Halprin et al v. First National Bank et al

Filing 422

ORDER GRANTING 403 Motion for Summary Judgment; GRANTING IN PART AND DENYING IN PART 406 Motion for Summary Judgment; DENYING 411 Motion for Summary Judgment Signed by Judge Robert Pitman. (mgr)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
SAN ANTONIO DIVISION
GREGORY HALPRIN, et al.,
Plaintiffs,
v.
FEDERAL DEPOSIT INSURANCE
CORPORATION as receiver for FIRST
NATIONAL BANK, et al.,
Defendants.

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5:13-CV-1042-RP

ORDER
Before the Court are the following motions:
1. Defendant American Title Group, Inc. f/k/a LandAmerica Lawyers Title of San
Antonio, Inc.’s (“American Title”) “Motion for Summary Judgment on Its CrossClaim for Indemnity against Defendant Mauro T. Padilla,” (“Padilla”) (Dkt. 403);1
2. American Title’s “Motion for Summary Judgment on Its Counterclaim Pursuant to
Texas Civil Practice and Remedies Code 17.50(c) against Plaintiffs,”2 (Dkt. 406),
Plaintiffs’ response, (Dkt. 408), and American Title’s reply, (Dkt. 409); and

Padilla has neither responded to this motion nor requested additional time to respond. The date by which
his response was due has passed. See W.D. Tex. Loc. R. CV-7(e)(2).
2 “Plaintiffs” are Joseph Amelio, Tawny Amelio, Edward Arriola, Kennie Arriola, Gerald Bates, Adolfo
Bejarano, Mauricio Bejarano, Silvio Brigliadoro, Maria R. Collins, David Goldberg, Gregory Halprin, Denise
Heywood, George Heywood, Kristopher Hochart, Gohar Karahagopian, Hagop Karahagopian, Hermann
Kinschner, Les Klingerman, Payam Paul Kohanbosh, Ben Li, Lin Li, Michael Loeffler, Irena Minkova, Mikail
Minkov, Andrew V. Nguyen, Simon Parrott, Melissa Parrott, Stan Salah, Brian Taus, David Trustey, Kevin
Trustey, Michael Trustey, Patricia Trustey, Michael Vick, Paul Weber, and Desiree Young. (7th Am. Compl.,
Dkt. 124, ¶ 3).
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3. Plaintiffs’ “Motion for Summary Judgment on [American Title’s] ‘Groundless’
Counterclaim,” (Dkt. 411),3 American Title’s response, (Dkt. 412), and Plaintiffs’
reply, (Dkt. 413).
After considering the parties’ arguments, the record, and the relevant law, the Court grants
American Title’s motion for summary judgment on its indemnity cross-claim, (Dkt. 403), grants in
part and denies in part American Title’s motion for summary judgment on its Texas Civil Practice
and Remedies Code 17.50(c) counterclaim, (Dkt. 406), and denies Plaintiffs’ motion for summary
judgment on that counterclaim, (Dkt. 411).
I. BACKGROUND
In this “complex and unusually contentious case,” Bear Ranch, LLC v. Heartbrand Beef, Inc.,
No. 6:12-CV-14, 2016 WL 1588312, at *1 (Costa, Circuit J., S.D. Tex. Apr. 20, 2016), Plaintiffs
alleged that they entered into individual agreements with Defendants HTG Real Property
Management (“HTG”), the Padilla Property Corporation (“PPC”), Maria Del Rosario Padilla, Mauro
T. Padilla, Mauro Joe Padilla, and Carlos Miguel Padilla (collectively, the “Padilla Defendants”) to
purchase lots on which the Padilla Defendants would build one or more multi-family living units.
(7th Am. Compl., Dkt. 124, ¶¶ 5–6). Plaintiffs alleged that they provided American Title with a
down payment and that the Padilla Defendants then deeded half-acre lots to Plaintiffs. (Id.). After
construction began, the Padilla Defendants allegedly asked Plaintiffs to deed their lots back to the
Padilla Defendants in order to obtain construction financing. (Id. ¶ 7). The Padilla Defendants also
allegedly asked Plaintiffs to agree to subrogate their claims to those of the construction lender,
telling Plaintiffs that this would allow the Padilla Defendants to obtain construction financing and

American Title’s “Motion for Summary Judgment on Its Counterclaim Pursuant to Texas Civil Practice and
Remedies Code 17.50(c)” against Plaintiffs, (Dkt. 406), and Plaintiffs’ “Motion for Summary Judgment on
[American Title’s] ‘Groundless’ Counterclaim,” (Dkt. 411), are cross-motions for summary judgment.
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complete construction. (Id.). Instead, Plaintiffs alleged that the Padilla Defendants used those funds
to pay personal and/or corporate debt. (Id.). The investment properties were never completed. (Id.
¶ 13). Plaintiffs then brought this action, in which they asserted a variety of claims against HTG,
PPC, and the Padilla Defendants. (Id. at 9–24). Plaintiffs also asserted claims against American Title,
the title company that survived the merger with the company that facilitated Plaintiffs’ real estate
transactions: common law and statutory fraud, violations of the Deceptive Trade Practices Act
(“DTPA”), civil conspiracy, assisting and participating, negligence, and breach of fiduciary duty. (Id.
at 25–28). American Title filed a motion to dismiss each of Plaintiffs’ claims, (Dkt. 126), which the
Court granted, (Dkt. 227). American Title also filed counterclaims against Plaintiffs for contractual
and statutory indemnity, arguing that each plaintiff violated their agreement to indemnify American
Title by suing it. (Am. Ans., Dkt. 125, at 20–24). The Court granted summary judgment in Plaintiffs’
favor on the contractual indemnity counterclaims. (Dkt. 389).
Plaintiffs filed a notice of their intent to appeal the dismissal of their seventh amended
complaint. (Dkt. 231). They then dismissed the appeal without prejudice. (Dkt. 232 at 1). Plaintiffs
subsequently filed a motion to stay pending appeal and to sever the dismissed claims so that they
could be appealed as final orders, (Dkt. 233), which the Court denied, (Dkt. 239). And Plaintiffs filed
a motion for Rule 54(b) certification of final judgment and petition for § 1292(b) interlocutory
appeal, (Dkt. 257), which the Court also denied, (Dkt. 304).
Now, American Title seeks summary judgment on its statutory indemnity cross-claim against
Padilla, (Dkt. 403), and its counterclaim against Plaintiffs in which it argues that their DTPA claims
are “groundless” within the meaning of Texas Business and Commerce Code § 17.50(c), (Dkt. 406).
Plaintiffs simultaneously seek summary judgment on the latter counterclaim. (Dkt. 411).

