988) (holding valid a party's contention '\that the district court
improperly awarded [the prevailing parties] an amount that
represented expenses their attorneys incurred in litigating the
case."))).

F. 3d 800, 807 (5th Cir. 2010) (emphasis added) ; see also Lesikar v.

Ra~peport, 33 S.W.3d 282, 306 (Tex. App.--Texarkana 2000, pet.
denied)

('

[A]ttorneys' fees incurred in prior litigation with a

third party
damages . " )

.

are recoverable in a subsequent suit as actual
Village's claim for attorney's fees incurred in third-

party litigation is therefore not a claim for attorney's fees under
either section 38.001 or the Prompt Payment Act, but instead a
claim for consequential damages resulting from Trading Fair's
breach.
A claim for attorney's fees as consequential damages must be
"proved at trial as an element of damages."

FED. R. CIV. P.

54 (d)(2)(A); see United Indus., Inc. v. Simon-Hartlev, Ltd., 91
F.3d 762, 765-66 (5th Cir. 1996) (noting that Federal procedural
law governs requests for attorney' s fees) ; Malin Int'1 Ship Repair
&

Drydock, Inc. v. M/V SEIM Swordfish, 611 F. Supp. 2d 627, 636

(E.D. La. 2009), aff'd sub nom Malin Int'l Ship Repair and Drydock,
Inc. v. Veolia Es Special Servs. Inc., 369 F. App'x 553, 555 (5th
Cir. 2010) ("In distinguishing between attorney's fees that are
recoverable by motion, and those that are only recoverable as an
element of damages, courts have differentiated between claims for
attorney's fees based on 'prevailing party' contractual provisions
and claims for attorney's fees based on other types of contractual
provisions.

. . .

from a breach of

[Wl hen a party seeks attorney's fees stemming

contract, courts have

found the issue of

attorney's fees to be an element of damages." (citing Rockland
Trust Co. v. Computer Associated Intfl, Inc., No. 95-11683-DPW,
2008 WL 3824791, *5 (D. Mass. Aug. 1, 2008)) (quotation marks
omitted)); see also Pride Hyundai, Inc. v. Chrysler Fin. Co., LLC,
355 F. Supp. 2d 600, 605-06 (D.R.I. 2005) ("Because the attorneys1
fees in this case were in the nature of damages, CFC had the burden
of proving at trial that it was contractually entitled to those
fees it sought in its counterclaim.").
Aside from a brief reference to lost credit rating and having
to breach its Houston lease--with no proof of any attendant
monetary damages--Village failed to present any evidence at trial
regarding its entitlement to, and the amount of, any consequential
damages, let alone consequential damages relating to its thirdparty litigation against its landlord and against Mobile Dry
Force.

Because Village concedes that its attorney1s fees claim

includes 121.6 hours relating to third-party disputes on its lease
and against Mobile Dry Force6--whichnumber Trading Fair does not
challenge--the fees of $18,240.00 ($150 per hour multiplied by
Indeed, Village did not request a jury instruction regarding
these consequential damages; the closest it came was a request for
an instruction on the general definition of consequential damages:
"Consequential damages result naturally, but not necessarily, from
opposing party's wrongful acts. Consequential damages must be
foreseeable and directly traceable to the wrongful act and result
from it ." Document No. 219 at 29. The Court denied this requested
instruction because there was no evidence to support a recovery of
consequential damages.
See Document No. 235, ex. A at 4.

121.6 hours) attributable to those hours will not be included in
the lodestar amount.
2.

State Court Litiqation Attorney's Fees

Village pursued related litigation against Trading Fair and
others in state court
interpleader action.

in addition to its advocacy in this

The Texas Supreme Court made clear in Tony

Gullo Motors I, L.P. v. Chapa that a fee applicant is not excused
from segregating recoverable from unrecoverable claims due merely
to factual interrelatedness. 212 S.W.3d 299, 313 (Tex. 2006) ; see
also Reinhardt v. Walker No. 14-07-00304, 2008 WL 2390482, at * 6
(Tex. App. --Houston [14th Dist .I 2008, pet. denied)

("

[TIhe mere

fact that claims are based on common facts or are 'intertwined'
does not make all fees incurred recoverable." ) .

