Preview
Filed: 12/21/2021 2:15 PM
J OHN D. KINARD - District Clerk
Galveston County, Texas
Envelope No. 60227738
By: Shailja Dixit
20-CV-1564 12/21/2021 2:37 PM
CAUSE NO. 2020-31023
ROBERT L. MOODY, JR. IN THE DISTRICT COURT OF
V. GALVESTON COUNTY, TEXAS
GREER, HERZ, & ADAMS, LLP,
IRWIN “BUDDY” HERZ, JR. and
ROSS RANKIN MOODY 122NP JUDICIAL DISTRICT
TRUSTEE IRWIN HERZ, JR.’S APPLICATION FOR ATTORNEYS’ FEES
Trustee Irwin Herz, Jr. (“Herz”) respectfully moves to recover his reasonable and necessary
attorneys’ fees and costs pursuant to Section 114.064 of the Texas Property Code or, alternatively,
under Rule 91a.7 of the Texas Rules of Civil Procedure. Without waiver of his right to further
relief, Herz requests not less than $1,041,073.00 in reasonable and necessary attorneys’ fees
incurred while defending against Robert Jr.’s legally and factually groundless claims, and court
costs of $230.14.!
As Trustee of the Three R Trusts, the Trusts indemnified Herz for his litigation expenses.
He therefore moves to recover these expenses to reimburse the Trusts, and not for his own benefit.
Robert Jr. forced the Trusts to bear these costs despite seeking relief solely for himself on the basis
of allegations that had little if any connection to his legitimate rights as a Trust beneficiary. Neither
the Trusts nor any other beneficiary supported the suit, shared its goals, or stood to gain anything
whatsoever from his claims. It would be inequitable and unjust to saddle the Trusts and non-
participating beneficiaries with the expenses of defending against Robert Jr.’s baseless claims.
The practical result of such a ruling would mean that either: (i) the Three R Trusts established for
' The Firm’s December 2021 invoices have not yet been prepared. Herz will supplement the amount of his requests
and his supporting invoices once those invoices are available.
each of Robert Jr.’s siblings would have to shoulder the costs of his frivolous litigation, or (ii) that
Robert Jr.’s own Three R Trust would have to bear these costs entirely—which, as a generation-
skipping trust, would ultimately impose these expenses on Robert Jr.’s children as its
remainderman beneficiaries. Instead, Herz’s defense costs should be borne by the person whose
empty claims necessitated them—Robert Jr. himself.
I Background & Summary
Robert Jr. filed suit in May 2020, asserting claims against Herz, his law firm Greer, Herz
and Adams, L.L.P. (GHA), and Robert Jr.’s brother Ross R. Moody. Robert Jr. is one of four adult
beneficiaries of generation-skipping trusts that were established by Robert Jr.’s and Ross’s father,
Robert L. Moody, Sr. (“Robert Sr.”), and which are known as the Three R Trusts (the “Trusts”).
Though technically consisting of four separate trusts, Herz jointly administers the Three R Trusts
under a single indenture and as a single pool of assets collectively worth roughly $400 million. As
Robert Sr.’s long-time friend, Trustee Herz has served in that role for five decades for a nominal
monthly fee of $200. Throughout that time, GHA or its predecessor law firms have represented
other entities connected to Robert Sr. or his family members, including the American National
Insurance Company, National Western Life Insurance Group, Moody National Bank, and the
Moody Foundation, among others. Until mid-2017, GHA also sometimes represented businesses
owned or controlled by Robert Jr.
None of Robert Jr.’s claims sought relief for or on behalf of the Three R Trusts. Instead,
Robert Jr. alleged that Herz and his co-defendants conspired to deprive Robert Jr., individually, of
various contracts, participation in the governance of Moody-affiliated entities, and other benefits
that he expected to enjoy as Robert Sr.’s “first born son and namesake.”? In fact, his suit sought
? See generally Exhibit 1 (Plaintiff's First Amended Petition).
to revive grievances that Robert Jr. previously asserted in three earlier failed proceedings asserted
directly against the entities involved, and which stood on even shakier ground when lodged against
Trustee Herz Robert Jr.’s appeals ofthose earlier dismissals have been rejected both in the state
and federal courts of appeals.
In this suit, Robert Jr. alleged that Herz and GHA breached fiduciary duties arising from
their past legal representation of Robert Jr., and that Herz himself breached his fiduciary duties as
trustee by failing to procure or preserve benefits for Robert Jr. from two insurance companies and
various non-profit foundations that have no connection to the Trusts whatsoever, and a bank and
several nursing homes whose stock are majority-owned by the Trusts. See Ex. | at §§ 45 & 49.
Robert Jr. also generically alleged that Herz “[p]urposely mismanaged and failed to oversee one
of the entities within the Trust. 05 Again, however, he sought damages only for himself. Jd. at §
62& p.31
Indeed, Robert Jr. did not allege any identifiable injury to the Trusts. Instead, he demanded
the outlandish sum of $100 million—jointly and severally from each defendant—which he
characterized as “disgorgement of all fees paid to GHA as counsel for any Moody interest. 96
Because Robert Jr. sued Herz in his trustee capacity, the Trust Agreement provided
indemnification for Herz’s attorneys’ fees and costs
* Moody v. American Nat'l Ins. Co., No. 3:19-cv-00206, 2020 WL 3128259 , at *1, *5 (S.D. Tex. June 12, 2020);
Robert L. Moody, Derivatively on Behalf of Nat'l W. Life Ins. Co. and Nat'l W. Life Grp., Inc. v. Ross Rankin
Moody et al., No. 17-CV-1196 (Tex. Dist-—Galveston [122nd Dist. Ct.] [filed Sept. 28, 2017]) (dismissed by the
Court); Moody v. Nat'l W. Life Ins. Co., Case No. 2019-SOX-31 (Dep’t of Labor [filed Apr. 25, 2019]).
4 See Moody v. Nat'l W. Life Ins. Co., 01-18-01106-CV, 2021 WL 3160375 (Tex. App.—Houston [1st Dist.] July 27
2021, no pet.); Moody v. Am. Nat’l Ins. Co., 842 Fed. Appx. 875, 876 (Sth Cir. 2021).
5 See Ex. 1 at ]49(ce).
© See id. at 1
See, e.g., Ex. | at § 47 (alleging “Plaintiff Bobby Moody, Jr. has been damaged” by Herz’s and GHA’s breaches
of fiduciary duty) (emphasis added); id. at {51 (“As a proximate result of Buddy Herz’s acts and omissions in his
individual capacity, Plaintiff Bobby Moody, Jr. has been damaged[.]”) (emphasis added); id. at § 56 (alleging
Herz and his co-defendants quickly moved to dismiss Robert Jr.’s suit. GHA moved to
dismiss all claims brought against itself and all those asserted against Herz in his capacity as an
attorney.’ Herz moved to dismiss claims alleging breaches of his duties as a Trustee. Herz further
separated those “Trust” claims into two categories: (1) “Perks Claims” which, though nominally
brought against Herz “as Trustee”, did not plausibly implicate the Trusts, and (2) “Trust
Management Claims” that at least theoretically touched on his duties as Trustee. See, e.g., Ex. 3
at 25 (“Plaintiff Robert Jr. makes four claims that actually do relate to Trustee Herz’s duties and
obligations as Trustee.”).
Robert Jr. asserted the “Perks Claims” claims against all Defendants and alleged that Herz,
in conspiracy with and aided and abetted by GHA and Ross Moody, denied Robert Jr. board seats,
contracts, and other perks from various Moody-affiliated entities.” The Defendants moved for
dismissal, among other grounds, because Herz had no duty as Trustee to procure those perks for
Robert Jr.!° Instead, Robert Jr.’s lawsuit complained of actions taken by third-parties that were
neither owned nor controlled by the Trusts and were beyond the scope of Herz’s duties as Trustee.
Any complaints that Robert Jr. had lay instead against the entities themselves.
In addition, Robert Jr. asserted a handful of conclusory “Trust Management Claims” solely
against Herz alleging that he mismanaged the Trust assets. i Unlike the bulk of Robert Jr.’s
“Plaintiff Bobby Moody, Jr. suffered damages” from an alleged conspiracy among the Defendants) (emphasis
added).
8 Ex. 2 at 1 (moving on behalf of itself and Herz “to the extent he is alleged to have acted in his capacity as a firm
lawyer.”). This motion does not seek fees for GHA’s defense of Herz in his legal capacity.
° See generally Ex. | at 9/45 & id. at 44 49(a), (c)-(g), (i), (1)-(dd), (ff), 4 54 (aiding and abetting); § 56 (conspiracy).
10 See Ex. 3 at 10-17 (Defendant Irwin “Buddy” Herz, Jr.’s, Individually and as Trustee of the Three R Trusts, Rule
91a Motion to Dismiss). To be clear, Herz also denies that he took any action to deny or interfere with Robert Jr.’s
access to such benefits.
"Bx. 3 at 25 (citing Pet. at 44] 49(b), (g), (h), (j), (Kk), (ee).
petition, these at least theoretically touched on Herz’s duties as Trustee. Herz moved for dismissal
of these claims because they were inadequately pled and were barred by the Trust Agreement. !”
Undeterred, Robert Jr. filed a consolidated response to the motions arguing they “are
frivolous, have no merit, should not have been filed, and warrant an award of attorneys’ fees” t
Robert Jr.!> The Court disagreed. On October 14, 2020, the Court dismissed all claims against
GHA (and all claims against Herz in his attorney capacity), all claims against Ross Moody, and
the overwhelming majority of claims against Herz.'* With respect to Herz, the Court ruled:
The Court, having considered the Motion, the response filed by Plaintiff Robert
Moody, Jr., Herz’s reply, and the arguments of counsel, hereby rules and Orders
that the Motion should be DENIED as to claims against Herz as Trustee and
GRANTED as to all other claims against Herz.
It is therefore ORDERED that Defendant Herz’s 91a Motion to Dismiss is DENIED
as to claims against Herz as Trustee and GRANTED as to all other claims against
Herz, which are dismissed with prejudice.
Collectively, the Court’s orders disposed of all claims alleging breaches of Herz and
GHA’s fiduciary duties in their capacities as attorneys, all claims asserted against Herz in his
individual capacity, all “Perks Claims,” and with them Robert Jr.’s demand for more than $100
million in fees that GHA allegedly earned by representing Moody-affiliated entities.
Robert Jr. was left to pursue only his Trust Management Claims—consisting of a jumble
of sparsely pleaded “kitchen-sink” allegations concerning Herz’s management of the Trusts.