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II. LEGAL STANDARD
Summary judgment is appropriate under Federal Rule of Civil Procedure 56 only “if the
movant shows that there is no genuine dispute as to any material fact and the movant is entitled to
judgment as a matter of law.” Fed. R. Civ. P. 56(a). A dispute is genuine only if the evidence is such
that a reasonable jury could return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 254 (1986). “A fact issue is ‘material’ if its resolution could affect the outcome of the
action.” Poole v. City of Shreveport, 691 F.3d 624, 627 (5th Cir. 2012).
The party moving for summary judgment bears the initial burden of “informing the district
court of the basis for its motion, and identifying those portions of [the record] which it believes
demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317,
323 (1986). “[T]he moving party may [also] meet its burden by simply pointing to an absence of
evidence to support the nonmoving party’s case.” Boudreaux v. Swift Transp. Co., 402 F.3d 536, 544
(5th Cir. 2005). The burden then shifts to the nonmoving party to establish the existence of a
genuine issue for trial. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 585–87
(1986); Wise v. E.I. Dupont de Nemours & Co., 58 F.3d 193, 195 (5th Cir. 1995). Unsubstantiated
assertions, improbable inferences, and unsupported speculation are not competent summary
judgment evidence, and thus are insufficient to defeat a motion for summary judgment. Turner v.
Baylor Richardson Med. Ctr., 476 F.3d 337, 343 (5th Cir. 2007). Furthermore, the nonmoving party is
required to identify specific evidence in the record and to articulate the precise way that evidence
supports her claim. Adams v. Travelers Indem. Co. of Conn., 465 F.3d 156, 164 (5th Cir. 2006). Rule 56
does not impose a duty on the court to “sift through the record in search of evidence” to support
the nonmoving party’s opposition to the motion for summary judgment. Id. After the nonmoving
party has been given the opportunity to raise a genuine factual issue, if no reasonable juror could
find in its favor, summary judgment will be granted. Miss. River Basin Alliance v. Westphal, 230 F.3d
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170, 175 (5th Cir. 2000). Courts must view the summary judgment evidence in the light most
favorable to the nonmoving party. Rosado v. Deters, 5 F.3d 119, 123 (5th Cir. 1993).
The same core summary judgment standard applies to cross-motions: the court “review[s]
each party’s motion independently, viewing the evidence and inferences in the light most favorable
to the nonmoving party.” Ford Motor Co. v. Texas Dep’t of Transp., 264 F.3d 493, 498 (5th Cir. 2001);
see also 10A Charles Alan Wright, et al., Federal Practice and Procedure § 2720 (4th ed. 2019). “The mere
filing, however, of cross[-]motions for summary judgment neither establishes that there is no issue
of material fact, nor does it obligate the trial court to render summary judgment.” Jacobs v. Hartford
Life & Accident Ins. Co., No. CV H-02-3100, 2006 WL 8451348, at *2 (S.D. Tex. July 12, 2006). The
Fifth Circuit has previously elaborated upon the effect of cross-motions on a finding of a genuine
dispute of material fact:
“Cross-motions for summary judgment will not, in themselves, warrant the court in
granting summary judgment unless one of the parties is entitled to judgment as a
matter of law on facts that are not genuinely disputed. . . . The rationale for this rule,
of course, is that each party moving for summary judgment may do so on different
legal theories dependent on different constellations of material facts. Indeed, crossmotions for summary judgment may demonstrate a genuine dispute as to material
facts as often as not. . . . Nonetheless, cross-motions may be probative of the nonexistence of a factual dispute when . . . they demonstrate a basic agreement
concerning what legal theories and material facts are dispositive.”
Bricklayers, Masons & Plasterers Int’l Union of Am., Local Union No. 15, Orlando, Fla. v. Stuart Plastering
Co., 512 F.2d 1017, 1023 (5th Cir. 1975).
III. DISCUSSION
A. American Title’s Motion for Summary Judgment on Its Indemnity Cross-Claim
American Title asks the Court to grant summary judgment on its cross-claim for statutory
indemnity against Padilla.4 (Dkt. 403 at 3; see also Dkt. 125 at 28 (cross-claim)). But not only does it
American Title originally made its cross-claim against a group of parties it referred to as the “Padilla CrossDefendants”: “HTG Real Property Management, Padilla Property Corp., Mauro T. Padilla, Maria Del Rosario
Padilla, Mauro Joe Padilla, and Carlos Miguel Padilla.” (Dkt. 125 at 26). However, the language it uses in the
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request that it prevail on that legal issue, it also asks that the Court award it “attorney’s fees and
costs in the amount of $468,293.58 for fees incurred, $30,000.00 for any appeal taken to the Fifth
Circuit Court of Appeals, and $15,000[.00] should this cause be appealed to the United States
Supreme Court.” (Dkt. 403 at 7). Padilla, who American Title states “was sentenced to prison” “[f]or
his role” in the events giving rise to this case, did not respond. (Id. at 1–2). As American Title notes,
the Court previously entered a final judgment against Padilla on all of Plaintiffs’ claims in their
Seventh Amended Complaint, including for violations of the Texas Deceptive Trade Practices Act
(“DTPA”), Tex. Bus. & Com. Code. § 17.42 et seq. (Agreed Judgment, Dkt. 364, at 1; see also Dkt.
403 at 2). Padilla failed to address all of American Title’s fact assertions, which the Court will thus
treat as “undisputed for the purposes of the motion.” Fed. R. Civ. P. 56(e)(2); Eversley v. MBank
Dallas, 843 F.2d 172, 174 (5th Cir. 1988).
1. Basis for American Title’s Motion
Section 17.555 of the DTPA allows “[a] person against whom an action has been brought
under [the DTPA] may seek . . . indemnity from one who, under the statute law or at common law,
may have liability for the damaging event of which the consumer complains.” That person “may

