Opinion issued December 31, 2024
In The
Court of Appeals For The
First District of Texas ———————————— NO. 01-23-00018-CV ——————————— JENNIFER MORTELL, RICHARD “DICK” MORAW, AND JAMES “SONNY” PERRY, Appellants/Cross-Appellees V. N. RUSSELL SCOTT AND KATHRYN MULLEN, Appellees/Cross-Appellants
and
RUSTY SCOTT AND MELANIE MCDONALD, Appellants V. N. RUSSELL SCOTT AND KATHRYN MULLEN, Appellees
On Appeal from the 149th District Court Brazoria County, Texas Trial Court Case No. 102448-CV MEMORANDUM OPINION
Appellants/cross-appellees, Jennifer Mortell, Richard “Dick” Moraw, and
James “Sonny” Perry, and appellants, Rusty Scott (“Rusty”) and Melanie McDonald
(collectively “appellants”), challenge the trial court’s order granting the motion for
sanctions filed against them by appellees/cross-appellants, N. Russell Scott (“Scott”)
and Kathryn Mullen, in the suit against Scott and Mullen for forgery, fraud, breach
of fiduciary duty, money had and received, constructive trust, and a declaratory
judgment. In four issues, appellants contend that the trial court erred in granting the
motion for sanctions filed by Scott and Mullen (the “sanctions motion”) and
awarding Scott and Mullen attorney’s fees.
In their sole issue on cross-appeal, Scott and Mullen contend that the trial
court erred in awarding them only a small portion of their requested attorney’s fees.
We affirm.
Background
In her second amended petition, Mortell alleged that her father, Scott, was the
primary beneficiary and Mortell and her siblings, Rusty, McDonald, and Christopher
Scott (“Christopher”), were remainder beneficiaries of the Scott Family Trust
(Irrevocable) (the “trust”). When the trust was created in September 1997, the trust
property consisted of a 1,541.99 acre tract of land in Brazoria County, Texas that
2 Scott had purchased earlier that year. Later, other parcels of real property located in
Colorado and New Mexico were added to the trust. Mortell named the former
trustees, Moraw and Perry, as necessary parties to her suit.
Mortell further alleged that as the trust’s primary beneficiary, Scott took
proper “distributions for his health, maintenance, and support” as permitted under
the trust. In about 2007, Scott “met and began dating [Mullen], a licensed attorney
in the state of Texas.” Mullen “h[eld] herself out in various roles,” including as
“Scott’s girlfriend, “his attorney,” and even “[his] wife.”
Mortell alleged that after Mullen began living with Scott, the relationships
between Scott and his children became “increasingly more contentious.” According
to Mortell, Mullen restricted the children’s access to Scott. She took “complete
control over [Scott’s] cell[ular] [tele]phone” and would “not permit Scott’s children
to visit” him “unless she approve[d]” the visit in advance. Mortell also believed that
Scott “suffer[ed] from reduced mental capacity as a result of age-related memory
loss.” Mortell surmised that “Mullen ha[d] taken increasing advantage of Scott’s
diminished mental capacity to gain control of Scott and his assets.”
Mortell further alleged that in 2008, Mullen “began a campaign” “to terminate
the [t]rust and have the property distributed to [Scott] outright.” She “began taking
control of the trust property by asserting that she represented the [t]rust as its
3 attorney,” and she “chang[ed] the mailing addresses” for the trust property from the
trust’s business address, where the trustees would receive it, “to her own address.”
According to Mortell, Mullen, in an attempt to terminate the trust, drafted a
Termination Agreement and Mutual Release (the “trust termination agreement”).
Scott signed it, but he either “did not have capacity to execute [it] . . . or [Mullen]
unduly influenced him to sign the [the trust termination agreement] and lie to his
children.” Mullen then “pressured Scott’s children to sign [the trust termination
agreement].” Mortell “did not sign” the trust termination agreement when Mullen
first presented it because she “fe[lt] strongly that [Mullen]’s actions were
suspicious.” Ultimately, though, Mortell signed it and “back dated her signature at
[Mullen]’s prompting.” But neither Mortell’s brother, Christopher, nor the trust’s
co-trustee, Moraw, “ever signed any agreement to terminate the [t]rust,” and both
denied having done so. Yet Mullen, representing “that the [t]rust was already
terminated,” engaged in negotiations “to sell 300 acres of the Brazoria County
[p]roperty.”
Mortell brought claims against Scott and Mullen for forgery, fraud, breach of
fiduciary duty, money had and received, and constructive trust. She also sought a
declaration that the trust had not terminated and asked the trial court to “identify
each beneficiary and trustee of the [t]rust[] and describe their rights and duties with
regards to the [t]rust, if any.” And she requested “that the [trial court] declare that
4 [Mullen] ha[d] no rights, remedies, or individual standing in any proceeding
involving the [t]rust.”
In his third amended answer and second amended counterclaim, Scott
generally denied the allegations in Mortell’s petition and requested that the trial court
issue certain declarations as to the validity of the trust termination agreement and
the distribution of trust assets. Scott also sought attorney’s fees pursuant to both
Texas Property Code section 114.0641 and Texas Civil Practices and Remedies Code
section 37.009.2
Mullen, in her third amended answer and special exceptions to Mortell’s
petition, generally denied the allegations in Mortell’s petition, denied the existence
of a fiduciary relationship between her and Mortell, and requested that the trial court
“declare that the [trust termination agreement] [wa]s binding on all signatories
thereto and was effective on April 5, 2018, the date the last party signed it,” or
alternatively, that it was “effective on February 12, 2019.” Mullen also requested
that the trial court award her “reasonable and necessary attorney[’s] fees” pursuant
1 See TEX. PROP. CODE ANN. § 114.064 (“Costs”). 2 See TEX. PRAC. & REM. CODE ANN. § 37.009 (“Costs”).
5 to Texas Property Code section 114.064 and Texas Civil Practices and Remedies
Code section 37.009.3
On January 27, 2021, Scott and Mullen filed a joint motion for sanctions,
asserting that appellants’ position as to whether Moraw, Perry, and Christopher had
signed the trust termination agreement and whether their signatures on it were forged
“was intentionally fabricated . . . in an attempt to unwind [the trust termination
agreement] and return the former trust property to the control of the former trustees
and the eventual benefit of Scott’s children.” According to Scott and Mullen,
appellants’ scheme was revealed when Christopher “sought to clear his conscience”
and “finally admitted that he did in fact execute the [trust] [t]ermination
[a]greement.” Scott and Mullen asserted that “[d]espite knowing that the [trust]
[t]ermination [a]greement had been validly executed” in 2018, Scott’s children
“concocted a scheme” to challenge its validity more than a year after its execution,
after they learned that Scott “had negotiated (and nearly finalized) a lucrative sale of
a small portion of the distributed [t]rust property.”
