Joel Flores, Individually and in a Representative Capacity and Criselda Flores, Individually and in a Representative Capacity v. Gonzalez & Associates Law Firm, Ltd. ( 2016 )

NUMBER 13-15-00205-CV
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI - EDINBURG
JOEL FLORES, INDIVIDUALLY
AND IN A REPRESENTATIVE
CAPACITY, AND CRISELDA FLORES,
INDIVIDUALLY AND IN A
REPRESENTATIVE CAPACITY, Appellants,
v.
GONZALEZ AND ASSOCIATES
LAW FIRM, LTD., Appellee.
On appeal from the 105th District Court
of Cameron County, Texas.
MEMORANDUM OPINION
Before Justices Benavides, Perkes, and Longoria
Memorandum Opinion by Justice Perkes
Appellants Joel Flores and Criselda Flores, individually and in a representative
capacity, (the Flores Family) filed suit against appellee Gonzalez and Associates Law
Firm, Ltd. (Gonzalez) asserting causes of action for breach of fiduciary duty, common law
fraud, and fraud by non-disclosure. Gonzalez filed a cross-claim alleging causes of
action for breach of contract and seeking a declaratory judgment.
The trial court granted Gonzalez’s motion for summary judgment and dismissed
the Flores Family’s claims.1 The case proceeded to a bench trial on Gonzalez’s claims.
The trial court entered judgment in favor of Gonzalez and awarded contract damages,
attorney’s fees, and prejudgment interest. By three issues, the Flores Family argues:
(1) genuine issues of material fact exist regarding the elements of their breach of fiduciary
duty claim; (2) the trial court abused its discretion by excluding evidence that the Flores
Family discharged Gonzalez from a legal services contract for cause; and (3) the trial
court’s award of unsegregated attorney’s fees was an abuse of discretion and was not
supported by legally sufficient evidence. We affirm.
I. BACKGROUND
A. Gonzalez Representation
On July 18, 2013, the Flores Family’s four-year-old son drowned in a swimming
pool at the McAllen Country Club (MCC) while attending a summer camp program.
Nereida Lopez-Singleterry, an attorney and a friend of the family, discussed the Flores
Family’s potential legal claim with MCC’s counsel, John Griffith. According to Lopez-
Singleterry, Griffith told her that there was no reason for the Flores Family to retain an
attorney “since a simple phone call by them would be enough to collect [insurance] policy
1 The Flores Family’s appeal concerns only the dismissal of their breach of fiduciary duty claim.
2
limits.” Lopez-Singleterry referred the Flores Family to attorney Jaime Gonzalez with the
Gonzalez and Associates Law Firm.
On or about July 25, 2013, the Flores Family, accompanied by Lopez-Singleterry,
met with Gonzalez at his law office. After discussing Griffith’s oral comments, Gonzalez
recommended that Lopez-Singleterry send a letter to Griffith to verify that MCC was
willing to pay the limits on its insurance policy. Gonzalez assisted in drafting the letter
which Lopez-Singleterry signed and delivered under her name. In the letter, Lopez-
Singleterry asked Griffith to confirm the number of policies in place, the amount of
coverage for each policy, and that all polices were being offered for full and final
settlement. Griffith’s written response, dated July 26, 2013, provided as follows:
I guess your letter dated July 25, 2013 further shows that no good
deed goes unpunished. I had merely called you so that you could tell Ms.
Flores that it was my prediction that the insurance companies for McAllen
Country Club would attempt to settle this case quickly. I pointed out that,
in that case, she may want to stop and think before she signs a 40%
contingency fee contract. I even suggested that she negotiate a 10% fee
if the case settles in 6 months or less as I anticipated it would. Never once
did I discuss the payment of policy limits one way or the other nor did I say
that a simple call by them would be enough to collect policy limits. And
clearly I never made any offers to settle whatsoever as I never had any
authority to do so. Your conscious misstating and overstating of my
communications to you is completely improper, especially given that my
heartfelt discussion with you was done only to assist Ms. Flores.
I am still working hard on orchestrating an early resolution of this
case to benefit Ms. Flores. In the meantime, she is free to hire any attorney
she chooses and to sign up for any contingency fee she chooses. Clearly
our investigation into this case is in a very preliminary stage. In the
meantime, I am doing my best to get all the information to the insurance
company and my client so that they can properly evaluate their positions.
If you should have any questions or comments, please do not
hesitate to contact me.
3
Lopez-Singleterry forwarded the letter by e-mail to Criselda on July 29, 2013.