motion at issue here, including in the motion’s title, indicates that it is seeking a ruling on its cross-claim only
as to Mauro T. Padilla, not the other “Padilla Cross-Defendants.” (Dkt. 403 at 1, 3, 5). Complicating the
matter is that American Title served “all counsel of record” and Maria Del Rosario Padilla, Mauro T. Padilla,
Mauro Joe Padilla, Carlos Miguel Padilla, Daniel L. Brown, and Padilla Property Corporation with its motion.
(Id. at 9).
Several of the initial set of “Padilla Cross-Defendants” are either no longer parties to this case or subject to a
motion for default judgment. On September 30, 2016, the Court granted Daniel L. Brown’s motion to
dismiss, (Dkt. 153), terminating him as a party to this case. (Dkt. 227). On July 6, 2018, the Court granted
Carlos Miguel Padilla’s oral motion to dismiss the claims against him, also terminating him as a party. (Dkt.
351). On July 23, 2018, the Court dismissed Plaintiffs’ claims against Maria Del Rosario Padilla and Mauro
Joe Padilla with prejudice, terminating them as parties as well. (Dkt. 379). On January 17, 2019, the Clerk
entered default against HTG Real Property Management and Padilla Property Corporation (in addition to
Mauro Joe Padilla, who by this time was no longer a party to the case), (Dkt. 399), though no party
subsequently filed a motion for default judgment.
Given this procedural history, only Mauro T. Padilla remains as a party to this case who has previously
appeared before the Court. Accordingly, the Court will construe American Title’s motion as seeking statutory
indemnity from Mauro T. Padilla alone.

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recover all sums that he is required to pay as a result of the action, his attorney’s fees reasonable in
relation to the amount of work performed in maintaining his action for indemnity, and his costs.”
Tex. Bus. & Com. Code § 17.555. A defendant who is sued under the DTPA, but who is not itself
found liable, may recover indemnity for attorney’s fees it incurred in that litigation. Swafford v. ViewCaps Water Supply Corp., 617 S.W.2d 674, 675 (Tex. 1981) (per curiam).5
American Title is such a defendant, (7th Am. Compl., Dkt. 124, ¶¶ 27–28), and so it may
seek indemnity from Padilla, who has been found liable for DTPA violations, (Agreed Judgment,
Dkt. 364, at 1). As in Swafford, “[t]he statute expressly authorizes indemnity for attorney’s fees in this
situation.” 616 S.W.2d at 675. No genuine dispute of material fact exists for this issue.
2. American Title’s Attorney’s Fees
Given that the basis for American Title’s motion is valid, the Court next assesses the
accuracy of its fees request.6
i. The Fees American Title Requests
The $468,293.58 for which it asks is a sum derived from its own calculations, based on
billing rates of $225–425 per hour for attorneys and $125–35 per hour for paralegals at Jackson

