Belinda Lopez v. Santos Maldonado ( 2015 )

ACCEPTED
13-15-00042-CV
THIRTEENTH COURT OF APPEALS
CORPUS CHRISTI, TEXAS
FILED 7/20/2015 6:20:08 PM
IN THE 13TH COURT OF APPEALS CECILE FOY GSANGER
CLERK
7/20/15 No. 13-15-00042-CV
In the Thirteenth Court of AppealsRECEIVED IN
13th COURT OF APPEALS
CLERK Corpus Christi, Texas
CORPUS CHRISTI/EDINBURG, TEXAS
7/20/2015 6:20:08 PM
CECILE FOY GSANGER
Clerk
Belinda Lopez,
Appellant
v.
Santos Maldonado,
Appellee
On Appeal from Trial Court Case No. F-2820-10-E
275th District Court of Hidalgo County, Texas
Honorable Juan R. Partida
APPELLANT’S BRIEF
R. W. Armstrong
State Bar No. 01323500
The Armstrong Firm
2600 Old Alice Road, Suite A
Brownsville, Texas 78521
Telephone: (956) 546-5556
Telecopier: (956) 546-0470
COUNSEL FOR APPELLANT BELINDA LOPEZ
ORAL ARGUMENT REQUESTED
IDENTITY OF PARTIES AND COUNSEL
Appellant
Belinda Lopez R. W. Armstrong
State Bar No. 01323500
The Armstrong Firm
2600 Old Alice Road, Suite A
Brownsville, Texas 78521
Telephone: (956) 546-5556
Telecopier: (956) 546-0470
office@armstrong-firm.com
Special Counsel to the Armstrong Firm:
Tracia Y. Lee
State Bar No. 24013021
Tracia Y. Lee, P.L.L.C.
P.O. Box 171022
Austin, Texas 78717
Telephone: (512) 814-6167
Facsimile: (512) 271-6806
tlee@tleelaw.com
Appellee
Santos Maldonado Reynaldo L. Diaz, Jr.
Law Offices Of Reynaldo L. Diaz, Jr.
1615 Broadway
San Antonio, Texas 78215
i
TABLE OF CONTENTS
IDENTITY OF PARTIES AND COUNSEL............................................ i
TABLE OF CONTENTS .................................................................. ii, iii
INDEX OF AUTHORITIES ............................................................. iv, v
STATEMENT REGARDING CITATIONS TO THE RECORD………...v
STATEMENT OF THE CASE.............................................................. 1
ISSUE PRESENTED........................................................................... 2
STATEMENT OF FACTS .................................................................... 2
SUMMARY OF THE ARGUMENT ...................................................... 7
ARGUMENT ........................................................................................ 7
I. Review standard and burden of proof standard ......................... 8
A. This Court reviews the trial court’s summary judgment
de novo ............................................................................. 8
B. Maldonado had the burden of proof to show his
entitlement to attorney’s fees and expenses ..................... 8
II. Maldonado is not entitled to summary judgment because he
failed to establish his entitlement to attorney’s fees and his
contract is unenforceable as a matter of law ............................. 9
A. Maldonado did not submit any summary judgment
evidence to support his motion ......................................... 9
ii
B. Maldonado is not entitled to 20% of Ms. Lopez’s
recovery because his own contract prohibits
such a contingency fee ................................................... 10
C. Maldonado is not entitled to reasonable
attorney’s fees because he made no attempt
to establish that his fees for representing
Ms. Lopez were reasonable ............................................ 11
D. Maldonado did not establish that his alleged
expenses for representing Ms. Lopez were
necessary or reasonable ................................................. 14
E. Maldonado is not entitled to a contingency
fee because such fee is unconscionable ........................ 16
F. Because Maldonado’s contingency fee
contract is unconscionable and against public
policy, it is unenforceable as a matter of law ................... 16
PRAYER............................................................................................ 19
CERTIFICATE OF COMPLIANCE .................................................... 21
