Halprin et al v. First National Bank et al

Filing 444

ORDER MOOTING 427 Motion for Attorney Fees; GRANTING 429 Motion for Leave to File Sealed Document; GRANTING IN PART AND DENYING IN PART 430 Motion for Attorney Fees; GRANTING 432 Motion for Default Judgment; GRANTING IN PART AND DENYING IN PART 434 Motion for Default Judgment; GRANTING 435 Motion to Dismiss ; GRANTING 436 Motion to Dismiss Signed by Judge Robert Pitman. (bc)

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

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5:13-CV-1042-RP

ORDER
Before the Court are several motions which the Court has considered and will rule on as
described below:
1. Plaintiffs’1 motion for default judgment against Defendants Padilla Property
Corporation (“PPC”) and HTG Property Management, Inc. (“HTG”), (Pls.’ Mot.
Default J., Dkt. 432), which the Court will grant;
2. Defendant American Title Group, Inc. f/k/a LandAmerica Lawyers Title of San
Antonio, Inc.’s (“LandAmerica Title”) motion for default judgment against
Crossdefendants PPC, HTG, Maria del Rosario Padilla, Mauro Joe Padilla, and
Carlos Miguel Padilla, (LandAmerica Title’s Mot. Default J., Dkt. 434), which the
Court will grant in part and deny in part (without prejudice);

“Plaintiffs” are Joseph Amelio, Tawny Amelio, Edward Arriola, Kenny Arriola, Gerald Bates, Adolfo
Bejarano, Mauricio Bejarano, Silvio Brigliadoro, Maria R. Collins, David Goldberg, Gregory Halprin, Denise
Heywood, George Heywood, Kristopher Hochart, Craig Inaba, 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.
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3. LandAmerica Title’s unopposed motion to dismiss its crossclaim for contribution
against Crossdefendants PPC, HTG, Mauro T. Padilla, Maria del Rosario Padilla,
Mauro Joe Padilla, and Carlos Miguel Padilla, (LandAmerica Title’s Mot. Dismiss
Padillas Cross-cl., Dkt. 435), which the Court will grant;
4. LandAmerica Title’s unopposed motion to dismiss its crossclaims against Defendant
Dan Brown (“Brown”) for contractual indemnity and contribution, (LandAmerica
Title’s Mot. Dismiss Brown Cross-cls., Dkt. 436), which the Court will grant;
5. LandAmerica Title’s unopposed motion for leave to file billing entries under seal,
(LandAmerica Title’s Mot. Seal, Dkt. 429), which the Court will grant;
6. LandAmerica Title’s initial motion for attorney’s fees, (LandAmerica Title’s Mot. Att.
Fees, Dkt. 427), which the Court will deem moot; and
7. LandAmerica Title’s election of remedies and amended motion for attorney’s fees,
(LandAmerica Title’s Am. Mot. Att. Fees, Dkt. 430), which the Court will grant in
part and deny in part, having reviewed Plaintiffs’ response, (Resp. LandAmerica
Title’s Am. Mot. Att. Fees, Dkt. 437), and LandAmerica Title’s reply, (Reply
LandAmerica Title’s Am. Mot. Att. Fees, Dkt. 439).
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 (S.D. Tex. Apr. 20, 2016) (Costa, Circuit J.), Plaintiffs
alleged that they entered into individual agreements with Defendants Padilla Property Corporation
(“PPC”), HTG Real Property Management (“HTG”), Mauro T. Padilla, Maria del Rosario 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 LandAmerica Title with a down

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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
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 LandAmerica
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). LandAmerica Title filed a motion to dismiss each of Plaintiffs’ claims, (Dkt. 126), which
the Court granted, (Dkt. 227). LandAmerica Title also filed counterclaims against Plaintiffs for
contractual and statutory indemnity, arguing that each plaintiff violated their agreement to indemnify
LandAmerica 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).

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Then, on January 24, 2020, the Court granted LandAmerica’s motion for summary judgment
on its Texas Business and Commerce Code § 17.555 crossclaim for statutory indemnity against
Mauro T. Padilla. (Mot., Dkt. 403; Order, Dkt. 422). The Court also granted in part and denied in
part LandAmerica Title’s motion for summary judgment on its Texas Business and Commerce Code
§ 17.50(c) counterclaim against Plaintiffs. (Mot., Dkt. 406; Order, Dkt. 422). The Court’s Order
awarded LandAmerica Title $468,293.58 in fees and costs from Mauro T. Padilla and $135,063.40 in
fees and costs from Plaintiffs, in an effort to prevent double recovery. (Order, Dkt. 422, at 17–20).
On February 19, 2020, the Court held a status conference. (See Min. Entry, Dkt. 428). At that
conference, the parties discussed which parties and claims remained in the case and explained their
positions on how the case should proceed. As a result of that discussion, the parties filed the
motions now before the Court in an effort to resolve the claims still pending in this case.
II. MOTIONS FOR DEFAULT JUDGMENT
A. Legal Standard
Under Federal Rule of Civil Procedure 55(a)–(b), federal courts have the authority to enter a
default judgment against a defendant that has failed to plead or otherwise defend itself. That said,
“[d]efault judgments are a drastic remedy, not favored by the Federal Rules and resorted to by courts
only in extreme situations.” Sun Bank of Ocala v. Pelican Homestead & Sav. Ass’n, 874 F.2d 274, 276
(5th Cir. 1989). A party is not entitled to a default judgment simply because the defendant is in
default. Ganther v. Ingle, 75 F.3d 207, 212 (5th Cir. 1996). Rather, a default judgment is generally
committed to the discretion of the district court. Mason v. Lister, 562 F.2d 343, 345 (5th Cir. 1977).
In considering motions for default judgment, the Court must determine: (1) whether default
judgment is procedurally warranted; (2) whether the moving party’s pleading sets forth facts
sufficient to establish that it is entitled to relief; and (3) what form of relief, if any, the moving party

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should receive. United States v. 1998 Freightliner VIN #: 1FUYCZYB3WP886986, 548 F. Supp. 2d
381, 384 (W.D. Tex. 2008) (“1998 Freightliner”).
To determine whether entry of a default judgment is procedurally warranted, district courts
in the Fifth Circuit consider six factors: “[1] whether material issues of fact are at issue, [2] whether
there has been substantial prejudice, [3] whether the grounds for default are clearly established,
[4] whether the default was caused by a good faith mistake or excusable neglect, [5] the harshness of
a default judgment, and [6] whether the court would think itself obliged to set aside the default on
the defendant’s motion.” Lindsey v. Prive Corp., 161 F.3d 886, 893 (5th Cir. 1998).
Default judgment is proper only if the well-pleaded factual allegations in the complaint
establish a valid cause of action. Nishimatsu Constr. Co., 515 F.2d at 1206. By defaulting, a defendant
“admits the plaintiff’s well-pleaded allegations of fact.” Id. In determining whether factual allegations
are sufficient to support a default judgment, the Fifth Circuit employs the same analysis used to
determine sufficiency under Rule 8. Wooten v. McDonald Transit Assocs., Inc., 788 F.3d 490, 498 (5th
Cir. 2015). The complaint must contain “a short and plain statement of the claim showing that the
pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). The factual allegations in the claim need only “be
enough to raise a right to relief above the speculative level, on the assumption that all the allegations
in the complaint are true (even if doubtful in fact).” Wooten, 788 F.3d at 498 (quoting Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555 (2007)). While “detailed factual allegations” are not required, the pleading
must present “more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Id.
(quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)).
Federal Rule of Civil Procedure 54(c) states that “[a] default judgment must not differ in
kind from, or exceed in amount, what is demanded in the pleadings.” Fed. R. Civ. P. 54(c). In
other words, the relief prayed for in a complaint defines the scope of relief available on default
judgment. 1998 Freightliner, 548 F. Supp. 2d at 384. “Rule 54(c), and for that matter fundamental

