Opinion
No. 10-04-00021-CV
Opinion Delivered and Filed June 29, 2005.
Appeal from the 13th District Court, Navarro County, Texas, Trial Court No. 03-00-12821-CV.
Reversed and Remanded.
Before Chief Justice GRAY, Justice VANCE, and Justice REYNA.
MEMORANDUM OPINION
Avila appeals from a judgment in an interpleader action claiming that the trial court abused its discretion by failing to award him attorney's fees. We reverse.
Background
Alfredo Saldana and Efren Avila were driving back from work in a tractor when a pick-up truck struck them from behind. The truck, owned by Andy Christopher, was driven by Daniel Alan Christopher. Avila and Saldana suffered multiple injuries and filed suit against Andy, Daniel, and B.G. Williams d/b/a Williams Asphalt, Saldana's employer. Andy and Daniel offered to settle with Avila for their policy limit, $20,000. Avila agreed, but his medical bills totaled over $70,000. Avila negotiated with his medical creditors and offered them a pro-rata share of the settlement less attorney's fees. The medical creditors refused. Subsequently, Avila filed an interpleader action, and the trial court divided the settlement among the providers, but did not award Avila attorney's fees from the settlement funds. The trial court severed this cause from the remainder of the issues in the case, and Avila appealed.
Attorney's Fees in an Interpleader Action
Avila argues in his sole issue that the trial court abused its discretion in failing to award him attorney's fees.
An interpleader action permits an innocent stakeholder facing rival claims to allow the courts to decide who is entitled to the fund and thus avoid the peril of acting as judge and jury itself. Union Gas Corp. v. Gisler, 129 S.W.3d 145, 153 (Tex.App.-Corpus Christi 2003, pet. denied); Olmos v. Pecan Grove Mun. Utility Dist., 857 S.W.2d 734, 741 (Tex.App.-Houston [14th Dist.] 1993, no pet.). The elements of an interpleader action are: (1) the party is either subject to, or has reasonable grounds to anticipate, rival claims to the same fund or property; (2) the party has not unreasonably delayed filing an action for interpleader; and (3) the party has unconditionally tendered the fund or property into the court's registry. Hanzel v. Herring, 80 S.W.3d 167, 173 (Tex.App.-Fort Worth 2002, no pet.) (citing Bryant v. United Shortline Inc., 984 S.W.2d 292, 296 (Tex.App.-Fort Worth), aff'd, 972 S.W.2d 26 (Tex. 1998)). "The interpleader asks only that he be released and discharged from any liability on account of the proceeds, that he recover his attorney's fees for bringing the interpleader, and that he be paid his fees and costs out of the proceeds." Id. However, the award of attorney fees is within the sound discretion of the trial court. Olmos, 857 S.W.2d at 741; Beneficial Standard Life Ins. Co. v. Trinity Nat'l Bank, 763 S.W.2d 52, 56 (Tex.App.-Dallas 1988, writ denied).
Several creditors claimed an interest in Avila's settlement. There is no evidence that Avila delayed in bringing the interpleader action once it became clear that the matter could not be resolved. Further, Avila tendered the settlement amount to the trial court. Therefore, as an innocent stakeholder, Avila is entitled to recover attorney fees under Texas interpleader law. United States v. Ray Thomas Gravel Co., 380 S.W.2d 576, 581 (Tex. 1964) (holding that in Texas an innocent stakeholder is entitled to attorney's fees); Heggy v. American Trading Employee Retirement Account Plan, 110 S.W.3d 692, 703 (Tex.App.-Houston [14th Dist.] 2003, pet denied); Olmos, 857 S.W.2d at 741. Therefore, we find that the trial court abused its discretion in failing to award Avila reasonable attorney's fees for bring the interpleader action. Accordingly, we sustain Avila's sole issue.
Conclusion
We reverse and remand this cause to the trial court for further proceedings consistent with this opinion.
DISSENTING OPINION
There is simply no pleasant way to say this. This case and its appeal have been botched beyond repair, and it is not this Court's job to fix it. There are so many problems in both the underlying case and the opinion of the majority that I do not know where to begin; so I will start where I first knew there was a problem and proceed with a stream of consciousness as new problems emerged. With this approach it is important for you to know that this is an opinion that I had taken home with me, so all I had was the opinion and brief. I did not have access to the record or other filings until the next day.
The first thing that came to my attention was a simple thing. The style on the Appellant's brief did not match the style on the opinion. This caused me to go in search of a brief for the Appellees. There is none.
Then I turned to the merits of the opinion. It was clear to me, that contrary to the statement in the opinion, Avila is not a disinterested stakeholder in this interpleader action. I knew this from the opinion which states that Avila tried to negotiate the allocation of the settlement proceeds, less attorney's fees, with the medical creditors. This clearly placed Avila in the position of a person interested in the allocation of the proceeds at a time prior to the filing of the interpleader of the settlement proceeds. Avila's attorney was seeking his fee from the settlement proceeds. Of course, the failure to receive those fees is the sole issue on appeal. Thus there can be no question that he was definitely interested in the pot, and was not a disinterested stakeholder.
Further, as to the elements of an interpleader action, it is clear that Avila did delay the filing of the interpleader action until it was clear that the medical creditors were not going to accede to his demand that he receive his attorney fees. Additionally, it is uncontroverted that there was not an unconditional tender of the fund into the court's registry.
