X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Click here for the full text of this decision FACTS:Southwestern Bell Yellow Pages initiated a suit to collect a $7,092.18 unpaid debt for a yellow pages advertisement from Joshua Cordova. Cordova filed an answer that asserted four different affirmative defenses, and asserted counterclaims, asking that the advertising contract be rescinded or cancelled, due to alleged material misrepresentations. He also alleged fraud in the inducement, breach of contract and violations of the DTPA. After a bench trial, the trial court awarded SWBYP the $7,092.18, plus $20,885 in attorneys’ fees. As evidence of the attorneys’ fees, SWBYP’s lawyer, Stuart Schwartz, testified that he first prepared a demand letter for Cordova to respond to, which he did not. Though the case was simple at first, Schwartz said he had to prepare far more because of Cordova’s counterclaim. He believed the respective claims of both sides were interrelated and that he needed to defend the counterclaims in order to prevail on SWBYP’s debt collection action. He also did not learn until the day of trial that Cordova had no evidence in defense of SWBYP’s claims. Though he initially took the case on a contingency basis, he eventually settled on an hourly rate with SWBYP of $150 per hour, though his usual hourly rate was between $200 and $225. Cordova’s attorney, Tony Conde testified that he thought the case was straightforward. He believed that even with Cordova’s counterclaims, fees would be limited to between $1,500 and $2,000, and that he thought $20,000 was unreasonable, though he admitted that discovery included written interrogatories, requests for production, motions to compel and additional disputes. Additionally billing statements were admitted into evidence. On appeal, Cordova only challenges the award of attorneys’ fees. HOLDING:Affirmed as reformed. The court confirms that attorneys’ fees were allowable in this case. Unlike a case brought under the DTPA, SWBYP was not required to prove that the fees it requested were both reasonable and necessary. Nor was the company required to prove that the award was equitable and just under the Uniform Declaratory Judgment Act. The court then rejects Cordova’s argument that the fees should have at least been segregated so that he be required to pay only for the hours Schwartz spent on the original suit, not in defense of the counterclaim. Cordova insists that the original suit and the counterclaim were not related, but the court holds that because Cordova pled his counterclaim as an affirmative defense, SWBYP had to overcome his claims of misrepresentation in order to prevail on its debt collection. Consequently, there was an overlap in issues at the time of trial, and SWBYP did not need to segregate its fees between claims. The court next examines the reasonableness of the fee. Though the fee is nearly three times the size of the amount in controversy, the court says that that is not reason alone to strike down the fee award, nor was the amount awarded here excessive. “This was not a simple debt collection. By his counterclaim, Cordova requested damages for lost profits, attorney’s fees, court costs, prejudgment interest, and exemplary damages. Despite the knowledge that Cordova had no evidence of actual damages, this information was not related to SWBYP until the day of trial a year later. And so, as it turned out, the trial itself was not complicated. But the preparation was.” The court finds no evidence that Schwartz’s fees resulted from over preparation. Because of the counterclaim, there was additional discovery. While the trial turned out not to be complicated, it appeared that it would be at first. Nonetheless, the court reforms the jury award, finding that the trial court made a mathematical error, and that SWBYP’s concedes the error. The attorneys’ fees is reduced to $18,007. OPINION:Ann Crawford McClure, J.; Larsen, McClure and Chew, JJ.

Want to continue reading?
Become a Free ALM Digital Reader.

Benefits of a Digital Membership:

  • Free access to 3 articles* every 30 days
  • Access to the entire ALM network of websites
  • Unlimited access to the ALM suite of newsletters
  • Build custom alerts on any search topic of your choosing
  • Search by a wide range of topics

*May exclude premium content
Already have an account?

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.