Opinion
No. 02-01-080-CV.
Delivered February 6, 2003.
Appeal from the 141st District Court of Tarrant County.
PANEL A: CAYCE, C.J.; DAY and DAUPHINOT, JJ.
The Law Offices of Windle Turley, P.C., and Thomas B. Cowart, Dallas, Texas, Attorney for Appellant.
Russell, Brown Sawicki, L.L.P., and Michael G. Sawicki, Dallas, Texas, Attorney for Appellee.
OPINION
Introduction
The primary issue we must decide in this case is whether the trial court properly granted appellees summary judgment on the Law Offices of Windle Turley's (LOWT's) petition in intervention to recover attorney's fees under several contingent fee agreements. We must also decide whether the trial court properly awarded appellees appellate attorney's fees. Because we conclude that summary judgment for appellees on LOWT's contingency fee claim is proper, but that the award of appellate attorney's fees is not, we will affirm in part and reverse and render in part.
Appellees are Robert L. French, individually and on behalf of the estate of Velma Rae French, deceased, Robert R. French, Gwenda Dunn, Linda Gilliland, and Robin French (the Frenches).
Background Facts and Procedural History
Beginning in December 1995, all of the appellees except Gwenda Dunn signed contingent fee agreements in which they retained LOWT to represent them in a medical malpractice suit. LOWT attorney Michael G. Sawicki filed the medical malpractice suit on the Frenches' behalf on September 5, 1997 and served as LOWT's lead counsel for that suit. In February 2000, Sawicki left LOWT to start his own law firm. By that time, LOWT had incurred $32,585.48 in out-of-pocket expenses prosecuting the Frenches' claims. John Kirtley took over the case on LOWT's behalf. Shortly thereafter, Robert L. French instructed Kirtley not to perform any more work on the case until Robert could speak with LOWT's president, Windle Turley. Turley assured the Frenches that LOWT was capable of handling their case and stood ready and willing to do so.
On April 20, 2000, Robert L. French asked for the case files and informed LOWT that he was going to hire Sawicki to try the case. Robert explained that he was taking this action because, without Sawicki, LOWT did not have anyone well-versed in trying medical malpractice cases. In particular, Robert expressed his concern over Kirtley's lack of medical malpractice experience. Robert also reminded LOWT that the case had previously been delayed when the Frenches lost their first attorney (before LOWT) and expressed concern over further delay that could be caused if Sawicki was not allowed to continue handling the case. In addition, Robert offered to reimburse LOWT for its out-of-pocket expenditures in the event the Frenches prevailed on their medical malpractice claims and urged LOWT to work out a joint venture fee agreement with Sawicki.
On April 28, 2000, LOWT filed a notice of assignment of attorney's fees, asserting that the Frenches had terminated the contract without good cause and that LOWT was therefore entitled to recover the full contingency fee and its expenses under the contract.
On May 10, 2000, LOWT filed an agreed motion to withdraw substituting Sawicki and his new firm as lead counsel for the Frenches. Also on May 10, LOWT filed a first supplemental motion to withdraw, averring that the withdrawal was not voluntary and that the Frenches had unilaterally terminated LOWT's representation. The motion further stated: "Although [LOWT is] willing to continue its representation of the Plaintiffs, in compliance with the wishes of Mr. French, on behalf of all Plaintiffs, Plaintiffs' counsel request that [LOWT] be allowed to withdraw as attorneys of record and substitute Mr. Michael G. Sawicki . . . as lead counsel for Plaintiffs." The trial court granted LOWT's first supplemental motion to withdraw on May 11.
In July 2000, LOWT filed a petition in intervention in the Frenches' medical malpractice suit, seeking the full fee under the contingent fee agreements. The Frenches moved to strike the petition in intervention. Thereafter, however, in October and November 2000, the Frenches repeatedly asked LOWT to take the case back and sent their case files back to LOWT's offices. LOWT steadfastly refused to take the case back, citing Robert L. French's filing of a grievance against it, the amount of time that had passed, concerns about whether Sawicki had diligently pursued the Frenches' claims, and discord or conflict of personalities. In early November 2000, Sawicki filed a motion to withdraw and to substitute LOWT as the Frenches' counsel. LOWT did not oppose Sawicki's withdrawal, but refused to be substituted as counsel and returned the Frenches' case files to Sawicki's office.
