Law firm wins bid to waive $90,000 fee in invoice dispute

A Texas law firm will avoid paying $90,000 in attorneys’ fees for a breach of contract lawsuit it lost, after a Texas appeals court ruled on Thursday that the fees would not were not recoverable under a state declaratory judgment law.

Ramey & Schwaller LLP denied owing nearly $9,000 on eight unpaid invoices to The Document Group Inc., a document management company, because it alleged it worked as an agent for two of its clients. However, TDG claimed that the law firm never informed it of the billing of the two clients and sued the firm for breach of contract.

TDG later amended its pleading to add a cause of action under the State’s Declaratory Judgments Act for the court to decide that the company never disclosed that it was acting as a agent. TDG also requested a statement of its rights with respect to the invoices it sent and attorneys’ fees.

A jury ruled against Ramey & Schwaller, which appealed on several issues, including that the jury improperly awarded TDG attorneys’ fees.

Because TDG’s amended motion seeking declaration of its rights under the invoices added another issue similar to the one already in dispute, the attorney’s fees were not recoverable, the Texas Court of Appeals said, first district.

While the AJD can be used to award reasonable attorneys’ fees, it cannot be used as a means to obtain “otherwise inadmissible attorneys’ fees,” the court said. Here, TDG does not dispute that it used the AJD to obtain the $90,000 in attorney’s fees, as these fees were not available in its original claim due to the terms of the contract.

Therefore, since there is no material distinction between the TDG’s claim for declaratory relief and its claim for breach of contract, the state appeals court struck attorneys’ fees from the court’s judgment of first case.

The court dismissed Ramey & Schwaller’s appeals on other issues.

Judge Richard Hightower delivered the opinion. Judges Sarah Beth Landau and Veronica Rivas-Molloy joined.

Ramey & Schwaller represented itself. Irelan McDaniel PLLC represented TDG.

The case is Ramey & Schwaller LLP v. Document Grp., Inc., Tex. App., 1st Dist., No. 01-20-00368-CV, 05/19/22.