In Swafford, the court apparently awarded indemnity for attorney’s fees under Section 17.555’s “all sums”
catch-all category rather than the “attorney’s fees” provision. 616 S.W.2d at 675. The latter category is limited
to attorney’s fees expended in service of the “action for indemnity.” Tex. Bus. & Com. Code § 17.555; see also
Cent. Consol., Inc. v. Robertshaw Controls Co., 868 S.W.2d 910, 912 (Tex. App.—Beaumont 1994, writ denied)
(citing Swafford, 616 S.W.2d at 674) (“The courts have recognized the right to recover attorney’s fees in the
absence of other liability where a statute specifically provides that a person against whom a deceptive trade
practices action has been brought may recover ‘all sums that he is required to pay as a result of the action.’”).
6 Typically, a party would request attorney’s fees in a separate motion under Federal Rule of Civil Procedure
54(d)(2)(A). In other words, after being granted summary judgment on the claim that entitles it to relief, the
party would then move to specify and obtain the relief to which it has become entitled. Here, though, the
Court considers American Title’s unified request, having granted summary judgment on the core legal issue.
See Exxon Corp. v. St. Paul Fire & Marine Ins. Co., 129 F.3d 781, 786 (5th Cir. 1997) (“[T]he policy goal that
animates Rule 56 is the prompt disposition of cases when there is no genuine issue of any material fact for the
court to consider. In order to achieve this goal, the rule thus requires a court, under the proper conditions, to
grant the relief to which a party is entitled . . . .”); see also Whitney Bank v. Hancock, No. CIV.A. H-11-2164,
2013 WL 1404822, at *2–5 (S.D. Tex. Apr. 5, 2013) (granting summary judgment on claim for attorney fees
and immediately proceeding to evaluate the attorney fee request).
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Walker LLP, American Title’s primary firm, and $285 per hour for attorneys at Winstead PC, a
second firm American Title retained. (Wheatley Decl., Dkt. 403, Ex. C, at 34–35). Significantly, this
sum represents “the total amount of attorneys’ fees [American Title] incurred in this dispute.” (Dkt.
403 at 6). American Title argues that it “incur[red] fees it would have not sustained but for Mauro T.
Padilla’s conduct” and that “[t]his matter required more time and labor from counsel for [American
Title] because of the Plaintiffs’ baseless, unmeritorious assertions against [American Title], the
number of litigants involved, the evolution in Plaintiffs’ legal theories for liability, multiplicity of
claims, numerous unsuccessful attempts to replead, and revolving sets of counsel.” (Id. at 6–7).
According to American Title, “the amount of attorney’s fees incurred in this case [is] comparable to
other cases that are similar in complexity and duration.” (Id. at 7). In this motion, American Title
seeks fees assessed in 40 Jackson Walker invoices and 28 Winstead invoices.7 (Dkt. 403 at 43–327).
ii. Background Law
“Resolving the fee question thus requires the Court to perform a couple preliminary tasks
before it conducts a lodestar analysis of the fee request.8 First, it must determine which of [American
Title’s] claims . . . are “recoverable” under the fee provision. After sorting out the recoverable and
unrecoverable claims, the Court needs to determine whether the work related to the unrecoverable
claims was nonetheless inextricably intertwined with the work on recoverable claims allowing a full
award or whether there is a basis for segregation or percentage allocation.” Bear Ranch, LLC v.
Heartbrand Beef, Inc., No. 6:12-CV-14, 2016 WL 1588312, at *1 (Costa, Circuit J., S.D. Tex. Apr. 20,
The Jackson Walker invoices are numbered 1375366, 1380042, 1383586, 1387305, 1393301, 1398736,
1401090, 1406808, 1413430, 1418320, 1422047, 1427255, 1432460, 1435770, 1441261, 1445906, 1451691,
1455659, 1460715, 1463476, 1472256, 1476444, 1480791, 1486173, 1490362, 1494355, 1499351, 1504190,
1508806, 1513077, 1517759, 1520363, 1527835, 1540821, 1555238, 1559837, 1564532, 1568688, 1570819,
and 1575900. The Winstead invoices are numbered 1652898, 1660029, 1667174, 1674060, 1688560, 1695950,
1703719, 1711869, 1718464, 1725603, 1734394, 1740924, 1749782, 1757191, 1776312, 1765826, 1776303,
1776313, 1791047, 1800356, 1801378, 1817775, 1834472, 1837210, 1837205, 1861090, 1871411, and
1871676. (Dkt. 403 at 43–327).
8 American Title, however, suggests that the Court proceed directly to the lodestar analysis. (Dkt. 403 at 6).
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2016). “[T]he governing Texas law provides guidance on how to decide fee disputes when work for
some claims is recoverable but work on other claims is not.” Id. at *3.
Typically, attorney’s fees must be segregated between “claims for which they are recoverable
and those for which they are not,” Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 311 (Tex.
2006), though an exception exists when the claims arise out of the same transaction and are “so
interrelated that their prosecution or defense entails proof or denial of essentially the same facts.”
Navigant Consulting, Inc. v. Wilkinson, 508 F.3d 277, 298 (5th Cir. 2007) (quoting Stewart Title Guaranty
Co. v. Sterling, 822 S.W.2d 1, 11 (Tex. 1991)). And when “the services involved in preparing one claim
would still be incurred in preparing the other,” “many if not most legal fees . . . cannot and need not
be precisely allocated to one claim or the other.” Id. “[T]he failure to segregate does not mean that a
party cannot recover any of its attorney’s fees” because “[u]nsegregated attorney’s fees for the entire
case are some evidence of what the segregated amount should be.” Navigant Consulting, 508 F.3d at
298 (quoting Chapa, 212 S.W.3d at 313). If the fee-seeking party does not segregate its fees, “[t]he
district court, as the trier of fact on the question of attorney’s fees, [does] not abuse its discretion in
awarding a percentage of . . . fees rather than denying recovery of fees completely.” Id. However,
“interrelated or intertwined facts are not enough to trigger the exception; ‘it is only when discrete
legal services advance both a recoverable and unrecoverable claim that they are so intertwined that
they need not be segregated.’” In re Alonzo, 540 F. App’x 370, 373 (5th Cir. 2013) (quoting Chapa,
212 S.W.3d at 311). Moreover, when attorneys undertake an “effort to recover 100 percent of their
fees,” the Court must be watchful that their fee-seeking position is not “inconsistent with [their]
underlying claims.” Chapa, 212 S.W.3d at 313.
To determine whether the segregation exception applies, the Court examines the exact
billing records detailing the work done on the case’s various claims. See, e.g., Navigant Consulting, 508
F.3d at 298 (“The district court, as the trier of fact on the question of attorney’s fees . . . examined
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the facts and proof in the case to see whether the issues were inextricably intertwined.”); MidContinent Cas. Co. v. Petroleum Sols., Inc., No. CV 4:09-0422, 2017 WL 6942658, at *15 (S.D. Tex. Sept.
21, 2017) (referring to “the invoices” and specific “billing entr[ies]” the court reviewed); Eagle
Suspensions, Inc. v. Hellman Worldwide Logistics, Inc., No. 3:12-CV-0611-G, 2015 WL 252442, at *2
(N.D. Tex. Jan. 20, 2015) (“Plaintiff submitted its unredacted billing invoices in camera as ordered.”).
Here, American Title filed its unredacted billing entries under seal. (Dkt. 420; see also Order, Dkt. 415
(directing American Title to file its unredacted billing entries as attachments to a motion for leave to
file under seal)). Generally, “[t]he party seeking attorneys’ fees must present adequately documented
time records to the court. Using this time as a benchmark, the court should exclude all time that is
excessive, duplicative, or inadequately documented.” Watkins v. Fordice, 7 F.3d 453, 457 (5th Cir.
1993).
Once the Court completes that step, it performs the following “lodestar” analysis:
First, the court calculates a “lodestar” fee by multiplying the reasonable number of
hours expended on the case by the reasonable hourly rates for the participating
lawyers. Louisiana Power & Light Co. v. Kellstrom, 50 F.3d 319, 324 (5th Cir. 1995). The
court then considers whether the lodestar figure should be adjusted upward or
downward depending on the circumstances of the case. Id. In making a lodestar
adjustment the court should look to twelve factors, known as the Johnson factors,
after Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974). The factors
are: (1) the time and labor required for the litigation; (2) the novelty and difficulty of
the questions presented; (3) the skill required to perform the legal services properly;
(4) the preclusion of other employment by the attorney due to acceptance of the
case; (5) the customary fee; (6) whether the fee is fixed or contingent; (7) time
limitations imposed by the client or the circumstances; (8) the amount involved and
the result obtained; (9) the experience, reputation and ability of the attorneys; (10)
the “undesirability” of the case; (11) the nature and length of the professional
relationship with the client; and (12) awards in similar cases. Id. at 717–19.
Migis v. Pearle Vision, Inc., 135 F.3d 1041, 1047 (5th Cir. 1998).9 “These factors are comparable to
those laid out by the Texas Supreme Court, and this Court may rely on them when determining