Robert had apparently filed a grievance with the State Bar of Texas, asserting that LOWT was not entitled to a 40% contingency fee based on the circumstances of the case.
The trial court set Sawicki's motion to withdraw for hearing on December 18, 2000. On that date, rather than ruling on the motion to withdraw, the trial court granted the Frenches' motion to strike and dismissed LOWT's petition in intervention. In January 2001, the Frenches obtained a favorable jury verdict in their medical malpractice suit, and LOWT refiled its petition in intervention on January 18, 2001. On January 19, the trial court rendered judgment on the jury's medical malpractice verdict, awarding the Frenches a total of $550,212.32 in damages and prejudgment interest and $4,534.80 in costs.
On February 6, 2001, LOWT filed a motion for summary judgment on its petition in intervention. The Frenches also moved for summary judgment, on February 13, 2001. A fiat was attached to the Frenches' motion, but no completed copy setting a date and time for the hearing appears in the record. On February 15, LOWT filed its response to the Frenches' motion for summary judgment. In its response, LOWT referred to a hearing scheduled for later that day and stated:
[I]t is anticipated by Intervenor that the hearing scheduled for February 15, 2001, is a hearing on the various motions pending including, possibly, the motions for summary judgment. Though not specifically defined by the Court, in the event this is a hearing to determine the "reasonableness" of the attorney's fees sought, Intervenor cites the following language from [Texas case law.]
. . . .
WHEREFORE, Intervenor prays that the Court enter an Order denying [the Frenches'] Motion for Summary Judgment, and granting Intervenor's First Amended Motion for Summary Judgment.
At the February 15 hearing, the trial court orally granted the Frenches' summary judgment motion. Six days later, LOWT objected in writing to the trial court's oral ruling on the Frenches' motion, protesting that LOWT had believed the hearing was only going to be a status conference. This factual allegation was not supported by affidavit evidence. On February 28, 2001, the trial court rendered judgment granting the Frenches' motion for summary judgment and denying LOWT's motion. The judgment recites that the trial court considered the parties' motions, responses, objections, and summary judgment proof before rendering judgment.
Notice of Summary Judgment Hearing
In its first issue, LOWT contends that summary judgment for the Frenches was improper because the trial court failed to give LOWT notice of the summary judgment hearing. Because summary judgment is a harsh remedy, the twenty-one-day notice requirement of rule 166a(c) is mandatory and strictly construed against the movant. The purpose of the notice provision is to prevent the rendition of judgment before the opposing party is given a full opportunity to respond to the merits of the motion. Nonetheless, lack of notice is a nonjurisdictional defect that can be waived.
Martin v. Martin, Martin Richards, Inc., 991 S.W.2d 1, 11, 13 (Tex.App.-Fort Worth 1997), rev'd on other grounds, 989 S.W.2d 357 (Tex. 1998).
Id.; Stephens v. Turtle Creek Apts., Ltd., 875 S.W.2d 25, 26 (Tex.App.-Houston [14th Dist.] 1994, no writ).
Martin, 989 S.W.2d at 359; May v. Nacogdoches Mem'l Hosp., 61 S.W.3d 623, 626 (Tex.App.-Tyler 2001, no pet.).
If a party receives notice that is untimely, but sufficient to enable it to attend the summary judgment hearing, the party must file a motion for continuance or raise the complaint of late notice in writing, supported by affidavit evidence, during the summary judgment hearing; otherwise, a complaint about insufficient notice is waived. A party who receives no notice at all of a summary judgment hearing may preserve error in a post-trial motion, but the complaint must be supported by evidence. In addition, even a no-notice complaint can be waived if the nonmovant appears at and participates in the summary judgment hearing, does not contest jurisdiction, and seeks judgment or adjudication on some question.
