Industrial Disposal Supply Co., Inc. v. Perryman Bros. Trash Service, Inc.

• Decision Date: 14 December 1983
• Docket Number: No. 04-81-00387-CV,04-81-00387-CV
• Citation: 664 S.W.2d 756
• Parties: INDUSTRIAL DISPOSAL SUPPLY COMPANY, INC., Appellant, v. PERRYMAN BROTHERS TRASH SERVICE, INC. and Southern Refuse Company, Appellees.
• Court: Texas Court of Appeals

Page 756

664 S.W.2d 756

INDUSTRIAL DISPOSAL SUPPLY COMPANY, INC., Appellant, v. PERRYMAN BROTHERS TRASH SERVICE, INC. and Southern Refuse Company, Appellees.

No. 04-81-00387-CV.

Court of Appeals of Texas San Antonio.

Dec. 14, 1983.

Rehearing Denied Jan. 9, 1984.

Addai Scheinberg and Juan A. Vasquez, Leighton, Hood & Vasquez, San Antonio, for appellant.

Donald O. Ferguson, Gardner, Ferguson, Sommers & Dorr, Wm. Richard Davis, Gilliland, McNeel & Davis, San Antonio, for appellees.

Before ESQUIVEL, CANTU and REEVES, JJ.

OPINION

CANTU, Justice.

Industrial Disposal Supply Company, Inc. (IDS), plaintiff below, appeals from a portion of the judgment in a suit on a sworn account rendered in its favor for the sum of $14,575.19 plus interest.

IDS limits its appeal to the portion of the judgment denying attorney's fees and denying recovery against appellee, Southern Refuse Company (Southern). Appellee, Perryman Brothers Trash Service, Inc. (Perryman) brings forth cross-points challenging the trial court's conclusion of law that the contract involved was not usurious and the trial court's denial of attorney's fees.

IDS filed its original petition on March 5, 1981, and its amended original petition on May 11, 1981. Perryman filed its original answer and counterclaim on June 11, 1981 asserting the defense and affirmative claim of usury and seeking statutory forfeiture.

IDS's suit against Perryman arose out of the acquisition of certain equipment used in Perryman's refuse hauling business. The suit sought to recover the value of numerous containers and other supplies and equipment as well as interest representing late charges.

IDS is in the business of selling a number of trash disposal related items including garbage trucks, trash containers, small parts and accessories. Perryman was in the business of hauling refuse for commercial and industrial customers. IDS maintained two accounts under the name of Perryman Brothers Trash Services, Inc. One account was for the sale of small parts including small tools, replacement parts, supplies and miscellaneous refuse industry related items. Perryman was regularly invoiced and billed directly for these small items. Perryman paid for the items on this account promptly and was considered, by IDS, to be a good customer. The second account contained orders for large equipment and trucks. These orders, although placed by Perryman, were normally billed to Industrial Leasing (Industrial), a leasing company which subsequently leased the equipment to Perryman. As a matter of customary practice, IDS extended a line of credit to Industrial. IDS allowed the equipment purchases to build up to a dollar value equal to the line of credit before invoices and bills were sent to Industrial. This generally meant that IDS did not bill Industrial for a period of 30 to 90 days after the equipment was received by Perryman.

Over a period of 8 to 10 years between 500 and 1,000 orders were placed by Perryman on both accounts. Each time an order was placed, an invoice form was used which contained in bold type letters: LATE CHARGE OF 1 1/2% PER MONTH WILL BE ADDED AFTER 30 DAYS. Although the invoice states interest will be added after thirty days, the testimony indicated that the 1 1/2% late charge accrued thirty days from the end of the month following the invoice date and that interest was charged to the account thirty days thereafter.

Late charges were assessed on only two occasions during this 8 to 10 year period. The charges totalled $108.00 on the small parts account and were paid by Perryman's bookkeeper. More recently, the late charges pertained to orders placed in August and September of 1980 and were billed to Perryman's large equipment account.

Prior to the August and September orders, it was customary practice for Perryman to accept delivery of the equipment by signing a bill of lading evidencing receipt.

At the time the containers and related items were ordered in August and September, it was understood that the items would be billed to the leasing company as had been the practice. However, on October 1, 1980. Southern acquired 100% of the outstanding capital stock of Perryman and Perryman was subsequently dissolved. Consequently, Lee Perryman ¹ informed IDS to invoice Perryman, rather than Industrial.

On December 31, 1980, IDS billed Perryman, rather than the leasing company, seeking the amount of fourteen thousand sixty-seven dollars and sixty two cents ($14,067.62) plus an additional five hundred and seven dollars and fifty seven cents ($507.57) as current and prior late charges.