Scott and Mullen further asserted that when appellants “discovered that the
notary records for the trustees’ and Christopher’s signatures were either missing or
did not reference the [trust] [t]ermination [a]greement,” they then “conspired to
3 Moraw and Perry, the former trustees, brought counterclaims against Scott and Mullen for fraud, breach of fiduciary duty, forgery, money had and received, constructive trust, misapplication of fiduciary property, and a declaratory judgment.
6 manipulate this fact to their benefit and falsely claimed that those signatures and
notary acknowledgments were not authentic.”
Additionally, appellants falsely claimed that Scott lacked the legal capacity to
enter into the trust termination agreement, and they advanced a “conspiracy theory
that [Mullen] manufactured a detailed scheme to dissolve the [t]rust.” And they
“repeatedly committed fraud on [the trial court] by submitting false testimony,
falsified pleadings, and evasive and inaccurate discovery responses that [were]
premised on lies relating to the [t]ermination [a]greement and its execution.”
According to Scott and Mullen, “[t]he lies and deception advanced by
Christopher and [appellants] ha[d] wrought devastating harm” on Scott, and
appellants “[r]epeatedly harassed” Scott and Mullen. Appellants forced Scott and
Mullen “to incur more than $1 million in costs and attorney[’s] fees to fend off
[appellants’] knowingly frivolous claims” and “deliberately tied up [Scott]’s assets
to prevent his use and enjoyment of such assets.”
Scott and Mullen explained that the “fraudulent scheme” concocted by
appellants “came to light” when Christopher contacted Scott, who referred him to
speak to his counsel. Scott’s counsel arranged for a January 27, 2021 Zoom4 meeting
with Christopher, which was recorded. Christopher began by stating that he had
4 Zoom is a videoconferencing platform. See In re D.L.W.W., 617 S.W.3d 64, 71–73 (Tex. App.—Houston [1st Dist.] 2020, no pet.); see also United States v. Sheppard, 7 texted [Scott] and said, “you’ve got people still calling me in regards to the property in Norwood, [Colorado,] taking care of it for the realtor to show, and tax stuff for the cattle.” I . . . said, “I can’t reach you about these issues on the ranch. How do I do that?” And he said, in a very brief couple sentences, “[Y]ou know, until you do the right thing, and tell the truth, we can’t have a relationship and talk. So, you can contact my attorney if you need to get information to me.”
Christopher recounted that
this storyline [wa]s convoluted over the past couple years to say the least. But as we all know, it really began with me saying that I didn’t sign the [trust] [t]ermination [a]greement. That’s not true. I remember signing the [trust] [t]ermination [a]greement. I was clear headed. And after two years—I’m two and a half years—sober, I’ve been through a gnarly separation and custody battle. And I’ve lost the most important person, besides my daughter, in my life—is my father, because of my dishonesty and guidance from my sister.
....
[S]o, let’s start with me signing the [trust] [t]ermination [a]greement. I went to visit my father . . . in Taos. And he and [Mullen] had presented the [trust] [t]ermination [a]greement to me. All of my sibling[s’] signatures were on there. And I was pretty clear, you know, I’m not going to sign that unless everyone signs it. Well, everyone had signed it, and I was at a place in my life where I was doing well for myself. And I was standing on solid ground. And to me, my father, as I feel now, should do what he wants with his money and his investments. Whether they were in a trust, or not, at a certain point, the trust was liquidated and they had all the signatures. I don’t know what happened after that, or it being turned in, but when I went to [the bank notary] with my father, it was the final signature being added to the document.
Crim. Action No. 5:17-CR-00026-TBR, 2020 WL 6534326, at *1 (W.D. Ky. Nov. 5, 2020) (mem. op. and order).
8 Scott’s counsel asked Christopher why he was recanting his previous sworn
statement that he did not sign the trust termination agreement. Christopher explained
that after signing the trust termination agreement, he moved to Durango, Colorado.
He was “still on good terms” with Scott, but he and Mullen “had begun to have a
rocky relationship and it became tumultuous.” At that point, he “kind of was on the
outs” with Scott. Scott was “disappointed in some decisions” that Christopher had
made. So, Christopher “reached out to [Mortell]” because he had no other relatives
in Colorado and “[his] daughter ha[d] a lot of cousins” in Telluride, Colorado, where
his sister and her children lived. Christopher wanted his daughter “to have [family]
in her life.” When Christopher “contacted [Mortell], she let [him] know” that she
was in a legal dispute with Scott over some condominium properties “in [the]
Montrose [area]” of Houston, Texas. Mortell also discussed the interactions that she
had with Mullen about signing the trust termination agreement. Mortell told
Christopher that “she sent her copy signed, but the notary stamp was smudged,” and
Mullen had asked her to sign another one. Christopher recounted that when Mortell
told him that, “as greedy children do, we decided to make a plan that would place us
into a lawsuit against my father’s girlfriend” that would “hopefully clear” Mortell of
any money that she owed Scott for “some condos that she [had] worked on with
[Scott].” According to Christopher, “[t]he frivolous notion that first came up” was
based on “bad bookkeeping and probably bad timing,” which “kind of shined a light
9 that, oh look, like, we can say we didn’t sign it because it [was] not in [the notary’s]
book.” But “[i]t was signed. It just wasn’t recorded. And that’s what allowed them
to have the new attorney say that it was never signed, because there [was] no proof.”
As for Christopher, he had told the trial court that he “was notarizing a hunting
agreement” because “that’s what [his] sister [had] told [him] to say, because [he]
had already signed a document with [the same notary] that was a hunting
agreement.” Christopher remarked that
this ha[d] kind of been the story of events throughout th[e] case, [wa]s that little tiny things have fallen into place for my sister and what she calls, you know, the family lawsuit, but it’s really her and my other siblings. And these little things have kind of fallen into place to build somewhat of a case, but in reality, the case is based off of one lie.
And it spiraled far out of control. At th[at] point, I know that my father [wa]s losing a lot of things he’s cared about and worked really hard to get to at his age. And, I’ve had my own trials and tribulations at this point. And some would say they’re a lot similar to my father’s. And I want to be able to do right by what I’ve done, and if I can make things better for him, in taking back, you know, I lied. And I lied because I thought I was going to get some money. And I lied because my sister was playing buddy, buddy to me after not having talked to me for five years. And it felt good, but I’m at a point now where I’m on my feet again, and I’m stable, and I’m running my own business—like I mentioned, I’m two and a half years sober. I don’t know. I don’t want to look back—my dad’s 80 years old—I don’t want to look back and have been the reason he couldn’t enjoy the last years of his life. It’s really heavy on my heart. And if I don’t get to be a part of his life, I’ll understand that. But I don’t want to wake up in five years and him be gone, and me have been the reason he couldn’t be happy.
