A Texas appeals court has determined that a law firm failed to substantiate its claim for damages in a breach of contract counterclaim against a vendor hired to provide litigation support services involving electronic discovery. A-Delta Overnight Legal Reproduction Servs., Corp. v. David W. Elrod, PLLC, No. 05-11-00708-CV (Tex. App., 5th Dist., Dallas, decided October 31, 2012). According to the court, one of the firm’s attorneys testified that the 65 hours required to resolve the plaintiff/vendor’s alleged breach was lost revenue to the law firm. She testified that this was time she “could not spend on – on other cases and files.” Her billing rate was $325, and the trial court awarded the firm $20,000 in lost profits.
Reversing, the court found “not more than a scintilla of evidence that [the law firm] suffered reasonably certain business losses resulting from [the plaintiff/vendor’s] breach.” The attorney did not show that she billed less that year because of the breach or “that but for the breach she would have billed more.” She also failed to indicate what particular business she would have worked on had she not been “dealing with” the vendor’s alleged breach. The court further found that no effort had been made to establish what expenses would have been attributable to the attorney’s billable hours. In this regard the court stated, “testimony that the firm netted a profit in 2009 (and in the years before and the year after) does not constitute proof that every hour [the attorney] might have billed had she not been dealing with [the] breach would have been net profit. Finally, there was no evidence presented that [the law firm] lost any specific business or any business opportunity because of the breach.”