      Case: 13-20412          Document: 00512880370              Page: 1      Date Filed: 12/23/2014




           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT     United States Court of Appeals
                                                       Fifth Circuit

                                                                                                 FILED
                                                                                          December 23, 2014
                                            No. 13-20412
                                                                                             Lyle W. Cayce
                                                                                                  Clerk
SYMETRA LIFE INSURANCE COMPANY; SYMETRA ASSIGNED
BENEFITS SERVICE COMPANY,

                                                 Plaintiffs - Appellants Cross-Appellees
v.

RAPID SETTLEMENTS, LIMITED,

                                                 Defendant - Appellee Cross-Appellant

------------------------------------------------------------------------------------------------------------
RAPID SETTLEMENTS, LIMITED,

                                                 Plaintiff-Appellee Cross-Appellant
v.

SYMETRA LIFE INSURANCE COMPANY; SYMETRA ASSIGNED
BENEFITS SERVICE COMPANY,

                                                 Defendants-Appellants Cross-Appellees




                     Appeals from the United States District Court
                          for the Southern District of Texas
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                                       No. 13-20412
Before STEWART, Chief Judge, and JONES and HIGGINSON, Circuit
Judges.

EDITH H. JONES, Circuit Judge:
       After nine years of litigation and a prior appeal to this court, three house-
keeping items are presented in this appeal: attorneys’ fees, damages, and the
scope of injunctive relief. Appellants Symetra Life Insurance and Symetra
Assigned Benefits Service (collectively “Symetra”) appeal the district court’s
refusal to award attorneys’ fees under the Texas and Washington State
Structured Settlement Protection Acts (“SSPAs”). 1                     Rapid Settlements
(“Rapid”) cross appeals the district court’s award of attorneys’ fees as damages
for tortious interference and the district court’s permanent injunction, arguing
that the injunction relies on an erroneous interpretation of the SSPAs.
       Regrettably, in view of the interminable proceedings thus far, we must
REVERSE and REMAND the district court’s denial of statutory attorneys’
fees, but we AFFIRM the district court’s award of damages and permanent
injunctive relief.
                                     BACKGROUND
       Symetra and Rapid are participants in the market for structured
settlement payments. Structured settlement payments are the result of tort
lawsuits. To reduce the cost of settling claims, a tort defendant negotiates to
pay the victims a large sum in installments over the victim’s lifetime. The tort
defendant then assigns the obligation to pay the installments to a company
like Symetra Assigned Benefits Service. Following the assignment, Symetra



       1 The district court “assume[d], without deciding, that the Texas and Washington Acts
apply to any transfer attempted that involves a Symetra annuitant.” Symetra Life Ins. Co.
v. Nat’l Ass’n of Settlement Purchasers, No. H-05-3167, 2012 WL 5880799, at*13 (S.D. Tex.
Nov. 21, 2012). Because the Texas and Washington Acts are identical in all ways relevant to
this appeal, and the parties do not argue otherwise in this court, we will refer to the statutes
collectively as the “SSPAs” or the “Acts.”
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                                       No. 13-20412
Assigned makes all future payments according to the settlement’s terms. To
fund the payments, Symetra Assigned buys annuities from Symetra Life
Insurance.
       A tort victim (called an “annuitant”) 2 is not always satisfied with this
arrangement—often he would prefer a large one-time payment in lieu of the
smaller payments over time. As a result of the gap between the defendant’s
and victim’s preferences, companies like Rapid (called “factors” in the industry)
offer to pay the annuitant a lump sum now in exchange for the right to collect
the annuitant’s future payments. The factor’s offer is usually much smaller
than the discounted present value of the future payments, but an annuitant
may accept the offer anyway, either because he does not understand the
transaction or he needs the money. The factor profits by purchasing the future
payments for much less than their worth.
       “[T]o protect litigants . . . from transferring their rights to future periodic
payments . . . for a lump sum that is inadequate[,]” many states enacted SSPAs.
RSL Funding, LLC v. Aegon Structured Settlements, Inc., 384 S.W.3d 405, 408
(Tex. App. 2012).        Under the Acts, anyone trying to acquire structured
settlement payment rights must disclose the amounts of future payments to be
transferred, the discounted present value of those payments, the gross amount
to be paid to the payee, the expenses to be deducted from the gross amount,
and the net amount the payee is to receive. Tex. Civ. Prac. & Rem. Code
§ 141.003(1)-(6); Wash. Rev. Code § 19.205.020(1)-(6); RSL Funding, 384
S.W.3d at 408. Even then, a transfer is effective only if a state court finds that



       2 In the structured settlement market, the tort victims are alternatively called
annuitants or payees. This title refers to their status vis-à-vis Symetra; because the victims
are the beneficiaries of annuities purchased from Symetra Life, they are called annuitants;
similarly, because they receive payments under obligations undertaken by Symetra Assigned
they are payees. For simplicity, this opinion will refer to the tort victims as annuitants.

