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Court of Appeals of Texas, Fourth District, San Antonio
July 25, 2001, Delivered ; July 25, 2001, Filed
[*481] We are asked to decide whether an employer who seeks to enforce a covenant not to compete may be awarded attorney's fees under Texas Business Code section 15.51 or under Texas Civil Practice and Remedies Code section 38.001(8) when the trial court reforms the covenant and the employer prevails but does not recover damages. Because we hold that an employer is not entitled to attorney's fees under Section 15.51, we reverse.
Texas Disposal Systems, Inc. ("TDS") sued its former employees, Albert Perez, Jose Maldonado, and Raul Gutierrez ("the Employees") for violation of covenants not to compete contained in their employment contracts. TDS asked for an injunction and attorney's fees and costs; TDS did not ask for damages for breach of the non-compete agreements. After a bench trial, the court enjoined [**2] the Employees from engaging in certain activities, but reformed the covenants not to compete to make them narrower in scope. The trial court did not award damages to TDS, but awarded TDS attorney's fees and costs. The Employees appeal on the issue of attorney's fees alone.
] As a general rule, unless expressly provided for by statute or contract, attorney's fees incurred in the defense or prosecution of a lawsuit are not recoverable. Holland v. Wal-Mart Stores, Inc., 1 S.W.3d 91, 95 (Tex. 1999). ] We review a trial court's award of attorney's fees under an abuse of discretion standard. Copeland v. Alsobrook, 3 S.W.3d 598, 609 (Tex. App.--San Antonio 1999, pet. denied). ] The trial court's construction of a restrictive covenant and remedies for its breach are matters of law for our decision. Williams v. Compressor Eng'g Corp., 704 S.W.2d 469, 471 (Tex. App.--Houston [14th Dist.] 1986, writ ref'd n.r.e.). Here, there is no contractual basis for an award of attorney's fees; therefore, TDS's recovery of attorney's fees must be authorized by statute.
TDS argues its recovery is authorized by either Texas Business Code [**3] section 15.51 or Civil Practice and Remedies Code section 38.001(8). The Employees assert the only statutory basis upon which TDS could recover attorney's fees is Section 15.51, which they argue does not allow employers to recover attorney's fees.
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53 S.W.3d 480 *; 2001 Tex. App. LEXIS 4875 **; 2001-2 Trade Cas. (CCH) P73,391
Albert PEREZ, Jose Maldonado, and Raul Gutierrez, Appellants v. TEXAS DISPOSAL SYSTEMS, INC., Appellee
Subsequent History: Reversed by, Remanded by, Petition for review granted by Tex. Disposal Sys. v. Perez, 80 S.W.3d 593, 2002 Tex. LEXIS 99 (Tex., June 27, 2002)
Prior History: [**1] From the 285th Judicial District Court, Bexar County, Texas. Trial Court No. 99-CI-14162. Honorable David Berchelmann, Jr., Judge Presiding.
Disposition: AFFIRMED IN PART, REVERSED AND RENDERED IN PART.
covenant, attorney's fees, promisee, reformed, damages, award of attorney's fees, injunctive relief, Employees, promisor, compete
Civil Procedure, Remedies, Costs & Attorney Fees, General Overview, Appeals, Standards of Review, Abuse of Discretion, Business & Corporate Compliance, Contracts Law, Types of Contracts, Covenants, Real Property Law, Encumbrances, Restrictive Covenants, Labor & Employment Law, Conditions & Terms, Trade Secrets & Unfair Competition, Noncompetition & Nondisclosure Agreements, Attorney Fees & Expenses, Basis of Recovery, Statutory Awards