Those were my observations based upon Avila's brief and the opinion. After I went through the record, I had even more questions, but some of the questions that I previously had were also answered.
None of the "parties" listed on Avila's brief as Appellees were ever served with the interpleader action or otherwise made a party to this proceeding. When Avila set the matter for a hearing and notified the medical creditors, he simply notified those individuals with whom he had been trying to negotiate an agreement on the allocation of the settlement proceeds. To the extent there were people at the hearing on behalf of these medical creditors, they do not appear to have been attorneys and I question whether the presence of an employee or collection agent constitutes an appearance for an entity, particularly a corporation or partnership, which has not been served. During the hearing, the trial court noted there was only one lawyer present, Avila's, stating, "Since we have one lawyer representing one party and three non-lawyers, would you suggest we do this on an informal basis and just allow them to say what their claim is?" Avila's attorney said that would be "fine."
Of course, when I found out the medical creditors had never been made a party to the proceeding, it certainly explained why we had no brief from any of the medical creditors.
Then I learned some really interesting information from the reporter's record of the hearing on the allocation of the settlement proceeds. Avila's attorney had been seeking a forty percent fee, and that is the fee that the medical creditors would not agree to have deducted before the pro-rata settlement allocation offered. It was not until the interpleader was filed that the attorney reduced his requested fee to one third of the settlement funds. But even more important, Avila was demanding that he also have allocated to him individually another one-third from the settlement proceeds. This was a third that he sought, without regard to the extent of the unpaid medical claims. So what the interpleader action actually sought was to have a third of the settlement paid to Avila, a third paid to Avila's attorney, and a third allocated as settlement of the claims of all the amounts owed the medical creditors. Disinterested stakeholder? I think not.
And the fee that Avila's attorney sought was not for having to file the interpleader, but was for filing the suit and recovery of a fund for the benefit of Avila and the medical creditors. The attorney apparently recognized that this fee could not be properly recovered as the fee for bringing the interpleader action, because the interpleader sought the fee under the quantum merit theory of recovery. Seeking the fee under this theory may be the one part of this entire proceeding that was done correctly. The attorney even argued quantum merit at the hearing. The last statement the attorney made to the court at the hearing was, "Judge, the only thing I want to tell the court is my standard fee is forty percent and I did reduce to thirty-three percent in order to kind of have a parity to all of the parties." The problem was that the attorney did absolutely nothing to show himself entitled to a recovery based upon this theory because he presented absolutely no evidence at the hearing. Further, at the hearing, he did not seek attorney fees for having filed the interpleader.
But the real problem in this appeal is that we have but one judgment to review against individuals/entities that were actually parties to the suit, and that judgment is the agreed settlement with the original defendants for their policy limits. The allocation of the proceeds was made by the trial court, who candidly conceded that he was not familiar with such a procedure, and requested input from the attorney about how it should be divided and what to consider. Ultimately the trial court responded to the request for a division based upon the informal proceeding, and actually allocated $3,115.00 to Avila. Avila's attorney requested and caused the informal allocation procedure to occur without making any of the medical creditors parties. He should not be able to now complain about what the trial court did at his request and guidance.
Finally, back to the issue of the style, the only thing that is clear is that B.G. Williams is NOT a party to this appeal. This appeal is from the claims of Avila against Andy and Daniel Christopher which were severed and settled. The only notice of appeal in the record gives the original style of the case, "Afredo Saldana and Efren Avila v. Andy Christopher, Daniel Alan Christopher and B.G. Williams d/b/a Williams Asphalt," but indicates that only Avila desires to appeal only the "Court's Interpleader Order rendered on August 12, 2003." I tried to examine the docketing statement to see if I could better identify the parties, but a docketing statement was not filed. We have dismissed appeals for failing to file a docketing statement after we requested the appellant to do so. We did not here.
One other factor that is critical in connection with a proper disposition of this appeal is to understand the effect that the case against B.G. Williams, which remains pending, may have on the issues raised in this appeal. The medical creditors, who provided a substantial amount of services to Avila, are legitimately concerned that if they settle with Avila on the allocation of their part of this settlement fund, the settlement will extinguish the balance of their medical lien. That is the settlement Avila proposed prior to filing the interpleader. The problem from their perspective is that Avila is going to get a part of these proceeds and attorney fees in this proceeding, pay pennies on the dollar to them for their services, extinguish their medical services liens, and then recover from a third party using the "cost" of their medical services as an element of damages to enhance the recovery. While I understand their concern, that issue is not before us, because the medical service providers are not even before us, and that issue is not yet ripe for consideration. It does, however, highlight the growing problem of parties seeking severance of a part of their total claims, leading to an appeal, the result of which could be impacted by what happens with the remainder of the case.
In summary, I can see several ways to affirm the judgment, but no proper avenue through which a reversal of this case for Avila's attorney to be awarded his fees for the debacle that attorney has, himself, created by failing to properly serve the parties to the interpleader, failure to present evidence that would support his fees for the interpleader, the failure to present any evidence that would entitle him to a quantum merit recovery of attorney fees under that theory or the recovered fund doctrine, securing a severance of multiple claims for a single amount of damages, etc. Ultimately, having failed to follow any of the proper procedures, or showing that he met the requirements, for bringing an interpleader, I would hold that the trial court did not abuse its discretion in denying the attorney any fee for the filing of the "interpleader."
I dissent.