Berry v. Bay, Ltd.
| Citation | 643 S.W.3d 424 |
| Decision Date | 03 March 2022 |
| Docket Number | NUMBER 13-21-00067-CV |
| Parties | Kenneth L. BERRY, Appellant, v. BAY, LTD., Appellee. |
| Court | Court of Appeals of Texas |
Jason Davis, Santos Vargas, Davis & Santos, P.C., San Antonio, for Appellant.
Thomas F. Nye, Gault, Nye & Quintana, LLP, Corpus Christi, for Appellee.
Before Justices Hinojosa, Tijerina, and Silva
Opinion by Justice Silva
Appellant Kenneth L. Berry appeals the amount of attorneys’ fees and sanctions awarded to him adjudged against appellee Bay, Ltd. (Bay). By two issues, Berry argues that the trial court abused its discretion by: (1) issuing an arbitrary and unreasonable attorneys’ fees award; and (2) ordering insufficient sanctions against Bay. We affirm in part and reverse and remand in part.
This case is before this Court for a second time since its inception. See Berry v. Bay, Ltd. , No. 13-18-00438-CV, 2020 WL 486486, at *1 (Tex. App.—Corpus Christi–Edinburg Jan. 30, 2020, no pet.) (mem. op.) ( Berry I ). Because Berry and Bay both refer to filings in the record in the previous appeal, we take judicial notice of the clerk's record therein. A brief review of the relevant history will provide the necessary context for the issues before us in the current appeal.
On March 5, 2018, Bay filed suit against Berry for defamation, alleging that Berry falsely and anonymously reported to the Texas Commission on Environmental Quality (TCEQ) that Bay improperly buried a barge on its property.1 Id. Berry answered asserting multiple affirmative defenses, including the defense of limitations. Id. Shortly thereafter, Berry filed a motion to dismiss pursuant to the Texas Citizens Participation Act (TCPA), which was overruled by operation of law after thirty days. See TEX. CIV. PRAC. & REM. CODE ANN. §§ 27.001 –.011; Berry I , 2020 WL 486486, at *1. Berry appealed to this Court. Berry I , 2020 WL 486486, at *1.
On appeal, we concluded that Bay's suit fell under the TCPA because Berry's statements to TCEQ were an exercise of his First Amendment rights. Id. at *3 ; see TEX. CIV. PRAC. & REM. CODE ANN. §§ 27.002, 27.005(b)(1)(A). We further concluded that Bay's claims should have been dismissed because they were barred by limitations. Berry I , 2020 WL 486486, at *4. Because the matter of limitations was dispositive to the case, we did not address Berry's remaining affirmative defenses. Id. Therefore, we reversed the trial court's order denying Berry's motion to dismiss, and we remanded the case to the trial court for further proceedings consistent with our memorandum opinion. Id.
On remand, Berry filed a motion to enter an order of dismissal and a motion for attorneys’ fees, costs, expenses, and sanctions under the TCPA. As it related to attorneys’ fees, Berry requested a total of $79,712.50 "for the pre-appeal trial stage, incurred appellate attorney's fees, and post-appeal trial stage." According to Berry's motion, the rates charged by his counsel ranged from $225 per hour to $325 per hour for attorneys and $150 per hour for paralegals. The motion specified that Berry's counsel dedicated 259.4 total hours for his defense and included a stage-based itemization: 108.2 hours for the pre-appeal trial stage, 117 hours for the interlocutory appeal stage, and 42.9 hours for the post-appeal trial stage.2 Berry's counsel "further anticipate[d] spending an additional [fifteen] hours analyzing any response(s) filed, drafting any objections to any evidence submitted with any such response(s), drafting a reply to any such response(s), and preparing for and attending the hearing on the Motion to Enter."
Berry requested $20,400 for conditional appellate attorneys’ fees for an appeal to this Court and an additional $10,200 contingent on oral argument. If the appeal reached the Texas Supreme Court, Berry requested $23,800 through the petition for review stage, $27,200 for briefing on the merits, and $13,600 if the Texas Supreme Court granted oral argument.
Berry included five exhibits to his motion, consisting of (1) Bay's original petition and attached exhibits; (2) our memorandum opinion and judgment from Berry I ; (3) our mandate from Berry I ; (4) the bill of costs from Berry I ; and (5) a declaration from his counsel with relevant attachments including a chart of descriptions of the work completed, the time to complete each task, the individual who completed each task, and the hourly rate charged for each task. The breakdown of work completed is further itemized into each stage of the suit comporting with Berry's requests for attorneys’ fees. Small portions of the chart are redacted.
The attorney's declaration outlined the education and qualifications of each attorney and paralegal who provided services to Berry. Berry's counsel declared that, for each stage of the suit, "[a] reasonable number of hours were expended," and the fees charged were "reasonable and necessary under Texas law." Specifically, he declared that "[t]he rates charged ... [were] reasonable given the experience, reputation, and ability of the lawyers and paralegals and comparable to rates charged by attorneys practicing in [the area]."
