Eureka Holdings Acquisitions, L.P. v. Marshall Apartments, LLC

Opinion

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

NO. 03-21-00442-CV

Eureka Holdings Acquisitions, L.P., Appellant

v.

Marshall Apartments, LLC, Appellee

FROM THE 53RD DISTRICT COURT OF TRAVIS COUNTY, NO. D-1-GN-16-005630, THE HONORABLE MAYA GUERRA GAMBLE, JUDGE PRESIDING

MEMORANDUM OPINION

Appellant Eureka Holdings Acquisitions, L.P. (Eureka) appeals from the trial

court’s judgment in a case arising from Eureka’s twice-failed real-estate transaction with Appellee

Marshall Apartments, LLC, (Marshall) concerning the sale of government-sponsored housing in

Austin, Texas. Eureka contends that the trial court erred by (1) dismissing Eureka’s

breach-of-contract claim; (2) dismissing Eureka’s promissory-estoppel claim; (3) failing to dismiss

Marshall’s breach-of-contract counterclaim; and (4) awarding attorneys’ fees to Marshall’s

counsel, counsel’s law firm (together, the Counsel Defendants), and Marshall; and failing to award

attorneys’ fees to Eureka. We affirm the judgment.

BACKGROUND

In December 2015, Marshall entered into a contract (Original Contract) to sell a

government-sponsored apartment complex to Eureka. The Original Contract included conditions precedent to closing the sale because the property was covered by a Section-8 Housing Assistance

Payment Contract (HAP Contract) and a loan agreement with Austin Housing Financial

Corporation (AHFC Loan).

One of the material conditions of closing required Eureka to apply for and obtain

“Assumption Approval” of the government-backed loans binding Marshall to the property within

one hundred days of the Effective Date of the Original Contract.1 As defined in the Original

Contract, “Assumption Approval” required Eureka to (1) assume the AHFC loan, which occurred

when the City of Austin and any servicer “executed and delivered written approval to consummate

the assumption of the [l]oan,” and (2) obtain “written approval from HUD [Housing and Urban

Development] for the assignment of the HAP Contract.”

If Eureka did not obtain Assumption Approval within the Assumption Approval

Period that expired one hundred days after the Effective Date, Marshall could terminate the

contract based upon Eureka’s not obtaining a material condition of the closing. Paragraph 4.2 of

the Original Contract, “Seller’s Conditions to Closing,” provides that Marshall’s obligation to

close with respect to conveyance of the property “shall be subject to and conditioned upon the

fulfillment of” the “condition precedent” that “[a]ll of the documents and funds required to be

delivered by [Eureka] to [Marshall] at the Closing pursuant to the terms and conditions hereof shall

have been delivered;” and “[t]he Assumption Approval has been obtained.” Paragraph 4.1

likewise provides that Eureka’s obligation as purchaser to close “shall be subject to and

conditioned upon the fulfillment of” the “condition[] precedent” that “[t]he Assumption Approval

1 The Original Contract defines the Effective Date as the latest date of execution by the Seller or Purchaser as indicated on the signature page.

2 has been obtained.” Finally, the paragraph titled “Failure or Waiver of Conditions Precedent”

states that

[i]n the event any of the conditions set forth in Paragraphs 4.1 or 4.2 are not fulfilled or waived, the party benefitted by such conditions may, by written notice to the other party, terminate this Contract, whereupon all rights and obligations hereunder of each party shall terminate except those that expressly survive any termination.

If Eureka terminated the Original Contract prior to the expiration of the Assumption Approval

Period, which expired one hundred days after the Effective Date, Eureka could seek return of the

Earnest Money. If the Original Contract was terminated after this time, the Earnest Money was

owed to Marshall.

In April 2016, after the Assumption Approval period had expired, Marshall notified

Eureka that Eureka had breached its obligations by failing to obtain Assumption Approval. Two

weeks later, Eureka filed a lawsuit in Dallas County, seeking a declaratory judgment that Eureka

did not breach the Original Contract and specific performance compelling Marshall to sell

the property. After Marshall answered, filed a counterclaim, and moved to transfer venue,

the lawsuit was transferred to Travis County. Marshall thereafter filed a motion for partial

summary judgment.

Before the trial court ruled on the motion for partial summary judgment, Marshall

and Eureka entered into a Settlement Agreement and Release (Settlement Agreement). Pursuant

to the section of the Settlement Agreement labeled “Mutual Release and Covenant Not To Sue,”

Marshall and Eureka agreed to “release and forever discharge one another” from

any and all claims, suits, actions, liabilities, damages, costs or losses of any kind whatsoever, known or unknown, in law, in equity, or otherwise, . . . including but not limited to those arising under state, federal, or other law, that the Parties ever had, now have or hereafter can, shall, or may have, in the U.S. or any other

3 jurisdiction, arising from or relating in any way to any act or omission of the Parties (or any of them) directly or indirectly concerning the Real Estate Contract, occurring at any time prior to the date on which this Settlement Agreement is executed by all Parties (hereinafter the “Released Claims”).

Marshall and Eureka also entered into an Amended and Restated Real Estate

Contract (Amended Contract) on November 28, 2017, for the property sale. The Amended

Contract contained the same Assumption Approval requirements, conditions precedent, and

termination rights as those previously described in the Original Contract.2 Just like the Original

Contract, the Amended Contract required Eureka to obtain Assumption Approval within one

hundred days of signing the agreement as a condition of closing. The Amended Contract also

defined the closing date as “not later than the last to occur of”:

(i) thirty (30) days after Purchaser’s receipt of the Assumption Approval [which includes assumption of the AHFC loan] . . .;

(ii) thirty (30) days after Purchaser’s receipt of the amendments to the Caritas Agreement . . .;3 [or]

(iii) one hundred twenty (120) days after the Effective Date . . .

2 The Purchase Price in the Original Contract was $8,364,000.00, and the Purchase Price in the Amended Contract was $9,500,000.00. Both contracts required $250,000.00 as an initial deposit under the Earnest Money paragraphs. 3 Marshall’s sale of the property to Eureka was subject to Caritas of Austin Partnership Housing, LLC’s right of first refusal because of a pre-existing agreement that Marshall had entered into with Caritas (Caritas Agreement). Marshall was thus contractually required to confirm that (1) Caritas would not exercise its right of first refusal to purchase the property; and (2) the Caritas Agreement would be amended to delete Caritas’ right of first refusal effective as of the date of Eureka’s Closing. The Caritas Agreement was amended in November 2017 when Marshall and Eureka entered into the Settlement Agreement and again in on March 9, 2018.

4 Eureka could extend the closing date for a period of up to twenty days upon written notice to

Marshall at least five days prior to the date set for closing; but only if Eureka released to Marshall

“a portion of the Earnest Money equal to $125,000.00.” The Amended Contract “embodie[d] the

entire agreement between the parties” and could be “amended or supplemented only by an

instrument in writing executed by the parties.”