Christopher reflected, 10 [I] don’t expect a reconciliation with my dad after this, he’s lost a lot of money, and time, and heartache, and probably relationship issues in his home. But I lied for my siblings, and I’m not going to live with that lie the rest of my life. I haven’t spoken to anyone about this, about calling you. I haven’t even mentioned it to anybody. I don’t talk to my siblings because about seven months ago, it turned from being about my dad’s care and health, to about the money. And yeah, that was a part of it for me, but I’m the only child that had a relationship with my dad. I’m the only child he raised by himself. And it wasn’t just about the money, you know? I had a tumultuous relationship with his girlfriend, and I thought if I somehow played a part in making it bad enough, that she’d be gone, and we’d have our big happy family back. But the issue isn’t my dad and [Mullen], or me and [Mullen]. The issue is my siblings, and it always has been.
Christopher concluded,
I love my dad too much to just go on with this lie. I don’t care what happens to me, or the [t]rust, or the money. I don’t care about any of it, you know. I just want a clear [conscience] about what I put my dad through.
Scott and Mullen, in their motion for sanctions, then turned to Perry, who had
initially executed a sworn statement that he did not sign the trust termination
agreement and believed that his purported signature on the agreement had been
forged. But “less than a month after the lawsuit was filed,” Perry’s statement “was
proven to be false” by the records of the notary who “acknowledged his signature.”
Perry then recanted his sworn statement and “unequivocally admitted that his
signature was authentic and [that] he did, in fact, execute and approve the [t]rust
termination agreement.”
11 Scott and Mullen also noted that Moraw, in his original answer, had
“characterized [Mortell]’s attempts to invalidate the [trust] [t]ermination
[a]greement as not only false but sanctionable,” and he criticized Mortell’s “lack of
due diligence in bringing [her] lawsuit.” Yet nine days later, and represented by new
counsel, Moraw “withdrew his [o]riginal [a]nswer” and filed a new answer in which
he reversed course entirely, challenging the authenticity of his signature on the trust
termination agreement, “withdrawing his demand for sanctions against [Mortell]’s
frivolous claims and asserting [counter]claims against [Scott and Mullen].”
Scott and Mullen emphasized that the suit against them was “not about an
inadvertent misstatement or discovery mistake, but about a mountain of falsified
claims, outright lies, perjured testimony, and a total disregard for truth designed to
deceive” them and the trial court. They asserted that there was never “a good-faith
basis for [appellants] to allege that the [trust termination agreement] was invalid.”
Scott and Mullen requested that the trial court “issue terminating sanctions
against [appellants] and enter an order striking [appellants’] pleadings and awarding
[Scott and Mullen] all attorney[’s] fees and costs that they ha[d] incurred in th[e]
lawsuit.”
After the joint motion for sanctions was filed, Mortell non-suited her claims
against Scott and Mullen and the trustees non-suited their counterclaims against
Scott and Mullen.
12 In her response to the joint motion for sanctions, Mortell maintained that her
“claims hinged upon repeated representations by [Christopher], including at least
two instances of sworn testimony before [the trial court], that he did not sign the
[trust] [t]ermination [a]greement.” Mortell also insisted that she relied in good faith
on Christopher’s prior sworn statements in bringing her claims against Scott and
Mullen. She accused Christopher of “effectively perjur[ing] himself,” and she
asserted that she should not be punished with sanctions based on Christopher’s
misconduct.
In response to Scott and Mullen’s argument that sanctions were proper against
Mortell under Texas Rule of Civil Procedure 13,5 Mortell noted that she had included
several exhibits with her petition, including an affidavit executed by Christopher in
which he attested that he did not sign the trust termination agreement. She had
believed Christopher and that her claims were meritorious until January 27, 2021,
when she learned of Christopher’s dishonesty. Further, according to Mortell, Scott
and Mullen did not present any evidence that she had “been dishonest or malicious,
save for bare conclusory statements from Christopher, who [could not] be believed.”
Likewise, Mortell asserted that Scott and Mullen presented no evidence
affirmatively showing that her attorneys “had actual knowledge throughout the
5 See TEX. R. CIV. P. 13 (“Effect of Signing of Pleadings, Motions and Other Papers; Sanctions”).
13 course of [the] lawsuit that Christopher was lying in his [a]ffidavit” or that Mortell
and Christopher had “conspired together.”
In their response to the joint motion for sanctions, Moraw and Perry asserted
that they brought their counterclaims against Scott and Mullen in good faith reliance
on Christopher’s sworn statements that he did not sign the trust termination
agreement. On October 7, 2021, Moraw and Perry also filed a supplemental
response to the joint motion for sanctions. They noted that Christopher failed to
respond within thirty days to the request for admissions that they had served on him
September 3, 2021, in which they asked Christopher to admit that his statement in
the Zoom meeting recording that he signed the trust termination agreement was
false, and they asserted that such deemed admission bolstered the validity of his prior
sworn testimony that he did not sign the trust termination agreement.
On February 22, 2021, Scott and Mullen filed a motion for entry of a
declaratory judgment, seeking a declaratory judgment in favor of Scott and Mullen
that the trust did terminate and was no longer in existence and that the trust
termination agreement was valid and enforceable. On March 12, 2021, the trial court
granted the request for a declaratory judgment, declaring that the trust termination
agreement was valid and enforceable and was binding on all signatories thereto; the
trust was terminated and was no longer in existence; and Scott was the owner of the
property formerly held in the trust.
14 At the evidentiary hearing on Scott and Mullen’s joint sanctions motion, Scott
testified he was eighty-one years old and considered himself a “self-made man in
th[e] area of property development.” He bought the Brazoria County property
because of its “investment potential” and created the trust as “the best way” to hold
property based on his knowledge “of tax situations.” Scott had Moraw named as the
original trustee because Moraw was a longtime friend, and Scott expected that
Moraw would allow him to retain control over and make decisions about the trust
property. About twenty years after creating the trust, Scott decided to have Perry
appointed as co-trustee because Scott and Moraw were getting older, and like
Moraw, Perry would “do what [Scott] asked him to do.”
Several years later, Mullen brought to Scott’s attention a change in the tax
treatment of inheritances. Scott learned that the trust was no longer necessary to
maximize the financial benefit to his heirs. After getting a legal opinion to make
sure there would not be any tax consequences, Scott decided to terminate the trust.
In March 2018, Scott sent a letter to his children about his decision to
terminate the trust along with a copy of the trust termination agreement. The letter
was “absolutely [his] thoughts and [in his] handwriting.” One reason for terminating
the trust was his difficulty in getting Moraw and Perry to respond to time-sensitive
requests during his negotiations to sell a portion of the trust property. With the
15 copies of the trust termination agreement sent to Moraw and Perry, Scott sent
stamped return envelopes in an effort to “make it as easy as possible on [them].”