Gonzalez also reviewed Griffith’s response and advised the Flores Family that they would
need to file a lawsuit if they wanted to recover from MCC. The parties later entered into
a contract for legal services. Pursuant to the contract, Gonzalez agreed to investigate
and prosecute claims against MCC. In return, Gonzalez would receive a 25% contingent
fee if the case settled within sixty days and a 31% contingent fee if the case was settled
after sixty days. The contract also provided that Gonzalez would receive no fee if the
case settled prior to August 1, 2013.
Gonzalez filed a lawsuit against MCC on August 5, 2013. Later, Gonzalez
informed the Flores Family that MCC was covered by two applicable insurance policies
which provided a total of $6 million in coverage. The Flores Family agreed with
Gonzalez’s suggestion to send MCC a formal settlement demand requesting $8.5 million
in damages. On December 19, 2013, Gonzalez called Criselda and informed her that
MCC offered to settle the case for $6 million with an additional $250,000 to be distributed
either to a non-profit established in her son’s honor or another charity of the Flores
Family’s choosing. Later that day, Gonzalez went to the Flores Family’s home and
advised them to accept the settlement offer. The Flores Family agreed, and, on
December 26, 2013, the parties executed a Rule 11 settlement agreement 2 which
provided as follows:
2 Rule 11 of the Texas Rules of Civil Procedure states that “[u]nless otherwise provided in these
rules, no agreement between attorneys or parties touching any suit pending will be enforced unless it be in
writing, signed and filed with the papers as part of the record, or unless it be made in open court and entered
of record.” TEX. R. CIV. P. 11.
4
(1) “[MCC] will contribute $250,000.00 to a non-profit foundation set up
to honor [their son] or to any other charitable cause as directed by
the Flores [F]amily.”
(2) “[MCC is] authorized to extend policy limits of $6 million which [the
Flores Family] agree[s] to accept.”
(3) Implementation of recommendations by pool safety experts;
(4) A formal apology to the Flores Family from the MCC board of
directors and staff; and
(5) A forgiveness ceremony at St. Frances Xavier Cabrini Catholic
Church to be held that same day.
B. Discharge of Gonzalez and Ensuing Litigation
On May 9, 2014, prior to the execution of a formal settlement agreement and
release, the Flores Family informed Gonzalez that they were discharging him as their
attorney. In a letter to Gonzalez, the Flores Family explained that “[f]or the reasons
discussed earlier today the trust that we once had for you no longer exists.” Gonzalez
then filed a plea in intervention seeking to enforce the legal services contract.
On June 4, 2014, the Flores Family, now represented by new counsel, filed a third
amended original petition reasserting all claims as against MCC. In addition, the Flores
Family pleaded causes of action against Gonzalez for breach of fiduciary duty, fraud, and
fraud by non-disclosure. The Flores Family sought disgorgement of Gonzalez’s fee and
rescission of the Rule 11 settlement agreement. MCC filed an amended pleading
alleging breach of contract against the Flores Family and seeking enforcement of the Rule
11 settlement agreement. Gonzalez later filed a second amended petition in intervention
asserting claims for declaratory judgment and breach of the legal services contract.
5
Gonzalez filed a traditional and no-evidence motion for summary judgment seeking
dismissal of the Flores Family’s claims for breach of fiduciary duty, fraud, and fraud by
non-disclosure. Gonzalez also filed a supplement to the motion for summary judgment.
The motion and supplement were supported by Gonzalez’s affidavit, the contract for legal
services, the Rule 11 settlement agreement, and Criselda’s deposition testimony with
attached exhibits. With respect to the breach of fiduciary duty claim, Gonzalez’s motion
asserted that the Flores Family could not produce any evidence that Gonzalez breached
his fiduciary duty or that any alleged breach resulted in any injury to the Flores Family or
a benefit to Gonzalez. Gonzalez also argued that the summary judgment evidence
showed that Gonzalez did not breach his fiduciary duty as a matter of law.
The Flores Family filed a response supported by Criselda’s affidavit and attached
exhibits, Gonzalez’s deposition testimony, and Gonzalez’s responses to interrogatories.
The Flores Family’s response also cited Criselda’s deposition testimony which was filed
in support of Gonzalez’s motion for summary judgment. In their response, the Flores
Family maintained that the summary judgment evidence created a genuine issue of
material fact regarding those elements challenged in Gonzalez’s motion. Most
specifically, the Flores Family argued the summary judgment evidence established the
following: (1) Gonzalez misrepresented and failed to disclose the entirety of the Griffith
letter; (2) Gonzalez failed to disclose that his wife was a member and shareholder of
MCC; (3) Gonzalez failed to disclose his wife’s ownership interest in a company that
provided services in support of the litigation; (4) Gonzalez failed to recover their son’s
belongings from MCC; (5) Gonzalez misrepresented MCC’s net worth; and (6) Gonzalez
6
verbally agreed to accept a 25% contingency fee but was seeking the full 31% fee
provided for in the legal services contract through his pleadings. The Flores Family
further argued that they were not required to prove injury to prevail on their breach of
fiduciary duty claim.
