NO HARM - NO FEE RULE ESTABLISHED
Intercontinental Group Partnership v. KB Home Lone Star LP.,
No. 07-0815 (Aug. 28, 2009)(Willett)(prevailing party for attorney's fees purposes) (a finding of breach
of contract unaccompanied by any tangible recovery - either monetary or equitable relief - cannot
confer “prevailing party” status for attorneys fee award purposes).
We agree with the United States Supreme Court, which holds that to prevail, a
claimant must obtain actual and meaningful relief, something that materially alters
the parties’ legal relationship. That is, a plaintiff must prove compensable injury
and secure an enforceable judgment in the form of damages or equitable relief.
The plaintiff here secured neither. We thus reach the same conclusion as in
another breach-of-contract case decided today: “a client must gain something
before attorney’s fees can be awarded.” We reverse the court of appeals’ judgment
and render a take-nothing judgment.
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
Medina joined. [pdf]
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 Willett delivered the opinion of the Court, in which Chief Justice Jefferson, Justice
Hecht, Justice Green, and Justice Johnson joined.
Justice Brister filed a dissenting opinion, in which Justice O’Neill, Justice Wainwright and
Justice Medina joined.
This breach-of-contract case poses a straightforward question: What does “prevailing
party” mean? We have construed this phrase in a discretionary fee-award statute1 but not in a
mandatory fee-award contract. Specifically, when a contract mandates attorney’s fees to a
“prevailing party,” a term undefined in the contract, has a party “prevailed” if the jury finds the
other side violated the contract but awards no money damages? We agree with the United
States Supreme Court, which holds that to prevail, a claimant must obtain actual and meaningful
relief, something that materially alters the parties’ legal relationship.2 That is, a plaintiff must
prove compensable injury and secure an enforceable judgment in the form of damages or
equitable relief. The plaintiff here secured neither. We thus reach the same conclusion as in
another breach-of-contract case decided today: “a client must gain something before attorney’s
fees can be awarded.”3 We reverse the court of appeals’ judgment and render a take-nothing
KB Home Lone Star L.P. (KB Home), a national homebuilder, contracted with Intercontinental
Group Partnership (Intercontinental), a real estate developer, to develop lots in a McAllen
subdivision known as Santa Clara and sell them to KB Home. The contract provided:
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 losing party as fixed by the court.
“Prevailing party” was not defined.
Intercontinental began selling Santa Clara lots to other buyers, and KB Home sued for breach
of contract (among other theories) and sought specific performance, damages, injunctive relief,
and attorney’s fees.4 KB Home did not seek a declaratory judgment under the contract. At trial,
KB Home sought only one type of actual damages: lost profits due to Intercontinental’s alleged
breach. Intercontinental counterclaimed, asserting that KB Home failed to honor an oral
agreement to buy Santa Clara at a below-market price in exchange for an exclusive partner
arrangement for future property acquisitions.
The jury found that Intercontinental breached the written contract but answered “0” on damages,
though it did award KB Home $66,000 in attorney’s fees.5 The jury rejected Intercontinental’s
oral-agreement claim and consequently did not answer the conditional question about
Intercontinental’s attorney’s fees related to that claim. Both parties moved for judgment, claiming
attorney’s fees as the “prevailing party.” The trial court sided with KB Home and signed a
judgment in its favor for $66,000, concluding that KB Home “should recover its damages against
[Intercontinental] as found by the jury . . . .” The court of appeals affirmed.6
II. Is KB Home the Prevailing Party?
Under the American Rule, litigants’ attorney’s fees are recoverable only if authorized by statute
or by a contract between the parties.7
A. Applicability of Chapter 38 to KB Home’s Breach Claim
We first address the applicability of the discretionary attorney’s-fees provision in Chapter 38 of
the Civil Practice and Remedies Code.8 As seen here, the statutory and contract provisions are
similar in general but dissimilar in particular:
If either party named herein brings an action to enforce the terms of this Contract or to declare
rights hereunder, the prevailing party . . . shall be entitled to his reasonable attorney’s fees to be
paid by losing party as fixed by the court.
A person may recover reasonable attorney’s fees from an individual or corporation, in addition
to the amount of a valid claim and costs, if the claim is for . . . an oral or written contract.
We held in Green International, Inc. v. Solis that before a party is entitled to fees under section
38.001, that “party must (1) prevail on a cause of action for which attorney's fees are
recoverable, and (2) recover damages.”9 If Green and Chapter 38 applied to this case, KB
Home could not recover attorney’s fees since it did not recover any damages. But Green, while
instructive, is not controlling, nor is Chapter 38.
