This is a restricted appeal from a no-answer default judgment on a suit for declaratory judgment. The petition sought court approval on an equity buyout through the terms of the parties’ corporate operating agreement.[1] In addition to its jurisdictional elements, Mintvest argues there are three errors on the face of the record in connection with the court’s award of attorney’s fees. We affirm in part, reverse in part, and reform the judgment accordingly. I.FACTUAL AND PROCEDURAL BACKGROUND Two old friends, Ashton Soniat and Prieur Leary III, decided to create a Bitcoin mining firm. Soniat, trustee and beneficiary of Coinmint Living Trust (“CLT”), and Leary, the president of Mintvest Capital LTD (“Mintvest”) agreed CLT and Mintvest would be equal 50% owners of the company, Coinmint, LLC (“Coinmint”). Coinmint’s structure, the relationship of its members and managers, the corporate contribution and compensation scheme, its terms of operation, and matters relating to the disposition of membership interests, including repurchase rights were governed by the Limited Liability Company Agreement (“Operating Agreement”). Mintvest’s ownership interest in Coinmint, LLC was diluted over time due to disproportionate capital contributions by CLT. Soniat and Leary disputed the control and direction of Coinmint, resulting in litigation in Texas, Delaware, and Puerto Rico. Delaware Lawsuit In December 2019, Mintvest and Leary sued Coinmint and CLT in the Delaware Court of Chancery (the “Delaware case”). Mintvest sought to dissolve Coinmint, to nullify Coinmint’s conversion from a Delaware entity to a Puerto Rico entity, and to declare the company’s proper managers. Coinmint opposed Mintvest’s requested relief on various grounds The Delaware court issued various orders containing findings that Leary and Mintvest had been harming Coinmint, including: An “Order Granting Respondent’s Motion to Enforce the Status Quo Order” in February 2021, finding that Leary and Mintvest had been and should cease from communicating “business information of Coinmint, LLC, including without limitation, financial information of any offers by any party to engage in a transaction with Coinmint, LLC” to third parties. An “Order Granting Judgment in Favor of Respondent and Vacating Status Quo Order,” issued in May 2021, and its “Opinion,” issued in August 2021, finding that Mintvest and “Leary divulged confidential Company information and interfered with Company operations in an attempt to steer the Company in his preferred direction.” Repurchase Notice In August 2021, Coinmint delivered its “Repurchase Notice” to Mintvest informing Mintvest that it had breached Section 3.8 of the Operating Agreement, as adjudicated by the Delaware court, and that Coinmint was exercising its right to repurchase Mintvest’s Membership Interests in Coinmint. Coinmint provided notice that it intended to exercise its “Repurchase Option” for “all Membership Interests in the Company owned by the Breaching Member [identified as Mintvest] which presently constitutes a Membership Interest with a 5.3% Sharing Ratio . . . .” Further, Coinmint notified Mintvest that the purchase price for the Repurchased Interests, at 75% of the Fair Market Value of such interests, is $995,297.80, and proposed that 20% of this amount ($191,059.56) be paid in cash and the balance of the amount be paid in the form of a promissory note. Coinmint also notified Mintvest of the time and place where the Repurchase Option would be effected. Mintvest objected to the Repurchase Notice and refused to participate in the repurchase procedure under Section 6.11 of the Operating Agreement. Declaratory Judgment Action and Motion for Default Judgment The Coinmint and CLT (collectively the “Coinmint Parties”) filed a declaratory judgment action against Mintvest in Harris County seeking a declaration that Mintvest breached Section 3.8 of the Operating Agreement, thereby triggering CLT’s repurchase rights under Section 6.11 of the agreement. Coinmint alleged that CLT had delivered proper notice to Mintvest and Leary of its exercise of its repurchase rights under Section 6.11. Coinmint also requested that the trial court order Mintvest to appoint an appraiser or order that the purchase has already been effectuated and closing should occur at Coinmint’s calculated purchase price. The petition included various exhibits including the Operating Agreement, various orders from the Delaware case to support allegation of the breach that Mintvest’s principle (Leary) divulged confidential information, and the repurchase notice which includes the repurchase offer value (“$955,297.80″). The request also sought either an appraiser to be appointed or a declaration that repurchase was