These included conclusory allegations that Herz: (i) failed to make certain Trusts assets productive,
(ii) used his Trustee position to perform legal services for the Trusts; (iii) failed to account for the
2 Ex. 3 at 25-29.
13 See Exhibit 4 at 1 (Plaintiff Robert L. Moody Jr.’s Response to Defendants’ Rule 91a Motions to Dismiss, and
Motion for Attorneys’ Fees) (emphasis in original).
'4 See Exhibit 5 (Order Granting Herz’s Rule 91a Motion to Dismiss); see a/so Exhibit 6 (Order on GHA’s Rule 91a
Motion to Dismiss); Exhibit 7 (Order Granting Ross Moody’s Rule 91a Motion to Dismiss).
Trusts’ expenses, (iv) delegated his duty to preserve the Trusts’ assets, and (v) mismanaged and
failed to oversee one of the trust assets. See Ex. | at f§ 49(b), (g), (j); (k), and (ee).
Robert Jr. offered no specific examples of Herz’s alleged mismanagement and did not
identify any resulting injury to the Trusts. Nor did Robert Jr. seek relief for the Trusts. Robert Jr.
also made no attempt to obtain deposition discovery supporting these claims. While Robert Jr.
noticed multiple depositions (some of which he later abandoned), none of the testimony sought
could have supported the Trust Management Claims. For example, Robert Jr. demanded to depose
Herz’s wife on the grounds that she had knowledge that might relate to venue—but devoted the
majority of the deposition to harassing questions regarding a purportedly risqué-themed birthday
party that she had thrown for her husband years before. !>
Hence, on February 9, 2021, Herz filed his Motion for Summary Judgment to Dismiss
Robert Jr.’s Remaining Trustee Claims.'® Robert Jr.’s response consisted largely of a misguided
attempt to resurrect his “Perks” Claims,!’ and the Court granted the motion on November 2,
ordering the dismissal of all of Robert Jr.’s remaining claims with prejudice.'* In sum, Robert
Jr.’s suit has been a vain, wasteful attempt to leverage the Three R Trusts to extract tens of millions
of dollars for his personal benefit by asserting claims with no legitimate basis in law or fact, and
which were overwhelmingly unrelated to any duty associated with Herz’s service as Trustee.
IL. Entitlement to Fees and Costs Requested
A. Herz Is Entitled to Recover his Reasonable and Necessary Attorneys’
Fees in the Interest of Justice and Equity
15 See Ex. 8 at 15-16 (Herz’s Reply in Support of Motion to Transfer Venue, dated Oct. 8, 2020, including Ex. 1
thereto).
16 See generally Ex. 9 (Defendant Irwin Herz Jr.’s Motion to Dismiss Robert Jr.’s Remaining Trustee Claims) (filed
without exhibits).
17 See Ex. 10 (Plaintiffs’ Response to Defendant Herz Jr.’s Motion for Summary Judgment).
'8 See Ex. 11 (Order dated Nov. 2, 2021 granting Herz’s Motion for Summary Judgment).
It would be equitable and just for the Court to Order an award of all attorneys’ fees and
costs incurred by Trustee Herz—not for his own benefit, but to reimburse the Trusts for the fees
and costs incurred in defending against Robert Jr.’s meritless litigation. The attorneys’ fees
incurred to date amount to approximately $1,040,073, excluding December 2021’s invoice. Court
costs total $230.14.
The Texas Trust Code Provides that, “[i]n any proceeding under this code the court may
make such award of costs and reasonable and necessary attorney’s fees as may seem equitable and
just.” TEX. PROP. CODE § 114.064; see also, e.g., Lesikar v. Moon, 237 S.W.3d 361, 375 (Tex.
App.—Houston [14th Dist.] 2007, no pet.). An award of fees under Section 114.064 is within the
sound discretion of the trial court. Alpert v. Riley, No. CIV.A. H-04-3774, 2012 WL 2193985, at
*1 (S.D. Tex. June 14, 2012). “A reviewing court may not reverse the trial court’s judgment absent
a clear showing that the trial court abused its discretion by acting without reference to any guiding
rules and principles.” Jd.; see also In re Ray Ellison Grandchildren Trust, 261 S.W.3d 111, 126
(Tex. App.-San Antonio 2008, pet. denied); Hachar v. Hachar, 153 8.W.3d 138, 142 (Tex. App.-
San Antonio 2004, no pet.). In determining whether fees are reasonable and necessary, a court
applies the familiar eight-factor test derived from Arthur Andersen & Co. v. Perry Equipment
Corp.,!° which is discussed in detail at Section ILD, infra.
It would be inequitable and unjust to deny an award of Herz’s attorneys’ fees and costs.
The overwhelming majority of Robert Jr.’s assertions failed even to articulate a cognizable claim,
had been thrice rejected in earlier proceedings, and lacked any legitimate connection to the Trusts.
The few Trust Management Claims that survived dismissal were summarily disposed of because
19 945 SW2d 812, 818 (Tex.1997).
Robert Jr. was unable to muster even a scintilla of evidence in their favor. From start to finish,
Robert Jr.’s lawsuit was a costly exercise in futility, carried out in part at the Trusts’ expense.
Robert Jr. was well aware that the Three R Trusts would be forced to subsidize his litigation
when he filed suit. In his Petition, Robert Jr. asserted—wrongly—that each and every allegation
against Herz constituted a breach of his fiduciary duties as Trustee to the Three R Trusts. 20
Because Robert Jr. sued Herz in his capacity as Trustee, Herz was indemnified against his
reasonable attorneys’ fees, costs and litigation expenses.7! The Trust Agreement provides, in
relevant part, that Herz may “employ attorneys ... or other agents which the Trustee may deem
advisable, and to pay reasonable compensation to any person or firm employed[,]” and that “[i]n
the case of legal proceedings involving the Trustee or other principle of the Trust Estate, the
Trustee may defend such proceedings[.] 9922
Accordingly, the Three R Trusts indemnified Herz for his attorneys’ fees, costs and
expenses. Robert Jr. thus pushed these expenses onto his co-beneficiaries to the Three R Trusts—
or onto his own children as remaindermen beneficiaries to his individual Trust. It bears repeating
that none of the relief in this litigation was sought for the benefit of the Trusts, his fellow
beneficiaries or even his children. Instead, Robert Jr. imposed these costs on the Trusts and his
co-beneficiaries
for his own personal gain. It would be equitable and just to require Robert Jr. to
bear the costs of defending against his meritless claims.
20 Ex. 1 at 49; see also Ex 10 at pp. 5-10.
2! Robert Jr. sued Herz both in his “individual” capacity and as trustee of the Three R Trusts. See Ex. 1 at 79. Robert
Jr. never pled “individual” claims that were distinct from his allegations against Herz as Trustee, however. Nor did
he allege that Herz owed him fiduciary or other duties in his individual capacity. To the extent Robert Jr. argues that
some of these funds were used to defend Herz in his individual capacity, that distinction is untenable.
2? Ex, 12 at Art II (e) and (v) (Indenture of Trust dated June 13, 1960 by Robert L. Moody, as amended on May 16,
1972).
B. Herz is Entitled to Recover His Reasonable and Necessary Attorneys’
Fees as the Prevailing Party in his Rule 91a Motion.
Alternatively, Trustee Herz is entitled to recover his attorney’s fees and costs incurred
through the Court’s partial order of dismissal pursuant to TEX. R. Civ. P. 91a.7, which states:
Except in an action by or against a governmental entity or a public official acting
in his or her official capacity or under color of law, the court may award the
prevailing party on the motion all costs and reasonable and necessary attorney fees
incurred with respect to the challenged cause of action in the trial court. Any award
of costs or fees must be based on evidence.
Importantly, these fees are not limited to the costs of advancing the Rule 91a Motion.
Rather, the Rule permits an award of all attorney’s fees “associated with” the challenged causes of
action, “including fees for preparing or responding to the motion to dismiss.” Fiamma Statler,
L.P. v. Matthew D. Challis and Jeffries, LLC, No. 02-18-00374-CV, 2020 WL 6334470 *18 (Tex.
App.—Fort Worth, Oct. 29, 2020, no pet. hist.) (emphasis in original, quotations and citations
omitted). “{I]n Texas statutes, the word ‘including’ is a term of enlargement.” McGibney v.
Rauhauser, 549 S.W.3d 816, 837 (Tex. App.—Fort Worth 2018, pet. denied). Indeed, in Fiamma,
the Court of Appeals recently held that a trial court abused its discretion by limiting a defendant’s
recoverable fees under Rule 91a.7 to those incurred in connection with a motion to dismiss. See
2020 WL 6334470 *18; see also Weizhong Zheng v. Vacation Network Inc., 468 S.W.3d 180, 188
(Tex. App.—Houston [14" Dist.] 2015, pet. denied). Further, the recoverable fees include
reasonable and necessary attorneys’ fees that may be required in the appellate and Texas Supreme
Courts. See Zheng, 468 S.W.3d at 188 (“[T]he word ‘all’ entails just that—‘all’ fees—which
would include appellate fees[.]””) (quoting TEX. R. Civ. P. 91a.7).
The sole limitation on this recovery is a requirement that the prevailing party segregate
fees relating to the challenged causes of action from fees that are not recoverable under Rule 91a.7.
See, e.g., Zheng, 468 S.W.3d at 188; CA Partners v. Spears, 274 S.W.3d 51, 81-82 (Tex. App.—
Houston [14th Dist.] 2008, pet. denied). “When discrete legal services advance both recoverable
claims and unrecoverable claims,” however, “attorneys are not required to segregate fees to
recover the total amount covering all claims. In this situation, the claims are said to be
‘intertwined,’ and the mere fact that attorney’s fees are incurred in advancing both recoverable and
unrecoverable claims does not render those fees unrecoverable.” Spears, 274 S.W.3d at 81 (citing
Tony Gullo Motors I, L.P. v. Chapa, 212 $.W.3d 299, 313-14 (Tex. 2006)). When it applies, the
segregation requirement is met when the attorney renders an opinion as to the percentage of time
spent on the recoverable claims. See Chapa, 212 S.W.3d at 314.75
Consistent with those standards, fees recoverable under Rule 91a were calculated by
identifying attorneys’ fees incurred from the filing of the litigation through October 2020, when
the Court issued its Order of partial dismissal, and then applying a 5-percent reduction
conservatively estimating the fees attributable to the Trust Management Claims that survived that
Order. These fees total $668,800 in attorneys’ fees and $230.14 in costs. To be clear, no such
segregation is required or appropriate to an award granted under Section 114.064 of the Property
Code, which covers the entirety of this case.