CERTIFICATE OF SERVICE ............................................................ 21
APPENDIX ........................................................................................ 22
iii
INDEX OF AUTHORITIES
Cases
Arthur Andersen & Co. v. Perry Equip. Corp.,
945 S.W.2d 812 (Tex. 1997) ............................................................. 12
Barrow v. Jack's Catfish Inn, 641 S.W.2d 624
(Tex. App.—Corpus Christi 1982, no writ)..................................... 9, 10
Bullock v. Foster Cathead Co., 631 S.W.2d 208
(Tex. App.—Corpus Christi 1982, no writ……………………………..12
Cruse v. O'Quinn, 273 S.W.3d 766
(Tex. App.—Houston [14th Dist.] 2008, pet. denied)......................... 18
Davis Law Firm v. Bates, 2014 WL 585855
(Tex. App.—Corpus Christi 2014, no pet.) ...................... 16, 17, 18, 19
Eggert v. Am. Standard Life Ins. Co., 404 S.W.2d 99
(Tex. Civ. App.—Corpus Christi 1966, no writ) ................................. 10
Great American Reserve Insurance Co. v. Britton,
406 S.W.2d 901 (Tex.1966)………………………………………...12, 13
Hidalgo v. Sur. Sav. & Loan Ass'n, 462 S.W.2d 540
(Tex. 1971) ........................................................................................ 10
In re Plaza, 363 B.R. 517, 521-522 (Bankr. S.D. Tex. 2007) ............ 18
Laidlaw Waste Sys. (Dallas), Inc. v. City of Wilmer,
904 S.W.2d 656 (Tex. 1995) ............................................................. 10
MMP, Ltd. v. Jones, 710 S.W.2d 59 (Tex. 1986) ................................ 8
Ross v. Union Carbide Corp., 296 S.W.3d 206
(Tex. App.—Houston [14th Dist.] 2009, pet. denied)......................... 19
Ryland Group, Inc. v. Hood, 924 S.W.2d 120 (Tex. 1996) ................ 14
iv
Sanes v. Clark, 25 S.W.3d 800
(Tex. App.—Waco 2000, pet. denied) ............................................... 18
Valence Operating Co. v. Dorsett, 164 S.W.3d 656 (Tex. 2005) ........ 8
Rules
Texas Disciplinary Rule of Professional Conduct 1.02(a)(2) ....... 17, 18
Texas Disciplinary Rule of Professional Conduct 1.04................ 11, 16
STATEMENT REGARDING CITATIONS TO THE RECORD
Appellant refers to the clerk’s record as “CR ____” and the
supplemental clerk’s record, submitted by the trial court to this Court on
July 20, 2015, as “SCR ____”.
v
STATEMENT OF THE CASE
Belinda Lopez filed for divorce from Erasmo Lopez on
November 3, 2010. CR 9-19. On July 21, 2011, Ms. Lopez retained
Intervenor Santos Maldonado, Jr. to represent her as her legal
counsel during the divorce proceedings. CR 270-273; 288. She
signed a contingency fee agreement with Maldonado. CR 270-273.
When she discovered that Maldonado was negligent in performing his
legal responsibilities to her by failing to provide information necessary
for her to evaluate her case, she terminated their contract. CR 288-
291.
Despite the breach of his contract and duty to her, Maldonado
intervened in the divorce proceeding, asserting a Plea in Intervention
seeking to collect his attorney’s fees and legal expenses he claims
were incurred while representing Ms. Lopez. CR 58-60. Ms. Lopez
responded by asserting a counterclaim against him for negligence
and legal malpractice. CR 61-62.
Maldonado moved for summary judgment to recover his
attorney’s fees. CR 266-267. Ms. Lopez moved for summary
judgment to avoid paying his attorney’s fees under their contract due
to his negligence and legal malpractice. CR 294-302. The trial court
1
granted Maldonado’s motion (CR 325-326) but never ruled on Ms.
Lopez’s motion.
The order granting Maldonado’s summary judgment motion
orders Ms. Lopez to reimburse him $19,431.82 for expenses and to
pay him the “owed contractual amount of 20% of her recovery
received…” See CR 325.
Ms. Lopez seeks review of the summary judgment granted to
Maldonado.
