Lawsuit Against Guarantors of a Shopping Center Lease in Texas

In Smith v. Patrick W.Y. Tam Trust, 296 S.W.3d 545 (Tex. 2009), the landlord sued the guarantors of a shopping center lease for $ 215,391.50 in damages and sought $ 47,438.75 in attorney's fees. Id. at 546.

The guarantors unsuccessfully objected to the landlord's attorney fee statements as hearsay but did not otherwise challenge or contradict the landlord's evidence of attorney's fees. Id.

The jury found the guarantors liable but awarded only $ 65,000 in damages and no attorney's fees. Id. The trial court entered judgment that the landlord receive $ 65,000 in damages, but it rendered judgment notwithstanding the jury's verdict that the landlord recover $ 7,500 in attorney's fees. Id. at 546-47.

The court of appeals vacated the award of $ 7,500 in attorney's fees, rendered judgment that the landlord recover all of the $ 47,438.75 in attorney's fees it proved at trial, and held that the trial court abused its discretion by awarding only $ 7,500 in attorney's fees because the landlord presented uncontroverted evidence of its attorney's fees. Id. at 547.

The supreme court held that the fee of $ 47,438.75, "though supported by uncontradicted testimony, was unreasonable in light of the amount involved and the results obtained, and in the absence of evidence that such fees were warranted due to circumstances unique to this case." Id. at 548.

The court held that the court of appeals erred by holding that the landlord proved entitlement to the entire fee as a matter of law, but it also stated that although the jury "could have rationally concluded that, in light of the amount involved and the results obtained, a reasonable fee award was less than the full amount sought, no evidence supported the jury's refusal to award any attorney's fees." Id.

The court continued, "On retrial, the evidence may support a similar fee award, but that is a matter within the jury's purview." Id. .