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fairness, dictate that a judgment by default operates as a deemed admission only as to the relief
requested in the complaint.” Matter of Dierschke, 975 F.2d 181, 185 (5th Cir. 1992). See also Ditech Fin.,
L.L.C. v. Naumann, 742 F. App’x 810, 813 (5th Cir. 2018) (“[T]he appropriate standard for
determining whether a default judgment differs in kind from or exceeds in amount the relevant
pleadings . . . flows from the reason for the rule itself—to ensure a party pondering default has
meaningful notice, based on the complaint alone, of her exposure in the event of default.”).
Generally, a defendant’s default concedes the truth of the allegations of the complaint concerning
the defendant’s liability, but not damages. United States v. Shipco Gen. Inc., 814 F.2d 1011, 1014 (5th
Cir. 1987).
B. Plaintiffs’ Motion for Default Judgment
Plaintiffs ask for default judgment against Defendants PPC and HTG on their claims for
breach of contract, violations of the Texas Deceptive Trade Practices Act (“DTPA”), common-law
fraud, breach of fiduciary duty, statutory fraud under Texas Business and Commerce Code § 27.01,
and conspiracy. (Pls.’ Mot. Default J., Dkt. 432, at 1). The Clerk entered default against PPC and
HTG on January 17, 2019. (Dkt. 399).
A brief description of certain aspects of these parties’ participation in this case is warranted.
Neither PPC nor HTG have filed any notices of appearance, motions, or other materials in this case,
in state court prior to its removal or in federal court. Still, at various points, parties have asserted
that both PPC and HTG have been or are represented by counsel. (See, e.g., Notice of Removal, Dkt.
1, at 5–6 (listing putative counsel for PPC and HTG); 7th Am. Compl., Dkt. 124, at 6 (asserting that
counsel for PPC and HTH had “already made an appearance in this case”)). Complicating the matter
is the fact that Adam C. Cortez, putative counsel for PPC, filed a document in response to the
Court’s inquiry into PPC’s representation in which he stated that while he represented PPC prior to

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this case, he never represented PPC in this case.2 (Dkt. 291 at 1; Order, Dkt. 290). Also, Plaintiffs
allege that Defendants Mauro T. Padilla, Maria del Rosario Padilla, Carlos Miguel Padilla, and/or
Mauro Joe Padila “at all pertinent times were believed to have owned, controlled, and operated [PPC
and HTG].” (7th Am. Comp., Dkt. 124, at 6–7). When Mauro T. Padilla appeared before the Court
pro se on July 10, 2018, he attempted to appear pro se on behalf of PPC and HTG as well, and was
denied because corporations may not appear pro se. (Order, Dkt. 398, at 1 (citing Sw. Exp. Co. v. I.
C. C., 670 F.2d 53, 55 (5th Cir. 1982) (per curiam)); Pls.’ Mot. Default J., Dkt. 432, at 1). In any case,
at this stage in the proceedings, it is readily apparent that PPC and HTG have not meaningfully
participated in this case.
1. Procedural Requirements
On balance, the Lindsey factors weigh in favor of entering a default judgment against PPC
and HTG. See 161 F.3d at 893. Because they have not filed responsive pleadings, there are no
material facts in dispute. See Nishimatsu Const. Co., Ltd. v. Hous. Nat. Bank, 515 F.2d 1200, 1206 (5th
Cir. 1975) (“The defendant, by his default, admits the plaintiff’s well-pleaded allegations of fact.”).
Their failure to appear and respond has frustrated the adversary process, prejudicing Plaintiffs’
interest in pursuing their claims for relief against them. See Ins. Co. of the W. v. H & G Contractors, Inc.,
No. CIV.A. C-10-390, 2011 WL 4738197, at *3 (S.D. Tex. Oct. 5, 2011). PPC and HTG appear to
have been effectively served via Mauro T. Padilla. (See, e.g., 7th Am. Compl., Dkt. 124, at 28). They
have subsequently failed to appear and participate at all, despite likely being aware of the case
through Mauro T. Padilla himself. There is no indication that the default was caused by a good-faith

“I have never entered an appearance on behalf of any person or entity in [this case]. I do not know exactly
how it is that my name is listed as counsel for Padilla Property Corporation. . . . Pursuant to Texas Tax Code
§ 171.252(1), Padilla Property Corporation has forfeited its right to both sue and to defend lawsuits in Texas
court because it is no longer a legal entity. I have been contacted by various counsel for the plaintiffs herein
and I have informed them of the fact that I have no client to represent nor do the plaintiffs have an entity
that has the capacity to be sued.” (Dkt. 291 at 1).
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mistake or excusable neglect. The amount of a default judgment may indeed be “harsh”—the
amount for which PPC and HTG would be jointly and severally liable with Padilla exceeds $3.9
million. (See Padilla J., Dkt. 364, at 1-1). While it is not clear if PPC and HTG continue to exist as
legal entities, a default judgment may still be entered against them because if they do exist, the Court
has previously determined it has jurisdiction over them. See, e.g., Victoria’s Secret Stores Brand Mgmt.,
Inc. v. VS Secrets of Romance, LLC, No. 4:10CV158, 2010 WL 3657836, at *1 (E.D. Tex. Aug. 18,
2010), report and recommendation adopted, No. 4:10CV158, 2010 WL 3657639 (E.D. Tex. Sept. 10,
2010). In any case, it has not been conclusively demonstrated, for purposes of this case, whether
PPC and HTG have ceased to exist as legal entities and/or if they have the ability to defend a
lawsuit in federal court. Moreover, the Court is not aware of any facts that would obligate it to set
aside the default if challenged by PPC and HTG. The Court therefore finds that default judgment is
procedurally warranted.
2. Sufficiency of the Claims
Assuming that PPC and HTG are effectively synonymous with Mauro T. Padilla himself, the
Court finds that Plaintiffs’ claims against them are sufficient for purposes of default judgment. In
their seventh amended complaint, the operative pleading in this case, Plaintiffs allege facts that raise
their right to relief from PPC and HTG above the speculative level. (See 7th Am. Compl., Dkt. 124,
at 6–9). Moreover, the Court accepted the sufficiency of Plaintiffs’ claims against Mauro T. Padilla
when it entered the agreed judgment against him and allowed him to consent to joint and several
liability with PPC and HTG should judgment be entered against them. (See Padilla J., Dkt. 364, at 1).
3. Relief
Plaintiffs ask the Court to enter default judgment against PPC and HTG for the damages
specified in the agreed judgment previously entered against Mauro T. Padilla. (Pls.’ Mot. Default J.,
Dkt. 432, at 2; see Padilla J., Dkt. 364, at 1). The damages they seek also do not exceed those which

