In Ventling v. Johnson, decided on May 8, 2015, the Texas Supreme Court held that appellants who were prevailing parties at trial may recover conditional appellate attorney's fees for pursuing, rather than defending, an appeal. The holding arose in the context of § 38.001 of the Texas Civil Practice & Remedies Code, under which a plaintiff who prevails, and recovers damages, in a breach of contract action is entitled to trial court attorney's fees as a matter of right. The Court had previously held that if trial court attorney's fees are mandatory under § 38.001, then appellate attorney's fees are also mandatory when proof of reasonable fees is presented. In holding that a prevailing trial court party may be entitled to appellate attorney's fees as a successful appellant, the Court emphasized that no precedent conditions an award of appellate attorney's fees upon a prevailing trial court party seeking such fees for successfully defending an appeal.
The Court went on to hold that where attorney's fees are mandatory, a prevailing trial court party is entitled to conditional appellate attorney's fees for at least partially prevailing on appeal; fully prevailing is not required. The trial court has discretion as to the amount of reasonable and necessary attorney's fees, but does not have discretion to award no fees.
The Court further held that an award of conditional appellate attorney's fees accrues postjudgment interest from the date the award is made final by the appropriate appellate court's judgment (Court of Appeals or Texas Supreme Court), rather than from the date the appeal was perfected. This aspect of the Court's decision presents a limited exception to the general rule that the "judgment" for postjudgment interest purposes is the trial court's judgment.
It is implicit in the Court's decision that under a discretionary attorney's fees scheme such as the Declaratory Judgment Act, a prevailing trial court party could seek, and a trial court could award, conditional appellate attorney's fees for pursuing a successful appeal. Under the abuse of discretion standard, however, it would be difficult to overcome the denial of such fees. Other interesting scenarios now present themselves. For example, consider a declaratory judgment action in which the defendant prevails in the trial court, and the trial court awards trial court attorney's fees to the defendant. Under the reasoning in Ventling, it would be perfectly appropriate for the trial court to award conditional appellate attorney's fees to the defendant for defending against the plaintiff's unsuccessful appeal and to the plaintiff for pursuing a successful appeal. The outcome of the appeal would determine whether the plaintiff or the defendant recovers the appellate attorney's fees.
The decision in Ventling is significant, as it presents new opportunities for, as well as questions about, the recovery of appellate attorney's fees. It will take time for the contours of these opportunities to take shape and for these questions to be answered.