C. Trustee Herz Is the Prevailing Party with Respect to His Rule 91a Motion
Trustee Herz prevailed on his Rule 91a Motion to Dismiss. The Court dismissed all of the
“Perks Claims”—including Robert Jr.’s claims that Ross Moody and GHA aided, abetted and
conspired in Herz’s alleged breaches.** The Court also dismissed all claims purporting to sue Herz
in any capacity other than as Trustee. See Ex. 6 (dismissing “all other claims against Herz”).
3 See also, e.g., Stewart Title Guar. Co. v. Aiello, 941 S.W.2d 68, 73 (Tex.1997); Med. Specialist Group, P.A. v.
Radiology Assocs., L.L.P. 171 S.W.3d 727, 738 (Tex. App.-Corpus Christi 2005, pet. denied); Flagship Hotel, 117
S.W.3d, 552, 566 n. 7 (Tex. App.—Texarkana 2003, pet. denied).
24 See generally Ex. | 4 45(a)-(ff) (alleging breaches of Herz’s fiduciary duties as Trustee); id. § 54 (claiming that
Ross Moody aided and abetted breaches of Herz’s fiduciary duties as Trustee); id. at | 59 (alleging that GHA and
Ross Moody conspired with Herz to violate his fiduciary duties as Trustee).
10
These included claims alleging Herz breached his fiduciary duties as an attorney and Robert Jr.’s
demand for more than $100 million in alleged legal fees. See Ex. 1 at §§j (1) and 45(a)-(ff).
The handful of Trust Management claims that survived the dismissal order did not
undermine Herz’s prevailing party status.*> “A party prevails if he successfully prosecutes the
action or successfully defends against it ....” Arrow Marble, LLC v. Estate of Killion, 441 $.W.3d
702, 707 (Tex. App.—Houston [1st Dist.] 2014, no pet.) (quotations omitted). A party need not
win on every claim or argument presented to recover attorneys’ fees as a prevailing party. See,
e.g., Arrow Marble, 441 S.W.3d at 706 (“Equicap’s failure to obtain judgment on its breach-of-
contract claim does not affect its recovery of attorney’s fees as the prevailing party[.]”); accord
Darnell v. Rogers, 588 §.W.3d 295, 306 (Tex. App.—El Paso 2019, no pet.).
Herz prevailed on the overwhelming majority of Robert Jr.’s claims for breach of fiduciary
duty and his $100 million “disgorgement” demand, and he substantially narrowed the scope of
Robert Jr.’s remaining claims so they could be quickly disposed on summary judgment. Herz was
undisputedly the prevailing party for the purpose of applying Rule 91a.7.
D. Herz’s Attorneys’ Fees, Costs, and Expenses are Reasonable.
In his affidavit, Herz’s lead counsel Robin C. Gibbs addresses the amount of Herz’s
claimed fees and the reasonableness of those fees under settled Texas law.?° A party submits
sufficient evidence to show the reasonableness of attorneys’ fees when its billing records state the
services performed, when they were performed, who performed them, and at what hourly rate. See
e.g., Arthur Andersen & Co. v. Perry Equip. Corp., 945 S.W.2d 812, 818 (Tex. 1997); Rohrmoos
Venture v. UTSW DVA Healthcare, LLP, 578 S.W.3d 469, 502 (Tex. 2019).
°5 Plaintiff alleged 32 breaches of Herz’s fiduciary duties as trustee. See Ex. 1 at §{] 49(a)-(ff). Only five of these were
Trust Management Claims surviving the Court’s Order of dismissal. See id. at {4 49(b), (g), (j); (k), and (ee).
26 See Ex. 13 (Affidavit of Robin C. Gibbs dated December 21, 2021).
11
Litigants often use the “lodestar method” as an efficient means to show that a given fee
award is reasonable under the so-called Arthur Andersen factors. See Arthur Andersen, 945
S.W.2d at 818. Under this method, the fact finder first determines the reasonable hours spent by
counsel on the matter and a reasonable hourly rate for the work. The fact finder then multiplies
those hours by the applicable rate, the product of which is the “lodestar” or base fee. The fact
finder may then adjust the lodestar up or down if relevant factors indicate an adjustment is
necessary. See id.; Rohrmoos Venture, 578 S.W.3d at 490.
As detailed below and in Mr. Gibbs’ affidavit, the hours worked by Herz’s counsel in
connection with this matter and the rate at which those hours were billed were reasonable.
Accordingly, the “base lodestar” equates to the actual hours billed and costs and expenses incurred
by Herz’ counsel in this matter, and he is entitled to recover the full amount of those fees.
L Lodestar Calculation
Mr. Gibbs testifies in his affidavit that he is familiar with the services that he and other
attorneys at Gibbs & Bruns provided in this matter and the usual and customary fees charged in
commercial cases of similar complexity. See Ex. 13 at 1-5. Mr. Gibbs has negotiated numerous
fee arrangements with clients for similar work at similar rates to those charged Herz in this case.
Id. at 2. The fees charged by Gibbs & Bruns are consistent with the usual and customary fees
charged by attorneys of comparable experience in Houston and the surrounding areas. Jd. at 4 5.
Information regarding the hourly rates of each attorney who performed legal services for
Herz, the hours they worked, their experience and expertise, and a summary of the work they
performed is set out in the paragraphs below. A detailed description of the work performed by
each is contained in Gibbs & Bruns’s fee records for this action, which are submitted in evidence
12
as Exhibits A through R of the affidavit.2” Gibbs & Bruns’s December 2021 invoice has not yet
been prepared and will be provided promptly when available.
Mr. Gibbs has served as lead counsel for Herz from the inception of this case in May 2020
until the present. See id. §/ 23. He expended 345 hours on this matter through November 2021,
initially at a billing rate of $1280 per hour and, since October 2021, at a rate of $1,350 per hour.
Id. His rates are consistent with his experience, expertise, and the results obtained for clients
during fifty years practice specializing in complex commercial litigation. /d. As lead counsel, Mr.
Gibbs has and continues to play a crucial role in setting Herz’s litigation strategy; drafting,
reviewing, and approving written discovery, letters, and pleadings; and representing Herz at
hearings. Jd. While he has been involved throughout this litigation, Mr. Gibbs delegated many
tasks to more junior attorneys when appropriate. Jd.
Sam W. Cruse, III is a partner at Gibbs & Bruns. Jd. at § 24. Through November 2021,
Mr. Cruse expended 126 hours in connection with defending Herz, initially at a billing rate of $585
per hour and, beginning in October 2020, at an hourly rate of $610. Jd. Mr. Cruse’s rate reflects
19-years’ experience in commercial litigation, his academic achievements as a Chancellor’s
scholar at the University of Texas, and his recognition as a Texas “Rising Star” from 2012 through
2017 and as a Texas “Super Lawyer” from 2017 through 2021, among other achievements. Jd.
His hourly rate is consistent with the prevailing market rate for partners in the Houston market.
Id. As shown by the Firm’s invoices, Mr. Cruse participated in the development of case strategy,
discovery, and preparing Herz’s written submissions and arguments, among other contributions.
Id.
27 Herz has submitted its invoices in redacted form as attachments to Mr. Gibbs’s affidavit and will provide them for
review by the Court in camera in unredacted form on the Court’s request.
13
Ross MacDonald is a partner at Gibbs & Bruns. /d. at 25. Through November 2021, Mr.
MacDonald expended 681 hours in connection with defending Herz at an hourly billing rate of
$410 and, since October 2020, at a rate of $440 per hour. Jd. Mr. MacDonald became a partner
with the Firm in September 2021, at which time his billing rate increased to $510 per hour. Jd.
Mr. MacDonald was a University of Texas Grand Chancellor, clerked for Judge Pricilla Owen on
the U.S. Court of Appeals for the Fifth Circuit, and is a member of the Order of the Coif. Jd. His
rate reflects his academic achievements, six years’ experience in complex commercial litigation,
and the results obtained for his clients during that time. /d. His hourly rate is consistent with the
prevailing market rate for attorneys with comparable experience in the Houston market. Jd. As
demonstrated by Gibbs & Bruns’ billing records, Mr. MacDonald played a central role in
developing case strategy, discovery, defending key depositions, and in preparing the Firm’s written
submissions and arguments. Id.
Angus J. Dodson is a senior counsel at Gibbs & Bruns. /d. at § 26. Through November
2021, Mr. Dodson expended 507.75 hours in connection with Herz’s defenses at an initial hourly
billing rate of $445. In October 2020 his billing rate increased to $460 per hour, and it increased
again to $495 in October 2021. Jd. Mr. Dodson was ranked first in his class at the University of
Colorado upon graduation, is a member of the Order of the Coif, clerked for Judge David Ebel on
the U.S. Court of Appeals for the Tenth Circuit, and is a Lifetime Fellow of the Texas Bar
Foundation, among other achievements. /d. His billing rate reflects his academic attainments, his
20 years’ experience in complex commercial litigation and the results achieved for his clients
during this period. /d. As shown by the Firm’s billing records, Mr. Dodson played a critical role
in the discovery process, and in researching, drafting and reviewing our written submissions and
arguments in connection with the motion and other filings, among other contributions. Id.
14
The hours expended by Mr. Gibbs, Mr. Cruse, Mr. MacDonald and Mr. Dodson represent
the vast majority of the hours expended by professionals at Gibbs & Bruns on this matter. Jd. at {
27. The hourly rates charged by Gibbs & Bruns and the number of hours expended are reasonable.
See id. at 28-43. Accordingly, the actual rates and hours expended by Herz’s attorneys should
serve as the “base lodestar” amount that he is entitled to recover. Jd. at | 28.
ii. Reasonableness Factors
In determining whether attorney rates and hours expended are reasonable, Texas courts
consider non-exclusive factors including: (1) the time and labor required, the novelty and difficulty
of the questions involved, and the skill required to perform the legal services properly; (2) the
likelihood, if apparent to the client, that acceptance of the particular employment will preclude
other employment by the law; (3) the fee customarily charged in the locality for similar legal
services; (4) the amount involved and results obtained; (5) the time limitations imposed by the
client or by the circumstances; (6) the nature and length of the professional relationship with the
client; (7) the experience, reputation, and ability of the lawyer or lawyers performing the services;
and (8) whether the fee is fixed or contingent.?* Mr. Gibbs considered these factors in forming his
opinions that the rates charged and hours expended by Herz’s attorneys were reasonable. See id.
at § 29. These factors collectively support the reasonableness of Herz’s fee request.