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they requested in their seventh amended complaint. (See 7th Am. Compl., Dkt. 124, at 24–27). The
Court finds that this relief is appropriate, satisfying Federal Rule of Civil Procedure 54(c)’s
requirements.
C. LandAmerica Title’s Motion for Default Judgment
LandAmerica Title moved for default judgment against PPC, HTG, Maria del Rosario
Padilla, Mauro Joe Padilla, and Carlos Miguel Padilla. (LandAmerica Title’s Mot. Default J., Dkt.
434).
The Clerk entered default against PPC and HTG on January 17, 2019.3 (Dkt. 399). The Clerk
has not entered default against Maria del Rosario Padilla, Mauro Joe Padilla, and Carlos Miguel
Padilla. The Court previously granted Plaintiffs’ motion to withdraw their motion for entry of
default against Maria del Rosario Padilla and Mauro Joe Padilla. (Mot. Enter Default, Dkt. 361; Mot.
Withdraw, Dkt. 375; Text Orders, July 23, 2018).
Because the Clerk has not entered default against Maria del Rosario Padilla, Mauro Joe
Padilla, and Carlos Miguel Padilla, and claims against them are not for a sum certain or a sum that
can be made certain by computation, the Court cannot enter default judgment against any of them.
See Fed. R. Civ. P. 55; New York Life Ins. Co. v. Brown, 84 F.3d 137, 141 (5th Cir. 1996) (“An entry of
default is what the clerk enters when the default is established by affidavit or otherwise. After
defendant’s default has been entered, plaintiff may apply for a judgment based on such default. This
is a default judgment.”); Can Capital Asset Servicing, Inc. v. Huerta, Jr., No. SA-15-CV-1049-XR, 2016 WL
8223267, at *1 (W.D. Tex. Mar. 31, 2016) (citing Fed. R. Civ. P. 55) (“Default under Rule 55 is a
two-step process: (1) the entry of default and (2) the subsequent entry of a default judgment.”); (see

The Clerk did so at the request of Plaintiffs, rather than LandAmerica Title, (see Mot. Enter Default, Dkt.
352), but the entry of default functions for LandAmerica Title’s claims as well: PPC and HTG have not
responded to LandAmerica Title’s crossclaims against them.
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also Text Order, July 6, 2018 (denying Plaintiffs’ motion for default judgment because they did not
first move for clerk’s entry of default)).
The Court also notes that on July 6, 2018, it dismissed Plaintiffs’ claims against Carlos
Miguel Padilla, (Dkt. 351), and on July 23, 2018, the Court dismissed Plaintiffs’ claims against Maria
del Rosario Padilla and Mauro Joe Padilla with prejudice. (Dkt. 379). LandAmerica Title seeks
statutory indemnity and contribution from Maria del Rosario Padilla, Mauro Joe Padilla, and Carlos
Miguel Padilla. (LandAmerica Title’s Mot. Default J., Dkt. 434, at 1). Thus, for similar reasons as
expressed in its motion to dismiss its crossclaim against Mauro T. Padilla, Maria del Rosario Padilla,
Mauro Joe Padilla, and Carlos Miguel Padilla, (Dkt. 435), neither an entry of default nor a default
judgment may be warranted. See infra Section V.A.
Here, the Court analyzes LandAmerica Title’s motion for default judgment as to PPC and
HTG only.
1. Procedural Requirements
Again, the Court concludes that the Lindsey factors weigh in favor of entering a default
judgment against PPC and HTG. See 161 F.3d at 893. Because they have not filed responsive
pleadings, there are no material facts in dispute. See Nishimatsu, 515 F.2d at 1206. Their failure to
appear and respond has frustrated the adversary process, prejudicing LandAmerica Title’s interest in
pursuing their crossclaims against them. See Ins. Co. of the W., 2011 WL 4738197, at *3. PPC and
HTG appear to have been effectively served via Mauro T. Padilla. (See, e.g., LandAmerica Title’s
Answer, Dkt. 125, at 30). They have subsequently failed to appear and participate at all, despite likely
being aware of the case through Mauro T. Padilla himself. There is no indication that the default was
caused by a good-faith mistake or excusable neglect. At this stage in the case, the amount of a
default judgment is unlikely to be “harsh”—Plaintiffs’ claims against LandAmerica Title have been
dismissed, (see Order, Dkt. 227), so PPC and HTG would not be liable to LandAmerica Title for

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indemnity and contribution arising from those claims even if the Court could be certain that they
continue to exist as legal entities. The Court is not aware of any facts that would obligate it to set
aside the default if challenged by PPC and HTG. The Court therefore finds that default judgment is
procedurally warranted.
2. Sufficiency of the Claim
The Court finds that LandAmerica Title’s claims against PPC and HTG are sufficient for
purposes of default judgment. By failing to respond, PPC and HTG have effectively conceded the
truth of LandAmerica Title’s allegations against them. See Dierschke, 975 F.2d at 185; Shipco Gen., 814
F.2d at 1014. In its crossclaims, LandAmerica Title alleges facts that raise its right to relief from PPC
and HTG above the speculative level. (See LandAmerica Title’s Answer, Dkt. 125, at 26–28).
Therefore, default judgment is justified.
3. Relief
LandAmerica Title asks the Court only to render default judgment in its favor against PPC
and HTG for liability on its claims for indemnity and contribution, as opposed to attorney’s fees and
expenses. (See LandAmerica Title Mot. Default J., Dkt. 434, at 2 n.1). Should this case be appealed
and then reversed and/or remanded, LandAmerica Title wishes to retain the ability to elect an
alternative remedy. (See id. (citing Malvino v. Delluniversita, 840 F.3d 223, 233–34 (5th Cir. 2016))).
Taking these considerations into account, the damages LandAmerica Title seeks do not exceed those
which it initially requested in its crossclaims—that is, indemnity for “all sums that it is required to
pay as a result of the action” and appropriate contribution under Texas Business and Commerce
Code § 17.555. (LandAmerica Title’s Answer, Dkt. 125, at 26–28). The Court previously held in a
similar context that such indemnity relief was justified. (See Order, Dkt. 422, at 6–7). Now, the Court
finds that both the requested indemnity and contribution relief are appropriate, satisfying Federal
Rule of Civil Procedure 54(c)’s requirements.

