Ashburn v. Myers

JOHN BRADLEY ASHBURN AND POST OAK APPALACHIA, LLC, Appellants v. ROBERT J. MYERS, JOHN J. SHAW, AND MYERS SHAW, Appellees

No. 02-20-00183-CV

Court of Appeals Second Appellate District of Texas at Fort Worth

April 1, 2021

On Appeal from the 17th District Court Tarrant County, Texas

Trial Court No. 017-315749-20

Before Birdwell, Bassel, and Womack, JJ.

Memorandum Opinion by Justice Bassel MEMORANDUM OPINION

I. Introduction

Appellants John Bradley Ashburn and Post Oak Appalachia, LLC bring one issue challenging an award of attorney's fees to Appellees Robert J. Myers, John J. Shaw, and Myers Shaw.¹ The fee award was made after Appellees were discharged on their answer in a garnishment proceeding. We sustain Appellants' argument that Appellees failed to properly segregate their fee claim between claims for which fees were recoverable and those for which fees were not recoverable. Appellees, however, introduced some evidence of a reasonable and necessary fee. Thus, we reverse and remand the fee issue to the trial court to determine a reasonable and necessary fee when properly segregated, but we affirm the judgment in all other respects.

II. Background

Appellants hold a multi-hundred-thousand-dollar judgment against judgment debtors identified as an individual and two LLCs. As a postjudgment recovery vehicle, Appellants filed an application for a writ of garnishment that named Appellees as garnishees. The application claimed that Appellees had been retained as legal counsel to represent the judgment debtors in a lawsuit. Appellants sought to garnish a retainer supposedly paid by the judgment debtors to Appellees. The application stated in part that

[one of the Appellants] has been in contact with certain counsel in the Lawsuit, and it is his belief that Garnishee would require a substantial retainer from Judgment Debtors before they would appear and represent Judgment Debtors in the lawsuit. Myers and Shaw ha[ve] appeared in the Lawsuit, leading Plaintiff/Garnishor to believe Garnishees do indeed hold funds belonging to one or more of the Judgment Debtors in one or more IOLTA accounts.

Our record does not contain the writ that was issued; however, a writ was apparently issued and served on Appellees. Appellees responded by filing a combined multi-page answer, motion to quash, and motion for sanctions. This pleading alleged among other things that (1) one Appellee—Myers Shaw—was a "dba" of the other Appellees and not a distinct legal entity; (2) Appellees were not indebted to judgment debtors, nor did they hold any property, money, or any other thing of value belonging to the judgment debtors; (3) the doctrine of attorney immunity should bar an attempt by opponents in a lawsuit from seizing funds held by attorneys to secure payment of their fees and expenses; (4) attorney trust accounts are not subject to garnishment; and (5) the writ should be quashed because it relied on an affidavit that was conclusory, speculative, and based on hearsay. The remainder of the pleading's substantive allegations involved Appellees' request to sanction Appellants for filing the garnishment application. The pleading also sought to recover attorney's fees under Texas Rule of Civil Procedure 677. The trial court set a single hearing date for both the application for the writ and the motion to quash and for sanctions.

Appellees next amended their answer and motion to quash. The amended pleading added an allegation that the judgment underlying Appellants' garnishment application was not final.

Appellants responded to Appellees' answers and motions to quash and for sanctions. The multi-page response detailed the basis for Appellants' garnishment application and responded to Appellees' arguments that they held no funds of the judgment debtors, that the underlying judgment was not final, that attorney immunity was a defense to the garnishment, and that attorney trust accounts were not subject to garnishment. The response also addressed Appellees' sanction request. The response concluded that Appellees could recover fees under Texas Rule of Civil Procedure Rule 677 only for answering the garnishment action, should that action be unsuccessful, and could not recover fees for an attempt to quash the writ or for seeking sanctions. Appellants' response was supported by a revised affidavit in support of the garnishment application.

The response prompted a reply from Appellees. A substantial part of the reply challenged Appellants' motives in filing the garnishment application and argued that sanctions were warranted. The reply, however, augmented Appellees' argument regarding why the judgment against the judgment debtors was not final, why attorney immunity should be a defense to a garnishment action, and why attorney trust accounts should not be subject to garnishment. The reply also responded toAppellants' argument that sought to limit the matters for which fees could be recovered.