While the Court reaches the conclusion concerning the applicability of the lodestar method that American
Title urges, the cases American Title cites in support are inapt. (Dkt. 403 at 5). In Todd v. AIG Life Ins. Co., 47
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attorney’s fees under Texas law which governs” the DTPA claims in this case. Iniekpo v. Avstar Int’l
Corp., No. SA-07-CA-879-XR, 2010 WL 3909321, at *3 (W.D. Tex. Sept. 30, 2010) (citing Mid–
Continent Cas. Co. v. Chevron Pipe Line Co., 205 F.3d 222, 232 (5th Cir. 2000); Arthur Andersen & Co. v.
Perry Equip. Corp., 945 S.W.2d 812, 818 (Tex. 1997)). Generally, “[t]here is a strong presumption that
the lodestar is the reasonable fee, and the fee applicant bears the burden ‘of showing that such an
adjustment is necessary to the determination of a reasonable fee.’” Walker v. U.S. Dep’t of Hous. &
Urban Dev., 99 F.3d 761, 771 (5th Cir. 1996) (quoting City of Burlington v. Dague, 505 U.S. 557, 562
(1992)).
“[O]f the Johnson factors, the court should give special heed to the time and labor involved,
the customary fee, the amount involved and the result obtained, and the experience, reputation and
ability of counsel.” Migis, 135 F.3d at 1047 (citing Von Clark v. Butler, 915 F.2d 255, 258 (5th Cir.
1990)). But the amount involved and the result obtained, and the experience, reputation and ability
of counsel factors cannot serve as independent bases for adjusting the lodestar amount upward—so
too for the novelty and difficulty of the questions presented and the skill required to perform the
legal services properly. Walker, 99 F.3d at 771, 771 n.12 (citing Pennsylvania v. Delaware Valley Citizens’
Council for Clean Air, 478 U.S. 546, 565 (1986)). “Enhancements based upon these factors are only
appropriate in rare cases supported by specific evidence in the record and detailed findings by the
courts.” Id. (quoting Alberti v. Klevenhagen, 896 F.2d 927, 936 (5th Cir.), opinion vacated in part on reh’g,
903 F.2d 352 (5th Cir. 1990)). And consideration of whether the fee is fixed or contingent is barred
entirely. Id. (citing City of Burlington, 505 U.S at 567).

F.3d 1448, 1459 (5th Cir. 1995), and Wegner v. Standard Ins. Co., 129 F.3d 814, 822 (5th Cir. 1997), the Fifth
Circuit explained that courts apply the lodestar method in ERISA cases. This is not an ERISA case.

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iii. Analysis
Initially, the threshold question of recoverability—that is, whether the sum American Title
requests mixes fees incurred in pursuing claims for which those fees are recoverable and claims for
which they are not—is relatively simply answered. The DTPA explicitly and capaciously allows for
recovery of “all sums that [American Title] is required to pay as a result of the action.” Tex. Bus. &
Com. Code § 17.555. This case is not akin to the more common situation in which a party seeks full
attorney’s fees arising from two causes of action, one recoverable and one not. See, e.g., Chapa, 212
S.W.3d at 313; Bear Ranch, 2016 WL 1588312, at *3. Similarly, the fees need not be segregated
between recoverable and nonrecoverable claims because the DTPA’s broad ambit renders them
sufficiently intertwined.10 See Chapa, 212 S.W.3d at 311. American Title’s current fee-seeking position
does not appear to be inconsistent with its underlying claims as expressed in its previous filings, in
that it has consistently maintained that it is entitled to indemnity from Padilla. Chapa, 212 S.W.3d at
313. (See Crossclaim, Dkt. 125, at 26–29; Am. Mot. Dismiss, Dkt. 126).
So, the Court proceeds to the lodestar analysis. “Attorneys’ fees are to be calculated at the
‘prevailing market rates in the relevant community.’” Walker, 99 F.3d at 770 (quoting Blum v. Stenson,
465 U.S. 886, 895 (1984)). American Title supports its fee request with a declaration from Scott A.
Wheatley of Jackson Walker, its “primary attorney,” who explains that he charged “$325 per hour
from 2014 through 2018,” and $425 per hour in 2019. (Ex. C, Dkt. 403, at 34). Other attorneys at
his firm charged rates ranging from $225 to $425 per hour, and paralegals charged $125 to $135 per
hour (both ranges including increases beginning in 2019). (Id. at 34–35). Most of the invoices are
dated before 2019. (Dkt. 403 at 43–327). The Winstead attorneys that American Title retained