effectuated (because Mintvest refused to comply with the repurchase procedures). Coinmint also requested attorney’s fees under Section 37.009 and Chapter 38 of the Texas Civil Practice and Remedies Code for fees incurred by its lawyers, Hughes Arrell Kinchen LLP. Mintvest was served with the lawsuit but did not answer or otherwise become involved with the case until filing its notice for restricted appeal. On November 22, 2021, the Coinmint Parties moved for default judgment against Mintvest on all claims. Though not included in their pleadings, the motion requested that the trial court “render a default judgment establishing defendant’s liability and awarding plaintiffs damages in the amount of $88,034.53, plus costs, attorney fees [sic], and prejudgment interest in relation to the attorney’s fees ordered by the Delaware court.” Declaratory Judgment The trial court signed its Final Default Judgment with findings sought by the Coinmint Parties and ordered an award for all the relief requested by the Coinmint Parties in their petition. The trial court found that the actions described in the Delaware case violated Section 3.8 of the Operating Agreement, in which Mintvest promised not to “engage in any activity competitive with or adverse to the Business [defined as "cryptocurrency and distributed technology infrastructure"], whether alone, as a partner, officer, director, employee, agent, or investor of or in any other entity (other than the Company).” The court’s award included attorney’s fees totaling $8,948.75 for the declaratory judgment action challenged in this appeal. The court also, based on a finding that Mintvest was ordered to pay $88,034.53 in the Delaware case and had failed to do so, ordered the relief requested in the Coinmint Parties’ default-judgment motion. The court ultimately applied that amount as a credit for the benefit of Coinmint Parties. II.RESTRICTED APPEAL For Mintvest to prevail on its restricted appeal, it must show that: (1) it filed notice of the restricted appeal within six months after the judgment was signed; (2) it was a party to the underlying lawsuit; (3) it did not participate in the hearing that resulted in the judgment complained of, and it did not timely file any post-judgment motions or requests for findings of fact and conclusions of law; and (4) error is apparent on the face of the record. Tex. R. App. P. 30; Pike-Grant v. Grant, 447 S.W.3d 884, 886 (Tex. 2014). The first three requirements are jurisdictional. Ex parte E.H., 602 S.W.3d 486, 497 (Tex. 2020). Though Coinmint does not dispute them we must consider them first. A. Have the jurisdictional elements been satisfied for review of the merits? The Default Judgment was entered on March 14, 2022. The Notice of Restricted Appeal was filed on August 31, 2022, which is within six (6) months after the Final Default Judgment was signed. The record shows that Mintvest was the defendant to the underlying lawsuit, did not participate in the hearing that resulted in the judgment complained of, and did not timely file any post-judgment motions or requests for findings of fact and conclusions of law. Having reviewed the record, under the applicable standard of review, we conclude that these first three jurisdictional elements are satisfied. The crux of this appeal, and all relevant questions of law, lie within the issues raised in connection with the fourth required element of the restricted appeal—whether there was error on the face of the record. B. Has Mintvest established error on the face of the record? Once the jurisdictional requirements of the restricted appeal are met, an appellant must then establish error on the face of the record to prevail. Ex parte E.H., 602 S.W.3d at 497. Mintvest contends that error is apparent on the face of the record for three independent reasons: First, Mintvest contends the default judgment purports to award damages directly from an undomesticated foreign judgment; second, Mintvest argues the damages awarded in the declaratory judgment are not supported by the Coinmint Parties’ pleadings; and finally, Mintvest argues that there is “factually and legally insufficient information on the face of the record.” Altogether Mintvest’s three points of error relate to and challenge paragraphs 2a, 2b, and 2e of trial court’s judgment where it ordered: a. Plaintiffs COINMINT, LLC and COINMINT LIVING TRUST are awarded actual damages in the amount of $88,034.53 from defendant MINTVEST CAPITAL LTD., which will satisfy the orders in the Delaware Case with which defendant MINTVEST CAPITAL LTD. has not yet complied. b. Plaintiffs COINMINT, LLC and COINMINT LIVING TRUST are awarded reasonable and necessary attorney fees in the amount of $8,948.75 from defendant