On April 6, 2018, Marshall notified Eureka that Marshall had not received either

(1) a closing date and proof that Eureka had obtained Assumption Approval or (2) five days’

written notice seeking an extension of the closing date and the $125,000.00 in earnest money

required for an extension. Marshall explained that the Effective Date of the Amended Contract

was November 27, 2017. Pursuant to contractual terms, the closing was to occur not later than the

last of: (i) thirty days after Eureka’s receipt of Assumption Approval, (ii) thirty days after Eureka’s

receipt of the amendments to the Caritas Agreement, or (iii) one hundred and twenty days after the

Effective Date of the Amended Contract. Marshall explained that the Assumption Approval

Period was limited to one hundred days after the Effective Date, and thirty days after this date fell

on April 7, 2018. Marshall stated that the Caritas Agreement was amended on March 9, 2018, and

thirty days after this date fell on April 8, 2018. Finally, Marshall explained that one hundred and

twenty days after the Effective Date fell on March 28, 2018. Marshall informed Eureka that,

because April 9, 2018, was the latest possible closing date of the Amended Contract, Eureka must

notify Marshall in writing no later than 5:00 p.m. on April 9, 2018, if Eureka intended to extend

the closing date under the contract’s terms. Marshall stated that if Eureka did not intend to extend

the closing date, the Amended Contract would terminate pursuant to its terms. Eureka did not

notify Marshall by the deadline.

5 After the deadline passed, Eureka proposed offers of alternative terms to Marshall

that included extending contract terms with a lesser amount of earnest money. Eureka

acknowledged that it could not obtain Assumption Approval, so Eureka attempted to negotiate

terms that would permit Eureka to pay off the AHFC loan rather than assume it. The parties did

not reach an agreement.

Eureka thereafter filed a third amended petition in the same 2016 lawsuit it had

agreed to dismiss under the Settlement Agreement. Eureka sought rescission of the Settlement

Agreement and of the Amended Contract and a declaratory judgment and specific performance

compelling Marshall to sell the property under a contract “equitably reformed.” Eureka also

asserted various tort claims against Marshall. Marshall answered Eureka’s third amended petition

and asserted counterclaims, including breach of contract, breach of settlement agreement, and

tortious interference. Marshall submitted with its answer: (1) the Settlement Agreement that

released all parties from all claims directly or indirectly related to the Original Contract; (2) the

Amended Contract, and argument that Eureka failed to comply with Paragraph 2.10.5 and timely

obtain Assumption Approval; and (3) the April 6, 2018 notification that Marshall sent to Eureka.

Eureka moved to dismiss Marshall’s first amended counterclaim under the Texas Citizens

Participation Act (TCPA).

Marshall moved for summary judgment on all claims in Eureka’s fourth amended

petition.4 Marshall argued that Eureka breached the Amended Contract by failing to timely obtain

Assumption Approval and failing to timely close the transaction. Marshall stated that it informed

4 Marshall filed a traditional motion for summary judgment on Eureka’s third amended petition. In response to Marshall’s motion for summary judgment, Eureka filed a fourth amended petition that added a business disparagement claim. Marshall thereafter amended its summary-judgment motion and sought to dismiss Eureka’s fourth amended petition.

6 Eureka on April 6, 2018, that the Amended Contract would terminate on April 9, 2018, and Eureka

did not release earnest money to extend the Amended Contract. Finally, Marshall maintained that

Eureka released Marshall from alleged liability concerning communications that purportedly

concerned the sale of the property when Eureka executed the Settlement Agreement.

In July 2019, the trial court conducted a hearing on Marshall’s amended motion for

summary judgment on Eureka’s fourth amended petition. That same day, the trial court denied

Eureka’s TCPA motion to dismiss as to all counterclaims except Marshall’s tortious-interference

counterclaim, which the trial court ordered dismissed with prejudice. Eureka informed the trial

court that it would “not appeal the Dismissal Order” denying in part Eureka’s TCPA motion to

dismiss Marshall’s counterclaims, although Eureka stated that it retained the “procedural right to

appeal” the “order setting the amount of attorney’s fees and sanctions.” The trial court

subsequently conducted a fee hearing on Eureka’s TCPA motion and ordered Marshall to pay

attorneys’ fees, costs, and sanctions associated with its tortious-interference counterclaim. Eureka

thereafter filed a notice of interlocutory appeal of the of the trial court’s order denying in part its

TCPA motion to dismiss Marshall’s counterclaims.

On August 6, 2019, Eureka filed a motion for leave to supplement the

summary-judgment record. On August 16, 2019, the trial court granted Marshall’s amended

motion, awarding Marshall a summary judgment on all of Eureka’s claims in the fourth amended

petition. The trial court also denied all requests for affirmative relief on Marshall’s counterclaims

and denied “all other relief not expressly granted.” After conducting another hearing, the trial

court denied Eureka’s motion for leave to supplement the summary-judgment record.

Eureka thereafter filed a fifth amended petition, which reasserted the same claims

against Marshall on which the trial court had granted Marshall a summary judgment, based largely

7 upon the same facts. Eureka added to the fifth amended petition a claim for promissory estoppel

and also asserted a claim of negligent misrepresentation against the Counsel Defendants.5

In October 2019, Marshall filed a “Motion to Enter Final Judgment in Accordance

with the Court’s Prior Summary Judgment Order and Motion for Sanctions or Alternative Motion

to Strike the Fifth Amended Petition or Additional Motion for Traditional Summary Judgment.”

The Counsel Defendants also moved under the TCPA to dismiss Eureka’s claims asserted against

them. The trial court noticed both motions for a hearing in November 2019; however, the case

was stayed for a year while Eureka pursued an attempted interlocutory appeal of the denial of its

TCPA motion to dismiss Marshall’s counterclaims. See Eureka Holdings Acquisitions, L.P.

v. Marshall Apartments, LLC, 597 S.W.3d 921, 924 (Tex. App.—Austin 2020, pet. denied)

(Eureka I).6

Once the trial court case resumed, Marshall amended its motion that requested that

the trial court enter final judgment, asking the court for judgment either: in accordance with the

court’s prior summary-judgment order; by striking Eureka’s fifth amended petition; or by

disposing of the claims by summary judgment. The Counsel Defendants also amended their TCPA

5 The Counsel Defendants stated that Eureka’s drafting of the fifth amended petition left them unsure of which claims Eureka asserted against them. Eureka appeared to assert at least a negligent-misrepresentation claim against an individual attorney who represented Marshall and that attorney’s law firm. 6 In Eureka I, we concluded that the time to appeal from the trial court’s partial denial of Eureka’s TCPA motion to dismiss Marshall’s counterclaims began to run when the trial court signed its order addressing the merits of Eureka’s motion. Eureka Holdings Acquisitions, L.P. v. Marshall Apartments, LLC, 597 S.W.3d 921, 924 (Tex. App.—Austin 2020, pet. denied). Because Eureka’s notice of appeal was filed beyond the applicable deadline and there was no statutory basis for an interlocutory appeal from the trial court’s subsequent order that addressed only attorney fees for the partial granting of the motion to dismiss, we dismissed the attempted interlocutory appeal for lack of jurisdiction. Id. at 924–25.