The trial court conducted its hearing on the writ application and Appellees' answer, motion to quash, and motion for sanctions. Counsel for Appellants forewent swearing in the sole Appellee who appeared as a witness. A substantial amount of the hearing involved recriminations about the motive for issuing the writ and alleged failures to communicate between the lawyers. Appellees also argued their various points challenging the validity of the garnishment.

At the end of the day, Appellees represented that they had not been paid anything by the judgment debtors or anyone on their behalf. Appellants' counsel accepted this representation and agreed that the trial court should enter judgment discharging Appellees from the writ; Appellants' counsel stated that

Mr. Myers has asserted in his response and then again more clearly in his reply, as well as here before this Court today, that neither he, nor Mr. Shaw, nor his firm hold any funds belonging to [the individual judgment debtor]. That is good enough for us, and as far as garnishments go, I think that is the end of the story.

At the hearing, Appellees also continued to press their claims for attorney's fees. Before Appellants' counsel represented that Appellees who had appeared at the hearing need not be sworn in as witnesses, Appellees' counsel stated,

I do need to put on some evidence about the attorney's fees that we have incurred, which is substantially more than one would find in a normal garnishment case for the reasons that we set forth in our reply. We've done a great deal of research to try to determine . . . whether attorneys' trust accounts are indeed subject to garnishment.

Frankly, my first thought was whether the [Texas Citizens Participation Act] applies. I resolved that pretty quickly. Apparently there's a specific exception for postjudgment things, and sometimes I actually read, so I got that resolved pretty quickly.

But these other issues about, you know, whether, in fact, it's subject to garnishment in the first place, whether the attorney immunity doctrine applies, you know, issues about whether the [c]ourt's judgment was indeed final or whether there is a portion of it that the [c]ourt granted without subject[-]matter jurisdiction to do so, all . . . done and contemplated in connection with mine and Mr. Shaw's defense of this garnishment action.

And . . . I can give the [c]ourt a number. It's $13,250 thus far at the rate of $500 an hour, 26.5 hours spent by me. Mr. Shaw had some time in it too, but I'm not even counting his time or that of my paralegal. That's just mine, 26 and a half hours, so I'll swear to that under oath if I need to, but at a minimum, we're going to be asking for that as award of attorney's fees that we put in this thing.

Appellants responded to Appellees' statement with their view that much of the work Appellees did in response to the writ was unnecessary because their representation that they did not hold any of the judgment debtors' funds was sufficient to resolve the matter. Appellees countered that Appellants sought to characterize the matter as a simple garnishment proceeding when Appellants had set in motion the question whether an attorney's trust account could be garnished. Again, Appellees questioned Appellants' motive for filing the garnishment proceeding, and Appellants defended their actions. In response to the trial court's inquiry, Appellants' counsel defended their action in not nonsuiting the writ application once Appellees answered that they held no property or effects of the judgment debtors because of the need to defend against Appellees' sanctions claim.

As the hearing wound down, Appellants raised a more focused objection to Appellees' fee claims. That objection took the following form:

I don't believe Mr. Myers has segregated his attorney's fees from the time spent to simply answer garnishment and say that he had nothing versus all the other 30-plus pages of research and sanctions. I think those should definitely be segregated differently.

I think in the Rohrmoos case² he needs to have specific tasks multiplied by the time it took in order to be sufficient.

When the trial court challenged Appellants to tell the court their view of what Appellees' reasonable fee should be, they demurred from giving a definite answer. Appellants stated that they had not seen a statement itemizing Appellees' work but felt that any work done beyond the drafting of an answer and short affidavit was excessive. When pressed for an answer by the trial court, Appellants opined that a fee of no more than $750.00 was warranted.

The trial court then noted that the evidence it had heard so far gave it "a difficult time ascertaining information used in connection with . . . going forward on the motion for sanctions versus a response under a more complex garnishment action like this." The trial court stated its inclination to both deny the writ and the sanctions request as well as its inclination "to give a reasonable and necessary attorney's fee, given the complexity of the nature of this...