Smith v. McCarthy
| Decision Date | 04 May 2006 |
| Docket Number | No. 2-05-202-CV.,2-05-202-CV. |
| Citation | 195 S.W.3d 301 |
| Parties | William SMITH and Jeanie Feeney-Smith, Appellants, v. Dawn McCARTHY and Security Union Title Insurance Co., Appellees. |
| Court | Texas Court of Appeals |
Robert Harms Bliss, Dallas, for appellants.
Eugene Zemp DuBose, Dallas and Paul D. Pruitt, Security Union Title Insurance Co., Irving, for appellees.
PANEL B: DAUPHINOT, WALKER, and McCOY, JJ.
On March 16, 2006, this Court issued an opinion affirming the trial court's judgment. Appellants William Smith and Jeanie Feeney-Smith filed a motion for rehearing. After due consideration, we deny the Smiths' motion for rehearing, but we withdraw our opinion and judgment dated March 16, 2006, and substitute the following. The disposition, however, remains unchanged.
This case arose out of a dispute regarding the ownership of a strip of property between the Smiths' house and Appellee Dawn McCarthy's house. McCarthy moved into her house in 1970 and has lived there since then. The Smiths purchased their home in 1996. The houses are back-to-back. For thirty-two years, each house had its own backyard fence, and there was an open area of roughly fifteen feet between the fences. This fifteen feet of land is subject to an easement in favor of Dallas Power and Light Company and Southwestern Bell Telephone Company.
This portion of land was included in the legal description of the Smiths' deed but not fenced in by their backyard fence. It contained a back alley (referred to by the Smiths as a "concrete pad") on one end, which McCarthy and her family used along with the grassy area next to it. This was McCarthy's only access to the main back alley, where she put her garbage, and her family allegedly drove their cars into and out of the alley on almost a daily basis.
In March 2001, the Smiths surveyed their property and decided to move their backyard fence outward to their property line. In March 2002, McCarthy filed a trespass to try title suit, alleging that she owned the southern nine feet six inches of this portion of land (the "Strip") through adverse possession. McCarthy alleged that the adverse possession occurred between 1970 and 1980 (and thereafter), when the land at issue was owned by the previous owners, and that the Smiths therefore never acquired title to the Strip. The Smiths filed an answer alleging an affirmative defense that, pursuant to Section 16.030 of the Texas Civil Practice and Remedies Code, McCarthy could not adversely possess the Strip because it was dedicated to public use.1 They also filed a counterclaim, alleging that even if McCarthy had obtained title to the Strip by adverse possession, they subsequently reacquired title by adverse possession under the five-year statute of limitations.2 They requested attorney's fees under Section 16.034 of the Texas Civil Practice & Remedies Code and sanctions.
In May 2002, while the suit was pending, the Smiths removed the concrete pad and erected a fence enclosing property, including the disputed portion, and cutting off McCarthy's access to the alley. The Smiths then brought a third-party breach of warranty of title claim against their predecessors in title.3 They also demanded that Appellee Security Union Title Company (Security Union) provide a defense upon their title insurance policy. When Security Union refused, the Smiths sued Security Union as a third-party defendant.
On May 15, 2004, McCarthy filed a nonsuit with prejudice. The Smiths then non-suited all third-party defendants except for Security Union. The Smiths and Security Union filed cross-motions for summary judgment, and the Smiths moved for attorney's fees against McCarthy based on their previous request. The trial court denied this motion and the Smiths' motion for summary judgment and granted Security Union's motion for summary judgment.
In two issues on appeal, the Smiths argue that 1) the trial court erred in denying their counterclaim for attorney's fees against McCarthy after she took a nonsuit with prejudice because Appellants, as a matter of law, were the prevailing party under Section 16.034 of the Texas Civil Practice and Remedies Code and 2) the trial court erred in denying their motion for summary judgment against Security Union and in granting Security Union's motion for summary judgment because Security Union failed to establish an exception under the title insurance policy that would relieve it of its duty to defend them.