Instead, no

segregation is required only when each discrete legal service
"advance[s] both a recoverable and unrecoverable claimu--that is,
the discrete service would have been necessary even absent the
claims for which attorney's fees cannot be recovered.

Cha~a,
212

S .W. at 313-14; see also id. at 313 ("To the extent such services
3d
would have been incurred on a recoverable claim alone, they are not
disallowed simply because they do double service.").

Village

provides no explanation as to how each discrete service regarding
the state court action was necessary to advance the breach of
contract or Prompt Payment Act claims on which it prevailed in this

Court, as

distinguished

from being

related only because of

intertwined facts. From an exhaustive review of Village's billing
records, and separate from the reductions already claimed to have
been made by Village's counsel of time attributable to Village
suing Trading Fair's attorney and its public adjuster in the state
s
court suit, the Court finds approximately $29,000.00 of attorneyr
fees claimed in the state court action before any mention is ever
made of this suit in Plaintiff's billing records, plus roughly
$12,225.00 of fees that are found to relate solely to the state
court action after the commencement of this suit.'
Some legal services rendered in the state court case may have
been required in Village's breach of contract and Prompt Payment
Act suit in this Court and hence should be counted, but Village has
not identified those services with proof sufficient for the Court
to make an allowance for them. Accordingly, the approximate sum of
$41,225.00 solely attributable to Village's state court case will
not be included in the lodestar amount.

See Document No. 228-1 at 12.
For example, Village seeks recovery of attorney's fees for
correspondence, preparation, and filing of and relating to various
procedural aspects of the state court case--such as motions to
stay, motions to consolidate, checking the state court case status,
scheduling order disputes, and sanctions under Texas law, among
other things. See, e.g., Document No. 228, ex. F (Feb. 17-19, Mar.
11-15, Apr. 5-16, Aug. 10-12, 2010 entries). Village also seeks
attorney's fees relating solely to its attorney's withdrawal from
the state court case. See i . ex. F (Aug. 27 through Sept. 1,
d,
2010 entries).

3.

Apportionment of Fees of Services Advancins Both
Contractual and Non-Contractual Claims, and Analysis
of Time Not Reasonably Spent on the Contract Claim

Even legal services that advance both recoverable and nonrecoverable claims must further be examined to determine what
portion of the charges for each service should be allocated to the
recoverable claims.

For example, if

drafting a

complaint,

requesting disclosures, or otherwise discovering background facts
would be necessary for both fee-recoverable breach of contract
claims and non-fee-recoverable tort claims, the fee applicant
should provide some opinion or basis for allocating the proportion
of time spent on that discrete service directly attributable to the
fee-recoverable breach of contract claims.

See Chaparral Tex.,

L.P. v. W. Dale Morris, Inc., No. H-06-2468, 2009 WL 455282, at *7
(S.D. Tex. Feb. 23, 2009) (Rosenthal, J.) (citing and examining
C h a ~ a ,212 S.W.3d at 313-14); see also Chapa, 212 S.W.3d at 314
(noting that, while the attorneys "did not have to keep separate
time records when they drafted the fraud, contract, or DTPA
paragraphs of her petition[,] an opinion would have sufficed
stating that, for example, 95 percent of their drafting time would
have been necessary even if there had been no fraud claim").
In this case, while certain correspondence, depositions, other
fact-finding, and research would have been necessary to Village's
recovery on its breach of contract claim, it is quite evident that
the total time attributable to those kinds of services would not
11

have been as large had there been only the breach of contract and
Prompt Payment Act claims in this suit.

For example, while the

depositions presumably gathered information on the contract claims
pending both in this Court and in state court, there is no showing
that they did not also explore various other claims, including lien
claims and various tort claims (such as fraud) against not only
Trading Fair, but various other related (and arguably unrelated)
parties, such as Trading Fair's attorney, William Harmeyer, and
Trading Fair's public adjuster, A.J. Vise.''