8 motion. The trial court entered an order that granted the motions. The trial court also ordered that,

in accordance with the order dismissing all claims in Eureka’s fifth amended petition and its

August 2019 order that awarded Marshall a summary judgment on all claims in Eureka’s fourth

amended petition, Marshall was entitled to its reasonable costs and attorneys’ fees incurred as a

result of having to defend against the claims “as the prevailing party.” Finally, the trial court

ordered that the Counsel Defendants were entitled to a mandatory award of costs and reasonable

attorneys’ fees as successful movants under the version of the TCPA that applied to the suit. The

order did not affect Marshall’s pending counterclaims. Eureka moved the trial court to reconsider

its August 2019 order granting summary judgment on Eureka’s fifth amended petition. The trial

court denied the motion.

During the evidentiary hearing to determine the attorneys’ fees and costs that

Marshall and the Counsel Defendants would seek, Eureka argued that the trial court could not

determine reasonable and necessary amounts until Marshall’s counterclaims were resolved.

Marshall announced during the hearing that it would nonsuit its counterclaims without prejudice

to avoid further delay of the lawsuit. In May 2021, the trial court entered an order that awarded

Marshall $488,302.16 as “reasonable costs, charges, and expenses, including attorneys’ fees

incurred as the prevailing party” pursuant to Paragraph 8.15 of the Amended Contract, and

awarded the Counsel Defendants $32,621.00 as reasonable costs and attorneys’ fees incurred in

defending against the dismissed legal action in connection with their TCPA motion.

Eureka thereafter moved for award of its own attorneys’ fees as a “prevailing party”

because Marshall nonsuited its counterclaims. Eureka also moved for entry of a final judgment or

motion to modify, correct, or reform any existing final judgment. In August 2021, the trial court

denied Eureka’s motions and entered a “final judgment disposing of all claims of all parties.”

9 ISSUES ON APPEAL

Eureka raises four issues on appeal. In its first two issues, Eureka argues that the

trial court erred by granting judgment against it on its breach-of-contract and promissory-estoppel

claims. Eureka next argues that the trial court erred by failing to dismiss Marshall’s

breach-of-contract counterclaim. Finally, Eureka contends that the trial court’s fee awards should

be reversed.

I. Breach of Contract

Eureka first argues that the trial court erred by dismissing its breach-of-contract

claim because the Amended Contract did not terminate on April 9, 2018, and the parties orally

waived Eureka’s Assumption Approval obligations. Marshall responds that the trial court

determined that the Amended Contract was unambiguous and that Marshall appropriately

terminated the Amended Contract because Eureka did not obtain Assumption Approval.

A party moving for traditional summary judgment bears the burden of showing that

no genuine issue of material fact exists and that it is entitled to judgment as a matter of law. Tex.

R. Civ. P. 166a(c); see Provident Life & Accident Ins. v. Knott, 128 S.W.3d 211, 215–16 (Tex.

2003). In deciding whether a disputed material fact issue exists to preclude summary judgment,

evidence favorable to the nonmovant will be taken as true and every reasonable inference must be

indulged in favor of the nonmovant. City of Keller v. Wilson, 168 S.W.3d 802, 824 (Tex. 2005);

Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 549 (Tex. 1985). The evidence raises a genuine

issue of fact if reasonable and fair-minded jurists could differ in their conclusions in light of all of

the summary-judgment evidence. Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d 754, 755

(Tex. 2007).

10 We review a no-evidence summary judgment under the same legal-sufficiency

standard used to review a directed verdict. See Tex. R. Civ. P. 166a(i). When analyzing a

no-evidence summary judgment, we consider all of the evidence in the light most favorable to the

nonmovant, indulging every reasonable inference and resolving all doubts against the movant.

Sudan v. Sudan, 199 S.W.3d 291, 292 (Tex. 2006) (citing Wilson, 168 S.W.3d at 823). When the

trial court’s order granting summary judgment does not specify the grounds relied upon, the

reviewing court must affirm the summary judgment if any of the summary-judgment grounds are

meritorious. FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868, 872 (Tex. 2000).

When construing a contract, a reviewing court’s primary goal is to determine the

parties’ intent as expressed in the terms of the contract. Chrysler Ins. v. Greenspoint Dodge of

Hous., Inc., 297 S.W.3d 248, 252 (Tex. 2009); Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983).

Contract language that can be given a certain or definite meaning is not ambiguous and is construed

as a matter of law. Greenspoint Dodge of Hous., 297 S.W.3d at 252; Coker, 650 S.W.2d at 393.

A contract is ambiguous when its meaning is uncertain and doubtful, or it is reasonably susceptible

to more than one meaning. Coker, 650 S.W.2d at 393. We review an unambiguous contract de

novo. Greenspoint Dodge of Hous., 297 S.W.3d at 252.

To prevail on a breach of contract claim, a plaintiff must prove (1) the existence

of a valid contract, (2) the plaintiff’s performance, (3) the defendant’s breach, and (4) the

plaintiff’s damages resulting from the breach. See S&S Emergency Training Sols., Inc. v. Elliott,

564 S.W.3d 843, 847 (Tex. 2018) (citing USAA Tex. Lloyds Co. v. Menchaca, 545 S.W.3d 479,

501 n.21 (Tex. 2018)).

The relevant terms of the Amended Contract were unambiguous. Paragraph

4.2 provides:

11 4.2 Seller’s Conditions to Closing. Without limiting any of the rights of Seller elsewhere provided for in this Contract, Seller’s obligation to close with respect to the conveyance of the Property under this Contract shall be subject to and conditioned upon the fulfillment of each and all of the following conditions precedent:

....

4.2.3 The Assumption Approval has been obtained.

“Assumption Approval” is defined under the Amended Contract as “HUD Approval and the Loan

Assumption Approval.” “Loan Assumption Approval” was satisfied only “when the [AHFC] and

any servicer have all executed and delivered written approval [for Eureka] to consummate the

assumption of the Loan.” The “Assumption Approval Period” is defined as “the expiration of the

100th day after the Effective Date.”

The Amended Contract unambiguously provided Marshall with the right to

terminate under Paragraph 4.3:

4.3 Failure or Waiver of Conditions Precedent. In the event any of the conditions set forth in Paragraphs 4.1 or 4.2 are not fulfilled or waived, the party benefitted by such conditions may, by written notice to the other party, terminate this Contract, whereupon all rights and obligations hereunder of each party shall terminate except those that expressly survive termination.

Marshall was the party benefitted by Eureka’s Assumption Approval obligations and was

permitted under Paragraph 4.3 to terminate if Eureka did not timely obtain Assumption Approval.

There is no genuine issue of material fact that Marshall notified Eureka that Marshall was

terminating the Amended Contract effective April 9, 2018, if Eureka did not obtain (1) Assumption

Approval by that date or (2) extend the Amended Contract pursuant to its terms. Eureka

acknowledged on April 9, 2018, that Eureka had not received Assumption Approval, and Eureka

12 did not extend the Amended Contract pursuant to its terms. Because Eureka did not obtain

Assumption Approval, Marshall exercised its right to terminate under Paragraph 4.3.

