Albert G. Hill, Jr. v. Shamoun & Norman, Llp , 544 S.W.3d 724 ( 2018 )

IN THE SUPREME COURT OF TEXAS
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NO. 16-0107
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ALBERT G. HILL, JR., PETITIONER,
v.
SHAMOUN & NORMAN, LLP, RESPONDENT
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ON PETITION FOR REVIEW FROM THE
COURT OF APPEALS FOR THE FIFTH DISTRICT OF TEXAS
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Argued October 10, 2017
JUSTICE GREEN delivered the opinion of the Court.
JUSTICE GUZMAN did not participate in the decision.
This case involves a law firm’s quantum-meruit suit for the reasonable value of its services
in assisting its client reach a comprehensive settlement of various lawsuits filed against him. We
must decide whether Texas Government Code section 82.065 or our common law permits the firm’s
quantum-meruit recovery for services it performed under an unenforceable contingent-fee agreement
and whether the firm’s damages expert improperly based his damages model on that agreement. We
hold that despite the firm’s lack of a signed writing, the statute of frauds does not preclude its
quantum-meruit claim. In addition, we hold that there was sufficient evidence to demonstrate that
the firm performed compensable services in negotiating the global settlement. However, we hold
that the expert’s opinion as to the reasonable value of the firm’s services cannot be given legal
weight, and without it, there is legally insufficient evidence to support the jury’s award. Because
there is some evidence of the reasonable value of the firm’s services, we reverse the part of the court
of appeals’ judgment that reinstated the jury’s award and remand the case to the trial court for a new
trial on the amount of the firm’s recovery.
I. Background
Albert G. Hill, Jr. (Hill) became involved in contentious litigation with his son, Albert Hill,
III (Hill III) and numerous other parties beginning in 2007. These lawsuits, referred to as the “spider
web of litigation,” involved other members of the Hill family, family trusts, trustees, and various
business entities. In February 2010, this web of litigation comprised more than twenty lawsuits,
spanning multiple courts and involving approximately one hundred lawyers representing various
parties and entities.
Shamoun & Norman, LLP (S&N) initially became involved in the web of litigation in 2009.
Hill and Gregory Shamoun signed two limited-engagement agreements for S&N’s representation
in what the parties refer to as the “Abbott Financial” case (agreement signed November 19, 2009)
and the “Bordeaux Trust” case (agreement signed January 15, 2010). The Abbott Financial case
involved the collection of a debt against Hill III, and the Bordeaux Trust case involved a suit
alleging that Hill and his wife withdrew money from a trust for their own benefit. Shamoun testified
that at the time he was retained for representation in those two cases, he had not yet engaged in
“global settlement negotiations” for Hill.
2
In March 2010, Hill was also facing a federal civil RICO lawsuit, set for trial in May 2010,
in which $1 billion in damages were sought against him by Hill III and other family members for
alleged impropriety in withdrawing and distributing funds related to various trusts (the “RICO
case”). At an earlier point in the RICO case, Hill had been sanctioned and held in contempt for
filing a false affidavit. This contempt order frustrated Hill’s settlement efforts, and as of March
2010, settlement negotiations had effectively halted.
On March 5, 2010, Frances Wright, Hill’s personal attorney, asked Shamoun to attend a
meeting with the lawyers for the trust, trustees, and Hill’s family because Hill needed to find “a
person who could be one voice for the group” and deal with Hill III’s lead attorney, Steven Malouf.
Shamoun attended the meeting, and though he did not formally become settlement-negotiations
counsel at that time, he began communicating and negotiating with Malouf about a global
settlement. According to Malouf, settlement negotiations became “very active” when he started
dealing with Shamoun, and Shamoun “reenergized” the settlement discussions. In early- to mid-
March, Shamoun offered Malouf’s clients $55 million to settle, but they rejected the offer. Malouf
emailed Shamoun on March 27, expressing his lack of interest in settling and stating, “We just need
to let the jury decide.”
Hill claims that Shamoun first requested a potential discretionary bonus in a meeting
sometime in the first week of March. Hill claims he told Shamoun he would consider it, and that
as Hill understood it, he had unfettered discretion in whether there would be a bonus and how much
any bonus might be.
3
On March 27, Wright called Shamoun on behalf of Hill and explained that Hill wanted
Shamoun to get involved in the RICO case and work toward a global resolution of the cases
composing the web of litigation before the RICO trial in May. Wright discussed Hill’s desire to
increase his outstanding settlement offer from $55 million to $73 million, and authorized Shamoun
to make this offer to Malouf to settle all pending cases. In this conversation, Wright also told
Shamoun that Hill had offered to pay him a bonus based on this settlement offer—Hill would pay
Shamoun 50% of the savings, if any, between the $73 million ceiling and the cash component of the
global settlement if that resolution was reached before the RICO trial in May. As Shamoun
understood it at the time, Hill would keep the other 50% of any settlement savings. If a global
settlement was achieved for $73 million or more, Shamoun understood that under Hill’s offer he
would receive nothing.
Shamoun immediately relayed the $73 million settlement offer to Malouf, who again
indicated no interest in settling. After this rejection, Shamoun called Hill. Shamoun told Hill that
he and Wright had spoken earlier that day, and Wright had relayed Hill’s desire for a global
resolution of all the cases in the web of litigation and had extended Hill’s settlement-bonus offer to
achieve that end. Shamoun claims that in this conversation he formally accepted Hill’s offer.
Shamoun’s understanding of his obligation under this alleged oral contingent-fee agreement was to
achieve a global resolution of all the cases in the web of litigation before the RICO trail and have
the trial court vacate the contempt order against Hill.
In April 2010, after Hill’s counsel withdrew in the RICO case, Shamoun agreed to formally
represent Hill in that case and in a separate probate case. Hill and Shamoun executed two hourly
4
fee, limited-engagement agreements on April 12 and April 13—bringing the total to four written
engagement agreements between Hill and Shamoun.
On April 30, Shamoun and Hill were summoned to the federal courthouse to discuss the
status of the settlement. Shamoun and Hill both testified that during their visit to the courthouse,
Shamoun told Hill three times to “remember my bonus,” and that each time Hill confirmed that he
remembered. Hill testified that he thought Shamoun’s request was odd, and he later told Wright
about the exchange.
On May 2, Wright presented to Hill a document entitled “Performance Incentive Bonus.”
Wright testified that she prepared the document in May, that she alone drafted it, and that the
document correctly represented the oral contingent-fee agreement Shamoun reached with Hill. The
document, which was introduced into evidence by both parties, stated: “The performance incentive
bonus shall be calculated as the delta between $55 million and $73 million, and shall be split 50/50
between Law Offices of Frances Johnson Wright, P.C. and Shamoun and Norman.” Shamoun
testified he had not seen the document before it was presented to Hill and had no part in drafting it.
When Wright presented the document to Hill, Hill refused to sign it.