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the “transfer is in the best interest of the payee, taking into account the welfare
and support of the payee’s dependents.”               Tex. Civ. Prac. & Rem. Code
§ 141.004(1); Wash. Rev. Code § 19.205.030(1). If a factor fails to comply with
these provisions, it is liable for any costs, including attorneys’ fees, “arising as
a consequence” of its non-compliance.            See Tex. Civ. Prac. & Rem. Code
§ 141.005(2)(B); Wash. Rev. Code § 19.205.040(2)(b).
       Rapid’s systematic violations of the SSPAs are the root of this lawsuit.
In the typical case, Rapid would contract with a Symetra annuitant, offering a
lump sum in exchange for future payments. Symetra Life Ins. Co. v. Rapid
Settlements, Ltd. (Permanent Injunction Opinion), 599 F. Supp.2d 809, 824
(S.D. Tex. 2008). Rapid would then seek state-court approval of the transfer.
Id. at 820-21. Often, Symetra would appear in the state-court proceeding to
object to the proposed transfer. E.g., id. The state court usually sustained
Symetra’s objection, holding that the proposed transfer either violated the
SSPAs or was not in the annuitant’s best interest. 3 Id.
       After the state courts rejected the transfers, disputes between Rapid and
the annuitants inevitably arose. Sometimes the annuitants tried to cancel the
contract, which is explicitly permitted under the SSPAs; other times, the
annuitants tried to resell the future payments to another factor; and some
refused to repay an advance Rapid made in anticipation of gaining state-court
approval of the transfer. Permanent Injunction Opinion, 599 F. Supp. at 824-
25.    Rapid’s standard contract required arbitration of “[a]ny dispute or
disagreement arising under this Agreement of any nature whatsoever