MINTVEST CAPITAL LTD. for the prosecution of this case through this judgment. . . . e. Plaintiffs COINMINT, LLC and COINMINT LIVING TRUST are ordered to deposit cash with their counsel, Hughes Arrell Kinchen LLP, in the amount of $191,059.56 for the benefit of defendant MINTVEST CAPITAL LTD. COINMINT LIVING TRUST are entitled to deduct $88,034.53 from the deposit amount to satisfy the judgment against defendant MINTVEST CAPITAL LTD. described above in subparagraph 2.a., resulting in a total cash deposit of $103,025.03 to be deposited with plaintiffs’ counsel for the benefit of defendant. Plaintiffs COINMINT, LLC and COINMINT LIVING TRUST are ordered to execute a promissory note in favor of defendant MINTVEST CAPITAL LTD. in the total amount of $764,238.24, to be paid out over five years commencing on the one-year anniversary of this Order and Final Judgment, and payable each anniversary thereafter, in equal installments with interest accruing annually at the Prime Rate…. 1. Was the trial court’s award of $88,034.53 to satisfy the Delaware court’s orders improper in the absence of procedures domesticating the Delaware court orders? In Mintvest’s first point, it argues that the trial court’s default judgment —at paragraph 2.a—erroneously enforces the Delaware judgment absent any of the recognized procedures for enforcing a foreign judgment. Texas recognizes two methods of enforcing a foreign judgment: (1) filing the judgment in accordance with the Uniform Enforcement of Foreign Judgments Act (“UEFJA”), and (2) filing a common-law action to enforce the judgment. Tex. Civ. Prac. & Rem. Code §§ 35.003, 35.008; Brown v. Lanier Worldwide, Inc., 124 S.W.3d 883, 902 (Tex. App.—Houston [14th Dist.] 2004, no pet.). Coinmint Parties do not contend that their Petition seeks to enforce the judgment and the record does not indicate that they complied with either procedure. Rather the Coinmint Parties contend that because they had neither asserted a claim nor a counterclaim in the Delaware action, the Delaware court’s award of $88,034.53 does not represent “damages” awarded such that Coinmint did not need to domesticate the Delaware judgment because it did not seek (or obtain) any affirmative relief in the Delaware case or obtain damages that it was attempting to collect in Texas. But this rule the Coinmint Parties rely on providing that attorney’s fees do not qualify as actual damages only applies to fees sought for “the prosecution or defense of a claim”, not fees from another lawsuit. In re Nalle Plastics, 406 S.W.3d 168, 173- 75 (Tex. 2013) (“attorney’s fees for the prosecution or defense of a claim …are not…damages.”) (emphasis added). The very case Coinmint Parties offer as support for its argument makes clear that attorney’s fees stemming from an underlying cause (e.g., the Delaware case) when sought as damages in the instant case are actual damages. In re Xerox Corp., 555 S.W.3d 518, 529 n.66 (citing In re Nalle Plastics, 406 S.W.3d 168, 174-75) (“attorney’s fees that are the subject-matter of the litigation are damages”). The fees awarded in the Delaware judgment, though not raised in Mintvest’s pleadings were raised in its motion for default judgment as supplemental subject-matter in the action. To secure such an award from a foreign court, the Coinmint Parties were required to invoke one of the above two procedures. The trial court’s award in absence of those procedures, including a claim for enforcement relief, was improper and presents error on the face of the record. See id. 2. Does the trial court’s judgment match the live pleadings? Even if we presume that was no clear error with respect to the undomesticated foreign judgment, we consider Mintvest’s next argument— whether the judgment matches the pleadings. Under Texas Rule of Civil Procedure 301, the trial court’s judgment must conform to the pleadings. Tex. R. Civ. P. 301. But issues not raised in the pleadings can be tried by express or implied consent of the parties. Tex. R. Civ. P. 67; see also Flowers v. Flowers, 407 S.W.3d 452, 457 (Tex. App.—Houston [14th Dist.] 2013, no pet.). The unpleaded issue may be deemed tried by consent when evidence on the issue is developed without objection under circumstances indicating both parties understood the issue was being contested. See Ingram v. Deere, 288 S.W.3d 886, 893 (Tex. 2009); Adeleye v. Driscal, 544 S.W.3d 467, 484 (Tex. App.—Houston [14th Dist.] 2018, no pet.). Default judgment proceedings rarely present such circumstances. There can be no trial by consent on issues decided by default judgment. In re J.A.A., No. 13-07-413-CV, 2008 WL 384250, at *1 (Tex. App.—Corpus Christi–Edinburg Feb. 14, 2008, no pet.); see also Maswoswe v. Nelson, 327 S.W.3d 889, 895–96 (Tex. App.