Roger Wisard and Katherine Armstrong v. Henry Koenig and Janis Koenig D/B/A Rio Vista Resort

• Court: Court of Appeals of Texas
• Decided: April 20, 2015
• Docket: 03-13-00480-CV
• Status: Published

Opinion

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

NO. 03-13-00480-CV

Roger Wisard and Katherine Armstrong, Appellants

v.

Henry Koenig and Janis Koenig d/b/a Rio Vista Resort, Appellees

FROM THE COUNTY COURT OF LLANO COUNTY NO. 02224, HONORABLE GUILFORD L. JONES III, JUDGE PRESIDING

MEMORANDUM OPINION

This is an appeal from a bench trial in a breach of contract case. The issue presented

is whether the trial court abused its discretion by awarding attorney’s fees to a prevailing party

whose net recovery on a counterclaim was zero. We will affirm the judgment.

BACKGROUND

The parties agree that they entered into a valid contract. Roger Wisard and Katherine

Armstrong sued Henry Koenig and Janis Koenig d/b/a Rio Vista Resort (“the Resort”), alleging

breach of contract and other causes of action. The Resort counterclaimed, alleging that Wisard and

Armstrong breached the contract. The judgment reflects that a jury was waived. The trial court

ruled in favor of the Resort, against Wisard and Armstrong, and awarded the Resort attorney’s fees.

The record on appeal is slim at best. There is no reporter’s record of the trial

testimony or any evidence introduced. We were not provided a copy of the parties’ contract or its terms. There are no findings of fact or conclusions of law, other than recitations in the judgment,

and none were requested. We have only a clerk’s record, consisting of each party’s pleading and

the court’s judgment, and a partial reporter’s record, consisting of testimony the Resort designated

in support of its claim for attorney’s fees and the arguments as to those fees. See Tex. R. App.

P. 34.6 (c)(2) (allowing parties other than appellant to designate portions of testimony for inclusion

in reporter’s record).

From the pleading allegations and briefs, it appears that Wisard and Armstrong

entered into a contract with the Resort to use its premises and hotel rooms for a wedding during the

2011 Memorial Day weekend. They paid the Resort several nonrefundable deposits, then informed

the Resort on April 30 that they would not use all the facilities previously reserved. The dispute

revolved around whether, based on their contract and any modification, the Resort owed Wisard and

Armstrong any refund from the deposits they had made or whether Wisard and Armstrong owed the

Resort more money due to their late cancellation. Wisard and Armstrong sought a refund of $7,164

for deposits they paid on room reservations that they later cancelled. The Resort sought $5,512 for

the last unpaid deposit, lost income, property damage, and other expenses. Both sides requested

attorney’s fees.

The trial court ruled against Wisard and Armstrong on their claims for breach of

contract, promissory estoppel, and deceptive trade practices. The court’s judgment expressly recited

that the parties had not modified their contract, that Wisard and Armstrong were not entitled to any

refund or other recovery from the Resort, and that they took nothing on their claims.

The court ruled in favor of the Resort on its breach-of-contract counterclaim. The

court found that Wisard and Armstrong breached the parties’ contract, but the judgment does not

2 recite any amount awarded to the Resort for recovery.1 Instead, the judgment recites that “the lawful

and allowable credits and offsets against the award to [the Resort] cancels the amount of [the

Resort’s] recovery against [Wisard and Armstrong].” Thus, the judgment indicates that the court

determined the amount the Resort was entitled to recover for the breach, reduced that amount

by what the court determined to be all of Wisard and Armstrong’s lawful and allowable credits

and offsets against that sum, and ruled that no further damages were owed to the Resort. In effect,

the Resort was awarded the money in dispute, which satisfied its claim, but was not awarded

further damages. The judgment further shows that the court awarded the Resort attorney’s fees and

expenses of $6,847.32. This appeal followed.

DISCUSSION

Wisard and Armstrong bring one issue on appeal, contending that the trial court

abused its discretion in awarding the Resort attorney’s fees on its counterclaim because its net

recovery was zero, and therefore the Resort “took nothing.” The Resort responds that it recovered

on its counterclaim and contends, among other arguments, that the appellate court cannot reverse the

judgment for abuse of discretion absent a complete record.