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III. MOTIONS TO DISMISS
A. LandAmerica Title’s Motion to Dismiss Crossclaim against PPC, HTG, Mauro T.
Padilla, Maria del Rosario Padilla, Mauro Joe Padilla, and Carlos Miguel Padilla
LandAmerica Title moves to dismiss its crossclaim against PPC, HTG, Mauro T. Padilla,
Maria del Rosario Padilla, Mauro Joe Padilla, and Carlos Miguel Padilla for contribution under Texas
Business and Commercial Code § 17.555. (LandAmerica Title’s Mot. Dismiss Padillas Cross-cl., Dkt.
435; see Answer 7th Am. Compl., Dkt. 125, at 26–28). It asks the Court to dismiss the crossclaim
without prejudice so that it could be reasserted if the Fifth Circuit ultimately reverses and/or
remands this case for trial on the merits. (LandAmerica Title’s Mot. Dismiss Padillas Cross-cls., Dkt.
435 at 1). LandAmerica Title notes that because Plaintiffs’ claims against it have been dismissed, its
crossclaim for contribution “is not currently ripe, yet it remains pending.” (Id.; see Order, Dkt. 227
(dismissing claims)). Plaintiffs do not oppose the motion. (LandAmerica Title’s Mot. Dismiss
Padillas Cross-cl., Dkt. 435, at 3).
Federal Rule of Civil Procedure 41(c) outlines a certain procedure for dismissing
crossclaims.4 It provides that Rule 41(a)(1)(A)(i)’s jurisdiction-stripping provision, which applies to
voluntary dismissal of entire actions, also applies to dismissing crossclaims. Fed. R. Civ. P. 41(c); see,
e.g., Bonin v. Bilfinger Salamis, Inc., No. CV 16-1092, 2017 WL 490622, at *2 (E.D. La. Feb. 6, 2017)
(“Rule 41(c) specifically provides for dismissal of third-party claims under Rule 41(a)(1)(A)(i).”); see
also 9 Arthur R. Miller, Federal Practice and Procedure § 2374 (Apr. 2020 update). The claimant must
dismiss the crossclaim either “before a responsive pleading is served” or “if there is no responsive
pleading, before evidence is introduced at a hearing or trial.” Fed. R. Civ. P. 41(c).

Previously, the Court entered partial final judgment on LandAmerica Title’s counterclaim against Plaintiffs
under Rule 54(b). (Dkt. 423). Rule 41(c) did not apply to that counterclaim because Plaintiffs had filed a
responsive pleading. (Dkt. 136).)
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Here, PPC, HTG, Mauro T. Padilla, Maria del Rosario Padilla, Mauro Joe Padilla, and Carlos
Miguel Padilla did not timely answer or otherwise respond to LandAmerica Title’s crossclaims
against them. (See Mot. Default J., Dkt. 434, at 1). No hearing or trial has been held at which
evidence related to these crossclaims could be introduced.5 Therefore, the Court concludes that Rule
41(c) applies. LandAmerica Title’s motion to dismiss does not cite a specific rule of civil procedure,
but the Court construes it as invoking Rule 41(c), and in turn, Rule 41(a)(1)(A)(i). LandAmerica
Title’s motion is therefore “self-effectuating and terminates the [claim] in and of itself; no order or
other action of the district court is required.” In re Amerijet Int’l, Inc., 785 F.3d 967, 973 (5th Cir.
2015), as revised (May 15, 2015).
B. LandAmerica Title’s Motion to Dismiss Crossclaims against Brown
LandAmerica Title also moves to dismiss its crossclaims against Brown for contractual
indemnity and contribution under Texas Business and Commercial Code § 17.555. (LandAmerica
Title’s Mot. Dismiss Brown Cross-cls., Dkt. 436; see Answer 7th Am. Compl., Dkt. 125, at 24–26).
The request is similar to its first motion: again, it asks the Court to dismiss the crossclaim without
prejudice and notes that because Plaintiffs’ claims against it have been dismissed, its crossclaim
against Brown are “not currently ripe, yet . . . remain[] pending.” (LandAmerica Title’s Mot. Dismiss
Brown Cross-cls., Dkt. 436, at 1; see Order, Dkt. 227 (dismissing claims)). While Plaintiffs do not
oppose the motion, LandAmerica Title states that it was unable to confer with Brown.
(LandAmerica Title’s Mot. Dismiss Brown Cross-cls., Dkt. 436, at 1).
Rule 41(c) applies to this motion as well. Here, a review of the docket shows that Brown did
not timely answer or otherwise respond to LandAmerica Title’s crossclaims against him. Instead, he
opted to file a motion to dismiss Plaintiffs’ claims against him, which the Court ultimately granted.

A bench trial was scheduled for July 11, 2018. However, before the trial began, the parties (who did not
include these Defendants) met outside the presence of the Court and agreed to settle. (Minute Entry, Dkt.
358, at 1). Because no trial actually occurred, no evidence was presented at trial in this case.
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(Brown Mot. Dismiss, Dkt. 153; Order, Dkt. 227). No hearing or trial has been held at which
evidence related to these crossclaims could be introduced. Again, then, the Court construes
LandAmerica Title’s motion as invoking Rule 41(c), and in turn, Rule 41(a)(1)(A)(i), rendering it selfeffectuating. See Amerijet Int’l, 785 F.3d at 973.
IV. LANDAMERICA TITLE’S MOTION FOR LEAVE TO FILE UNDER SEAL
LandAmerica Title seeks leave to file its additional unredacted billing entries under seal on
much the same grounds as its previous requests to file billing entries under seal. (LandAmerica
Title’s Mot. Seal, Dkt. 429, at 1–2; see 1st Mot. Seal, Dkt. 416). For the reasons discussed below, the
Court grants the motion.
Generally, the public has a right to inspect judicial records. Nixon v. Warner Commc’ns, Inc.,
435 U.S. 589, 597 (1978). “This right ‘promotes the trustworthiness of the judicial process, curbs
judicial abuses, and provides the public with a better understanding of the judicial process, including
its fairness[, and] serves as a check on the integrity of the system.’” Bradley ex rel. AJW v. Ackal, 954
F.3d 216, (5th Cir. 2020) (quoting United States v. Sealed Search Warrants, 868 F.3d 385, 395 (5th Cir.
2017)). But this right is not absolute: the “common law merely establishes a presumption of public
access to judicial records.” Id. (citing SEC v. Van Waeyenberghe, 990 F.2d 845, 848 (5th Cir. 1993)).
The Fifth Circuit has neither assigned a particular weight to this presumption nor interpreted the
presumption in favor of access as creating a burden of proof. Id. at 225. But in light of the public’s
right to access judicial records, courts are required to “use caution in exercising [their] discretion to
place records under seal.” United States v. Holy Land Found. for Relief & Dev., 624 F.3d 685, 689–90
(5th Cir. 2010). “In exercising its discretion to seal judicial records, the court must balance the
public’s common law right of access against the interests favoring nondisclosure.” Bradley, 954 F.3d
at 225 (quoting Van Waeyenberghe, 990 F.2d at 848). “The presumption, however gauged, in favor of
public access to judicial records is one of the interests to be weighed on the public’s side of the