May, 61 S.W.3d at 626; Rios v. Tex. Bank, 948 S.W.2d 30, 33 (Tex.App.-Houston [14th Dist.] 1997, no writ); see also Tex.R.Civ.P. 166a(g) (providing that, where affidavit of party opposing summary judgment establishes that it cannot, for reasons stated, present by affidavit facts essential to justify its opposition, trial court may refuse application for judgment, order a continuance, or make such other order as may be just).
May, 61 S.W.3d at 626; Rios, 948 S.W.2d at 33 n. 4.
Martin, 991 S.W.2d at 13-14.
LOWT asserts that the waiver rule does not apply to this case because it received no notice at all of the hearing and filed written objections in the trial court to both the lack of notice and the inadequate opportunity it was afforded to respond to the Frenches' motion. LOWT filed these objections after the summary judgment hearing, but before the trial court rendered judgment. LOWT's response to the Frenches' summary judgment motion shows, however, that LOWT had sufficient information from which to conclude that the trial court would consider the motion at the February 15 hearing. In addition, LOWT appeared at and participated in the hearing and sought a judgment granting its own summary judgment motion. There is no evidence that LOWT objected at the hearing to the lack of notice, and LOWT did not support its post-hearing complaints of no notice and inadequate opportunity to respond with affidavit evidence. We hold that, under these circumstances, LOWT waived its right to object to the lack of notice. To hold otherwise would allow LOWT to participate in the summary judgment hearing, but lay behind the log until it learned of the trial court's adverse ruling and then raise the notice issue for the first time. We overrule this portion of LOWT's first issue.
LOWT did not even allege in its post-hearing objections that it objected on February 15 to the lack of notice.
See Martin, 991 S.W.2d at 13; Rios, 948 S.W.2d at 33; see also Hudenburg v. Neff, 643 S.W.2d 517, 518 (Tex.App.-Houston [14th Dist.] 1982, writ ref'd n.r.e.) (holding that nonmovant waived complaints about insufficient notice and insufficient time to prepare response where she did not support her post-hearing motion for continuance with affidavit evidence as required by Tex.R.Civ.P. 166a(f) [now 166a(g)]), cert. denied, 464 U.S. 937 (1983).
May, 61 S.W.3d at 626; Rios, 948 S.W.2d at 33.
Competence of Summary Judgment Evidence
Also in its first issue, LOWT complains that the Frenches presented no competent summary judgment evidence to support their motion. LOWT asserts that all but one of the Frenches' evidentiary exhibits attached to their summary judgment motion are unsworn. This is a complaint about a defect in the form of the Frenches' summary judgment evidence, and LOWT does not direct us to any place in the record where it objected to the Frenches' evidence on this basis. Consequently, the complaint is waived on appeal.
See Tex.R.Civ.P. 166a(f); Lazaro v. Univ. of Tex. Health Sci. Ctr., 830 S.W.2d 330, 331 (Tex.App.-Houston [14th Dist.] 1992, writ denied).
LOWT also complains that the affidavit of James M. McCormack, the Frenches' expert witness, is not competent summary judgment evidence because all of McCormack's opinions are merely legal conclusions and the documents on which he relied are not attached to his affidavit. We need not address this complaint because we do not consider McCormack's affidavit in disposing of this appeal. We overrule this portion of LOWT's first issue.
See Tex.R.App.P. 47.1 (holding the appellate court need only address issues raised that are necessary to the final disposition of the appeal).
Theories Supporting Summary Judgment
LOWT's final argument under its first issue is that summary judgment for the Frenches is improper because none of the Frenches' legal theories support the judgment. The Frenches moved for summary judgment on five grounds: LOWT abandoned its contingent fee agreements with the Frenches; LOWT's attempt to recover its contingent fee is unconscionable under the circumstances of this case; the contingent fee agreements violate public policy as represented by the Texas Rules of Disciplinary Conduct; the Frenches had good cause to terminate the contract with LOWT; and LOWT had no contract with Gwenda Dunn. The summary judgment does not state the ground on which the trial court granted judgment; therefore, we must affirm the summary judgment if any of the Frenches' theories are meritorious.
