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Toshiba Machine Co.11/10/2005
ime 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. Miller, 142 S.W.3d at 336-37. One method of computing a reasonable fee is the "lodestar" method, or "the product of reasonable hours times a reasonable rate." City of Burlington v. Dague, 505 U.S. 557, 559, 112 S.Ct. 2638, 2640 (1992). We review a court-ordered award of attorney's fees under the abuse of discretion standard. Ridge Oil Co., Inc. v. Guinn Invs., Inc., 148 S.W.3d 143, 163 (Tex. 2004).
In this case, the issue of attorney's fees was submitted to the trial court, rather than the jury, by agreement of the parties. SPM's lead counsel, Marshall Searcy, testified about SPM's attorney's fees. SPM's fee agreement with Searcy's firm consisted of three elements. First, SPM paid Searcy's firm a flat fee of $150,000 up front. Second, SPM agreed to pay Searcy's firm 5% of SPM's ultimate recovery, if any. Third, SPM agreed that Searcy's firm could keep any attorney's fees awarded by the trial court. SPM argues that this third provision contemplates a fee higher than the flat $150,000 plus 5%, contingent upon whether the trial court awarded attorney's fees.
Searcy testified that the services his firm rendered to SPM had a lodestar value of $667,114. He then testified that a reasonable fee would be $1.5 million. To support a reasonable fee in excess of the lodestar value, Searcy testified at length about the rule 1.04 elements. Most significantly, Searcy testified that the risk his firm took of losing the case and receiving nothing over its $150,000 base fee justified the $1.5 million fee. He also testified that the lodestar value would represent a reasonable fee if SPM had paid his firm on a monthly basis; but since his firm had to wait until the conclusion of the case to collect its fee, the lodestar value was insufficient. Finally, Searcy testified that $1.5 million represented about 25% of the jury's verdict--significantly less than the 30%-50% typically charged by Tarrant County attorneys in contingent fee cases.
The trial court made findings of fact and conclusions of law that specifically took into account the rule 1.04 factors. The trial court found that the following attorney's fees were reasonable: $1.5 million through the date of judgment, plus $200,000 if Toshiba is unsuccessful in this appeal, plus $35,000 if Toshiba files a petition for review with the Supreme Court of Texas and the petition is denied, or $65,000 if the Supreme Court grants the petition but rules against Toshiba on the merits. The trial court incorporated these fees into its judgment.
Toshiba lodges two complaints about SPM's attorney's fees. First, Toshiba contends that SPM is not entitled to any award of attorney's fees because SPM did not prevail on its breach of contract claim. We have already concluded that SPM may recover for breach of contract; therefore, SPM may also recover its reasonable attorney's fees. See TEX. CIV. PRAC. & REM. CODE ANN. ยง 38.001.
Second, Toshiba argues that the trial court erred by awarding more than the lodestar amount. To support this argument, Toshiba cites Dague, 505 U.S. at 557, 112 S.Ct. at 2638, and PPG Industries, Inc. v. JMB/Houston Centers Partners Ltd. P'ship, 41 S.W.3d 270 (Tex. App.--Houston [14th Dist.] 2001, no pet.), rev'd on other grounds, 146 S.W.3d 79 (Tex. 2004). The question in Dague was whether the attorney's fees shifting provisions of the federal Solid W
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