Opinion
No. 01-01-01242-CV
Opinion issued October 13, 2005.
On Appeal from the 80th District Court, Harris County, Texas, Trial Court Cause No. 98-20396.
Panel consists of Justices TAFT, KEYES, and HANKS.
OPINION ON REMAND
After a confidential settlement, the trial court awarded Joe Crabb $117,150 in guardian ad litem fees and an additional $55,000 for appellate fees. In three issues, Maria Jocson, M.D. and Woman's Hospital of Texas, Inc. (" the hospital") argue that the trial court abused its discretion in awarding Crabb $120,077.75 in guardian ad litem fees in the underlying medical malpractice suit. In our original opinion in this case, we held that the appellants waived their complaints by failing to provide an adequate record for review and by failing to pursue their objections during the course of pre-trial discovery, and we affirmed the award. Jocson v. Crabb, 98 S.W.3d 273 (Tex.App.-Houston [1st Dist.] 2003). The Texas Supreme Court subsequently granted the appellants' petition for review, reversed this Court's judgment, and ordered us to review the appeal on the merits. Jocson v. Crabb, 133 S.W.3d 268 (Tex. 2004). We reverse and render.
In addition to the $117,150 in guardian ad litem fees that he was awarded, the trial court ordered that Crabb be reimbursed for the $2,927.75 in expenses that he incurred when he consulted a law firm that specializes in creating trusts.
Background
On April 30, 1998, Adrienne and David Draper sued Texas Woman's Hospital, Dr. Jocson, and other healthcare providers for damages allegedly sustained as a result of medical malpractice during the birth of their daughter. They claimed that their daughter suffered brain damage during the delivery. On December 12, 1998, after approximately eight months of pre-trial activity, the trial court appointed Crabb as the guardian ad litem for the Drapers' daughter. On December 30, John F. Irwin, M.D., who is not a party to this appeal and who bears no responsibility under the trial court's order for payment of the guardian ad litem fees, filed a motion for reconsideration of the appointment of the guardian ad litem. The trial court denied the motion. No other party presented any further complaint regarding the appointment of Crabb as the guardian ad litem.
On October 1, 2001, after the Drapers reached a confidential settlement with all the defendants in the case, the trial court conducted a hearing on Crabb's request for guardian ad litem fees. The only two witnesses who testified during the hearing were Crabb and Jimmy Williamson, the Drapers' trial attorney.
The settlement is final, and the Drapers are not parties to this appeal.
Crabb testified that he has been a licensed attorney for more than 30 years and has served as a guardian ad litem between 30 and 50 times. He testified that this was an extremely complex medical malpractice case because "the medical professionals differed in their opinion." Crabb submitted a 42-page fee invoice that reflected 585.75 hours of work billed at $200 an hour and totaled $117,150. In addition, Crabb testified that he had independently, without leave of court, retained legal counsel for the purpose of creating a trust for the Drapers' child. Crabb sought an additional $2,927.75 to pay the firm of Crain, Caton James for their services concerning the trust. Finally, Crabb asked the trial court for the following appellate fees: $30,000 in the event that an unsuccessful appeal was filed and pursued in the court of appeals, $10,000 in the event that a petition for review was filed and denied in the Texas Supreme Court, and $15,000 in the event that the supreme court granted a petition for review and affirmed the award. The trial court awarded Crabb all the fees that he submitted.
Ad Litem Fees
In three issues, Dr. Jocson and the hospital argue that (1) the trial court abused its discretion in its award of ad litem fees to Crabb for his work in the trial court, (2) there is legally and factually insufficient evidence to support the award of ad litem fees to Crabb, and (3) the trial court abused its discretion in the award of ad litem fees to Crabb on appeal.
Standard of Review
Rule 173 vests the trial court with the authority to appoint a guardian ad litem for a party represented by a next friend or guardian only if: "(1) the next friend or guardian appears to the court to have an interest adverse to the party, or (2) the parties agree." Tex. R. Civ. P. 173.2. When the conflict of interest no longer exists, the trial court should remove the ad litem. Brownsville-Valley Reg'l Med. Ctr., Inc. v. Gamez, 894 S.W.2d 753, 755 (Tex. 1995); J.D. Abrams, Inc. v. McIver, 966 S.W.2d 87, 97 (Tex.App.-Houston [1st Dist.] 1998, pet. denied).
Rule 173 authorizes the trial court to award an ad litem a reasonable fee for his services, and the determination of the amount of compensation awarded to an ad litem lies within the sound discretion of the trial court. Simon v. York Crane Rigging Co., 739 S.W.2d 793, 794 (Tex. 1987). We may not overturn a fee award absent evidence showing a clear abuse of discretion. Id. The review includes, but is not limited to, the legal and factual sufficiency of the evidence. Garcia v. Martinez, 988 S.W.2d 219, 222 (Tex. 1999).
The Texas Supreme Court issued final orders amending rule 173, effective February 1, 2005, in all pending cases. The amended rule describes the roles of a guardian ad litem as follows:
(a) Court Officer and Advisor. A guardian ad litem acts as an officer and advisor to the court.
(b) Determination of Adverse Interest. A guardian ad litem must determine and advise the court whether a party's next friend or guardian has an interest adverse to the party.
(c) When Settlement Proposed. When an offer has been made to settle the claim of a party represented by a next friend or guardian, a guardian ad litem has the limited duty to determine and advise the court whether the settlement is in the party's best interest.