Scott was confident that Christopher signed the trust termination agreement
because he did so when he was visiting Scott and Mullen. He told Christopher that
it was “a perfect time to get [his] . . . signature” on the trust termination agreement,
and they drove to the bank, where Scott knew one of the notaries by name. They sat
down with the notary, and with Scott and the notary watching, Christopher signed
the trust termination agreement.
“[E]verything was done” as to finalizing the trust termination agreement
before summer 2018. By the time that Mortell’s suit was filed in April 2019, “no
one had said a thing” to him about the trust termination agreement for eleven months.
He saw all the allegations made in the suit, and they were “[a]ll untruths.” He saw
the claims that he was incompetent and lacked mental capacity. He “couldn’t believe
it,” and no doctor had ever concluded that.
In October 2019, Scott went to a “respected neurologist” to evaluate his
mental capacity. In his report, the neurologist concluded that Scott was “perfectly
competent to handle his own affairs” and there was “no evidence of cognitive
decline.” Scott also noted that he was still negotiating sophisticated land
transactions at the time.
16 Perry testified that Scott, who was his cousin, asked him to serve as co-trustee
of the trust in about 2011. At some point, Perry heard “that they wanted to do away
with the trust.” Mullen told him that “all of the children had agreed” to terminate
the trust.
Cameron McCulloch, an estates attorney who had previously represented
Perry in connection with another matter, sent him a proposed affidavit, which stated:
“I did not sign the [trust termination agreement], nor did I have any signature on the
[trust termination agreement] notarized.” Perry took the affidavit to a bank and
signed it. Perry conceded that the statement in the affidavit was not true, but he did
not remember reading the affidavit before signing it. And he did not know that if he
signed an untruthful statement under oath that it would constitute perjury. After a
while, Perry “started to worry” about having signed the affidavit. He was concerned
about whether he “was getting the right things out there.” He went back to the notary
to see if he was wrong. When faced with evidence that he actually had signed the
trust termination agreement, Perry recanted his affidavit statements and admitted
that he had signed the trust termination agreement.
Perry further testified that he hired Darlene Smith and Jocelyn Slater of Crain,
Caton, & James to represent him “because there were questions about the trust.”
Perry did not remember receiving the petition naming him, in his capacity as
co-trustee, as a party in Mortell’s suit.
17 Perry also testified that he served as co-trustee of the trust with Moraw for
about seven years. Each co-trustee under the trust was an independent trustee and
could act on their own, so he never had to interact with Moraw. If they did interact
during the time they were co-trustees, “it had nothing to do with the [t]rust.”
Perry noted that he was legally blind and had other health conditions and
“some memory issues.” It was difficult for him to read lengthy documents. Usually
he just tried to “get the gist” of what he was reading.
As to Christopher, Perry explained that Christopher spoke to him over the
telephone about whether he signed the trust termination agreement. Christopher told
Perry that he had not signed the document, and Perry believed him.
Lawrence Packard, an attorney, testified that he had known Moraw for “at
least [thirty] years.” During that time, he had represented Moraw in about ten to
fifteen different matters. Moraw retained Packard in 2019 to represent him in
connection with Mortell’s suit. Packard filed an answer for Moraw and then
resigned from representing Moraw. Moraw’s affidavit denying that he had signed
the trust termination agreement was dated after Packard had resigned. Packard did
not know whether Moraw reviewed the answer that Packard had filed on Moraw’s
behalf before Packard filed it, but he knew that Moraw “got a copy at some point in
time, maybe before, maybe after.”
18 Moraw testified that he was the original trustee for the trust and remained a
trustee until the trust was terminated in 2018. Moraw initially denied having signed
the trust termination agreement, but ultimately acknowledged that his signature did
appear on the agreement, although he could not explain how it got there.
After the hearing, the trial court sent a letter to the parties notifying them of
its intent to grant Scott and Mullen’s joint sanctions motion. After nearly a year
after the trial court had granted Scott and Mullen’s unopposed request for a
declaratory judgment, declaring that the trust had terminated and that Scott was the
“sole and exclusive owner” of the property formerly held by the trust, appellants
filed a motion for reconsideration of the declaratory judgment. The trial court denied
that motion.
On February 22, 2022, the trial court signed an order granting the Scott and
Mullen’s joint motion for sanctions and awarding sanctions to Scott and Mullen for
the sanctioned parties’ violations of Texas Rule of Civil Procedure 13 and Texas
Civil Practice and Remedies Code chapter 10. In its findings of fact and conclusions
of law in support of its order granting the joint motion for sanctions, the trial court
found:
• In 2018, [Scott] requested that the [t]rust be terminated and the [t]rust’s assets be distributed to him due to the changing business climate.
• Accordingly, [Scott], together with his wife, [Mullen], prepared [the trust termination agreement]. 19 • At various times in March and April of 2018, the [t]rustees, [Scott], and each of the four children signed the [t]ermination [a]greement . . . .
• Each signatory to the [t]ermination [a]greement had his or her signature acknowledged before a notary public.
• The [t]ermination [a]greement was effective on April 5, 2018.
• The allegation that [Mullen] forged the signatures on the [trust termination agreement] was included in each of the [s]anctioned [p]arties’ affirmative pleadings in th[e] lawsuit and was continued in each [a]mended [p]etition thereafter.
• The [s]anctioned [p]arties all failed to reasonably investigate the allegation of forgery.
• [Mortell] testified that she was not aware of: (i) any witness that saw [Mullen] forging a signature to the [trust termination agreement]; (ii) any photo, video, affidavit, or other document suggesting that [Mullen] forged a signature to the [trust termination agreement]; or (iii) any evidence whatsoever that she was aware of to suggest that [Mullen] forged any signatures to the [trust termination agreement].
• [Mullen] testified that [Christopher] did not verify his signature with the notary [who] attested to it before filing suit.
• [Mortell] testified that she ha[d] never been aware of any evidence of any kind that [Mullen] forged any signature to the [trust termination agreement], specifically including the signatures of [Christopher], [Perry], or [Moraw].
• [Mortell] testified that despite the fact that she was never aware of any evidence to support those allegations, she didn’t withdraw the claims because she followed what her attorneys told her to do.
20 • [Perry] testified that he was not aware of any evidence to suggest that [Mullen] ever forged any signature to the [trust termination agreement], including his own.
• [Mortell] also confirmed at the [s]anctions [h]earing that despite retaining a handwriting expert in th[e] matter, there was never any handwriting expert that was willing to testify that [Mullen] had forged or wrongfully signed any of the signatures on the [trust termination agreement].
• [Moraw] testified that the signature on the [trust termination agreement] looked like his but he had no explanation for how his signature got onto the agreement.
• [Perry] testified that he was not aware of any evidence to support the forgery claims or allegations asserted on his behalf and ha[d] never been aware of anything that would support that claim.
Further, the trial court concluded that:
• Neither the [sanctioned] parties nor the attorneys made reasonable inquiries about [Perry’s], [Moraw’s], or [Christopher’s] signatures to the trust termination agreement prior to filing the pleadings alleging forgery.