Time, labor, and skill required. Robert Jr.’s claims alleged almost three-dozen separate
breaches of Herz’s duties as Trustee and sought more than $100 million in damages. Successfully
defending him against these claims required gaining an understanding of the sprawling interests
of the Moody family, including the Three R Trusts, several nonprofit foundations and institutes
connected with the Moody family, and multiple regulated banking, insurance and health-care
8 See, e.g., Arthur Anderson & Co. v. Perry Equipment Corp., 945 8.W.2d 812, 818 (Tex. 1997).
15
entities. Jd. at §§] 30-35. In particular, Gibbs & Bruns was required to quickly understand the
structure of the Moody affiliated entities, the nature of the benefits to which Robert Junior claimed
entitlement, the alleged duties underlying his claims, and relevant Texas case law. Id. J 30.
Defending this suit required extensive motions practice and accelerated, time-consuming
discovery efforts. Id. at J 31. These included, without limitation, researching, briefing and
successfully arguing a motion to transfer the case to Galveston County, Texas; preparing to address
repeated threats by Robert Jr. to seek meritless injunctive relief; and quickly responding to
extensive discovery requests, much of which was overbroad, unduly burdensome and harassing.
Id. at §§ 31-33. For example, Robert Jr. served 422 Requests for Admission, 194 Interrogatories
(including sub-parts) and 188 Requests for Production on Herz. /d. at 32. Gibbs & Bruns was
required to spend hundreds of hours reviewing documents, drafting responses, and assembling a
privilege log related to these requests, most of which were rendered irrelevant by the Court’s
October 2020 dismissal order. /d. Counsel was also forced to address harassing and irrelevant
discovery demands that Robert Jr. sent to non-parties, and to defend against multiple frivolous
motions to compel filed by Robert Jr. /d. { at 33. As a result, counsel had to prepare, brief, and
attend six different hearings during the pendency of this case, many of which lasted multiple hours.
Id. Counsel also prepared multiple witnesses for depositions sought by Robert Jr., including for
Herz’s wife and two adult children, several of which were abandoned after being noticed by Robert
Jr. Id. at § 33. Gibbs & Bruns also researched and prepared extensive legal briefing and
demonstrative aids for the Court. Jd at J 34.
In contrast, Herz noticed no depositions and the Firm’s discovery-related services were
almost exclusively responsive to Robert Jr.’s harassing requests and motions practice. Indeed, in
an effort to conserve the parties’ and the Court’s resources, Herz and his co-defendants sought to
16
postpone all merits discovery until completion of the transfer and Rule 91a proceedings—requests
that were vociferously opposed by Robert Jr. and ultimately denied in August 2020, thus adding
fees to the amounts sought in this Motion. Jd. § 35.
Likelihood that representation of Herz would preclude other employment. By representing
Herz in this litigation, counsel for Gibbs & Bruns were precluded from other employment. /d. at
4/37. Multiple attorneys from Gibbs & Bruns were required to set aside time to work on this case
that otherwise could have been spent handling litigation matters for other clients. Jd.
Fees customarily charged in the locality for similar legal services. The billing rates
charged by Herz’s attorneys were consistent with customary fees charged in Houston and
Galveston for similar legal services. Jd. 38. This weighs in favor of the reasonableness of Herz’s
fee request.
Amount involved and results obtained. Robert Jr.’s original and first amended petitions
advanced a sprawling set of allegations and claims, coupled with an in terrorem demand for more
than $100 million in damages. These allegations invoked and relied upon a decades-long
relationships between Herz, Robert Sr., Robert Jr. and his co-beneficiaries under the trust, and
numerous commercial and non-profit entities. See generally Ex. 1. The Firm succeeded first in
eliminating the majority of Robert Jr.’s claims, leaving only a handful of summarily pleaded Trust
Management Allegations. See id. at | 39. These results substantially reduced Herz’s exposure,
streamlined further litigation efforts, and facilitated Counsel’s subsequent summary judgment
motion disposing of Robert Jr.’s remaining claims. The attorneys’ fees sought are reasonable and
proportionate given the amounts that Robert Jr. sought and the results obtained.
Time limitations imposed by the circumstances. Robert Jr. filed suit in May 2020, and the
hearing on Herz’s 91a Motion took place on September 14, 2020, resulting in an Order for partial
17
dismissal on October 14. Jd. | 40. To move a case of this magnitude from initial filing to the
disposition of the vast majority of Robert Jr.’s claims in this timeframe required great effort on the
part of the Firm’s attorneys. /d. Within only four months, Herz filed his successful motion for
summary judgment disposing of the remainder of Robert Jr.’s claims. This again weighs in favor
of the reasonableness of Herz’s fee request.
Nature of professional relationship with Client. Herz engaged Gibbs & Bruns in May 2020
and had no prior professional relationship with the Firm. Jd. § 41. The fee arrangement between
Gibbs & Bruns was thus negotiated at arms-length and under circumstances where it was required
to provide competitive rates to secure their new professional relationship with Herz. Jd. This
weighs in favor of the reasonableness of the fees charged by Gibbs & Bruns.
The experience, reputation, and ability of the attorneys performing the services. The
experience, reputation, and ability of the attorneys performing services on Herz’s behalf supports
the reasonableness of their requested attorneys’ fees. As discussed, all of those attorneys have
outstanding academic records and professional accomplishments supporting their billing rates. Id.
at | 42. Having reviewed and contributed to the written submissions and oral argument to the
Court, Mr. Gibbs is of the opinion that Gibbs & Bruns has been efficient, effective and well
prepared throughout the presentation of Herz’s defenses. Jd.
Gibbs & Bruns is also a nationally recognized leader in complex commercial litigation.
Chambers & Partners, for instance, ranks Gibbs & Bruns in “Band 1” of Texas commercial
litigation firms along with only four other firms. Jd. at § 43. Mr. Gibbs personally is ranked in
“Band 1” of individual Texas commercial litigators. /d. As stated, Mr. Cruse, Mr. MacDonald
and Mr. Dodson are eminently qualified by their experience, academic and professional
attainment. Jd. at [{j] 23-27.
18
iii. Intertwined Nature of Robert Jr.’s Claims
Because of the nature of Robert Jr.’s claims and allegations, it is impossible to segregate
the fees and expenses incurred defending Herz in his individual capacity from those asserted
against him as Trustee of the Three R Trusts. Jd. § 30. Robert Jr.’s Petition alleged that all of
Herz’s alleged acts and omissions were taken in both his individual capacity and as Trustee. See
generally Ex. 1. Even prior to the Court’s Order of partial dismissal which dismissed all claims
asserted against Herz in his non-trust capacities, the vast majority of work performed related to the
overall defense of the case, without respect to the capacity in which Herz was sued. Ex. 13 at J
36; Ex. 10 at pp. 5-10. These included all discovery efforts, challenges to Robert Jr.’s venue, and
nearly all other activities which were so intertwined as to render it impossible to segregate them
based upon Robert Jr.’s separate claims. Ex. 13 at § 36. Indeed, Robert Jr. himself invoked the
interrelated nature of his claims in his opposition to summary judgment—arguing (wrongly) that
the Harris County Court’s order did nothing to eliminate the “Perks Claims” because he attempted
to characterize every single allegation in the petition as a violation of Trust duties, regardless of
any real connections to the Three R Trusts.”°
Of course, following the Court’s Order of partial dismissal, all of the fees and costs
incurred related exclusively to defending claims alleging breach of Herz’s duties as Trustee
because that was all that remained of Robert Jr.’s suit. Were the Court to limit fees recoverable
under Rule 91.a.7, however, Mr. Gibbs conservatively estimates that no more than 5% of Herz’s
?9 See, e.g., Ex. 10 at | (“Herz claims that only Bobby Moody’s “mismanagement” claims remain. That is false.
Judge Payne’s order on Herz’s Rule 91a Motion to Dismiss denied all claims against Herz as Trustee, including
mismanagement claims and claims that Herz engaged in self-dealing and intentionally acted to harm Bobby
Moody.”) (emphasis in original); id. at 4 (“Judge Payne denied Herz’s Motion to Dismiss under Rule 91a as it relates
to all claims against Herz in his capacity as Trustee and dismissed his remaining claims. The effect of this is that all
of the allegations against Herz as Trustee remain.”); id. at 6 (“The claims asserted by Bobby Moody against Herz as
Trustee are extensive and are identified on pages 24-27 of his live pleading.”); id. at 8 (“The Motion claims Judge
Payne’s Rule 91a order dismissed the allegations in paragraphs: a., c., d., ¢., f£., g.,i., 1, m., 1., 0., p., q., 1, S., t., UL, V.,
W., X., y., Z., aa., bb., cc., dd., and ff. when such is false.”).
19
fees and expenses through October 2020 related to Robert Jr.’s then-surviving causes of action.
See Ex. 13 at § 36.
E. Fees Related to Potential Post-Judgment Activities
Should Robert Jr. seek mandamus or appeal the Court’s rulings on his claims to the
intermediate court of appeals, Mr. Gibbs estimates that Herz will incur an additional $250,000 to
$350,000 in attorneys’ fees and costs. See id. at §.45. In addition, Mr. Gibbs estimates that in the
event Robert Jr. files a petition for review with the Texas Supreme Court, the reasonable and
necessary costs of responding to such a petition would total approximately $100,000. Jd. at § 45.
Should the Texas Supreme Court request briefing on the merits, Mr. Gibbs estimates that the
reasonable and necessary costs of responding to that request would total approximately $100,000
in additional attorneys’ fees. Jd. Finally, if oral argument is granted at the Texas Supreme Court,
Mr. Gibbs estimates that the reasonable and necessary costs of such argument would total
approximately $50,000. Jd. Mr. Gibbs’ affidavit provides sufficient evidence of the conditional
future appellate fees and establishes their reasonableness as a matter of law. See Hunsucker, 238
S.W.3d at 432.
CONCLUSION AND PRAYER
Pursuant to Section 114.064 of the Texas Property Code, and for all other aforementioned
reasons, Herz respectfully requests that the Court award him $1,041,073 in attorneys’ fees and
$230.14 in court costs. Such an award would justly and equitably reimburse the Trusts for the fees
that it was required to expend in defense of Robert Jr.’s legally and factually baseless claims that
were asserted—not for the benefit of the Trusts themselves—but for the sole and exclusive
personal benefit of Robert Jr.
20
In the alternative, should the Court limit its award to fees recoverable only under Rule
91a(7), Herz respectfully requests that the Court award him $668,800 in attorneys’ fees and
$230.14 in costs incurred in defending against Robert Jr.’s dismissed claims through October 2020.
Dated: December 21, 2021 Respectfully submitted,
GIBBS & BRUNS, L.L.P.