ISSUE PRESENTED
Maldonado is not entitled to summary judgment on his
attorney’s fees or expenses because he failed to establish as a
matter of law that he is entitled to recover attorney’s fees or expenses
from Ms. Lopez.
STATEMENT OF FACTS
On November 3, 2010, Ms. Lopez filed her Original Petition for
Divorce against her husband, Erasmo Lopez. CR 9-19.
On July 21, 2011, Ms. Lopez was referred to Santos
Maldonado as an attorney who has family law experience and who
could represent me in my divorce. CR 288. 1 She retained him to
1
Maldonado did not object to any statements Ms. Lopez made in her affidavit.
2
represent her in the divorce proceedings. Id. Maldonado drafted the
contingency fee contract, which he entitled “Contingent Contract of
Employment,” and both parties signed it. Id.; CR 270-273.
Maldonado advised Ms. Lopez to accept a settlement in the
divorce proceeding, and the Lopezes’ respective attorneys dictated a
purported agreement before a court reporter when the court was not
in session. CR 288-291. However, Ms. Lopez later repudiated the
agreement after discovering that Maldonado had failed to provide
information necessary for her to evaluate her case and that he had
advised her to accept a settlement that was not fair or proper to her.
Id.
Prior to the court meeting, Ms. Lopez spoke with Maldonado
about the valuations of the community property and specifically the
house and furniture. Id. Even though the furniture had little value,
Maldonado directed and advised her to accept the valuation of
$150,000.00. Id. He also directed and advised her to accept the
valuation of $400,000.00 for the community property house, instead
of the Hidalgo County Appraised value of $219,000.00. Mr. Lopez
wanted to value it at $400,000.00, and Maldonado directed and
advised her to accept that value. Id. Although Ms. Lopez was the
3
client, Maldonado always overruled her. Maldonado had no concern
for Ms. Lopez’s opinions. Id.
Maldonado allowed Mr. Lopez to receive substantially most of
the assets and certainly all the income earning assets. Id. After Ms.
Lopez terminated Attorney Maldonado’s employment, she discovered
that the promissory note Mr. Lopez gave to her as part of her
distribution was totally unsecured. Id. None of the assets awarded to
Mr. Lopez were subject to a lien for performance of the promissory
note in the principle amount of $365,000.00. Id. Ms. Lopez was
shocked when she discovered that there was no security whatsoever,
and that the promissory notes was based solely on Mr. Lopez’s
naked promise that he would pay. Id.
Ms. Lopez also discovered that Maldonado had written in one
of the proposed decrees that the payments from the promissory note
mentioned above were to be paid directly to Maldonado. Id.
Maldonado never discussed such self-dealing with Ms. Lopez at
anytime, and she would not have agreed to this payment
arrangement. Id.
Additionally, after Ms. Lopez terminated Maldonado, she was
advised that she would have received a larger share of the
4
community property if the court found fault against Mr. Lopez. Id.
However, Maldonado never informed Ms. Lopez about this law. Id.
Either he did not understand the law or chose not to inform her of this
issue. Id. Ms. Lopez told Maldonado that Mr. Lopez had maintained
several mistresses during their marriage and that she had personally
confronted Mr. Lopez leaving a hotel in Brownsville, Texas with his
girlfriend Joana Benavides, one week before she filed for divorce. Id.
Ms. Lopez believed that Mr. Lopez was a serial adulterer, having one
girl friend after another during our marriage. Id. However, Maldonado
did not use this information to help Ms. Lopez obtain a larger
proportion of the community assets. Id. Ms. Lopez did not know this
law until after she had terminated Maldonado’s services. Id.
Because Ms. Lopez believes that Maldonado has harmed her
divorce case due to his incompetency, self-dealing, and refusal to
listen to her, even though she was the client, Ms. Lopez asserted a
claim of legal malpractice against Maldonado. Id.
The trial court ultimately entered a judgment based on the
terms that Maldonado had recited to the court reporter at the
aforementioned court meeting, which terms Ms. Lopez had
5
repudiated. CR 164-202. Ms. Lopez is appealing that divorce decree.
CR 292-293.
The contract that Attorney Maldonado is attempting to enforce
does not grant him the absolute right to recover a 20% contingency
fee. CR 270-273.