An award of attorney’s fees rests in the sound discretion of the trial court, and the

judgment will not be reversed absent a clear showing that the court abused its discretion. City of

Austin v. Janowski, 825 S.W.2d 786, 788 (Tex. App.—Austin 1992, no writ). A trial court

abuses its discretion when it acts without reference to any guiding rules and principles. Downer

1 The Resort’s brief states that it was awarded damages of $5,512.00, which is the amount requested in the Resort’s counterclaim, but the record contains no evidence of this amount.

3 v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241 (Tex. 1985). When reviewing a trial court’s

decision under this standard, we must view the evidence in the light most favorable to the

trial court’s ruling and indulge every presumption in its favor. Aquaduct, L.L.C. v. McElhenie,

116 S.W.3d 438, 444 (Tex. App.—Houston [14th Dist.] 2003, no pet.). We cannot set aside the

award without examining the entire record to determine whether the trial court abused its discretion

in awarding fees. See Mercedes-Benz Credit Corp. v. Rhyne, 925 S.W.2d 664, 666 (Tex. 1996).

Absent a sufficient record, we must presume that the record contains evidence to support a judgment.

Simon v. York Crane & Rigging Co., 739 S.W.2d 793, 795 (Tex. 1987). The complaining party has

the burden to bring forth the record demonstrating the trial court’s abuse of discretion. Id.; see also

Favaloro v. Commission for Lawyer Discipline, 13 S.W.3d 831, 840 (Tex. App.—Dallas 2000,

no pet.) (noting that points of error dependent on the state of the evidence cannot be reviewed

without complete record and holding that appellant waived review by failing to bring complete

record for review of trial court’s award of attorney’s fees). The complaining party must show that

the trial court’s judgment is arbitrary and unreasonable. See Janowski, 825 S.W.2d at 788.

The trial court can award attorney’s fees to a prevailing party in a breach of contract

case. Tex. Civ. Prac. & Rem. Code § 38.001(8). To recover fees under this statute, a litigant must

(1) prevail on a breach of contract claim and (2) recover some amount of damages on the claim.

MBM Fin. Corp. v. Woodlands Operating Co., 292 S.W.3d 660, 666 (Tex. 2009). Attorney’s fees

cannot be awarded when the litigant fails to recover damages resulting from the breach. Green Int’l,

Inc. v. Solis, 951 S.W.2d 384, 390 (Tex. 1997); see also In re Nalle Plastics Family Ltd. P’ship,

406 S.W.3d 168, 173 (Tex. 2013). However, the Texas Supreme Court has held that a party need

not obtain a net recovery to be entitled to recover its requested attorney’s fees. McKinley v. Drozd,

4 685 S.W.2d 7, 10-11 (Tex. 1985) (construing predecessor to chapter 38 of Civil Practice and

Remedies Code and concluding that party was entitled to attorney’s fees even though its damages

were offset by opposing party’s counterclaim); Imperial Lofts, Ltd. v. Imperial Woodworks, Inc.,

245 S.W.3d 1, 8 (Tex. App.—Waco 2007, pet. denied); Murrco Agency, Inc. v. Ryan, 800 S.W.2d

600, 602-03 (Tex. App.—Dallas 1990, no writ).

Here, the judgment shows that the Resort prevailed on its breach-of-contract

counterclaim and was awarded some amount of damages against Wisard and Armstrong, but

“credits and offsets against the award” resulted in no net recovery. The Resort’s net recovery of zero

does not bar its award of attorney’s fees under chapter 38. See Drozd, 685 S.W.2d at 10-11. Thus,

Wisard and Armstrong failed to demonstrate from this limited record that the trial court’s award of

attorney’s fees to the Resort was an abuse of its discretion.

CONCLUSION

We overrule the issue on appeal and affirm the judgment.

__________________________________________

Marilyn Aboussie, Justice

Before Justices Goodwin, Field, and Aboussie*

Affirmed

Filed: April 17, 2015

* Before Marilyn Aboussie, Chief Justice (retired), Third Court of Appeals, sitting by assignment. See Tex. Gov’t Code § 74.003(b).