A settlement conference was ordered in the RICO case for May 4, 2010, before federal
Magistrate Judge Paul Stickney. In attendance were Shamoun, Hill, Hill III, and Hill III’s attorney,
Charla Aldous. At this conference, Shamoun communicated Hill’s settlement terms to Hill III and
his attorney. Aldous said the terms included, but were not limited to, vacating federal orders from
the federal lawsuit and settling the cases composing the web of litigation. No settlement documents
were signed at that time, but the parties were back in court the next day for a court-ordered
5
mediation. Later that day, Shamoun discovered Wright’s failed attempt to memorialize the oral
contingent-fee agreement. Shamoun called Hill that evening to ask about it and recorded the
conversation, unbeknownst to Hill. Hill, in response to Shamoun’s inquiry about whether the two
had an agreement, stated, “we need to make a deal that is understandable and reasonable. You
know, that has some relevance and makes sense.” Hill and Shamoun spoke again by phone later that
evening. Hill testified that in this call he fired Shamoun, but Hill admitted that he “should have
elaborated a bit more.” Shamoun’s understanding of that conversation was not that Hill had fired
him, but merely that Hill told him that two other attorneys, Keith Benedict and Ty Miller, would be
taking the lead at the mediation the next day. Shamoun thought this made sense because those
attorneys were more familiar with the specific trust and tax issues at hand.
Shamoun presented text messages and emails showing that he was still in contact with
Benedict and Miller about the settlement agreement on the morning of May 5. Shamoun attended
the mediation on May 5 but left early. Before he left, Shamoun asked Hill about the oral contingent-
fee agreement again and told Hill not to have a “selective memory,” to which Hill responded, “Trust
me.” The final settlement terms were read into the record at the end of the mediation on May 5, and
a formal settlement agreement was signed on May 13, 2010.
There is disputed testimony as to who negotiated the final settlement. Aldous and Malouf
testified that the terms Shamoun discussed prior to and on May 4 became part of the settlement
agreement signed on May 13. Hill, Benedict, and Judge Stickney—who acted as mediator—testified
that Shamoun was not involved and did not settle the web of litigation on May 5. Judge Stickney
6
testified that during Shamoun’s brief time at the mediation on May 5, Shamoun said he was not
representing Hill in the mediation because of a disagreement.
On May 17, 2010, Hill sent Shamoun a formal letter terminating his representation in all
matters. The letter stated:
As you know, I terminated your representation of me as settlement counsel prior to
the global settlement in the cases in which you were providing representation. Given
the claim you and Frances Wright have made to a fee contingent on the terms of that
settlement, I think it would be better if you and I fully disengaged.
On August 16, 2010, S&N sent Hill a demand letter claiming $11,250,000 for its legal services. Hill
declined to pay this amount, but he did satisfy all other fee obligations relating to the four written
engagement agreements between him and S&N.
S&N subsequently brought suit against Hill for breach of contract, fraud, fraudulent
inducement, civil conspiracy, quantum meruit, quasi-estoppel, exemplary damages, and attorney’s
fees.1 Hill filed counterclaims against S&N and Shamoun for breach of fiduciary duty, breach of
contract, and civil conspiracy. Before trial, the trial court granted Hill’s summary judgment motion
on S&N’s breach-of-contract and quasi-estoppel claims, and S&N abandoned its civil-conspiracy
claim against Hill. The case went to trial on S&N’s quantum-meruit, fraud, and fraudulent-
inducement claims and Hill’s counterclaims. The trial court granted Hill’s motion for directed
verdict on S&N’s fraud and fraudulent-inducement claims, but it denied his motion for directed
verdict on quantum meruit.
1
S&N also asserted various causes of action against Benedict, Miller, and AG Hill Partners, LLC, but later
nonsuited those claims.
7
At trial, S&N’s counsel conceded that the “Performance Incentive Bonus” was unenforceable
because it was an oral contingent-fee agreement. S&N’s damages expert, Richard Sayles, testified
at trial to the reasonable value of S&N’s services by considering the factors laid out in Arthur
Andersen & Co. v. Perry Equip. Corp., 945 S.W.2d 812, 818 (Tex. 1997).2 Sayles discussed each
factor individually and concluded that the reasonable value of S&N’s services in reaching a global
settlement of the web of litigation was $15,912,500—the same amount that S&N would be entitled
to had the “Performance Incentive Bonus” been an enforceable contract. On direct examination,
Sayles indicated that he calculated this number based on the terms of the oral contingent-fee
agreement that Shamoun alleges he and Hill entered into on March 27, 2010.3 On cross
examination, Sayles further admitted that his opinion was based on the assumption that this alleged
agreement was enforceable.4 Shamoun testified that he worked between 150 and 400 hours
2
The factors are:
(1) the time and labor required, the novelty and difficulty of the questions involved, and the skill
required to perform the legal service properly; (2) the likelihood . . . that the acceptance of the
particular employment will preclude other employment by the lawyer; (3) the fee customarily charged
in the locality for similar legal services; (4) the amount involved and the results obtained; (5) the time
limitations imposed by the client or by the circumstances; (6) the nature and length of the professional
relationship with the client; (7) the experience, reputation, and ability of the lawyer or lawyers
performing the services; and (8) whether the fee is fixed or contingent on results obtained or
uncertainty of collection before the legal services have been rendered.
Arthur Andersen, 945 S.W.2d at 818.
3
On direct examination, Sayles testified:
[A]s I understand it, the value on the services between [Shamoun] and [Hill] was that the cash
component of the overall settlement, being half of the difference between 73 million and whatever the
cash component turned out to be . . . . [T]he cash component was about 41.175 million. So you do the
math on that and it comes up to the fee that I gave you.
4
On cross examination, Sayles testified:
Q: [Y]our opinions are based on the assumption that Mr. Hill promised a mandatory bonus to Mr.
8
performing global settlement services for Hill, but, in contrast to his work under the four
engagement agreements, he did not keep records of his time on this matter. Sayles admitted that his
opinion as to the reasonable value of S&N’s services would not be justified based on a time factor
alone.
Hill’s defense at trial was that Shamoun’s so-called “global settlement services” were
actually services already covered under the four engagement agreements the parties executed prior
to the alleged oral contingent-fee agreement, thus preventing S&N’s recovery under quantum
meruit. Hill offered each engagement agreement into evidence at trial. Shamoun’s fee under those
agreements ranged from $400 to $650 per hour. Shamoun testified that in 2010 he charged his
clients anywhere from $275 to $600 per hour.
The jury found in favor of S&N on its quantum-meruit claim, concluding that (1) S&N had
provided compensable global settlement services for Hill, and (2) the reasonable value of S&N’s
compensable global settlement services was $7,250,000. The jury did not award S&N any
attorney’s fees. The jury also found in S&N’s favor on all of Hill’s counterclaims. In response to
this verdict, Hill filed a motion to determine appropriate equitable relief and set aside the jury
findings, and S&N filed a motion to disregard the jury’s award of zero attorney’s fees. The trial
court granted Hill’s motion, setting aside the jury’s quantum-meruit findings and rendering a take-
nothing judgment. S&N appealed.
