Imagine Automotive Group, Inc. v. Boardwalk Motor Cars, LLC
Docket: No. 05-11-01119-CV
Court: Court of Appeals of Texas; November 7, 2011; Texas; State Appellate Court
The Chief Justice WRIGHT issued an opinion regarding the motion to review the sufficiency of the security amount required to suspend enforcement of a judgment during an appeal under the Texas Theft Liability Act. The case involves the appellants, Imagine Group, who were found liable for damages amounting to $259,950, along with $389,898 in attorney's fees and additional court costs awarded to the appellees, Boardwalk Cars. Imagine Group sought to suspend the judgment by posting a cash bond of $325,000, which was based on the awarded damages, estimated costs of $10,000, and interest for a twelve-month appeal period.
Boardwalk Cars contested the bond's sufficiency, arguing it did not cover the anticipated higher costs, potential extended appeal duration, and omitted the attorney’s fee award. The trial court subsequently increased the bond to cover actual costs and additional interest but denied the request to include the attorney’s fees.
The opinion clarifies that a judgment debtor can defer payment while appealing, as per Texas law, and that the bond must generally equal the total of compensatory damages, costs, and interest for the estimated appeal duration. The court determined that the term "compensatory damages" does not explicitly include attorney's fees, which are considered separate from actual damages. As such, the court upheld the trial court's decision, concluding that attorney's fees are not required to be included in the bond amount for suspension of the judgment.
Attorney’s fees are generally not recoverable as damages unless explicitly provided for in a contract. In the case of PopCap Games, Inc. v. Mumbo-Jumbo, LLC, the court determined that attorney’s fees do not qualify as “compensatory damages” in breach of contract situations unless the contract specifies otherwise. This decision referenced Shook v. Walden, which similarly involved a breach of contract and awarded fees under the civil practice and remedies code chapter 38. The court in Shook noted that attorney’s fees are distinct from compensatory damages, which are intended to cover actual losses. The Austin court of appeals ruled that fees awarded were not considered part of the judgment’s compensatory damages, highlighting a legislative shift towards protecting the judgment debtor's right to appeal, and reiterated that attorney’s fees are typically borne by the parties themselves.
Boardwalk Cars contends that the situation is different under the Texas Theft Liability Act, which mandates the award of attorney’s fees to the prevailing party, arguing that these fees are integral to the claim itself. They assert that this makes the fees compensatory. Additionally, Boardwalk Cars disputes the decisions in Shook and PopCap Games, advocating for the perspective of Fairways Offshore Exploration, Inc. v. Patterson Services, Inc., which supports the idea that legal expenses are a recoverable loss.
Boardwalk Cars' argument that Shook and PopCap Games are not controlling is rejected. The Austin court's analysis included not only the considerations of chapter 38 but also legislative history, the common understanding of “compensatory damages,” and common law principles, which are broadly applicable. The distinction between the underlying claim for losses and attorney’s fees under the Act is emphasized, particularly through section 134.005(a), which allows recovery of actual damages and additional damages up to $1,000, and section 134.005(b), which addresses attorney’s fees separately. This indicates that attorney's fees are to be treated as “in addition to” actual damages, not part of the claim. The argument is supported by case law stating that “actual damages” are recoverable at common law and that attorney’s fees are generally not compensable. Consequently, it is concluded that attorney’s fees do not qualify as “compensatory damages” under the Act, leading to a dismissal of the rationale in Fairways Offshore. The request to increase the bond to secure the attorney’s fees award is denied.
