Varner v. Cardenas

We recently held in Tony Gullo Motors I, L.P. v. Chapa that a prevailing party must segregate recoverable from unrecoverable attorney’s fees in all cases. 212 S.W.3d 299, 313 (Tex.2006). The court of appeals here correctly reversed and remanded for segregation; but as it defined recoverable fees too narrowly, we modify its judgment.

The Varners sold a ranch to the Carde-nases in December 1997 in return for cash and a promissory note. The note provided for ten annual installments due each December. The Cardenases paid the first installment in December 1998, but no others. In response to the…