The dispute started in 2004, when TWDC, then known as The Woodlands Operating Company, decided not to renew a lease for 19 copiers from MBM Financial Corporation and Marimon Business Systems.
From Houston Community Newspapers On LineSupreme Court wipes away company’s award
By Lucretia Cardenas
Updated: 09.14.09
After sticking a company with nearly $150,000 in legal fees for a judgment of $1,000 in damages, The Woodlands Development Company may not see a penny.
Recently, the Texas Supreme Court reversed a judgment made by the Ninth District Court of Appeals last year, which affirmed the damages but called for a new trial on the attorney fees. In doing away with the judgment for lack of evidence, the Supreme Court threw out the attorney fees.
The dispute started in 2004, when TWDC, then known as The Woodlands Operating Company, decided not to renew a lease for 19 copiers from MBM Financial Corporation and Marimon Business Systems. WOC officials gave a notice and sought a place to return the machines, but MBM’s president allegedly changed dates on the termination letter to make the notice untimely, thus demanding rent for another year, Justice Scott Brister stated in his opinion.
The WOC sued, claiming breach of contract, fraud and declaratory relief. MBM countersued for $160,794 the company believes WOC owes it, but later dropped the suit.
Following a two-day bench trial in 2006, 9th state District Court Judge Fred Edwards ruled in the WOC’s favor, granting it $1,000 “in actual damages in the form of nominal damages” and $149,091 to its attorneys, including additional fees to cover costs of appeals.
MBM took the decision to the 9th Court of Criminal appeals in Beaumont and, then, to the Supreme Court of Texas, where it received a ruling in its favor because, Brister wrote, “the only damages mentioned at trial related to wasted time,” but the WOC didn’t present evidence quantifying the cost of it or the value of it.
“It is easy to understand The Woodlands’ frustration with MBM,” Brister stated. “Viewing the evidence in proper light, MBM withheld information, changed renewal dates and manipulated the truth to try to get more rent than it was entitled. It raised dodges, defenses and counterclaims at various stages that all eventually collapsed in a heap, but only after forcing the Woodlands to incur legal fees and costs.
“But to recover those fees, the Woodlands had to recover damages for breach of contract. That it failed to do.”
Phillip Livingston, one of MBM’s attorneys, pointed out that the justices presumed all the facts presented in the trial court, including the ones MBM denies.
“The Supreme Court looked at the worst-case scenario for The Woodlands and still came to the proper result,” Livingston said.
The case was not a complete loss for the WOC, said Douglas Drucker, who was not a lead attorney on the case, but whose law firm represented WOC. The WOC prevailed in some issues in the appellate court, but the WOC is disappointed in the opinion of the Supreme Court, where the main consideration was attorney fees. He would not comment on whether the WOC would seek another opinion.
“We’re obviously disappointed in the opinion, but we respect the Texas Supreme Court,” Drucker said.
Jennifer Hogan, who also represented MBM, said she is not surprised by the Supreme Court’s ruling based on its prior decisions regarding attorney fees.
Usually, she said, nominal fees are considered when an ideal, such as a constitutional right, is being debated. Attorney fees are awarded at the court’s discretion because money isn’t at the center of the argument.
“Courts do tend to be very concerned about people bringing things to court that involve things like contracts gone wrong,” Hogan said. “The Supreme Court and most courts think they should not be encouraging this economic waste.”
Hogan argued that MBM already had taken everything back by the time the WOC filed its lawsuit, but WOC court records state otherwise.
According to Hogan, the Supreme Court’s decision this summer is the traditional one, and the right one. She also believes the WOC will be thankful the law was upheld in this way if it ever ends up on the other side of a similar case.
The Courier contacted Texans for Lawsuit Reform, which often campaigns against high awards for attorneys or clients and promotes quick dispute resolution, for comments about the case, but the spokesperson said the organization does not comment on specific cases.
Supreme Court wipes away company’s award
By Lucretia Cardenas
Updated: 09.14.09
After sticking a company with nearly $150,000 in legal fees for a judgment of $1,000 in damages, The Woodlands Development Company may not see a penny.
Recently, the Texas Supreme Court reversed a judgment made by the Ninth District Court of Appeals last year, which affirmed the damages but called for a new trial on the attorney fees. In doing away with the judgment for lack of evidence, the Supreme Court threw out the attorney fees.
The dispute started in 2004, when TWDC, then known as The Woodlands Operating Company, decided not to renew a lease for 19 copiers from MBM Financial Corporation and Marimon Business Systems. WOC officials gave a notice and sought a place to return the machines, but MBM’s president allegedly changed dates on the termination letter to make the notice untimely, thus demanding rent for another year, Justice Scott Brister stated in his opinion.
The WOC sued, claiming breach of contract, fraud and declaratory relief. MBM countersued for $160,794 the company believes WOC owes it, but later dropped the suit.
Following a two-day bench trial in 2006, 9th state District Court Judge Fred Edwards ruled in the WOC’s favor, granting it $1,000 “in actual damages in the form of nominal damages” and $149,091 to its attorneys, including additional fees to cover costs of appeals.
MBM took the decision to the 9th Court of Criminal appeals in Beaumont and, then, to the Supreme Court of Texas, where it received a ruling in its favor because, Brister wrote, “the only damages mentioned at trial related to wasted time,” but the WOC didn’t present evidence quantifying the cost of it or the value of it.
“It is easy to understand The Woodlands’ frustration with MBM,” Brister stated. “Viewing the evidence in proper light, MBM withheld information, changed renewal dates and manipulated the truth to try to get more rent than it was entitled. It raised dodges, defenses and counterclaims at various stages that all eventually collapsed in a heap, but only after forcing the Woodlands to incur legal fees and costs.
“But to recover those fees, the Woodlands had to recover damages for breach of contract. That it failed to do.”
Phillip Livingston, one of MBM’s attorneys, pointed out that the justices presumed all the facts presented in the trial court, including the ones MBM denies.
“The Supreme Court looked at the worst-case scenario for The Woodlands and still came to the proper result,” Livingston said.
The case was not a complete loss for the WOC, said Douglas Drucker, who was not a lead attorney on the case, but whose law firm represented WOC. The WOC prevailed in some issues in the appellate court, but the WOC is disappointed in the opinion of the Supreme Court, where the main consideration was attorney fees. He would not comment on whether the WOC would seek another opinion.
“We’re obviously disappointed in the opinion, but we respect the Texas Supreme Court,” Drucker said.
Jennifer Hogan, who also represented MBM, said she is not surprised by the Supreme Court’s ruling based on its prior decisions regarding attorney fees.
Usually, she said, nominal fees are considered when an ideal, such as a constitutional right, is being debated. Attorney fees are awarded at the court’s discretion because money isn’t at the center of the argument.
“Courts do tend to be very concerned about people bringing things to court that involve things like contracts gone wrong,” Hogan said. “The Supreme Court and most courts think they should not be encouraging this economic waste.”
Hogan argued that MBM already had taken everything back by the time the WOC filed its lawsuit, but WOC court records state otherwise.
According to Hogan, the Supreme Court’s decision this summer is the traditional one, and the right one. She also believes the WOC will be thankful the law was upheld in this way if it ever ends up on the other side of a similar case.
The Courier contacted Texans for Lawsuit Reform, which often campaigns against high awards for attorneys or clients and promotes quick dispute resolution, for comments about the case, but the spokesperson said the organization does not comment on specific cases.
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