The plaintiff in Kivowitz v. Dorfman sought to “remove his deceased parents’ remains from mausoleum crypts on Hillcrest’s property.” The defendants had a different view; the unfortunate cemetery operators were stuck in the middle. The resulting litigation contributes to the – body – of law about recoverability of attorneys’ fees in declaratory-judgment cases.

“Caught between competing demands and mindful of its statutory and contractual obligations,” the cemetery sought a declaratory judgment, and “took no position regarding appropriate disposition of the Decedents’ remains.”  The trial court issued a declaratory judgment that the plaintiff was right, and assessed attorneys’ fees of $191,245.25 against the cemetery pursuant to the Declaratory Judgment Act.

The cemetery appealed, noting that the (surprisingly detailed) provisions about the handling of human remains in the Health & Safety Code did not allow for the recovery of fees. The Fifth Court agreed and reversed, citing primarily MBM Fin. Corp. v. Woodlands Operating Co., 292 S.W.3d 660, 669 (Tex. 2009) (“[A] party cannot use the [Declaratory Judgments] Act as a vehicle to obtain otherwise impermissible attorney’s fees.”). Put another way, the plaintiff did not urn a fee award by his suit.

“First Ovilla sought to build a house on property that is encumbered by restrictive covenants, and the property owners’ association had previously sought to prevent another builder from constructing a house with a similar building plan. The amended permanent injunction signed in that case (and on which appellees largely relied in their plea to the jurisdiction) has been dissolved by this Court. Therefore, given the record before us, the declarations sought by First Ovilla present a justiciable controversy and are not moot.” First Ovila v. Primm, No. 05-19-00042-CV (April 27, 2020) (mem. op.) (emphasis added).

Majority: “Gutman’s petition alleges that Wells requested a release, Gutman refused to provide the release, and Wells and Arbitrage harassed and threatened Gutman because he refused to provide the release. This sets out a controversy—whether Gutman must provide the requested release—that is real and not hypothetical. Taking all reasonable inferences in Gutman’s favor there is a justiciable controversy because Wells is repeatedly harassing and threatening Gutman. Although these allegations are less than specific, at this early [Rule 91a] stage they adequately assert that the declaratory judgment will serve a useful purpose of terminating the parties’ controversy and ending the harassment and threats.”

Dissent: “First, Gutman does not seek construction of a contract, nor does he argue that his rights have been ‘affected by a statute, municipal ordinance, contract, or franchise . . . .’ Second, a fair reading of Gutman’s petition, and the majority’s characterization of it, shows his claims for civil harassment, to the extent such a cause of action exists, sound in tort.”

Gutman v. Wells, No. 05-18-01227-CV (Aug. 5, 2019) (mem. op.), and dissent.

Richardson Business Center proved an easement by estoppel, and appealed the trial court’s decision to not award attorneys’ fees for its successful declaratory-judgment action. However: “The trial court did not file findings of fact or conclusions of law. Without findings of fact establishing the basis for the trial court’s exercise of discretion, we cannot conclude as a matter of law that the trial court abused its discretion in declining to award attorney’s fees.” Hazzani v. Richardson Business Center, No. 05-18-00346-CV (July 21, 2019) (mem. op.)

A common issue about attorneys’ fees awards in commercial cases involves “allocation” between activity for which fees are recoverable (speaking generally, contract claims), and those for which they are not (again generally, related business tort claims.  A variant of that issue appeared in Anderton v. City of Cedar Hill, in which the City recovered attorneys’ fees in a declaratory judgment dispute with property owners about permissible land use. Unfortunately for the City, the fee award proved to have a weak connection to the four pieces of property at issue in the litigation:

• as to “Lot 4,” while the City argued that its use was a main objective of the litigation, the parties’ pleadings did not in fact make a claim about it, and the landowners voluntarily ceased to occupy it at some point during the litigation;
• as to “Lot 5,” the parties’ claims were mooted by zoning amendments that came after the majority of the fees incurred about it;
• as to “Lot 6,” while “[t]he City appears to have accomplished some, although not all, of its objectives,” “the [property owners] appear to have been largely successful in defending their use of” the lot, if not their construction on it;
• and as to “Lot 7,” the parties largely agreed upon the resolution of their issues.

Accordingly, after examining “the parties’ claims, objectives, and outcomes” about the lots, the Fifth Court concluded that a $166,000 fee award under the declaratory judgment statute was not “equitable or just.” No. 05-17-00138-CV (May 25, 2018).