While Gonzalez’s motion for summary judgment was pending, the Flores Family
accepted the Rule 11 settlement agreement, thereby resolving all claims involving MCC.
The trial court later granted Gonzalez’s motion for summary judgment, dismissing all of
the Flores Family’s affirmative claims.
C. Gonzalez’s Breach of Contract Claim Proceeds to Trial
Following the dismissal of their affirmative claims for relief, and two months after
the pleading deadline, the Flores Family filed a motion for leave to file a sixth amended
petition seeking to add a claim for breach of contract. Specifically, the Flores Family’s
petition alleged that the legal services contract was orally modified to provide for a 25%
contingent fee, and that Gonzalez breached the agreement by seeking a 31% contingent
fee. The petition also alleged that the Flores Family “agree[s] to tender 25% of the
insurance proceeds (excluding the payment to the non-profit) and the reimbursable
expenses.” The trial court denied the motion for leave.
In January of 2015, the trial court entered a second amended docket control order
that extended the pleading deadline. The Flores Family subsequently filed a
supplemental answer and counterclaim again alleging a breach of contract claim. In the
pleading, the Flores Family also raised an affirmative defense to Gonzalez’s breach of
contract claim alleging they discharged Gonzalez for cause. During a pretrial hearing,
7
the trial court stated that the deadline extension was unintended. The trial court later
entered a corrected second amended docket control order that superseded its prior order
and which did not provide for an extended pleading deadline. The Flores Family
thereafter filed a motion for leave to file a supplemental answer and counterclaim which
the trial court denied.
At a pretrial hearing, the following exchange took place concerning the scope of
the upcoming trial:
[Gonzalez’s attorney]: But l don't think it is a defense but the
court has ruled on all the alleged
misrepresentations of—of whatever
nature. In fact, they're listed in—in this
motion. I asked that Ms. Flores and Mr.
Flores list them all. And that was the
subject of the court's ruling.
[The Flores Family’s attorney]: And—those are the ones—the ones that
are listed, we agreed with. We are not
going to get into those at trial.
[Trial Court]: Okay. Now—now I’m not sure I'm
following you.
[The Flores Family’s attorney]: The—seven—the seven that they've
listed, those factual allegations.
[Trial Court]: Okay. You—you’re agreeing that you're
not going to get into those?
[The Flores Family’s attorney]: Correct, Mr.—
[Trial Court]: Okay. Then that moots this one. Okay.
That’s already taken care of then. Let's
move on
Thereafter, the trial court granted Gonzalez’s motion to exclude evidence
regarding whether the Flores Family discharged Gonzalez for cause. The case
8
proceeded to a bench trial on Gonzalez’s breach of contract claim, during which the Flores
Family submitted an offer of proof concerning the reasons why they discharged Gonzalez.
The trial court entered a final judgment in favor of Gonzalez and ordered the Flores Family
to pay damages of $1,951,829.30 and prejudgment interest of $82,082.59. The trial
court also awarded Gonzalez attorney’s fees of $490,260.67 and contingent appellate
attorney’s fees. This appeal followed.
II. SUMMARY JUDGMENT
By their first issue, the Flores Family argues that “[Gonzalez] breached its fiduciary
duty by failing to treat [the Flores Family] with the ‘absolute and perfect candor’ it owed
them as a matter of law.” Specifically, the Flores Family maintains that the trial court
erred in granting summary judgment because there are genuine issues of material fact
regarding the elements of their breach of fiduciary claim.
A. Standard of Review
We review a trial court’s summary judgment de novo. Mann Frankfort Stein &
Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009). We review the
evidence presented in the motion and response in the light most favorable to the party
against whom the summary judgment was rendered, crediting evidence favorable to that
party if reasonable jurors could, and disregarding contrary evidence unless reasonable
jurors could not. See City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005); Johnson
v. Brewer & Pritchard, P.C., 73 S.W.3d 193, 208 (Tex. 2002). The party moving for
traditional summary judgment bears the burden of showing no genuine issue of material
fact exists and it is entitled to judgment as a matter of law. Mann Frankfort, 289 S.W.3d
9
at 848; see TEX. R. CIV. P. 166a(c). A defendant who conclusively negates at least one
of the essential elements of a cause of action or conclusively establishes an affirmative
defense is entitled to summary judgment. Frost Nat'l Bank v. Fernandez, 315 S.W.3d
494, 508 (Tex. 2010). If the movant demonstrates it is entitled to judgment as a matter
of law, the burden shifts to the non-movant to present evidence raising a genuine issue
of material fact as to the movant's summary-judgment grounds. Ayeni v. State, 440
S.W.3d 707, 709 (Tex. App.—Austin 2013, no pet.).