Parties are free to contract for a fee-recovery standard either looser or stricter than Chapter
38's, and they have done so here. As KB Home points out, Chapter 38 permits recovery of
attorney’s fees “in addition to the amount of a valid claim,” while nothing in the contract expressly
requires that a party receive any “amount” of damages. The triggering event under the contract is
that a party prevail in an action “to enforce the terms of this Contract or to declare rights
hereunder . . . .” True enough, but the question remains: what does “prevailing party” mean under
B. Attorney’s Fees Under the Contract
The contract leaves “prevailing party” undefined, so we presume the parties intended the term’
s ordinary meaning.10 We have found the United States Supreme Court’s analysis helpful in this
area.11 In Hewitt v. Helms, the Court was faced with the question of whether a plaintiff who
obtained a favorable judicial pronouncement in the course of litigation, yet suffered a final
judgment against him, could be a prevailing party.12 Helms had sued several prison officials
alleging a violation of his constitutional rights.13 The district court granted summary judgment
against him on the merits of his claim, but the court of appeals reversed, holding that he had a
valid constitutional claim.14 On remand, the district court still rendered summary judgment
against him, finding that the defendants were shielded by qualified immunity.15 Helms then
sought his attorney’s fees, claiming that the court of appeals’ decision made him the prevailing
party.16 The Supreme Court disagreed, saying “[r]espect for ordinary language requires that a
plaintiff receive at least some relief on the merits of his claim before he can be said to prevail.”
17 And since Helms did not obtain a damages award, injunctive or declaratory relief, or a
consent decree or settlement in his favor, he was not a prevailing party.18 Five years later in
Farrar v. Hobby, a federal civil-rights case, the Court elaborated:
[T]o qualify as a prevailing party, a . . . plaintiff must obtain at least some relief on the merits of
his claim. The plaintiff must obtain an enforceable judgment against the defendant from whom
fees are sought, or comparable relief through a consent decree or settlement. Whatever relief
the plaintiff secures must directly benefit him at the time of the judgment or settlement. Otherwise
the judgment or settlement cannot be said to “affect the behavior of the defendant toward the
plaintiff.” Only under these circumstances can civil rights litigation effect “the material alteration of
the legal relationship of the parties” and thereby transform the plaintiff into a prevailing party. In
short, a plaintiff “prevails” when actual relief on the merits of his claim materially alters the legal
relationship between the parties by modifying the defendant's behavior in a way that directly
benefits the plaintiff.19
The Court concluded that the plaintiff “prevailed” in Farrar because he was awarded one dollar
in damages: “A judgment for damages in any amount, whether compensatory or nominal,
modifies the defendant’s behavior for the plaintiff’s benefit by forcing the defendant to pay an
amount of money he otherwise would not pay.”20 Farrar did not speak to whether a plaintiff
awarded zero damages can claim prevailing-party status, but under the Farrar Court’s analysis,
a plaintiff who receives no judgment for damages or other relief has not prevailed.
The trial-court judgment in today’s case recited the jury’s finding that “[t]he sum of zero dollars
would fairly and reasonably compensate KB” for its damages, if any, resulting from
Intercontinental’s breach, and that “[t]he sum of sixty-six thousand dollars and zero cents”
constituted a reasonable fee for the necessary services of KB Home’s attorneys. The judgment
It appearing to the Court that, based upon the verdict of the jury, KB Home Lone Star should
recover its damages against the International Group Partnership as found by the jury, and the
Court so finds.
IT IS ACCORDINGLY ORDERED, ADJUDGED AND DECREED that KB Home Lone Star have
and recover from the International Group Partnership judgment for the sum of sixty-six thousand
dollars and zero cents ($66,000.00).21
The court erred in making that award. The jury answered “0" on damages, and KB Home
sought no other type of relief, so the trial court should have rendered a take-nothing judgment
against KB Home on its contract claim.22
It seems beyond serious dispute that KB Home achieved no genuine success on its contract
claim. Whether a party prevails turns on whether the party prevails upon the court to award it
something, either monetary or equitable. KB Home got nothing except a jury finding that
Intercontinental violated the contract. It recovered no damages; it secured no declaratory or
injunctive relief; it obtained no consent decree or settlement in its favor; it received nothing of
value of any kind, certainly none of the relief sought in its petition.23 No misconduct was
punished or deterred, no lessons taught. KB Home sought over $1 million in damages, but
instead left the courthouse empty-handed: “That is not the stuff of which legal victories are made.”
24 Nor do we perceive any manner in which the outcome materially altered the legal relationship
between KB Home and Intercontinental.25 Before the lawsuit, Intercontinental was selling lots
that were promised to KB Home. After the lawsuit, Intercontinental had sold the promised lots
and was not required to pay a single dollar in damages or do anything else it otherwise would
not have done.
