Billing “A lot of Time” Preparing for Trial is Insufficient to Support Fee Award, Says Texas Supreme Court

alotAlthough the Texas Supreme Court handed down its El Apple opinion over 20 months ago, attorneys continue to submit inadequate affidavits and fail to provide redacted fee bills in discovery, precluding  recovery of attorney’s fees. Don’t say we didn’t warn you. In City of Laredo v. Montano, the Texas Supreme Court reaffirmed its holding in El Apple and confirmed that the days of submitting conclusory affidavits and hyperbolic testimony as “evidence” of attorney’s fees are gone (in most cases).

At issue in City of Laredo was the attempted condemnation of property in the central business district of Laredo owned by the Montano family. In December of 2004, the City decided it needed the Montanos’ property to widen a street and build a pedestrian plaza near the bridge. The Montanos refused to sell. The family claimed that the City had no public purpose for their land but rather merely intended to benefit El Portal Center, a private entity operating a nearby shopping center.

The City filed suit to condemn the property in March of 2006, and the case was tried to a jury about four years later. The jury agreed with the Montanos that the City had no authorized public use for the property and awarded attorney’s fees and expenses. The trial court rendered judgment on the jury verdict, awarding the Montanos $446,000 in attorney’s fees through trial, additional attorney’s fees on appeal, and additional sums for appraisals and other expenses the property owners incurred. The City appealed the attorney’s fees award.

A Tale of Two Attorneys

During the litigation, the Montanos were represented by multiple attorneys, including Richard J. Gonzalez and Adriana Benavides-Maddox. Gonzalez testified to performing the following tasks in the Montanos’ defense: (1) making an open records request; (2) searching through city council meeting minutes regarding the Montano family’s property; (3) watching 38 DVDs of the city-council meetings (some more than once); (4) visiting the premises many times; (5) conducting “a lot” of legal research; (6) preparing the pleadings and motions; (7) spending time in court for appearances; (8) spending “countless hours” preparing for and taking depositions; (9) reviewing the transcripts and DVDs of the depositions; and (10) preparing for trial and trying the case. Gonzalez further testified to working on the case for 226 weeks, estimating that he devoted on average “a barebones minimum” of six hours a week to the case.

The Court held that Gonzalez’s testimony that he spent “a lot of time getting ready for the lawsuit,” conducted “a lot of legal research,” visited the premises “many, many, many, many times,” and spent “countless” hours on motions and depositions was not evidence of a reasonable attorney’s fee under the lodestar method. Montano, 414 S.W.3d 731, 736 (Tex. 2013) (citing El Apple I, Ltd. v. Olivas, 370 S.W.3d 757, 763 (Tex. 2012)). In fact, the Court characterized Gonzalez’s testimony as “simply devoid of substance.”

The Court reaffirmed El Apple, noting 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.” Id. (citing El Apple, 370 S.W.3d at 765). The Court further noted that “in all but the simplest cases, the attorney would probably have to refer to some type of record or documentation to provide this information.” Based on this reasoning, the Court reversed the award of attorney’s fees to Gonzalez and remanded the case back to the trial court for further proceedings.

Benavides-Maddox’s testimony, on the other hand, was not deficient. She testified that she used a billing system to keep track of her time in the case and that she had billed, and been paid, $25,000 for her work up to trial. She further testified that her contract with the Montanos provided for payment at her $200 hourly rate. Finally, she testified that she arrived early each day of trial and continued to work after the jury was dismissed preparing for the next day. She estimated that she worked about twelve hours per day during the course of the five-day trial. The Court noted:

While similar to Gonzalez’s estimation that he worked the case an average of six hours a week during his four-year involvement, it is also different in significant respects. The billing inquiry here involves contemporaneous events and discrete tasks—the trial and associated preparation for each succeeding day. Moreover, it is a task the opponent witnessed at least in part, having also participated in the trial. Despite this knowledge, Benavides-Maddox’s charges relating to the trial were not questioned on cross-examination. Unlike Gonzalez’s testimony, Benavides-Maddox’s testimony about her unbilled trial work is some evidence on which to base an award of attorney’s fees because it concerns contemporaneous or immediately completed work for which she had not had time to bill, or presumably even record, in her billing system.

Id. at 737. The Court affirmed the award attributable to Benavides-Maddox’s fees.

The tale of these two attorneys provides an important moral: he that does not keep (and submit) contemporaneous billing records or other documentation recorded reasonably close to the time when the work is performed is a man awaiting his folly.

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