IN THE SUPREME COURT OF TEXAS
`444444444444
`NO. 12-0274
`444444444444
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`CITY OF LAREDO, TEXAS, PETITIONER,
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`v.
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`LUIS MONTANO, CECILIA MONTANO MOTA, CRUZ JORGE MONTANO, CLARENCE
`HILLBURN AND CLARENCE HILLBURN AS EXECUTOR OF THE ESTATE OF GLORIA
`MONTANO HILLBURN, DECEASED, RESPONDENTS
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`4444444444444444444444444444444444444444444444444444
`ON PETITION FOR REVIEW FROM THE
`COURT OF APPEALS FOR THE FOURTH DISTRICT OF TEXAS
`4444444444444444444444444444444444444444444444444444
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`PER CURIAM
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`In this eminent-domain case, a jury determined that the City of Laredo’s condemnation was
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`not for an authorized public use and awarded attorney’s fees and expenses to the property owner
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`under Texas Property Code § 21.019(c). This fee-shifting statute authorizes the trial court to “make
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`an allowance to the property owner for reasonable and necessary fees” and expenses to the judgment
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`date, when condemnation is denied. The City appealed the award, complaining about deficiencies
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`in the property owner’s attorney’s fees proof under the fee-shifting statute. The court of appeals
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`reformed the award in part and, as reformed, affirmed. ___ S.W.3d ___, ___ (Tex. App.—San
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`Antonio 2012). Because we conclude that deficiencies remain in the property owner’s proof of
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`attorney’s fees, we reverse the court of appeals’ judgment, in part, and remand to the trial court for
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`further proceedings.
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`The Montano family owns property in the central business district of Laredo near the
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`International Bridge No. 1 to Mexico. In December 2004, the City decided it needed the Montanos’
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`property to widen a street and build a pedestrian plaza near the bridge. The Montanos refused to sell.
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`The family claimed that the City had no public purpose for their land but rather merely intended to
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`benefit El Portal Center, a private entity operating a nearby shopping center.
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`The City filed suit to condemn the property in March 2006. The case was tried to a jury
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`about four years later. The jury agreed with the Montanos that the City had no authorized public use
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`for the property and awarded attorney’s fees and expenses. The trial court rendered judgment on the
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`jury verdict, awarding the Montanos $446,000 in attorney’s fees through trial, additional attorney’s
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`fees on appeal, and additional sums for appraisals and other expenses the property owner incurred.
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`The City appealed the attorney’s fees award.
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`The court of appeals reversed the award of appellate attorney’s fees, holding that the statute
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`did not authorize their recovery. ___ S.W.3d at ___ (citing FKM P’ship Ltd. v. Board of Regents of
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`the Univ. of Houston Sys., 255 S.W.3d 619, 637 (Tex. 2008)). And, after the Montanos agreed to
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`reduce their attorney’s fees recovery to $422,302.91 through remittur, the court of appeals affirmed
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`the remainder of the judgment. Id. at ___. The City appeals, asking this Court to remand the
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`attorney’s fees award to the trial court for reconsideration because of inadequacies in the Montanos’
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`proof.
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`During this litigation, the Montanos were represented by three attorneys, Lopez Peterson,
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`L.L.C., Richard J. Gonzalez, and Adriana Benavides-Maddox. The trial court awarded the Montanos
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`their attorney’s fees as a lump sum, but the court of appeals broke the award down by representation,
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`concluding the evidence to be legally and factually sufficient to support an award of “$46,302.91 for
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`Lopez Peterson’s hours, $339,000 for Gonzalez’s hours, and $37,000 for Benavides-Maddox’s
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`hours,” yielding a reasonable and necessary fee of $422,302.91 through the trial of the case. Id. at
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`___. Lopez Peterson represented the Montanos only through the Special Commissioner’s award, and
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`the City does not question its fees in this Court. The City, however, does question the fees attributed
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`to the other two attorneys, Gonzalez and Benavides-Maddox, and their testimony in support of the
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`award.