The “Contingent Contract of Employment” executed by the
parties provides the following:
• Since Ms. Lopez terminated the contract, Maldonado is entitled
to only “a reasonable fee pursuant to the factors and guidelines
approved by the Supreme Court of Texas and in the Code of
Professional Responsibility." CR 271.
• Ms. Lopez cannot settle her case without Maldonado’s consent:
Necessity for Attorney’s Consent to Settlement
Client will make no settlement of the claim herein, or accept any
sum as reimbursement for any bodily injuries or expenses,
without the Attorney’s consent. CR 272.
• Ms. Lopez pays only reasonable and necessary expenses: “[A]ll
costs, necessary disbursements, investigative fees, reasonable
personal expenses, as well as necessary expenses to prepare
6
the case for settlement or trial… are to be paid by Client.” CR
270.
At no point did Maldonado show Ms. Lopez any documentation
that he spent $24,431.82 preparing her case for settlement or trial.
CR 288-291. At no point did he show Ms. Lopez invoices, receipts, or
other documentation substantiating his alleged expenses for her case
or benefit. CR 288-291.
SUMMARY OF THE ARGUMENT
Maldonado is not entitled to summary judgment on his
attorney’s fees or expenses because (1) since Ms. Lopez terminated
his services, his own contract prohibits him from recovering a 20%
contingency fee; (2) since Ms. Lopez terminated his services, his own
contract entitles him to only reasonable attorney’s fees, and he did
not establish that his attorney’s fees are reasonable; and (3) his
contingency fee contract is not enforceable under Texas law.
Furthermore, Maldonado even admits in a pleading that his
entitlement to attorney’s fees is a fact issue.
7
ARGUMENT
I. Review standard and burden of proof standard
A. This Court reviews the trial court’s summary
judgment de novo
The appeals court reviews the trial court's summary judgment
de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661
(Tex. 2005). When reviewing a summary judgment, the appeals court
takes as true all evidence favorable to the nonmovant, and indulges
every reasonable inference and resolve any doubts in the
nonmovant's favor. Id.
B. Maldonado had the burden of proof to show his
entitlement to attorney’s fees and expenses
Because Maldonado was seeking affirmative relief, he had the
burden of proof to establish he was entitled to relief as a matter of
law. To be entitled to summary judgment on his own claim for
affirmative relief, a movant must conclusively prove all essential
elements of his claim. MMP, Ltd. v. Jones, 710 S.W.2d 59, 60 (Tex.
1986). The movant has the burden to show that there are no genuine
issues of material fact and that movant is entitled to judgment as a
matter of law. Id. Evidence favorable to the nonmovant will be taken
8
as true and every reasonable inference must be indulged in
nonmovant, and any doubts resolved in nonmovant’s favor. Id.
II. Maldonado is not entitled to summary judgment because
he failed to establish his entitlement to attorney’s fees and
his contract is unenforceable as a matter of law
On July 28, 2014, Maldonado filed his one-page motion for
summary judgment to recover attorney’s fee. CR 266-274. In his one-
page motion, Maldonado claims he is entitled to 20% of Ms. Lopez’s
recovery in the divorce proceedings and that he incurred $24,431.822
in expenses for “developing the case.” CR 266. He attached the
parties’ contingency fee contract (CR 270-273) and a document
entitled “Belinda Lopez’ Case Expenses” (CR 274) to his motion.
Maldonado did not authenticate either exhibit. Instead, he verified his
motion.
A. Maldonado did not submit any summary judgment to
support his motion
Maldonado submitted no evidence at all to support his
summary judgment motion, since his verified summary judgment
motion is not summary judgment evidence. A motion for summary
judgment is a pleading. Barrow v. Jack's Catfish Inn, 641 S.W.2d
2
Ms. Lopez paid Maldonado a $5,000.00 retainer.
9
624, 625 (Tex. App.—Corpus Christi 1982, no writ). Pleadings, such
as factual statements in summary judgment motions, do not
constitute competent summary judgment evidence, even if sworn or
verified. Id.; Laidlaw Waste Sys. (Dallas), Inc. v. City of Wilmer, 904
S.W.2d 656, 660 (Tex. 1995); Hidalgo v. Sur. Sav. & Loan Ass'n, 462
S.W.2d 540, 541 (Tex. 1971).