A no-evidence summary judgment motion is essentially a motion for a pretrial
directed verdict. Timpte Indus., Inc. v. Gish, 286 S.W.3d 306, 310 (Tex. 2009) (citing
TEX. R. CIV. P. 166a(i)); Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 581–82 (Tex.
2006). A party without the burden of proof may, without presenting evidence, seek
summary judgment on the ground that there is no evidence to support one or more
essential element of the non-movant's claim or defense. TEX. R. CIV. P. 166a(i). The
trial court must grant the motion unless the non-movant produces summary judgment
evidence that raises a genuine issue of material fact. Timpte Indus., Inc., 286 S.W.3d at
310.
Unless the grounds for granting the summary judgment are specified, a summary
judgment order must be affirmed if any of the summary judgment grounds are meritorious.
FM Prop’s Operating Co. v. City of Austin, 22 S.W.3d 868, 872 (Tex. 2000).
B. Breach of Fiduciary Duty
To prevail on a claim for breach of fiduciary duty, a plaintiff must establish the
existence of a fiduciary relationship and a breach of that duty. See Beck v. Law Offices
10
of Edwin J. (Ted) Terry, Jr., P.C., 284 S.W.3d 416, 429 (Tex. App.—Austin 2009, no pet.).
An attorney owes a fiduciary duty to his client as a matter of law. Willis v. Maverick, 760
S.W.2d 642, 645 (Tex. 1988). The essence of a claim for breach of fiduciary duty
focuses on whether an attorney obtained an improper benefit from representing the client.
Gibson v. Ellis, 126 S.W.3d 324, 330 (Tex. App.—Dallas 2004, no pet.). “Breach of
fiduciary duty by an attorney most often involves the attorney’s failure to disclose conflicts
of interest, failure to deliver funds belonging to the client, placing personal interests over
the client’s interests, improper use of client confidences, taking advantage of the client’s
trust, engaging in self-dealing, and making misrepresentations.” Id.
C. No Evidence Motion - Analysis
Gonzalez sought summary judgment on the Flores Family’s breach of fiduciary
duty claim by arguing, in part, that the Flores Family could produce no evidence that
Gonzalez breached his fiduciary duty. See TEX. R. CIV. P. 166a(i). In response, the
Flores Family presented evidence which they claim shows a breach of fiduciary duty.
We will address each allegation and the corresponding evidence in turn to determine
whether the Flores Family produced evidence that raised a genuine issue of material fact.
See Garcia v. State Farm Lloyds, 287 S.W.3d 809, 817 (Tex. App.—Corpus Christi 2009,
pet. denied) (“When a party moves for summary judgment under both Rules 166a(c) and
166a(i) of the Texas Rules of Civil Procedure, we will first review the trial court’s judgment
under the standards of Rule 166a(i).”).
1. The Griffith Letter
11
The Flores Family argues in their summary judgment response that Gonzalez
failed to disclose the full contents of Griffith’s July 26, 2013 letter. Specifically, they
assert that Gonzalez did not tell them that Griffith predicted the case would settle quickly
or that Griffith suggested a 10% contingent fee if the case was settled within six months.
We conclude that the Flores Family failed to present evidence that Gonzalez
breached his fiduciary duty for the following reasons: (1) Criselda testified that Lopez-
Singleterry earlier informed her of Griffith’s purported representations that the case would
settle for policy limits and that the Flores Family would not need to hire an attorney; and
(2) Lopez-Singleterry, who was the recipient of the letter, provided a copy of Griffith’s July
26, 2013 letter to both Gonzalez and Criselda. Further, we observe no clear
misrepresentation with respect to Gonzalez’s characterization of the letter. Gonzalez
purportedly stated the letter was “rude” and that litigation was required. Such
representations constitute his subjective view of the contents of the letter and are
consistent with Griffith’s representations that he did not have authority to settle the case
for policy limits and his statement that Lopez-Singleterry’s letter was a “conscious
misstating and overstating of [Griffith’s earlier] communications[.]”
2. Member of MCC
The Flores Family also alleged in their response that Gonzalez failed to disclose
that his wife was a member of MCC. An “attorney's failure to disclose conflicts of
interest” is one of the circumstances that may give rise to an independent breach of
fiduciary duty claim. Beck, 284 S.W.3d at 436. But only if the gist of the plaintiff’s
12
complaint is that the lawyer obtained an improper benefit by not disclosing the asserted
“conflict.” Id.
We first observe the Flores Family presented no evidence showing Gonzalez
obtained any benefit regarding his purported non-disclosure. More importantly, the
Flores Family’s own summary judgment evidence provides that Gonzalez disclosed a
family membership in MCC. The Flores Family cites to Criselda’s deposition testimony
in which she testified that Gonzalez did not disclose that his wife was a member of MCC.