As judgment should have been rendered in Intercontinental’s favor, it is untenable to say that
KB Home prevailed and should recover attorney’s fees. A stand-alone finding on breach confers
no benefit whatsoever.26 A zero on damages necessarily zeroes out “prevailing party” status for
C. Declaration of Rights?
KB Home argues that it should nonetheless recover attorney’s fees because it sued to
“declare rights” under the contract and prevailed by obtaining a jury verdict that Intercontinental
breached the contract. We disagree. In Southwestern Bell Mobile Systems v. Franco we noted
that “[i]t is the judgment, not the verdict, that we must consider in determining whether attorney’s
fees are proper.”28 The United States Supreme Court has likewise reasoned that the judgment
is critical to the prevailing-party determination.29 In this case, the trial court should have
rendered a take-nothing judgment on KB Home’s contract claim. Neither law nor logic favors a
rule that bestows “prevailing party” status upon a plaintiff who requests $1 million for actual injury
but pockets nothing except a jury finding of non-injurious breach; to prevail in a suit that seeks
only actual damages — compensation for provable economic harm — there must be a showing
that the plaintiff was actually harmed, not merely wronged.
If KB Home had brought its breach-of-contract case and obtained favorable answers on the
same “failure to comply” questions, but the jury also found that an affirmative defense barred KB
Home’s claim, a take-nothing judgment in favor of Intercontinental would have been rendered.
There would be no dispute that KB Home had not prevailed, despite jury findings that
Intercontinental breached. No rational distinction exists between that scenario and the one
before us. In both, the end result is a take-nothing judgment with no meaningful judicial relief for
KB Home. Its only “relief” in either case is the gratification that comes with persuading a jury that
Intercontinental behaved badly. But vindication is not always victory. However satisfying as a
matter of principle, “purely technical or de minimis” success affords no actual relief on the merits
that would materially alter KB Home’s relationship with Intercontinental.30 Accordingly, KB
Home, while perhaps a “nominal winner”31 in convincing the jury that it was “wronged,”32 cannot
be deemed a “prevailing party” in any non-Pyrrhic sense.33
III. Is Intercontinental the Prevailing Party?
If KB Home “lost” by receiving no damages does that mean Intercontinental “won” by remitting
no damages? We cannot reach this question if it is not properly presented, and it is not. On the
record before us,34 it is undisputed that Intercontinental neither preserved the issue nor
presented any evidence (either before, during, or after trial) regarding its attorney’s fees for
defending KB Home’s breach-of-contract claim.35 This failure, along with others discussed
below, waives any right to recovery.36
Intercontinental contends that the phrase “fixed by the court” in the contract means the trial
judge, not the jury, decides the proper measure of attorney’s fees after trial ends, thus “there was
no need for Defendant to have submitted a question on attorneys fees.” Reading “fixed by the
court” to mean “fixed by the judge” is a straightforward construction.37 But a contract’s
overriding purpose is to capture the parties’ intent, meaning we must construe it in light of how
the parties meant to construe it. In this case, the parties’ trial conduct is itself instructive.
In this case, KB Home submitted the attorney’s-fees issue, like other fact issues, to the jury, not
to the court, and the record contains no indication that Intercontinental objected.38
Intercontinental’s lone pleading requesting attorney’s fees is its original counterclaim, where it
asserts Chapter 38, not the written contract, as a basis for recovering fees related to its oral-
contract counterclaim. The one time that Intercontinental mentioned fees spent defending KB
Home’s written-contract claim came during a post-trial hearing for entry of judgment when
Intercontinental argued, “If they’re not the prevailing party, then we successfully defended. And . .
. we’re entitled to attorney’s fees. And I’m prepared to present evidence today to that effect.” The
trial court did not respond, and Intercontinental neither pressed the issue nor made any offer of
proof. The record contains no mention of a jury-charge conference or any pretrial conference,
much less one indicating that the manner of setting attorney’s fees was in question.
Intercontinental never argued the contract was ambiguous. Moreover, there is no indication that
Intercontinental asked the trial court to take judicial notice of trial testimony concerning its
attorney’s fees,39 or that Intercontinental offered any fees-related testimony in the post-trial
Both KB Home as plaintiff on its written-contract claim and Intercontinental as counter-plaintiff
on its oral-contract claim submitted an attorney’s fees question on their affirmative claims,
apparently because they understood that the jury would hear evidence and decide what fee
award, if any, was proper. Thus, the parties, given how they and the trial court actually tried the
case, interpreted “fixed by the court” to mean that fees in this case would be determined by a
court proceeding (for example, a court judgment effectuating the jury’s verdict). This reading is
not unreasonable. The contract does not reserve fees specifically to the trial judge, but to the
court, and both parties submitted all fact questions to the jury. In short, any reading of “fixed by
the court” must be informed by the record and by how the parties chose to present fees to the
jury on their respective claims.