Shamoun. That’s fair, right?
A: I believe that [Hill] agreed to that bonus as being the fair value of achieving a global settlement as
Gregory Shamoun described in his own testimony.
Q: And that’s an assumption you’re making?
A: That’s what I am basing my opinion on, I don’t have anything beyond that.
9
The court of appeals reversed, holding that the trial court should not have granted Hill’s
motion to disregard because the verdict conflicted with Texas Government Code section 82.065 and
there was legally sufficient evidence to support the jury’s finding both that S&N provided
compensable global settlement services and that the monetary value of those services was
$7,250,000. 483 S.W.3d 767, 779–80 (Tex. App.—Dallas 2016, pet. granted). In determining that
there was sufficient evidence to support this award, the court of appeals relied primarily on Sayles’s
expert opinion. Id. at 785–89.
In this Court, Hill presents two issues in support of his position that the court of appeals
erroneously reinstated the jury verdict that the trial court set aside. First, Hill raises a legal
question—whether Texas Government Code section 82.065, a statute of frauds that requires
contingent-fee contracts for legal services be signed and in writing, precludes a law firm’s quantum-
meruit recovery as a matter of law for legal services performed under an alleged oral contingent-fee
agreement. See TEX. GOVT. CODE § 82.065. Second, Hill contends that the court of appeals’
decision violates equitable principles governing quantum meruit, including that the ultimate decision
on the amount of equitable relief to be awarded belongs to the trial court. We address each issue in
turn.
II. S&N’s Quantum-Meruit Claim
We first address Hill’s contention that the court of appeals’ decision violates the statute of
frauds by reinstating a jury verdict that gives legal effect to an unenforceable oral contingent-fee
agreement. Specifically, we must determine whether Texas Government Code section 82.065
10
precludes S&N’s quantum-meruit recovery as a matter of law for the global settlement services
Shamoun provided. We hold it does not.
A. Statute of Frauds
Quantum meruit is an equitable remedy that is “based upon the promise implied by law to
pay for beneficial services rendered and knowingly accepted.” In re Kellogg Brown & Root, Inc.,
166 S.W.3d 732, 740 (Tex. 2005). The purpose of this common law doctrine is to prevent a party
from being “unjustly enriched” by “retain[ing] the benefits of the . . . performance without paying
anything in return.” Truly v. Austin, 744 S.W.2d 934, 938 (Tex. 1988). To recover under a
quantum-meruit claim, a claimant must prove that: (1) valuable services were rendered or materials
furnished; (2) for the person sought to be charged; (3) those services and materials were accepted
by the person sought to be charged, and were used and enjoyed by him; and (4) the person sought
to be charged was reasonably notified that the plaintiff performing such services or furnishing such
materials was expecting to be paid by the person sought to be charged. Vortt Exploration Co. v.
Chevron U.S.A., Inc., 787 S.W.2d 942, 944 (Tex. 1990). A party generally cannot recover under a
quantum-meruit claim when there is a valid contract covering the services or materials furnished.
In re Kellogg Brown & Root, 166 S.W.3d at 740. The measure of damages for recovery under a
quantum-meruit theory is the reasonable value of the work performed and the materials furnished.
E.g., Lamajak, Inc. v. Frazin, 230 S.W.3d 786, 796 (Tex. App.—Dallas 2007, no pet.).
The court of appeals relied in part on Texas Government Code section 82.065(c) in holding
that S&N’s quantum-meruit claim was permissible despite the fact that the parties lacked a signed
agreement. 483 S.W.3d at 778–80. Section 82.065 currently reads:
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(a) A contingent fee contract for legal services must be in writing and signed by
the attorney and client.
(b) Any contract for legal services is voidable by the client if it is procured as a
result of conduct violating Section 38.12(a) or (b), Penal Code, or Rule 7.03
of the Texas Disciplinary Rules of Professional Conduct of the State Bar of
Texas, regarding barratry by attorneys or other persons.
(c) Any attorney who was paid or owed fees or expenses under a contract that
is voided under this section may recover fees and expenses based on a
quantum meruit theory if the client does not prove that the attorney
committed barratry or had actual knowledge, before undertaking the
representation, that the contract was procured as a result of barratry by
another person. To recover fees or expenses under this subsection, the
attorney must have reported the misconduct as required by the Texas
Disciplinary Rules of Professional Conduct of the State Bar of Texas, unless:
(1) another person has already reported the misconduct; or
(2) the attorney reasonably believed that reporting the misconduct would
substantially prejudice the client’s interests.
TEX. GOVT. CODE § 82.065. The court of appeals reasoned that even if Hill and S&N’s oral
contingent-fee agreement was void under subsection (a) because it was not it writing, subsection (c)
permits an attorney to recover fees owed under quantum meruit. 483 S.W.3d at 779. Thus, the fact
that the parties’ oral contingent-fee agreement was unenforceable under the statute of frauds did not
preclude S&N’s quantum-meruit claim. Id.
Whether a contract falls within the statute of frauds is a question of law, which we review
de novo. Dynegy, Inc. v. Yates, 422 S.W.3d 638, 642 (Tex. 2013). Section 82.065, enacted in 1989,
originally consisted of only subsections (a) and (b). Act of May 29, 1989, 71st Leg. R.S., ch. 866,
§ 3, 1989 Tex. Gen. Laws 3855, 3857. In 2011, the Legislature added subsection (c) and broadened
subsection (b) to apply to “any contract for legal services” rather than only a “contingent fee
contract.” Act of May 19, 2011, 82d Leg., R.S., ch. 94, § 4, sec. 82.065(b), (c), 2011 Tex. Gen.
12
Laws 534, 534–35. Subsection (b) was further amended in 2013. Act of May 17, 2013, 83d Leg.,
R.S., ch. 315, § 1, sec. 82.065(b), 2013 Tex. Gen. Laws 1073, 1075 (narrowing subsection (b)’s
applicability by removing “the laws of this state” and replacing it with “Section 38.12(a) or (b),
Penal Code or Rule 7.03”).
Hill and S&N agree that the court of appeals erred in applying subsection (c) because the
alleged oral contingent-fee agreement would have been entered into before the enactment of that
subsection.5 The 2011 version of section 82.065, effective September 1, 2011, and the 2013 version,
effective September 1, 2013, do not apply to contracts entered into prior to their effective dates. § 4,
sec. 82.065(b), (c), 2011 Tex. Gen. Laws at 535 (“Section 82.065, Government Code, as amended
by this Act, applies only to a contract entered into on or after the effective date of this Act. A
contract entered into before the effective date of this Act is governed by the law in effect
immediately before the effective date of this Act, and that law is continued in effect for that
purpose.”); § 1, sec. 82.065(b), 2013 Tex. Gen. Laws at 1075 (using the same language as the 2011
Act). S&N and Hill allegedly entered into the unenforceable oral contingent-fee agreement in 2010.