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`Gonzalez testified that Luis Montano hired him as the lead attorney in the case in December
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`2004 or January 2005. Gonzalez did not testify as to the details of his fee agreement, but his
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`testimony about the hours devoted to the case suggests the agreement was for Gonzalez to be paid
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`an hourly rate, rather than a negotiated or contingent fee. The attorney testified to performing the
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`following tasks in the Montanos’ defense: (1) made an open records request; (2) searched through
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`city council meeting minutes regarding the Montano family’s property; (3) watched thirty-eight
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`DVDs of the city council meetings (some more than once); (4) visited the premises many times; (5)
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`conducted “a lot” of legal research; (6) prepared the pleadings and motions; (7) spent time in court
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`for appearances; (8) spent “countless hours” preparing for and taking depositions; (9) reviewed the
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`transcripts and DVDs of the depositions; and (10) prepared for trial and tried the case. Gonzalez
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`further testified to working on the case for 226 weeks, estimating that he devoted on average “a
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`barebones minimum” of six hours a week to the case.
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`Gonzalez, however, admitted that he did not keep time records in the case. Moreover, he
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`apparently did not have a firm idea about what the Montanos owed him for his work before his
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`testimony at trial. While on the witness stand, Gonzalez was given a calculator with which he
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`eventually estimated that he had 1,356 hours in the case (226 weeks x 6 hours/week). He then
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`multiplied those hours by his hourly rate of $250 to conclude that the Montanos owed him a fee of
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`$339,000 through trial. He noted that the family had previously paid him $35,000, leaving a balance
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`of $304,000.
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`In addition to the time and labor involved in representing the Montanos, Gonzalez touched
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`upon some other factors that we have acknowledged as relevant to the determination of a reasonable
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`attorney’s fee. See Arthur Andersen & Co. v. Perry Equip. Corp., 945 S.W.2d 812, 818 (Tex. 1997)
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`(quoting Texas Disciplinary Rule of Professional Conduct 1.04, State Bar Rules, Art. 10 § 9, Rule
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`1.04). Gonzalez testified that recent changes in the law made the case novel and complicated. He
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` Gonzalez did not represent the Montanos before the Special Commissioners but returned to the case after the
`Special Commissioners awarded the property to the City.
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`2 (
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` The decision and rule list the following eight factors as relevant when determining the reasonableness of a fee:
`1) the time and labor required, the novelty and difficulty of the questions involved, and the skill required to
`perform the legal service properly;
`(2) the likelihood ... that the acceptance of the particular employment will preclude other employment by the
`lawyer;
`(3) the fee customarily charged in the locality for similar legal services;
`(4) the amount involved and the results obtained;
`(5) the time limitations imposed by the client or by the circumstances;
`(6) the nature and length of the professional relationship with the client;
`(7) the experience, reputation, and ability of the lawyer or lawyers performing the services; and
`(8) whether the fee is fixed or contingent on results obtained or uncertainty of collection before the
`legal services have been rendered.
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`also claimed to have turned away other business because of the time demands of the case, although
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`he could not remember any specific examples. Finally, he noted his success in defeating the City’s
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`attempt to condemn the Montanos’ property for far less than its appraised $4,000,000 value, and the
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`defense’s modest cost, which was only about ten percent of the property’s value. There was also
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`testimony that Gonzalez was one of only a few local attorneys who would take this type of case and
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`that his hourly rate of $250 an hour was reasonable and customary for a lawyer of his experience,
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`reputation, and ability.
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`On cross-examination, Gonzalez conceded that this was his first condemnation case, although
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`he claimed extensive experience in other types of litigation against the government. When asked
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`about any bills, invoices or other documentary evidence of his time in the case, Gonzalez admitted
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`he had none but pointed to the “thousands and thousands and thousands of pages that were
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`accumulated in this case” as evidence of his time investment. Gonzalez further conceded that he
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`would have put more effort into documenting his hours in the case were he preparing a bill for his
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`client.