In any case, even assuming the written contract reserved attorney’s fees exclusively to the
judge and not the jury, Intercontinental has certainly waived that argument and its rights to
recover fees under the contract. Intercontinental did not plead for attorney’s fees under the
contract, and never sought to amend its pleadings to do so.40 Nor, apparently, did
Intercontinental ever object, either before the case went to the jury or post-trial, that KB Home’s
jury question on attorney’s fees was immaterial because the contract left that issue to the judge.
As noted above, Intercontinental first raised its “fixed by the court” argument during a post-trial
hearing for entry of judgment, after the case (including Intercontinental’s jury request for fees on
the oral contract) had been fully tried to the jury. Nothing indicates that Intercontinental made the
trial court aware of its position before the jury charge was submitted or raised any issue about
the contract’s meaning as to attorney’s fees. Nor did Intercontinental offer any evidence when it
made its oral, post-trial request that the trial court award it fees under the contract.
Given that both parties tried questions of breach and attorney’s fees to the jury, Intercontinental
cannot be excused for failing to submit a jury question on attorney’s fees incurred in defending
KB Home’s lawsuit on the written contract, or otherwise preserving the issue for appellate review.
41 The issue of whether a breaching-but-nonpaying defendant can be a “prevailing party” under
an attorney’s-fees provision like this is interesting legally, but not before us procedurally.42
IV. Response to the Dissent
The dissent accuses the Court of ignoring the contract’s language in order to reach an easy-to-
apply answer. Nothing could be further from the truth. Since the contract leaves “prevailing party”
undefined, we must do our best to effectuate the parties’ intent. We believe the most sensible
interpretation is that a plaintiff prevails by receiving tangible relief on the merits.
Despite what the dissent contends, the Court is not saying a plaintiff must recover a money
judgment in every breach-of-contract action. Quite the opposite. The dissent cites a variety of
situations where we agree the plaintiff would “prevail”: when the plaintiff obtains rescission of the
contract, specific performance, an injunction, or a declaratory judgment. Today’s decision is not
grounded on the fact that KB Home received no money damages, but rather on the fact that KB
Home received nothing at all.43
The reason we focus on money damages is because KB Home focused on money damages.
Had KB Home pursued nominal damages, rescission, specific performance, injunctive relief, or
declaratory relief, that would be another case.44 But since KB Home’s sole goal at trial was
actual damages, it cannot declare victory without recovering any, a point the dissent seems to
concede: “Money damages may be indispensable in contract claims seeking money damages. .
. .”45 This is exactly such a claim.
The jury’s verdict delivered KB Home a stand-alone finding on breach, but a breach-of-contract
plaintiff who seeks nothing beyond economic damages cannot receive a judgment based on
breach alone.46 In CU Lloyd’s of Texas v. Feldman, the court of appeals granted the plaintiff a
partial summary judgment on liability and rendered judgment for him.47 We reversed, holding:
When the relief sought is a declaratory judgment, an appellate court may properly render
judgment on liability alone. In this case, however, Feldman sought no declaratory relief and no
evidence of damages was submitted or considered. . . . Thus, the court of appeals erred in
rendering judgment for Feldman.48
Feldman was a summary-judgment case (where the plaintiff submitted no evidence of
damages), and today’s case arises in a jury-verdict context (where the plaintiff submitted
evidence of damages that the jury rejected), but the common thread is plain: Absent tangible
relief, either monetary or equitable, a judgment on liability alone is improper. Where a party
seeks only damages, as here, damages are a precondition to “prevailing.”