In Premier Pools Management Corp. v. Premier Pools Inc., the Fifth Court found that a successful trademark plaintiff had established sufficient evidence of secondary meaning for the phrase “Premier Pools,” noting — in particular — the plaintiff’s proof about its advertising about and long use of the name, as well as the testimony of nine impartial witnesses about the issue of confusion. Similar evidence supported the findings for liability, damages, and disgorgement. The Court reversed the related declaratory judgment (and with it, the attorney’s fees award), finding that the “claim added nothing and provided access to no remedy that was not otherwise available . . . ” No. 05-14-01388-CV (Aug. 12, 2016) (mem. op.)

While otherwise affirming the plaintiffs’ victory in an easement dispute, the Dallas Court of Appeals struck a portion of the trial court’s declaratory judgment related to the legal rights associated with that easement.  The Court found no request for judgment on that matter in the plaintiffs’ live pleading or summary judgment motion, and also found that general discussion of the applicable city regulations had been offered for other purposes.  The Court reminded: “[A]n issue is not tried by consent when evidence relevant to the unpleaded issue is also relevant to a pleaded issue because admitting that evidence would not be calculated to elicit an objection and its admission would not prove the parties’ ‘clear intent’ to try the unpleaded issue.”  United Services Pyramid Group v. Hurt, Noi. 05-14-00108-CV (Dec. 7, 2015) (mem. op.)

Among several issues on appeal in this dispute between a commercial landlord and tenant, the Court of Appeals considered whether the defendant could recover attorneys’ fees pursuant to the declaratory judgments act.  After the plaintiff sued the defendant for breach of contract for failing to construct ramps in compliance with the ADA, the defendant responded by requesting a declaratory judgment that he had no duty to pay for the ramps.  Because the defendant’s counsel admitted at trial that the issues raised in his declaratory judgment action would be resolved by the plaintiff’s breach of contract lawsuit, the court rejected the defendant’s attempt to recover attorneys’ fees, noting the rule that “a party cannot use the declaratory judgments act merely as a vehicle to obtain otherwise impermissible attorney’s fees.”

Cellular Sales of Knoxville, Inc. v. McGonagle

Two and a half years ago, Charlene Taggert obtained the reversal of a declaratory judgment ordering that certain retirement accounts of her late husband belonged to his estate, not to her. The probate court had awarded attorney fees to the executors, so the Court of Appeals remanded to that court for further consideration of the attorney fees now that Charlene had become the prevailing party. On remand, the probate court awarded Charlene $18,000 for fees incurred at trial, and an additional $5,000 for the appeal. Both sides appealed the $5,000 award for the first appeal. The Court of Appeals rejected the executors’ claim that appellate fees could only be awarded on a conditional basis (i.e., “if the appeal is successful”), rather than for an appeal that has already been successful. The Court noted that “[o]n remand, the parties stand in the position they held before judgment was entered.” Likewise, the Court rejected Charlene’s argument that the probate court should have permitted her to offer new evidence of her actual appellate fees, rather than relying on the estimated fees presented during the original trial of the case. Relying on the Texas Supreme Court’s opinion in Varner v. Cardenas, 218 S.W.3d 68 (Tex. 2007), the Court held that retrial of a party’s attorney fees on remand is only necessary when the evidence offered at trial is no longer relevant.

Tigert v. Tigert, No. 05-12-01282-CV

According to the operators of Hank’s Texas Grill, the City of McKinney and its police officers have been wrongfully harassing the restaurant, its employees, and its customers for the last ten years. In response, the city alleges that Hank’s violates numerous city ordinances. The city filed a plea to the jurisdiction to invoke its governmental immunity. The trial court denied the plea, and the city appealed. Summarizing the recent (and conflicting) string of cases challenging local ordinances, the Court of Appeals concluded that “the Declaratory Judgments Act waives governmental immunity against claims that a statute or ordinance is invalid,” but “does not waive a governmental entity’s immunity against a claim that government actors have violated the law.” Construing Hank’s pleadings, the Court concluded that they did not demonstrate that Hank’s claim was outside the scope of the city’s governmental immunity. However, the pleading also did not demonstrate that the claim was barred by governmental immunity, meaning that Hank’s had to be given the opportunity to amend. The Court also affirmed the trial court’s ruling that Hank’s claim for damages was not barred by immunity to the extent that it was an offset against the city’s own damage claims. Finally, the Court of Appeals rejected the city’s claim that the trial court lacked subject matter jurisdiction to enjoin its enforcement of state laws and local ordinances, ruling that the pleadings and arguments at this stage of the case were still too unclear to affirmatively demonstrate that the trial court lacked jurisdiction to issue an injunction.

City of McKinney v. Hank’s Restaurant Group, L.P., No. 05-123-01359-CV