Eureka argues that the Amended Contract imposed no deadline at all on Eureka

receiving Assumption Approval. Eureka’s interpretation of the Amended Contract results in a

contract for the sale of real property with no termination date. Eureka’s interpretation ignores the

contract’s language and renders numerous provisions of the Amended Contract meaningless,

including the Closing Date, “Time is of the Essence” and Assumption Approval provisions, as

well as the provision providing Marshall the right to terminate based on Eureka’s failure to obtain

conditions precedent under Section 4.3. See Great Am. Ins. v. Primo, 512 S.W.3d 890, 893 (Tex.

2017) (explaining that reviewing court strives to give meaning to all contract language so that no

provision is rendered meaningless).

In the alternative, Eureka contends that even if the Amended Contract was set to

terminate on April 9, 2018, the parties orally agreed to extend this date and waive Assumption

Approval. The terms of the Amended Contract prohibited such an oral agreement, providing that

the “Contract may be amended or supplemented only by an instrument in writing and executed by

the parties.” Moreover, under the statute of frauds, a contract for the sale of real estate must be in

writing and signed by the party charged with compliance with its terms. Tex. Bus. & Com. Code

§ 26.01(b)(4). Generally, if a contract falls within the statute of frauds, a party cannot enforce any

subsequent oral modification to the contract. See Dracopoulas v. Rachal, 411 S.W.2d 719, 721

(Tex. 1967). To support its argument, Eureka cites a narrow exception to the statute of frauds that

permits an oral agreement to extend the time of performance of a contract; however, this exception

applies only when the oral agreement is made before the written contract expires. See id. at 722.

In addition, where the oral modification to the termination date changes other contractual rights

13 and duties, the modification materially affects the written contract and must be in writing. See id.

The record does not contain evidence to raise a fact issue that before the Amended Contract expired

on April 9, 2018, Eureka and Marshall orally agreed to extend the time of performance of the

Amended Contract. Even if the parties had so agreed, waiving Assumption Approval would

materially affect the written contract and thus must have been in writing. See id.

We conclude that the trial court did not err in granting summary judgment as to

Eureka’s breach-of-contract claim and we overrule Eureka’s first issue.

II. Promissory Estoppel

Eureka next argues that a fact issue exists as to whether Marshall promised on

May 2, 2018, to close the real-estate transaction on May 10, 2018. Eureka alleges that if the

Amended Contract terminated on April 9, 2018, then Marshall’s promise to close the real-estate

transaction on May 10, 2018, constitutes an independent promise that Marshall is estopped from

avoiding. Marshall responds that Eureka’s promissory-estoppel claim was not properly before the

trial court because Eureka first asserted the claim in the fifth amended petition, which was

improperly filed without leave of court after the summary-judgment hearing and after the trial

court entered the August 2019 order awarding Marshall a summary judgment on all of Eureka’s

claims in the fourth amended petition. Marshall also contends that even if the trial court considered

Eureka’s fifth amended petition, the promissory-estoppel claim is barred by the statute of frauds.

The Trial Court Considered Eureka’s Fifth Amended Petition

We must first consider whether Eureka timely amended its petition to assert the

promissory-estoppel claim. Marshall moved to strike the fifth amended petition because Eureka

filed the petition (1) after the summary-judgment hearing, (2) after the trial court entered an order

14 that awarded Marshall summary judgment on Eureka’s claims in the fourth amended petition and

dismissed the claims with prejudice, and (3) after the trial court denied Eureka leave to supplement

the summary-judgment record. Marshall argued that Eureka violated Rules 63 and 166a of the

Texas Rules of Civil Procedure by late-filing the fifth amended petition without leave of court,

particularly because the fifth amended petition pled new claims arising from the same nucleus of

operative facts as the prior petition. Eureka responded that it had a right to file the fifth amended

petition without leave of court because Marshall’s counterclaims were pending.

A party may amend its pleading without leave of the trial court up to seven

days before the summary-judgment hearing. See Goswami v. Metropolitan Sav. & Loan Ass’n,

751 S.W.2d 487, 490 (Tex. 1988) (per curiam). If a party files an amended pleading after this

deadline but before the summary-judgment hearing, leave of court is presumed if the summary

judgment recites that the trial court examined the pleadings, there is no indication that the amended

pleading was not considered, and the opposing party does not show surprise. See id. at 490; Cont’l

Airlines, Inc. v. Kiefer, 920 S.W.2d 274, 276 (Tex. 1996). If a party files an amended pleading

after the summary-judgment hearing but before the judgment is signed, there is no presumption

that leave was granted and the record must affirmatively demonstrate that the trial court granted

leave. See Tex. R. Civ. P. 166a(c); Kiefer, 920 S.W.2d at 276 (explaining appellate court presumes

leave was granted when summary judgment states that all pleadings were considered, record does

not indicate that amended pleading was not considered, and opposing party does not show

surprise). In the summary judgment context, “[c]ourts of appeals considering whether a trial court

granted leave commonly—and correctly—examine the record for an ‘affirmative indication that

the trial court permitted the late filing.’” B.C. v. Steak N Shake Operations, Inc., 598 S.W.3d 256,

259 (Tex. 2020).

15 In this case, the record does not contain an order granting Eureka leave to file the

fifth amended petition. We presume, however, that the trial court considered Eureka’s fifth

amended petition because the trial court held a hearing on Marshall’s motion concerning the

petition and the trial court’s summary-judgment order recited that the court considered “the

competent summary judgment evidence, the pleadings on file, and the relevant law.”7 See Mosaic

Baybrook One, L.P. v. Cessor, 668 S.W.3d 611, 624 (Tex. 2023) (instructing that leave to amend

pleading should be presumed in certain circumstances); Kiefer, 920 S.W.2d at 276 (presuming that

leave was granted for late-filed amended petition because judgment recited that “after examining

the pleadings,” trial court concluded that Continental was entitled to summary judgment).

We also conclude that the trial court appropriately disposed of the

promissory-estoppel claim on summary judgment because the claim fails as a matter of law. In

the fifth amended petition, Eureka acknowledged that AHFC refused to allow Eureka to assume

the AHFC loan. Eureka alleged that it rejected Marshall’s demand to either close the Amended

Contract by April 8, 2018, or be in default.8 Eureka claimed that in May 2018, Marshall promised

to waive the Assumption Approval condition and close the transaction with Eureka paying off the

AHFC loan.

7 The trial court’s “Order on Defendants’ Motion to Enter Final Judgment or Alternative Motion for Summary Judgment and Motion to Dismiss Pursuant to the [TCPA]” (formatting altered) did not specifically reference Marshall’s motion to strike Eureka’s fifth amended petition. The order recited that the trial court heard “Defendants’ Motion to Enter Final Judgment or Alternative Motion for Summary Judgment and Defendants’ Motion to Dismiss Pursuant to the Texas Citizens’ Participation Act” on January 20, 2021; however, Marshall argued its motion to strike during the January 2021 hearing. 8 Marshall informed Eureka on April 6, 2018, that, pursuant to the terms of the Amended Contract, the Closing Date should occur on Sunday, April 8, 2018, which would extend to Monday, April 9, 2018.

