HealthTronics, Inc. v. Lisa Laser USA, Inc.

• Decision Date: 31 August 2012
• Docket Number: No. 03–11–00530–CV.,03–11–00530–CV.
• Citation: 382 S.W.3d 567
• Parties: HEALTHTRONICS, INC., Appellant, v. LISA LASER USA, INC. and Lisa Laser Products, OHG, Appellees.
• Court: Texas Court of Appeals

382 S.W.3d 567

HEALTHTRONICS, INC., Appellant,

v.LISA LASER USA, INC. and Lisa Laser Products, OHG, Appellees.

No. 03–11–00530–CV.

Court of Appeals of Texas, Austin.

Aug. 31, 2012.

Breck Harrison, Joshua A. Romero, Jackson Walker, L.L.P., Austin, TX, for Appellant.

Derek L. Davis, Byrd Davis Furman, LLP, Austin, TX, Richard E. Korb, Berkeley, CA, for Appellee.

Before Chief Justice JONES, Justices PEMBERTON and HENSON.

OPINION

DIANE M. HENSON, Justice.

HealthTronics, Inc. sued Lisa Laser USA, Inc. and Lisa Laser Products, OHG (collectively, “Lisa Laser”) for breach of contract and tortious interference with contract. After the trial court issued an order dismissing the suit based on a mandatory forum-selection clause in the parties' contract, it denied Lisa Laser's request for an award of attorneys' fees. On appeal, this Court reversed the portion of the trial court's order denying attorneys' fees and remanded for a determination of the amount of reasonable attorneys' fees incurred. Lisa Laser USA, Inc. v. HealthTronics, Inc., No. 03–10–00464–CV, 2011 WL 1237639, at *5 (Tex.App.-Austin Mar. 31, 2011, no pet.) (mem. op.) (“ Lisa Laser II ”). Now, after the remand, HealthTronics appeals the trial court's order awarding $150,768.00 in attorneys' fees and additional fees in case of appeal to Lisa Laser. In one issue on appeal, HealthTronics contends that the trial court erred by: (1) admitting the testimony of Lisa Laser's attorneys, which HealthTronics asserts was inconsistent and unreliable; (2) concluding the fees sought by Lisa Laser were reasonable; and (3) awarding fees to Lisa Laser that were not related to obtaining dismissal of the case in Texas. Because we hold that the attorney affidavits were properly admitted and the attorneys' fees granted by the trial court are reasonable and were incurred during the prosecution of the case in Texas, we will affirm the trial court's award.

BACKGROUND

The factual and procedural background of this case is fully discussed in our prior opinion in Lisa Laser II.Seeid. at *1–2. For our purposes in this appeal, we need only provide a brief timeline of relevant procedural events to provide context for our decision in this case.

HealthTronics sued Lisa Laser in Travis County District Court in December 2008 for breach of contract and tortious interference with contract. In January 2009, Lisa Laser moved to dismiss the suit based on the contract's forum-selection clause, asserting that the exclusive venue for disputes arising out of the contract was Alameda County, California. The trial court denied Lisa Laser's motion to dismiss.

Lisa Laser then filed a petition for writ of mandamus in this Court, seeking to compel the trial court to vacate its order and dismiss the suit. This Court denied the petition in May 2009. Lisa Laser next filed a petition for writ of mandamus in the Texas Supreme Court. During the pendency of the mandamus proceeding in the supreme court, in August 2009, Lisa Laser filed an amended answer in the underlying suit, asserting counterclaims against HealthTronics. In October 2009, the parties entered into an agreement that all discovery conducted while the lawsuit was in Travis County could be used in any lawsuit arising from the same or similar facts and claims between the parties in any California court. In December 2009, Lisa Laser sued HealthTronics in Alameda County, California, asserting exactly the same claims that it had asserted as counterclaims in HealthTronics's Texas suit. Also during this time, the parties conducted written discovery, HealthTronics began noticing depositions, and it took in Texas the deposition of Lisa Laser's president, who works in California. In April 2010, the Texas Supreme Court conditionally granted Lisa Laser's petition for writ of mandamus, ruling that the forum-selection clause applied to the parties' dispute. See In re Lisa Laser USA, Inc., 310 S.W.3d 880, 887 (Tex.2010) (per curiam) (“ Lisa Laser I ”).

In May 2010, Lisa Laser filed a motion in the trial court requesting that the court dismiss the case. Lisa Laser also requested an award of attorneys' fees incurred in connection with its successful defense of the Texas suit, relying on a clause in the parties' contract that provides:

The prevailing party in any legal action brought by one party against another party and arising out of this Agreement shall be entitled, in addition to any other rights and remedies it may have, to reimbursement for its expenses, including court costs and reasonable attorneys' fees.