• The length of time the allegations were maintained without reasonable investigation made [Scott and Mullen] incur excessive amounts of attorney’s fees and costs.
• Good cause exist[ed] to impose sanctions because the failure to investigate the claims of misconduct involving the integrity of another resulted in pleadings that were filed in bad faith and under the facts of this case, for purposes of harassment.
• The[] sanctions [we]re just, appropriate, necessary and limited to an amount to deter similar misconduct by the [s]anctioned [p]arties and others who learn of the issued sanctions.
21 The trial court also considered Scott’s request for $657,307.64 in attorney’s
fees and expenses as well as Mullen’s request for $1,919,522.62 in attorney’s fees
and expenses as sanctions. The trial court found that “[t]he fees charged by
[Mullen’s attorneys] [we]re not reasonable rates for Brazoria County” and that “[t]he
affidavits of [Scott’s attorneys] correctly reflect[ed] a reasonable rate in Brazoria
County . . . of $475 an hour based on their experience.”
Based on its findings of fact and conclusions of law, the trial court found that
Scott was entitled to recover $38,997.50 in sanctions and $54,755.00 in sanctions as
partial payment of his attorney’s fees. As to Mullen, the trial court found that she
was entitled to recover $160,977.00 in attorney’s fees as sanctions “as partial
payment of her attorney’s fees.” The trial court also awarded Scott and Mullen
conditional appellate attorney’s fees.
In its final judgment, the trial court ordered that Scott recover reasonable and
necessary attorney’s fees in the amount of $40,000.00 against Mortell and
reasonable and necessary attorney’s fees and expenses in the amount of $5,000.00
against both Moraw and Perry for defending against the declaratory judgment claims
in the suit asserted by Mortell, and “under the discretionary provisions of [Texas
Property Code section 114.064] and [Texas Civil Practices and Remedies Code
section 37.009].” As to Mullen, the trial court likewise ordered that she recover
attorney’s fees of $40,000.00 against Mortell and reasonable and necessary
22 attorney’s fees and expenses in the amount of $5,000.00 against both Moraw and
Perry for defending against the declaratory judgment claims in the suit asserted by
Mortell, and “under the discretionary provisions of [Texas Property Code section
114.064] and [Texas Civil Practices and Remedies Code section 37.009].” And the
trial court awarded both Scott and Mullen conditional appellate attorney’s fees.
Finally, the trial court ordered that appellants take nothing on their claims and
counterclaims against Scott and Mullen.
Sanctions
In their first and third issues, appellants argue that the trial court erred in
granting the joint sanctions motion filed by Scott and Mullen and in failing to grant
appellants’ request for jury trial because appellants’ pleadings were brought in good
faith, Christopher was the one who engaged in misconduct, and a jury should have
decided whether Christopher signed the trust termination agreement.
A trial court may be authorized to impose sanctions against a party or a party’s
attorney by rule, statute, or its inherent authority. See, e.g., TEX. R. CIV. P. 13; TEX.
CIV. PRAC. & REM. CODE ANN. §§ 10.001–.006; Phillips v. Am. Bankers Ins. Co. of
Fla., No. 01-18-00375-CV, 2019 WL 3121856, at *7 (Tex. App.—Houston [1st
Dist.] July 16, 2019, pet. denied) (mem. op.) (“A trial court possesses the inherent
authority to impose sanctions for a bad faith abuse of the judicial process even when
the specific conduct is not covered by a rule or statute.”). We review a trial court’s
23 order denying sanctions for an abuse of discretion. See Am. Flood Research, Inc. v.
Jones, 192 S.W.3d 581, 583 (Tex. 2006); Am. Fisheries, Inc. v. Nat’l Honey, Inc.,
585 S.W.3d 491, 506 (Tex. App.—Houston [1st Dist.] 2018, pet. denied). We may
reverse the trial court’s ruling on a motion for sanctions only if the trial court acted
without reference to any guiding rules and principles, such that its ruling was
arbitrary or unreasonable. See Am. Flood Research, 192 S.W.3d at 583; Am.
Fisheries, 585 S.W.3d at 506. The trial court does not abuse its discretion if it bases
its decision on conflicting evidence and some evidence supports its decision.
Unifund CCR Partners v. Villa, 299 S.W.3d 92, 97 (Tex. 2009); Am. Fisheries, 585
S.W.3d at 506.
A trial court may impose sanctions under Texas Rule of Civil Procedure 13 if
a party or a party’s attorney files a pleading that is groundless and that is brought in
bad faith or for the purpose of harassment. See TEX. R. CIV. P. 13; Am. Fisheries,
585 S.W.3d at 506. “Groundless” means “no basis in law or fact and not warranted
by good faith argument for the extension, modification, or reversal of existing law.”
TEX. R. CIV. P. 13 (internal quotations omitted). “To determine if a claim is
groundless, the trial court must objectively ask whether the party and [its] counsel
made a reasonable inquiry into the legal and factual basis of the claim at the time the
[pleading] in question was filed.” WWW.URBAN.INC. v. Drummond, 508 S.W.3d
657, 676 (Tex. App.—Houston [1st Dist.] 2016, no pet.). The court determines
24 whether the party and its counsel made a reasonable inquiry into the legal and factual
basis of the claim by considering the circumstances that existed when the pleading
was filed. Id. “Bad faith” means “the conscious doing of a wrong for dishonest,
discriminatory, or malicious purposes.” Thielemann v. Kethan, 371 S.W.3d 286,
294 (Tex. App.—Houston [1st Dist.] 2012, pet. denied). “Improper motive is an
essential element of bad faith.” Gomer v. Davis, 419 S.W.3d 470, 478 (Tex. App.—
Houston [1st Dist.] 2013, no pet.). “Bad faith does not exist when a party merely
exercises bad judgment or is negligent.” Thielemann, 371 S.W.3d at 294. “To
‘harass’ means to annoy, alarm, and verbally abuse another person.” Id. Whether a
party or its counsel acted in bad faith or for the purpose of harassment is also
determined in reference to the circumstances that existed when the pleading was
filed. Drummond, 508 S.W.3d at 676.
Notably, a court is to presume that “pleadings, motions and other papers are
filed in good faith.” TEX. R. CIV. P. 13. And the party moving for sanctions bears
the burden of overcoming that presumption. Am. Fisheries, 585 S.W.3d at 506. The
trial court’s decision to impose sanctions under Texas Rule of Civil Procedure 13 is
discretionary. Manning v. Enbridge Pipelines (E. Tex.) L.P., 345 S.W.3d 718, 728–
29 (Tex. App.—Beaumont 2011, pet. denied).