14

scales.” Id. (quoting Belo Broad. Corp. v. Clark, 654 F.2d 423, 434 (5th Cir. Unit A Aug. 1981))
(cleaned up). On the other hand, “sealing may be appropriate where orders incorporate confidential
business information.” N. Cypress Med. Ctr. Operating Co. v. Cigna Healthcare, 781 F.3d 182, 204 (5th
Cir. 2015).
Here, acting consistently with its previous Orders, (see, e.g., Order, Dkt. 415), noting that
Plaintiffs do not oppose LandAmerica Title’s motion, (see LandAmerica Title’s Mot. Seal, Dkt. 429,
at 3), and having weighed the public’s right of access against the interests favoring nondisclosure, the
Court finds that good cause exists to file LandAmerica Title’s additional unredacted billing entries
under seal. As before, the Court must be able to view, unobstructed, the exact billing entries
detailing the work done on the case’s various claims in order to evaluate LandAmerica Title’s motion
for attorney’s fees. See, e.g., Navigant Consulting, Inc. v. Wilkinson, 508 F.3d 277, 298 (5th Cir. 2007)
(“The district court, as the trier of fact on the question of attorney’s fees . . . examined the facts and
proof in the case to see whether the issues were inextricably intertwined.”); Mid-Continent 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.”). Thus, the Court will grant
LandAmerica Title’s motion. However, the public’s right of access weighs in favor of unsealing
LandAmerica Title’s motion itself (as opposed to the billing entry exhibits).
V. LANDAMERICA TITLE’S ELECTION OF REMEDIES AND AMENDED
MOTION FOR ATTORNEY’S FEES
Next, LandAmerica Title seeks to elect its remedy: it does not wish to recover on its § 17.555
crossclaim for statutory indemnity against Mauro T. Padilla, but does wish to recover on its
§ 17.50(c) counterclaim against Plaintiffs, including attorney’s fees and costs: a putative total of

15

$569,105.55.6 (LandAmerica Title’s Am. Mot. Att. Fees, Dkt. 430, at 3–5). Plaintiffs contend that
“what LandAmerica actually seeks is an election of ‘parties’—not ‘remedies’—through a backdoor,
non-voluntary dismissal of its cross-claims against Padilla,” which they maintain is impermissible
under applicable Texas law. (Resp. LandAmerica Title’s Am. Mot. Att. Fees, Dkt. 437, at 3).
LandAmerica Title, in its reply, argues that because judgment has not yet been entered on either its
§ 17.555 crossclaim for statutory indemnity against Mauro T. Padilla or its § 17.50(c) counterclaim
against Plaintiffs, and because its § 17.555 crossclaim for statutory indemnity against Mauro T.
Padilla is distinct from § 17.555 crossclaim for contribution against Mauro T. Padilla, it is entitled to
seek the full amount of fees and costs from Plaintiffs. (Reply LandAmerica Title’s Am. Mot. Att.
Fees, Dkt. 439, at 1–3).
A. Election of Remedies
Federal courts “follow Texas substantive law on the election of remedies when it comes to
state law claims.” Aguilar v. Williamson Cty., No. A-11-CA-278-SS, 2011 WL 13137682, at *3 n.3
(W.D. Tex. Dec. 19, 2011); see also Malvino, 840 F.3d at 234 (“When a plaintiff prevails on both

Throughout this stage of the litigation, the parties have disputed the precise amounts of fees and costs that
LandAmerica Title is requesting or is entitled to request. (See, e.g., LandAmerica Title’s Am. Mot. Att. Fees,
Dkt. 430, at 2 n.1; Pls.’ Resp. LandAmerica Title’s Mot. Att. Fees, Dkt. 437, at 2 nn.1–2). This disagreement
may stem in part from the large number of invoices LandAmerica has submitted at various points and some
degree of confusion concerning which invoices apply to which claims. The Court resolves this dispute for the
purposes of the motions now before the Court as follows.
In its motion now before the Court, LandAmerica Title explicitly lists, by invoice number, all of the fees and
costs it now requests. (LandAmerica Title’s Am. Mot. Att. Fees, Dkt. 430, at 5–6, 6 nn.3–5). It separates the
invoices into three groups: Group 1 comprises the invoices it originally submitted with its motion for
summary judgment on its § 17.555 crossclaim against Mauro T. Padilla, (Dkt. 403 at 43–327); Group 2
comprises the invoices it originally submitted with its motion for summary judgment on its § 17.50(c)
counterclaim against Plaintiffs, (Dkt. 406-2 at 192–262); and Group 3 comprises the invoices it submitted
prior to the February 19, 2020, status conference and with its motion for leave to file under seal, (Dkt. 429-1).
All of these invoices are now collected in one filing. (Dkt. 430-1 at 10–379).
These invoices collectively amount to the total fees and costs that LandAmerica Title now requests from
Plaintiffs. (LandAmerica Title’s Am. Mot. Att. Fees, Dkt. 430, at 5–6). The Court has reviewed this
conclusive set of invoices and finds LandAmerica Title’s description of them, including their total dollar
amounts, to be correct. Thus, for the purposes of deciding LandAmerica Title’s motion, the total amount of
fees and costs that LandAmerica is requesting from Plaintiffs is $569,105.55.
6

16

federal and Texas state law causes of action for the same injury, federal courts apply Texas’s one
satisfaction rule, which requires the prevailing party to elect between the alternative claims for
purposes of recovery.”). Under Texas law, “when a party tries a case on alternative theories of
recovery and a jury returns favorable findings on two or more theories, the party has a right to a
judgment on the theory entitling him to the greatest or most favorable relief.” Quest Med., Inc. v.
Apprill, 90 F.3d 1080, 1085 n.5 (5th Cir. 1996). Accordingly, that party may elect its preferred
remedy.
“An election of remedies is the act of choosing between two or more inconsistent but
coexistent modes of procedure and relief allowed by law on the same state of facts. When a party
thus chooses to exercise one of them he abandons his right to exercise the other remedy and is
precluded from resorting to it.” Custom Leasing, Inc. v. Tex. Bank & Trust Co., 491 S.W.2d 869, 871
(Tex. 1973). “An election between remedies occurs, at the latest, when a party proceeds to final
judgment on one claim with knowledge of an inconsistent claim or remedy. Generally, it is the
obtaining of a judgment on one theory or state of facts that precludes the ability to pursue other
inconsistent remedies.” Krobar Drilling, L.L.C. v. Ormiston, 426 S.W.3d 107, 113 (Tex. App.—
Houston [1st Dist.] 2012, pet. denied). Notably, this doctrine does not apply when a party asserts
“distinct causes of action against different parties arising out of independent transactions with such
parties” and the potential remedies “are neither inconsistent nor repugnant.” Tyler Title Co. v. Cowley,
No. 12-18-00043-CV, 2019 WL 1760105, at *6 (Tex. App.—Tyler Apr. 10, 2019, no pet.); see also
Krobar Drilling, 426 S.W.3d at 113; Haskell v. Border City Bank, 649 S.W.2d 133, 135–36 (Tex. App.—
El Paso 1983, no writ).
The doctrine is meant to “prevent a party who has obtained a specific form of remedy from
obtaining a different and inconsistent remedy for the same wrong.” Fina Supply, Inc. v. Abilene Nat.
Bank, 726 S.W.2d 537, 541 (Tex. 1987). It “operates to prevent a plaintiff from recovering twice for

