Propel Financial Services, LLC as Agent and Attorney in Fact for Propel Funding National 1, LLC v. Lupe Perez AKA Lupe G. Perez, Harris County, City of Houston, Houston Independent School District, Houston Community College System, and Lillian Wilson, LLC

CourtCourt of Appeals of Texas
DecidedJuly 26, 2018
Docket01-17-00682-CV
StatusPublished

This text of Propel Financial Services, LLC as Agent and Attorney in Fact for Propel Funding National 1, LLC v. Lupe Perez AKA Lupe G. Perez, Harris County, City of Houston, Houston Independent School District, Houston Community College System, and Lillian Wilson, LLC (Propel Financial Services, LLC as Agent and Attorney in Fact for Propel Funding National 1, LLC v. Lupe Perez AKA Lupe G. Perez, Harris County, City of Houston, Houston Independent School District, Houston Community College System, and Lillian Wilson, LLC) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Propel Financial Services, LLC as Agent and Attorney in Fact for Propel Funding National 1, LLC v. Lupe Perez AKA Lupe G. Perez, Harris County, City of Houston, Houston Independent School District, Houston Community College System, and Lillian Wilson, LLC, (Tex. Ct. App. 2018).

Opinion

Opinion issued July 26, 2018

In The

Court of Appeals For The

First District of Texas ———————————— NO. 01-17-00682-CV ——————————— PROPEL FINANCIAL SERVICES, LLC, AS AGENT AND ATTORNEY IN FACT FOR PROPEL FUNDING NATIONAL 1, LLC, Appellant V. LUPE PEREZ AKA LUPE G. PEREZ, HARRIS COUNTY, CITY OF HOUSTON, HOUSTON INDEPENDENT SCHOOL DISTRICT, HOUSTON COMMUNITY COLLEGE SYSTEM, AND LILLIAN WILSON, LLC, Appellees

On Appeal from the 113th District Court Harris County, Texas Trial Court Case No. 2015-34420

MEMORANDUM OPINION

Appellant Propel Financial Services, LLC, as Agent and Attorney in Fact for

Propel Funding National 1, LLC appeals the trial court’s judgment denying its request for attorney’s fees and expenses, as well as other fees, in the underlying tax

property foreclosure suit against appellees Lupe Perez aka Lupe G. Perez, Harris

County, City of Houston, Houston Independent School District, Houston

Community College System, And Lillian Wilson, LLC. In three issues, Propel

contends that the trial court abused its discretion by (1) awarding $0.00 in reasonable

and necessary attorney’s fees and expenses to Propel; (2) denying recovery of

appellate attorney’s fees to Propel; and (3) denying Propel recovery of release of lien

fees, abstract fees, and late fees. We reverse and render.

Background

On June 15, 2015, Propel Financial Services, LLC filed a property tax

foreclosure suit to recover delinquent ad valorem taxes on three tracts of property

owned by Perez.1 Propel Financial Services, LLC subsequently transferred and

assigned its rights and claims to Propel Funding National I, LLC (collectively

referred to as “Propel”). Perez was served with process but did not file an answer or

otherwise appear. The trial court referred the case to a tax master. The tax master

subsequently issued a report awarding delinquent taxes and interest to Propel, and

1 See generally TEX. TAX CODE ANN. §§ 32.06(c), 32.065(c), 33.41 (West 2015). Harris County, City of Houston, Houston Independent School District, Houston Community College System, and Lillian Wilson, LLC intervened in the suit.

2 recovery of release of lien fees, abstract fees, and late fees but reducing Propel’s

attorney’s fees to a percentage of the delinquent base tax, penalties, and interest.

On March 1, 2017, Propel timely filed a notice of appeal of the tax master’s

recommendation. Specifically, Propel challenged the tax master’s recommendation

that Propel’s request for attorney’s fees in the amount of $7,128.45 be reduced to

$2,366.09.

On March 31, 2017, the trial court held a hearing on Propel’s appeal of the tax

master’s recommendation as to its reasonable and necessary attorney’s fees. At the

hearing, the trial court had before it the evidence considered by the tax master, which

consisted of the affidavits of Yanira Reyes and Stephen Brearley as well as attached

documentation. Propel was the only party who appeared at the hearing.