Like Texas Rule of Civil Procedure 13, Texas Civil Practice and Remedies
Code chapter 10 allows the trial court to sanction a party or a party’s attorney for
25 filing a motion or pleading with an improper purpose or that lacks legal or factual
support. Nath v. Tex. Children’s Hosp., 446 S.W.3d 355, 362 (Tex. 2014);
Beddingfield v. Beddingfield, No. 10-15-00344-CV, 2018 WL 6378553, at *15 (Tex.
App.—Waco Dec. 5, 2018, pet. denied) (mem. op.). Specifically, Texas Civil
Practice and Remedies Code section 10.001 provides, in pertinent part:
The signing of a pleading or motion as required by the Texas Rules of Civil Procedure constitutes a certificate by the signatory that to the signatory’s best knowledge, information, and belief, formed after reasonable inquiry:
(1) the pleading or motion is not being presented for any improper purpose, including to harass or to cause unnecessary delay or needless increase in the cost of litigation;
(2) each claim, defense, or other legal contention in the pleading or motion is warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law;
(3) each allegation or other factual contention in the pleading or motion has evidentiary support, or for a specifically identified allegation or factual contention, is likely to have evidentiary support after a reasonable opportunity for further investigation or discovery; and
(4) each denial in the pleading or motion of a factual contention is warranted on the evidence or, for a specifically identified denial, is reasonably based on a lack of information or belief.
TEX. CIV. PRAC. & REM. CODE ANN. § 10.001. Thus, a trial court may impose
sanctions on a party or the party’s signatory for a violation of one of the statutory
26 provisions in section 10.001.6 See id. § 10.004 (“A court that determines that a
person has signed a pleading or motion in violation of [s]ection 10.001 may impose
a sanction on the person, a party represented by the person, or both.”); see also id.
§ 10.002 (“A party may make a motion for sanctions, describing the specific conduct
violating [s]ection 10.001.”). The party moving for sanctions under Texas Civil
Practice and Remedies Code chapter 10 has the burden to prove the pleading party’s
subjective state of mind, and the same presumption that “pleadings, motions and
other papers are filed in good faith” applies. See Drummond, 508 S.W.3d at 675;
see also GTE Commc’ns Sys. Corp. v. Tanner, 856 S.W.2d 725, 731 (Tex. 1993)
(trial court presumes parties and their counsel file all papers in good faith, and party
seeking sanctions must overcome that presumption). The trial court’s decision to
impose sanctions under chapter 10 is entirely discretionary. Manning, 345 S.W.3d
at 728.
Appellants assert that the evidence showed that they believed Christopher’s
repeated statements that he did not sign the trust termination agreement and that
Scott and Mullen presented no evidence that Mortell or Moraw and Perry were
6 The trial court “may not award monetary sanctions against a represented party” for making an unwarranted or frivolous legal contention in contravention of Texas Civil Practice and Remedies Code section 10.001(2). See TEX. CIV. PRAC. & REM. CODE ANN. § 10.004(d).
27 motivated by dishonest, discriminatory, or malicious purposes. We disagree. At
best, the evidence raises a genuine dispute about the motives of appellants.
Mortell stated that she believed Christopher was untrustworthy and knew him
to be untruthful, yet she admitted that she took no steps before filing suit to
investigate whether Christopher had signed the trust termination agreement. Moraw
denied having signed the trust termination agreement, but he had no explanation for
how his signature came to appear on the agreement, and he admitted that the
signature on the trust termination agreement looked like his signature. And Perry,
who had initially denied having signed the trust termination agreement, came to
admit after looking into the notary records that he actually did sign it. Further,
Mortell, Moraw, and Perry had no facts to support their allegations of misconduct
against Mullen. The evidence thus supports the trial court’s finding that “that neither
the [sanctioned] parties nor the attorneys made reasonable inquiries about” the
signatures to the trust termination agreement before they filed pleadings alleging that
Mullen had committed forgery.
Appellants also assert that Christopher’s statements recorded during the Zoom
meeting, which were “the sole basis for awarding sanctions,” were inadmissible
hearsay and thus could not support sanctions against them.
The Texas Rules of Evidence generally define “[h]earsay” as a statement that
“the declarant does not make while testifying at the current trial or hearing” that “a
28 party offers in evidence to prove the truth of the matter asserted in the statement.”
TEX. R. EVID. 801(d) (internal quotations omitted). Whether hearsay is inadmissible
depends on numerous factors, and many exceptions allow its admission at trial. See
id. 803, 804. Pertinent here, the statement against interest exception to the hearsay
rule provides that a statement is not excluded by the rule against hearsay if it is a
statement that “a reasonable person in the declarant’s position would have made only
if the person believed it to be true because, when made, it was so contrary to the
declarant’s proprietary or pecuniary interest or had so great a tendency to invalidate
the declarant’s claim against someone else or to expose the declarant to civil or
criminal liability or to make the declarant an object of hatred, ridicule, or disgrace.”
Id. 803(24)(A).
Here, Christopher’s statement was against his pecuniary interest because it
extinguished any possibility of his recovery in the lawsuit as a contingent beneficiary
of the trust. See Keeney v. Williams, No. 07-19-00374-CV, 2020 WL 5267568, at
*4 (Tex. App.—Amarillo Sept. 3, 2020, no pet.) (mem. op.) (statement forgoing
property interest was against pecuniary interest); Leigh v. Weiner, 679 S.W.2d 46,
49 (Tex. App.—Houston [14th Dist.] 1984, no pet.) (same). And Christopher’s
recantation of his prior sworn statements in which he had denied having signed the
trust termination agreement also exposed him to charges of perjury. See Robinson
v. Harkins & Co., 711 S.W.2d 619, 621 (Tex. 1986). Thus, Christopher’s statement
29 during the Zoom meeting falls within the exception to the hearsay rule set forth in
Texas Rule of Evidence 803(24)(A).
Appellants also rely on the argument they made in their supplemental
response to Scott and Mullen’s joint sanctions motion that Christopher’s failure to
respond to their request for admissions, including a request that he admit that his
Zoom statement that he did sign the trust termination agreement was false and his
prior sworn statements that he did not sign the trust termination agreement was true,
meant that the trial court was required to consider them as having conclusively
established those deemed admissions as facts. But deemed admissions apply only
against the party making the admission; they are not admissible against third parties,
like Scott and Mullen. See Cartwright v. MBank Corpus Christi, N.A., 865 S.W.2d
546, 550 (Tex. App.—Corpus Christi-Edinburg 1993, no writ); see also TEX. R. CIV.
P. 169(2); USX Corp. v. Salinas, 818 S.W.2d 473, 479 (Tex. App.—San Antonio
1991, writ denied) (“[I]t is well settled that deemed admissions resulting from one
defendant’s failure to respond to the requests may not be imputed to a co-defendant
nor are they binding upon the latter due to their hearsay nature.”). Because the
deemed admissions did not apply to Scott and Mullen, the trial court did not err in
declining to consider them as a basis for denying the joint sanctions motion.