17

the same wrong, not to prevent a plaintiff from recovering once.” Malvino, 840 F.3d at 234.
However, “[e]lection of remedies is not a favorite of equity and its scope should not be extended.”
Am. Sav. & Loan Ass’n of Houston v. Musick, 531 S.W.2d 581, 588 (Tex. 1975).
Here, the procedural prerequisites for LandAmerica Title’s election of remedies are present.
The Court has not entered final judgment, partial or otherwise, on its § 17.555 crossclaim for
statutory indemnity against Mauro T. Padilla or its § 17.50(c) counterclaim against Plaintiffs. See
Krobar Drilling, 426 S.W.3d at 113. LandAmerica Title’s § 17.555 crossclaim for statutory indemnity
against Mauro T. Padilla and its § 17.50(c) counterclaim against Plaintiffs ultimately arise from the
same set of facts. See Custom Leasing, 491 S.W.2d at 871. Plaintiffs’ strongest argument on this issue is
their point that the election of remedies doctrine typically applies to a prevailing party’s “selecti[on]
between two or more theories of recovery against the same party that caused a single wrong or
injury.” (Resp. LandAmerica Title’s Am. Mot. Att. Fees, Dkt. 437, at 3). While the authorities
LandAmerica Title cites and the additional authorities the Court has consulted do not explicitly
speak in terms of multiple parties, the limitations on election of remedies that these cases describe
do not bar LandAmerica’s election here. Even if these claims can be said to arise from “independent
transactions,” the potential remedies for each claim are “inconsistent” with each other in that
LandAmerica Title is precluded from collecting full damages on both by the one satisfaction rule
and the prohibition of double recovery. Tyler Title, 2019 WL 1760105, at *6; see generally, e.g., Sky View
at Las Palmas, LLC v. Mendez, 555 S.W.3d 101, 113–14 (Tex.), opinion corrected on reh’g (Sept. 28, 2018).
That is, LandAmerica Title cannot recover the same fees from multiple parties, though it may
recover them once. See Malvino, 840 F.3d at 234. Moreover, the one satisfaction rule and the
prohibition of double recovery support an equitable holding that even if the election of remedies
doctrine does not apply to the choice of from which party to recover, rather than on which theory
to recover, LandAmerica Title may not recover both from Padilla and from Plaintiffs.

18

Moreover, the Court’s previous Order does not preclude LandAmerica Title from obtaining
the total amount of its reasonable fees and costs from Plaintiffs. At this stage, the Court has
previously ordered that LandAmerica Title is entitled to a certain amount of attorney’s fees and costs
from its § 17.555 crossclaim for statutory indemnity against Mauro T. Padilla and a lesser amount
from its § 17.50(c) counterclaim against Plaintiffs. (See Order, Dkt. 422, at 18). Both of these claims,
taken alone, would allow LandAmerica to obtain a judgment for the total amount of reasonable fees
and costs it incurred in this case. (See id. at 6–7 (citing Tex. Bus. & Com. Code § 17.555; Swafford v.
View-Caps Water Supply Corp., 617 S.W.2d 674, 675 (Tex. 1981) (per curiam)); id. at 16–19 (citing Tex.
Bus. & Com. Code § 17.50(c))); see also Cypress Engine Accessories, LLC v. HDMS Ltd. Co., No. CV H15-2227, 2017 WL 5177617, at *1 (S.D. Tex. Nov. 8, 2017) (quoting Stromberger v. Law Offices of
Windle Turley, No. 05-04-00050-CV, 2005 WL 701034, at *3, 2005 (Tex. App.—Dallas [5th Dist.]
Mar. 28, 2005)) (“Once a trial judge concludes that a DTPA claim is groundless[,] . . . the only
limitation on the award of attorney’s fees and costs to defendants is that such fees be ‘reasonable
and necessary.’”) (emphasis added). It is true that, as Plaintiffs note, the Court previously held that
LandAmerica Title was entitled from Plaintiffs only to the total amount of reasonable fees and costs
it incurred in this case, minus the amount to which it was entitled from Mauro T. Padilla. (Resp.
LandAmerica Title’s Am. Mot. Att. Fees, Dkt. 437, at 5; Order, Dkt. 422, at 18). But that holding
was purely a function of the order in which LandAmerica Title filed its motions and the
corresponding order in which the Court decided them. (See Mot. Summ. J., Dkt. 403 (§ 17.555
indemnity crossclaim against Mauro T. Padilla); Mot. Summ J., Dkt. 406 (§ 17.50(c) counterclaim
against Plaintiffs)). The filing order alone cannot be deemed a definitive election of remedies. See
Fina Supply, 726 S.W.2d at 541 (“An election of remedies does not occur unless a party having two
or more inconsistent remedies pursues one of them to the exclusion of the others.”). And again, the
Court may revise any order “that adjudicates fewer than all the claims or the rights and liabilities of

19

fewer than all the parties . . . at any time before the entry of a judgment adjudicating all the claims
and all the parties’ rights and liabilities,” as is the case here. Fed. R. Civ. P. 54(b).
In other words, the Court held that LandAmerica Title was entitled to the full amount of
relief to which it was entitled by statute on both its § 17.555 crossclaim for statutory indemnity
against Mauro T. Padilla and its § 17.50(c) counterclaim against Plaintiffs. The Court also held that
LandAmerica Title could not recover its attorney’s fees and costs twice. LandAmerica Title now asks
the Court to allow it to elect to recover under its § 17.50(c) counterclaim against Plaintiffs: to
recover once, not twice. Its invocation of the election of remedies doctrine is entirely consistent with
applicable Texas law. See Malvino, 840 F.3d at 234. To the extent that the Court’s previous Order,
(Dkt. 422), is inconsistent with this Order, the Court revises the previous Order. See Fed. R. Civ. P.
54(b).
The Court addresses two of Plaintiffs’ objections here.7 Plaintiffs argue that permitting an
election of remedies at this stage would effectively allow a dismissal under Federal Rule of Civil
Procedure 41(a), which would be improper at this relatively late stage in the litigation. (Resp.
LandAmerica Title’s Am. Mot. Att. Fees, Dkt. 437, at 4–6). But though LandAmerica has dismissed
its § 17.555 crossclaim for contribution against Mauro T. Padilla, see supra Section III.A,
LandAmerica Title is not dismissing its § 17.555 crossclaim for statutory indemnity against Mauro T.
Padilla, (see LandAmerica Title’s Am. Mot. Att. Fees, Dkt. 430, at 3 n.2). LandAmerica Title’s motion
cannot properly be considered as invoking Rule 41(a). Plaintiffs’ contention that LandAmerica
should not be allowed to retain the ability to change its election of remedies should any claims or
defenses in this case be reversed or remanded after an appeal also rings hollow. (See Resp.
LandAmerica Title’s Am. Mot. Att. Fees, Dkt. 437, at 3–4; LandAmerica Title’s Am. Mot. Att. Fees,