/S/ ROBIN C. GIBBS
Robin C. Gibbs
rgibbs@gibbsbruns.com
State Bar No. 07853000
Samuel W. Cruse, IIT
scruse@gibbsbruns.com
State Bar No. 24036423
Angus J. Dodson
jdodson@gibbsbruns.com
State Bar No. 24034418
Ross M. MacDonald
rmacdonald@gibbsbruns.com
State Bar No. 24087956
1100 Louisiana, Suite 5300
Houston, Texas 77002
Telephone: (713) 650-8805
Facsimile: (713) 750-0903
THE LAW FIRM OF ALTON C. TODD
/S/ ALTON TODD
Preview
Filed: 12/21/2021 2:15 PM J OHN D. KINARD - District Clerk Galveston County, Texas Envelope No. 60227738 By: Shailja Dixit 20-CV-1564 12/21/2021 2:37 PM CAUSE NO. 2020-31023 ROBERT L. MOODY, JR. IN THE DISTRICT COURT OF V. GALVESTON COUNTY, TEXAS GREER, HERZ, & ADAMS, LLP, IRWIN “BUDDY” HERZ, JR. and ROSS RANKIN MOODY 122NP JUDICIAL DISTRICT TRUSTEE IRWIN HERZ, JR.’S APPLICATION FOR ATTORNEYS’ FEES Trustee Irwin Herz, Jr. (“Herz”) respectfully moves to recover his reasonable and necessary attorneys’ fees and costs pursuant to Section 114.064 of the Texas Property Code or, alternatively, under Rule 91a.7 of the Texas Rules of Civil Procedure. Without waiver of his right to further relief, Herz requests not less than $1,041,073.00 in reasonable and necessary attorneys’ fees incurred while defending against Robert Jr.’s legally and factually groundless claims, and court costs of $230.14.! As Trustee of the Three R Trusts, the Trusts indemnified Herz for his litigation expenses. He therefore moves to recover these expenses to reimburse the Trusts, and not for his own benefit. Robert Jr. forced the Trusts to bear these costs despite seeking relief solely for himself on the basis of allegations that had little if any connection to his legitimate rights as a Trust beneficiary. Neither the Trusts nor any other beneficiary supported the suit, shared its goals, or stood to gain anything whatsoever from his claims. It would be inequitable and unjust to saddle the Trusts and non- participating beneficiaries with the expenses of defending against Robert Jr.’s baseless claims. The practical result of such a ruling would mean that either: (i) the Three R Trusts established for ' The Firm’s December 2021 invoices have not yet been prepared. Herz will supplement the amount of his requests and his supporting invoices once those invoices are available. each of Robert Jr.’s siblings would have to shoulder the costs of his frivolous litigation, or (ii) that Robert Jr.’s own Three R Trust would have to bear these costs entirely—which, as a generation- skipping trust, would ultimately impose these expenses on Robert Jr.’s children as its remainderman beneficiaries. Instead, Herz’s defense costs should be borne by the person whose empty claims necessitated them—Robert Jr. himself. I Background & Summary Robert Jr. filed suit in May 2020, asserting claims against Herz, his law firm Greer, Herz and Adams, L.L.P. (GHA), and Robert Jr.’s brother Ross R. Moody. Robert Jr. is one of four adult beneficiaries of generation-skipping trusts that were established by Robert Jr.’s and Ross’s father, Robert L. Moody, Sr. (“Robert Sr.”), and which are known as the Three R Trusts (the “Trusts”). Though technically consisting of four separate trusts, Herz jointly administers the Three R Trusts under a single indenture and as a single pool of assets collectively worth roughly $400 million. As Robert Sr.’s long-time friend, Trustee Herz has served in that role for five decades for a nominal monthly fee of $200. Throughout that time, GHA or its predecessor law firms have represented other entities connected to Robert Sr. or his family members, including the American National Insurance Company, National Western Life Insurance Group, Moody National Bank, and the Moody Foundation, among others. Until mid-2017, GHA also sometimes represented businesses owned or controlled by Robert Jr. None of Robert Jr.’s claims sought relief for or on behalf of the Three R Trusts. Instead, Robert Jr. alleged that Herz and his co-defendants conspired to deprive Robert Jr., individually, of various contracts, participation in the governance of Moody-affiliated entities, and other benefits that he expected to enjoy as Robert Sr.’s “first born son and namesake.”? In fact, his suit sought ? See generally Exhibit 1 (Plaintiff's First Amended Petition). to revive grievances that Robert Jr. previously asserted in three earlier failed proceedings asserted directly against the entities involved, and which stood on even shakier ground when lodged against Trustee Herz Robert Jr.’s appeals ofthose earlier dismissals have been rejected both in the state and federal courts of appeals. In this suit, Robert Jr. alleged that Herz and GHA breached fiduciary duties arising from their past legal representation of Robert Jr., and that Herz himself breached his fiduciary duties as trustee by failing to procure or preserve benefits for Robert Jr. from two insurance companies and various non-profit foundations that have no connection to the Trusts whatsoever, and a bank and several nursing homes whose stock are majority-owned by the Trusts. See Ex. | at §§ 45 & 49. Robert Jr. also generically alleged that Herz “[p]urposely mismanaged and failed to oversee one of the entities within the Trust. 05 Again, however, he sought damages only for himself. Jd. at § 62& p.31 Indeed, Robert Jr. did not allege any identifiable injury to the Trusts. Instead, he demanded the outlandish sum of $100 million—jointly and severally from each defendant—which he characterized as “disgorgement of all fees paid to GHA as counsel for any Moody interest. 96 Because Robert Jr. sued Herz in his trustee capacity, the Trust Agreement provided indemnification for Herz’s attorneys’ fees and costs * Moody v. American Nat'l Ins. Co., No. 3:19-cv-00206, 2020 WL 3128259 , at *1, *5 (S.D. Tex. June 12, 2020); Robert L. Moody, Derivatively on Behalf of Nat'l W. Life Ins. Co. and Nat'l W. Life Grp., Inc. v. Ross Rankin Moody et al., No. 17-CV-1196 (Tex. Dist-—Galveston [122nd Dist. Ct.] [filed Sept. 28, 2017]) (dismissed by the Court); Moody v. Nat'l W. Life Ins. Co., Case No. 2019-SOX-31 (Dep’t of Labor [filed Apr. 25, 2019]). 4 See Moody v. Nat'l W. Life Ins. Co., 01-18-01106-CV, 2021 WL 3160375 (Tex. App.—Houston [1st Dist.] July 27 2021, no pet.); Moody v. Am. Nat’l Ins. Co., 842 Fed. Appx. 875, 876 (Sth Cir. 2021). 5 See Ex. 1 at ]49(ce). © See id. at 1 See, e.g., Ex. | at § 47 (alleging “Plaintiff Bobby Moody, Jr. has been damaged” by Herz’s and GHA’s breaches of fiduciary duty) (emphasis added); id. at {51 (“As a proximate result of Buddy Herz’s acts and omissions in his individual capacity, Plaintiff Bobby Moody, Jr. has been damaged[.]”) (emphasis added); id. at § 56 (alleging Herz and his co-defendants quickly moved to dismiss Robert Jr.’s suit. GHA moved to dismiss all claims brought against itself and all those asserted against Herz in his capacity as an attorney.’ Herz moved to dismiss claims alleging breaches of his duties as a Trustee. Herz further separated those “Trust” claims into two categories: (1) “Perks Claims” which, though nominally brought against Herz “as Trustee”, did not plausibly implicate the Trusts, and (2) “Trust Management Claims” that at least theoretically touched on his duties as Trustee. See, e.g., Ex. 3 at 25 (“Plaintiff Robert Jr. makes four claims that actually do relate to Trustee Herz’s duties and obligations as Trustee.”). Robert Jr. asserted the “Perks Claims” claims against all Defendants and alleged that Herz, in conspiracy with and aided and abetted by GHA and Ross Moody, denied Robert Jr. board seats, contracts, and other perks from various Moody-affiliated entities.” The Defendants moved for dismissal, among other grounds, because Herz had no duty as Trustee to procure those perks for Robert Jr.!° Instead, Robert Jr.’s lawsuit complained of actions taken by third-parties that were neither owned nor controlled by the Trusts and were beyond the scope of Herz’s duties as Trustee. Any complaints that Robert Jr. had lay instead against the entities themselves. In addition, Robert Jr. asserted a handful of conclusory “Trust Management Claims” solely against Herz alleging that he mismanaged the Trust assets. i Unlike the bulk of Robert Jr.’s “Plaintiff Bobby Moody, Jr. suffered damages” from an alleged conspiracy among the Defendants) (emphasis added). 8 Ex. 2 at 1 (moving on behalf of itself and Herz “to the extent he is alleged to have acted in his capacity as a firm lawyer.”). This motion does not seek fees for GHA’s defense of Herz in his legal capacity. ° See generally Ex. | at 9/45 & id. at 44 49(a), (c)-(g), (i), (1)-(dd), (ff), 4 54 (aiding and abetting); § 56 (conspiracy). 10 See Ex. 3 at 10-17 (Defendant Irwin “Buddy” Herz, Jr.’s, Individually and as Trustee of the Three R Trusts, Rule 91a Motion to Dismiss). To be clear, Herz also denies that he took any action to deny or interfere with Robert Jr.’s access to such benefits. "Bx. 3 at 25 (citing Pet. at 44] 49(b), (g), (h), (j), (Kk), (ee). petition, these at least theoretically touched on Herz’s duties as Trustee. Herz moved for dismissal of these claims because they were inadequately pled and were barred by the Trust Agreement. !” Undeterred, Robert Jr. filed a consolidated response to the motions arguing they “are frivolous, have no merit, should not have been filed, and warrant an award of attorneys’ fees” t Robert Jr.!> The Court disagreed. On October 14, 2020, the Court dismissed all claims against GHA (and all claims against Herz in his attorney capacity), all claims against Ross Moody, and the overwhelming majority of claims against Herz.'* With respect to Herz, the Court ruled: The Court, having considered the Motion, the response filed by Plaintiff Robert Moody, Jr., Herz’s reply, and the arguments of counsel, hereby rules and Orders that the Motion should be DENIED as to claims against Herz as Trustee and GRANTED as to all other claims against Herz. It is therefore ORDERED that Defendant Herz’s 91a Motion to Dismiss is DENIED as to claims against Herz as Trustee and GRANTED as to all other claims against Herz, which are dismissed with prejudice. Collectively, the Court’s orders disposed of all claims alleging breaches of Herz and GHA’s fiduciary duties in their capacities as attorneys, all claims asserted against Herz in his individual capacity, all “Perks Claims,” and with them Robert Jr.’s demand for more than $100 million in fees that GHA allegedly earned by representing Moody-affiliated entities. Robert Jr. was left to pursue only his Trust Management Claims—consisting of a jumble of sparsely pleaded “kitchen-sink” allegations concerning Herz’s management of the Trusts. These included conclusory allegations that Herz: (i) failed to make certain Trusts assets productive, (ii) used his Trustee position to perform legal services for the Trusts; (iii) failed to account for the 2 Ex. 3 at 25-29. 