—Beaumont 2010, no pet.) (collecting cases in Austin, Eastland and Corpus Christi). A pleading should contain “a short statement of the cause of action sufficient to give fair notice of the claim involved.” Tex. R. Civ. P. 47(a); Lone Star Air Sys., Ltd. v. Powers, 401 S.W.3d 855, 861 (Tex. App.—Houston [14th Dist.] 2013, no pet.). In the absence of special exceptions, a petition should be construed liberally in favor of the pleader. Boyles v. Kerr, 855 S.W.2d 593, 601 (Tex. 1993). A court should uphold the petition as to a cause of action that may be reasonably inferred from what is specifically stated, even if an element of the cause of action is not specifically alleged. Id. Though we liberally construe a petition to include claims that may reasonably be inferred from the language used, we may not “use a liberal construction of the petition as a license to read into the petition a claim that it does not contain.” Flowers v. Flowers, 407 S.W.3d 452, 458 (Tex. App.–Houston [14th Dist.] 2013, no pet.). Similarly, while a prayer for general relief may include relief consistent with the petitioner’s pleading, it cannot be used to “enlarge a pleading to the extent that it embraces an entirely different cause of action for which fair notice does not exist.” Stoner v. Thompson, 578 S.W.2d 679, 683 (Tex. 1979); See also King v. Lyons, 457 S.W.3d 122, 126 (Tex. App.—Houston [1st Dist.] 2014, no pet.). To review Mintvest’s complaint we consider the entire live petition to determine if any aspect of it contains the challenged award of fees from the Delaware action. After identifying the parties to the action, venue, and background facts, (none of which mention anything about the Delaware court’s orders awarding attorney’s fees, Mintvest’s dereliction of those orders, or the need to enforce them), in their petition’s section titled “Request for Relief”, the Coinmint Parties only requested that the trial court declare: ” … that Defendant’s breaches of section 3.8 of the Operating Agreement properly triggered Plaintiffs’ repurchase rights under section 6.11 of the Operating Agreement, and that Plaintiffs have properly noticed their exercise of their repurchase rights under section 6.11 of the Operating Agreement. Plaintiffs request that the Court either order Mintvest to appoint an appraiser or that the repurchase has already been effectuated and closing should occur at Plaintiffs’ calculated purchase price.” And in the alternative, the Coinmint Parties asserted a claim for breach of contract, claiming: Defendant is now in breach of section 6.11 of the Operating Agreement, a valid and enforceable contract, and request specific performance by Mintvest of its obligations thereunder. Plaintiffs request that the Court either order Mintvest to appoint an appraiser or that the repurchase has already been effectuated and closing should occur at Plaintiffs’ calculated purchase price. Nothing further is included in the “Request for Relief” section. Immediately following is a section titled “Attorney’s Fees”. The language under this section leaves little room for interpretation as to what type of attorney’s fees the Coinmint Parties seek—”reasonable and necessary attorney’s fees” under “Chapter 38″ and “section 37.009 of the Texas Civil Practice and Remedies Code.” The precise language contained in this section is as follows: 16. Plaintiffs have retained the firm of Hughes Arrell Kinchen LLP to represent plaintiffs in this action and has agreed to pay the firm reasonable and necessary attorney’s fees. An award of reasonable and necessary attorney’s fees to the plaintiffs would be equitable and just and therefore authorized by section 37.009 of the Texas Civil Practice and Remedies Code. Plaintiffs are also entitled to reasonable and necessary attorney’s fees under Chapter 38 of the Texas Civil Practice and Remedies Code. Notably, this request for attorney’s fees references the legal representation “in this action” and references no representation in Delaware or elsewhere. Even under a liberal construction, we cannot reasonably construe anything in this section as request to enforce the attorney’s fee award in Delaware. Similarly, though the “Prayer” section also contains a request for “attorney’s fees” it makes no reference to the Delaware action or any enforcement relief. The complete list of items set out in the “Prayer” section is as follows: a) A declaration that Defendant’s breaches of section 3.8 of the Operating Agreement properly triggered Plaintiffs’ repurchase rights under section 6.11 of the Operating Agreement, and that Plaintiffs have properly noticed their exercise of their repurchase rights under section 6.11 of the Operating Agreement. b) Specific performance