It is unconvincing to construe KB Home’s suit as one seeking declaratory relief. The DJA, like
the contract, covers an action “to declare rights,”49 and as explained above, authorizes an
award of attorney’s fees. A declaratory judgment, by its nature, is forward looking; it is designed
to resolve a controversy and prevent future damages.50 It affects a party’s behavior or alters the
parties’ legal relationship on a going-forward basis. Here, however, KB Home’s suit was
decidedly focused on the past, seeking backward-looking money damages for prior breaches of
contract. The dissent is right that “[a]n action to ‘declare rights’ is not an action for money
damages,”51 but this case was never the former and always the latter. KB Home could have
brought a declaratory-judgment action and “prevailed” (and thus recovered attorney’s fees) had
the trial court rendered judgment on liability.52 It chose not to, opting instead to seek actual
damages from the jury. The attorney’s-fees provision does not require a monetary recovery in
every case, but KB Home made it necessary in this case by demanding only monetary, not
The dissent contends the judgment declares the parties’ rights, but the part of the judgment the
dissent quotes from merely incorporates the jury verdict. KB Home’s petition sought jury findings
on breach, damages and attorney’s fees. Taken at face value, the lawsuit asks the jury to
“enforce the terms of this Contract”; it does not ask the court to declare rights. Intercontinental’s
attorney noted as much at a post-trial hearing, stating that “an action to enforce a contractual
provision” is “exactly what we’re dealing with here.” There are cases where parties who disagree
over a contract’s meaning have asked the courts to declare their respective rights,53 but these
cases are typically brought as declaratory-judgment actions. One exception is Feldman, which
strengthens our decision today as illustrated in Feldman’s opening paragraph:
In this insurance case, we consider whether a court of appeals may properly render judgment on
a party’s liability for breach of contract without evidence of damages and when no declaratory
judgment has been sought. We conclude that it cannot . . . .54
Finally, the dissent resurrects an old version of Black’s Law Dictionary to define “prevailing
party” as the one who prevails on the “main issue” of the case. The dissent then states there was
“no doubt the main issue was defendant Intercontinental’s counterclaim,” and because the jury
found for KB Home on that counterclaim, KB Home must be the prevailing party. But this
analysis does precisely what the dissent accuses the Court of doing: It disregards the language
of the contract.
The attorney’s-fees provision makes clear that the prevailing party is judged by "an action to
enforce the terms of this Contract or to declare rights hereunder."55 The problem with the
dissent’s analysis is that Intercontinental's counterclaim was not rooted in the parties’ written
contract, but rather in an alleged separate oral agreement. Under the dissent’s “main issue” test,
the interpretation of “prevailing party” in “this Contract” is controlled by the fate of a claim brought
under a separate oral contract.
Displacing the parties’ agreed-to language with the dissent’s “main issue” analysis would yield
an anomalous result: Plaintiff sues for $1 million-plus, winds up empty-handed, but nonetheless
“prevails.” That cannot be right. Focusing on what KB Home walked away with post-trial – no
relief whatsoever – we cannot say it emerged the prevailing party.
Whether seeking attorney’s fees under Chapter 38 (which impliedly requires a claimant to first
recover damages)56 or under this contract (where the jury denied the claimant’s sole basis for
recovery), the bottom line is the same: As there was no award to the client, there can be no
attorney’s fee award either.57 KB Home obtained nothing of value from its breach-of-contract
lawsuit — certainly no judgment acknowledging compensable injury — and thus cannot recover
its attorney’s fees under the contract: “to recover those fees, the [claimant] had to recover
damages for breach of contract.”58 On these uncommon facts, we adopt a “no harm, no fee”
rule, meaning a stand-alone finding of breach unaccompanied by any tangible recovery (either
monetary or equitable relief) cannot bestow “prevailing party” status. As for Intercontinental, it
waived any claim for attorney’s fees defending KB Home’s breach-of-contract claim by not
submitting the issue to the factfinder.
Accordingly, we reverse the court of appeals’ judgment and render judgment that KB Home
Don R. Willett
OPINION DELIVERED: August 28, 2009
1 Green Int’l, Inc. v. Solis, 951 S.W.2d 384, 390 (Tex.
2 Farrar v. Hobby, 506 U.S. 103, 111-12 (1992).
3 MBM Fin. Corp. v. Woodlands Operating Co., ___ S.
W.3d ___, ___ (Tex. 2009) (construing the attorney’s-
fees provision in section 38.001 of the Texas Civil
Practice & Remedies Code, which specifies that
attorney’s fees must be “in addition to the amount of
a valid claim and costs”).
4 Intercontinental had sold a majority of the Santa
Clara lots to other developers, so KB Home dropped
its specific performance and injunctive relief claims
before trial and sought only lost profits.
5 Specifically, the jury was asked: “Did
Intercontinental Group Partnership fail to comply with
the Santa Clara Lot Contract?” and separately “What
sum of money, if any, if paid now in cash, would fairly
and reasonably compensate KB Home Lone Star, L.
P. for its damages, if any, that resulted from such
failure to comply with the Santa Clara Lot Contract?”
6 ___ S.W.3d ___, ___.
7 MBM Fin. Corp. v. Woodlands Operating Co., __ S.
W.3d __, __ (“Texas has long followed the ‘American
Rule’ prohibiting fee awards unless specifically
provided by contract or statute.” (citing Tony Gullo
Motors I, L.P. v. Chapa, 212 S.W.3d 299, 310-11
(Tex. 2006) (“Absent a contract or statute, trial courts
do not have inherent authority to require a losing
party to pay the prevailing party’s fees.”))).