Thus, the court of appeals was required to apply the 1989 version of section 82.065, which did not
contain subsection (c).
S&N concedes that the alleged oral contingent-fee agreement is unenforceable under section
82.065(a), but argues it is nevertheless entitled to the reasonable value of its services under a
quantum-meruit theory in order to prevent Hill’s unjust enrichment. Hill argues that S&N’s claim
5
Hill further argues that the court of appeals erred in applying subsection (c) because it applies only to contracts
procured through barratry. Because we hold that the court of appeals erred in relying on subsection (c) based on the
subsection’s effective date, we do not address this argument.
13
is an attempt to circumvent the statute of frauds and give effect to an otherwise unenforceable
contingent-fee agreement. The statute of frauds, Hill argues, dictates that attorney’s fees cannot be
based on a measure that is contingent on the result.
Whether the statute of frauds bars recovery for a non-contract claim depends on the nature
of the damages the plaintiff seeks to recover. Baylor Univ. v. Sonnichsen, 221 S.W.3d 632, 636
(Tex. 2007); Haase v. Glazner, 62 S.W.3d 795, 800 (Tex. 2001). In Haase, we held that the statute
of frauds bars a fraud claim to the extent the plaintiff seeks to recover as damages the benefit of a
bargain that cannot otherwise be enforced because it fails to comply with the statute of frauds. 62
S.W.3d at 799. We relied on this holding in Sonnichsen when we held that the statute of frauds
barred a volleyball coach’s fraud claim for benefit-of-the-bargain damages when the claim arose
from an unenforceable oral employment contract. 221 S.W.3d at 637. We noted, however, that the
statute of frauds does not bar recovery of out-of-pocket damages for fraud, and if Sonnichesen had
sought such restitution-based damages, his suit would have been viable. Id. at 636.
Here, S&N initially pled a claim for breach of the alleged oral contingent-fee agreement,
seeking the benefit of that bargain. But before trial, the court granted Hill’s summary judgment
motion on the breach-of-contract claim, and S&N’s only issue submitted to the jury was on quantum
meruit. The jury charge tracked the Pattern Jury Charge on quantum-meruit damages, asking
(1) whether S&N performed “compensable global settlement services” for Hill, and if so, (2) what
was the “reasonable value of such compensable global services at the time and place they were
performed.” See Comm. on Pattern Jury Charges, State Bar of Tex., TEX. PATTERN JURY
CHARGES: BUSINESS, CONSUMER, INS. & EMPLOYMENT 115.7 (2012). Thus, S&N sought
14
only the reasonable value of its services in assisting Hill reach a global settlement, not the benefit
of its bargain under the alleged oral contingent-fee agreement.
Further, despite Texas Government Code section 82.065(c)’s inapplicability in this case, the
common law has provided for quantum-meruit recoveries for attorneys who did not have written
contingent-fee agreements that complied with subsection (c). For example, in Celmer v. McGarry,
412 S.W.3d 691 (Tex. App.—Dallas 2005, pet. denied), the court of appeals rejected an attorney’s
argument that a series of emails constituted evidence of a contingent-fee agreement but held that the
attorney was permitted to recover the reasonable value of his services in quantum meruit. Id. at
707–08 (“[W]here a written contract is unenforceable, a plaintiff is not barred from recovery in
quantum meruit.”); see also In re Webber, 350 B.R. 344, 381–82 (Bankr. S.D. Tex. 2006) (mem.
op.) (applying Texas law, “[t]his Court finds that even if the oral contingency fee agreement is void
[under section 82.065(a)], [the attorney] may recover attorney’s fees on the equitable principle of
quantum meruit”).
“The purpose of the Statute of Frauds is to remove uncertainty, prevent fraudulent claims,
and reduce litigation.” Givens v. Dougherty, 671 S.W.2d 877, 878 (Tex. 1984). This Court has
recognized that attorney-client contracts “are [to be] closely scrutinized.” Anglo-Dutch Petrol. Int’l
v. Greenberg Peden, P.C., 352 S.W.3d 445, 450 (Tex. 2011). Section 82.065(a)’s requirement that
such agreements be in writing and signed by both parties makes clear the Legislature’s concern that
clients are aware of the terms of their contracts for legal services. See TEX. GOV’T CODE
§ 82.065(a). This concern, however, does not preclude an attorney’s recovery for the reasonable
value of his or her services under the equitable theory of quantum meruit. See, e.g., Celmer, 412
15
S.W.3d at 708. To hold otherwise would allow some clients to be unjustly enriched by retaining the
benefits of an attorney’s performance without paying anything in return. See Truly, 744 S.W.2d at
938. Accordingly, we hold that Texas Government Code section 82.065(a) does not preclude a law
firm’s quantum-meruit suit to recover the reasonable value of legal services performed under an
unenforceable agreement.
The court of appeals relied on Enochs v. Brown, 872 S.W.2d 312, 321 (Tex. App.—Austin
1994, no writ), disapproved on other grounds, Roberts v. Williamson, 111 S.W.3d 113 (Tex. 2003)
(addressing whether parents of injured children may recover loss-of-consortium damages), in
permitting S&N’s quantum-meruit claim. 483 S.W.3d at 779. Though we similarly hold that Texas
Government Code section 82.065(a) does not preclude S&N’s claim despite the lack of a signed
writing, the court of appeals’ analysis in Enochs conflicts with our later decision in Quigley v.
Bennett, 227 S.W.3d 51 (Tex. 2007), and thus did not influence our opinion.6
B. Legal Sufficiency of the Evidence
Having determined that the statute of frauds does not preclude S&N’s quantum-meruit claim
as a matter of law, we next consider Hill’s argument that the jury verdict fails because the jury’s
quantum-meruit findings are not supported by legally sufficient evidence. We hold that there was
6
In Enochs, the court of appeals affirmed an attorney’s recovery of fees based on a written contingent-fee
contract that was signed only by the client despite Texas Government Code section 82.065(a). 872 S.W.2d at 317–19.
The court reasoned that subsection (a)’s purpose was fulfilled because the client’s signature demonstrated her awareness
of the contingent-fee arrangement and because the attorney had fully performed. Id. at 318. The court next addressed
the alternative quantum-meruit holding in the event that the contract was not enforceable. Id. at 320. In reviewing the
appellant’s no-evidence challenge, the court considered the client’s mother’s testimony that “she understood that [the
lawyer’s] fee would be one-third of [the client’s] recovery.” Id. at 321. Given our later holding in Quigley, it was
improper for the court to consider evidence of the value of the unenforceable contingent-fee agreement as evidence
supporting quantum-meruit recovery. See discussion infra.