of Mintvest’s obligations under section 6.11 of the Operating Agreement. c) An order that Mintvest appoint an appraiser or that the repurchase has already been effectuated and closing should occur at Plaintiffs’ calculated purchase price. d) Attorney’s fees. e) Costs of suit. f) Pre-judgment and post-judgment interest as applicable. g) All other relief to which the Plaintiffs may be justly entitled at law or in equity. In context, there is no reason to interpret any one of the above requests as a cause of action for enforcement of the Delaware judgment. The Coinmint Parties concede that its pleadings do not set out an enforcement action. Instead, Coinmint argues that Mintvest waived its right to challenge the offset because it failed to challenge sufficiency of Coinmint’s pleadings by not objecting to Coinmint’s failure to plead offset or deduction of the $88.034.53 fee award. This argument lacks merit. The party asserting the offset, Coinmint here, had the burden of pleading offset and of proving facts necessary to support it. Brown v. Am. Transfer & Storage Co., 601 S.W.2d 931, 936 (Tex. 1980). We conclude that it did not plead the right to offset in its live pleading. Coinment only requested the Delaware attorney’s fees as an offset in its motion for default judgment; the motion did not, and Coinmint does not suggest, operate as a pleading served on Mintvest. The award is not supported by the pleadings, and thus represents clear error on the face of the record. See id. 3. Whether sufficient evidence supports the award of attorney’s fees for the declaratory judgment action? In Mintvest contends that the court was presented with legally insufficient evidence to support the $8,948.75 in attorney’s fees it awarded to the Coinmint Parties. We review a trial court’s judgment awarding attorney’s fees for an abuse of discretion. Fort Worth Transp. Auth. v. Rodriguez, 547 S.W.3d 830, 850 (Tex. 2018); PM Holdings, LLC v. Jong Song, No. 14-15-00933-CV, 2017 WL 830552, at *6 (Tex. App.—Houston [14th Dist.] Feb. 28, 2017, no pet.) (mem. op.). An award of attorney’s fees must be supported by evidence that the fees are reasonable and necessary. See Stewart Title Guar. Co. v. Sterling, 822 S.W.2d 1, 10 (Tex. 1991); see also Venture v. UTSW DVA Healthcare, LLP, No. 16-0006, 578 S.W.3d 469, 484, 2019 WL 1873428, at *8 (Tex. Apr. 26, 2019) (“When fee-shifting is authorized, whether by statute or contract, the party seeking a fee award must prove the reasonableness and necessity of the requested attorney’s fees.”) Specifically, Mintvest contends that sole evidence it presented to support the award, an attorney’s affidavit, failed to address the loadstar factors, such as the (1) particular services performed, (2) who performed those services, (3) approximately when the services were performed, (4) the reasonable amount of time required to perform the services, and (5) the reasonable hourly rate for each person performing such services.” Yowell v. Granite Operating Co., 620 S.W.3d 335, 354 (Tex. 2020). The affidavit sets out the following: · The affiant is a Texas-licensed attorney who has been practicing since 2007. · That the affiant is “familiar with the hourly rates charged by attorneys in Harris, Dallas, Travis, Bexar, and surrounding counties for work related to similar cases” · That “a fee of $350 per hour to $550 per hour is fair and reasonable for the type of work expended in this case.” · That Coinmint retained and agreed to pay his firm $405 to $610 per hour to represent Coinmint in the lawsuit. · That his firm expended only 26.75 hours in prosecuting this case and that the total fees incurred is $8,948.75. In their brief, the Coinment Parties also fairly deduce from the affidavit that if the total fees incurred is divided by the number of hours expended, the average hourly rate for the work performed is $334.51 and note that this amount is less than the lowest rate of $350 per hour in the range of fair and reasonable fees that the affiant identified in his affidavit, and even less than the lowest rate charged by affiant’s firm in this case of $405. Though we find nothing controversial about statements in the affidavit, without further detail of the tasks performed, who performed them, it resembles the kind of bare-bones support that was once common but now outmoded. In the absence of any details about the tasks performed, who performed them the affidavit leaves the court to speculate on factors under the current relevant analysis.[2] If taken alone it fails to satisfy the standard. In response, the Coinmint Parties contend that we should accept, as the Austin court did in 2017, that the trial court in this case “could consider the entire record in the case, which included numerous motions and hearings filed in slightly more than six months’ time . . . most of all of which were granted by the trial court . . . .”