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`When asked about tracking his time for billing purposes, Gonzalez began to explain his
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`process before a sustained objection cut him off in mid-sentence:
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`Normally the way that I would do this is that I would go back in time and look at the
`documents in the case and then that would help me to make a list of how much time
`I spent; for example, preparing the list of witnesses that was requested by your office.
`I remember that list of witnesses and the list of —
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`Later, Gonzalez explained that his estimate of six hours a week on average during the course of the
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`litigation was conservative, suggesting that he was giving the City a discount for his billable time
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`in the case:
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`I know that if I had had the time to put together the list of the work that I performed,
`that it would be well over the amount that I’m requesting. I know that it would be
`more than that number of hours and I would be able to tell you for each and every
`thing that I did in this case.
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`Luis Montano also hired Benavides-Maddox to assist Gonzalez in the case and agreed to pay
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`$200 an hour for her work. Benavides-Maddox testified that her hourly rate was reasonable and
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`customary for a lawyer of her competence and experience. She did not list all her tasks, but she
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`testified about her areas of responsibility. Among other things, she was responsible for creating the
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`jury charge, managing the experts, and understanding their appraisal and evaluation methods for her
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`direct examination during the trial. Benavides-Maddox testified that she kept detailed billing records
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`of her tasks and the time spent, and had billed and been paid $25,000 for her work before the trial
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`began. Luis Montano confirmed that Benavides-Maddox had been paid $25,000 for her work.
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`Benavides-Maddox also testified that she put in twelve hour days during the five-day trial and was
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`therefore owed an additional $12,000 for her trial work. On cross-examination, she was asked
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`whether she had brought any records to document her time in the case. Benavides-Maddox replied
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`that she had not, explaining that the City had not asked her to produce these records.
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`Using the Andersen factors, the court of appeals found the evidence legally and factually
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`sufficient to support an attorney’s fee award to the Montanos in the amount of $422,302.91, which
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`included “$339,000 for Gonzalez’s hours and $37,000 for Benavides-Maddox’s hours.” ___ S.W.3d
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`at ___. The City complains that the evidence of attorney’s fees is insufficient because Gonzalez and
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`Benavides-Maddox failed to produce time records, billing statements, or even a client agreement to
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`substantiate their fee requests. The City argues that such documentation is necessary in light of our
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`recent decision in El Apple I, Ltd. v. Olivas, 370 S.W.3d 757 (Tex. 2012).
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`In El Apple, the claimant sought recovery of attorney’s fees in connection with a claim under
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`the Texas Human Rights Commission Act. We held that an award under that statute had to be based
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`on the “lodestar” method, which required consideration of the time spent, the reasonable value of
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`that time, and whether the time was reasonable and necessary. Id. at 760. We further observed that
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`testimony in generalities about tasks performed in a case that did not provide enough information
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`for a meaningful review of whether the tasks and hours were reasonable and necessary was an
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`insufficient basis for a lodestar calculation. Id. at 763. Finally, we observed that hours not properly
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`billed to one’s client are also not properly billed to one’s adversary under a fee-shifting statute. Id.
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`at 762 (quoting Hensley v. Eckerhart, 461 U.S. 424, 434 (1983).
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`Contrary to the City’s argument, El Apple does not hold that a lodestar fee can only be
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`established through time records or billing statements. We said instead that an attorney could testify
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`to the details of his work, but that “in all but the simplest cases, the attorney would probably have
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`to refer to some type of record or documentation to provide this information.” Id. at 763. For this
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`reason, we encouraged attorneys using the lodestar method to shift their fee to their opponent to keep
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`contemporaneous records of their time as they would for their own client. Id. The fee-shifting
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`statute in this case, however, does not require that attorney’s fees be determined under a lodestar
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`method, as in El Apple. The property owner nevertheless chose to prove up attorney’s fees using this
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`method and so our observations in El Apple have similar application here. And, as was the “proof”
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`in El Apple, Gonzalez’s testimony here is simply devoid of substance.