       3 The transfers were not in the best interests of the annuitants because Rapid was
offering only a fraction of the future payments’ actual worth. For example, Rapid contracted
with Abigail Dempsey to buy $96,000 in payments, with a discounted present value of
$64,016, for $9,000. Permanent Injunction Opinion, 599 F. Supp.2d at 820-21. Likewise,
Rapid contracted to buy Troy Walker’s $210,000 in payments, with a discounted present
value of $108,864, for $30,000. Id. at 823.
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                                 No. 13-20412
including but not limited to those sounding in constitutional, statutory, or
common law theories as to the performance of any obligations, the satisfaction
of any rights, and/or the enforceability hereof.” Id. at 824 (internal citation
and quotation marks omitted). Whatever the circumstances, Rapid invoked
the clause to resolve these disputes.
      The ensuing arbitrations were a sham—designed to circumvent the
SSPAs’ exclusive method for transferring future payments.                All the
arbitrations took place in Houston, Texas, where Rapid is located, regardless
of where the customer resided. Permanent Injunction Opinion, 599 F. Supp.
at 824-25. The (usually unrepresented) annuitants appeared telephonically,
in front of Rapid’s hand-picked arbitrators.       Id.   Under the guise of an
arbitration award for a breach of contract, Rapid essentially re-offered the
terms of the contract: Rapid would pay the annuitant the same lump sum if
the annuitant agreed to an arbitration award that transferred the same future
payments. Id. The annuitants agreed. Id. Then Rapid drafted an award
declaring “that the proposed transfer satisfies all applicable statutory
requirements.” Id. at 825. With award in hand, Rapid ran to state court to
convert the award into a judgment.          After confirmation, Rapid informed
Symetra that it owns the future payments—despite the state court’s initial
disapproval of the transfer.
      Seeing this scheme for what it was—a naked attempt to circumvent the
SSPAs—Symetra sued Rapid for tortious interference and violation of the
SSPAs.    As relief, Symetra asked for a declaration that Rapid’s scheme
contravened the SSPAs and that all of Rapid’s attempted transfers with
Symetra annuitants were ineffective.          Symetra also sought damages,
attorneys’ fees, and an injunction preventing Rapid from transferring future
payments via arbitration.       The district court preliminarily and then
permanently enjoined Rapid from conducting sham arbitrations with Symetra
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                                  No. 13-20412
annuitants to circumvent the SSPAs.           Symetra Life Ins. Co. v. Rapid
Settlements, Ltd. (Preliminary Injunction Opinion), No. H-05-3167, 2007 WL
114497, at *2 (S.D. Tex. Jan. 10, 2007); Permanent Injunction Opinion,
599 F. Supp.2d at 847. Symetra then sought summary judgment for attorneys’
fees on its SSPA and tortious interference claims. The district court denied
Symetra’s request for attorneys’ fees under the Acts, but awarded it attorneys’
fees incurred in a state court litigation as damages for tortious interference.
See Symetra Life Ins. Co. v. Nat’l Ass’n of Settlement Purchasers (Attorneys’
Fees Opinion), No. H-05-3167, 2012 WL 5880799, at *1 (S.D. Tex. Nov. 21,
2012). These appeals followed.
                                 DISCUSSION
        The parties present three issues on appeal. Symetra argues that the
district court should have awarded it attorneys’ fees under the SSPAs. Rapid
argues that the court wrongfully awarded Symetra fees incurred in Indiana
state court as damages for tortious interference. Rapid also contends that the
district court’s injunction erroneously limited Rapid’s ability to get first refusal
rights. We will address each issue in turn.
   I.     Statutory Attorneys’ Fees
   We first address whether the SSPAs entitle Symetra to attorneys’ fees
incurred in this litigation. Because the SSPAs require state court approval of
proposed transfers, this case implicates two levels of litigation (state and
federal), each of which could give rise to attorneys’ fees. Except for the Gross
litigation, discussed in Part II, Symetra has forsaken recovery of fees incurred
in state court.   Rather, Symetra seeks only fees incurred in this federal
litigation. The district court held that these fees were unrecoverable.           It
started with the premise that the SSPAs provide for attorneys’ fees only
“following a transfer” of structured settlement payments in violation of the
statute. According to the court, Symetra instead challenged “Rapid’s general
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                                  No. 13-20412
business practices of using arbitrations and similar tactics to effect a transfer,
which circumvented, and violated, the Acts.” Attorneys’ Fee Opinion, 2012 WL
5880799 at *14. The court noted that attorneys’ fees could not be awarded for
an injunction against future transfers. Id. at *15. Therefore, the court held
that Symetra’s fees were unrecoverable. Id. We disagree. Throughout this
litigation, Symetra challenged up to ten individual transfers. For at least some
of these, Symetra may be able to recover some of its attorneys’ fees.
Importantly, Symetra does not argue that the SSPAs allow recovery of all fees
incurred in this federal litigation. Nor could it. To be recoverable, fees must
arise from a factor’s non-compliance with the Acts. Fees incurred to enjoin
future violations of the Acts in unnamed cases do not arise from an SSPA
violation, they precede it and are unrecoverable.
        A. Standard of Review and Applicable Law
      In this diversity case, we apply state substantive law, but federal
procedural law. DP Solutions, Inc. v. Rollins, Inc., 353 F.3d 421, 427 (5th Cir.
2003). “‘State law controls both the award of and the reasonableness of fees
awarded where state law supplies the rule of decision.’” Walker Int’l Holdings,
Ltd. v. Republic of Congo, 415 F.3d 413, 415 (5th Cir. 2005) (quoting Mathis v.
Exxon Corp., 302 F.3d 448, 461 (5th Cir. 2002)). When the highest state court
is silent on an issue we must make an Erie guess, using the sources of law that
the state’s highest court would look to. DP Solutions, 353 F.3d at 430-31. In
both Texas and Washington the availability of attorneys’ fees under a
particular statute is a question of law subject to de novo review. See Holland
v. Wal–Mart Stores, Inc., 1 S.W.3d 91, 94 (Tex. 1999); Cosmopolitan Eng’g Grp.,
Inc. v. Ondeo Degremont, Inc., 149 P.3d 666, 669 (Wash. 2006).
      For attorneys’ fees, Texas and Washington follow the American Rule:
each party is responsible for its attorneys’ fees unless a contractual or statutory