While Village in its

See, e.g., Document No. 231, ex. A at 10 (transcript from
Aug. 27, 2010 state court hearing) ( T E
'H
COURT: . . . When
[Village] didn't get paid, [its president] decided he was going to
sue everybody in sight, including the people that owe the money,
the insurance company, any adjuster that ever came near the
place.") .
See, e.g., Document No. 228, ex. F (Mar. 18, 2009 entry)
(noting preparation of interrogatories for "Defendant A.J. 'Jeff'
Vise"); id., ex. F (Sept. 1, 2009 entry) (noting receipt and
examination of "Defendant William F . Harmeyer' s Original Answer" ) .
In sum, Village's state court suit, as amended, asserted claims of
breach of contract, quantum meruit, fraud, breach of fiduciary
duty, theft, conversion, fraudulent inducement, misrepresentation,
tortious interference with existing contract, and business
disparagement and defamation claims variously against multiple
parties, including Trading Fair and the partners of a limited
partnership affiliated with Trading Fair, in addition to Harmeyer
and Vise. Image No. 43097408, Villaqe Contractors, Inc. v. Tradinq
Fair IV et al., No. 2009-07591 (89th Dist. Ct., Harris County, Tex.
filed Feb. 6, 2009). Village dismissed its contract claims in that
court on March 25, 2010, but Trading Fair thereafter asserted in
d,
that case a counterclaim for breach of contract. I . Image Nos.
44958343, 44951871.
In the suit tried in this Court, Village
originally asserted claims for breach of contract, quantum meruit,
unjust enrichment, and breach of fiduciary duty against Trading
Fair, the two limited partners separately sued in state court, and
numerous other possibly related corporate entities in which those
limited partners had interests, as well as the wives of the two

instant request for attorney1 fees has removed many entries
s
relating to Harmeyer and Vise as defendants, it has not identified
discrete entries relating on the one hand to (1) non-contractual
claims against Trading Fair and related parties, including Harmeyer
and Vise, and on the other hand to

(2) Village's

successful

contract claim against Trading Fair.l1

In fact, Village appears

still to include in its request some entries relating only to
Harmeyer or V s . '
ie'

These are a few examples gleaned from a careful

review of the billing records, which billing records intrinsically
fail

to provide

recoverable where

proof
the

of

what

services

proportion of
rendered

are

the

fees are

for both

fee-

recoverable and non-fee-recoverable claims.
limited partners (who were also listed as limited partners in the
affiliated entity). See Document No. 44. It dismissed its claims
in this Court against parties other than Trading Fair at a hearing
on December 2, 2010. See Document No. 133 (Minute Entry) , and
later added its Prompt Payment Act claim against Trading Fair.
Document No. 142 at 4-5.

d,
See, e.g., i . ex. F (Sept. 2, 2009 entry) (preparing
written discovery responses for various parties, including both
d,
Trading Fair and William Harmeyer) ; i . ex. F (Aug. 13-27, 2010
entries) (preparation for and moving to compel Vise's second
deposition); id., ex. F (Aug. 17-20, 2010 entries) (preparing a
motion to compel, attending a hearing on attorney-client privilege
apparently related to Harmeyer's presence as a defendant); see also
Image No. 46072324 at 2-3, Villase Contractors, Inc., No. 200907591 (Village's Motion for Ruling on Claims of Attorney-Client
Privilege During Deposition of Hardam S. Azad, relating to issues
of attorney-client privilege due to Harmeyer's status as a party in
the case, and asking the court "to re-consider the previously filed
Motion to Disqualify Attorney Harmeyer").
l2 See, e.g., i .
d , ex. F (Aug. 3, 2010 entry) ("Review legal
authority on lawsuits against attorneys by opposing non-client.").

Village's counsel has filed an affidavit that no more than
10 percent of Village's request, or $24,250.00, includes fees for
"any non-contractual claim against any non-Trading Fair IV related
party" and, if that sum is deducted, Village's alternative fee
claim is reduced to $218,250.00.13 The Court, with all due respect
to counsel, is unable to accept her 10 percent estimate of
$24,250.00, which is just a little more than the $18,240.00 already
rejected for attorney's fees claimed in the nature of unproven
consequential damages for third-party litigation, and considerably
less

than

the

$41,225.00 already

rejected

for

fees

solely

attributable to the state court litigation. The Court is unable to
find that all but $24,250.00 of a fee claim for $242,500.00 was
attributable solely to Village's contract claim, especially in
light of the Court's familiarity with the litigation and based on
the services described in counsel's billing records.
Both counsel for Village and counsel for Trading Fair agree
that $43,500 would be a reasonable attorney's fee for a "simple
breach of contract case."14 This case, however, involved multiple
complications, including the presence of additional parties for
much of its pendency, dual litigation in state and federal court,
and a sizable, indeed, excessive amount of pretrial motions
practice.

