Brister's Dissent in
Intercontinental Group Partnership v. KB Home Lone Star LP.,
No. 07-0815 (Aug. 28, 2009)(Willett)(prevailing party for attorney's fees purposes)
I agree there is little reason to encourage suits by those who have suffered no
damages solely so an attorney can recover a large fee. But that is not the way
litigation usually works, or what occurred here. Lost profits from a venture that failed
are always hard to assess, so litigants often believe they have been damaged until
a jury tells them they have not. I would not punish such litigants for failing to prove
damages unless that is what their contract requires.
Markets, especially in real estate, can rise or fall substantially in a very short time.
Under the Court’s interpretation, the “prevailing party” entitled to attorney’s fees
may depend precisely upon those swings, not upon who was in the wrong. That
may be a reasonable way to draft a statute, but that is not what the parties
contracted for here. Accordingly, I would affirm the judgment of the trial court and
court of appeals.
INTERCONTINENTAL GROUP PARTNERSHIP v. KB HOME LONE STAR L.P.; from Hidalgo County;
13th district (13-06-00617-CV, ___ SW3d ___, 08-23-07)
The Court reverses the court of appeals' judgment and renders judgment.
Justice Willett delivered the opinion of the Court, in which Chief Justice Jefferson, Justice Hecht, Justice
Green, and Justice Johnson joined.
Justice Brister delivered a dissenting opinion, in which Justice O'Neill, Justice Wainwright, and Justice
View Electronic Briefs in INTERCONTINENTAL GROUP P'SHIP v. KB HOME LONE STAR L.P.
Intercontinental Group Partnership v. KB Home Lone Star LP (Tex. 2009)
Argued March 12, 2009
Justice Brister, joined by Justice O’Neill, Justice Wainwright and Justice Medina, dissenting.
You would hardly know it from the Court’s opinion, but the only question in this case is what the parties
intended in a contract providing attorney’s fees for “the prevailing party.” In the rush to find a simple
answer, the Court grabs the nearest tool at hand: federal and state laws using the same words. But
legislative intent (which forms the basis of the companion case decided today1) is not the same as the
parties’ intent, unless the parties intended to adopt the same meaning—and there is no evidence here
that they did. To the contrary, we must presume they did not, as the defendant filed only a partial reporter’
s record with no statement of points.2
The judgment here granted the plaintiff KB Home no damages, but, as the Court admits, “nothing in
the contract expressly requires that a party receive any amount of damages” before recovering its fees.3
The contract provided fees to the prevailing party in an action “to declare rights hereunder,” and the
judgment here declared that the defendant Intercontinental breached the contract. This alone was
enough to justify the fee award.
KB Home’s victory in the trial court was not Pyrrhic—that is, a victory “won at excessive cost.”4 Until
now, this suit cost KB Home nothing because the jury assessed fees against its opponent. It hardly seems
fair to declare that KB Home gained nothing by this suit after setting aside the part of the jury verdict and
judgment in which it gained something.
I agree with the court of appeals that under this contract, “liability, not damages, is the appropriate
indicator of which party has prevailed in litigation.”5 Accordingly, I would affirm the judgment for the
plaintiff; because the Court does otherwise, I respectfully dissent.
I. “To Declare Rights Hereunder”
Texas follows “the American Rule” prohibiting recovery of attorney’s fees unless provided by contract
or statute.6 As this fee award depends entirely on a contract, we must start with the contract’s terms:
Attorney’s Fees. If either party named herein brings an action to enforce the terms of this Contract or to
declare rights hereunder, the prevailing party in any such action, on trial or appeal, shall be entitled to his
reasonable attorney’s fees to be paid by [the] losing party as fixed by the court.