13 See Exhibit 4 at 1 (Plaintiff Robert L. Moody Jr.’s Response to Defendants’ Rule 91a Motions to Dismiss, and Motion for Attorneys’ Fees) (emphasis in original). '4 See Exhibit 5 (Order Granting Herz’s Rule 91a Motion to Dismiss); see a/so Exhibit 6 (Order on GHA’s Rule 91a Motion to Dismiss); Exhibit 7 (Order Granting Ross Moody’s Rule 91a Motion to Dismiss). Trusts’ expenses, (iv) delegated his duty to preserve the Trusts’ assets, and (v) mismanaged and failed to oversee one of the trust assets. See Ex. | at f§ 49(b), (g), (j); (k), and (ee). Robert Jr. offered no specific examples of Herz’s alleged mismanagement and did not identify any resulting injury to the Trusts. Nor did Robert Jr. seek relief for the Trusts. Robert Jr. also made no attempt to obtain deposition discovery supporting these claims. While Robert Jr. noticed multiple depositions (some of which he later abandoned), none of the testimony sought could have supported the Trust Management Claims. For example, Robert Jr. demanded to depose Herz’s wife on the grounds that she had knowledge that might relate to venue—but devoted the majority of the deposition to harassing questions regarding a purportedly risqué-themed birthday party that she had thrown for her husband years before. !> Hence, on February 9, 2021, Herz filed his Motion for Summary Judgment to Dismiss Robert Jr.’s Remaining Trustee Claims.'® Robert Jr.’s response consisted largely of a misguided attempt to resurrect his “Perks” Claims,!’ and the Court granted the motion on November 2, ordering the dismissal of all of Robert Jr.’s remaining claims with prejudice.'* In sum, Robert Jr.’s suit has been a vain, wasteful attempt to leverage the Three R Trusts to extract tens of millions of dollars for his personal benefit by asserting claims with no legitimate basis in law or fact, and which were overwhelmingly unrelated to any duty associated with Herz’s service as Trustee. IL. Entitlement to Fees and Costs Requested A. Herz Is Entitled to Recover his Reasonable and Necessary Attorneys’ Fees in the Interest of Justice and Equity 15 See Ex. 8 at 15-16 (Herz’s Reply in Support of Motion to Transfer Venue, dated Oct. 8, 2020, including Ex. 1 thereto). 16 See generally Ex. 9 (Defendant Irwin Herz Jr.’s Motion to Dismiss Robert Jr.’s Remaining Trustee Claims) (filed without exhibits). 17 See Ex. 10 (Plaintiffs’ Response to Defendant Herz Jr.’s Motion for Summary Judgment). '8 See Ex. 11 (Order dated Nov. 2, 2021 granting Herz’s Motion for Summary Judgment). It would be equitable and just for the Court to Order an award of all attorneys’ fees and costs incurred by Trustee Herz—not for his own benefit, but to reimburse the Trusts for the fees and costs incurred in defending against Robert Jr.’s meritless litigation. The attorneys’ fees incurred to date amount to approximately $1,040,073, excluding December 2021’s invoice. Court costs total $230.14. The Texas Trust Code Provides that, “[i]n any proceeding under this code the court may make such award of costs and reasonable and necessary attorney’s fees as may seem equitable and just.” TEX. PROP. CODE § 114.064; see also, e.g., Lesikar v. Moon, 237 S.W.3d 361, 375 (Tex. App.—Houston [14th Dist.] 2007, no pet.). An award of fees under Section 114.064 is within the sound discretion of the trial court. Alpert v. Riley, No. CIV.A. H-04-3774, 2012 WL 2193985, at *1 (S.D. Tex. June 14, 2012). “A reviewing court may not reverse the trial court’s judgment absent a clear showing that the trial court abused its discretion by acting without reference to any guiding rules and principles.” Jd.; see also In re Ray Ellison Grandchildren Trust, 261 S.W.3d 111, 126 (Tex. App.-San Antonio 2008, pet. denied); Hachar v. Hachar, 153 8.W.3d 138, 142 (Tex. App.- San Antonio 2004, no pet.). In determining whether fees are reasonable and necessary, a court applies the familiar eight-factor test derived from Arthur Andersen & Co. v. Perry Equipment Corp.,!° which is discussed in detail at Section ILD, infra. It would be inequitable and unjust to deny an award of Herz’s attorneys’ fees and costs. The overwhelming majority of Robert Jr.’s assertions failed even to articulate a cognizable claim, had been thrice rejected in earlier proceedings, and lacked any legitimate connection to the Trusts. The few Trust Management Claims that survived dismissal were summarily disposed of because 19 945 SW2d 812, 818 (Tex.1997). Robert Jr. was unable to muster even a scintilla of evidence in their favor. From start to finish, Robert Jr.’s lawsuit was a costly exercise in futility, carried out in part at the Trusts’ expense. Robert Jr. was well aware that the Three R Trusts would be forced to subsidize his litigation when he filed suit. In his Petition, Robert Jr. asserted—wrongly—that each and every allegation against Herz constituted a breach of his fiduciary duties as Trustee to the Three R Trusts. 20 Because Robert Jr. sued Herz in his capacity as Trustee, Herz was indemnified against his reasonable attorneys’ fees, costs and litigation expenses.7! The Trust Agreement provides, in relevant part, that Herz may “employ attorneys ... or other agents which the Trustee may deem advisable, and to pay reasonable compensation to any person or firm employed[,]” and that “[i]n the case of legal proceedings involving the Trustee or other principle of the Trust Estate, the Trustee may defend such proceedings[.] 9922 Accordingly, the Three R Trusts indemnified Herz for his attorneys’ fees, costs and expenses. Robert Jr. thus pushed these expenses onto his co-beneficiaries to the Three R Trusts— or onto his own children as remaindermen beneficiaries to his individual Trust. It bears repeating that none of the relief in this litigation was sought for the benefit of the Trusts, his fellow beneficiaries or even his children. Instead, Robert Jr. imposed these costs on the Trusts and his co-beneficiaries for his own personal gain. It would be equitable and just to require Robert Jr. to bear the costs of defending against his meritless claims. 20 Ex. 1 at 49; see also Ex 10 at pp. 5-10. 2! Robert Jr. sued Herz both in his “individual” capacity and as trustee of the Three R Trusts. See Ex. 1 at 79. Robert Jr. never pled “individual” claims that were distinct from his allegations against Herz as Trustee, however. Nor did he allege that Herz owed him fiduciary or other duties in his individual capacity. To the extent Robert Jr. argues that some of these funds were used to defend Herz in his individual capacity, that distinction is untenable. 2? Ex, 12 at Art II (e) and (v) (Indenture of Trust dated June 13, 1960 by Robert L. Moody, as amended on May 16, 1972). B. Herz is Entitled to Recover His Reasonable and Necessary Attorneys’ Fees as the Prevailing Party in his Rule 91a Motion. Alternatively, Trustee Herz is entitled to recover his attorney’s fees and costs incurred through the Court’s partial order of dismissal pursuant to TEX. R. Civ. P. 91a.7, which states: Except in an action by or against a governmental entity or a public official acting in his or her official capacity or under color of law, the court may award the prevailing party on the motion all costs and reasonable and necessary attorney fees incurred with respect to the challenged cause of action in the trial court. Any award of costs or fees must be based on evidence. Importantly, these fees are not limited to the costs of advancing the Rule 91a Motion. Rather, the Rule permits an award of all attorney’s fees “associated with” the challenged causes of action, “including fees for preparing or responding to the motion to dismiss.” Fiamma Statler, L.P. v. Matthew D. Challis and Jeffries, LLC, No. 02-18-00374-CV, 2020 WL 6334470 *18 (Tex. App.—Fort Worth, Oct. 29, 2020, no pet. hist.) (emphasis in original, quotations and citations omitted). “{I]n Texas statutes, the word ‘including’ is a term of enlargement.” McGibney v. Rauhauser, 549 S.W.3d 816, 837 (Tex. App.—Fort Worth 2018, pet. denied). Indeed, in Fiamma, the Court of Appeals recently held that a trial court abused its discretion by limiting a defendant’s recoverable fees under Rule 91a.7 to those incurred in connection with a motion to dismiss. See 2020 WL 6334470 *18; see also Weizhong Zheng v. Vacation Network Inc., 468 S.W.3d 180, 188 (Tex. App.—Houston [14" Dist.] 2015, pet. denied). Further, the recoverable fees include reasonable and necessary attorneys’ fees that may be required in the appellate and Texas Supreme Courts. See Zheng, 468 S.W.3d at 188 (“[T]he word ‘all’ entails just that—‘all’ fees—which would include appellate fees[.]””) (quoting TEX. R. Civ. P. 91a.7). The sole limitation on this recovery is a requirement that the prevailing party segregate fees relating to the challenged causes of action from fees that are not recoverable under Rule 91a.7. See, e.g., Zheng, 468 S.W.3d at 188; CA Partners v. Spears, 274 S.W.3d 51, 81-82 (Tex. App.— Houston [14th Dist.] 2008, pet. denied). “When discrete legal services advance both recoverable claims and unrecoverable claims,” however, “attorneys are not required to segregate fees to recover the total amount covering all claims. In this situation, the claims are said to be ‘intertwined,’ and the mere fact that attorney’s fees are incurred in advancing both recoverable and unrecoverable claims does not render those fees unrecoverable.” Spears, 274 S.W.3d at 81 (citing Tony Gullo Motors I, L.P. v. Chapa, 212 $.W.3d 299, 313-14 (Tex. 2006)). When it applies, the segregation requirement is met when the attorney renders an opinion as to the percentage of time spent on the recoverable claims. See Chapa, 212 S.W.3d at 314.75 Consistent with those standards, fees recoverable under Rule 91a were calculated by identifying attorneys’ fees incurred from the filing of the litigation through October 2020, when the Court issued its Order of partial dismissal, and then applying a 5-percent reduction conservatively estimating the fees attributable to the Trust Management Claims that survived that Order. These fees total $668,800 in attorneys’ fees and $230.14 in costs. To be clear, no such segregation is required or appropriate to an award granted under Section 114.064 of the Property Code, which covers the entirety of this case. C. Trustee Herz Is the Prevailing Party with Respect to His Rule 91a Motion Trustee Herz prevailed on his Rule 91a Motion to Dismiss. The Court dismissed all of the “Perks Claims”—including Robert Jr.’s claims that Ross Moody and GHA aided, abetted and conspired in Herz’s alleged breaches.** The Court also dismissed all claims purporting to sue Herz in any capacity other than as Trustee. See Ex. 6 (dismissing “all other claims against Herz”). 3 See also, e.g., Stewart Title Guar. Co. v. Aiello, 941 S.W.2d 68, 73 (Tex.1997); Med. Specialist Group, P.A. v. Radiology Assocs., L.L.P. 171 S.W.3d 727, 738 (Tex. App.-Corpus Christi 2005, pet. denied); Flagship Hotel, 117 S.W.3d, 552, 566 n. 7 (Tex. App.—Texarkana 2003, pet. denied). 