Village is not responsible for injecting all of the

l3

Document No. 228, ex. F at 5 (Campbell Aff.).

l4

See Document No. 231, ex. B at 2; Document No. 232 at 4-5.
14

complexities into the case15 and, to be sure, there is evidence of
obfuscation by Trading Fair, especially related to disclosures of
its complex layers of corporate, partnership, individual, and
employee relationships. There is also ample evidence of Village's
own excessive filings.

The latter at best demonstrate an over-

eagerness to seek Court intervention for what should have been
easily-resolved issues16 or, at worst, represent gamesmanship

For example, Chaucer Corporate Capital, Limited, and not
Village, filed this interpleader action leading to dual litigation.
See also, e.g., Document Nos. 108-110, 112-114 (Motions for Summary
Judgment filed by each individual defendant other than Trading Fair
IV, containing identical arguments) ; Document No. 125 at 1-3
(Trading Fair's request that Village's counsel be required to show
authority to proceed in this case after her discharge from the
state court case, which its attorney submitted to the Court rather
than simply calling Village's counsel to ask if she still
represented Village here) .
For example, Village filed a Rule 4(d) (2) motion for costs
of service resulting from Defendant Jagdesh Azad's refusal to waive
service of process.
See Document No. 77. While Rule 4 (d)(2)
permits such recovery, Village's counsel never asked for
reimbursement prior to filing the motion. Instead, she sent a copy
of the motion to Jagdesh Azad's counsel while he was out of town,
then filed the motion the following day, asking not only for costs
of service, but for the costs incurred in drafting and filing the
motion, which far outweighed the service costs. See Document No.
85 at 2-3; &, ex. 1. The Court previously denied this spurious
request, see Document No. 115 (Memorandum and Order dated Sept. 15,
2010), yet it appears before the Court once more, this time
unsuccessfully hiding within a mountain of billing statements.
Similarly, Village moved to strike Trading Fair's answer and crossclaims due to its late joinder of additional parties related to
Trading Fair's unrelated insurance coverage dispute. See Document
No. 120. While technically correct on the late joinder issue,
billing records reflect correspondence the same
Village's counsel~s
day from counsel for one of Trading Fair's insurers that Trading
Fair had agreed to non-suit the late-joined insurers, which it did
indeed do approximately one month later.
l6

designed to harass opposing counsel.17

Even if the more benign

explanation is correct, the billing records appear bloated due to
the

introduction of

needless complexity to

Village is entitled to only those attorney's

this litigation.
fees that were

reasonably and necessarily incurred in its successful prosecution
of its breach of contract claim, which at its core was a simple
breach of contract action involving a factual dispute over the
quality of the roofing repairs performed. See generally Chaparral,
2009 WL 455282, at *15-16 (noting Texas appellate courtst "inquiry
into the complexity of the legal issues and the conduct of the
opposing party when asked to approve a fee award high in relation
to the damages sought or awarded," and comparing cases in which
attorney's

fees were

excessive due to the applicant's

over-

preparation to cases in which high attorney's fees were justified
in view of

"

[tlhe opposing party's

conduct"); see also Mid-

Continent Cas. Co. v. Chevron P i ~ e
Line Co., 205 F.3d 222, 234 (5th

In this regard, Village doggedly pursued putative claims
personally against Trading Fair's attorney of record, including a
non-redacted charge for review of "legal authority on lawsuits
against attorneys by opposing non-client." Document No. 228, ex.
Village also has submitted charges
F (Aug. 3, 2010 entry) .
relating to research on witness tampering, disqualification of
d,
counsel, and perjury in a civil case. I . ex. F (Aug. 6-9, 2010
entries). The claims against Harmeyer were dismissed by the state
court on his motion for summary judgment, and the motion to
disqualify was denied, although Village sought reconsideration of
the disqualifi-cation denial at least once.
See Image Nos.
48331980, 46072324, Villaqe Contractors, Inc. v. Tradinq Fair IV et
a . No. 2009-07591 (89th Dist. Ct., Harris County, Tex. filed
l,
Feb. 6, 2009).
l7

Cir. 2000) ("[Biased on our review of the record
for this action

. . .