Because Maldonado failed to submit summary judgment
evidence to support his motion, he does not even come close to
meeting his burden of proof to show his entitlement to attorney’s fees
or expenses.
B. Maldonado is not entitled to 20% of Ms. Lopez’s
recovery because his own contract prohibits such a
contingency fee
Because Ms. Lopez terminated Maldonado, he cannot recover
a 20% contingency fee under their contract.
It is the function of the court to construe and enforce the
contract as it is written where the terms of the contract are plain and
unambiguous. Eggert v. Am. Standard Life Ins. Co., 404 S.W.2d 99,
104 (Tex. Civ. App.—Corpus Christi 1966, no writ) (citation omitted).
The “Contingent Contract of Employment” plainly and unambiguously
provides that if Maldonado withdraws or Ms. Lopez terminates the
10
agreement, he "shall be entitled to a reasonable fee pursuant to the
factors and guidelines approved by the Supreme Court of Texas and
in the Code of Professional Responsibility." CR 271. There is no
dispute that Ms. Lopez terminated their contract. Thus, even under
the clear, plain, and unambiguous terms of Maldonado’s own
agreement that he drafted, he is not entitled to recover the full
contracted amount of 20% of Ms. Lopez’s recovery.
Thus, the trial court’s summary judgment ordering Ms. Lopez to
pay Maldonado the “owed contractual amount of 20% of her recovery
received…” (see CR 325) cannot possibly stand.
C. Maldonado is not entitled to reasonable attorney’s
fees because he made no attempt to establish that his
fees for representing Ms. Lopez were reasonable
Because Ms. Lopez terminated the agreement, Maldonado’s
contract permits him to recover only “a reasonable fee pursuant to the
factors and guidelines approved by the Supreme Court of Texas and
in the Code of Professional Responsibility," (CR 271), the fact finder
must consider these factors in determining the reasonableness of
Maldonado’s fee, as set out by the Supreme Court of Texas, citing
Texas Disciplinary Rule of Professional Conduct 1.04:
11
(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).
Also, the reasonableness of attorney's fees is a question of fact
and must be supported by competent evidence. Bullock v. Foster
Cathead Co., 631 S.W.2d 208, 212 (Tex. App.—Corpus Christi 1982,
no writ) (citing Great American Reserve Insurance Co. v. Britton, 406
S.W.2d 901, 907 (Tex.1966)). A court does not have authority to
adjudicate the reasonableness of attorney's fees on judicial
knowledge without the benefit of evidence. Bullock, 631 S.W.2d at
12
212 (citing Great American Reserve Insurance Co., 406 S.W.2d at
907).
Here, because Ms. Lopez terminated the agreement,
Maldonado must convince a fact finder that his fees are reasonable
using the Arthur Andersen factors, in order to recover his fees.
However, Maldonado made no attempt to show that his fees were
reasonable.
Maldonado proffered no testimony about his fees with his
motion for summary judgment. See CR 266-274. Maldonado
proffered no testimony about his fees with his untimely reply to Ms.
Lopez’s response to his motion for summary judgment. See SCR 31-
35. (Maldonado filed his reply the day before the summary judgment
hearing, so anything filed with his reply is untimely and cannot be
considered by the Court.)
In a document entitled “Billing Records Affidavit Pertaining to
Belinda Lopez” that Maldonado attached to his untimely reply to Ms.
Lopez’s response to his motion for summary judgment, Maldonado
boldly states “The service I provided was and the amount that I
charged for the service was reasonable at the time and place that the
service was provided” with nothing to support his statement. See
13
SCR 35. Such a conclusory statement, with supporting facts, is not
credible and is not proper summary judgment evidence. See e.g.
Ryland Group, Inc. v. Hood, 924 S.W.2d 120, 122 (Tex. 1996) (citing
Tex.R. Civ. P. 166a(c)).