Star-Telegram, Inc. v. Doe, 915 S.W.2d 471, 473 (Tex. 1995); Harwell v. State Farm Mut. Auto. Ins. Co., 896 S.W.2d 170, 173 (Tex. 1995).
Summary Judgment Standard of Review
In a summary judgment case, the issue on appeal is whether the movant met his summary judgment burden by establishing that no genuine issue of material fact exists and that the movant is entitled to judgment as a matter of law. The burden of proof is on the movant, and all doubts about the existence of a genuine issue of material fact are resolved against the movant. Therefore, we must view the evidence and its reasonable inferences in the light most favorable to the nonmovant. In deciding whether there is a material fact issue precluding summary judgment, all conflicts in the evidence are disregarded, and the evidence favorable to the nonmovant is accepted as true. Evidence that favors the movant's position will not be considered unless it is uncontroverted.
Tex.R.Civ.P. 166a(c); KPMG Peat Marwick v. Harrison County Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex. 1999); City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex. 1979).
Rhone-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 223 (Tex. 1999); Friendswood Dev. Co. v. McDade + Co., 926 S.W.2d 280, 282 (Tex. 1996); Great Am. Reserve Ins. Co. v. San Antonio Plumbing Supply Co., 391 S.W.2d 41, 47 (Tex. 1965).
Great Am., 391 S.W.2d at 47.
Rhone-Poulenc, 997 S.W.2d at 223; Harwell, 896 S.W.2d at 173.
Great Am., 391 S.W.2d at 47.
Unconscionability of LOWT's Contingent Fee
LOWT asserts that the trial court erred if it granted summary judgment on the ground that LOWT's attempt to collect its contingent fee was unconscionable. A fee is unconscionable if a competent lawyer could not form a reasonable belief that the fee is reasonable. Contingent fee agreements are governed by general principles of contract law. Because the amount of an attorney's fee is a contractual matter between attorney and client, a court ordinarily has no authority to determine whether the fee is reasonable — if the fee agreement was valid when made and was between mentally competent persons. The issue here, however, is not whether the fee set out in the fee agreements is reasonable or unconscionable per se, but whether LOWT's attempt to collect its fee is unconscionable in light of the circumstances of this case.
Tex. Disciplinary R. Prof'l Conduct 1.04(a), reprinted in Tex. Gov't Code Ann., tit. 2, subtit. G app. A (Vernon 1998) (Tex. State Bar R. art. X, § 9).
In re Polybutylene Plumbing Litig., 23 S.W.3d 428, 436 (Tex.App.-Houston [1st Dist.] 2000, pet. dism'd).
Id.; see also Lopez v. Munoz, Hockema Reed, L.L.P., 22 S.W.3d 857, 862 (Tex. 2000) (holding that courts will enforce unambiguous contingent fee contracts as written).
LOWT asserts that the Frenches' repudiation of the fee agreements made LOWT's performance impossible; therefore, LOWT was entitled to treat the repudiation as putting an end to the contract and to recover its full fee thereunder — despite its later refusal to represent the Frenches. We disagree.
While a client's breach of a fee agreement may excuse the attorney from performing thereunder, it does not entitle the attorney to the full contractual fee. An attorney is only entitled to recover his full fee under a contingent fee agreement that has been repudiated when he is damaged by being prevented from performing. In addition, the attorney's recovery is reduced by "any circumstances which may have afforded him the means of mitigating his loss." Here, LOWT was not damaged by being prevented from performing because it had clearly had the opportunity to perform, but chose not to. In addition, LOWT was afforded the means of fully mitigating its alleged loss, but refused to take advantage of that opportunity.
See Mead v. Johnson Group, Inc., 615 S.W.2d 685, 689 (Tex. 1981) (holding that default by one party excuses performance by the other party).