Even if “prevailing party” status usually requires an award of money damages (which, as shown below, it
does not), this contract precludes such an interpretation for three reasons. First, the contract provides
fees for a prevailing defendant as well as a prevailing plaintiff. A defendant with no counterclaim could
never recover money damages, yet under this contract would be entitled to recover its attorney’s fees
Second, the contract provides for fees in actions “to declare rights hereunder.” An action to “declare
rights” is not an action for money damages; a declaratory judgment may be rendered on liability alone
without any reference to damages.7 The Court says KB Home did not obtain a judgment declaring its
rights, but that is not what the judgment itself says. After detailing the jury’s verdict, the judgment explicitly
states on page 4 that Intercontinental “failed to comply with the Santa Clara Lot Contract” and its “failure
to comply was not excused.” What more could a judgment say to declare the parties’ contractual rights?
Third, a party with no damages can still bring an action “to enforce the terms” of a contract. Since its
earliest days, Texas law has provided that a party who has suffered no damages may still obtain nominal
damages for breach of contract.8 A party with no damages may also seek rescission or specific
performance.9 Money damages may be indispensable in contract claims seeking money damages, but not
for contract claims seeking something else.
The Court says “[a] stand-alone finding on breach confers no benefit whatsoever.”10 But this judgment
did not rescind the contract or render it void, and there was no evidence all the lots in Santa Clara had
been sold. While KB Home did not request specific performance, that does not mean either party no
longer has to perform. Before suit was filed, Intercontinental acted as if it were excused from the contract;
this judgment says it is not. That seems to me precisely the kind of “judicially sanctioned change in the
legal relationship of the parties”11 that makes KB Home at least partly the winner.
The Court avoids the parties’ contract by looking entirely to federal and state statutory law, but those
laws are drafted differently. In Texas, statutory attorney’s fees for breach of contract require a monetary
recovery because the statute provides for fees only when recovered “in addition to the amount of a valid
claim.”12 The federal Declaratory Judgment Act does not authorize attorney’s fees,13 so the Supreme
Court cases said to be “helpful in this area” all concern federal statutes attaching attorney’s fees to a
damages claim.14 Of course, the Supreme Court’s views are not just “helpful” but binding when we
construe those federal statutes. But that is not the case when we apply Texas law to construe a Texas
contract whose terms differ from any existing federal or state law. As there is no evidence the parties
contracted with reference to these statutes or cases, relying on them simply replaces the parties’ intent
with someone else’s.
I agree that if a statute of limitations or some other affirmative defense barred KB Home’s contract
claim, it could not be the prevailing party. But the judgment in such a case would declare that KB Home
had no contractual rights due to that affirmative defense. By contrast, the absence of damages does not
preclude a declaration that KB Home has a right to contract performance. Reading this contract as a
whole, the parties never intended zero damages to mean zero attorney’s fees.
II. “Prevailing Party”
There is a another reason KB Home is entitled to attorney’s fees under this contract and this judgment:
it was the “prevailing party” as that term is understood in Texas law. The contractual context here shows
the parties did not intend “prevailing party” to require damages, but the term itself would require the same
conclusion regardless of context.
When looking for common and ordinary meanings of legal terms, we routinely refer to Black’s Law
Dictionary,15 which defines “prevailing party” as “[a] party in whose favor a judgment is rendered,
regardless of the amount of damages awarded.”16 By ignoring the second phrase and making the $0
damage award dispositive, the Court departs from the ordinary meaning of “prevailing party.”
Earlier editions of Black’s from the 1960s until the 1990s included an additional qualifier—that
“prevailing party” should focus on the “main issue” in the litigation:
Prevailing party. The party to a suit who successfully prosecutes the action or successfully defends
against it, prevailing on the main issue, even though not necessarily to the extent of his original contention.
This “main issue” qualification has been adopted by 11 of the 14 courts of appeals in Texas.18
In this litigation, there is no doubt the main issue was the defendant Intercontinental’s counterclaim.
The parties’ contract reserved every lot in the Santa Clara subdivision for KB Home, and Intercontinental
conceded it sold some of those lots to third parties. Thus, the main issue was not whether Intercontinental
had breached the contract; it clearly had. Instead, the main issue was whether that breach was excused
by KB Home’s refusal to buy lots at high prices elsewhere in return for buying at low prices in Santa Clara.