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                                   No. 13-20412
provision says otherwise. Cosmopolitan Eng’g Grp., 149 P.3d at 669; Dall.
Cent. Appraisal Dist. v. Seven Inv. Co., 835 S.W.2d 75, 77 (Tex. 1992)
        To encourage compliance, the SSPAs make noncompliant factors liable
for attorneys’ fees: “Following a transfer of structured settlement payment
rights . . . the transferee shall be liable to the structured settlement obligor . . .
[for] reasonable costs and attorneys’ fees . . . arising as a consequence of the
transferee’s failure to comply with this chapter.” Tex. Civ. Prac. & Rem. Code
§ 141.005(2)(B); Wash. Rev. Code § 19.205.040(2)(b). This language creates
three prerequisites to recovery: the fees must follow a transfer of structured
settlement payment rights; there must be a violation of the SSPAs; and there
must be a causal connection between the violations and the fees incurred.
Because the district court held that Symetra’s federal court fees did not “follow
a transfer” of payment rights, it did not address the SSPA violations involved
in each case and the extent to which those violations caused Symetra to incur
fees.    We need discuss only the first element in depth; the second is
unchallenged; and the district court will determine the third element on
remand.
        The Acts define a transfer as “any sale, assignment, pledge,
hypothecation, or other alienation or encumbrance of structured settlement
payment rights made by a payee for consideration[.]” Tex. Civ. Prac. & Rem.
Code § 141.002(18); Wash. Rev. Code § 19.205.010(18). Under this definition,
a transfer undoubtedly occurs if a state court approves a sale of structured
settlement payments.       The more difficult question is whether a sale not
approved by a state court is a transfer. On this point, Texas and Washington
courts have held a transfer “includes the transfer agreement between the
payee and the transferee.” RSL Funding, 384 S.W.3d at 410; see also Rapid
Settlements, Ltd. v. Symetra Life Ins. Co., 139 P.3d 411, 413 (Wash. App. 2006).
Even if transfer agreements were not SSPA transfers, arbitration awards are.
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                                    No. 13-20412
See Rapid Settlements, Ltd. v. Green, 294 S.W.3d 701, 707-08 (Tex. App. 2009). 4
Consequently, Symetra can recover its fees, so long as it challenged annuitants’
contracts with, or arbitration awards in favor of, Rapid.
      This litigation involved ten annuitants, each of whom signed transfer
agreements with Rapid and were subjected to its sham arbitration scheme.
Symetra’s complaint referenced Rapid’s attempt to buy future payments from
Kenneth Gross and two unnamed Symetra annuitants. Symetra’s preliminary
injunction motion asked the district court “to enjoin Rapid from taking any
action . . . with respect to the proposed transfer of [Candy Ann] Richardson’s
payment rights, pending further action by this court.” Subsequently, Symetra
sought to enjoin Rapid from taking further action with respect to five other
annuitants: Mary Foreman, Thomas Remedies, Paul Patterson, Leslie Dean,
and Robert Hargette. Preliminary Injunction Opinion, 2007 WL 114497 at *5.
The district court eventually “enjoined [Rapid] from taking further action to
compel Symetra to comply with the judgments entered in the Richardson,
Patterson, and Gross matters pending the hearing on a permanent injunction”
and required Rapid to further inform the court about the status of six of the
contested transfers. Id. at *36. At the permanent injunction hearing Symetra
showed that three additional Symetra annuitants, Abigail Dempsey, Robert
Ayars, and Troy Walker, were subjected to Rapid’s arbitration scheme.
Permanent Injunction Opinion, 599 F. Supp.2d at 820-24.