Criselda, however, also testified that she asked Gonzalez on the day she signed the legal
services contract if he was a member of MCC, and Gonzalez responded “Oh, yes, Cris,
but don’t worry about it, I am fearless.” We conclude it is not material whether the
disclosure related to Gonzalez’s own interest or his wife’s. Under either scenario,
Gonzalez disclosed the potential conflict to the Flores Family.
3. Ownership of APT
The Flores Family presented evidence that Gonzalez failed to disclose his wife’s
ownership of Advanced Presentation Technologies (APT), a company that provided some
litigation support services for Gonzalez and was listed on an expense report provided to
the Flores Family. The Flores Family maintains that this report constitutes some
evidence of “self-dealing” on the part of Gonzalez.
The very same expense report, however, shows that Gonzalez did not charge the
Flores Family for any services provided by APT. Because Gonzalez waived the
expenses, neither Gonzalez nor his wife received an improper benefit from the use of
APT. See Beck, 284 S.W.3d at 429 (explaining that Texas courts have generally held
13
that a breach-of-fiduciary-duty claim focuses on whether an attorney obtained an
improper benefit from representing the client). Therefore, we conclude that such
evidence does not show Gonzalez engaged in self-dealing or otherwise breached his
fiduciary duty.
4. Recovery of Son’s Belongings
The Flores Family presented evidence that Criselda requested Gonzalez to
recover her son’s clothing and art projects from his last day at MCC, and that a
representative from Gonzalez’s office told Criselda they could not find her son’s clothing.
Criselda, however, was able to subsequently locate her son’s clothing and art projects.
While Gonzalez may have stated he would attempt to accomplish this task, it was
not required as a part of his representation of the Flores Family. Generally, a lawyer's
fiduciary duties to a client extend only to dealings within the scope of the underlying
relationship of the parties. See Joe v. Two Thirty Nine Joint Venture, 145 S.W.3d 150,
159 (Tex. 2004) (citing Rankin v. Naftalis, 557 S.W.2d 940, 944 (Tex.1977)); see also
Joseph v. State, 3 S.W.3d 627, 639 (Tex. App.—Houston [14th Dist.] 1999, no pet.) (“The
nature of the attorney-client relationship defines an attorney’s duties and the professional
services to be rendered.”). “While it is true that an attorney owes a client a duty to inform
the client of matters material to the representation . . . this duty to inform does not extend
to matters beyond the scope of the representation.” Joe, 145 S.W.3d at 160 (internal
citations omitted). Because this evidence relates to actions that are beyond the scope
of the attorney-client relationship, it cannot support a claim for breach of fiduciary duty.
5. Net Worth of MCC
14
The Flores Family contends that Gonzalez represented MCC’s net worth as being
less than $1 million and that this representation impacted their decision to settle the case
for policy limits. The Flores Family’s response, however, also included MCC’s sworn
response to interrogatory requests propounded by Gonzalez in which MCC states that its
net worth is $922,721. The Flores Family presented no evidence that Gonzalez
possessed any additional information that would lead him to believe that MCC’s
representation was inaccurate. Therefore, we conclude the Flores Family presented no
evidence that Gonzalez misrepresented this fact.
6. The Contingency Fee
Finally, the Flores Family argued that Gonzalez misrepresented that he would
charge only a 25% contingent fee because he was seeking a 31% contingent fee through
his pleadings. The Flores Family’s evidence reflects that the parties agreed to a 31%
contingent fee as reflected in the legal services contract. After the execution of the legal
services contract, the Flores Family first requested Gonzalez to reduce his fee to 25%
and then to 10%, before discharging him and seeking to disgorge his entire fee.3
The Flores Family cites no authority for the proposition that an attorney breaches
his fiduciary duty by seeking to enforce the fee provisions of a legal services contract.
3 Criselda asserted that Gonzalez stated at a December 5, 2013 meeting that he would agree to a
25% contingency fee instead of the 31% fee provided for by the legal services contract. In February of
2014, Gonzalez sent Criselda a draft document titled “Final Accounting and Disbursement Statement”
providing for $1,500,000 million in attorney’s fees, which constituted 24% of the total $6,250,000 settlement.
After executing the Rule 11 settlement agreement, Criselda testified that she requested Gonzalez to reduce
his contingency fee to 10%.
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We decline to consider any discussions pertaining to the Flores Family’s attempt to modify
the legal services contract as evidence of a breach of fiduciary duty.4
D. Summary
The Flores Family presented no summary judgment evidence that Gonzalez
breached his fiduciary duty. Gibson, 126 S.W.3d at 330. Therefore, the trial court did not
err in granting summary judgment.5 See TEX. R. CIV. P. 166a(i). We overrule the Flores
Family’s first issue.
