HOUSTON - A Harris County businessman was able to chip away at an attorney’s fee calculations for handling a lengthy bankruptcy proceeding, but a Texas appeals court this week affirmed the reasonableness of the majority of the fees.
Brad Jones, who went through a bankruptcy involving his company Exquisite Designs, filed an appeal with First District Court of Appeals after being billed for nearly $190,000 by attorney Reese Baker of Baker & Associates. The Chapter 11 proceedings began in 2012.
A trial court concluded that Baker was owed $139,612.58 in attorney fees for work performed prior to a Chapter 11 agreement and after the agreement was signed. Based on the bankruptcy court’s determinations and the details of Baker’s invoices, the First District court concluded these fees were reasonable but lowered the damages award by $500 due to an error in previous calculations.
But the appeals court did find problems with an award to Baker of nearly $49,000 in prejudgment interest. Previous calculations did not provide an accurate accrual date from which the trial court calculated the prejudgment interest, leading to an inflated amount, according to the court.
“We agree that there is error in the calculation of prejudgment interest and will remand this issue to the trial court for a recalculation of prejudgment interest,” the Aug. 22 opinion states.
The justices, however, rejected Jones’ argument that Baker was barred from filing his breach-of-contract lawsuit in January 2018 by a four-year statute of limitations on lawsuits involving debts.
“Because Baker’s claim for breach of the guaranty agreement did not accrue until at least June 6, 2014, when he demanded payment from Jones, the four-year statute of limitations for a cause of action on a debt had not run when Baker filed suit in January 2018,” the opinion says.
Baker did not receive any payments from Jones after January 2013, despite Jones’ obligation to make monthly payments, but Baker continued to represent Exquisite Designs until the bankruptcy court allowed the attorney to withdraw from the proceedings, according to this week’s opinion.