"Be careful what you ask for," John Zavitsanos cautions plaintiffs that ask for attorney fees in a declaratory judgment action.
That’s because he turned the tables in a recent case, winning $453,500 in attorney fees for a defendant. 80th District Judge Larry Weiman of Houston issued the March 26 final judgment in BP Oil Pipeline Co. v. Plains Pipeline, LP.
The change-up came when Weiman reversed his grant of summary judgment to plaintiff BP and entered final judgment for defendant Plains. Zavitsanos had argued his client was entitled to fees on the same basis that the judge previously had awarded them to BP.
"That was the defining variable. We argued that it was unjust to have awarded it to them and then not to us. We beat that argument like a dead horse," says Zavitsanos, partner in Houston’s Ahmad, Zavitsanos, Anaipakos, Alavi & Mensing.
He adds, "We simply said that they had asked for fees the first time so they were a little bit in a box."
Jana Grauberger, a shareholder in the Houston office of Liskow & Lewis who represents BP, declines comment and says her client also declines comment.
Back in 2006, Plains entered into a contract with BP to purchase pipeline assets.
Litigation ensued four years later. In a 2010 complaint in an underlying suit, The Gulf of Mississippi River Transportation Co. LP v. BP Oil Pipeline Co., et al., the Gulf of Mississippi River Transportation Co. (GM), asserted a trespass claim against BP related to the pipelines BP had sold Plains. GM did not name Plains as a defendant in the suit. BP won in the U.S. District Court for the Middle District of Louisiana, but GM appealed to the 5th U.S. Circuit Court of Appeals, where the appeal remains pending.
On July 11, 2011, BP filed its suit against Plains in the 80th District Court, bringing a breach of contract cause of action and a claim for declaratory relief. In its petition, BP alleged that, by entering into the 2006 contract, Plains had agreed to indemnify BP against suits related to the pipeline assets, including the one filed by GM. BP asked that the court to issue a declaration stating Plains’ obligation to indemnify BP against the GM suit and ordering Plains to pay damages for its alleged contract breach. BP also sought attorney fees for the cost related to pursuing the contract-breach damages and the declaratory relief against Plains.
In a Jan. 18th answer and counterclaim in BP, Plains denied BP’s allegations and sought a declaratory judgment stating it had no obligation to indemnify BP. Additionally, Plains sought attorney fees and alleged that BP had failed to disclose any related issues with the pipelines during the due diligence stage of the pipeline asset sale.
On May 31, 2012, Weiman granted BP’s motion for a partial summary judgment, ruling that Plains must indemnify BP and Plains must pay "all costs and fees."
But on Feb. 7, Weiman reversed his partial summary judgment for BP. Based on Plains’ motion for reconsideration, Weiman ruled that Plains had no duty to indemnify and granted Plains’ motion for a summary judgment dismissing BP’s claims.
The question remained whether BP would pay Plains’ attorney fees.
In a March 15 brief, BP argued that the judge should exercise his discretion not to award fees to Plains, because the litigation was "hard fought," and created "legitimate controversy" for both sides.
According to Lizzie Fletcher, an associate with Ahmad, Zavitsanos who also worked on the case, Plains argued that Weiman previously had ordered that Plains pay BP, as it had requested, "all costs and fees." So, Fletcher says, Plains argued BP should pay Plains’ fees.