24 See generally Ex. | 4 45(a)-(ff) (alleging breaches of Herz’s fiduciary duties as Trustee); id. § 54 (claiming that Ross Moody aided and abetted breaches of Herz’s fiduciary duties as Trustee); id. at | 59 (alleging that GHA and Ross Moody conspired with Herz to violate his fiduciary duties as Trustee). 10 These included claims alleging Herz breached his fiduciary duties as an attorney and Robert Jr.’s demand for more than $100 million in alleged legal fees. See Ex. 1 at §§j (1) and 45(a)-(ff). The handful of Trust Management claims that survived the dismissal order did not undermine Herz’s prevailing party status.*> “A party prevails if he successfully prosecutes the action or successfully defends against it ....” Arrow Marble, LLC v. Estate of Killion, 441 $.W.3d 702, 707 (Tex. App.—Houston [1st Dist.] 2014, no pet.) (quotations omitted). A party need not win on every claim or argument presented to recover attorneys’ fees as a prevailing party. See, e.g., Arrow Marble, 441 S.W.3d at 706 (“Equicap’s failure to obtain judgment on its breach-of- contract claim does not affect its recovery of attorney’s fees as the prevailing party[.]”); accord Darnell v. Rogers, 588 §.W.3d 295, 306 (Tex. App.—El Paso 2019, no pet.). Herz prevailed on the overwhelming majority of Robert Jr.’s claims for breach of fiduciary duty and his $100 million “disgorgement” demand, and he substantially narrowed the scope of Robert Jr.’s remaining claims so they could be quickly disposed on summary judgment. Herz was undisputedly the prevailing party for the purpose of applying Rule 91a.7. D. Herz’s Attorneys’ Fees, Costs, and Expenses are Reasonable. In his affidavit, Herz’s lead counsel Robin C. Gibbs addresses the amount of Herz’s claimed fees and the reasonableness of those fees under settled Texas law.?° A party submits sufficient evidence to show the reasonableness of attorneys’ fees when its billing records state the services performed, when they were performed, who performed them, and at what hourly rate. See e.g., Arthur Andersen & Co. v. Perry Equip. Corp., 945 S.W.2d 812, 818 (Tex. 1997); Rohrmoos Venture v. UTSW DVA Healthcare, LLP, 578 S.W.3d 469, 502 (Tex. 2019). °5 Plaintiff alleged 32 breaches of Herz’s fiduciary duties as trustee. See Ex. 1 at §{] 49(a)-(ff). Only five of these were Trust Management Claims surviving the Court’s Order of dismissal. See id. at {4 49(b), (g), (j); (k), and (ee). 26 See Ex. 13 (Affidavit of Robin C. Gibbs dated December 21, 2021). 11 Litigants often use the “lodestar method” as an efficient means to show that a given fee award is reasonable under the so-called Arthur Andersen factors. See Arthur Andersen, 945 S.W.2d at 818. Under this method, the fact finder first determines the reasonable hours spent by counsel on the matter and a reasonable hourly rate for the work. The fact finder then multiplies those hours by the applicable rate, the product of which is the “lodestar” or base fee. The fact finder may then adjust the lodestar up or down if relevant factors indicate an adjustment is necessary. See id.; Rohrmoos Venture, 578 S.W.3d at 490. As detailed below and in Mr. Gibbs’ affidavit, the hours worked by Herz’s counsel in connection with this matter and the rate at which those hours were billed were reasonable. Accordingly, the “base lodestar” equates to the actual hours billed and costs and expenses incurred by Herz’ counsel in this matter, and he is entitled to recover the full amount of those fees. L Lodestar Calculation Mr. Gibbs testifies in his affidavit that he is familiar with the services that he and other attorneys at Gibbs & Bruns provided in this matter and the usual and customary fees charged in commercial cases of similar complexity. See Ex. 13 at 1-5. Mr. Gibbs has negotiated numerous fee arrangements with clients for similar work at similar rates to those charged Herz in this case. Id. at 2. The fees charged by Gibbs & Bruns are consistent with the usual and customary fees charged by attorneys of comparable experience in Houston and the surrounding areas. Jd. at 4 5. Information regarding the hourly rates of each attorney who performed legal services for Herz, the hours they worked, their experience and expertise, and a summary of the work they performed is set out in the paragraphs below. A detailed description of the work performed by each is contained in Gibbs & Bruns’s fee records for this action, which are submitted in evidence 12 as Exhibits A through R of the affidavit.2” Gibbs & Bruns’s December 2021 invoice has not yet been prepared and will be provided promptly when available. Mr. Gibbs has served as lead counsel for Herz from the inception of this case in May 2020 until the present. See id. §/ 23. He expended 345 hours on this matter through November 2021, initially at a billing rate of $1280 per hour and, since October 2021, at a rate of $1,350 per hour. Id. His rates are consistent with his experience, expertise, and the results obtained for clients during fifty years practice specializing in complex commercial litigation. /d. As lead counsel, Mr. Gibbs has and continues to play a crucial role in setting Herz’s litigation strategy; drafting, reviewing, and approving written discovery, letters, and pleadings; and representing Herz at hearings. Jd. While he has been involved throughout this litigation, Mr. Gibbs delegated many tasks to more junior attorneys when appropriate. Jd. Sam W. Cruse, III is a partner at Gibbs & Bruns. Jd. at § 24. Through November 2021, Mr. Cruse expended 126 hours in connection with defending Herz, initially at a billing rate of $585 per hour and, beginning in October 2020, at an hourly rate of $610. Jd. Mr. Cruse’s rate reflects 19-years’ experience in commercial litigation, his academic achievements as a Chancellor’s scholar at the University of Texas, and his recognition as a Texas “Rising Star” from 2012 through 2017 and as a Texas “Super Lawyer” from 2017 through 2021, among other achievements. Jd. His hourly rate is consistent with the prevailing market rate for partners in the Houston market. Id. As shown by the Firm’s invoices, Mr. Cruse participated in the development of case strategy, discovery, and preparing Herz’s written submissions and arguments, among other contributions. Id. 27 Herz has submitted its invoices in redacted form as attachments to Mr. Gibbs’s affidavit and will provide them for review by the Court in camera in unredacted form on the Court’s request. 13 Ross MacDonald is a partner at Gibbs & Bruns. /d. at 25. Through November 2021, Mr. MacDonald expended 681 hours in connection with defending Herz at an hourly billing rate of $410 and, since October 2020, at a rate of $440 per hour. Jd. Mr. MacDonald became a partner with the Firm in September 2021, at which time his billing rate increased to $510 per hour. Jd. Mr. MacDonald was a University of Texas Grand Chancellor, clerked for Judge Pricilla Owen on the U.S. Court of Appeals for the Fifth Circuit, and is a member of the Order of the Coif. Jd. His rate reflects his academic achievements, six years’ experience in complex commercial litigation, and the results obtained for his clients during that time. /d. His hourly rate is consistent with the prevailing market rate for attorneys with comparable experience in the Houston market. Jd. As demonstrated by Gibbs & Bruns’ billing records, Mr. MacDonald played a central role in developing case strategy, discovery, defending key depositions, and in preparing the Firm’s written submissions and arguments. Id. Angus J. Dodson is a senior counsel at Gibbs & Bruns. /d. at § 26. Through November 2021, Mr. Dodson expended 507.75 hours in connection with Herz’s defenses at an initial hourly billing rate of $445. In October 2020 his billing rate increased to $460 per hour, and it increased again to $495 in October 2021. Jd. Mr. Dodson was ranked first in his class at the University of Colorado upon graduation, is a member of the Order of the Coif, clerked for Judge David Ebel on the U.S. Court of Appeals for the Tenth Circuit, and is a Lifetime Fellow of the Texas Bar Foundation, among other achievements. /d. His billing rate reflects his academic attainments, his 20 years’ experience in complex commercial litigation and the results achieved for his clients during this period. /d. As shown by the Firm’s billing records, Mr. Dodson played a critical role in the discovery process, and in researching, drafting and reviewing our written submissions and arguments in connection with the motion and other filings, among other contributions. Id. 14 The hours expended by Mr. Gibbs, Mr. Cruse, Mr. MacDonald and Mr. Dodson represent the vast majority of the hours expended by professionals at Gibbs & Bruns on this matter. Jd. at { 27. The hourly rates charged by Gibbs & Bruns and the number of hours expended are reasonable. See id. at 28-43. Accordingly, the actual rates and hours expended by Herz’s attorneys should serve as the “base lodestar” amount that he is entitled to recover. Jd. at | 28. ii. Reasonableness Factors In determining whether attorney rates and hours expended are reasonable, Texas courts consider non-exclusive factors including: (1) the time and labor required, the novelty and difficulty of the questions involved, and the skill required to perform the legal services properly; (2) the likelihood, if apparent to the client, that acceptance of the particular employment will preclude other employment by the law; (3) the fee customarily charged in the locality for similar legal services; (4) the amount involved and results obtained; (5) the time limitations imposed by the client or by the circumstances; (6) the nature and length of the professional relationship with the client; (7) the experience, reputation, and ability of the lawyer or lawyers performing the services; and (8) whether the fee is fixed or contingent.?* Mr. Gibbs considered these factors in forming his opinions that the rates charged and hours expended by Herz’s attorneys were reasonable. See id. at § 29. These factors collectively support the reasonableness of Herz’s fee request. Time, labor, and skill required. Robert Jr.’s claims alleged almost three-dozen separate breaches of Herz’s duties as Trustee and sought more than $100 million in damages. Successfully defending him against these claims required gaining an understanding of the sprawling interests of the Moody family, including the Three R Trusts, several nonprofit foundations and institutes connected with the Moody family, and multiple regulated banking, insurance and health-care 8 See, e.g., Arthur Anderson & Co. v. Perry Equipment Corp., 945 8.W.2d 812, 818 (Tex. 1997). 