Further, appellants assert that Christopher’s statement during the Zoom
meeting, which contradicted his prior sworn statements about whether he signed the
30 trust termination agreement, created a fact issue a that should have been resolved in
a jury trial. We note that appellants did not file their request for a jury trial and
motion for reconsideration until long after the trial court had granted Scott and
Mullen’s unopposed request for declaratory judgment and after the trial court had
sent the parties a letter informing them of its intent to grant the joint sanctions
motion. Under these circumstances, the trial court had the discretion to deny the
request for jury trial and motion for reconsideration solely for the purpose of
managing its docket. See Dow Chem. Co. v. Francis, 46 S.W.3d 237, 240 (Tex.
2001) (trial courts have “inherent power to control the disposition of cases with
economy of time and effort for itself, for counsel, and for litigants.” (internal
quotations omitted)); see also TEX. R. CIV. P. 216 (civil litigant entitled to jury trial
only if “a written request for a jury trial is filed with the clerk of the court a
reasonable time before the date set for trial”).
Appellants also complain about the trial court’s denial of their belated request
for a jury trial on the issue of attorney’s fees based on the trial court’s finding that
the parties had agreed to try attorney’s fees by affidavit.7 The trial court’s finding is
grounded in a discussion held in open court on October 8, 2021, in which Mullen’s
attorney noted that Mullen had a pending motion for attorney’s fees “under the
7 To the extent appellants raise this as a separate issue, we consider and dispose of it as part of their third issue, which also complains about the trial court’s refusal to grant their request for a jury trial.
31 [Texas] Declaratory Judgment Act and some other provisions.” The trial court then
asked whether the parties could “do [their] attorney[’s] fees by affidavit.” Mullen’s
attorney and Scott’s attorney both responded that they agreed to present the
attorney’s fees by affidavit. Moraw and Perry’s attorney was present at the hearing
but did not respond. The trial court asked if there were “any objections” to
presenting attorney’s fees by affidavit, and Mortell’s attorney responded that Mortell
was “going to have objections to the fees, the amounts, the reasonableness, all that,”
but could “do it by affidavit if [the trial court] want[ed] [them] to.” After Scott and
Mullen filed their fee requests, accompanied by the attorney’s fee affidavits,
appellants filed various objections in response, but they did not object to the
submission of the affidavits or request a jury trial on attorney’s fees at that time.
Again, appellants did not file a request for jury trial until after the trial court sent the
parties a letter indicating its intent to grant the motion for sanctions and the amount
of attorney’s fees that it intended to award Scott and Mullen. The same docket
management rationale that applied to the rest of the proceeding makes this issue
unavailing. See Dow Chem. Co., 46 S.W.3d at 240. Further, because appellants did
not timely object to the trial court’s proposal that the attorney’s fees be tried by
affidavit and acquiesced to the mode of presentation by responding to the fee
requests without opposing such proposal, they waived any complaint about the trial
court’s finding that they agreed to try the issue of attorney’s fees by affidavit. See
32 Aguiar v. Segal, 167 S.W.3d 443, 451 (Tex. App.—Houston [14th Dist.] 2005, pet.
denied) (waiver can be established by a party’s express renunciation of a known
right or by “silence or inaction for so long a period as to show an intention to yield
the known right.”); see also TEX. R. CIV. P. 216 (civil litigant entitled to jury trial
only if “a written request for a jury trial is filed with the clerk of the court a
reasonable time before the date set for trial”); TEX. R. APP. P. 33.1 (preservation of
error for appellate review requires appellant to make timely request or objection in
trial court).
Based on the foregoing, we hold that trial court did not err in granting the joint
sanctions motion filed by Scott and Mullen and in failing to grant appellants’ request
for a jury trial.
We overrule appellants’ first and third issues.
Attorney’s Fees
In their second and fourth issues, appellants assert that the trial court erred in
awarding Scott and Mullen attorney’s fees. In their sole issue on cross-appeal, Scott
and Mullen assert that the trial court erred in not awarding “the full amount” of
attorney’s fees.
We review a trial court’s award of attorney’s fees for an abuse of discretion.
See Fort Worth Transp. Auth. v. Rodriguez, 547 S.W.3d 830, 850 (Tex. 2018). A
trial court abuses its discretion when it acts in an arbitrary or unreasonable manner
33 without reference to guiding rules or principles. See Hill v. Shamoun & Norman,
LLP, 544 S.W.3d 724, 742 (Tex. 2018); Samlowski v. Wooten, 332 S.W.3d 404, 410
(Tex. 2011). Under this standard, we cannot reverse the trial court’s award merely
because we would have awarded a different amount of fees. See Samlowski, 332
S.W.3d at 410 (noting abuse of discretion standard of review insulates trial court’s
reasonable decisions from appellate second-guessing). “Further, courts are free to
look at the entire record, the evidence presented on reasonableness, the amount in
controversy, the common knowledge of the participants as lawyers and judges, and
the relative success of the parties to determine a reasonable fee.” McMahon v.
Zimmerman, 433 S.W.3d 680, 693 (Tex. App.—Houston [1st Dist.] 2014, no pet.);
see also Santos v. Tex. Enters., Inc., No. 03-09-00579-CV, 2010 WL 4054479, at *2
(Tex. App.—Austin Oct. 15, 2010, no pet.) (mem. op.).
Texas follows the lodestar method to determine the amount of an award of
attorney’s fees.8 Rohrmoos Venture v. UTSW DVA Healthcare, LLP, 578 S.W.3d
8 The lodestar method is a shorthand version of the Arthur Andersen factors that a fact finder should consider when determining the reasonableness of a fee. See Rohrmoos Venture v. UTSW DVA Healthcare, LLP, 578 S.W.3d 469, 496 (Tex. 2019) (citing Arthur Andersen & Co. v. Perry Equip. Corp., 945 S.W.2d 812, 818 (Tex. 1997) (listing factors as (1) time and labor required, novelty and difficulty of questions involved, and skill required to perform legal service properly; (2) likelihood that acceptance of particular employment will preclude other employment by lawyer; (3) fee customarily charged in locality for similar legal services; (4) amount involved and results obtained; (5) time limitations imposed by client or by circumstances; (6) nature and length of professional relationship with client; (7) experience, reputation, and ability of lawyer or lawyers performing 34 469, 496 (Tex. 2019). The lodestar method requires the fact finder to determine
reasonable attorney’s fees by first determining the reasonable hours spent by counsel
in the case and the reasonable hourly rate for counsel’s work. See El Apple I, Ltd. v.
Olivas, 370 S.W.3d 757, 760 (Tex. 2012). The fee claimant must provide sufficient
evidence of both the reasonable hours worked and the reasonable hourly rate.