16
legally sufficient evidence to support the jury’s determination that S&N performed compensable
global settlement services for Hill. However, because there was some evidence of the value of
S&N’s services, but not enough to support the jury’s award, we reverse the part of the court of
appeals’ judgment that reinstated the jury’s verdict and remand the case to the trial court for a new
trial on the amount of S&N’s recovery. See Midland W. Bldg. L.L.C. v. First Serv. Air Conditioning
Contractors, 300 S.W.3d 738, 739 (Tex. 2009) (per curiam) (reversing and remanding for a new trial
on attorney’s fees when there was evidence that services provided some value but insufficient
evidence to support the full fee requested).
Evidence is legally insufficient to support a jury finding when (1) the record discloses a
complete absence of evidence of a vital fact, (2) the court is barred by rules of law or of evidence
from giving weight to the only evidence offered to prove a vital fact, (3) the evidence offered to
prove a vital fact is no more than a mere scintilla, or (4) the evidence conclusively establishes the
opposite of a vital fact. Crosstex N. Tex. Pipeline, L.P. v. Gardiner, 505 S.W.3d 580, 613 (Tex.
2016) (citations omitted). “In determining whether there is no evidence of probative force to support
a jury’s finding, all the record evidence must be considered in the light most favorable to the party
in whose favor the verdict has been rendered,” Merrell Dow Pharms. v. Havner, 953 S.W.2d 706,
711 (Tex. 1997), including evidence offered by the opposing party that supports the verdict. See
City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005) (“Nor can evidence supporting a verdict
be identified by which party offered it . . . .”).
As stated above, to recover under a quantum-meruit theory, a claimant must prove that:
(1) valuable services were rendered or materials furnished; (2) for the person sought to be charged;
17
(3) those services and materials were accepted by the person sought to be charged, and were used
and enjoyed by him; and (4) the person sought to be charged was reasonably notified that the
plaintiff performing such services or furnishing such materials was expecting to be paid by the
person sought to be charged. Vortt Exploration Co., 787 S.W.2d at 944. A party must introduce
evidence on the correct measure of damages to recover on a quantum-meruit claim, meaning that
the party must establish the reasonable value of work performed or materials furnished. LTS Group,
Inc. v. Woodcrest Capital, L.L.C., 222 S.W.3d 918, 920–21 (Tex. App.—Dallas 2006, no pet.). A
quantum-meruit claim does not proceed on a contract for a specified price, but proceeds
independently of a contract to recover the value of the services rendered or materials furnished. Air
Conditioning, Inc., v. L.E. Travis & Sons, Inc., 578 S.W.2d 554, 556 (Tex. Civ. App.—Austin 1979,
no writ). When an attorney attempts to support a quantum-meruit claim with a bare contingent-fee
percentage and no supporting evidence of the value of services rendered, courts deem the claimed
contingent-fee agreement “no evidence” of the reasonable value of the services performed. E.g., Ray
v. T.D., No. 03-06-00242-CV, 2008 WL 341490, at *7–8 (Tex. App.—Austin Feb. 7, 2008, no pet.)
(mem. op.); see also Girards v. Frank, No. 3:13-cv-2695-BN, 2016 WL 454465, at *10 (N.D. Tex.
Feb. 5, 2016) (stating that the law firms’ expected percentage of fee-sharing under an unenforceable
agreement was not evidence of the specific value of the work performed). Additionally, evidence
of the value of an agreement that is unenforceable under the statute of frauds “cannot be given any
weight or effect and legally cannot be considered as evidence supporting the jury’s finding.” See
Quigley, 227 S.W.3d at 54.
18
Hill argues that S&N’s quantum-meruit claim fails because Shamoun’s so-called “global
settlement services” were actually services already covered under the four signed engagement
agreements. Additionally, Hill argues that our holding in Quigley means that the value of the
alleged unenforceable oral contingent-fee agreement between Hill and Shamoun cannot be given
any legal weight, thus prohibiting consideration of Sayles’s expert opinion, which relied on the
terms of that agreement.7 Because Sayles’s opinion is the only evidence S&N offered as to the
reasonable value of its services and it cannot be considered, Hill argues, there is no evidence to
support the jury’s award. S&N argues that Sayles’s opinion is permissible because his calculation
of the reasonable value of S&N’s services did not rely exclusively on the oral contingent-fee
agreement; Sayles also offered opinions as to why the reasonable fee he proffered was appropriate
under each of the Arthur Andersen factors.
A party generally cannot recover under a quantum-meruit theory when there is a valid
contract covering the services or materials furnished. In re Kellogg Brown & Root, 166 S.W.3d at
740. However, the existence of an express contract does not preclude recovery in quantum meruit
for the reasonable value of work performed and accepted which is not covered by an express
contract. Black Lake Pipe Line Co. v. Union Const. Co., 538 S.W.2d 80, 86 (Tex. 1986), overruled
on other grounds by Sterner v. Marathon Oil Co., 767 S.W.2d 686 (Tex. 1989). The question of
7
S&N claims Hill waived this evidentiary challenge because Hill did not object at trial to Sayles’s calculation
as inadmissible under Quigley or Texas Government Code section 82.065. Hill’s motion for directed verdict and
renewed motion for directed verdict argued, however, that S&N’s only damages evidence was the oral agreement and
the statute of frauds bars recovery based on the oral agreement—thus preserving his legal sufficiency challenge. See
Office of the Atty. Gen. v. Burton, 369 S.W.3d 173, 175 (Tex. 2012) (per curiam) (“As a general rule, an appellant must
first complain to the trial court by a timely request, objection, or motion and obtain a ruling as a prerequisite for appellate
review of that complaint, but the general rule does not apply to complaints about the sufficiency of the evidence in a trial
to the court.”).
19
whether an express contract covers the services at issue is a legal question reviewed de novo.
Christus Health v. Quality Infusion Care, Inc., 359 S.W.3d 719, 724 (Tex. App.—Houston [1st
Dist.] 2011, no pet.).
Each of the four written limited-engagement agreements, signed by Hill and Shamoun on
behalf of S&N, covers “reasonable and necessary legal services, including, without limitation,
conducting a preliminary investigation; drafting documents, correspondence, and pleadings; motion
practice; conducting and defending discovery; attending mediation and trial; and drafting settlement
documents.” However, the agreements also contain language limiting the scope of services to the
specifically named cause of action, such as: “[This] Engagement is not general in nature, but is
limited to the definition of ‘Engagement’ contained herein, and . . . S&N shall perform the
Engagement but shall be under no obligation to perform services not within the scope of the
Engagement.” Thus, nothing in these agreements granted S&N authority to engage in global
settlement services regarding the various lawsuits in the web of litigation. Further, Shamoun’s
initial contact with Malouf about a global settlement was over a month before the parties executed
the third and fourth engagement agreements in which Shamoun replaced Hill’s lead attorney in the
RICO case. Therefore, we agree with the court of appeals that the four limited-engagement
agreements do not encompass any services S&N provided in negotiating the global settlement.