Plaintiffs additionally argue that a large increase in the fees and costs for which they are liable is unduly
prejudicial to them. (Pls.’ Resp. LandAmerica Title’s Mot. Att. Fees, Dkt. 437, at 6). The Court addresses the
thrust of this argument in Section V.B, infra.
7

20

Dkt. 430, at 3 n.2). In Malvino, the Fifth Circuit applied Texas law and concluded that no authority
clearly supports Plaintiffs’ line of reasoning, noting that “the equitable nature of the one satisfaction
rule counsels against such a stringent approach.” 840 F.3d at 233.
B. What LandAmerica Title May Recover
1. § 17.50(c) and Segregation
However, the Court does not conclusively hold in this Order that LandAmerica Title is
entitled to the full $569,105.55 which it claims from Plaintiffs. In DTPA actions, including under
§ 1750(c), “reasonableness of the fee claimed must be established by evidence,” and “it is the
province of the [factfinder] to determine the reasonable value of an attorney’s services.” Streber v.
Hunter, 221 F.3d 701, 739 (5th Cir. 2000) (quoting Leggett v. Brinson, 817 S.W.2d 154, 157 (Tex.
App.—El Paso 1991, no writ); Brown v. Bank of Galveston, 930 S.W.2d 140, 145 (Tex. App.—Houston
[14th Dist.] 1996, writ granted)). “As a general rule, the party seeking to recover attorney’s fees
carries the burden of proof.” Stewart Title Guar. Co. v. Sterling, 822 S.W.2d 1, 10 (Tex. 1991), holding
modified by Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299 (Tex. 2006).
Typically, attorney’s fees must be segregated between “claims for which they are recoverable
and those for which they are not,” Chapa, 212 S.W.3d at 311, 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

21

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.
The Court previously held that LandAmerica Title did not need to segregate the fees it
sought on its § 17.555 crossclaim for statutory indemnity against Mauro T. Padilla. (Order, Dkt. 422,
at 12). The Court described its reasoning as follows:
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. See Chapa, 212 S.W.3d at
311. [LandAmerica 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).
(Order, Dkt. 422, at 12) (footnote omitted).
But now, LandAmerica Title asks the Court to consider its § 17.50(c) counterclaim against
Plaintiffs. § 17.50(c)’s language does not include the capacious “all sums” provision present in
§ 17.555; rather, it provides only for “reasonable and necessary attorneys’ fees and court costs.” See
Cypress Engine Accessories, 2017 WL 5177617, at *1. As Plaintiffs note, LandAmerica Title has
admitted that “it “incur[red] fees it would have not sustained but for Mauro T. Padilla’s conduct”—

22

that is, not necessarily “reasonable and necessary” as to Plaintiffs. (Resp. LandAmerica Title’s Am.
Mot. Att. Fees, Dkt. 437, at 6 (quoting Mot. Summ. J., Dkt. 403, at 7)). This inconsistency cautions
against allowing LandAmerica Title to recover fees and costs from Plaintiffs that may not be fairly
traceable to Plaintiffs’ claims or litigation conduct. See Chapa, 212 S.W.3d at 313. Thus, the Court
cannot say with certainty—and without unduly prejudicing Plaintiffs—that LandAmerica Title need
not segregate its fees and costs between those that are reasonable and necessary as to Plaintiffs
within the ambit of § 17.50(c) and those that are not. And, without a comprehensive sense of which
fees and costs are reasonable and necessary as to Plaintiffs, the Court cannot say with certainty that
LandAmerica Title is only entitled to the $16,130.50 or $135,063.40 sums that Plaintiffs propose.
(See Resp. LandAmerica Title’s Am. Mot. Att. Fees, Dkt. 437, at 6).
Thus, informed by the imperatives of appropriate notice to the parties and judicial economy,
the Court concludes that LandAmerica Title is entitled to the fees and costs listed in the Group 2
and Group 3 invoices it has submitted. The Group 2 invoices, totaling $135,063.40, which
LandAmerica Title originally submitted in support of its motion for summary judgment on its
§ 17.50(c) counterclaim against Plaintiffs, (Dkt. 406-2 at 192–262), can properly be considered
reasonable and necessary as to Plaintiffs. The Group 3 invoices, totaling $25,503.40, which
LandAmerica Title represents as describing fees and costs it incurred from “Plaintiffs’ response and
continuing to defend against Plaintiffs’ claims, including affirmative dispositive relief filed by
Plaintiffs,” can also properly be considered reasonable and necessary as to Plaintiffs. (LandAmerica
Title’s Mot. Att. Fees, Dkt. 427, at 2).
2. The Fees LandAmerica Title Requests
The Court has already reviewed the propriety of the fees and costs described in the Group 2
invoices, determining that they need not be segregated. (See Order, Dkt. 422, at 7–16). However, the
Court modifies its previous Order to remove one cost that LandAmerica requests, but is not

23

properly part of a statutory fees and costs award. See generally Fed. R. Civ. P. 54(b). District courts in
the Fifth Circuit considering requests for costs, “including expenses that normally are passed on to a
client by an attorney, routinely deny requests for items that are not listed in [28 U.S.C.] § 1920.”
Martinez v. Refinery Terminal Fire Co., No. 2:11-CV-00295, 2016 WL 4594945, at *14 (S.D. Tex. Sept.
2, 2016) (collecting cases). Thus, while costs for copies “necessarily obtained for use in the case” are
permissible, 28 U.S.C. § 1920, “costs for faxes, meals, messenger and delivery services, mileage,
postage, research and documentation, and travel expenses” are not, Tempest Publ’g, Inc. v. Hacienda
Records & Recording Studio, Inc., 141 F. Supp. 3d 712, 725 (S.D. Tex. 2015). In general, “[i]f the party
against whom costs are taxed does not specifically object, the costs sought are presumed necessary
for the case.” Kellogg Brown & Root Int’l, Inc. v. Altanmia Commercial Mktg. Co., No. 07–2684, 2009 WL
1457632, at *3 (S.D. Tex. May 26, 2009). Accordingly, the Court determines that LandAmerica Title
is not entitled to recover $13.50 in costs that are outside § 1920’s scope.8 LandAmerica Title has not
requested any other impermissible costs in the Group 2 or Group 3 invoices.
As for the attorney’s fees listed in Group 3, the Court concludes that LandAmerica Title
need not segregate the fees by claim because each fee is reasonable and necessary as to Plaintiffs. In
addition, almost all the Group 3 fees concern LandAmerica Title’s § 17.50(c) counterclaim, and the
few that do not are sufficiently related so as to not require segregation. 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 the facts and proof in the case to see
whether the issues were inextricably intertwined.”); Mid-Continent 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.,
8

This cost is listed in Group 2, invoice # 1609102 ($13.50 in delivery fees). (Dkt. 430-1 at 224).

