Tite Water Energy, LLC v. Wild Willy’s Welding LLC (No. 01-22-00158-CV; issued August 31, 2023) arose from personal injury lawsuit involving an explosion at a saltwater reclamation plant in Kingfisher, Oklahoma, owned by Devon Energy Corporation. While the injured party was offloading saltwater at the plant, Devon, Tite Water, and Wild Willy’s were conducting operations to pull oil from the bottom of a storage tanker. The injured employee sued Devon, Tite Water, and Wild Willy’s for negligence, gross negligence, and premises liability. Wild Willy’s sought defense and indemnification from Tite Water under the Master Service and Supply Agreement for Exploration and Production between Devon and Tite Water (the “MSSA”). When Tite Water refused, Wild Willy’s filed cross-claims against it for breach of the MSSA and declaratory judgment. The trial court bifurcated Wild Willy’s claims from the injured employee’s tort claims The remaining defendants settled the injured party’s claims during trial. Wild Willy’s claims went to the jury, which determined that Wild Willy’s was Devon’s agent and consultant for purposes of the MSSA and thus entitled to defense and indemnification. The jury found further that the reasonable and necessary attorney’s fees owing to Wild Willy’s came to about $1.3 million for trial and $35,000 for each level of the appellate process. The trial court entered judgment on the verdict for Wild Willy’s and denied Tite Water’s motions for JNOV, new trial, and to modify the judgment.
The court of appeals affirmed. First, the court determined that the trial court did not abuse its discretion when it submitted a question to the jury that included definitions of “agent” and “consultant.” Tite Water argued that these definitions were “superfluous” and “unnecessary and harmful” because they “prevented the jury from interpreting the terms in their ordinary or popular sense, prevented Tite Water from arguing to the jury that they should interpret these terms in their ordinary and popular sense, and [] ‘steered’ the jury towards finding that Wild Willy’s was Devon’s agent and consultant.” This outcome of this question, Tite Water argued, was determinative because if they jury found that Wild Willy’s met one or both of these definitions, it would be considered a member of the “Company Group” under the MSSA. The court held that even if submission of the definitions constituted an abuse of discretion, the error was harmless. Applying Oklahoma law (almost identical to Texas law on this question), the court found that the definitions in the jury charge were “based on dictionary definitions and Oklahoma court opinions,” including definitions from Black’s Law Dictionary and Cambridge Dictionary, Moreover, at the charge conference Tite Water never objected to the definitions themselves, just whether any definitions should be placed in the charge. Moreover, at trial Tite Water did not argue that Wild Willy’s use of the terms deviated from their ordinary or popular meaning, only that Wild Willy’s was operating as another party’s consultant and independent contractor, not Devon’s.
As to the attorney’s fee award, Tite Water raised legal and factual insufficiency issues and asserted that the trial court abused its discretion by awarding appellate attorney’s fees regardless of their success on the merits. It further challenged the trial court’s denial of its motions for JNOV, new trial, or to modify the judgment. Taking up the amount of the attorney’s fees, the court considered whether Wild Willy’s “prove[d] the attorney’s reasonable hours worked and reasonable rate by presenting sufficient evidence to support the fee award sought” (citation omitted). As Texas follows the lodestar method laid down by SCOTX in Arthur Anderson & Co. v. Perry Equip. Corp., 945 S.W.2d 812 (Tex. 1997), the proper calculation requires the finder of fact to determine “the reasonable hours spent by counsel in the case and the reasonable hourly rate for counsel’s work,” multiplied by the reasonably hourly rate. The factfinder may consider a non-exclusive list of factors, including the complexity of the work, the level of skill required, whether the attorney had to forego other work, the customary fee for similar services, the particular relationship with the client, the results obtained, the attorney’s reputation, expertise, and ability, and whether the fee is fixed or contingent. 945 S.W.2d at 818.
Wild Willy’s presented testimony from its attorney’s fee expert (its own counsel) and the invoices he submitted showing hours billed, billing rates, and task description. The expert’s testimony identified some of the Andersonfactors, particularly regarding the experience, reputation, and ability of the lawyers and paralegals, the rates charged (which were below the hourly fees customarily charged in Harris County for those services), the complexity of the multi-party lawsuit, the large amount of discovery involved, and the more than $700 million in potential liability in the underlying personal injury lawsuit. Moreover, the expert testified that it successfully obtained a finding of no liability for his client and worked on the case for more than 4,000 hours, precluding the acceptance of other work. The court held that this evidence, in addition to corroborating invoices (though some were heavily redacted), constituted more than a scintilla of evidence supporting the award.
Turning to Tite Water’s request that the court of appeals modify the judgment as to the appellate fees, the court observed that “[t]rial courts do not have discretion to ‘award appellate attorney’s fees that are not conditioned on the party’s failure to obtain relief” (citations omitted). Nevertheless, the court held that it “need not reverse the trial court’s judgment on this basis,” but simply modify it to make the award contingent upon Wild Willy’s success on appeal.
The size of the attorney’s fee award upheld in this case should make it most interesting to litigants on either side of the issue. The court of appeals’ relatively detailed analysis appears to us to justify deference to the jury’s finding.