. See Ogle v. Hector, No. 03-16-00716- CV, 2017 WL 3379107, at *6 (Tex. App—Austin 2017, pet denied). In support, the Coinmint Parties point to the clerk’s record, which revealed that the work performed on behalf of Coinmint between August 2021 and March 2022 included: · preparation and filing of the Original Petition for Declaratory Judgment; · obtaining service of process on Mintvest through the Texas Secretary of State; · preparing the Attorney’s Fee Affidavit; · drafting and filing the Motion for Default Judgment; · gathering and organizing the exhibits to that motion into a pdf document; · drafting and submitting the Final Default Judgment; · preparation for and participating in the hearing on Coinmint’s Motion for Default Judgment. Such tasks implied by the record are reasonable considerations that could have been asserted to justify the request for attorney’s fees, and may in fact have been reasonable considerations had the trial court taken judicial notice, but even if we were to consider these items, this implied evidence taken with the affidavit still is not sufficiently specific as to allow the fact finder to determine the amount of time spent on each particular task and to decide whether that length of time was reasonable. See Sloane v. Goldberg B’Nai B’Rith Towers, 577 S.W.3d 608, 621 (Tex. App.—Houston [14th Dist.] 2019, no pet.). The changes in the law make old templates, forms and boilerplate obsolete and require attorneys to provide more detail than in the past. We conclude that the Coinmint Parties failed to satisfy their burden of proof in establishing legally sufficient evidence to support essential factors of the loadstar analysis. As a result, the trial court abused its discretion and clear error is apparent on the record. 4. Whether remand is necessary? The parties debate the proper remedy under the circumstances of our findings. Though Mintvest seeks appellate relief in the form of a remedy that would upend the entire judgment and result in a new trial, none of the above points of error is made as a broad attack to the entire Default Judgement, nor do any of Mintvest’s points of error independently or collectively attack all or even the most significant aspects of the judgment, including the trial court’s favorable findings on the relief requested in the pleadings, specifically that: (1) Mintvest breached Section 3.8 of the Operating Agreement, triggering CLT’s right of purchase under Section 6.11; (2) Coinmint sent proper notice to Mintvest exercising the rights under Section 6.11 of the Operating Agreement; (3) Mintvest failed to participate in, and therefore waived all rights and remedies under, the repurchase procedure in Section 6.11; and (4) Mintvest accepted and agreed to the Fair Market Value of its Membership Interest in the amount of $955,297.80. Rather, Mintvest’s first two points of error implicate only one of nine findings made by the trial court, and only attack the actual damages of $88,034.53 awarded to satisfy the orders in the Delaware Case. By reversing this award we do not disturb the significant aspect of the action below and accordingly reform the award rather than remand. Stoner v. Thompson, 578 S.W.2d at 685 (reforming erroneous part of default judgment while affirming the remainder in restricted appeal). Mintvest’s third point of error, relating only to the discretionary $8,948.75 award in attorney’s fees for prosecution of the declaratory judgment action do not provide a proper basis for remand. See Interest of K.A.M.S., 583 S.W.3d 335, 350 (Tex. App.—Houston [14th Dist.] 2019, no pet.) (reversing award of discretionary attorney’s fees (as legally insufficient proof in the record “for lack of details about details about the work done, how much time was spent on the tasks”) without remand for redetermination of fees); See also Donnelly v. Speck, 667 S.W.3d 885, 892 (Tex. App.—Houston [14th Dist.] 2023, no pet.). III. CONCLUSION Having found Mintvest satisfied the jurisdictional requirements for review of its restricted appeal, and having found error apparent on the face of the record with respect to the trial court’s $88,034.53 award of actual damages (which it applied as a credit to Coinmint’s repurchase payment) and the $8,948.75 attorney’s fees award, we reverse the judgment in part, render judgment in part deleting the $88,034.53 award of actual damages and the $8,948.75 in attorney’s fees, and affirm in part, keeping the remainder of the judgment. Randy Wilson Justice Panel consists of Justices Jewell, Spain, and Wilson. (Spain, J., concurring and dissenting).