Berry requested that the trial court award him court costs, including court reporter fees, and "other expenses" such as "copies, Westlaw fees, and miscellaneous expenses that were incurred in defending against Bay's lawsuit." According to Berry and the documents attached to his motion, Berry's court costs were $349.85 and $1,670 for appellate court costs. Berry's "other expenses" totaled $6,365.44.
Finally, Berry requested that, when determining the amount for the mandatory sanction, the trial court consider that Bay filed its suit in retaliation to other suits between Berry and Bay and to stifle Berry's constitutional rights. Although Berry's motion did not specify the amount of sanction he requested, in a subsequent response Berry asked the trial court to use the fees and costs Berry incurred as a guidepost and assess $79,712.50 as a sanction.
In response to Berry's motion, Bay claimed that Berry's requests for attorneys’ fees was " ‘excessive’ and ‘extreme’ in light of the amount in controversy raised by [its] pleadings and evidence." Bay argued that it only sought $128,0003 in damages and awarding two-thirds of its requested damages as attorneys’ fees would not be "moderate or fair." Bay argued, in part, that our memorandum opinion in Berry I only considered Berry's limitations defense and did not consider his merits-based defense, "so his ‘relative success’ on appeal was low." Thus, Bay asked the trial court to "strike any time spent by Berry's attorneys on the substantive defamation arguments."
Additionally, Bay asserted that, in the alternative, Berry was required to segregate between recoverable and unrecoverable fees. According to Bay, Berry's counsel should have segregated the fees between the limitations-based defense and the merits-based defense.
Bay acknowledged that under the applicable version of the TCPA, sanctions were mandatory if a party prevailed under a TCPA motion to dismiss. However, it argued that only nominal sanctions were appropriate because "deterrence is the only legitimate purpose of a TCPA sanction." Bay noted that "no court has passed judgment on the arguments made or evidence produced by Berry and Bay as to the [merits of the] defamation suit" because the matter was resolved on limitations. Although Berry alleged that Bay's suit was brought in retaliation to a previous suit between Berry and Bay, Bay responded that the only evidence of alleged retaliation was timing which should be insufficient.
After a hearing on January 26, 2021, the trial court took the parties’ arguments and evidence under advisement. On February 11, the trial court issued an order dismissing Bay's suit with prejudice and awarded Berry $17,000 in actual attorneys’ fees,4 up to $17,500 for conditional appellate attorneys’ fees, all court costs, and $2,160.09 for other expenses. Bay was assessed $2,000 as a sanction, which the trial court found "constitute[d] an amount sufficient to deter Bay from bringing similar actions in the future." This appeal followed.
A trial court's determination of reasonable attorneys’ fees under the TCPA is "within the court's sound discretion" and will be reviewed under the abuse of discretion standard. Sullivan v. Abraham , 488 S.W.3d 294, 299 (Tex. 2016) ; see also McIntyre v. Castro , No. 13-17-00565-CV, 2018 WL 6175858, at *6 (Tex. App.—Corpus Christi–Edinburg Sept. 6, 2018, pet. denied) (mem. op.). The trial court also has discretion to determine whether an award for "other expenses incurred in defending against the action is equitable and just." Avila v. Larrea , 506 S.W.3d 490, 496 (Tex. App.—Dallas 2015, pet. denied). The trial court's assessment of appropriate sanctions is also reviewed under an abuse of discretion standard. Batra v. Covenant Health Sys. , 562 S.W.3d 696, 717 (Tex. App.—Amarillo 2018, pet. denied).
"A trial court abuses its discretion when a ‘decision is arbitrary, unreasonable, and without reference to guiding principles.’ " In re A.L.M.-F. , 593 S.W.3d 271, 282 (Tex. 2019) (quoting Mercedes-Benz Credit Corp. v. Rhyne , 925 S.W.2d 664, 666 (Tex. 1996) ). "When a trial court does not issue findings of fact or conclusions of law, as in this case, ‘all facts necessary to support the judgment and supported by the evidence are implied.’ " Gray, Ritter & Graham, PC v. Goldman Phipps PLLC , 511 S.W.3d 639, 653 (Tex. App.—Corpus Christi–Edinburg 2015, pet. denied) (quoting BMC Software Belgium, N.V. v. Marchand , 83 S.W.3d 789, 795 (Tex. 2002) ); see also Sprute v. Levey , No. 04-14-00358-CV, 2015 WL 4638298, at *7 (Tex. App.—San Antonio July 15, 2015, no pet.) (mem. op.) ( that where the trial court did not expressly state its reason for a reduced fee, "we must infer that the trial court found ‘some...
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