      4 We assume Washington courts would find arbitration awards to be transfers given
the plain language and purposes of the Acts. The statute’s list is meant to encompass all
possible attempts to transfer future payments including the “sale, assignment, pledge,
hypothecation, or other alienation or encumbrance.” Wash. Rev. Code § 19.205.010(18)
(emphasis added). It makes only one exception for “security interest[s] in structured
settlement payment rights under a blanket security agreement entered into with an insured
depository institution . . . .” Wash. Rev. Code § 19.205.010(18). An arbitration award
purporting to transfer future payments, like the ones Rapid obtained, undoubtedly is an
encumbrance on or alienation of those payments.
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                                  No. 13-20412
      This litigation, moreover, was Symetra’s first opportunity to challenge
most of the arbitration awards.         Symetra did not participate in the
arbitrations, id. at 824, nor did it receive notice of Rapid’s attempt to confirm
the arbitration awards until the time to challenge them was effectively over.
Id. at 825. The Acts do not limit recovery of attorneys’ fees to state court
proceedings; a party can recover in any proper forum subject to the other
requirements of the Acts.      Symetra’s claim for fees as to each individual
“follow[ed] the transfer” of structured settlement payments by means of the
sham arbitrations.     Therefore, the SSPAs allow Symetra to recover some
portion of its fees.
      Symetra’s failure to seek fees in the state SSPA proceedings does not
mean it has not challenged any specific transfers here. It is true that, in
several cases, Rapid gave Symetra notice of the attempted transfer when it
sought state court approval.      See, e.g., Preliminary Injunction Opinion,
2007 WL 114497 at *6. If Symetra received notice, it objected and won. Id. In
those proceedings, as the district court correctly noted, although Symetra could
have asked for attorneys’ fees, it did not. Attorneys’ Fee Opinion, 2012 WL
5880799 at *15. And its failure to do so bars recovery of fees incurred in those
proceedings. But this case is distinct from the state court proceedings because
Symetra challenged different transfers: the arbitration awards obtained in the
cases of Kenneth Gross, Candy Ann Richardson, Mary Foreman, Thomas
Remedies, Paul Patterson, Leslie Dean, Robert Hargette, Abigail Dempsey,
Robert Ayars, and Troy Walker.         The court awarded Symetra specific
injunctive relief for three of those transfers, and the permanent injunction
covered the other transfers.
      Moreover, Rapid’s argument—that failure to seek fees in state court
means no specific transfers were challenged here—ignores that there can be
separate SSPA violations, occurring at different times, each of which
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                                  No. 13-20412
potentially gives rise to an attorneys’ fees claim. This case is a perfect example.
Rapid first violated the SSPAs by proposing a transfer that a state court
ultimately rejected. It then committed a second violation when it tried to
transfer the payments via arbitration anyway. That Symetra declined to seek
fees in the first proceeding cannot bar its attorneys’ fee claim for the second
violation on which the federal case is premised.
      In sum, the district court erroneously held that Symetra could not
recover any fees under the SSPAs. As the foregoing shows, specific transfers
were challenged throughout this litigation. Symetra can recover some portion
of its fees related to some of those transfers.
      We stress, however, that under Texas law, Symetra is “required to
segregate fees between claims for which they are recoverable and claims for
which they are not.” Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 313
(Tex. 2006).   Fees that “relate solely to a claim for which such fees are
unrecoverable” must be segregated. Id. To put a finer point on it, Symetra
must separate fees related to the specific annuitants for SSPA violations from
the fees incurred to enjoin future SSPA violations in unnamed cases and fees
incurred to develop non-SSPA claims.         A court can excuse the failure to
segregate only when discrete legal services advance both a recoverable and
unrecoverable claim. Id. at 313-14.
      Rapid argues that the district court denied Symetra’s fee request
partially because of inadequate segregation, hence remand is inappropriate.
At the time, however, Symetra believed all of its fees were recoverable, either
under the SSPA or as damages for tortious interference. See Attorneys’ Fee
Opinion, 2012 WL 5880799 at *16-17. In addressing fee segregation, the
district court’s opinion is unclear. Its segregation discussion begins by noting
that “Symetra did not attempt to segregate its fees [ ] for tortious interference”
from its other claims. Id. On its own, this suggests the court denied Symetra’s
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claim for fees as damages for tortious interference because of inadequate
segregation. But then the court concludes, “[t]he record continues to provide
an insufficient basis to award Symetra its fees and costs incurred in this
litigation on the basis of the attorney-fee provisions in the Texas and
Washington Acts.” Id. at 17. Because Symetra moved for fees under multiple
theories and the district court ruled no specific transfers were challenged here,
it is unclear which fee claim was denied on segregation grounds. Accordingly,
remand is appropriate. But Symetra bears the burden of segregating fees, and
the district court retains discretion to deny Symetra’s attorneys’ fees request
for failure to segregate. 5
   II.       Fees as Damages for Tortious Interference
         Symetra also sought fees incurred in state court with respect to one
annuitant, Kenneth Gross, as damages for tortious interference under Texas
law.     The district court granted Symetra’s request and awarded $87,859.
Attorneys’ Fee Opinion, 2012 WL 5880799 at *20. Rapid now appeals that part
of the district court’s ruling.
         An attorneys’ fee award in Texas will not be disturbed absent an abuse
of discretion. Tex. Mut. Ins. Co. v. Sara Care Child Care Ctr., Inc., 324 S.W.3d
305, 319 (Tex. App. 2010); Am. Rice, Inc. v. Producers Rice Mill, Inc., 518 F.3d
321, 341 (5th Cir. 2008).          However, any “findings of fact regarding the
reasonableness of attorney’s fee awards are reviewed for clear error.”
American Rice, 518 F.3d at 341.