16 On appeal, Eureka argues that, if the Amended Contract terminated before

May 2, 2018, then Marshall promised on May 2 to close the transaction on May 10, 2018, and

Marshall is estopped from avoiding that May 2 promise. Eureka contends that the substance of

the purported oral agreement made on May 2, 2018, was to close the transaction on the terms stated

in the Amended Contract, notwithstanding the Amended Contract’s expiration, with Eureka

assuming the AHFC Loan by paying it in full.

Promissory estoppel requires evidence of: (1) a promise; (2) foreseeability of

reliance; (3) actual, substantial, and reasonable reliance by the promisee to his detriment; and

(4) that failing to enforce the promise would result in an injustice. In re Weekley Homes, L.P.,

180 S.W.3d 127, 133 (Tex. 2005) (orig. proceeding). Eureka’s promissory-estoppel claim fails as

a matter of law because it is based upon an allegation that Eureka and Marshall had an oral

agreement to convey property, which was unenforceable for the lack of a required

written agreement. See Reiland v. Patrick Thomas Props., Inc., 213 S.W.3d 431, 437 (Tex.

App.—Houston [1st Dist.] 2006, pet. denied) (concluding that statute of conveyances and statute

of frauds require conveyances and contracts for sale of real property to be in writing and signed

by conveyor) (citing Tex. Prop. Code § 5.021; Tex. Bus. & Com. Code § 26.01(b)(4))).

Even if the Amended Contract had not terminated, the “Entirety and Amendments”

paragraph of the Amended Contract prevented the parties from orally changing the closing date to

May 2018 or altering the terms of Assumption Approval. Moreover, for the purposes of this

promissory-estoppel claim, Eureka has asserted that purported oral promises contradicted the

terms of the Amended Contract. However, Eureka has not shown it was reasonable and justified

to rely on Marshall’s purported promises—especially considering that Eureka had already filed a

17 lawsuit against Marshall alleging breach of contract concerning the sale.9 See Comiskey v. FH

Partners, LLC, 373 S.W.3d 620, 635 (Tex. App.—Houston [14th Dist.] 2012, pet. denied)

(explaining that promisee’s reliance must be reasonable and justifiable reliance depends on

sophistication of parties); Ortiz v. Collins, 203 S.W.3d 414, 424 (Tex. App.—Houston [14th Dist.]

2006, no pet.) (concluding promissory estoppel claim failed because, given parties’ adversarial

relationship, plaintiff’s reliance on defendant’s alleged promise to draft contract was unjustified).

We conclude that the trial court did not err in granting summary judgment as to

Eureka’s promissory-estoppel claim, and we overrule Eureka’s second issue.

III. Marshall’s Counterclaim

In its third issue, Eureka argues that the trial court erroneously denied Eureka’s

TCPA motion seeking the dismissal of Marshall’s breach-of-contract counterclaim.10 Specifically,

Eureka argues that (1) the TCPA broadly applies to all counterclaims that are based on, relate to,

or respond to a plaintiff’s pleading or lawsuit and (2) Marshall did not present a prima facie case

that Eureka breached the Amended Contract because Eureka had no contractual obligation to

9 Eureka cites Haase v. Glazner for the proposition that Eureka can still recover reliance damages even if the statute of frauds barred its claim for specific performance of the oral promise. See 62 S.W.3d 795, 798 (Tex. 2001) (holding benefit-of-the-bargain damages not available for fraud that induces nonbinding contract but can recover out-of-pocket damages). Because Eureka does not allege that Marshall committed fraud, this argument is without merit. 10 Marshall does not dispute Eureka’s contention that the analysis of its TCPA motion to dismiss Marshall’s counterclaim is governed by the TCPA as it existed before September 2019. See Act of May 17, 2019, 86th Leg. R.S., ch. 378 §§ 11, 12, 2019 Tex. Gen. Laws 684, 687 (stating that amendments to TCPA apply “only to an action filed on or after” September 1, 2019). The parties also do not dispute that Eureka can raise this issue on appeal. See Hale v. Rising S Co., No. 05-21-001103-CV, 2023 WL 3714751, at *3 (Tex. App.—Dallas May 30, 2023, pet. denied) (mem. op.) (concluding that appeal of TCPA issue after final judgment presented different issue than prior denial of appellate jurisdiction due to untimely interlocutory appeal of TCPA order and declining to apply law of the case).

18 obtain Assumption Approval. Marshall responds that it presented a prima facie case that Eureka

breached the Amended Contract by failing to obtain Assumption Approval, failing to close the sale

of the property, and failing to deliver $125,000.00 in earnest money to Marshall.

We review de novo a trial court’s ruling on a TCPA motion to dismiss. Dallas

Morning News, Inc. v. Hall, 579 S.W.3d 370, 377 (Tex. 2019). The TCPA provides a three-step

process for the dismissal of a legal action. Castleman v. Internet Money Ltd., 546 S.W.3d 684,

691 (Tex. 2018); see also Tex. Civ. Prac. & Rem. Code § 27.005(b)–(d). First, the movant must

show by a preponderance of the evidence that the legal action is based on, relates to, or is in

response to the movant’s exercise of the right of free speech, right to petition, or right of

association. Tex. Civ. Prac. & Rem. Code §§ 27.003(a), 005(b). If the movant meets that burden,

the burden shifts to the non-movant to establish “by clear and specific evidence a prima facie case

for each essential element of the claim in question.” In re Lipsky, 460 S.W.3d 579, 587 (Tex.

2015) (orig. proceeding) (quoting Tex. Civ. Prac. & Rem. Code § 27.005(c)). Finally, if the TCPA

applies and the nonmovant satisfies its burden of presenting a prima facie case, the burden shifts

back to the movant to establish each essential element of any valid defense by a preponderance of

the evidence.11 See Tex. Civ. Prac. & Rem. Code § 27.005(d); Youngkin v. Hines, 546 S.W.3d 675,

679–80 (Tex. 2018). In deciding whether to dismiss a legal action under the TCPA, a court shall

consider the pleadings and evidence that a court could consider in connection with a summary

judgment motion, as well as supporting or opposing affidavits stating the facts on which the claims

or defenses are based. Tex. Civ. Prac. & Rem. Code 27.006(a); see USA Lending Grp. v. Winstead

11 We need not address the third step because Eureka does not assert an affirmative defense

or otherwise attempt to meet its burden to prove each essential element of any valid defense by a preponderance of the evidence. See Tex. Civ. Prac. & Rem. Code § 27.005(d); Youngkin v. Hines, 546 S.W.3d 675, 679–80 (Tex. 2018).

19 PC, 669 S.W.3d 195, 200 (Tex. 2023) (noting that Act does not contemplate extensive discovery).

Although the trial court may consider pleadings as evidence under the TCPA, the Act requires

more than mere notice pleading. See RigUp, Inc. v. Sierra Hamilton, LLC, 613 S.W.3d 177,

189–90 (Tex. App.—Austin 2020, no pet.) (citing In re Lipsky, 460 S.W.3d at 590–91).

