Opinion
NUMBER 13-15-00097-CV
03-30-2017
TIMOTHY D. RAUB AND RAUB LAW FIRM, P.C., Appellants, v. GATE GUARD SERVICES, L.P., SIDNEY L. SMITH, AND ASSOCIATION CASUALTY INSURANCE COMPANY, Appellees.
On appeal from the County Court at Law No. 1 of Nueces County, Texas.
MEMORANDUM OPINION
Before Chief Justice Valdez and Justices Rodriguez and Hinojosa
Memorandum Opinion by Chief Justice Valdez
Appellants, Timothy D. Raub and Raub Law Firm, P.C. (collectively "Raub"), appeal the trial court's grant of a plea to the jurisdiction in favor of appellees, Gate Guard Services, L.P., Sidney L. Smith, and Association Casualty Insurance Company (collectively "Gate Guard"). By one issue, Raub contends it had standing. We affirm.
I. BACKGROUND
Tonya Craft entered into a contract with Raub to represent her after she received injuries in a car accident in April 2011. Craft was a passenger in a car driven by Kristilyn Carlock that collided with a vehicle driven by Smith, who was in the course and scope of his employment with Gate Guard Services. In July 2011, Craft terminated her contract with Raub and hired another attorney to represent her in this cause. Craft's new attorney filed suit against Gate Guard on October 17, 2011.
Carlock eventually settled her claim against Gate Guard.
On February 27, 2013, Raub intervened in Craft's suit against Gate Guard asserting an interest in Craft's lawsuit. Raub argued it was entitled to contractually assigned attorneys' fees and reimbursement of the expenses Raub had incurred in Craft's case before she fired Raub. Raub claimed "an interest in and a lien on 'any money derived as a result of settlement or final judgment obtained in this case and cause.'"
In August 2013, Gate Guard agreed to mediate Craft's claims. Raub was not notified of the mediation and did not participate. After mediation, Gate Guard settled with Craft who agreed to accept $350,000 in exchange for the release of her claims. Craft also agreed to indemnify Gate Guard against any future lawsuits brought by Raub. The trial court signed a final judgment memorializing the settlement agreement. However, Raub was not notified of the final judgment.
Raub sued Gate Guard when Raub discovered that Craft had settled with Gate Guard. In addition, Raub sought a declaratory judgment on the validity of Raub's contract with Craft and a declaration of its rights under that contract. Gate Guard filed a plea to the jurisdiction seeking dismissal of Raub's claims, arguing that Raub lacked standing to sue. Relying on a case from this Court, Berry v. Nueces County, Gate Guard argued that Raub's claims were derivative of Craft's claims, and therefore Raub's cause of action should have been brought against Craft. No. 13-05-383-CV, 2006 WL 1280901, at *3 (Tex. App.—Corpus Christi May 11, 2006, pet. denied) (mem. op.). After a hearing, the trial court granted Gate Guard's plea and dismissed Raub's suit. This appeal followed.
II. STANDARD OF REVIEW AND APPLICABLE LAW
We review a plea to the jurisdiction under a de novo standard of review. Westbrook v. Penley, 231 S.W.3d 389, 394 (Tex. 2007). A plea to the jurisdiction seeks to dismiss a case for want of jurisdiction. Tex. Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226-27 (Tex. 2004).
A plea to the jurisdiction is a dilatory plea, the purpose of which is to defeat a cause of action without regard to whether the claims asserted have merit. The claims may form the context in which a dilatory plea is raised, but the plea should be decided without delving into the merits of the case. The purpose of a dilatory plea is not to force the plaintiffs to preview their case on the merits but to establish a reason why the merits of the plaintiffs' claims should never be reached.Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 554 (Tex. 2000) (internal citations omitted).
Standing is a necessary element of subject-matter jurisdiction. Berry, 2006 WL 1280901, at *2. To establish standing, a party asserting a claim must show a justiciable interest by alleging an actual or imminent threat of injury peculiar to one's circumstances. Id. Thus, in order to have standing Raub must demonstrate that a personal justiciable interest is at stake. See id. When an attorney has been discharged by his client before the representation is completed, the attorney may sue the client for breach of contract and collect the amount of his compensation. Mandell & Wright v. Thomas, 441 S.W.2d 841, 847 (Tex. 1969); see also Berry, 2006 WL 1280901, at *2. Moreover, because the attorney-client relationship is one of contract and the attorney's rights are wholly derivative from those of his client, the discharged attorney does not have a claim against the opposing party in the underlying litigation. Berry, 2006 WL 1280901, at *2; see also Hoover Slovacek LLP v. Walton, 206 S.W.3d 557, 561 (Tex. 2006).