         For example, the parties settled Thomas Remedies’s case during the litigation and
         5

the district court’s injunction did not address it. Preliminary Injunction Opinion, 2007 WL
114497 at *12-13, 36. On remand, we leave it to the district court to decide whether, under
these circumstances, Symetra can recover any fees related to the Remedies transfer.
       Rapid also argues that Symetra did not make the required Rule 26 disclosures, and
therefore, Symetra cannot recover its fees. We do not address this argument, however,
because it was raised for the first time in Rapid’s reply brief. Cavallini v. State Farm Mut.
Auto Ins. Co., 44 F.3d 256, 260 n.9 (5th Cir. 1995).
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       Under Texas law, “‘necessary and reasonable attorneys’ fees and costs
even though expended and incurred in previous litigation can be recovered as
proper damages in a later suit based on tortious interference of [sic] contract.’”
DP Solutions Inc., 353 F.3d at 431 (citing Texas Beef Cattle Co. v. Green,
883 S.W.2d 415, 430 (Tex. App. 1994) rev’d on other grounds, 921 S.W.2d 203
(Tex. 1996)). 6 But the “exception is limited to situations where the natural and
proximate results and consequences of prior wrongful acts had been to involve
a plaintiff . . . in litigation.”      Id. (internal citation and quotation marks
omitted).
       The natural and proximate result of Rapid’s conduct toward Gross was
to drag Symetra into Indiana state court litigation, and therefore, the district
court’s damage award was proper. Like the others, Gross contracted to sell his
future payments to Rapid. Attorneys’ Fee Opinion, 2012 WL 5880799 at *17-
20. Rapid did not obtain approval to transfer Gross’s future payments in
Indiana state court. Id. Later, Rapid alleged that Gross breached the contract
and compelled arbitration. Id. Gross “agreed” to an arbitration award that
transferred all future payments to Rapid. Id. Rapid sought, and obtained,
confirmation of the arbitration award in Texas state court. Id. Symetra, after
finding out about the award in July 2005, successfully moved the Texas trial
court to vacate it. Id. On appeal, the Texas First Court of Appeals held that



       6  Texas appellate courts disagree on the recoverability of attorneys’ fees as damages.
See Martin-Simon v. Womack, 68 S.W.3d 793, 797-98 (Tex. App. 2001) (“Under various
circumstances, some of our sister courts of appeals have adopted an equitable exception to
the general rule of non-recovery of attorney’s fees in tort cases. However, neither the Texas
Supreme Court nor this court has adopted any [ ] exception to this rule and we decline to do
so in this case.”) (footnotes omitted). And the Texas Supreme Court has not resolved the
conflict, yet. See Akin, Gump, Strauss, Hauer & Feld, L.L.P. v. Nat’l Dev. & Research Corp.,
299 S.W.3d 106, 119 (Tex. 2009) (“we need not and do not address whether the [litigation
exception] should be adopted as Texas law”). Nevertheless, because this Court has already
decided that the Texas Supreme Court would adopt the exception, we will continue to assume
attorneys’ fees are recoverable as damages. See D.P. Solutions, 353 F.3d at 430-31.
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the trial court lacked jurisdiction to vacate its judgment, but refused to enforce
the arbitration award against Symetra. Id.
       While all this was happening, Gross contracted with Kent Niemeier to
buy land. When Gross failed to complete the deal, Niemeier sued him and an
Indiana court awarded Niemeier a nearly $113,000 judgment. Attorneys’ Fee
Opinion, 2012 WL 5880799 at *17-20. In November 2005, Niemeier garnished
a $150,000 payment that Symetra owed Gross. Id. In August 2006, before
Symetra was scheduled to make the $150,000 payment, Rapid notified
Symetra of the arbitration award and demanded the payment. Id. Based on
the Indiana garnishment order and the Texas Court of Appeals’ ruling,
Symetra refused.        Id.   Meanwhile, Niemeier moved to hold Symetra in
contempt for not paying the garnished funds. Id. Symetra appeared in Indiana
state court to contest the contempt motion. Id. It impleaded Rapid and asked
for a declaration that Rapid’s attempted transfer via arbitration violated the
Indiana Structured Settlement Protection Act. Id. The Indiana court agreed
and declared Rapid’s attempted transfer invalid. See Niemeier v. Gross, No.
65C01-0504-PL-00105, 2008 WL 4892985 (Ind. Cir. Ct. Apr. 10, 2008).
       Contrary to Rapid’s assertions, Symetra’s involvement in the Indiana
litigation was completely foreseeable. Rapid was on notice, at least since 2006
and probably earlier, that its arbitration scheme violated various State
Structured Settlement Protection Acts. 7 An annuitant like Gross—a victim of


