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Texas Jury Denies Attorney Fees to Prevailing Oil Companies

July 22, 2015 | Posted in : Defense Fees / Costs, Fee Award, Fee Clause, Fee Dispute, Fee Entitlement / Recoverability, Fee Expert / Member, Fee Request, Fee Shifting, Fee Statute, Prevailing Party Issues

A recent Texas Lawyer story, “Suit Sparks Brawl Over $589K in Attorney Fees,” reports that two Texas oil companies recently won a jury trial in a landman case fought in Dallas County, yet the jury failed to award the winning parties their respective attorney fees that together total approximately $600,000.

In 2013, plaintiff Cherene Jackson Patty filed a breach of contract suit in Dallas County against SDC Montana Consulting and U.S. Enercorp.  Patty alleged that the two companies were contractually obligated to pay her work as a landman for all past revenue shares and overriding royalty payments.  Patty alleged that the two defendants owed her approximately $855,000 in commissions, after giving them credit for a partial payment of approximately $188,650.  She also was seeking punitive damages and attorney fees.

The jury ruled in favor of the defendants, saying the oil companies did not violate their contract with Patty.  However, the jurors did not award attorney fees to U.S. Enercorp and SDC Montana Consulting.  In response, the two companies’ lawyers filed a motion asking the judge to disregard the jury’s verdict and award attorney fees.  According to court records, U.S. Enercorp is asking for $490,000 in attorney fees and SDC Montana Consulting is asking for $99,751.

Corey Wehmeyer, a partner with the San Antonio-based law firm Santoyo Moore Wehmeyer who represents U.S. Enercorp in the case, said, “The contract plaintiff sued under contains a ‘loser pays’ clause awarding attorney fees to the prevailing party in any litigation.  After being sued in approximately 11 different causes of action by the plaintiff, U.S. Enercorp Ltd. prevailed on the entirely of every claim asserted by plaintiff in the case.  In addition to its contractual right to recover attorney fees, U.S. Enercorp prevailed in causes of action for fraudulent transfer and declaratory judgment that statutorily provide for an award of fees to U.S. Enercorp as the prevailing party.”

He commented that expert testimony from U.S. Enercorp’s counsel at trial established the reasonable fee for U.S. Enercorp’s attorneys’ services as $450,000, and plaintiff called no rebuttal witness and offered no testimony to rebut the reasonableness of the $450,000 in fees.  Pursuant to Texas Supreme Court precedent, in this situation U.S. Enercorp is entitled to judgment against plaintiff for $450,000 as a matter of law, according to Wehmeyer.