See Howell v. Kelly, 534 S.W.2d 737, 739-40 (Tex. Civ. App.-Houston [1st Dist.] 1976, no writ) (holding that an attorney who is damaged by the repudiation of a fee agreement may treat the repudiation as "putting an end to the contract for all purposes of performance, and sue for the profits he would have received if he had not been prevented from performing") (emphasis supplied).
Pollack v. Pollack, 39 S.W.2d 853, 857 (Tex. Comm'n App. 1931, holding approved); accord America's Favorite Chicken Co. v. Samaras, 929 S.W.2d 617, 626 (Tex.App.-San Antonio 1996, writ denied) (noting Pollack measure of damages for suits based on anticipatory breach).
This situation is distinguishable from the cases on which LOWT relies. In Mandell Wright v. Thomas, 441 S.W.2d 841 (Tex. 1969), the party seeking to avoid the contingent fee agreement refused to cooperate with her attorneys in the prosecution of her claim, making it impossible for them to proceed further, until the case was eventually settled by another law firm. Id. at 847. Likewise, in Myers v. Crockett, 14 Tex. 257 (1855), the client fired the attorney with whom he had the fee agreement and hired another attorney, who prosecuted the case to completion. Id. at 257-58. Here, unlike the situations in Mandell and Myers, LOWT had the opportunity to represent the Frenches after they hired Sawicki, but chose not to take advantage of it.
Contingent fee agreements are executory agreements, and an attorney is not entitled to recover thereunder unless the contingency set forth in the agreement occurs. The contingency in the fee agreements here was the Frenches' recovery of "proceeds from any compromise, settlement, judgment or recovery" in their medical malpractice case. Because the Frenches had not recovered any proceeds in their medical malpractice lawsuit when LOWT intervened for attorney's fees in July 2000, LOWT was not entitled to any recovery at that time, under either the case law or the terms of the agreements themselves. Two or three months passed from the time the Frenches asked LOWT to take their case back and the time the case went to trial in January 2001. During that time, LOWT was afforded the means of mitigating fully any potential damages caused by the Frenches' alleged repudiation of the fee agreements by taking the case back and settling or trying it. LOWT refused to take advantage of this opportunity. Thus, it was LOWT's failure to mitigate that caused its damages, if any, not the Frenches' alleged repudiation of the fee agreements.
Lee v. Cherry, 812 S.W.2d 361, 363 (Tex.App.-Houston [14th Dist.] 1991, writ denied); see also Marre v. United States, 117 F.3d 297, 307-08 (5th Cir. 1997) (applying Texas law). An executory contract is one that is still unperformed by both parties or one with respect to which something still remains to be done on both sides. B.L. Nelson Assocs. v. City of Argyle, 535 S.W.2d 906, 909 (Tex. Civ. App.-Fort Worth 1976, writ ref'd n.r.e.).
The contingent fee agreements in this case provide:
LOWT agrees to prosecute such claims and Client agrees to pay and hereby assigns to LOWT forty percent (40%) if settled 10 days before trial, and forty-five (45%) thereafter or if appealed[,] of all proceeds from any compromise, settlement, judgment or recovery whether paid now or in the future. . . . If no proceeds are obtained, no fee shall be payable to LOWT.
. . . .
All expenses incurred by LOWT . . . are to be repaid by the Client from the Client's share of the recovery at the conclusion of the case; but only in the event that there is a recovery at the conclusion of the case. If there is no recovery . . . LOWT will remain responsible for all expenses.
In addition, LOWT's refusal to take the case back placed the Frenches in a no-win situation of having to give up their lawsuit, represent themselves pro se, find an attorney who would represent them for nothing, or pay the bulk of their recovery in attorney's fees. Under these circumstances, we do not believe that a competent lawyer could form a reasonable belief that LOWT's attempt to recover its contingent fee is reasonable. Therefore, we hold that LOWT's attempt to recover its contingent fee is unconscionable as a matter of law. Accordingly, the trial court did not err by granting the Frenches summary judgment on the ground that LOWT's attempt to recover its contingent fee is unconscionable.
