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Click here for the full text of this decision FACTS:Dollar Rent A Car operated a car rental agency and a three-story parking garage near Hobby Airport on premises formerly leased from Parking Company of America (PCA). The 15-year lease provided that the lessor keep the foundation, walls and roof in good repair and make repairs in a reasonable amount of time following written notice from the lessee. The lease also provided that the lessee would make other types of repairs and keep the premises clean. PCA paid for temporary repairs to the expansion joints in the building in 1998 and 2000. The 1998 repairs were considered temporary, because not all design information was properly documented at that time. In December 2000, Dollar negotiated with PCA to buy the garage for $5.55 million. Dollar retained an engineering firm to survey the garage and state its opinion on the garage’s current overall structural condition. On Dec. 26, 2000, the firm produced a report stating that the expansion joints needed repair within a year. Dollar sent the report to PCA and to Scott Word, PCA’s real estate broker. For reasons unrelated to the garage’s structural condition, Dollar later notified PCA on Jan. 25, 2001, that it would not proceed with the sale. 7979 Airport Garage LLC (7979) subsequently negotiated with PCA to purchase the garage. The negotiations were conducted through Scott Word, who acted as the real estate agent for PCA and 7979. Word sent 7979 the report and an estimate commissioned by Dollar. Word had added hand-written notations to the estimate. Armand Laskey, 7979′s principal, testified that he construed Word’s notes to mean that the work on the expansion joints had already been performed. Additionally, he testified that Word assured him the work had been done. On Aug. 15, 2001, 7979 purchased the garage for $5.35 million. On Feb. 28, 2002, Dollar wrote to 7979, stating: “The prior owner of this property . . . was put on notice in December 2000 that there was a structural problem at this property. We provided a proposal to repair the [expansion] joints at the property to the prior owner in January 2001 . . . [W]e are putting you on notice that we expect the landlord/owner to pay for the repair.” Dollar hired a firm to sue 7979 for breach of contract and breach of warranty, and to obtain a declaratory judgment. Six months after Dollar filed suit, contractors hired by 7979 began work on the expansion joints. The final project as ultimately bid and performed at 7979′s expense included barricades, signs, traffic barriers, temporary support of work, and the protection of existing construction during cutting and patching to prevent damage. The work was finished in March of 2003 at a cost of $165,863.41. 7979 paid for the repairs but refused to reimburse Dollar for monies Dollar expended on a May 2002 inspection and the installation of barricades and safety netting. In October 2004, the case was tried to a jury, and judgment was rendered in favor of Dollar for actual damages of $16,037.20 plus prejudgment and postjudgment interest. In addition, the jury awarded Dollar attorneys’ fees of $340,000 and conditional attorneys’ fees of up to $90,000, depending on the number of appeals. The trial court denied 7979′s motion for judgment notwithstanding the verdict and its motion for new trial. 7979 appealed. 7979 contended that legally and factually insufficient evidence supported the jury’s verdict in Dollar’s favor on the issues of breach of contract, breach of the implied warranty of suitability and damages. 7979 argued alternatively that Dollar or the previous owner of the parking garage was responsible for the costs of repairs and that Dollar was estopped from asserting its claims against 7979. Finally, 7979 contended the trial court erred in awarding unsegregated attorneys’ fees to Dollar and that the fees were excessive. Initially, the court affirmed the trial court; however, 7979 sought a rehearing. The 14th Court of Appeals granted rehearing. HOLDING:Affirmed in part, reversed and remanded in part on the issue of attorneys’ fees. (7979 again argued that legally and factually insufficient evidence supported the jury’s verdict in Dollar’s favor on its claims for breach of contract, breach of the implied warranty of suitability and damages. Alternatively, 7979 argued that either Dollar or the prior owner of the parking garage was responsible for the costs of repairs and that Dollar was estopped from asserting its claims against 7979. Finally, 7979 contended that the trial court erred in awarding unsegregated attorneys’ fees to Dollar, and that, in any event, the fees were excessive. The court concluded that the lease unambiguously required 7979 to pay for the repairs at issue; thus, Dollar could recover its actual damages and the attorneys’ fees it incurred to defeat 7979′s counterclaims and recover on the contract. The court therefore affirmed the portion of the judgment incorporating the jury’s finding that 7979 is liable to Dollar for actual damages in the amount of $16,037.20 and that Dollar is not liable to 7979. But one issue remained: attorneys’ fees. 7979 argued that the Texas Supreme Court’s 2006 opinion Tony Gullo Motors I LP v. Chapa required that the court remand the matter for a redetermination of Dollar’s recoverable attorneys’ fees. The court agreed. Because a party seeking attorneys’ fees, the court stated, must show that the fees were incurred in connection with a claim that allows their recovery, parties must ordinarily segregate fees incurred for such work from fees incurred in connection with claims for which no such recovery is allowed. Thus, the court found that because Dollar failed to segregate the attorneys’ fees it incurred in prosecuting its breach of contract claim and defending against 7979′s counterclaims from the fees it incurred solely in connection with its breach of warranty claim, it reversed the portion of the judgment awarding attorneys’ fees, severed this issue from the remainder of the judgment, and remanded this issue to the trial court for further proceedings. In light of its disposition of the attorneys’ fees issue, the court did not reach 7979′s claim that the fee award was excessive. OPINION:Guzman, J.; Hedges, C.J., and Yates and Guzman, J.J.

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