In their first issue, the Smiths argue that the trial court abused its discretion by denying their counterclaim for attorney's fees against McCarthy.
Section 16.034(a) of the Texas Civil Practice and Remedies Code provides:
In a suit for the possession of real property between a person claiming under record title to the property and one claiming by adverse possession, if the prevailing party recovers possession of the property from a person unlawfully in actual possession, the court may award costs and reasonable attorney's fees to the prevailing party.4
When a statute states that a trial court "may award" attorney's fees, such an award is discretionary.5 Thus, Section 16.034 provides for a discretionary award of attorney's fees, which we review under an abuse of discretion standard.6
To determine whether a trial court abused its discretion, we must decide whether the trial court acted without reference to any guiding rules or principles; in other words, whether the act was arbitrary or unreasonable.7 Merely because a trial court may decide a matter within its discretion in a different manner than an appellate court would in a similar circumstance does not demonstrate that an abuse of discretion has occurred.8
An abuse of discretion does not occur where the trial court bases its decisions on conflicting evidence.9 Furthermore, an abuse of discretion does not occur as long as some evidence of substantive and probative character exists to support the trial court's decision.10
In their reply brief, the Smiths argue that the trial court decided not to award attorney's fees "not [based] upon his discretion," but because it incorrectly interpreted the written demand provisions of Section 16.034. They argue that the attorney's fees issue turned on whether the written demand provisions had been met. The written demand provisions of Section 16.034 provide:
(b) To recover attorney's fees, the person seeking possession must give the person unlawfully in possession a written demand for that person to vacate the premises. The demand must be given by registered or certified mail at least 10 days before filing the claim for recovery of possession.
(c) The demand must state that if the person unlawfully in possession does not vacate the premises within 10 days and a claim is filed by the person seeking possession, the court may enter a judgment against the person unlawfully in possession for costs and attorney's fees in an amount determined by the court to be reasonable.11
We disagree that the trial court's decision so clearly resulted from Smiths' lack of compliance with these provisions. Whether the written demand provisions were complied with—or even had to be complied with in this case—did not appear to be the sole issue before the trial court with regard to attorney's fees. McCarthy's response to the request for attorney's fees contained several arguments. While she did argue that Smiths did not comply with the written demand provisions, she also argued that "[p]erhaps a more central reason why no award of attorney's fees may be made under this statute is that the award is only to the `prevailing party.'" In addition, at oral argument, although the parties discussed the written demand provisions, McCarthy's attorney's closing argument focused on whether the Smiths could recover attorney's fees under the statute (meaning, whether they met the "prevailing party" definition) even though there was no adjudication. Also, neither the judgment nor the trial court's ruling explains why the trial court denied attorney's fees under section 16.034. Therefore, we do not assume that the court denied the Smiths' request for attorney's fees for the reason they suggest, and we may uphold the denial on any legal theory supported by the evidence.12
Assuming without holding that attorney's fees could have been properly awarded to the Smiths under the statute we will not disturb the trial court's denial of attorney's fees unless the trial court abused its discretion.13 At the November 16, 2004, combined hearing on attorney's fees and the motion for sanctions, the trial court specifically denied attorney's fees under Section 16.034. However, the trial court expressed the belief that at some point during the course of trial and as discovery continued, McCarthy's attorney learned that he had an impossible case but continued with the suit. The court thus stated that it was granting the Smiths' motion for sanctions in part, imposing sanctions from this unspecified point (when the attorney learned that McCarthy's claim was groundless) onwards. The court requested the attorneys to submit in writing their damage calculation regarding this time frame. The court stated its intent to make his order final when it received the calculations.
The docket sheet notes that a motion for determination of sanctions was granted on January 31, 2005, and sanctions against McCarthy's attorney were set, with an order reflecting the amount to be tendered. The court's judgment entered on May 4, 2005, indicates the denial of attorney's fees under Section 16.034, but does not mention sanctions. According to the Smiths' brief, they dismissed their amended motion for sanctions against McCarthy and her attorney after the parties reached a...
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