       7 See In re Rapid Settlements Ltd.’s Application for Approval of Structured Settlement
Payment Rights, 136 P.3d 765, 774-76 (Wash. App. 2006) (North Carolina); Allstate
Settlement Corp. v. Rapid Settlements, Ltd., No. 06-4989, 2007 WL 1377667 (E.D. Penn., May
8, 2007) (Pennsylvania); Allstate Settlement Corp. v. Rapid Settlements, Ltd., 559 F.3d 164
(3d Cir. 2009) (same); Pac. Life Ins. Co. v. Rapid Settlements, Ltd., No. 06-CV-6554L, 2007
WL 2530098 (W.D.N.Y., Sept. 5, 2007) (New York); Pac. Life Ins. Co. v. Rapid Settlements,
Ltd., 309 F. App’x 459 (2d Cir. 2009) (unpublished) (same); R&Q Reins. Co. v. Rapid
Settlements Ltd., No. 06-14239-CIV, 2007 WL 2330899 (S.D. Fla., Aug. 13, 2007) (Florida);
Allstate Life Ins. Co. v. Rapid Settlements Ltd, 328 F. App’x 289, 290 (5th Cir. 2009)
(unpublished) (per curiam) (Mississippi).
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                                        No. 13-20412
Rapid’s sham-arbitration scheme—still maintained a claim to his annuity
payments because the transfers violated the Acts. Accordingly, a dispute could
arise among the annuitant, Rapid, and Symetra over the proper payee. If an
annuitant could assert a competing claim to the funds, one can imagine an
annuitant’s creditor asserting its own claim. Although Rapid may not have
foreseen the exact nature of the dispute, it must have known the funds it
sought could be subject to conflicting claims.                To resolve these disputes,
litigation would almost surely ensue.
       Nevertheless, Rapid argues Symetra cannot recover fees for the Gross
litigation because Symetra “voluntarily interjected itself” into the Gross
litigation; the attorneys’ fees must be incurred fighting third parties, and these
were not; there must be a history of prior acts before awarding attorneys’ fees
as damages, and there is none; and Symetra’s status as a garnishee in the
Indiana state court bars recovery. None of these arguments has merit.
       Rapid’s assertion that Symetra “voluntarily interjected” itself into the
Gross litigation is inaccurate. 8 Symetra did not enter the Indiana litigation
voluntarily—it was forced. The $150,000 payment owed to Gross was subject
to conflicting claims by Rapid and Niemeier. Given the competing claims,
Symetra withheld the money until it was sure whom to pay.                          Only after
Niemeier moved to hold Symetra in contempt did it enter the fray. Thus,
Symetra’s entry wasn’t voluntary, it was compulsory. Once involved, Symetra
had to litigate the entire dispute once and for all. Gross was scheduled to



       8 Relatedly, Rapid contends Symetra cannot recover because it initiated the
underlying litigation. Like its “voluntarily interjected” argument, this too is meritless.
Rapid’s own brief points out, if its conduct forces Symetra “to prosecute or defend litigation in
another proceeding,” Symetra can recover. In the Indiana litigation, Symetra was both
prosecuting and defending various actions. It was defending itself against contempt and
garnishment orders and prosecuting Rapid for its unlawful behavior via a third-party
complaint for declaratory relief. The fact that Symetra initiated the underlying litigation
does not bar recovery.
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                                      No. 13-20412
receive payments from Symetra until 2036, and Rapid bought most of these
payments. Preliminary Injunction Opinion, 2007 WL 114497 at *10. It is
almost certain that future creditors of Gross would try to access the funds,
leading to conflicting claims between the creditor and Rapid. Symetra could
not—and should not—wait for these creditors to sue it in the future, when the
whole dispute could be definitively settled in a forum it was already forced to
be in. 9 Future litigation was foreseeable and inevitable.
       Rapid also contends that Symetra cannot recover attorneys’ fees because
its actions did not force Symetra to litigate with third parties—it only litigated
against Rapid. This is not only factually inaccurate, but legally baseless.
Symetra was forced to litigate against Niemeier, a third party, in the Indiana
garnishment proceeding. Regardless, under Texas law, attorneys’ fees are
recoverable even if they were incurred fighting the tortious interferer. See
Standard Fire Ins. Co. v. Stephenson, 963 S.W.2d 81, 90 (Tex. App. 1997).
Therefore, Rapid’s involvement in the Gross litigation does not prevent
Symetra’s recovery.
       Moreover, Rapid contends there must be a history of prior wrongful acts
before a court can award attorneys’ fees as damages.                 Because the Gross
arbitration was its first bad act, there “is no basis to assert that there were . . .
prior wrongful actions.” But that isn’t the law. In Texas, a single wrongful act
is enough to recover damages. See Baja Energy, Inc. v. Ball, 669 S.W.2d 836,
839 (Tex. App. 1984) (awarding attorneys’ fees based on a single bad act).
Rapid cites no cases suggesting otherwise. Moreover, the statement from DP
Solutions, Inc. v. Rollins, Inc., on which Rapid relies, is taken out of context.