24

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, LandAmerica Title filed its unredacted billing entries as an exhibit to a motion for
leave to file under seal. See supra Part IV. 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). Ultimately, the Court finds that none of the Group 3 billing entries is
excessive, duplicative, or inadequately documented, and that each reasonably pertains to
LandAmerica Title’s § 17.50(c) counterclaim against Plaintiffs.
Next, the Court performs the following “lodestar” analysis on the Group 3 invoices:
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).
“These factors are comparable to those laid out by the Texas Supreme Court, and this Court
may rely on them when determining attorney’s fees under Texas law which governs” the § 17.50
counterclaim 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)).

25

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).
“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)).
LandAmerica Title supports its fee request with a declaration from Scott A. Wheatley of Jackson
Walker, its “primary attorney,” who explains that he charged $425 per hour in 2019. (Wheatley
Decl., Dkt. 430-1 at 1–2). Other attorneys at his firm charged $295 per hour in 2019, and paralegals
charged $135 per hour in 2019. (Id. at 2–3).
As derived from the Group 3 invoices, then, the lodestar for LandAmerica Title’s attorney’s
fees is $25,503.40—i.e., the hours the attorneys and paralegals expended on the case multiplied by

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their various hourly rates, plus permissible costs. (See Group 3 Invoices, Dkt. 429-1); Migis, 135 F.3d
at 1047. The Court finds that the number of hours is reasonable, as this is an inordinately complex
and time-consuming 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. LandAmerica 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 it as a party. (Dkt. 2-1 at 18). In LandAmerica Title’s characterization, “[t]his matter
required more time and labor from counsel . . . because of the Plaintiffs’ unfounded, baseless
assertions, the number of litigants involved, Plaintiffs’ constantly shifting theories, multiplicity of
claims, numerous unsuccessful attempts to replead, and revolving sets of counsel.” (Wheatley Decl.,
Dkt. 430-1 at 3). The Court expressly does not pass judgment on Plaintiffs’ litigation strategy, but
finds the spirit of LandAmerica 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, LandAmerica Title does not allege that the legal questions presented were
notably novel or difficult. (Id.). For factors (3) and (9) LandAmerica Title, through Wheatley, argues

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that “[i]t was necessary for [LandAmerica Title] to retain an attorney with [Wheatley’s] level of
expertise to work on this case.” (Id. at 2). The Court concurs to the extent that experience in
complex civil litigation and real estate/land title disputes aided LandAmerica Title’s counsel in
properly performing the legal services LandAmerica Title required. For factor (4), LandAmerica
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),
LandAmerica Title’s counsel obtained favorable results, (see, e.g., Order, Dkt. 227); the amount
involved is apparent in the attorney’s fees requested. (Group 3 Invoices, Dkt. 429-1). For factor (10),
it does not seem that this case was “undesirable” for counsel—LandAmerica Title’s counsel
continued to work on its behalf for years, with no indication of trepidation. For factor (11),
LandAmerica Title and its counsel appear to have a developed professional relationship, as they
negotiated discounted hourly rates, supporting the reasonableness of those rates (Wheatley Decl.,
Dkt. 430-1, at 2–3). For factor (12), it is difficult to find precisely similarly situated cases with which
to compare fee awards.
Overall, having analyzed the Johnson factors, the Court declines to adjust the lodestar
amount. The Court finds that LandAmerica Title has carried its burden in demonstrating the proper
amount of fees to which it is entitled in the Group 3 invoices.
VI. CONCLUSION
For the reasons discussed above, IT IS ORDERED that:
1. Plaintiffs’ motion for default judgment against PPC and HTG, (Dkt. 432), is
GRANTED. The Court will enter partial final judgment as to these claims in a
separate order.

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2. LandAmerica Title’s motion for default judgment against PPC, HTG, Maria del
Rosario Padilla, Mauro Joe Padilla, and Carlos Miguel Padilla, (Dkt. 434), is
GRANTED IN PART AND DENIED IN PART. It is GRANTED as to PPC
and HTG. It is DENIED WITHOUT PREJUDICE as to Mauro Joe Padilla,
Maria del Rosario Padilla, and Carlos Miguel Padilla. Should LandAmerica Title wish
to file a motion for clerk’s entry of default and then renew its motion for default
judgment as to Mauro Joe Padilla, Maria del Rosario Padilla, and Carlos Miguel
Padilla, the Clerk and the Court will entertain those motions. The Court will enter
partial final judgment as to these claims against PPC and HTG in a separate order.
3. LandAmerica Title’s unopposed motion to dismiss its crossclaim for contribution
against PPC, HTG, Mauro T. Padilla, Maria del Rosario Padilla, Mauro Joe Padilla,
and Carlos Miguel Padilla, (Dkt. 435), is GRANTED.
4. LandAmerica Title’s unopposed motion to dismiss its crossclaims against Defendant
Dan Brown (“Brown”) for contractual indemnity and contribution, (Dkt. 436), is
GRANTED.
5. LandAmerica Title’s unopposed motion for leave to file billing entries under seal,
(Dkt. 429), is GRANTED.
6. LandAmerica Title’s motion for attorney’s fees, (Dkt. 427), is MOOT.
7. LandAmerica Title’s election of remedies and amended motion for attorney’s fees,
(Dkt. 430), is GRANTED IN PART AND DENIED IN PART. It is
GRANTED as to the election of remedies and the availability of fees and costs to
LandAmerica Title. It is DENIED as to the amount of those fees and costs that
LandAmerica requests. The Court holds that LandAmerica Title is entitled to
$160,553.70 in reasonable and necessary fees and costs from Plaintiffs on

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LandAmerica Title’s § 17.50(c) counterclaim, comprising the fees and permissible
costs collected in the Group 2 and Group 3 invoices. LandAmerica Title may not
recover the same fees and costs both from Padilla and from Plaintiffs.
IT IS FURTHER ORDERED that the Clerk shall FILE LandAmerica Title’s unredacted
additional billing entries, (Dkt. 429-1), UNDER SEAL. The Clerk shall UNSEAL LandAmerica
Title’s unopposed motion for leave to file billing entries under seal and its attached proposed order,
(Dkt. 429, 429-2).
The Court may set a conference shortly during which the parties and the Court can discuss
the status of this case, including whether any other unresolved claims exist that preclude the entry of
judgment and an appeal.
SIGNED on August 7, 2020.

_____________________________________
ROBERT PITMAN
UNITED STATES DISTRICT JUDGE

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