Out-of-Pocket Expenses
It is not, however, unconscionable for LOWT to seek to recover its out-of-pocket expenses that had already been incurred by the time the contract dispute arose and that could not have been mitigated by LOWT's representation of the Frenches. The Frenches offered to reimburse LOWT for these expenses — the amount of which is uncontroverted — if they prevailed in their medical malpractice claims with Sawicki as their lawyer, and they did not assert in their motion for summary judgment that LOWT's recovery of these expenses would be unconscionable. They do, however, contend on appeal that LOWT should be precluded from recovering its out-of-pocket expenses under the theory of abandonment. We disagree.
If an attorney abandons his contract before the proceeding for which he was retained has been conducted to its termination, he forfeits all right to compensation; however, abandonment requires proof of intent to relinquish a known contractual right. If a party seeks to establish abandonment by conduct, the acts relied on must be positive, unequivocal, and inconsistent with the existence of a contract. Here, LOWT never engaged in any conduct that evidenced an intent to relinquish its rights under the fee agreements or that was inconsistent with the existence of the agreements. To the contrary, once the Frenches informed LOWT of their intent to switch attorneys, LOWT filed a notice of assignment of attorney's fees and later sued to collect the full contingent fee under the agreements. Even LOWT's refusal to represent the Frenches once they asked LOWT to take their case back was based on LOWT's contention that the Frenches had repudiated the fee agreements, not on LOWT's contention that the agreements did not exist.
Royden v. Ardoin, 160 Tex. 338, 331 S.W.2d 206, 209 (1960); Staples v. McKnight, 763 S.W.2d 914, 916 (Tex.App.-Dallas 1988, writ denied).
Huffington v. Upchurch, 532 S.W.2d 576, 579-80 (Tex. 1976); see also Palmer v. Fuqua, 641 F.2d 1146, 1160 (5th Cir. 1981) (applying Texas law).
Campbell v. Hart, 256 S.W.2d 255, 261 (Tex. Civ. App.-Fort Worth 1953, writ ref'd n.r.e.).
Viewed in the light most favorable to LOWT, the nonmovant, the summary judgment evidence and its reasonable inferences do not establish as a matter of law that LOWT abandoned the contingent fee agreements. Consequently, the trial court erred to the extent it granted summary judgment for the Frenches on LOWT's claim for out-of-pocket expenses based on the theory of abandonment.
See KPMG Peat Marwick, 988 S.W.2d at 748.
We hold that summary judgment for the Frenches based on unconscionability is proper to the extent that it denies LOWT recovery of its attorney's fees under the contingent fee agreement, but that summary judgment is improper to the extent it precludes LOWT from recovering its out-of-pocket expenses. We sustain LOWT's first issue as to its out-of-pocket expenses; we overrule the remainder of LOWT's first issue.
In light of our holding that the trial court did not err by granting the Frenches summary judgment based on unconscionability, we need not consider LOWT's remaining arguments under this issue. Also in light of our holding, we need not consider LOWT's third issue, in which it complains of the apportionment of the damages award in the medical malpractice judgment.
Attorney's Fees
In its second issue, LOWT contends that the trial court improperly awarded the Frenches up to $20,000 in appellate attorney's fees.
After the trial court rendered a final judgment for the Frenches, they filed a motion to modify it. In their motion, the Frenches sought attorney's fees in the event LOWT unsuccessfully appealed the case to this court and the Texas Supreme Court. The Frenches asserted their entitlement to attorney's fees based on section 38.001 of the civil practice and remedies code. The trial court granted the motion to modify and awarded the Frenches $10,000 in attorney's fees in the event of an unsuccessful appeal to this court, $5,000 if LOWT files a petition for review in the Texas Supreme Court, and another $5,000 if the supreme court grants the petition and orders briefing.
See Tex. Civ. Prac. Rem. Code Ann. § 38.001 (Vernon 1997).