The jury rejected that counterclaim, so KB Home was the prevailing party on the main issue in this
The Court rejects main-issue analysis (although adopted by virtually every other Texas court) because
Intercontinental’s counterclaim was not “an action to enforce the terms of this Contract.”20 But to recover
on this contract, KB Home had to prove it had not been orally amended by another. As we held in Varner
v. Cardenas, attorney’s fees for enforcing a contract include those incurred overcoming counterclaims
raised in defense.21
Oddly, the Court’s opinion today means Intercontinental was the prevailing party, even though it was
the only party that breached. The Court avoids awarding Intercontinental attorney’s fees on the ground
that it failed to preserve error. But future contract breakers may not make the same mistake. It is hard to
see the justice in reading this common contract provision to provide attorney’s fees for the party that
committed the breach.
The Court’s rule also ignores the reality that everybody incurs costs when a contract fails. Breach of
contract damages include lost profits (expectancy), out-of-pocket expenses (reliance), and restitution;22
most litigants pursue only lost profits as that is normally the largest measure. But today’s ruling requires
parties to sue for all of them, no matter how small, to make sure they will “prevail” by receiving some kind
of money judgment.
The Court’s no-damages/no-fees rule is certainly easy to apply, but making life easy for judges is not a
rule of contract construction.23 Whether a party prevailed in litigation is a mixed question of law and fact.
Perhaps in some cases a $1 recovery represents a substantial victory for the plaintiff, but in most cases it
represents a total loss; treating every plaintiff who wins $1 as a prevailing party is not what most people
intend when they sign a contract like this.
The contract here called for attorney’s fees to be “fixed by the court,” and the trial judge awarded them
to KB Home. With only a partial trial record, we must presume that was right.
I agree there is little reason to encourage suits by those who have suffered no damages solely so an
attorney can recover a large fee. But that is not the way litigation usually works, or what occurred here.
Lost profits from a venture that failed are always hard to assess, so litigants often believe they have been
damaged until a jury tells them they have not. I would not punish such litigants for failing to prove
damages unless that is what their contract requires.
Markets, especially in real estate, can rise or fall substantially in a very short time. Under the Court’s
interpretation, the “prevailing party” entitled to attorney’s fees may depend precisely upon those swings,
not upon who was in the wrong. That may be a reasonable way to draft a statute, but that is not what the
parties contracted for here. Accordingly, I would affirm the judgment of the trial court and court of appeals.
OPINION DELIVERED: August 28, 2009
1 See MBM Fin. Corp. v. Woodlands Operating Co., ___ S.
W.3d ___ (Tex. 2009).
2 See Feldman v. Marks, 960 S.W.2d 613, 614 (Tex.
1996) (per curiam) (“If an appellant fails to present a
complete statement of facts on appeal, the appellate
court must presume that the omitted portions are
relevant and support the trial court’s judgment.”); Tex. R.
App. P. 34.6(c)(1).
3 ___ S.W.3d at ___ (quotation marks omitted).
4 Webster’s Third New International Dictionary 1855
5 ___ S.W.3d at ___.
6 Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299,
310-11 (Tex. 2006).
7 CU Lloyd’s of Tex. v. Feldman, 977 S.W.2d 568, 569
(Tex. 1998) (per curiam) (“When the relief sought is a
declaratory judgment, an appellate court may properly
render judgment on liability alone.”).
8 See, e.g., Lubbock Mfg. Co. v. Sames, 598 S.W.2d 234,
237 (Tex. 1980); Malakoff Gin Co. v. Riddlesperger, 192 S.
W. 530, 532 (Tex. 1917); Porter v. Kruegel, 155 S.W. 174,
175 (Tex. 1913); Raymond v. Yarrington, 73 S.W. 800,
804 (Tex. 1903); Davis v. Tex. & P. Ry., 44 S.W. 822, 823
(Tex. 1898); Seibert v. Bergman, 44 S.W. 63, 64 (Tex.