On April 12, 2017, the trial court signed an order stating that the proof

submitted by Propel “is insufficient to meet the requirements enunciated in Long v.

Griffin, 442 S.W.3d 253 (Tex. 2014),” and ordered that Propel be “allowed until

April 28, 2017 to file revised proof of its attorney fees.” On May 31, 2017, the trial

court issued a final judgment granting foreclosure but awarding $0.00 in attorney’s

fees to Propel and striking the award of release of lien fees, abstract fees, and late

fees. In its order, the trial court further stated that despite an opportunity to submit

revised proof, “Propel had not submitted any additional evidence, in disregard of the

Court’s Order.”

3 Thereafter, Propel filed a request for findings of fact and conclusions of law

and a motion to modify judgment and/or for new trial. The trial court did not issue

finding and conclusions, and Propel’s motion was overruled by operation of law.

This appeal followed.

Standard of Review

We review a trial court’s award of attorney’s fees for an abuse of discretion.

Ridge Oil Co. v. Gunn Invs., Inc., 148 S.W.3d 143, 163 (Tex. 2004);

WWW.URBAN.INC. v. Drummond, 508 S.W.3d 657, 665 n.3 (Tex. App.—Houston

[1st Dist.] 2016, no pet.). A trial court abuses its discretion if it acts without

reference to any guiding rules and principles to the extent the act was arbitrary or

unreasonable. See Am. Flood Research, Inc. v. Jones, 192 S.W.3d 581, 583 (Tex.

2006) (per curiam).

Recovery of Attorney’s Fees

In its first issue, Propel contends that the trial court abused its discretion by

awarding it $0.00 in attorney’s fees and expenses. Propel argues that (1) it is entitled

to reasonable and necessary attorney’s fees pursuant to the parties’ contract and by

statute; (2) this is not a lodestar case; (3) the uncontroverted evidence is legally

sufficient to prove the reasonable and necessary attorney’s fees and expenses in a

non-lodestar case. Alternatively, Propel asserts that, if the lodestar method applies,

4 the original and amended evidence submitted to the trial court is sufficient to prove

its reasonable and necessary attorney’s fees.

A. Basis for Recovery

Under Texas law, litigants can only recover attorney’s fees if a statute or

contract specifically provides for such recovery. Epps v. Fowler, 351 S.W.3d 862,

865 (Tex. 2011) (citing Intercontinental Grp. P’ship v. KB Home Lone Star L.P.,

295 S.W.3d 650, 653 (Tex. 2009). Propel contends that it is entitled to recover its

reasonable and necessary attorney’s fees and expenses on three bases: (1) provisions

of the Tax and Finance Codes; (2) its contract with Perez; and (3) Chapter 38 of the

Civil Practice and Remedies Code.

As a tax lien “transferee,”2 Propel is entitled to collect “the fees expressly

authorized under Section 351.0021, Finance Code.” TEX. TAX CODE ANN.

§ 32.06(e-1)(5) (West 2015). Section 351.0021 of the Finance Code authorizes the

recovery of “reasonable and necessary attorney’s fees, recording fees, and court

costs for actions that are legally required to respond to a suit filed under Chapter 33,

2 “Transferee” means a person who is licensed under Chapter 351, Finance Code, or is exempt from the application of that chapter under Section 351.051(c), Finance Code, and who is: (A) authorized to pay the taxes of another; or

(B) a successor in interest to a tax lien that is transferred under this section.

TEX. TAX CODE ANN. § 32.06(a)(2) (West 2015).

5 Tax Code, or to perform a foreclosure, including fees required to be paid to an

official and fees for an attorney ad litem.” TEX. FIN. CODE ANN. § 351.0021(a)(4)

(West 2016). Here, the underlying suit in this case was for recovery of delinquent

taxes, penalties, interest, costs, fees, and for foreclosure.

In addition to the above statutory basis for recovery of attorney’s fees, the

record reflects that Perez signed a property tax payment agreement which provides

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