Marshall’s Prima Facie Case

Assuming without deciding that the TCPA applies to Marshall’s counterclaim, we

nevertheless conclude that Marshall established by clear and specific evidence a prima facie case

for each essential element of its counterclaim. See Tex. R. App. P. 47.1; In re Lipsky, 460 S.W.3d

at 587. “Evidence is ‘clear and specific’ if it provides enough detail to show the factual basis for

the claim.” Winstead PC, 669 S.W.3d at 200 (instructing that such evidence need not be

“conclusive, uncontroverted, or found credible”). A prima facie case “is not a high hurdle[,]” but

is “that minimum quantity of evidence necessary to rationally infer that an allegation is true.” Id.

at 198; In re Lipsky, 460 S.W.3d at 590 (explaining that prima facie case refers to evidence

sufficient to establish fact if it is not rebutted or contradicted). When we conduct our review, we

view the pleadings and evidence in the light most favorable to the nonmovant. See RigUp,

613 S.W.3d at 182; Dyer v. Medoc Health Servs., LLC, 573 S.W.3d 418, 424 (Tex. App.—Dallas

2019, pet. denied); Robert B. James, DDS, Inc. v. Elkins, 553 S.W.3d 596, 603 (Tex. App.—San

Antonio 2018, pet. denied).

Marshall asserted that Eureka breached the terms of the Amended Contract by

failing to obtain Assumption Approval, failing to deliver $125,000.00 to Marshall to extend the

Amended Contract pursuant to its terms, and failing to timely close the sale of the property. To

establish the first element the breach-of-contract claim—formation of a contract—Marshall pled

20 with specific detail to show the factual basis for this element of its claim that Marshall and Eureka

entered into the valid and enforceable Amended Contract on November 28, 2017. See RigUp,

613 S.W.3d at 189–90 (instructing that a trial court may consider pleadings as evidence if a

plaintiff provides more than notice pleading); S&S Emergency Training Sols., 564 S.W.3d at 847.

As evidence to support this element, Marshall offered a copy of the Amended Contract as

an exhibit to its amended counterclaim. Eureka acknowledged in its petition that the parties

entered into the Amended Contract, although Eureka alleged that Marshall subsequently breached

the agreement.

To establish the performance element of a breach-of-contract contract claim,

Marshall pled with specific detail to show the factual basis of its claim that it fully performed under

the terms of the Amended Contract. See RigUp, 613 S.W.3d at 189–90; S&S Emergency Training

Sols., 564 S.W.3d at 847. As evidence to support this element, Marshall offered the April 6, 2018

notification that it sent to Eureka stating that Marshall had not received proof of Assumption

Approval or a closing date, but that Marshall looked forward to hearing from Eureka “so that the

sale may close timely.” In the First Issue, we addressed Eureka’s allegation that Marshall did not

perform under the terms of the Amended Contract and concluded that Marshall was entitled to

summary judgment on Eureka’s breach-of-contract claim.

To establish the breach element of the claim, Marshall pled with specific detail to

show the factual basis of its claim that Eureka breached the Amended Contract by failing to “timely

obtain Assumption Approval, fail[ing] to deliver $125,000[.00] in earnest money in order to extend

the Closing Date,” and failing to timely close the sale of the property. See RigUp, 613 S.W.3d at

189–90; S&S Emergency Training Sols., 564 S.W.3d at 847. Marshall offered the Amended

Contract as evidence to support this element. Pursuant to the terms of the Amended Contract,

21 Eureka agreed to purchase the property with a closing date to occur no later than the latest of:

(1) thirty days after Eureka gained Assumption Approval; (2) thirty days after receipt of the

amendments by Caritas waiving its interest in the property; or (3) one hundred and twenty days

after the Effective Date of the Amended Contract. Pursuant to Paragraph 2.10.5 of the Amended

Contract, Eureka was obligated to obtain Assumption Approval within one hundred days of the

Effective Date of the Amended Contract. Marshall offered additional evidence that Eureka

acknowledged that AHFC refused Eureka loan assumption. Marshall also offered the notification

that it sent to Eureka on April 6, 2018, that showed that Eureka failed to obtain Assumption

Approval. The notification states that Eureka failed to comply with the terms of the Amended

Contract and the agreement would expire on April 9, 2018. Although Eureka could extend the

terms of the Amended Contract for an additional twenty days only upon written notice and the

release of earnest money, the record does not reflect that Eureka extended the deadline.12

To establish the injury element of the claim, Marshall pled with specific detail to

show the factual basis of its claim that it was injured because it lost the benefit of its bargain to

sell the Property and incurred additional finance and transactional costs. See RigUp, 613 S.W.3d

at 189–90; S&S Emergency Training Sols., 564 S.W.3d at 847. Marshall also pled that, after

Eureka’s breach, Marshall had to refinance its principal loan on the Property on less favorable

terms. See Winstead PC, 669 S.W.3d at 202 (providing that under TCPA, evidence must be

12 Eureka argues on appeal that its failure to obtain Assumption Approval was not a breach

but a condition precedent, and that Eureka had no obligation under the terms of Amended Contract to obtain Assumption Approval. Because Marshall established by clear and specific evidence a prima facie case that Eureka breached the Amended Contract for the additional reasons of failing to close the transaction by the latest agreed upon closing date and failing to deliver $125,000.00 in earnest money to Marshall to extend the Amended Contract according to its terms, we need not address Eureka’s argument. See Tex. R. App. P. 47.1.

22 sufficient to allow rational inference that some damages naturally flowed from movant’s conduct);

Elliot, 564 S.W.3d at 847 (instructing that direct evidence of damages is not required). As evidence

to support this element, Marshall offered the Amended Contract that provided that, if Eureka

defaulted in its obligation to purchase the property, Marshall “shall have the right to have the

Escrow Agent deliver the earnest money to [Marshall] as liquidated damages to recompense

[Marshall] for time spent, labor and services performed, and the loss of its bargain.” (formatting

altered). At this stage, Marshall’s counterclaim survives if the evidence “is legally sufficient to

establish a claim as factually true if it is not countered.” Winstead PC, 669 S.W.3d at 200 (citing

Elliott, 564 S.W.3d at 847). We conclude, for these purposes, that Marshall offered clear and

specific evidence supporting a prima facie breach of contract claim. See id. (instructing that “prima

facie evidence is taken at face value”).

The motion to dismiss stage is a “clearing of an initial hurdle” and not a battle of

evidence. See id. at 205 (explaining motion to dismiss does not select for plaintiffs certain to

succeed; it screens out plaintiffs certain to fail). Because Marshall established by clear and specific

evidence a prima facie case for each essential element of its claim, we conclude that the trial court

did not err in denying Eureka’s TCPA motion. See In re Lipsky, 460 S.W.3d at 589 (“That the

[Act] should create a greater obstacle for the plaintiff to get into the courthouse than to win its case

seems nonsensical.”). We thus overrule Eureka’s third issue.