8 Tex. Civ. Prac. & Rem. Code § 38.001.
9 951 S.W.2d 384, 390 (Tex. 1997).
10 See Valence Operating Co. v. Dorsett, 164 S.W.
3d 656, 662 (Tex. 2005).
11 See, e.g., Dallas v. Wiland, 216 S.W.3d 344, 358
n.61 (Tex. 2007); Sw. Bell Mobile Sys., Inc. v. Franco,
971 S.W.2d 52, 55-56 (Tex. 1998); Grounds v. Tolar
Indep. Sch. Dist., 856 S.W.2d 417, 423 (Tex. 1993).
12 482 U.S. 755, 757 (1987).
14 Id. at 757-58.
15 Id. at 758.
16 Id. at 759.
17 Id. at 760.
19 506 U.S. 103, 111-12 (1992) (reviewing attorney’s
fees awarded pursuant to 42 U.S.C. § 1988)
20 Id. at 113-14 (noting that “the prevailing party
inquiry does not turn on the magnitude of the relief
21 (Emphasis added).
22 Cf. State Farm Life Ins. Co. v. Beaston, 907 S.W.
2d 430, 437-38 (Tex. 1995) (rendering take-nothing
judgment against party who recovered no damages
on claim alleging violation of Insurance Code article
21.21, even assuming arguendo the party prevailed
on the article 21.21 claim).
23 See Helms, 482 U.S. at 760.
25 See Farrar, 506 U.S. at 111-12.
26 See id. at 111 (to be a prevailing party, “[w]
hatever relief the plaintiff secures must directly
benefit him . . . .”). It is difficult to conclude a breach-
of-contract plaintiff has prevailed when the jury says
the plaintiff was wholly uninjured and denies all
requested relief. As the dissent recognizes, money
damages are essential in contract claims seeking
money damages (though not for contract claims
seeking something else). ___ S.W.3d ___, ___.
Every single court of appeals has likewise held that
one of the required elements in a breach-of-contract
suit seeking money damages is that the plaintiff was
in fact damaged by the breach. Wright v. Christian &
Smith, 950 S.W.2d 411, 412 (Tex. App.—Houston
[1st Dist.] 1997, no pet.); Fieldtech Avionics &
Instruments, Inc. v. Component Control.com, Inc., 262
S.W.3d 813, 825 (Tex. App.—Fort Worth 2008, no
pet.); Roundville Partners, L.L.C. v. Jones, 118 S.W.
3d 73, 82 (Tex. App.—Austin 2003, pet. denied);
Killeen v. Lighthouse Elec. Contractors, L.P., 248 S.
W.3d 343, 349 (Tex. App.—San Antonio 2007, pet.
denied); Reynolds v. Nagley, 262 S.W.3d 521, 527
(Tex. App.—Dallas 2008, pet. denied); West v.
Brenntag Sw., Inc., 168 S.W.3d 327, 337 (Tex. App.—
Texarkana 2005, pet. denied); Domingo v. Mitchell,
257 S.W.3d 34, 39 (Tex. App.—Amarillo 2008, pet.
denied); Hovorka v. Cmty. Health Sys., Inc., 262 S.W.
3d 503, 508-09 (Tex. App.—El Paso 2008, no pet.);
Sullivan v. Smith, 110 S.W.3d 545, 546 (Tex. App.—
Beaumont 2003, no pet.); Bank of Am., N.A. v.
Hubler, 211 S.W.3d 859, 864 (Tex. App.—Waco
2006, pet. granted, judgm’t vacated w.r.m.); United
Plaza-Midland, L.L.C. v. First Serv. Air Conditioning
Contractors, Inc., No. 11-05-00382-CV, 2007 WL
4536525, at *7 (Tex. App.—Eastland Dec. 20, 2007,
pet. denied) (mem. op.); Lake v. Premier Transp.,
246 S.W.3d 167, 173 (Tex. App.—Tyler 2008, no
pet.); Pegasus Energy Group v. Cheyenne
Petroleum, 3 S.W.3d 112, 127 (Tex. App.—Corpus
Christi 1999, pet. denied); West v. Triple B Servs., L.
L.P., 264 S.W.3d 440, 446 (Tex. App.—Houston [14th
Dist.] 2008, no pet.).