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`Gonzalez testified that he had reasonably accumulated about 1,356 hours in the case. He
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`came to this number by multiplying his 226 weeks of active employment by a factor of six,
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`representing his estimate of the average number of hours per week he worked the case. But some
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`weeks, like the week of trial or the weeks he prepared for depositions, he obviously spent far more
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`than this average weekly estimate. Other weeks, he must have devoted little or no time to the case
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`to balance out these busier weeks and net his estimate of six hours. The record, however, provides
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`no clue as to how Gonzalez came to conclude that six hours a week was a “conservative” estimate
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`of his time in the case. Our puzzlement deepens when we consider Gonzalez’s testimony that he did
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`not make any record of his time in the case or prepare any bills or invoices for the Montanos. In fact,
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`Gonzalez does not appear to have known how much he was owed for his services until the
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`calculations at trial. In short, Gonzalez offered nothing to document his time in the case other than
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`the “thousands and thousands and thousands of pages” generated during his representation of the
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`Montanos and his belief that he had reasonably spent 1,356 hours preparing and trying the case. We
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`rejected similar proof in El Apple. Id. at 763.
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`Gonzalez’s testimony that he spent “a lot of time getting ready for the lawsuit,” conducted
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`“a lot of legal research,” visited the premises “many, many, many, many times,” and spent
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`“countless” hours on motions and depositions is not evidence of a reasonable attorney’s fee under
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`lodestar. See id. (noting that time estimates based on generalities provide none of the specificity
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`needed for a court to make a meaningful lodestar determination). In El Apple, we said that a lodestar
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`calculation requires certain basic proof, including itemizing specific tasks, the time required for those
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`tasks, and the rate charged by the person performing the work. Id. at 765. Here, Gonzalez conceded
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`that had he been billing his client he would have itemized his work and provided this information.
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`A similar effort should be made when an adversary is asked to pay instead of the client. See id. at
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`762 (“A meaningful review of the hours claimed is particularly important because the usual incentive
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`to charge only reasonable attorney’s fees is absent when fees are paid by the opposing party.”).
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`Benavides-Maddox’s testimony, on the other hand, is not similarly deficient. She testified
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`that she used a billing system to keep track of her time in the case and that she had billed, and been
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`paid, $25,000 for her work up to trial. She further testified that her contract with the Montanos
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`provided for payment at her $200 hourly rate. Finally, she testified that she arrived early each day
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`of trial and continued to work after the jury was dismissed preparing for the next day. She estimated
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`that she worked about twelve hours per day during the course of the five-day trial. While similar to
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`Gonzalez’s estimation that he worked the case an average of six hours a week during his four-year
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`involvement, it is also different in significant respects.
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`The billing inquiry here involves contemporaneous events and discrete tasks—the trial and
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`associated preparation for each succeeding day. Moreover, it is a task the opponent witnessed at
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`least in part, having also participated in the trial. Despite this knowledge, Benavides-Maddox’s
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`charges relating to the trial were not questioned on cross-examination. Unlike Gonzalez’s testimony,
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`Benavides-Maddox’s testimony about her unbilled trial work is some evidence on which to base an
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`award of attorney’s fees because it concerns contemporaneous or immediately completed work for
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`which she had not had time to bill, or presumably even record, in her billing system. The court of
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`appeals accordingly did not err in affirming the award attributable to her fees.
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`The court of appeals, however, did err in affirming the part of the award attributable to
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`Gonzalez’s claimed fee of $339,000. Accordingly, pursuant to Texas Rule of Appellate Procedure
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`59.1, the Court grants the petition for review and, without hearing oral argument, reverses the court
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`of appeals’ judgment as to the amount of the award due to Gonzalez’s services and remands to the
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`trial court for further proceedings.
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`Opinion Delivered: October 25, 2013
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