III. BENCH TRIAL - EVIDENTIARY RULING
By their second issue, the Flores Family argues that “[t]he trial court abused its
discretion by excluding evidence [during the bench trial on Gonzalez’s breach of contract
action] that [the Flores Family] fired [Gonzalez] for cause because that evidence was
critically important to the question of whether [the Flores Family] breached the fee
agreement.”
A. Standard of Review
4 We also note that “[a] contingent fee contract for legal services must be in writing and signed by
the attorney and client.” TEX. GOV’T CODE ANN. § 82.065 (West, Westlaw through 2015 R.S.). Section
82.065 can be “sensibly construed to operate in a manner similar to the statute of frauds.” Enochs v.
Brown, 872 S.W.2d 312, 318 (Tex. App.—Austin 1994, no writ), disapproved of on other grounds by Roberts
v. Williamson, 111 S.W.3d 113 (Tex. 2003). Any material modification to an agreement subject to the
statute of frauds must be in writing. Petrohawk Prop’s, L.P. v. Jones, 455 S.W.3d 753, 764 (Tex. App.—
Texarkana 2015, pet. dism’d).
5 We disagree with the Flores Family’s assertion that Gonzalez bore the burden at the summary
judgment stage to establish that his dealings were fair as a matter of law. In support of their proposition,
the Flores Family relies on the Texas Supreme Court case Archer v. Griffith and its progeny. See 390
S.W.2d 735 (Tex. 1964). Archer provides that a presumption of unfairness attaches to a contract entered
into during the existence of the attorney-client relationship. Id. at 739; see Robinson v. Garcia, 804 S.W.2d
238, 248 (Tex. App.—Corpus Christi 1991). However, the Flores Family did not bring any cause of action
challenging the propriety of a contract entered into after the attorney-client relationship was established.
Therefore, Archer is inapposite.
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The admission or exclusion of evidence rests within the sound discretion of the
trial court. State v. Bristol Hotel Asset Co., 65 S.W.3d 638, 647 (Tex. 2001); City of
Brownsville v. Alvarado, 897 S.W.2d 750, 753 (Tex. 1995). A trial court abuses its
discretion in admitting or excluding evidence if it acts without reference to any guiding
rules and principles or if the act complained of is arbitrary and unreasonable. Carpenter
v. Cimarron Hydrocarbons Corp., 98 S.W.3d 682, 687 (Tex. 2002); Downer v.
Aquamarine Operators, Inc., 701 S.W.2d 238, 241–42 (Tex. 1985). To show the trial
court abused its discretion, the appellant must demonstrate: (1) the court erred in not
admitting the evidence; (2) the excluded evidence was controlling on a material issue
dispositive of the case and was not cumulative; and (3) the error probably caused
rendition of an improper judgment in the case. See Tex. Dep’t of Transp. v. Able, 35
S.W.3d 608, 617 (Tex. 2000); Sharma v. Vinmar Int'l, Ltd., 231 S.W.3d 405, 422 (Tex.
App.—Houston [14th Dist.] 2007, no pet.); see also TEX. R. APP. P. 44.1(a) (discussing
reversible error). If there is a legitimate basis for the trial court’s evidentiary ruling, the
appellate court must uphold the ruling. Owens–Corning Fiberglas Corp. v. Malone, 972
S.W.2d 35, 43 (Tex. 1998).
B. Analysis
An affirmative defense must be pleaded in a responsive pleading, or the defense
will be waived. TEX. R. CIV. P. 94; Roth v. JPMorgan Chase Bank, N.A., 439 S.W.3d
508, 513 (Tex. App.—El Paso 2014, no pet.). As noted above, the Flores Family’s live
pleadings did not assert the affirmative defense that they fired Gonzalez for cause. The
Flores Family belatedly attempted to plead the defense following the expiration of the
17
pleading deadline. The trial court, however, denied the Flores Family’s motion for leave,
and that ruling is not challenged on appeal.
The issue of good cause is defensive in nature and relates to the attorney’s right
to recover under the contract of employment. See Rocha v. Ahmad, 676 S.W.2d 149,
156 (Tex. App.—San Antonio 1984, writ dism’d); Howell, 534 S.W.2d at 740 (“The burden
of proving the happening of a contingency which, by the terms of the contract, would
discharge the party from liability, or any default or refusal to perform on the part of the
plaintiff that would excuse the performance by the defendant, is on the party who seeks
to avoid the contract or excuse a failure to perform it on that ground.”); see also
Blackstone Med., Inc. v. Phoenix Surgicals, L.L.C., 470 S.W.3d 636, 646 (Tex. App.—
Dallas 2015, no pet.) (“The contention that a party to a contract is excused from
performance because of a prior material breach by the other contracting party is an
affirmative defense that must be affirmatively pleaded.”). If the former client pleads and
proves good cause for discharge, then the attorney is not entitled to recover under the
contract of employment. Rocha, 676 S.W.2d at 156. Because the Flores Family failed
to plead good cause, they waived the defense. See TEX. R. CIV. P. 94; Roth, 439 S.W.3d
at 513. Therefore, the trial court did not abuse its discretion in excluding evidence
relating to the defense. See Bristol Hotel, 65 S.W.3d at 647.