III. DISCUSSION
Here, Raub sought "to recover from [Gate Guard] its assigned attorneys' fee interest and reimbursement of costs/expenses from the Craft settlement of the Lawsuit." However, as we stated in Berry, Raub's claims for attorneys' fees are derivative from those of Craft, and Raub has no claim against Gate Guard the opposing party in the underlying litigation. See Berry, 2006 WL 1280901, at *2; see also Hoover Slovacek LLP, 206 S.W.3d at 561. Because we have already determined in Berry, which involves the same facts as this case, that an attorney has no standing to sue the opposing party in the underlying suit for his or her attorneys' fees, we conclude that Raub has no standing to sue Gate Guard here. See Berry, 2006 WL 1280901, at *2; see also Hoover Slovacek LLP, 206 S.W.3d at 561 ("In Texas, if an attorney hired on a contingent-fee basis is discharged without cause before the representation is completed, the attorney may seek compensation in quantum meruit or in a suit to enforce the contract by collecting the fee from any damages the client subsequently recovers."). Therefore, the trial court properly dismissed the case for lack of subject-matter jurisdiction.
Raub cites Honeycutt v. Billingsley, see 992 S.W.2d 570, 584 (Tex. App.—Houston [1st Dist.] 1999, pet. denied), to support his argument. In Honeycutt, the evidence established that the clients had assigned an interest in their claim to their former attorney who referred their case to a subsequent attorney. Id. "The referral agreement explicitly reaffirmed that the plaintiff had assigned a contingency interest in the first attorney, and that the first attorney would retain that interest but share it with the second attorney." Berry, 2006 WL 1280901, at *3 (citing Honeycutt, 992 S.W.2d at 574). The opposing party in the underlying claim knew that the clients had assigned an interest to their former attorney but still settled the claim. Honeycutt, 992 S.W.2d at 574. The Honeycutt court held that the former attorney who had an assigned interest in the former clients' lawsuit had standing to sue the defendants in the underlying lawsuit. Id.
Here, as in Berry, Craft unilaterally terminated Raub as her representative and her new counsel had no agreement or relationship with Raub. See Berry, 2006 WL 1280901, at *3. And, like in Berry, there is no evidence that Gate Guard had knowledge that Raub might assert a claim against it instead of Craft when Raub intervened in the suit. See id. Raub provided no evidence that Craft had assigned an interest in her claim against Gate Guard to Raub after she terminated Raub. Raub did not even provide the contract with Craft to the trial court in this matter. Moreover, Craft warranted in the settlement agreement and release that she had not assigned any interest in her claim to anyone. As we stated in Berry, "[t]his case does not present an issue of referral agreements between lawyers, and furthermore, does not present a case in which the parties themselves arrange a secret settlement in order to defraud their own attorneys." See id. (emphasis added). "Instead, we are simply presented with an attorney who may have a legitimate claim for reasonable fees against his former client, but who does not have standing to assert a claim against a defendant who has fully paid out all settlement proceeds and is no longer liable to the former client." Id. Therefore, we conclude that the trial court properly dismissed Raub's claim. We overrule Raub's sole issue.
In Honeycutt, the clients agreed to assign an interest in their suit to their attorney who referred the case to a third-party. Honeycutt v. Billingsley, see 992 S.W.2d 570, 584 (Tex. App.—Houston [1st Dist.] 1999, pet. denied). However, after the referral agreement was signed, the clients did not discharge the referring attorney's liabilities under the original contract but "merely agreed to accept substituted performance of [the referring attorney's] duties by [the referred attorneys]." Id. at 579. In addition, the referral "did not release [the clients] from their duty to pay [the referring attorney]." Id.
As we held in Berry, a discharged attorney who has not shown that his former client assigned an interest in the lawsuit to him and merely claims that the former client agreed to pay a percentage of the amount recovered must sue the client. See Berry v. Nueces County, No. 13-05-383-CV, 2006 WL 1280901, at *3 (Tex. App.—Corpus Christi May 11, 2006, pet. denied) (mem. op.). Here, Raub has not shown that Craft assigned an interest in the suit to Raub, and the evidence presented shows that she did not. See id.
Raub was not Craft's attorney once she terminated the contract.
IV. CONCLUSION
We affirm the trial court's judgment.
/s/ Rogelio Valdez
ROGELIO VALDEZ
Chief Justice Delivered and filed the 30th day of March, 2017.