To recover attorney's fees under section 38.001, a party must (1) prevail on a cause of action for which attorney's fees are recoverable under that section, and (2) recover damages or something of value. The Frenches' defense against LOWT's petition in intervention was not a cause of action, and the Frenches did not recover damages or anything of value from LOWT. Therefore, the trial court's award of attorney's fees was improper. We sustain LOWT's second issue.
Green Int'l, Inc. v. Solis, 951 S.W.2d 384, 390 (Tex. 1997); ITT Commercial Fin. Corp. v. Riehn, 796 S.W.2d 248, 256 (Tex.App.-Dallas 1990, no writ).
Conclusion
We reverse the trial court's summary judgment for the Frenches on LOWT's out-of-pocket expenses and render judgment that LOWT is entitled to recover $32,585.48 in expenses from the Frenches. We also reverse the award of attorney's fees for the Frenches and render judgment that they are not entitled to recover any attorney's fees from LOWT. We affirm the remainder of the trial court's summary judgment for the Frenches on LOWT's petition in intervention.
See Tex.R.App.P. 43.3 ("When reversing a trial court's judgment, the court must render the judgment that the trial court should have rendered. . . .").
The majority holds that LOWT's attempt to collect on its contract with the Frenches is unconscionable as a matter of law because LOWT refused to take the case back while still attempting to enforce the contract. Couched in terms of "opportunity to perform" and "failure to mitigate" damages, the majority concludes that LOWT caused its own damages, thus its attempt to enforce the contract under these circumstances is unconscionable. I believe a genuine issue of material fact was raised as to whether LOWT had the opportunity to perform and as to whether LOWT had the opportunity to mitigate its damages. I also believe that LOWT raised a genuine issue of material fact as to whether the Frenches had good cause to terminate the contract. Accordingly, I respectfully dissent.
Maj. Op. at 15.
The Frenches, excluding Gwenda Dunn, signed a contract with LOWT. The attorney assigned to the Frenches' case, Michael Sawicki, left LOWT to start his own firm. Disregarding their contract with LOWT, the Frenches fired LOWT on April 20, 2000 in order to follow Sawicki to his new firm. Robert French contends that his reason for leaving LOWT was that John Kirtley, LOWT's replacement attorney assigned to the case, was not experienced to handle medical malpractice cases. Windle Turley personally advised the Frenches that not only was Kirtley competent to handle medical malpractice cases but he would also be under Turley's close supervision and oversight. Turley also stated that he himself had litigated numerous medical malpractice cases.
Maj. Op. at 2.
Id.
Id. at 2-3.
Id. at 3.
On April 28, 2000, LOWT filed a notice of assignment of attorney's fees, and later, in July 2000, LOWT intervened in the Frenches' lawsuit seeking to enforce the contract. The trial court did not strike this petition until December 18, 2000.
The Frenches filed a grievance against LOWT with the State Bar of Texas concerning LOWT's maintenance of its lien in the Frenches' case. The grievance was dismissed, and the dismissal was affirmed by the Supreme Court of Texas Board of Disciplinary Appeals on August 14, 2000. The Frenches did not attempt to return the case to LOWT until October 2000, which was approximately three and one-half months before the medical malpractice case went to trial. After the jury verdict but before the trial court signed the judgment, LOWT timely filed another petition in intervention in the Frenches' lawsuit. Mandell Wright v. Thomas holds that when a client, without good cause, makes his attorney's prosecution of the client's claim impossible, "the attorney may recover on the contract for the amount of his compensation." The majority attempts to distinguish Mandell Wright from the present facts by arguing that LOWT had the opportunity to perform but chose not to. I believe LOWT raised a fact issue as to whether it had the opportunity to perform.
Id. at 4.
See First Alief Bank v. White, 682 S.W.2d 251, 252 (Tex. 1984).
441 S.W.2d 841, 847 (Tex. 1969).
Maj. Op. at 13 n. 26.