Even if there were both recoverable and nonrecoverable claims at issue here, “[t]he voluminous billings in
this complex and unusually contentious case . . . make it very difficult to segregate every time entry,” Bear
Ranch, 2016 WL 1588312, at *5, and the claims involved appear to be sufficiently interrelated as to trigger the
exception to the segregation requirement, see Navigant Consulting, 508 F.3d at 298.
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charged $285 per hour. (Id. at 35). American Title describes these fees as having been assessed “at a
significant discount from the usual and customary rates charged by these individuals for the
performance of legal services.” (Id.).
As derived from the invoices American Title submitted, then, the lodestar for their
attorney’s fees is $468,293.58—i.e., the hours the attorneys and paralegals expended on the case
multiplied by their various hourly rates (plus costs). (Dkt. 403 at 5). See Migis, 135 F.3d at 1047. The
Court finds that the high number of hours is reasonable, as this is an inordinately complex and timeconsuming case. The hourly rates are also reasonable based on the various lawyers’ experience and
their firms’ sizes and locations. (See Walker Decl., Dkt. 403, at 33–35). See also Nils Greger Olsson,
2015 Hourly Fact Sheet 12–13 (State Bar of Texas, Dep’t of Research and Analysis 2016),
https://www.texasbar.com/AM/Template.cfm?Section=Archives&Template=/CM/ContentDispla
y.cfm&ContentID=34182; see generally, e.g., Admiral Ins. Co. v. Wieland, No. A-15-CV-77-RP-ML, 2016
WL 8224270, at *3–4, 3 n.2 (W.D. Tex. Oct. 6, 2016) (taking judicial notice of hourly rate fact sheet
and using it to calculate a reasonable hourly rate).
Next, the Court considers whether to make a lodestar adjustment. See Migis, 135 F.3d at
1047. For factor (1), this litigation required a great deal of time and labor: it involves a complex set
of claims involving multiple parties. American Title has been involved in this case in some capacity
since at least October 26, 2010 (if not earlier), when the state court records filed with Defendant
Federal Deposit Insurance Corporation’s as receiver for First National Bank petition for removal first
list American Title as a party.11 (Dkt. 2-1 at 18). In American Title’s characterization, “[t]his matter
required more time and labor from counsel . . . because of the Plaintiffs’ unfounded, baseless

The first invoice American Title submitted is dated February 9, 2012, with the first billing entry dated
January 17, 2012. (Dkt. 403 at 223). It is a Winstead invoice, though; the first Jackson Walker invoice is dated
May 29, 2014, with the first billing entry dated April 8, 2014. (Id. at 43–44).
11

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assertions, the number of litigants involved, Plaintiffs’ constantly shifting theories, multiplicity of
claims, numerous unsuccessful attempts to replead, and revolving sets of counsel.” (Ex. C, Dkt. 403,
at 35). The Court expressly does not pass judgment on Plaintiffs’ litigation strategy, but finds the
spirit of American Title’s argument—that this case was particularly difficult to litigate—to be
reasonable given this case’s circumstances. For factor (2), though this case was logistically complex,
American Title does not allege that the legal questions presented were notably novel or difficult.
(Id.). For factors (3) and (9) American Title, through Wheatley, argues that “[i]t was necessary for
[American Title] to retain an attorney with [Wheatley’s] level of expertise to work on this case.” (Id.
at 34). The Court concurs to the extent that experience in complex civil litigation and real
estate/land title disputes aided American Title’s counsel in properly performing the legal services
American Title required. For factor (4), American Title does not maintain, and the Court does not
find, that its attorneys were meaningfully precluded from other employment because of their work
on this case. For factor (5), the Court finds that the fees charged were customary, as described
above. For factor (7), it is not clear that the client or the circumstances imposed any relevant time
limitations; litigation is still ongoing. For factor (8), American Title’s counsel obtained favorable
results, (see Order, Dkt. 227); the amount involved is apparent in the attorney’s fees requested. (Dkt.
403 at 2). For factor (10), it does not seem that this case was “undesirable” for counsel—American
Title’s counsel continued to work on its behalf for years, with no indication of trepidation. For
factor (11), American Title and its counsel appear to have a developed professional relationship, as
they negotiated discounted hourly rates, supporting the reasonableness of those rates (Ex. C, Dkt.
403, at 34). For factor (12), it is difficult to find precisely similarly situated cases with which to
compare fee awards.