1898); East Line & Red River R.R. v. Scott, 10 S.W. 99,
102 (Tex. 1888); Stuart v. W. Union Tel. Co., 18 S.W. 351,
352 (Tex. 1885); Moore v. Anderson, 30 Tex. 224, 231
(1867); Hope v. Alley, 9 Tex. 394, 395 (1853); McGuire v.
Osage Oil Corp., 55 S.W.2d 535, 537 (Tex. Comm’n App.
1932, holdings approved); see also Note, Pleading—
Necessity of Damage to Cause of Action, 9 Tex. L. Rev.
111, 112 (1930) (citing cases).
9 See, e.g., DiGiuseppe v. Lawler, 269 S.W.3d 588, 594
(Tex. 2008) (specific performance); Country Cupboard,
Inc. v. Texstar Corp., 570 S.W.2d 70, 73-74 (Tex. Civ. App.
—Dallas 1978, writ ref’d n.r.e.) (rescission).
10 ___ S.W.3d at ___.
11 See Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep’
t of Health & Human Res., 532 U.S. 598, 605 (2001); id.
at 615 (Scalia, J., concurring) (stating that “prevailing
party” has “traditionally” and “invariably” meant “the party
that wins the suit or obtains a finding (or an admission)
12 Tex. Civ. Prac. & Rem. Code § 38.001 (emphasis
added); see MBM Fin. Corp. v. Woodlands Operating Co.,
___ S.W.3d ___, ___ (Tex. 2009); Mustang Pipeline Co.
v. Driver Pipeline Co., 134 S.W.3d 195, 201 (Tex. 2004)
(per curiam); Green Int’l, Inc. v. Solis, 951 S.W.2d 384,
390 (Tex. 1997); State Farm Life Ins. Co. v. Beaston, 907
S.W.2d 430, 437 (Tex. 1995).
13 See AG Acceptance Corp. v. Veigel, 564 F.3d 695, 701
(5th Cir. 2009) (noting the federal Declaratory Judgment
Act, 28 U.S.C. §§ 2201-2202, authorizes attorney’s fees
only if state substantive law provides for them); see also
Camacho v. Tex. Workforce Comm’n, 445 F.3d 407, 409-
12 (5th Cir. 2006) (holding Texas Declaratory Judgment
Act does not represent “state substantive law”).
14 See County of Dallas v. Wiland, 216 S.W.3d 344, 358
n.61 (Tex. 2007) (addressing attorney’s fees provided by
42 U.S.C. § 1988); Sw. Bell Mobile Sys., Inc. v. Franco,
971 S.W.2d 52, 55-56 (Tex. 1998) (per curiam)
(addressing attorney’s fees provided by Texas Labor
Code § 21.259, a statute intended to effectuate Title VII of
the federal Civil Rights Act, see id. § 21.001); Grounds v.
Tolar Indep. Sch. Dist., 856 S.W.2d 417, 423 (Tex. 1993)
(Gonzalez, J., concurring) (addressing attorney’s fees
provided by 42 U.S.C. § 1988).
15 See, e.g., Ingram v. Deere, ___ S.W.3d ___, ___ (Tex.
2009); Entergy Gulf States, Inc. v. Summers, 282 S.W.3d
433, 437-38, 441 (Tex. 2009); Guitar Holding Co. v.
Hudspeth County Underground Water Conservation Dist.
No. 1, 263 S.W.3d 910, 916 n.6 (Tex. 2008); Hyundai
Motor Co. v. Vasquez, 189 S.W.3d 743, 751 n.33 (Tex.
2006); Am. Mfrs. Mut. Ins. Co. v. Schaefer, 124 S.W.3d
154, 158-59 (Tex. 2003).
16 Black’s Law Dictionary 1154 (8th ed. 2004)
17 Black’s Law Dictionary 1188 (6th ed. 1990)
(emphasis added); see also Black’s Law Dictionary
1069 (5th ed. 1979); Black’s Law Dictionary 1352 (4th ed.
18 1st: Indian Beach Prop. Owners’ Ass’n v. Linden, 222
S.W.3d 682, 696-97 (Tex. App.—Houston [1st Dist.] 2007,
no pet.); Weng Enters., Inc. v. Embassy World Travel, Inc.,
837 S.W.2d 217, 222-23 (Tex. App.—Houston [1st Dist.]
1992, no writ).
