Judgment for Interoil Services, LLC was affirmed in a breach of contract case the company filed and fought over unpaid debts.
The Fourteenth Court of Appeals backed a ruling from the 151st District Court in Harris Count on April 2. Justice Ken Wise wrote the opinion, and Justices Ken Frost and Meagan Hassan concurred.
Interoil Services, LLC filed suit against C&F International, Inc, alleging that it breached an oral contract and owed Interoil money after third-party Schahin didn’t pay what it owed. CFI then filed a counterclaim against Interoil, for breach of written contract, alleging that it had indemnity concerning Schahin’s conduct. The lower court awarded Interoil $96,081.63 in damages and $92,200 in attorney’s fees. While both sides appealed, the judges affirmed the ruling.
Interoil claimed its appeal that the CFI wasn’t owed indemnification, and that an indemnification clause isn’t unenforceable. But the judges pointed out that Interoil didn’t bring up this issue in its motion for judgment notwithstanding the verdict.
Interoil also said that the indemnity provision can’t be enforced because it offers CFI defense for CFI’s own “negligent credit decisions,” according to the lawsuit. Still, Judge Wise wrote, “The pleadings in this case do not show that CFI was seeking indemnity for its own negligence… Rather, the record shows that CFI’s loss was based on economic damages resulting from a third-party’s breach of contract.”
The judges then moved on to CFI’s appeal as it challenged the lower court’s awards for Interoil. CFI first noted that Interoil didn’t win its breach of oral contract or quantum meruit claims, and takes issue with the attorney’s fees award, not the damages award.
But according to the judges, “CFI does not cite to any rule of procedure, statute, or case law for this issue, nor does CFI provide this court with a legal framework within which to resolve the issue,” wrote Judge wise.
But the judges also determined that since Interoil won in damages for the written contract claim, it was also owed attorney’s fees, and subsequently owed costs.
At the same time, they ruled that the lower court justly denied CFI’s petition for attorneys’ fees on its own behalf. Interestingly enough, it was Interoil’s standing as an LLC that prevented it from prevailing here.
“A party cannot recover attorney’s fees under Section 38.001 against a limited liability company,” wrote Judge Wise.