A Prevailing Party Fee Provision Does Not Make Attorney Fees Compensatory Damages

When a judgment judgment for breach of contract is entered that includes an award of attorney fees, the defendant is generally not required to supersede that fee award in order to suspend judgment. Instead, the defendant only has to supersede post-judgment interest on the award for the expected duration of the appeal. In this case, Highland Capital Management was awarded $2.8 million in attorney fees, but the defendant only bonded out $287,000. Highland moved to increase the supersedeas bond, arguing that the attorney fees were actually compensatory damages because the parties’ contract contained a clause requiring the defendant to pay Highland’s fees in the event of a breach. The Court of Appeals rejected that argument, essentially concluding that an award of attorney fees under the contract was no different than an award of attorney fees under Chapter 38 of the Civil Practice & Remedies Code (which Highland had also sought in its pleadings and at trial).

Highland Capital Mgmt., L.P. v. Daugherty, No. 05-14-01215-CV