2nd: Taylor Elec. Servs., Inc. v. Armstrong Elec. Supply
Co., 167 S.W.3d 522, 532-33 (Tex. App.—Fort Worth
2005, no pet.); Head v. U.S. Inspect DFW, Inc., 159 S.W.
3d 731, 749 (Tex. App.—Fort Worth 2005, no pet.).
3rd: Lay v. Whelan, No. 03-03-00115-CV, 2004 WL
1469246, at *6 (Tex. App.—Austin July 1, 2004, pet.
denied); Cysco Enters., Inc. v. Hardeman Family Joint
Venture, Ltd., No. 03-02-00230-CV, 2002 WL 31833724,
at *6 (Tex. App.—Austin Dec. 19, 2002, no pet.).
4th: City of Laredo v. Almazan, 115 S.W.3d 74, 78 (Tex.
App.—San Antonio 2003, no pet.).
5th: Blockbuster, Inc. v. C-Span Enter., Inc., 276 S.W.3d
482, 491 (Tex. App.—Dallas 2008, pet. granted); In re M.A.
N.M., 231 S.W.3d 562, 566 (Tex. App.—Dallas 2007, no
pet.); Probus Props. v. Kirby, 200 S.W.3d 258, 265 (Tex.
App.—Dallas 2006, pet. denied).
6th: Moore v. Jet Stream Invs., Ltd., 261 S.W.3d 412, 431
n.15 (Tex. App.—Texarkana 2008, pet. denied); In re
Estate of Bean, 206 S.W.3d 749, 764 (Tex. App.—
Texarkana 2006, pet. denied).
7th: Brent v. Field, 275 S.W.3d 611, 622 (Tex. App.—
Amarillo 2008, no pet.); Dean Foods Co. v. Anderson,
178 S.W.3d 449, 454 (Tex. App.—Amarillo 2005, pet.
8th: Guitar Holding Co. v. Hudspeth County Underground
Water Conservation Dist. No. 1, 209 S.W.3d 146, 168
(Tex. App.—El Paso 2006), rev’d on other grounds, 263 S.
W.3d 910 (Tex. 2008).
12th: Robbins v. Capozzi, 100 S.W.3d 18, 27 (Tex. App.—
Tyler 2002, no pet.).
13th: Pegasus Energy Group, Inc. v. Cheyenne
Petroleum Co., 3 S.W.3d 112, 128 (Tex. App.—Corpus
Christi 1999, pet. denied); Norrell v. Aransas County
Navig. Dist. No. 1, 1 S.W.3d 296, 303 (Tex. App.—Corpus
Christi 1999, pet. dism’d).
14th: 4901 Main, Inc. v. TAS Auto., Inc., 187 S.W.3d 627,
634 (Tex. App.—Houston [14th Dist.] 2006, no pet.);
Emery Air Freight Corp. v. Gen. Transp. Sys., Inc., 933 S.
W.2d 312, 316 (Tex. App.—Houston [14th Dist.] 1996, no
19 See Cysco Enters., 2002 WL 31833724, at *6 (holding
defendant was prevailing party on main issue even
though jury awarded it no damages on its counterclaim).
20 ___ S.W.3d at ___.
21 See 218 S.W.3d 68, 69 (Tex. 2007) (per curiam).
22 Restatement (Second) of Contracts § 344 (1981); see
Quigley v. Bennett, 227 S.W.3d 51, 56 (Tex. 2007)
(Brister, J., concurring in part and dissenting in part); Lon
L. Fuller & William R. Perdue, The Reliance Interest in
Contract Damages, 46 Yale L.J. 52, 56 (1936).
23 I do not know what the Court means when it says the
Supreme Court’s opinion in Buckhannon “basically held
‘no money judgment, no fees.’” ___ S.W.3d at ___ n.26.
The question in Buckhannon was not money judgments
but collateral consequences—whether legislative action
apart from any judgment could make a litigant the