       9 For these same reasons, it is unreasonable to expect Symetra to file an interpleader
action. The Gross litigation involved twenty-two years’ worth of payments, all of which were
subject to conflicting claims. It would make no sense for Symetra to kick the can down the
road, knowing that future litigation with Rapid over the Gross payments was inevitable.
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                                  No. 13-20412
This court’s reference to “prior wrongful acts” dealt with the existence of a
litigation exception in Texas law. 353 F.3d at 431. In DP Solutions, the only
prior wrongful act supporting attorneys’ fees was Rollins’s attempt to hire DP
Solutions’ employees. Id. at 426. Nevertheless, this court upheld the jury’s
award of attorneys’ fees.
      Finally, it makes no difference, as Rapid claims, that Symetra was a
garnishee in Indiana state court. Although Texas courts have stated generally
there is no contractual or statutory ground for attorneys’ fee recovery in
garnishment proceedings, none has held that garnishee status makes fees
unrecoverable as damages. See Henry v. Ins. Co. of N. Am., 879 S.W.2d 366,
368-69 (Tex. App. 1994). The only requirement, fully satisfied here, is that the
fees are the natural and probable consequence of the tortious act.
   III.   Terms of the Permanent Injunction
      Rapid perfunctorily appeals one aspect of the district court’s permanent
injunction. Specifically, Rapid argues that the SSPAs do not require explicit
state court approval of first-refusal rights. In fact, Rapid asserts many state-
mandated disclosure forms require listing first-refusal rights. Therefore, the
district court’s requirement that state court transfer orders also list first-
refusal rights contravenes the SSPAs. We find no error, however, in the court’s
analysis of first refusal rights under the SSPAs
      This court reviews permanent injunctions for abuse of discretion.
N. Alamo Water Supply Corp. v. City of San Juan, Tex., 90 F.3d 910, 916-17
(5th Cir. 1996). An abuse of discretion occurs when the district court “(1) relies
on clearly erroneous factual findings when deciding to grant or deny the
permanent injunction[,] (2) relies on erroneous conclusions of law when
deciding to grant or deny the permanent injunction, or (3) misapplies the
factual or legal conclusions when fashioning its injunctive relief.” Id.


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                                  No. 13-20412
      The district court’s holding—that the SSPAs require court approval of
first-refusal rights—is correct. A transfer is “any sale, assignment, pledge,
hypothecation, or other alienation or encumbrance of structured settlement
payment rights[.]” Tex. Civ. Prac. & Rem. Code § 141.002(18); Wash. Rev. Code
§ 19.205.010(18). Washington courts have held that first-refusal rights are
encumbrances under its Act. See In re Rapid Settlements Ltd.’s Application for
Approval of Structured Settlement Payment Rights, 136 P.3d 765, 770 (Wash.
App. 2006) (holding that first-refusal rights are “an additional means by which
the transfer agreement encumbers all of the periodic payments”). Texas courts
are likely to follow suit, given that a transfer includes “any encumbrance” of
future payment rights. Tex. Civ. Prac. & Rem. Code § 141.002(18) (emphasis
added). Because all transfers must be “approved in advance in a final court
order,” Tex. Civ. Prac. & Rem. Code § 141.004; Wash. Rev. Code § 19.205.030,
the Acts require Rapid to get explicit court approval of first-refusal rights.
      Rapid argues that because the disclosure of first-refusal rights is already
required by state-mandated disclosure forms, requiring state court orders also
to identify the first-refusal rights contravenes the SSPAs. This is nonsense.
Rapid cites no state-mandated forms to support its position. Even if it had, the
fact that a form requires disclosure of first-refusal rights is consistent with
requiring that they also be listed in the state court’s order. The disclosure
statement is provided to the annuitant three days before he signs a transfer
agreement.    Tex. Civ. Prac. & Rem. Code § 141.003; Wash. Rev. Code
§ 19.205.020. This requirement does not change a factor’s obligation to obtain
explicit court approval of all transfers, including first-refusal rights. To decide
whether a transfer is in the best interest of the annuitant, the state court needs
to know exactly what the transfer consists of.              The district court’s
interpretation correctly applies the SSPAs.


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                              No. 13-20412
                            CONCLUSION
       For these reasons, we AFFIRM in part, REVERSE in part, and
REMAND for further proceedings consistent herewith.




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