27 We said in a 1998 decision discussing Farrar that
two plaintiffs who proved retaliatory discharge under
Texas law “prevailed” even though the jury awarded
no money damages. Sw. Bell Mobile Sys. v. Franco,
971 S.W.2d 52, 56 (Tex. 1998) (per curiam). Unlike
today’s case, however, one of the plaintiffs in Franco
received equitable relief: reinstatement. As to that
plaintiff, Franco correctly decided that he was a
prevailing party. However, like KB Home in this case,
the other Franco plaintiff received no relief
whatsoever. As we noted in Franco, under the United
States Supreme Court’s reasoning in Farrar, “‘the
only reasonable fee’” when a plaintiff fails to prove
damages is usually “‘no fee at all.’” Id. at 55-56
(quoting Farrar, 506 U.S. at 115). Also, our 1998
Franco decision predated the United States Supreme
Court’s 2001 decision in Buckhannon Board & Care
Home, Inc. v. West Virginia Department of Health &
Human Services, 532 U.S. 598, 603 (2001), which
refined its earlier analysis and basically held: “no
money judgment, no fees.” Accordingly, we disagree
with Francon that a plaintiff who recovers no money
and receives no equitable relief can be a prevailing
party. Instead, a plaintiff must receive affirmative
judicial relief to be considered a prevailing party.
28 971 S.W.2d at 56.
29 Buckhannon, 532 U.S. at 603-04.
30 See Tex. State Teachers Ass’n v. Garland Indep.
Sch. Dist., 489 U.S. 782, 792 (“Where the plaintiff’s
success on a legal claim can be characterized as
purely technical or de minimis, a district court would
be justified in concluding that” attorney’s fees should
31 Abraham Lincoln, Notes for Law Lecture (July 1,
1850), reprinted in 2 Collected Works of Abraham
Lincoln 142 (John G. Nicolay & John Hay eds. 1894)
(“Discourage litigation. Persuade your neighbors to
compromise whenever you can. Point out to them
how the nominal winner is often a real loser — in
fees, expenses, and waste of time.”).
32 But see Zapata Hermanos Sucesores, S.A. v.
Hearthside Baking Co., 313 F.3d 385, 389 (7th Cir.
2002) (Posner, J.) (“[A] breach of contract is not
considered wrongful activity in the sense that a tort or
a crime is wrongful. When we delve for reasons, we
encounter Holmes’s argument that practically
speaking the duty created by a contract is just to
perform or pay damages . . . .”) (citing Oliver Wendell
Holmes, Jr., The Common Law 300-02 (1881) and
Oliver W. Holmes, The Path of the Law, 10 Harv. L.
Rev. 457, 462 (1897)).
33 See Goland v. Cent. Intelligence Agency, 607 F.
2d 339, 356 (D.C. Cir. 1978) (declining to define
“substantially prevail” in the Freedom of Information
Act but doubting “that plaintiffs could be said to have
‘substantially prevailed’ if they, like Pyrrhus, have won
a battle but lost the war.”). See also Farrar v. Hobby,
506 U.S. 103, 117, 119 (1992) (O’Connor, J.,
concurring) (noting that a plaintiff who achieves a
purely technical victory, something Justice O’Connor
labels “[c]himerical accomplishments,” has in reality
“failed to achieve victory at all, or has obtained only a
pyrrhic victory for which the reasonable fee is zero.”).
34 In this Court, both the clerk’s and reporter’s
records are partial.
35 As its briefing makes clear, the only evidence
Intercontinental introduced on attorney’s fees, and
the only jury question it submitted on attorney’s fees,
concerned “its separate counterclaim for breach of
an oral agreement by Plaintiff” (emphasis in original),
not its defense of KB Home’s breach-of-contract
claim. Intercontinental concedes that since it lost on
that affirmative claim, “the jury rightfully denied
Defendant’s request for attorneys fees on that claim,
and Defendant does not complain about that finding.”
36 See Bocquet v. Herring, 972 S.W.2d 19, 21 (Tex.
1998) (noting that reasonableness and necessity of
fees are “question[s] of fact for the jury’s
determination’”) (quoting Trevino v. Am. Nat'l Ins. Co.,
168 S.W.2d 656, 660 (Tex. 1943)).
37 Somewhat analogous to this contract provision is
the attorney’s-fees provision in the Texas Declaratory
Judgment Act (DJA): “[T]he court may award costs
and reasonable and necessary attorney’s fees as are
equitable and just.” Tex. Civ. Prac. & Rem. Code §
37.009. One court of appeals has recently noted that,
“[o]n the face of this provision, it would appear that
the trial court, not the jury, determines the amount of
attorneys’ fees . . . .” Ogu v. C.I.A. Servs. Inc., No. 01-
07-00933-CV, 2009 WL 41462, at *3 (Tex. App.—
Houston [1st Dist.] Jan. 8, 2009, no pet.) (mem. op.).
But, the court continued, “the amount of the
attorneys’ fees is a question of fact for the jury to
decide.” Id. (citing City of Garland v. Dallas Morning
News, 22 S.W.3d 351, 367 (Tex. 2000)). We express
no view on the matter.