. . .

the award

is excessive for what was--or at least should

have been--simply a coverage dispute." (emphasis in original)).
Many of Village's attorney's fees submissions demonstrate its
engagement in what the state court judge labeled a "scorched earth"
litigation strategy, and noted that the parties "are here every
week arguing about every thing."18 This Court also implied some
criticism of the parties during the long pendency of this case.lg
A further example of needless motion practice, in addition to the
filings already noted,20 is Village's filing of multiple objections
and requests to strike filings and for sanctions.''

The sheer

volume of these filings on a case of this nature and size is
extraordinary. None of these motions or requests was granted, many

l8

See Document No. 231, ex. A at 10.

See, e.g., Document No. 153 at 10 (Dec. 2, 2010 Hearing
Transcript) (noting the "rash of parties and claims" pending);
Document No. 170 at 11 (Jan. 7, 2011 Docket Call Hearing
Transcript) ("Since our hearing a little over a month ago, you have
filled up two more files of stuff, and I'm feeling very sorry for
your clients at this point.
There just seems to be so much
needless contentiousness here. . . . I know what the fund is you
are fighting over and probably it is approaching using that all up
on lawyers' fees at this point . . . . " ) .
20

See supra nn. 16-17.

See, e . g . , Document Nos. 59, 65, 75, 77, 82, 86, 120, 141,
and Document No. 177 at 12.

wholly lacked meritrz2 and several were filed in addition to
substantive filings, which substantive filings often included not
only briefing on the merits but repetitions of the separately-filed
objections.2 3
The

Court

has

observed

additional defects in Village's

application, but further elaboration is unnecessary. Suffice it to
say that Village's claim for attorney's

fees has substantial

defects and includes many legal services for which Village is
entitled to no recovery of attorney's fees from Trading Fair.
Nonetheless, it is also evident that Village's counsel rendered
substantial services in successfully obtaining a jury verdict at
the end of a full trial for the full amount of the interpled fund.
Village has also shown itself entitled to prejudgment interest, as
set forth below, under the Prompt Payment to Contractors Act.

22 For instance, Village twice filed motions for leave to file
a motion to strike responses to its motions, asserting that the
responses were late. See Document Nos. 82, 86. The responses,
however, were filed within 21 days after the respective motions,
and were therefore plainly on time. See FED. R. CIV. P. 6 (a)(1);
Local Rules 7.3, 7.4. In an even more egregious example, Village
filed a motion for sanctions due to Defendant Jagdesh Azad's
joinder in then-pending motions to dismiss filed by other
Jagdesh Azad joined those
defendants.
See Document No. 75.
motions shortly after Village served her in this action, and she
added no additional arguments whatsoever to the pending motions.
Village implausibly asserted that her joinder in the motions was
filed solely to increase litigation costs, even though the only
increase in costs resulted from Village's motion.
23
Compare Document No. 59 with Document Nos. 60, 70; and
compare Document No. 65 with Document No. 70; and compare Document
No. 120 with Document No. 121.

Regrettably, in its aggressive pursuit of the contract claim,
Village ventured into a wide range of unrelated tort and other
allegations, unnecessarily joined numerous parties who were not
liable on the contract, and engaged--with substantial help from
Trading Fair--in a great amount of unnecessary contentiousness.
Village in its present submissions has not made it an easy
task for the Court to tease out from its total attorney's fees
claim the legitimate portion thereof that falls within the ambit of
reasonable attorney's fees for successfully prevailing on its
breach of contract claim.

Village has demonstrated, however, a

substantial amount of time reasonably spent on the contract claim,
and the Court--having presided over the jury trial--observed
counsel's

preparation

for and

successful prosecution of

the

contract claim. Based upon the foregoing and a careful review of
Village's billing records, and also drawing from 50 years of trial
experience in this profession, the Court finds from a preponderance
of the evidence that Plaintiff's two attorneys reasonably devoted
600 hours of attorney time to the successful prosecution of the
contract claim, for which a reasonable fee, at the reasonable rate
of $150 per hour claimed by Village's counsel, in the amount of
$90,000.00, should be awarded. Moreover, applying to the claim for
the contributions of legal assistants the same ratio of the hours
claimed to the hours found to be reasonable for counsel, the Court
finds that 270 hours of legal assistant time was reasonably

employed

on

Village's

successful

breach

of

contract

claim.