We also agree that there was legally sufficient evidence to support the jury’s finding that
S&N performed global settlement services for Hill outside of those four engagement agreements and
that Hill was aware Shamoun expected to be paid for these services. The jury heard extensive
testimony from Shamoun about how he worked as the “one voice” across Hill’s approximately one
20
hundred lawyers in seeking a global resolution of the cases composing the web of litigation. The
jury heard testimony that Shamoun’s services avoided over $1 billion in liability exposure for Hill,
achieved dismissal of more than twenty contentious and expensive legal battles, and resulted in a
federal judge vacating a perjury finding against Hill. Malouf, Hill III’s lead attorney, testified that
from the end of March to May 1, 2010, only he and Shamoun engaged in settlement discussions.
Malouf described the discussions as “intensive” and involving twelve- to fifteen- hour days. Several
witnesses testified that Shamoun relayed Hill’s primary settlement terms to Hill III and his attorney
at the May 4 settlement conference, and that it was at this conference that the parties reached a
global resolution in principle of all the cases composing the web of litigation. Malouf testified that
the “genesis of those terms [in the final settlement agreement] was the discussions [he] had with Mr.
Shamoun.” Finally, the jury heard an audio recording of the phone conversation that took place after
that settlement conference between Hill and Shamoun, in which Hill acknowledged that Shamoun
should be compensated for his services, but said the parties need to make a deal that was
“understandable and reasonable.” Reviewing the record in the light most favorable to the jury’s
finding, we conclude that S&N presented more than a mere scintilla of evidence to support the jury’s
finding that Shamoun provided Hill valuable, compensable global settlement services.
We next examine whether there was legally sufficient evidence to support the jury’s award
of $7,250,000 as the reasonable value of those services. In evaluating legal sufficiency, we must
first determine whether, as Hill argues, Sayles’s expert testimony cannot be given legal weight under
our holding in Quigley, or whether, as S&N argues, Quigley is distinguishable.
21
In Quigley, a geologist named Bennett agreed to help Quigley analyze Bennett’s interest in
some oil and gas leases in anticipation of selling those interests. 227 S.W.3d at 52. The parties had
no written or oral agreement as to Bennett’s compensation. Id. Sometime after the project was
completed and Bennett had not been paid, he sued Quigley for fraud and quantum meruit,
alternatively, seeking the value of a royalty interest as damages. Id. at 53. At trial, Bennett
presented evidence that geologists are usually compensated with overriding royalty interests in the
prospects they help generate, and that the value of a 1% overriding royalty interest in the past and
estimated future production of the leases Bennett’s work helped Quigley sell was approximately $4
million. Id. Quigley offered evidence that geologists who work for cash compensation rather than
overriding royalty interests earned between $500 a day and $20,000 per job. Id. The jury awarded
Bennett $1 million on his fraud claim and $2,500 on his quantum-meruit claim, and the court of
appeals affirmed. Id. at 53–54.
We reversed, holding that because there was no written agreement and an agreement to
transfer a royalty interest falls within the statute of frauds, evidence of the value of the interest could
not be given any legal effect in support of a damages award on Bennett’s fraud claim. Id. at 54–55.
Allowing such evidence would “circumvent the protections of the statute [of frauds].” Id.; see also
id. at 57 (Brister, J., dissenting on other grounds) (“[T]he problem was not with the charge but with
the evidence Bennett tried to squeeze into it. There was no evidence that generating geologists are
paid $1 million in cash for their services; the evidence showed they are paid royalty interests, which
are sometimes worth $1 million and sometimes worth nothing. As the Statute of Frauds prevents
22
enforcement of oral contracts for royalty interests, it likewise prevents an action for damages
measured by that amount.”).
The Legislature has made clear that a contingent-fee contract for legal services must be in
writing and signed by the attorney and client to be enforceable. TEX. GOVT. CODE § 82.065(a). As
in Quigley, allowing S&N to recover the value of the oral contingent-fee agreement would give
effect to an otherwise unenforceable agreement. See 227 S.W.3d at 54. Thus, as we reasoned in
Quigley, evidence of the oral contingent-fee agreement’s value “cannot be given any weight or effect
and legally cannot be considered as evidence supporting the jury’s award.” Id. Accordingly, we
hold that an attorney’s contingent-fee agreement that violates the statute of frauds cannot be
considered as evidence of the reasonable value of that attorney’s services.
S&N argues that Quigley is distinguishable because this holding was part of the Court’s
disposition of Bennett’s fraud claim, whereas the Court reversed Bennett’s quantum-meruit claim
only on limitations grounds. The court of appeals distinguished Quigley for the same reason. 483
S.W.3d at 780. However, our holding is consistent with previous holdings that the statute of frauds
bars recovery for non-contract claims if the plaintiff seeks to recover the benefit of his or her
bargain. See Sonnichsen, 221 S.W.3d at 636; Haase, 62 S.W.3d at 800. This principle applies to
any non-contract claim seeking benefit-of-the-bargain damages under an agreement voided by the
statute of frauds, not merely fraud claims. See Sonnichsen, 221 S.W.3d at 636. Just as the plaintiff
in Quigley sought the benefit of his bargain by offering evidence of the value of the overriding
royalty interest, here, in offering an expert opinion that ultimately relied on the alleged oral
contingent-fee agreement, S&N sought the benefit of its bargain under that alleged, unenforceable
23
agreement, even though it submitted its claim via a quantum-meruit theory. See Haase, 62 S.W.3d
at 798–99 (noting that when the bargain violates the statute of frauds and is unenforceable, allowing
recovery for benefit-of-the-bargain damages would deprive the statute of any effect).
S&N also attempts to distinguish Quigley on the basis that the value of a royalty interest does
not inform the value of personal services the plaintiff rendered to the defendant as it does in this
case. S&N cites a series of quantum-meruit cases in which courts considered the value of personal-
service contracts as evidence of the value of personal services when they were supported by other
evidence of value. However, in none of the cases S&N cites did the parties’ contract violate the
statute of frauds. See, e.g., Brender v. Sanders Plumbing, Inc., No. 2-05-00067-CV, 2006 WL
2034244, at *1–2 (Tex. App.—Fort Worth July 20, 2006, pet. denied) (mem. op.); H.E. Butt Grocery
Co. v. Rencare, Ltd., No. 04-03-00190-CV, 2004 WL 199272, at *1–2 (Tex. App.—San Antonio
Feb. 4, 2004, pet. denied) (mem. op.). Here, we cannot conclude that the formula stated in the
“Performance Incentive Bonus” is how both parties valued S&N’s services when Hill disputes that
he ever agreed to such an arrangement.
Quigley requires us to exclude the entirety of Sayles’s opinion as to the reasonable value of
S&N’s services. Though he analyzed S&N’s services under each Arthur Andersen factor separately,
Sayles conceded that his final opinion was based on the assumption that Hill had agreed to the oral
contingent-fee agreement. Because Sayles’s testimony as to the value of S&N’s services cannot be
considered as a matter of law, the question becomes whether S&N provided other legally sufficient
evidence of the reasonable value of its services.