IV. Award of Attorneys’ Fees

Fee Award to Marshall

Eureka argues that the trial court’s award of attorney fees to Marshall was erroneous

because Marshall did not establish that the rates on the fee award were reasonable and because the

23 award compensated for work that was not recoverable.13 Marshall responds that it produced

sufficient proof of the reasonableness and necessity of the fees.

The Amended Contract’s fee-shifting provision provided:

Attorneys’ Fees. Should either party employ attorneys to enforce any of the provisions hereof, the party against whom any final judgment is entered agrees to pay the prevailing party all reasonable costs, charges, and expenses, including attorneys’ fees, expended or incurred in connection therewith.

After conducting a hearing, the trial court awarded Marshall $488,302.16 “as reasonable costs,

charges, and expenses, including attorneys’ fees, expended and incurred as the prevailing party in

connection with this action.”

We review an award of attorneys’ fees for an abuse of discretion. See Sullivan

v. Abraham, 488 S.W.3d 294, 299 (Tex. 2016). “It is an abuse of discretion for a trial court to rule

arbitrarily, unreasonably, or without guiding legal principles, or to rule without supporting

evidence.” Bocquet v. Herring, 972 S.W.2d 19, 21 (Tex. 1998) (internal citations omitted).

However, a trial court does not abuse its discretion if “some evidence reasonably supports the trial

court’s ruling.” Henry v. Cox, 520 S.W.3d 28, 34 (Tex. 2017).

In determining the reasonableness and necessity of attorneys’ fees in a fee-shifting

situation, the factfinder first “determine[s] the reasonable hours spent by counsel in the case and a

13 Eureka also complains on appeal that the fee award should be reversed because Marshall

did not satisfy the Amended Contract’s “expended or incurred” requirement. Eureka, however, did not object to the fee award in the trial court on this basis. During the fee hearing, Marshall’s expert witness testified that Marshall incurred or expended a large amount of fees in connection with defending against Eureka’s claims. Eureka also acknowledged in a pleading that “Marshall incurred the attorney’s fees defending against the legal action.” Eureka thus did not preserve this claim of error for appellate review. See In re D.Z., 583 S.W.3d 284, 291 (Tex. App.—Houston [14th Dist.] 2019, no pet.) (although appellant raised several objections to attorney’s fees at trial, he failed to preserve new objection raised on appeal); Tex. R. App. P. 33.1(a).

24 reasonable hourly rate for such work” and “multiplies the number of such hours by the

applicable rate, the product of which is the base fee or lodestar.” Rohrmoos Venture v. UTSW

DVA Healthcare, LLP, 578 S.W.3d 469, 494 (Tex. 2019) (citing El Apple I, Ltd. v. Olivas,

370 S.W.3d 757, 760 (Tex. 2012)). Sufficient evidence “includes, at a minimum, evidence of

(1) particular services 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.” Id. at 498. The base

lodestar calculation, when supported by sufficient evidence, is presumed to “reflect[] the

reasonable and necessary attorneys’ fees that can be shifted to the non-prevailing party.” Id. at 499.

Although Eureka argues that Marshall did not offer evidence of any of the

timekeepers’ hourly rates, the record reflects that Marshall submitted itemized invoices that

included descriptions reflecting (1) the services performed, (2) who performed each service,

(3) when each service was performed, (4) the amount of time performed on each service, and

(5) the total amount billed for each service. See id. at 502 (instructing that billing records are not

required to prove that requested fees are reasonable and necessary but they are strongly

encouraged). Marshall also submitted a document listing the rates charged by its counsel. In

addition, Eureka submitted a transcript of the deposition testimony of Marshall’s attorneys’-fees

expert, Dillon Ferguson, who testified to the reasonableness of the rates of the billing attorneys.

Eureka argues that Ferguson offered conclusory testimony that undisclosed rates charged by

unidentified timekeepers was reasonable. However, Ferguson’s deposition testimony discussed

the years of experience and corresponding billing rates of specific attorneys for whose services

Marshall sought recovery.

25 Moreover, during the fees hearing, Ferguson testified to the reasonableness of the

hourly rate of individual attorneys and the reasonableness and necessity of the number of hours

billed. Ferguson testified that he has been practicing law since 1973, he has routinely practiced

oil-and-gas and real-estate law in Travis County, and he regularly prepared legal bills for his own

clients. Ferguson offered expert testimony that the fees sought by Marshall were reasonable and

necessary based upon his review of the invoices prepared in this case and other cases and by

comparing the fees charged by national and international law firms that have offices in Austin,

Texas. Ferguson made his determination “us[ing] the method that is set out in the Arthur Andersen

and [El] Apple cases and the Rohrmoos recent decision by the Texas Supreme Court.” Ferguson

established a “a reasonable fee for each of the [attorneys] involved [a]n the activity,” “review[ed]

that [attorney’s] activity in the case and the time necessary to accomplish the activity,” and

determined whether “the activity and the [attorney’s] reasonable rate multiplied together yielded”

“a reasonable and necessary fee for the activity.” He analyzed only the records of timekeepers

that he could identify, and he excluded the records of any timekeeper that he could not identify.

Ferguson considered this lawsuit a “procedural morass” with “various moves by the plaintiff and

defendant” that were “sophisticated,” “lengthy,” and “complex.” “The time and labor required

was extensive,” and the lawyering involved a high level of skill.14

Eureka also argues that the trial court awarded fees to Marshall for work not

recoverable under the terms of the Amended Contract. Eureka contends that fees Marshall

incurred to defend itself against Eureka’s tort claims and fees incurred in drafting pleadings were

14 Eureka’s attorneys’-fee expert, Kenneth Chaiken, testified that he did not find the billing

rates of Marshall’s attorneys reasonable.

26 not recoverable under the terms of the Amended Contract.15 The fee-shifting language of the

Amended Contract permits the prevailing party to recover “all reasonable . . . attorneys’ fees

expended or incurred in connection therewith.” See James Constr. Grp. v. Westlake Chem. Corp.,

650 S.W.3d 392, 403 (Tex. 2022) (“Texas courts regularly enforce unambiguous contract language

agreed to by sophisticated parties in arms-length transactions”); Pathfinder Oil & Gas, Inc. v.

Great W. Drilling, Ltd., 574 S.W.3d 882, 889 (Tex. 2019) (explaining that isolating words in

contract distorts meaning). The tort and fraud claims that Eureka asserted against Marshall relied

on the Amended Contract and sought to enforce the sale of the property. Consequently, we detect

no error in the trial court’s conclusion that the attorneys’ fees that Marshall incurred when Eureka

sued Marshall were expended or incurred in connection with defending against the tort claims,

which were based on the same alleged conduct as the breach-of-contract claim.

Considering the record and applying the factors set forth in Rohrmoos Venture, see

578 S.W.3d at 494, we conclude that the trial court did not abuse its discretion in its award of fees.

See Smith v. Patrick W.Y. Tam Tr., 296 S.W.3d 545, 547 (Tex. 2009) (instructing that

reasonableness of attorneys’ fees is ordinarily left to factfinder, and reviewing court may not

substitute its judgment for factfinder’s).