Multiplying 270 hours by a reasonable rate of $60 per hour equals
$16,200.00, which should be awarded. Thus, in all, the Court finds
that the loadstar for Village's recovery of reasonable attorney's
fees is the total sum of $106,200.00.

B.

Adjustment of the Lodestar Amount
The Court finds that there is no Johnson factor not already

considered that would merit adjustment of the lodestar amount.
Village is therefore entitled to a recovery of $106,200.00 in
reasonable attorney's fees.2 4
Prejudqment Interest
Village claims 1.5 percent simple interest per month as
prejudgment interest pursuant to the Prompt Payment to Contractors

2 4 TO the extent Village requests costs by way of the
ill of
Costs" attached to its reply in support of its motion for
attorney's fees, that request is denied without prejudice. Village
has provided no affidavit verifying the accuracy or necessity of
the costs, nor the necessity of the services for which the costs
were incurred. See 28 U.S.C. 5 1924; Alexander Mfq., Inc. v.
Emp'ee Stock Ownership and Trust v. Illinois Union Ins. Co., 688 F.
Supp. 2d 1170, 1176 (D. Ore. 2010) (denying bill of costs without
prejudice to re-file where the prevailing party's attorney failed
to verify the necessity of costs in his affidavit). Regardless,
Local Rule 54.2 provides that a bill of costs is to be submitted
within 14 days of the entry of a final judgment.
Counsel is
cautioned in filing a 'Bill of Costs" to include only taxable costs
and to avoid the kinds of deficiencies found in Village's
attorney's fees request. See 28 U.S.C. § 1920.

Act. Under this Act, an owner must pay a contractor for work done
on real property within 35 days of the contractor's invoice for the
work; failure to do so results in the accrual of 1.5 percent
monthly (18 percent annual) interest on the amount due until the
earlier of the date of delivery of the money or the date of
judgment for the amount.

TEX. PROP.CODE § § 28.002, 28.004.

None of Trading Fair's four objections to this award is
meritorious.

First, its contention that Trading Fair did not

withhold payment because the money claimed remained with its
insurer or the Court directly contradicts the jury's finding "that
Trading Fair IV withheld payment of any portion or all of the sum"
owed to Village "without there being a good faith dispute as to
that portion [ . I

"25

Second, the cases it cites to support its

position that "prejudgment interest .

. .

cannot be assessed

against an interpleader defendantnz6are inapposite. See Phillips
Petrol. Co. v. Adams, 513 F.2d 355, 369-70 (5th Cir. 1975); State
Farm Life Insurance Co. v. Martinez, 216 S.W.3d 799, 808 (Tex.
2007) .

In Martinez, the Texas Supreme Court held that prejudgment

interest could be assessed against an insurer for delayed payment
of life insurance proceeds to a beneficiary only up until the time
the insurer interpled the proceeds into court due to conflicting
claims of beneficiary status.

25

Document No. 225 at 13.

26

Document No. 233 at 2.

216 S.W.3d at 802, 806.

In that

circumstance, the 'interpleader sufficed in place of payment," as
the insurer, recognizing competing "adverse bona fide claims," was
no longer delaying payment, which was the action sought to be
punished by the prompt payment statute.

I .at 806. Likewise, in
d

Philli~s,a stakeholder was held liable for prejudgment interest
only during the time period in which 't enjoyed a reasonably free
i

use of the money, that is, from the time Phillips collected the
suspense money until the day it tendered or paid the funds into the
registry of the district court."
'ne
370 ( O c

513 F.2d at

369;

see also

id. at

a stakeholder makes an unconditional offer to give up

possession of a disputed fund, it ceases to exert that dominion
over the money sufficient to justify an obligation to pay interest
thereon, and the rule is that once such an unconditional tender is
made, any liability for interest ceases as of
tender.").

the date of

Here, in contrast, Trading Fair did not file this

interpleader action and, indeed, it made no "unconditional offer to
give up possession" of the disputed amount; quite to the contrary,
it asserted either that it was entitled to the interpled funds
directly, or that it was entitled to have those funds returned to
the insurer to be credited or remitted to Trading Fair for damage
to its property.
Trading Fair's third objection, that Village failed to plead
its Prompt Payment Act claim, ignores Village's Answer and Amended

Third-Party Complaint Against Trading Fair IV, Inc., wherein
Trading Fair's preit does plead a Prompt Payment Act ~iolation.'~
trial motion to strike this filing was denied."
fourth and final objection is also unpersuasive.