LOWT responded to the Frenches' motion for summary judgment and attached Windle Turley's affidavit as summary judgment evidence. Turley stated that prior to the Frenches' terminating their contract, Turley assured the Frenches that LOWT was perfectly capable of handling the case and that it was ready and willing to do so. Regardless of these assurances, the Frenches fired LOWT on April 20, 2000 before LOWT was able to fully perform under the contract. In LOWT's first supplemental motion to withdraw, which the trial court granted on May 11, 2000, LOWT stated that it was willing to continue its representation of the Frenches but that the Frenches' desires were otherwise. Furthermore, in a letter dated November 1, 2000, from Kirtley to Sawicki, Kirtley stated that but for the Frenches' grievance filed against LOWT, the amount of time that had passed since the termination, and LOWT's concern as to whether Sawicki had diligently pursued the Frenches' case, reconciliation may have been possible. This letter was attached to the Frenches' motion as summary judgment evidence.
Resolving all doubts about the existence of a genuine issue of material fact in favor of LOWT and viewing the evidence and its reasonable inferences in the light most favorable to LOWT, LOWT raised a fact issue concerning whether the Frenches rendered the firm's performance impossible, and thus whether LOWT's attempt to collect the fee was unconscionable. I would so hold.
Rhone-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 223 (Tex. 1999).
See Great Am. Reserve Ins. Co. v. San Antonio Plumbing Supply Co., 391 S.W.2d 41, 47 (Tex. 1965).
The majority also states that LOWT's attempt to collect the fee is unconscionable because LOWT had the opportunity to mitigate its damages but failed to do so. The majority states the rule that LOWT's recovery should be "reduced by [the] circumstances which may have afforded [it] the means of mitigating [its] loss." Furthermore, the majority states that because LOWT failed to mitigate its losses and because it "clearly had the opportunity to perform," LOWT suffered no damages.
Maj. Op. at 13.
Id.
Id.
The party charged with the breach of contract bears the burden of establishing that the injured party could have mitigated his damages but failed to do so. Furthermore, evidence of failure to mitigate is only admissible if the defendant pleads the failure to mitigate as an affirmative defense. The Frenches did not plead mitigation as an affirmative defense. Accordingly, discussion of whether LOWT failed to mitigate its damages is improper.
Great Am. Ins. Co. v. N. Austin Mun. Util. Dist. No. 1, 902 S.W.2d 488, 499 (Tex.App.-Austin 1993), rev'd on other grounds, 908 S.W.2d 415 (Tex. 1995).
Cash Am. Int'l, Inc. v. Hampton Place, Inc., 955 S.W.2d 459, 462 (Tex.App.-Fort Worth 1997, pet. denied); see also Austin Hill Country Realty, Inc. v. Palisades Plaza, Inc., 948 S.W.2d 293, 300 (Tex. 1997).
See Tex.R.App.P. 33.1.
LOWT also contends that the trial court erred if its judgment was based on a finding that the Frenches had good cause to terminate the contract. Good cause to discharge an attorney exists when "the attorney fails to perform his duties in the manner that an attorney of ordinary skill and ability would have performed his duties under the same or similar circumstances." Turley stated in his affidavit that Kirtley, who was board certified in personal injury trial law by the Texas Board of Legal Specialization, replaced Sawicki. Turley also assured the Frenches that Kirtley would be under Turley's supervision. Furthermore, Turley assured the Frenches that LOWT was ready, willing, and able to handle the case.
See Rocha v. Ahmad, 676 S.W.2d 149, 153 (Tex.App.-San Antonio 1984, writ dism'd) (citing the jury instruction defining "good cause" to discharge an attorney).
Disregarding all conflicts in the evidence and accepting LOWT's evidence as true, the Frenches have not conclusively proven good cause. I would hold that whether the Frenches had good cause to terminate the contract is a fact issue. If the trial court granted summary judgment on this issue, it did so in error. I would sustain this issue to the extent the court relied on the "good cause" ground in granting summary judgment.
See Rhone-Poulenc, 997 S.W.2d at 223; City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex. 1979).
For these reasons I respectfully dissent.