Attorneys’ Fees Recovery in Breach of Contract Claims in Texas

An issue that frequently arises in commercial litigation and collection lawsuits in Texas is the question of entitlement to repayment of attorneys’ fees by the losing party. Sometimes there is no mention of attorneys’ fees in the contract, or even no written contract at all. The reality in Texas collection cases is that no written contract is needed to prevail on a claim for attorneys’ fees in a breach of contract action. Even in the absence of entitlement to attorneys’ fees under the contract, a Plaintiff can still recover attorneys’ fees as a prevailing party under the Texas Civil Practice and Remedy Code.

Section 38.001 of the Texas Civil Practice and Remedy Code provides that a person may recover reasonable attorney’s fees, in addition to the amount of a valid claim and costs, if the claim is for rendered services, performed labor, furnished materials, a suit on a sworn account or . . . an oral or written contract. Tex. Civ. Prac. & Rem. Code  38.001.

A party must (1) prevail on a cause of action for which attorney’s fees are recoverable, and (2) recover damages. Green Int’l, Inc. v. Solis, 951 S.W.2d 384, 390 (Tex. 1997).

The claimant must present the claim to the opposing party or to a duly authorized agent of the opposing party and payment for the just amount owed must not have been tendered before the expiration of the 30th day after the claim is presented. See Tex. Civ. Prac. & Rem. Code Ann. 38.002.

The prevailing party is the one vindicated by the judgment rendered. See Taylor Elec. Servs., Inc. v. Armstrong Elec. Supply Co., 167 S.W.3d 522, 532 (Tex. App.-Fort Worth 2005, no pet.). In determining the prevailing party, the focus is the successful party on the merits of the case. Id. A party can be the prevailing party entitled to attorney’s fees even where the amount recovered is offset by an amount awarded to the opposing party. Id. at 533 (citing Blizzard v. Nationwide Mut. Fire Ins. Co., 756 S.W.2d 801, 806 (Tex. App.-Dallas 1988, no writ)).

Recovery of attorneys’ fees can be a win-win for the prevailing party in Texas business litigation, and the right approach to attorney fee recovery can make all the difference.

Need to learn more? Get in touch.