Unreported / Non-Citable
Background
RLI Insurance Company issued surety bonds, including payment and performance bonds, on behalf of J. Clark Construction for a City of La Vernia street repair and maintenance project. When J. Clark allegedly defaulted and failed to pay subcontractors and suppliers, RLI received multiple claims against the bonds and incurred total losses of $155,624.03. J. Clark made partial payments totaling $108,146.13, leaving RLI with remaining losses of $96,902.09.
RLI filed suit in November 2024 against J. Clark Construction, AJC Leasing, LLC, and Albert John Clark III under a General Indemnity Agreement. When defendants failed to answer or respond, RLI moved for default judgment. In September 2025, the court granted the default judgment motion but withheld final judgment, instructing RLI to file a properly documented motion for attorney’s fees.
RLI subsequently filed its motion for attorney’s fees, requesting $12,286.50 in fees and $1,390.75 in costs, supported by detailed time records showing 53.5 hours of work by four attorneys and two paralegals.
The Court’s Holding
The court granted RLI’s motion for attorney’s fees in full. Applying Texas law and the lodestar method, the court found that RLI’s requested attorney’s fees and costs were reasonable and necessary for prosecution of the case. The court considered the Anderson factors for reasonableness, including the time and labor required, the difficulty of the questions involved, the fees customarily charged in the locality for similar services, and the amount involved and results obtained.
The court awarded attorney’s fees of $12,286.50 and costs of $1,390.75, for a total of $13,677.25. With this award, the court entered a final judgment by default against J. Clark Construction, AJC Leasing, LLC, and Albert John Clark III in the total amount of $110,569.34, comprising the $96,902.09 in bond losses plus the $13,677.25 in attorney’s fees and costs.
Key Takeaways
- Under Texas law, parties to a written contract may recover attorney’s fees if they are proven to be reasonable and necessary for prosecution of the case.
- The lodestar method—multiplying hours reasonably expended by reasonable hourly rates—governs fee awards for hourly-fee representations, subject to adjustment based on the Anderson factors.
- District courts retain discretion to reduce attorney’s fee awards when documentation is inadequate, but here RLI provided detailed time records and affidavits supporting the fees requested.
Why It Matters
This decision reinforces that indemnitors under surety bond indemnity agreements remain fully liable for not only the underlying bond losses but also for the costs and attorney’s fees incurred by the surety in investigating claims and enforcing its indemnification rights. General Indemnity Agreements typically define “loss” to include all costs and expenses, including attorney’s fees, in connection with the bonds or enforcing the agreement’s terms.
For surety companies and their counsel, the ruling confirms that well-documented fee applications, with detailed time records and hour-by-hour breakdowns, will support recovery of reasonable attorney’s fees even when defendants default and do not contest the fee petition. The decision also illustrates the practical importance of complying with court orders requiring supplemental evidence before final judgment is entered.