Fee Award to the Counsel Defendants

Eureka argues that the fee award to the Counsel Defendants was an abuse of

discretion because the TCPA was not applicable to Eureka’s negligent misrepresentation claim

and the fee award was unreasonable. Eureka argues that counsel’s communications with Eureka

15 Eureka does not appeal the trial court’s dismissal of its fraud, tortious interference, business disparagement, and negligent misrepresentation claims.

27 about the real estate transaction did not pertain to a judicial proceeding and there was no lawsuit

pending when the communications occurred. Marshall responds that the Counsel Defendants were

entitled to recover reasonable attorneys’ fees because they successfully moved under the TCPA to

dismiss claims that Eureka asserted in connection with their representation of Marshall.

The trial court awarded Defendants $32,621.00 as reasonable costs and attorneys’

fees as successful movants under the TCPA. See Tex. Civ. Prac. & Rem. Code § 27.009(a)(1). A

“reasonable” attorneys’ fee is “not excessive or extreme, but rather moderate or fair.” Sullivan,

488 S.W.3d at 299. The Counsel Defendants had the burden to demonstrate by a preponderance

of the evidence that the “legal action”—Eureka’s negligent misrepresentation claim—was based

on or in response to their exercise of the right of free speech, the right to petition, or right of

association.16 Tex. Civ. Prac. & Rem. Code § 27.005(b)(1)(B). The term “legal action” includes

“a lawsuit, cause of action, petition, complaint, cross-claim, or counterclaim, or any other judicial

pleading or filing that requests declaratory or equitable relief” but does not include “a procedural

action taken or motion made in an action that does not amend or add a claim for legal, equitable,

or declaratory relief.” Id. § 27.001(6). The right to petition is defined as, among other things, a

“communication in or pertaining to . . . a judicial proceeding.” Id.

The clerk’s record makes clear that Eureka’s claims against the Counsel

Defendants, originally filed in 2019, are based on allegations that the Counsel Defendant Low

communicated that Marshall would close the Amended Contract or would close the Amended

Contract without Assumption Approval. As alleged, those communications would have occurred

while Eureka’s lawsuit was pending in Travis County and while the Counsel Defendants were

16 The parties agree that the version of the TCPA effective as of 2019 applies to the Counsel

Defendants’ TCPA motion.

28 representing Marshall. Moreover, evidence in the record makes clear that those alleged

communications were made in connection with the parties’ ill-fated attempts to avoid further

litigation during the parties’ second lawsuit relating to the Settlement Agreement and/or the

Amended Contract. Accordingly, those alleged communications “pertain to” the then-pending

judicial proceeding involving the parties. We thus conclude that the Counsel Defendants carried

their burden to show that the TCPA applied to their communications with Eureka. See Tex. Civ.

Prac. & Rem. Code § 27.003(a).

Eureka contends that the trial court’s fee award of $32,621.00 should be reversed

because the Counsel Defendants did not become personally liable for fees related to the TCPA

motion. A “law firm can be awarded fees for representation by its own attorneys.” Rohrmoos

Venture, 578 S.W.3d at 488 (citing Campbell, Athey & Zukowski v. Thomasson, 863 F.2d 398, 400

(5th Cir. 1989) (explaining that law firm is entitled to compensation for time which representing

attorney could have spent on other matters)). Finally, Eureka asserts the fee award to the Counsel

Defendants should be reversed because the rates were unreasonable, appearing to rely on its prior

argument regarding the rates awarded in Marshall’s fee award. As discussed supra, considering

the relevant factors, we conclude that the trial court did not abuse its discretion in its award of

attorneys’ fees. See Smith, 296 S.W.3d 547.

Failure to Award Eureka Attorneys’ Fees

Eureka lastly argues that the trial court erred when it failed to award attorneys’

fees to Eureka as the prevailing party on Marshall’s breach-of-contract counterclaim that

Marshall nonsuited.

29 The trial court entered an order granting Marshall’s motion to enter final judgment

or alternative motion for summary judgment and motion to dismiss pursuant to the TCPA,

awarding judgment for Marshall on all of Eureka’s claims. The trial court further ordered that, in

accordance with the court’s prior August 2019 order granting summary judgment on all claims

against Marshall, and in accordance with the current order dismissing all claims in Eureka’s fifth

amended petition, Marshall was entitled reasonable costs and attorneys’ fees incurred “as the

prevailing party.” The trial court ordered that the Counsel Defendants were also entitled to a

mandatory award of costs and reasonable attorneys’ fees as a result of successfully bringing a

TCPA motion, and all other relief sought was denied. The trial court stated that the order did not

affect Marshall’s counterclaims. The record does not demonstrate that the trial court adjudicated

Eureka the prevailing party.

Eureka argues that Marshall “effectively” nonsuited its counterclaim with

prejudice. However, the record demonstrates that Marshall nonsuited the counterclaim without

prejudice in order to create a final judgment. During the attorneys’ fees hearing, Marshall’s

counsel stated:

. . . more important than the outstanding earnest money is just having this become final, and so I know I could even nonsuit without prejudice in open court. It’s not like there’s a pending summary judgment or anything.

So I’m doing that right now to resolve that issue. We’re nonsuiting our counterclaims without prejudice. I don’t think–you know, I think that resolves all claims, all parties, and–but for the fee award, and we ask you go ahead and enter it. If they want to fight against that on appeal or whatever, at least we’ll move on a little bit further. It’s just worth it rather than delaying this further.

To support its argument, Eureka relies upon Epps v. Fowler, where the Texas

Supreme Court held that a defendant is not considered a prevailing party if a plaintiff nonsuits all

30 of its claims without prejudice unless the trial court determines, on the defendant’s motion, that

the nonsuit was taken to avoid an unfavorable ruling on the merits. See 351 S.W.3d 862, 864–65,

870 (Tex. 2011). In this case, the trial court denied Eureka’s Epps v. Fowler motion to be

considered a prevailing party that argued Marshall’s nonsuit was taken to avoid an unfavorable

ruling on the merits. Because the record does not demonstrate that Marshall nonsuited its case to

avoid an unfavorable ruling on the merits, Eureka has not demonstrated that it was a prevailing

party entitled to attorneys’ fees. See id.; Referente v. City View Courtyard, L.P., 477 S.W.3d 882,

885–86 (Tex. App.—Houston [1st Dist.] 2015, no pet.) (reviewing trial court’s determination

under Epps for abuse of discretion, deferring to factual findings that are supported by

some evidence and reviewing legal questions de novo). We conclude that the trial court did not

abuse its discretion in failing to award Eureka attorneys’ fees. We therefore overrule Eureka’s

fourth issue.

CONCLUSION

Having overruled all of Eureka’s issues, we affirm the judgment of the trial court.

____________________________________________ Edward Smith, Justice

Before Chief Justice Byrne, Justices Kelly and Smith

Affirmed

Filed: September 29, 2023