(d) Participation in Litigation Limited. A guardian ad litem:
(1) may participate in mediation or a similar proceeding to attempt to reach a settlement;
(2) must participate in any proceeding before the court whose purpose is to determine whether a party's next friend or guardian has an interest adverse to the party, or whether a settlement of the party's claim is in the party's best interest;
(3) must not participate in discovery, trial, or any other part of the litigation unless:
(A) further participation is necessary to protect the party's interest that is adverse to the next friend's or guardian's, and
(B) the participation is directed by the court in a written order stating sufficient reasons.
Tex. R. Civ. P. 173.4. The comment to this newly-revised rule specifically references the case before us on remand. The comment reads, in part, as follows:
[T]he responsibility of the guardian ad litem as prescribed by the rule is very limited, and no reason exists for the guardian ad litem to participate in the conduct of the litigation in any other way or to review the discovery or the litigation file except to the limited extent that it may bear on the division of settlement proceeds. See Jocson v. Crabb, 133 S.W.3d 268 (Tex. 2004) (per curiam). A guardian ad litem may, of course, choose to review the file or attend proceedings when it is unnecessary, but the guardian ad litem may not be compensated for unnecessary expenses or services.
Tex. R. Civ. P. 173 cmt. 3.
Crabb argues that the new rule does not apply to him because it did not go into effect until after the resolution of this case in the trial court. During oral argument, the parties agreed that the new rule would control the trial court's actions in the event that we remanded the case to the trial court. The parties disagreed, however, as to its application in this appeal.
In their first two issues, Dr. Jocson and the hospital argue that the trial court abused its discretion in the award of ad litem fees to Crabb for work done in the trial court because there was no evidence or insufficient evidence to support the award. To support this contention, they assert that there was no conflict between the interests of the minor child and the parents that justified Crabb's work or fees in this case and that Crabb was essentially doing work that was the responsibility of the Drapers' lawyer.
No Conflict
We need not determine whether the old rule or new rule applies to this appeal because both versions require the presence of a conflict to justify a guardian's fee. The former rule 173 provided that, "When a minor . . . is represented by a next friend . . . who appears to the court to have an interest adverse to such minor, . . . the court shall appoint a guardian ad litem for such person and shall allow him a reasonable fee for his services. . . ." Tex. R. Civ. P. 173 (amended 2005). A trial court abuses its discretion if it appoints a guardian ad litem in the absence of a conflict or if the trial court does not discharge the guardian ad litem when the conflict has ended. See Gamez, 894 S.W.2d at 755.
During the ad litem hearing, Crabb repeatedly testified that it was the continued presence of "money" that created a conflict of interest and justified the fees that he charged as the guardian ad litem in this case. Crabb testified that, "anytime you have money involved there is a conflict of interest. No matter how noble someone may be, money taints everything." Accordingly, Crabb argues that the entire guardian ad litem fee submitted was reasonable under rule 173 and the trial court did not err in awarding this fee. We disagree.
Generalized testimony regarding the continued presence of "money" in a lawsuit is not legally sufficient evidence to support a trial court's finding that there was a conflict of interest requiring a guardian ad litem's services. We recognize that a guardian ad litem may be needed when a party's next friend or guardian has an interest in the division of settlement proceeds. See Tex. R. Civ. P. 173 cmt. 3; Byrd v. Woodruff, 891 S.W.2d. 689, 705 (Tex.App.-Dallas 1994, writ denied). This conflict of interest may arise because both the party and her next friend or guardian are competing to be paid from the same fund. Byrd, 891 S.W.2d at 705. However, in this case, there was no evidence offered at the hearing regarding the division of settlement proceeds, the date when the final settlement was reached, how much time Crabb spent performing the duties of a guardian ad litem after this date or any other evidence necessary for the trial court to conclude that the entire fee amount or any portion thereof requested by Crabb was incurred because of a conflict of interest in the division of the settlement proceeds.
Despite the testimony presented at the hearing, the trial court awarded Crabb the entire amount of the ad litem fees that he submitted. The fees awarded were not identified by either Crabb or Williamson as having been incurred as a result of a conflict regarding the division of the settlement proceeds in this action. The award included, but was not limited to $19,000 for reviewing 378 letters, $5,250 for reviewing 105 deposition notices, and $35,900 for attending more than 50 depositions. The trial court also awarded fees to Crabb for reading the transcripts from at least 10 additional depositions and for his attendance at more than 10 hearings in this case. Under these circumstances, we find that the testimony and evidence presented at the hearing was legally insufficient to support the award, and the trial court abused its discretion in awarding these fees.
Crabb testified that it was necessary for him to attend the depositions in person to evaluate each witness's demeanor. Dr. Jocson and the hospital routinely objected to Crabb's presence at the depositions.
Rule 173.6 provides that guardians ad litem may be "reimbursed for reasonable and necessary expenses incurred. . . ." Tex. R. Civ. P. 173.6. Although he did not obtain leave of court to incur the legal fees paid to the law firm of Crain, Caton James, Crabb provided legally sufficient evidence to establish that these fees were necessary to effectuate the settlement of the minor child. Crabb testified that he sought the expertise of Crain, Caton James to assist him in creating a trust for the minor child. Accordingly, we hold that the trial court did not abuse its discretion in awarding the fees incurred by Crabb for services rendered by Crain, Caton James.
We sustain issues one and two and render judgment awarding Crabb ad litem fees of $2,927.75 for reimbursement of the Crain, Caton James's fees. Because of our holding on these issues, we need not address the issue relating to the award of ad litem fees on appeal.
The award of appellate fees was contingent upon an unsuccessful appeal in the court of appeals by Dr. Jocson and the hospital.
Conclusion
We hold that the trial court abused its discretion in awarding the ad litem fees to Crabb, we reverse the judgment of the trial court regarding the award of ad litem fees, and we render judgment that Crabb be reimbursed $2,927.75 for Crain, Caton James's fees.