Even if we were to find error, we cannot conclude that the error probably caused
rendition of an improper judgment in the case. See Able, 35 S.W.3d at 617. Through
their offer of proof, the Flores Family presented Criselda’s affidavit and deposition
testimony which was previously filed in their response to Gonzalez’s motion for summary
18
judgment. The Flores Family also presented Joel’s deposition testimony. We have
previously discussed the allegations found in Criselda’s testimony. Joel’s deposition
testimony is cumulative of Criselda’s and does not raise any new allegations. Nothing in
the Flores Family’s proffered evidence would serve to refute any of the elements of
Gonzalez’s breach of contract claim. See Marquis Acquisitions, Inc. v. Steadfast Ins.
Co., 409 S.W.3d 808, 813 (Tex. App.—Dallas 2013, no pet.) (“To succeed on a breach
of contract claim, a plaintiff must show: (1) a valid contract; (2) performance or tendered
performance by the plaintiff; (3) breach of the contract by the defendant; and (4) damages
sustained by the plaintiff as a result of the breach.”). Rather, the evidence pertains to
the Flores Family’s claims for breach of fiduciary duty, fraud, and fraud by non-disclosure,
which were resolved through summary judgment as set out earlier in this opinion. We
overrule the Flores Family’s second issue.
IV. ATTORNEY’S FEES
By their third issue, the Flores Family argues “[t]he trial court’s award of
unsegregated attorney’s fees was an abuse of discretion.” The Flores Family also
argues that “the amount of fees . . . awarded is not supported by legally sufficient
evidence.”
A. Segregation of Fees
1. Standard of Review and Applicable Law
We review a trial court’s award of attorney's fees for an abuse of discretion.
Bocquet v. Herring, 972 S.W.2d 19, 21 (Tex. 1998). A trial court abuses its discretion
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when it acts without regard for any guiding rules or principles. Owens–Corning Fiberglas
Corp. v. Malone, 972 S.W.2d 35, 43 (Tex. 1998).
Parties claiming attorney’s fees must “segregate fees between claims for which
they are recoverable and claims for which they are not” and are “required to show that
attorney’s fees were incurred while suing the defendant sought to be charged with the
fees on a claim which allows recovery of such fees.” Tony Gullo Motors I, L.P. v. Chapa,
212 S.W.3d 299, 311 (Tex. 2006) (quoting Stewart Title Guar. Co. v. Sterling, 822 S.W.2d
1, 10 (Tex. 1991)). “Intertwined facts” do not make fees for unrecoverable claims
recoverable. Id. at 313–14. “[I]t is only when discrete legal services advance both a
recoverable and unrecoverable claim that they are so intertwined that they need not be
segregated.” Id. Thus, “[i]f any attorney’s fees relate solely to a claim for which such
fees are unrecoverable, the claimant must segregate recoverable from unrecoverable
fees.” 7979 Airport Garage, L.L.C. v. Dollar Rent A Car Sys., Inc., 245 S.W.3d 488, 506
(Tex. App.—Houston [14th Dist.] 2007, pet. denied) (citing Tony Gullo, 212 S.W.3d at
313–14).
“[T]o prevail on a contract claim a party must overcome any and all affirmative
defenses (such as limitations, res judicata, or prior material breach), and the opposing
party who raises them should not be allowed to suggest to the jury that overcoming those
defenses was unnecessary.” Tony Gullo, 212 S.W.3d at 314. When a defendant
asserts a counterclaim that the plaintiff must overcome in order to fully recover on its
contract claim, the attorney’s fees necessary to defeat that counterclaim are likewise
recoverable. See Varner v. Cardenas, 218 S.W.3d 68, 69 (Tex. 2007) (per curiam).
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2. Analysis
The Flores Family does not dispute that attorney’s fees may be awarded in
connection with breach of contract and declaratory judgment actions. See TEX. CIV.
PRAC. & REM. CODE ANN. §§ 38.001(8), 37.009 (West, Westlaw through 2015 R.S.).
