A Texas law firm will avoid paying $90,000 in attorneys’ fees over a breach of contract dispute it lost, after a Texas appeals court said Thursday that the the fees weren’t recoverable under a state declaratory judgments law.
Ramey & Schwaller LLP denied owing nearly $9,000 in eight unpaid invoices to The Document Group Inc., a document-management company, because it alleged it was working as an agent for two of its clients. However, TDG claimed that the law firm never informed it to bill the two clients, and it sued the firm for breach of contract.
Later, TDG amended its pleading to add a cause of action under the state Declaratory Judgments Act to get the court to rule that the firm never disclosed it was acting as an agent. TDG also sought a declaration of its rights under the invoices it sent out and attorneys’ fees.
A jury ruled against Ramey & Schwaller, which appealed on several issues, including that the jury had improperly awarded TDG attorneys’ fees.
Because TDG’s amended petition seeking declaration of its rights under the invoices added another issue that was similar to the one already being litigated, attorney’s fees weren’t recoverable, the Texas Court of Appeals, First District, said.
While the DJA can be used to award reasonable attorneys’ fees, it can’t be used as a vehicle to obtain “otherwise impermissible attorneys’ fees,” the court said. Here, TDG doesn’t dispute that it used the DJA to get the $90,000 in attorneys’ fees because these fees weren’t available in its original claim due to the terms of the contract.
Therefore, because there is no material distinction between the TDG’s declaratory judgment claim and its breach of contract claim, the state appeals court deleted the attorneys’ fees from the trial court’s judgment.
The court rejected Ramey & Schwaller’s appeals on other issues.
Justice Richard Hightower delivered the opinion. Justices Sarah Beth Landau and Veronica Rivas-Molloy joined.
Ramey & Schwaller represented itself. Irelan McDaniel PLLC represented TDG.
The case is Ramey & Schwaller LLP v. Document Grp., Inc., Tex. App., 1st Dist., No. 01-20-00368-CV, 5/19/22.