Lisa Laser sought an award of attorneys' fees and expenses in the amount of $117,596.10. It attached to its motion affidavits from both its California attorney, Richard E. Korb, and its Texas attorney, Derek L. Davis.

The affidavits included extensive descriptions of each attorney's qualifications and experience. Korb had been licensed in California for approximately 29 years at the time he submitted the affidavit. He testified that his practice is primarily civil litigation with an emphasis on business-related disputes and commercial litigation, and he has served as lead counsel in well over 150 civil cases and approximately six appeals. Davis had been licensed in Texas for approximately 15 years at the time he submitted his affidavit. Davis testified that he has been a trial lawyer throughout his career, handling primarily personal injury and commercial litigation, and he has served as lead counsel in at least 12 jury and bench trials, assisted with others, and has been lead appellate counsel in over 10 appeals. Each attorney testified to his familiarity with the legal billing practices and rates for attorneys practicing in their respective regions, i.e., the East Bay of San Francisco, California for Korb; Austin, Texas for Davis. Davis also testified about his familiarity with the Arthur Andersen factors that Texas courts consider when determining an amount of “reasonable and necessary” attorneys' fees. See Arthur Andersen & Co. v. Perry Equip. Corp., 945 S.W.2d 812, 818 (Tex.1997).¹ Davis offered his opinion about the applicability of each of the Arthur Andersen factors relevant to this case. Korb also offered a detailed opinion about the work that the case had required, and his testimony touched on most of the Arthur Andersen factors.

Each attorney attached documentation to his affidavit showing his time entries on the case. The documentation included a description of the work done (with very little redaction), the amount of time spent, and the hourly rate, as well as itemized expenses. Korb also provided a detailed description in his affidavit of the work done to defend against the case in Travis County and explained some of the differences between Texas procedure and California procedure that resulted in more expense in the Texas case than would have been required in California. Davis testified that the time entries that he submitted related only to the work he had done defending Lisa Laser in the Travis County case and enforcing the forum-selection clause through mandamus actions in this Court and the Texas Supreme Court. Each attorney stated, based on his knowledge of the services rendered to Lisa Laser, that their submitted fees ($67,294.05 for Korb; $42,687.50 for Davis) were reasonable, as were the incurred expenses totaling $7,614.55.

HealthTronics opposed the motion, asserting that Lisa Laser was not a “prevailing party” under either California or Texas law for purposes of fee recovery. It did not object to Korb's and Davis's affidavits or the attached documents. It did not submit any evidence opposing the reasonableness of either attorney's hourly rates or time spent on the case.

The trial court dismissed the suit, as mandated by the supreme court, but it denied Lisa Laser's request for attorneys' fees. Lisa Laser appealed the trial court's ruling on attorneys' fees to this Court. As mentioned above, we reversed the portion of the trial court's order denying an award of attorneys' fees, finding that Lisa Laser was entitled as a prevailing party under California law to an award of reasonable attorneys' fees. Lisa Laser II, 2011 WL 1237639, at *5. We remanded the case to the trial court for a determination of the amount of the fee award. Id.

On remand, Lisa Laser filed a supplemental motion for attorneys' fees, requesting $31,672.00 in additional fees, bringing the total requested amount of fees and expenses to $149,268.10. The additional fees were for discovery related to its counterclaims, pre-litigation attorneys' fees, and fees related to the hearing on the original motion for attorneys' fees, the appeal of that order, and preparation of the supplemental motion. Lisa Laser based its supplemental request on a California court of appeals case that had been decided while its appeal in Lisa Laser II was pending before this Court. See PNEC Corp. v. Meyer, 190 Cal.App.4th 66, 118 Cal.Rptr.3d 730, 736 (2010). Lisa Laser asserted that PNEC Corp. clarified that an appropriate fee award includes fees for “work done while the case was under [the trial court's] jurisdiction.” Id. Lisa Laser argued that following PNEC Corp.' s holding and including all work done in Texas, including discovery, would eliminate any uncertainty about a California court's ability to determine the reasonableness of attorneys' fees incurred by attorneys following the discovery procedure of a foreign jurisdiction. In addition, Lisa Laser argued that “[e]stablishing a bright line between the Texas and California litigation” by including the fees incurred from pre-litigation to dismissal would prevent either state's trial court from second-guessing the other's decision.

HealthTronics opposed the supplemental motion, objecting to the affidavits submitted by Korb and Davis in connection with both the first motion for fees and the supplemental motion for fees. HealthTronics submitted two affidavits that Korb had offered in the California litigation seeking attorneys'...