Rohrmoos, 578 S.W.3d at 498. Sufficient evidence includes, at a minimum,
evidence of (1) the nature of the work performed, (2) who performed those services,
(3) approximately when the services were performed, (4) the reasonable amount of
time required to perform the services, and (5) the reasonable hourly rate for each
person performing such services. See id.; see also City of Laredo v. Montano, 414
S.W.3d 731, 736 (Tex. 2013) (“In El Apple, we said that a lodestar calculation
requires certain basic proof, including itemizing specific tasks, the time required for
those tasks, and the rate charged by the person performing the work.”). The fee
claimant must establish the reasonableness and necessity of its requested fees.
Rohrmoos, 578 S.W.3d at 488.
A. Amount of Attorney’s Fees Awarded as Sanctions
In their second issue, appellants argue that the trial court erred in awarding
Scott and Mullen a portion of their attorney’s fees as sanctions because Scott and
services; and (8) whether fee is fixed or contingent on results obtained or uncertainty of collection before legal services have been rendered)).
35 Mullen did not prove that the requested fees were reasonable and necessary. In their
sole issue on cross-appeal, Scott and Mullen argue that the trial court erred in
awarding them attorney’s fees because it only awarded them a small portion of the
attorney’s fees they incurred. We consider these issues in turn.
Appellants specifically assert that Scott and Mullen did not properly segregate
their fees related to their joint sanctions motion and the declaratory-judgment claim
from other work in the case, and they accuse Scott and Mullen’s attorney’s-fee
evidence of failing to segregate work in connection with defending against Moraw
and Perry’s counterclaims or sanctionable conduct from work defending against
Mortell’s claims or addressing her sanctionable conduct and of “block billing.”9
Appellants, though, provide no record citations or analysis of pertinent authority to
support their arguments. To assert an issue on appeal, an appellant’s brief “must
contain a clear and concise argument for the contentions made, with appropriate
citations to authorities.” TEX. R. APP. P. 38.1(i). An appellant waives an issue on
appeal if he does not adequately brief that issue by providing supporting arguments,
substantive analysis, and appropriate citations to authorities and the record. See id.;
Marin Real Estate Partners, L.P. v. Vogt, 373 S.W.3d 57, 75 (Tex. App.—San
9 “Block billing” refers to a practice of including multiple tasks in a single billing time entry. Lederer v. Lederer, No. 14-21-00012-CV, 2022 WL 11551156, at *7 (Tex. App.—Houston [14th Dist.] Oct. 20, 2022, no pet.) (mem. op.). It “is generally disfavored, particularly in federal court, because it can make meaningful review of attorney’s fees difficult.” Id.
36 Antonio 2011, no pet.); Huey v. Huey, 200 S.W.3d 851, 854 (Tex. App.—Dallas
2006, no pet.); Cervantes-Peterson v. Tex. Dep’t of Fam. & Protective Servs., 221
S.W.3d 244, 255 (Tex. App.—Houston [1st Dist.] 2006, no pet.); see also Fredonia
State Bank v. Gen. Am. Life Ins. Co., 881 S.W.2d 279, 284–85 (Tex. 1994). “Only
when [the Court is] provided with proper briefing may [it] discharge [its]
responsibility to review the appeal and make a decision that disposes of the appeal
one way or the other.” Bolling v. Farmers Branch Indep. Sch. Dist., 315 S.W.3d
893, 895 (Tex. App.—Dallas 2010, no pet.). Accordingly, we hold that appellants
waived their second issue due to inadequate briefing.
In considering Scott and Mullen’s sole issue on cross-appeal, we note that
“[w]hen a party seeks attorney’s fees as sanctions, the burden is on that party to put
forth some affirmative evidence of attorney’s fees incurred and how those fees
resulted from the sanctionable conduct.” CHRISTUS Health Gulf Coast v. Carswell,
505 S.W.3d 528, 540 (Tex. 2016). As to determining what Scott and Mullen were
entitled to recover, Scott and Mullen assert that the attorney’s-fee evidence that they
provided to the trial court satisfied the “strong presumption” that the full amount of
the requested fees under the base lodestar calculation was reasonable. In
determining the appropriate fee award as sanctions, though, the trial court was also
tasked with determining the extent to which the sanctioned parties acted in bad faith.
The trial court explicitly recognized that “[o]bviously not all the attorneys’ time was
37 spent on the cause of action found to be filed in bad faith” and reduced “the total
fees awarded . . . accordingly.” It also limited the sanctions it imposed to an amount
necessary “to deter similar misconduct by the [s]anctioned [p]arties and others who
learn of the issued sanctions.”
We cannot say that the trial court erred in determining that only a portion of
the attorney’s fees requested by Scott and Mullen was appropriate to sanction the
misconduct that it found appellants had committed. See Thielemann, 371 S.W.3d at
294 (bad faith does not exist when party merely exercises bad judgment or is
negligent). Thus, we hold that the trial court did not err in determining the amount
of attorney’s fees awarded to Scott and Mullen as sanctions.
We overrule Scott and Mullen’s sole issue on cross-appeal.
B. Attorney’s Fees under the Texas Declaratory Judgment Act and Texas Theft Act
In their fourth issue, appellants argue that the trial court erred in awarding
Mullen her attorney’s fees for her claims under the Texas Declaratory Judgment Act
and the Texas Trust Act because the trial court also found that Mullen lacked
statutory standing to pursue those claims.
Mullen’s standing, though, is not a criterion that the trial court was required
to consider in determining whether she was entitled to recover her attorney’s fees
under the Texas Declaratory Judgment Act. See TEX. CIV. PRAC. & REM. CODE ANN.
§ 37.009 (“In any proceeding under this chapter, the court may award costs and 38 reasonable and necessary attorney’s fees as are equitable and just.”); see also TEX.
PROP. CODE ANN. § 114.064(a) (“In any proceeding under this code the court may
make such award of costs and reasonable and necessary attorney’s fees as may seem
equitable and just.”). Appellants do not identify any authority to support their
assertion, and Texas courts, including our own, have allowed for recovery under
comparable circumstances. See, e.g., Feldman v. KPMG LLP, 438 S.W.3d 678,
685–86 (Tex. App.—Houston [1st Dist.] 2014, no pet.) (“[W]e conclude that the trial
court had the power to award attorney’s fees [to defendants] under [Texas Civil
Practice and Remedies Code] [s]ection 37.009 even though it had dismissed
[plaintiff’s] claim for declaratory relief for lack of jurisdiction.”).
Whether Mullen had statutory standing thus does not affect her entitlement to
attorney’s fees under the Texas Declaratory Judgment Act or the Texas Trust Act.
Thus, we hold that the trial court did not err in awarding Mullen her fees under those
statutes.
We overrule appellants’ fourth issue.
39 Conclusion
We affirm the judgment of the trial court.
Julie Countiss Justice
Panel consists of Chief Justice Adams and Justices Hightower and Countiss.