24
Sayles’s testimony is the only expert evidence S&N offered as to the reasonable value of its
services. Shamoun, Malouf, Judge Stickney, and Sayles testified to the scope of the services and
amounts at stake in the litigation, and Shamoun estimated that he worked between 150 and 400
hours performing global settlement services. Only Sayles offered an actual dollar amount as to the
reasonable value of S&N’s services. Hill offered evidence that Shamoun’s hourly rate under the
limited fee agreements—which Hill argued covered all of Shamoun’s work—was $650, the highest
rate Shamoun had ever charged. As the court of appeals acknowledged, neither party offered
evidence to the jury that an hourly rate times the number of hours worked was the proper method
of calculating the reasonable value of Shamoun’s services under his quantum-meruit claim. 483
S.W.3d at 787. Further, Hill did not object to the jury charge based on the argument that
“reasonable value” should be defined as an hourly rate times the number of hours worked.
Considering the evidence offered by both parties and in the light most favorable to S&N,
there is some evidence of the reasonable value of S&N’s services. In Quigley, absent evidence of
the overriding royalty interest, the only evidence of damages was that cash-based compensation for
a geologist was between $500 a day and $20,000 per job. 227 S.W.3d at 53. We held that though
this was some evidence of the value of Bennett’s work, it was legally insufficient to support the
entire $1 million fraud award, and we reversed the court of appeals’ judgment. Id. at 54. However,
because there was some evidence that Bennett suffered damages from Quigley’s actions constituting
fraud, we could not render judgment for Quigley on the fraud claim. Id. Similarly, the evidence of
Shamoun’s hourly rate under the limited-engagement agreements and the number of hours worked
on the settlement services constitutes some evidence of the reasonable value of S&N’s services.
25
Accordingly, we hold that the evidence is legally insufficient to support the jury’s answer to the
second question—that the reasonable value of S&N’s compensable global settlement services was
$7,250,000—but there was evidence to support some value.
III. Trial Court’s Discretion
In his second issue, Hill contends that even if S&N had a valid quantum-meruit claim and
presented legally sufficient evidence to support the jury’s findings, the court of appeals’
reinstatement of the jury’s verdict violated multiple equitable principles of quantum-meruit law.
Hill’s primary argument is that the court of appeals applied the wrong standard of review, which
deprived the trial court of its ultimate discretion to determine equitable awards.
The parties debate the correct standard of review we should apply in reviewing the trial
court’s order disregarding the jury findings and rendering a take-nothing judgment. Hill argues that
the court—not the jury—has ultimate discretion in fashioning equitable relief, and accordingly, the
trial court’s decision to set aside the jury’s verdict and render a take-nothing judgment must be
reviewed for an abuse of discretion. S&N claims that the jury’s quantum-meruit findings are
binding when supported by legally sufficient evidence and can be modified only when legally
sufficient evidence supports an equitable departure from the jury’s findings. Thus, according to
S&N, the trial court’s decision to disregard a jury finding must be reviewed under a legal sufficiency
standard.
As noted above, quantum-meruit is an equitable remedy based upon the promise implied by
law to pay for beneficial services rendered or materials furnished and knowingly accepted. In re
Kellogg Brown & Root, 166 S.W.3d at 740; Vortt Exploration Co., 787 S.W.2d at 944. Recovery
26
in quantum meruit will be had when nonpayment for the services rendered or materials furnished
would result in an unjust enrichment to the party benefitted by the work. Vortt Exploration Co., 787
S.W.2d at 944. As a general rule, the trial court, not the jury, determines the “expediency, necessity,
or propriety of equitable relief.” State v. Tex. Pet Foods, Inc., 591 S.W.2d 800, 803 (Tex. 1979).
“[W]hen contested fact issues must be resolved before equitable relief can be determined, a party
is entitled to have that resolution made by a jury.” Burrow v. Arce, 997 S.W.2d 229, 245 (Tex.
1999). “Once any such necessary factual disputes have been resolved, the weighing of all equitable
considerations . . . and the ultimate decision of how much, if any, equitable relief should be awarded,
must be determined by the trial court.” Hudson v. Cooper, 162 S.W.3d 685, 688 (Tex. App.—[14th
Dist.] 2005, no pet.) (citing Burrow, 997 S.W.2d at 245–46). When an attorney seeks fees for legal
services in equity, “the issue for the jury is the value of the attorney’s reasonable and necessary
services, not whether a reasonable fee thus determined should nevertheless be withheld for some
reason”—an “inherently equitable [decision that] must thus be made by the court.” Burrow, 997
S.W.2d at 245–46. In making such equity determinations, the court should weigh equitable
considerations particular to the case, but a trial court’s discretion to determine equitable relief is not
unlimited. See id. (discussing that in a fee forfeiture case, the court should consider “the adequacy
of other remedies and the public interest in protecting the integrity of the attorney-client relationship,
as well as the weighing of all other relevant considerations” and “whether a clear and serious
violation of duty has occurred”); Hudson, 162 S.W.3d at 688 (instructing that in a quantum-meruit
case, once the jury decides the disputed fact issues, the trial court should weigh “all equitable
considerations (such as whether the defendant has been unjustly enriched, the plaintiff would be
27
unjustly penalized if the defendant retained the benefits of the partial performance without paying
for them, and the plaintiff has ‘unclean hands’)”). A trial court’s decision to reduce a jury’s
attorney’s fee award for equity considerations is reviewed under an abuse of discretion standard and
may be overturned only if it was arbitrary or unreasonable. Ridge Oil Co., Inc. v. Guinn Invs., Inc.,
148 S.W.3d 143, 162–63 (Tex. 2004); cf. Wagner & Brown, Ltd. v. Sheppard, 282 S.W.3d 428–29
(Tex. 2008) (explaining that in “equitable actions, a jury may have to settle disputed issues about
what happened, but ‘the expediency, necessity, or propriety of equitable relief’ is for the trial court,
and its ruling is reviewed for an abuse of discretion”) (quoting Tex. Pet Foods, 591 S.W.2d at 803).
We note, however, that we cannot determine what equitable factors—if any—the trial court
considered in deciding to disregard the jury’s answers and render a take-nothing judgment. The trial
court granted Hill’s motion to disregard the jury’s findings without stating reasons. S&N
subsequently filed a motion asking the court to provide reasons for disregarding the jury’s verdict,
which the trial court denied. The trial court did not enter findings of facts and conclusions of law,
despite S&N’s request. We also note that Hill submitted his cross-claims to the jury with questions
asking whether Shamoun breached his fiduciary duty, engaged in a civil conspiracy, or breached
contracts. The jury answered all questions in Shamoun’s and S&N’s favor, and Hill has not argued
on appeal that either acted with unclean hands. See In re Gamble, 71 S.W.3d 313, 325 (Tex. 2002);
City of Fredericksburg v. Bopp, 126 S.W.3d 218, 221 (Tex. App.—San Antonio 2003, no pet.) (“A
party seeking to invoke [the unclean hands] doctrine must show that he has been seriously harmed
and the wrong complained of cannot be corrected without applying the doctrine.”).