IDS's first and second points of error dispute the trial court's conclusion of law that IDS was not entitled to attorney's fees because it failed to present sufficient evidence to justify an award of attorney's fees.

IDS argues that attorney's fees were established as a matter of law pursuant to TEX.REV.CIV.STAT.ANN. art. 2226 (Vernon Supp.1982-1983) because IDS presented its claim for $14,575.19 to appellees at least thirty days prior to filing suit and payment was not tendered by either appellee. IDS made no effort to offer any evidence on the issue of reasonable attorney's fees through its attorney. In fact, IDS attempted to reopen after both parties had closed for the sole purpose of discharging its burden of establishing reasonable attorney's fees. In support of its claim IDS relied entirely upon testimony elicited during cross-examination of appellees' attorney wherein he allegedly stated that a reasonable amount of time expended on this type of case for either plaintiff's or defendant's attorney was approximately sixty hours.

Appellant supports his argument with two lines of authority. The first line holds that an appellate court will award attorney's fees where the trial court, while denying attorney's fees, has made a factual determination of the amount of money that would constitute reasonable attorney's fees and the record discloses that a right to recovery was established as a matter of law. Staley v. Zimmite Corp., 565 S.W.2d 335, 337 (Tex.Civ.App.--Houston [14th Dist.] 1978, no writ).

In the second line of authority, the trial court, in denying attorney's fees, makes no finding as to what would constitute reasonable attorney's fees even though the record confirms a right to recovery of attorney's fees as a matter of law. In these cases the appellate court has reversed and remanded for a determination of reasonable attorney's fees. Woods Exploration & Producing Co., Inc. v. Arkla Equipment Co., 528 S.W.2d 568, 571 (Tex.1975); Zemaco, Inc. v. Navarro, 580 S.W.2d 616, 621 (Tex.Civ.App.--Tyler 1979, writ dism'd).

It is well established that an appellate court may not initiate an award of attorney's fees, because to do so would in effect be a usurpation of the trial court's fact finding function. International Security Life Insurance Co. v. Spray, 468 S.W.2d 347, 349 (Tex.1971); Staley v. Zimmite Corp., supra at 337.

IDS sought to recover reasonable attorney's fees pursuant to the provisions of TEX.REV.CIV.STAT.ANN. art. 2226 (Vernon Supp.1982-1983).

Article 2226 provides:

Any person, corporation, partnership, or other legal entity having a valid claim against a person or corporation for services rendered, labor done, material furnished, overcharges on freight or express, lost or damaged freight or express, or stock killed or injured, or suits founded upon a sworn account or accounts, or suits founded on oral or written contracts, may present the same to such persons or corporation or to any duly authorized agent thereof; and if, at the expiration of 30 days thereafter, payment for the just amount owing has not been tendered, the claimant may, if represented by an attorney, also recover, in addition to his claim and costs, a reasonable amount as attorney's fees. The usual and customary fees in such cases shall be presumed to be reasonable, but such presumption may be rebutted by competent evidence. In a proceeding before the court, or in a jury case where the issue of amount of attorney's fees is submitted to the court for determination by agreement, the court may in its discretion take judicial knowledge of the usual and customary fees in such matters and of the contents of the case file without receiving further evidence. The provisions hereof shall not apply to contracts of insurers issued by insurers subject to the provisions of the Unfair Claim Settlement Practices Act (Article 21.21-2, Insurance Code), nor shall it apply to contracts of any insurer subject to the provisions of Article 3.62, Insurance Code, or to Chapter 387, Acts of the 55th Legislature, Regular Session, 1957, as amended (Article 3.62-1, Vernon's Texas Insurance Code), or to Article 21.21, Insurance Code, as amended, or to Chapter 9, Insurance Code, as amended, and each such article or chapter shall be and remain in full force and effect. This Act shall be liberally construed to promote its underlying purposes.

Said article expressly applies to suits on a sworn account. Zemaco, Inc. v. Navarro, supra at 620.

At trial, Donald Ferguson, attorney of record for Perryman, testified that pursuant to his employment by Perryman as attorney, both with respect to defending Perryman against IDS's claim and with respect to representing Perryman on its cross-claim against IDS, a total aggregate of $5,218.50 was incurred as attorney's fees. Ferguson supported his testimony with a computer printout documenting the charges of $5,218.50 as attorney's fees.

During cross-examination of Ferguson by IDS's attorney the following transpired:

Q: ... What was your total hours expended in the defense and counterclaim of this matter, sir?

A: Fifty nine point plus, slightly less than sixty hours.

Q: And would you think that is a reasonable expenditure of time either on defense or the plaintiff posture in this particular lawsuit?

A: Yes ...

Q: For either a plaintiff or defendant's attorney, that was my question?

A: Well,...