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Overall, having analyzed the Johnson factors, the Court declines to adjust the lodestar
amount. The Court finds that American Title has carried its burden in demonstrating the proper
amount of fees to which it is entitled.12
However, American Title additionally asks for “$30,000.00 for any appeal taken to the Fifth
Circuit Court of Appeals” and “$15,000[.00] should this cause be appealed to the United States
Supreme Court.” (Dkt. 403 at 7). Texas law permits a court to award appellate attorney’s fees
“provided they are conditioned on ultimate appellate success.” Borg-Warner Protective Servs. Corp. v.
Flores, 955 S.W.2d 861, 870 (Tex. App.—Corpus Christi-Edinburg 1997, no pet.); Chilton Ins. Co. v.
Pate & Pate Enterprises, Inc., 930 S.W.2d 877, 896 (Tex. App.—San Antonio 1996, pet. denied). Here,
American Title’s request for appellate attorney fees is unconditional—i.e., not premised on its
potential success before higher courts. (Dkt. 403). Moreover, federal district courts applying Texas
law routinely deny requests for appellate attorney’s fees as speculative, and, citing concerns of
judicial economy, instruct the requesting party to refile its motion once it has actually incurred
appellate fees. See, e.g., Innovative Sports Mgmt., Inc. v. Perez, No. 3:13-CV-1328-L, 2014 WL 1095140, at
*3 (N.D. Tex. Mar. 20, 2014) (“The court believes that an award of attorney’s fees should be based
on time expended, not some yet-to-occur event. Moreover, federal courts rarely award attorney’s
fees for matters that have not occurred.”); Amlin Corp. Member, Ltd. v. Logistics Grp. Int’l, Inc., No.
CIV.A. H-09-2695, 2011 WL 3271335, at *10 (S.D. Tex. July 28, 2011); Gonzalez v. Hampshire Roofing
Co., L.L.C., No. 1:09-CV-875, 2010 WL 11629284, at *1 (E.D. Tex. Oct. 28, 2010); Edwards v. Aaron
Rents, Inc., 482 F. Supp. 2d 803, 814 (W.D. Tex. 2006). Accordingly, the Court denies American
Title’s request for appellate attorney’s fees without prejudice. Should American Title incur appellate

12

These fees are detailed in the invoices listed above. See n.7, supra.

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attorney’s fees that it believes it is entitled to recompense from Padilla under Section 17.555 of the
DTPA, it may file a motion seeking to recover them at that point.
B. American Title’s Motion for Summary Judgment on Its Texas Business and Commerce
Code 17.50(c) Counterclaim
American Title then requests that the Court grant it summary judgment on its counterclaim
against Plaintiffs, which alleges that their DTPA claims “are groundless and are brought in bad faith
or for the purposes of harassment.”13 (Dkt. 406 at 2; Counterclaim, Dkt. 125 at 24 (citing Tex. Bus.
Code § 17.50(c))). Texas Business and Commerce Code § 17.50(c) provides that “[o]n a finding by
the court that an action under [the DTPA] was groundless in fact or law or brought in bad faith, or
brought for the purpose of harassment, the court shall award to the defendant reasonable and
necessary attorneys’ fees and court costs” (emphasis added). American Title cites the Court’s
September 30, 2016, Order dismissing Plaintiffs’ DTPA claims against American Title, in which it
noted that Plaintiffs’ claims were insufficient despite “access to years of discovery, including 42
depositions.” (Dkt. 406 at 2–3 (citing Order, Dkt. 227, at 7)). American Title argues that Plaintiffs’
claims “are groundless because they have no basis in law or fact” and that Plaintiffs maintained their
DTPA claims in bad faith. (Id. at 4–9). Noting that Plaintiffs have amended their complaint seven
times,14 American Title protests that Plaintiffs should not “now get to demonstrate that their
previous eight complaints were well-founded by pointing only to their ninth, futile attempt.” (Dkt.
409 at 2).
Plaintiffs respond that American Title is effectively arguing that “because Plaintiffs’ DTPA
claims were dismissed, they should get their fees,” which is “obviously not the standard.” (Dkt. 408,
Though both American Title and Plaintiffs’ cross-motions concern the same legal issue, the Court
considers them separately and not mutually exclusively. See supra Part II.
14 “When the case was removed to federal court in 2013, Plaintiffs had already filed five versions of their
petition. After Plaintiffs were ordered to amend their petition to conform to the pleading requirements of the
Federal Rules of Civil Procedure, Plaintiffs filed a sixth amended complaint[,] (Dkt. 90).” (Order, Dkt. 214, at
2). Plaintiffs filed a seventh amended complaint as well. (Dkt. 124).
13

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at 3. “Failing to plead fraud-type claims with such particularity”—i.e., the level of detail required by
Federal Rule of Civil Procedure 9(b)—“is not the same as the claims having no basis in law or fact
under the DTPA.” (Id. at 5). Plaintiffs posit that in determining the merit of their claims in this
analytical context, the Court “should consider the facts that Plaintiffs would have presented” if
permitted to amend their complaint. (Id.). They argue that American Title has delayed this case’s
resolution and that the proportion of fees American Title seeks is invalid. (Id. at 7–12). And they
point to a February 19, 2019, text order in which the Court denied American Title’s previous motion
for attorney’s fees. (Id. at 3).
Preliminarily, the Court clarifies its February 19, 2019, text order. American Title is correct.
(See Dkt. 409 at 5). The order denies American Title’s Rule 54(d) motion for attorney’s fees; it has no
direct effect on American Title’s § 17.50(c) claim, which states a different and discrete basis for
relief.
Another significant preliminary consideration is whether American Title, having now been
granted the relief it sought in its motion for summary judgment against Padilla, may seek the same
relief from Plaintiffs. See Part III.A, supra. It may not.
The Supreme Court has stated that “it ‘goes without saying that the courts can and should
preclude double recovery.’” E.E.O.C. v. Waffle House, Inc., 534 U.S. 279, 297 (2002) (quoting Gen. Tel.
Co. of the Nw. v. Equal Employment Opportunity Comm’n, 446 U.S. 318, 333 (1980)). The rule against
double recovery “deriv[es] primarily from principles of unjust enrichment”: when the injured party
“has received in excess of full compensation from two sources for the same loss,” it is unjustly
enriched. US Airways, Inc. v. McCutchen, 569 U.S. 88, 96 n.4 (2013) (quoting 4 George E. Palmer, The
Law of Restitution § 23.16(b)). Texas law adopts the same rationale in the “one satisfaction rule.” See,
e.g., Crown Life Ins. Co. v. Casteel, 22 S.W.3d 378, 390 (Tex. 2000) (“Under the one satisfaction rule, “a
plaintiff is only entitled to one recovery for any damages suffered. . . . This rule applies when . . .
17