15 entities. Jd. at §§] 30-35. In particular, Gibbs & Bruns was required to quickly understand the structure of the Moody affiliated entities, the nature of the benefits to which Robert Junior claimed entitlement, the alleged duties underlying his claims, and relevant Texas case law. Id. J 30. Defending this suit required extensive motions practice and accelerated, time-consuming discovery efforts. Id. at J 31. These included, without limitation, researching, briefing and successfully arguing a motion to transfer the case to Galveston County, Texas; preparing to address repeated threats by Robert Jr. to seek meritless injunctive relief; and quickly responding to extensive discovery requests, much of which was overbroad, unduly burdensome and harassing. Id. at §§ 31-33. For example, Robert Jr. served 422 Requests for Admission, 194 Interrogatories (including sub-parts) and 188 Requests for Production on Herz. /d. at 32. Gibbs & Bruns was required to spend hundreds of hours reviewing documents, drafting responses, and assembling a privilege log related to these requests, most of which were rendered irrelevant by the Court’s October 2020 dismissal order. /d. Counsel was also forced to address harassing and irrelevant discovery demands that Robert Jr. sent to non-parties, and to defend against multiple frivolous motions to compel filed by Robert Jr. /d. { at 33. As a result, counsel had to prepare, brief, and attend six different hearings during the pendency of this case, many of which lasted multiple hours. Id. Counsel also prepared multiple witnesses for depositions sought by Robert Jr., including for Herz’s wife and two adult children, several of which were abandoned after being noticed by Robert Jr. Id. at § 33. Gibbs & Bruns also researched and prepared extensive legal briefing and demonstrative aids for the Court. Jd at J 34. In contrast, Herz noticed no depositions and the Firm’s discovery-related services were almost exclusively responsive to Robert Jr.’s harassing requests and motions practice. Indeed, in an effort to conserve the parties’ and the Court’s resources, Herz and his co-defendants sought to 16 postpone all merits discovery until completion of the transfer and Rule 91a proceedings—requests that were vociferously opposed by Robert Jr. and ultimately denied in August 2020, thus adding fees to the amounts sought in this Motion. Jd. § 35. Likelihood that representation of Herz would preclude other employment. By representing Herz in this litigation, counsel for Gibbs & Bruns were precluded from other employment. /d. at 4/37. Multiple attorneys from Gibbs & Bruns were required to set aside time to work on this case that otherwise could have been spent handling litigation matters for other clients. Jd. Fees customarily charged in the locality for similar legal services. The billing rates charged by Herz’s attorneys were consistent with customary fees charged in Houston and Galveston for similar legal services. Jd. 38. This weighs in favor of the reasonableness of Herz’s fee request. Amount involved and results obtained. Robert Jr.’s original and first amended petitions advanced a sprawling set of allegations and claims, coupled with an in terrorem demand for more than $100 million in damages. These allegations invoked and relied upon a decades-long relationships between Herz, Robert Sr., Robert Jr. and his co-beneficiaries under the trust, and numerous commercial and non-profit entities. See generally Ex. 1. The Firm succeeded first in eliminating the majority of Robert Jr.’s claims, leaving only a handful of summarily pleaded Trust Management Allegations. See id. at | 39. These results substantially reduced Herz’s exposure, streamlined further litigation efforts, and facilitated Counsel’s subsequent summary judgment motion disposing of Robert Jr.’s remaining claims. The attorneys’ fees sought are reasonable and proportionate given the amounts that Robert Jr. sought and the results obtained. Time limitations imposed by the circumstances. Robert Jr. filed suit in May 2020, and the hearing on Herz’s 91a Motion took place on September 14, 2020, resulting in an Order for partial 17 dismissal on October 14. Jd. | 40. To move a case of this magnitude from initial filing to the disposition of the vast majority of Robert Jr.’s claims in this timeframe required great effort on the part of the Firm’s attorneys. /d. Within only four months, Herz filed his successful motion for summary judgment disposing of the remainder of Robert Jr.’s claims. This again weighs in favor of the reasonableness of Herz’s fee request. Nature of professional relationship with Client. Herz engaged Gibbs & Bruns in May 2020 and had no prior professional relationship with the Firm. Jd. § 41. The fee arrangement between Gibbs & Bruns was thus negotiated at arms-length and under circumstances where it was required to provide competitive rates to secure their new professional relationship with Herz. Jd. This weighs in favor of the reasonableness of the fees charged by Gibbs & Bruns. The experience, reputation, and ability of the attorneys performing the services. The experience, reputation, and ability of the attorneys performing services on Herz’s behalf supports the reasonableness of their requested attorneys’ fees. As discussed, all of those attorneys have outstanding academic records and professional accomplishments supporting their billing rates. Id. at | 42. Having reviewed and contributed to the written submissions and oral argument to the Court, Mr. Gibbs is of the opinion that Gibbs & Bruns has been efficient, effective and well prepared throughout the presentation of Herz’s defenses. Jd. Gibbs & Bruns is also a nationally recognized leader in complex commercial litigation. Chambers & Partners, for instance, ranks Gibbs & Bruns in “Band 1” of Texas commercial litigation firms along with only four other firms. Jd. at § 43. Mr. Gibbs personally is ranked in “Band 1” of individual Texas commercial litigators. /d. As stated, Mr. Cruse, Mr. MacDonald and Mr. Dodson are eminently qualified by their experience, academic and professional attainment. Jd. at [{j] 23-27. 18 iii. Intertwined Nature of Robert Jr.’s Claims Because of the nature of Robert Jr.’s claims and allegations, it is impossible to segregate the fees and expenses incurred defending Herz in his individual capacity from those asserted against him as Trustee of the Three R Trusts. Jd. § 30. Robert Jr.’s Petition alleged that all of Herz’s alleged acts and omissions were taken in both his individual capacity and as Trustee. See generally Ex. 1. Even prior to the Court’s Order of partial dismissal which dismissed all claims asserted against Herz in his non-trust capacities, the vast majority of work performed related to the overall defense of the case, without respect to the capacity in which Herz was sued. Ex. 13 at J 36; Ex. 10 at pp. 5-10. These included all discovery efforts, challenges to Robert Jr.’s venue, and nearly all other activities which were so intertwined as to render it impossible to segregate them based upon Robert Jr.’s separate claims. Ex. 13 at § 36. Indeed, Robert Jr. himself invoked the interrelated nature of his claims in his opposition to summary judgment—arguing (wrongly) that the Harris County Court’s order did nothing to eliminate the “Perks Claims” because he attempted to characterize every single allegation in the petition as a violation of Trust duties, regardless of any real connections to the Three R Trusts.”° Of course, following the Court’s Order of partial dismissal, all of the fees and costs incurred related exclusively to defending claims alleging breach of Herz’s duties as Trustee because that was all that remained of Robert Jr.’s suit. Were the Court to limit fees recoverable under Rule 91.a.7, however, Mr. Gibbs conservatively estimates that no more than 5% of Herz’s ?9 See, e.g., Ex. 10 at | (“Herz claims that only Bobby Moody’s “mismanagement” claims remain. That is false. Judge Payne’s order on Herz’s Rule 91a Motion to Dismiss denied all claims against Herz as Trustee, including mismanagement claims and claims that Herz engaged in self-dealing and intentionally acted to harm Bobby Moody.”) (emphasis in original); id. at 4 (“Judge Payne denied Herz’s Motion to Dismiss under Rule 91a as it relates to all claims against Herz in his capacity as Trustee and dismissed his remaining claims. The effect of this is that all of the allegations against Herz as Trustee remain.”); id. at 6 (“The claims asserted by Bobby Moody against Herz as Trustee are extensive and are identified on pages 24-27 of his live pleading.”); id. at 8 (“The Motion claims Judge Payne’s Rule 91a order dismissed the allegations in paragraphs: a., c., d., ¢., f£., g.,i., 1, m., 1., 0., p., q., 1, S., t., UL, V., W., X., y., Z., aa., bb., cc., dd., and ff. when such is false.”). 19 fees and expenses through October 2020 related to Robert Jr.’s then-surviving causes of action. See Ex. 13 at § 36. E. Fees Related to Potential Post-Judgment Activities Should Robert Jr. seek mandamus or appeal the Court’s rulings on his claims to the intermediate court of appeals, Mr. Gibbs estimates that Herz will incur an additional $250,000 to $350,000 in attorneys’ fees and costs. See id. at §.45. In addition, Mr. Gibbs estimates that in the event Robert Jr. files a petition for review with the Texas Supreme Court, the reasonable and necessary costs of responding to such a petition would total approximately $100,000. Jd. at § 45. Should the Texas Supreme Court request briefing on the merits, Mr. Gibbs estimates that the reasonable and necessary costs of responding to that request would total approximately $100,000 in additional attorneys’ fees. Jd. Finally, if oral argument is granted at the Texas Supreme Court, Mr. Gibbs estimates that the reasonable and necessary costs of such argument would total approximately $50,000. Jd. Mr. Gibbs’ affidavit provides sufficient evidence of the conditional future appellate fees and establishes their reasonableness as a matter of law. See Hunsucker, 238 S.W.3d at 432. CONCLUSION AND PRAYER Pursuant to Section 114.064 of the Texas Property Code, and for all other aforementioned reasons, Herz respectfully requests that the Court award him $1,041,073 in attorneys’ fees and $230.14 in court costs. Such an award would justly and equitably reimburse the Trusts for the fees that it was required to expend in defense of Robert Jr.’s legally and factually baseless claims that were asserted—not for the benefit of the Trusts themselves—but for the sole and exclusive personal benefit of Robert Jr. 20 In the alternative, should the Court limit its award to fees recoverable only under Rule 91a(7), Herz respectfully requests that the Court award him $668,800 in attorneys’ fees and $230.14 in costs incurred in defending against Robert Jr.’s dismissed claims through October 2020. Dated: December 21, 2021 Respectfully submitted, GIBBS & BRUNS, L.L.P. /S/ ROBIN C. GIBBS Robin C. Gibbs rgibbs@gibbsbruns.com State Bar No. 07853000 Samuel W. Cruse, IIT scruse@gibbsbruns.com State Bar No. 24036423 Angus J. Dodson jdodson@gibbsbruns.com State Bar No. 24034418 Ross M. MacDonald rmacdonald@gibbsbruns.com State Bar No. 24087956 1100 Louisiana, Suite 5300 Houston, Texas 77002 Telephone: (713) 650-8805 Facsimile: (713) 750-0903 THE LAW FIRM OF ALTON C. TODD /S/ ALTON TODD