Trading Fair's
Even assuming

that the Court is not "required to award the Texas Prompt Payment
Act's penalty interestIMzg
as Trading Fair asserts, it gives no
reason why the Court should not award the statutory interest. The

27

See Document No. 142 at 3-4.

28

See Document No. 158 (Minute Entry) .

2 9 Document No. 223 at 3 (citing Landmark Ors., LP v. Delohini
Constr. Co., No. 13-04-371-CV,2005 WL 2560022, at *3 (Tex. App.-Corpus Christi Oct. 13, 2005, pet. denied). Landmark, which no
other court has cited, stated that the court was "not required to
rely only on the interest rates mandated by" the Prompt Payment Act
and another statute, because "this is not a claim involving
wrongful death, personal injury, property damage, or condemnation."
2005 WL 2560022, at * 3 (citing Phillios Petrol. Co. v. Stahl
Petrol. Co., 569 S.W.2d 480, 485 (Tex. 1978) (recognizing two bases
for prejudgment interest awards: an enabling statute and general
principles of equity)) . However, Landmark appears mistakenly to
have presumed that TEX. FIN. CODE ANN. § 304.102, which requires
prejudgment interest on [a] judgment in a wrongful death, personal
injury, or property damage case," is the sole enabling statute for
an award of prejudgment interest, thereby apparently rendering
application
of
any
other
prejudgment
interest
statute
discretionary. See Landmark, 2005 WL 2560022, at * 3 ("Statutory
prejudgment interest applies only to judgments in wrongful death,
personal injury, property damage, and condemnation cases." (citing
TEX. FIN. CODE ANN. § § 304.102, 304.201; Johnson & Hissins of Tex..
Inc. v. Kenneco Enerqy, 962 S.W.2d 507, 530 (Tex. 1998))). This in
turn appears to be a misreading of Kenneco, which addressed only
whether that statute's predecessor's "calculation rules apply to
all judgments," not whether the statute's listing of causes of
action was the exclusive enabling statute for prejudgment interest
in Texas. Section 28.004 of the Property Code expressly sets out
calculation of prejudgment interest in this case.
\\

Court finds in light of the facts proven and the Jury's finding in
this case, that Village should be awarded interest under the Act.
Village will therefore be awarded prejudgment interest under
Texas law at the rate of 1.5 percent per month on $338,382.00 from
December 25, 2008,30 to the date of this Order, 30 and one-half
months later, in the amount of $154,809.77.
111.

Order

Based on the foregoing, it is
ORDERED AND ADJUDGED that Plaintiff Village Contractors, Inc.
is entitled to entry of a Final Judgment against Defendant Trading
Fair IV, Inc. for $338,382.00 in damages, $106,200.00 in reasonable
attorney's fees, and $154,809.77 in prejudgment interest, for a
total Final Judgment of $599,391.77--toward
which the $338,382.00
interpled into the Court's registry and interest earned thereon,
will be applied--plus taxable costs of court and post-judgment
interest as provided by law. If Plaintiff successfully defends an
appeal of the Final Judgment to the United States Court of Appeals
for the Fifth Circuit, then Plaintiff shall have and recover from

30 This is 35 days after Village sent Trading Fair its invoice.
See Document No. 227, ex. 1; see also TEX. PROP. CODE § § 28.002(a),
28.004 (a).

Trading Fair IV, Inc. an additional attorney's fee of $15,000.00,
which the Court finds is reasonable.
The Clerk shall notify all parties and provide them with a
true copy of this Order.
SIGNED at Houston, Texas on this

11

ZY

of July, 2011.

C

G

WETLEIN,
JR.
DISTRICT JUDGE