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Click here for the full text of this decision FACTS:Emzy and Ava Barker owned Brushy Creek Custom Sires, a business that boarded and provided other services for Brahman bulls. Between 1981 and 1995, Walter Eckman owned interests in two bulls and in semen of a third that were boarded at Brushy Creek. Eckman, his co-owners and Brushy Creek agreed that Brushy Creek would board the bulls, collect, store and sell semen from the bulls and then distribute the sales proceeds to Eckman and his co-owners according to their interests. As a result of disclosures in bankruptcy proceedings of a co-owner of one of the bulls, Eckman became convinced that Brushy Creek had breached its agreement as to sales, handling of proceeds from sales and accounting for his shares of bull semen. By a letter dated Oct. 25, 1995, Eckman’s attorney demanded that the Barkers deliver the semen owned by Eckman to a different storage facility, compensate Eckman properly for his share of prior sales and repay overcharges for storage of the semen. The Barkers delivered the semen as requested but refused Eckman’s monetary demands. Eckman and the Barkers signed a tolling agreement dated Dec. 29, 1995 to see if Eckman’s monetary claims could be resolved without litigation. Eckman was not satisfied with the accounting provided by the Barkers, however, and sued them. In his suit, Eckman alleged that the Barkers breached their bailment agreement at various times through the years by 1. collecting proceeds of sales without crediting him for his share; 2. delivering semen without collecting proceeds; 3. failing to notify him of delivery or sales of semen; 4. charging storage for units of semen that should have been sold; and 5. delivering inadequate, false and misleading accounting for storage, sale and shipment. Following trial the case was submitted to the jury by three questions: 1. Did the Barkers fail to comply with a bailment agreement?; 2. If so, what were Eckman’s damages?; 3. And what were Eckman’s necessary attorneys’ fees? The jury answered the first question “yes,” found Eckman’s damages to be $111,983.58 and found Eckman’s attorneys’ fees for preparation and trial to be $222,000 with additional fees of $22,500 for appeal. The 1st Court of Appeals held that Eckman’s cause of action for each of the Barkers’ separate breaches of the agreement accrued at the time of each breach. Thus, the 1st Court held that damages for breaches such as failure to sell semen, failure to pay Eckman’s share of proceeds to him and excessive charges for storage of semen were barred if those actions took place more than four years before execution of the tolling agreement. The appeals court held that all but $16,180.14 of Eckman’s damages were barred by limitations and reduced the compensatory damages accordingly. The award of attorneys’ fees was not reduced. Eckman and the Barkers filed petitions for review. Eckman complained that the 1st Court erred in reducing his damages on the basis of limitations because the cause of action for all his damages accrued at the time of his demand in October 1995. The Barkers urged that the 1st Court erred in affirming the award of attorney’s fees to Eckman in light of the reduction in Eckman’s damages. HOLDING:Reversed and remanded. The Texas Supreme Court concluded that the 1st Court correctly held that damages for breaches which took place more than four years before Eckman filed suit were barred by the statute of limitations and that the 1st Court correctly reduced Eckman’s damages accordingly. The court also agreed that the Barkers preserved error for the challenges they presented to the attorney’s fees award. Not every appellate adjustment to the damages found by a jury in making attorneys’ fees findings will require reversal, the court stated. In this case, however, considering both the absolute value of the difference between the erroneous and correct amounts of damages and the fact that the correct damages were one-seventh of the erroneous damages, the court was not reasonably certain that the jury was not significantly affected by the error. Accordingly, the court held that the trial court’s error was harmful and reversed the award of attorneys’ fees to Eckman. The court affirmed the part of the 1st Court’s judgment reducing the trial court’s compensatory damage award to $16,180.14. OPINION:Johnson, J., delivered the opinion of the full court.

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