28
Nevertheless, for the reasons expressed in our discussion of the first issue, see supra Part II,
in which we conclude that the evidence was legally insufficient to support the jury’s full award, we
hold that the trial court’s decision to disregard the jury’s damages finding was neither arbitrary nor
unreasonable. The trial court did abuse its discretion by awarding S&N no attorney’s fees, however,
when there was legally sufficient evidence that S&N performed global settlement services for Hill
and that Hill was aware Shamoun expected to be paid for those services. To hold otherwise would
allow Hill to be unjustly enriched despite the promise implied by law to pay for beneficial services
rendered and knowingly accepted. See In re Kellogg Brown & Root, 166 S.W.3d at 740.
Hill argues that the court of appeals violated three additional equity principles of law by:
(1) reinstating a jury award that is not a “reasonable” value as required under a quantum-meruit
theory, (2) allowing S&N to recover for services covered by a written contract, and (3) concluding
that S&N met its burden of showing it would suffer an “unjust penalty” if it did not recover. First,
because we hold that the court of appeals erred in reinstating the jury award and because we remand
the case to the trial court for a new trial on this issue, we do not decide whether that award was
“reasonable.” Further, after examining the language used in the engagement agreements as
discussed above, see supra Part II, we agree with the court of appeals that the global settlement
services were not covered by existing contracts. See In re Kellogg Brown & Root, 166 S.W.3d at
740. Finally, Hill cites our decision in Truly for his argument that the court of appeals erred in
concluding that S&N met its burden of showing that it would be unjustly penalized if it did not
recover anything for its services. See generally 744 S.W.2d at 936–38. The agreement in Truly was
a contract for construction services, and S&N argues that the “unjust penalty” equitable
29
consideration is limited to similar contracts where a contractor provides labor and materials to
benefit the project owner. S&N argues that even if this equitable consideration does apply here,
S&N was unjustly penalized by the trial court’s take-nothing judgment. S&N is correct that we have
not addressed unjust penalty as part of a plaintiff’s burden in a quantum-meruit claim outside of
construction contracts. See id. However, because we hold that the court of appeals erred in
reinstating the jury’s verdict and we remand the case for a new trial on this issue, we need not decide
the applicability of this equitable consideration in this case.
IV. S&N’s Recovery
When a reversible error affects only part of a case, Texas Rule of Appellate Procedure 61.2
prohibits this Court from ordering a new trial solely on unliquidated damages if liability is contested.
TEX. R. APP. P. 61.2. However, this Court has reversed and remanded for a new trial solely on
unliquidated attorney’s fees when liability was contested a number of times. See, e.g., Midland W.
Bldg., L.L.C., 300 S.W.3d at 739–40; Smith v. Patrick Y.T. Tam Trust, 296 S.W.3d 545, 548–49
(Tex. 2009) (per curiam) (remanding for a new trial on attorney’s fees when “the evidence did no
more than raise a fact issue to be decided by the jury”); A.G. Edwards & Sons, Inc. v. Beyer, 235
S.W.3d 704, 710 (Tex. 2007) (remanding for a new trial on attorney’s fees when fees had not been
segregated between claims for which fees are recoverable and those for which they are
unrecoverable). In Midland, this Court reversed and remanded for a new trial on attorney’s fees
when the jury erroneously awarded no fees, despite evidence that the legal services rendered in
defending the case provided some value, but there was insufficient evidence to support the full fee
sought and awarded by the court of appeals. 300 S.W.3d at 739–40. Similarly, here we have
30
determined that there was legally sufficient evidence to support the jury’s finding that S&N
performed compensable global settlement services, and though the expert opinion cannot be
considered as evidence because it gives effect to an unenforceable agreement, there is some evidence
of the value of S&N’s services to Hill. Here, the jury’s determination on remand—that is, the
reasonable value of legal services S&N provided Hill—is no different from jury determinations in
the many cases in which this Court has remanded for a new trial to determine attorney’s fees. See,
e.g., id.; Patrick Y.T. Tam Trust, 296 S.W.3d at 548–49; A.G. Edwards & Sons, Inc., 235 S.W.3d
at 710. Although Texas Rule of Appellate Procedure 61.2 prohibits us from ordering a new trial
solely on unliquidated damages when liability is contested, see TEX. R. APP. P. 61.2, we see good
cause to suspend that rule in this case because the determination of S&N’s quantum-meruit recovery
on remand amounts to a determination of reasonable attorney’s fees. See TEX. R. APP. P. 2 (allowing
this Court to suspend a rule’s operation in order “to expedite a decision or for other good cause”).
Additionally, we hold that attorneys seeking recovery for legal services under a quantum-
meruit theory must show that the attorney’s fee award is “reasonable” under Arthur Andersen. See
945 S.W.2d at 818. We note that Arthur Andersen suggests that a fact finder consider both “the
amount involved and the results obtained” and “whether the fee is fixed or contingent.” Id. Our
holding, however, makes clear that evidence of an oral contingent-fee agreement prohibited by the
statute of frauds is no evidence of the reasonable value of that attorney’s services and cannot be
considered. It follows, then, that neither the fee an attorney stood to earn under such an
unenforceable fee agreement nor the specific result that would entitle the attorney to that contingent
fee under the agreement constitutes evidence to be considered under the Arthur Andersen factors.
31
Thus, under these circumstances, when the attorney has performed services under an alleged
contingent-fee agreement prohibited by the statute of frauds but has provided some value to the
client, the alleged contingent-fee agreement is no evidence of the “reasonableness” of the value of
the attorney’s services. It is possible that in some circumstances the amount due under an
unenforceable contingent-fee agreement and a reasonable attorney’s fee will be the same. Here, a
jury would have to find that the fee for Shamoun’s 150 to 400 hours of work is “reasonable” under
the Arthur Andersen factors. See id; General Motors Corp. v. Bloyed, 916 S.W.2d 949, 961 (Tex.
1996) (instructing that on remand “any fee awarded . . . should be tested against the lodestar
approach to prevent grossly excessive attorney’s fee awards”).
V. Conclusion
We hold that Texas Government Code section 82.065 does not preclude a law firm’s
quantum-meruit recovery as a matter of law for legal services performed under an unenforceable
contingent-fee agreement. In addition, we hold that there was legally sufficient evidence that S&N
performed compensable services for Hill in negotiating the global settlement. We hold that the trial
court did not abuse its discretion in disregarding the jury’s finding of $7,250,000, but we reverse the
court of appeals’ judgment reinstating the jury’s award of $7,250,000 because, though there was
some evidence of value, that award was not supported by legally sufficient evidence. Accordingly,
we remand the case to the trial court for a new trial on the amount of S&N’s recovery, and equitable
considerations regarding the value of S&N’s services will be addressed in a new trial.
32
___________________________________
Paul W. Green
Justice
OPINION DELIVERED: April 13, 2018
33