defendants commit technically different acts that result in a single injury.”), abrogated on other grounds;
Cho v. Kim, 572 S.W.3d 783, 805 (Tex. App—Houston [14th Dist.] 2019, no pet.). “[W]hether the
one-satisfaction rule applies relies not on the cause of action asserted by the plaintiff, but on
whether the plaintiff has suffered a single, indivisible injury.” Sky View at Las Palmas, LLC v. Mendez,
555 S.W.3d 101, 113–14 (Tex.), opinion corrected on reh’g (Sept. 28, 2018).
Here, American Title has already been granted a portion of the relief from Padilla that it now
seeks from Plaintiffs. It cannot recover from Plaintiffs what it has already recovered from Padilla. Its
potential relief is limited to the attorney’s fees and costs that it has not already been awarded, despite
its request for the entirety of its fees in this motion.15
As for American Title’s substantive argument, to prevail on its §17.50(c) claim, it must show
that the action “was groundless in fact or brought in bad faith, or brought for the purpose of
harassment.” Tex. Bus. & Com. Code § 17.50(c). It need not show that the action was groundless
and brought in bad faith; one will suffice. Owen v. Jim Allee Imports, Inc., 380 S.W.3d 276, 290 (Tex.
App.—Dallas 2012, no pet.); Baird v. Villegas, No. 03-03-00156-CV, 2004 WL 524460, at *5 (Tex.
App.—Austin Mar. 18, 2004, no pet.). As applied to the DTPA, a claim is groundless if “the totality
of the tendered evidence” does not “demonstrate[] an arguable basis in fact and law for the . . .
claim.” Splettstosser v. Myer, 779 S.W.2d 806, 808 (Tex. 1989). Claims that are not supported by any
evidence may be groundless, but a “no evidence” finding is not required for a claim to be
groundless. Donwerth v. Preston II Chrysler-Dodge, Inc., 775 S.W.2d 634, 637 (Tex. 1989). When
determining whether an “arguable basis in fact and law” exists, courts may look to “evidence that is
legally inadmissible or subject to other defects . . . provided there is some good faith basis for belief

Those fees and costs are listed in the Jackson Walker invoices numbered 1582790, 1587489, 1591918,
1594515, 1600578, 1601667, 1609102, 1613945, 1618480, 1622981, 1627155, 1631038, 1637478, 1642002,
1646382, 1651159, 1656587, and 0. (Dkt. 406-2 at 192–262). They total $135,063.40.
15

18

that the tendered evidence might be admissible or that it could reasonably lead to the discovery of
admissible evidence.” Id.
The Court concurs with American Title. Plaintiffs have had ample opportunity to establish
an arguable basis for their DTPA claims in fact and law, and they have failed to do so. While
Plaintiffs are correct that the standard for groundlessness is not identical to the standard for pleading
fraud claims under Federal Rule of Civil Procedure 9(b), (see Dkt. 408 at 5), that dissimilarity is not
dispositive. Even considering the additional facts that they would have pleaded in their eighth
amended complaint, had they been permitted to do so, it is not at all clear that they constitute
admissible evidence or could reasonably lead to the discovery of admissible evidence that years of
discovery and numerous depositions did not reveal or could not have revealed.16 Nor have Plaintiffs
articulated the precise way in which that evidence, if potentially admissible, would support their
claims. See Adams v. Travelers Indem. Co. of Conn., 465 F.3d 156, 164 (5th Cir. 2006). Therefore,
American Title is entitled to summary judgment in its favor on its Texas Business and Commerce
Code 17.50(c) counterclaim. Because the groundlessness standard is disjunctive, the Court does not
reach the issue of whether Plaintiffs brought or maintained their DTPA claims in bad faith.
B. Plaintiffs’ Motion for Summary Judgment on American Title’s Texas Business and
Commerce Code 17.50(c) Counterclaim
Though the Court considers Plaintiffs’ motion separately, see Ford Motor Co. v. Texas Dep’t of
Transp., 264 F.3d 493, 498 (5th Cir. 2001), Plaintiffs’ argument for summary judgment in their favor
on American Title’s Texas Business and Commerce Code 17.50(c) counterclaim also fails. Making all
relevant inferences in American Title’s favor, as the nonmoving party, the Court concludes that the
additional facts Plaintiffs seek to marshal do not provide an arguable basis in fact and law for their
DTPA claims. Plaintiffs are not entitled to summary judgment on this issue.

16

The same is true for Plaintiffs’ trial testimony. (See Dkt. 408 at 6).

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IV. CONCLUSION
For the reasons stated above, IT IS ORDERED that American Title’s motion for summary
judgment on its indemnity cross-claim, (Dkt. 403), is GRANTED, American Title’s motion for
summary judgment on its Texas Civil Practice and Remedies Code 17.50(c) counterclaim, (Dkt. 406),
is GRANTED IN PART AND DENIED IN PART, and Plaintiffs’ motion for summary
judgment on American Title’s “groundless” counterclaim, (Dkt. 411), is DENIED.

SIGNED on January 24, 2020.

_____________________________________
ROBERT PITMAN
UNITED STATES DISTRICT JUDGE

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