38 In Texas courts, the reasonableness of attorney’s
fees is normally “a fact issue for the jury.” Scott A.
Brister, Proof of Attorney’s Fees in Texas, 24 St. Mary’
s L.J. 313, 349 (1993) (“Texas law treats attorney's
fees as a fact issue for the jury rather than as a
collateral matter usually determined by the court after
the trial has been concluded and the loser
determined.”). Obviously, parties can contract
otherwise if they wish.
39 Tex. Civ. Prac. & Rem. Code § 38.004 (“The court
may take judicial notice of the usual and customary
attorney’s fees and of the contents of the case file
without receiving further evidence in: (1) a
proceeding before the court; or (2) a jury case in
which the amount of attorney’s fees is submitted to
the court by agreement.”).
40 Tex. R. Civ. P. 301 (providing that the court’s
judgment shall conform to the pleadings).
41 Tex. R. Civ. P. 279 (“Upon appeal all independent
grounds of recovery or of defense not conclusively
established under the evidence and no element of
which is submitted or requested are waived.”); cf. Wilz
v. Fluornoy, 228 S.W.3d 674, 676-77 (Tex. 2007)
(per curiam); Hunt Constr. Co. v. Cavazos, 689 S.W.
2d 211, 212 (Tex. 1985) (per curiam).
42 Some might argue that not every lawsuit produces
a winner (even cases that go to verdict); the parties
could battle to what amounts to a draw, pay their own
fees and expenses, and go home. Here, a jury finds
there was breach but not injurious breach; the
wronged plaintiff gets nothing and the wrongdoing
defendant gives nothing. If “receiving no damages”
means the plaintiff did not prevail, does “remitting no
damages” necessarily mean the breaching defendant
prevailed? When defining litigation success, some
might argue that while relief is required for plaintiffs to
prevail, a finding of “no breach” is required for
defendants — that is, a desired finding on breach is
insufficient for plaintiffs but indispensable for
43 Citing cases from 1917 and earlier, the dissent
also argues that KB is the prevailing party because it
is entitled to nominal damages. ___ S.W.3d ___, ___.
Nothing in the record shows that KB Home requested
nominal damages in the trial court or that it appealed
any non-award of nominal damages, so that scenario
is simply not before us today. More to the point, as
the Court makes clear in another case decided today,
the modern Texas rule is that “nominal damages are
not available when the harm is entirely economic and
subject to proof (as opposed to non-economic harm
to civil or property rights).” MBM Fin. Corp. v.
Woodlands Operating Co., ___ S.W.3d ___, ___
(Tex. 2009). KB Home asked the jury to award
damages to remedy an “entirely economic” harm that
was “subject to proof”: lost profits.
44 To this end, the dissent is mistaken in saying we
are requiring parties to wait until they are damaged in
order to seek a declaration of their respective rights.
45 ___ S.W.3d ___ at ___.
46 See CU Lloyd’s of Tex. v. Feldman, 977 S.W.2d
568, 568 (Tex. 1998) (per curiam).
47 Id. at 569.
48 Id. (internal citations omitted).
49 Tex. Civ. Prac. & Rem. Code § 37.003.
50 See Bonham State Bank v. Beadle, 907 S.W.2d
465, 467 (Tex. 1995) (“A declaratory judgment is
appropriate only if a justiciable controversy exists as
to the rights and status of the parties and the
controversy will be resolved by the declaration
51 ___ S.W.3d ___, ___.
52 CU Lloyd’s of Tex. v. Feldman, 977 S.W.2d 568,
569 (Tex. 1998) (“When the relief sought is a
declaratory judgment, an appellate court may
properly render judgment on liability alone.”).
53 See Tex. Civ. Prac. & Rem. Code § 37.004;
Allstate Ins. Co. v. Hallman, 159 S.W.3d 640, 641
(Tex. 2005); Brooks v. Northglen Ass’n, 141 S.W.3d
158, 161 (Tex. 2004); CU Lloyd’s of Tex. v. Feldman,
977 S.W.2d 568, 569 (Tex. 1998) (per curiam);
Firemen’s Ins. Co. of Newark, N.J. v. Burch, 442 S.W.
2d 331, 332 (Tex. 1968); Hoover v. Gen. Crude Oil
Co., 147 Tex. 89, 90, 212 S.W.2d 140, 141 (1948).
54 977 S.W.2d at 568.
55 (Emphasis added).
56 MBM Financial Corp. v. Woodlands Operating Co., ___ S.
W.3d ___ (Tex. 2009).
57 See id. at ___ (“a client must gain something before
attorney’s fees can be awarded.”).
58 Id. at ___.