However, they maintain that Gonzalez failed to segregate the fees incurred prosecuting
his frivolous pleading claim. The Flores Family argues that any fees associated with the
advancement of the frivolous pleading claim are unrecoverable. With respect to
segregation of attorney’s fees, the trial court stated the following:
The court finds that the factual matters are so intertwined as to the various
claims, causes of action and defensive matters so as to make any
segregation impractical and impossible because of the intertwined nature
of such, hereby awards attorneys' fees in favor of [Gonzalez] against the
[Flores Family] and makes—and also finds that they are reasonable and
necessary and customary in the amounts of the—at the trial court level.
We agree with the trial court’s finding in this regard. In addition to asserting a
breach of contract claim, Gonzalez’s live pleading alleged that the Flores Family’s
affirmative claims were frivolous. Gonzalez was required to overcome the Flores
Family’s claims for breach of fiduciary duty, fraud, and fraud by non-disclosure, in order
to recover on his breach of contract claim. Gonzalez’s claim that the Flores Family’s
pleadings were frivolous was pursued to overcome those claims. Therefore, the
attorney’s fees incurred were intertwined and thus recoverable. See Varner, 218 S.W.3d
at 68–70.
B. Legal Sufficiency
1. Standard of Review and Applicable Law
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We may sustain a legal sufficiency challenge only 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
establishes conclusively the opposite of a vital fact. Uniroyal Goodrich Tire Co. v.
Martinez, 977 S.W.2d 328, 334 (Tex. 1998). In determining whether there is legally
sufficient evidence to support the finding under review, we must consider evidence
favorable to the finding if a reasonable factfinder could and disregard evidence contrary
to the finding unless a reasonable factfinder could not. Cent. Ready Mix Concrete Co.
v. Islas, 228 S.W.3d 649, 651 (Tex. 2007); City of Keller, 168 S.W.3d at 827. Texas
courts consider eight factors when determining the reasonableness of attorney’s fees:
(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 & Co. v. Perry Equip. Corp., 945 S.W.2d 812, 818 (Tex. 1997). A trial
court is not required to receive evidence on each of these factors. State & Cty. Mut. Fire
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Ins. Co. ex rel. S. United Gen. Agency of Tex. v. Walker, 228 S.W.3d 404, 408 (Tex.
App.—Fort Worth 2007, no pet.). In reviewing an award of attorney’s fees, we look at
the entire record, the evidence presented, the amount in controversy, the common
knowledge of the participants, and the relative success of the parties. See Garrod Invs.,
Inc. v. Schlengel, 139 S.W.3d 759, 767 (Tex. App.—Corpus Christi 2004, no pet.).
2. Analysis
Gonzalez presented evidence on several of the Arthur Anderson factors in support
of his request for attorney’s fees. Gonzalez introduced the itemized billing records for
the three firms providing representation. Robert Valdez, a lawyer with over thirty years
of professional experience, was retained by Gonzalez to evaluate the attorney’s fees
incurred by Gonzalez. Valdez reviewed the billing statements and explained the role of
each law firm representing Gonzalez. Valdez opined that the litigation was lengthy and
complex. Valdez testified that he did not see any duplicative work in the billing records.
Based on his review of the billing records and docket summary, Valdez concluded that it
was likely that the firms were precluded from accepting other employment.
Valdez further testified that he has been “blessed with a lot of work in the Rio
Grande Valley,” and he was familiar with the rates charged in the area. Valdez
concluded that Gonzalez’s attorneys charged a fee that fell within the range of rates in
the area. Valdez stated that based on his review of how the case progressed, the results
obtained were “superior.” Valdez also observed that the case did not “lay around” and
that the attorneys were engaged in a “very active motion practice.” Valdez testified that
the attorneys involved “got along well to move the case forward,” and the law firms
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cooperated with the wishes of Gonzalez. With respect to the reputation and ability of the
attorneys, Valdez stated that he was familiar with several of the attorneys and that they
had “very good reputations” in the Rio Grande Valley. Valdez was familiar with the billing
arrangement between Gonzalez and the attorneys, and noted that Gonzalez was charged
on an hourly basis.
Considering the Arthur Andersen factors, we hold that there was some evidence
in the record to support the attorney’s fee award. See Arthur Andersen, 945 S.W.2d at
818; Uniroyal Goodrich, 977 S.W.2d at 334.
C. Summary
We conclude the trial court did not abuse its discretion in awarding unsegregated
attorney’s fees. See Varner, 218 S.W.3d at 68–70. We also conclude the award of
attorney’s fees was supported by legally sufficient evidence. See Uniroyal Goodrich, 977
S.W.2d at 334. We overrule the Flores Family’s third issue.
V. CONCLUSION
We affirm the trial court’s judgment.
GREGORY T. PERKES
Justice
Delivered and filed the
6th day of October, 2016.
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