Maldonado even admits that his entitlement to attorney’s fees
and expenses is a fact issue. In his Response to Ms. Lopez’s Motion
for No Evidence Motion for Summary Judgment, he states that
“attached hereto… is an appendix containing affidavits, official court
transcripts, and other documents setting forth summary judgment
proof of the existence of a material fact concerning entitled[sic] of
attorney fees and expenses pursuant to valid contract between
Santos Maldonado and Belinda Lopez.” See CR 427.
Because Maldonado failed to show that his fees were
reasonable, and he even admits that there is a genuine issue of
material fact regarding his entitlement to attorney’s fees, he is not
entitled to summary judgment awarding him attorney’s fees.
D. Maldonado did not establish that his alleged
expenses for representing Ms. Lopez were necessary
or reasonable
Because Maldonado’s contract expressly provides that “[a]ll
costs, necessary disbursements, investigative fees, reasonable
14
personal expenses, as well as necessary expenses to prepare the
case for settlement or trial… are to be paid by Client” (See CR 270)
(emphasis added), and he failed to proffer evidence to establish his
alleged expenses were reasonable and necessary, he is not entitled
to recover his such expenses.
To demonstrate his alleged expenses, Maldonado relies on a
document entitled “Belinda Lopez’ Case Expenses.” However, the
“Belinda Lopez’ Case Expenses” document contains inadmissible
hearsay, and inadmissible, unsubstantiated, and conclusory
statements. He is not entitled to recover his expenses simply
because he says so; he must proffer competent, admissible evidence
to show that his expenses are reasonable and necessary. However,
Maldonado made no attempt to show that any of the expenses listed
in the “Belinda Lopez’ Case Expenses” document are reasonable or
necessary. The document does not even include enough description
for each fee item to allow a fact-finder or Ms. Lopez to evaluate
whether a particular fee is reasonable or necessary.
Because no competent evidence supports the necessity or
reasonableness of the expenses Maldonado claims he incurred for
15
representing Ms. Lopez, he is not entitled to recover those alleged
expenses.
E. Maldonado is not entitled to a contingency fee
because such fee is unconscionable
Additionally, Maldonado cannot recover a 20% contingency fee
because his incompetent representation of Ms. Lopez makes such a
fee unconscionable. “A fee is unconscionable if a competent lawyer
could not form a reasonable belief that the fee is reasonable.” Davis
Law Firm v. Bates, 2014 WL 585855, *4 (Tex. App.—Corpus Christi
2014, no pet.) (citing Tex. Disciplinary R. Prof'l Conduct 1.04(a)).
Here, because the evidence shows that Maldonado did not
competently represent Ms. Lopez, no competent lawyer could form a
reasonable belief that Maldonado is entitled to 20% of Ms. Lopez’s
discovery.
F. Because Maldonado’s contingency fee contract is
unconscionable and against public policy, it is
unenforceable as a matter of law
Furthermore, the “Contingent Contract of Employment” is void
because it has a clause prohibiting settlement without Maldonado’s
consent, in violation of Texas Disciplinary Rule of Professional
16
Conduct 1.02(a)(2). Specifically, the “Contingent Contract of
Employment” states:
Necessity for Attorney’s Consent to Settlement
Client will make no settlement of the claim herein, or
accept any sum as reimbursement for any bodily injuries
or expenses, without the Attorney’s consent.
CR 272.
A provision forbidding Ms. Lopez to settle her claim without
Maldonado’s consent is unenforceable. The parties’ contract in this
case is similar to the one in Davis Law Firm v. Bates, 2014 WL
585855 (Tex. App.—Corpus Christi 2014, no pet.), where this Court
concluded that a client can void a contingency fee contract that
requires attorney consent to settle a claim. This Court acknowledged
that Texas Disciplinary Rule of Professional Conduct 1.02(a)(2)
requires an attorney to “abide by a client's decision” regarding
whether to accept a settlement offer and that Comment 5 following
the rule provides, in pertinent part: “An agreement concerning the
scope of representation must accord with the Disciplinary Rules of
Professional Conduct and other law. Thus, the client may not be
asked ... to surrender ... the right to settle or continue litigation that
the lawyer might wish to handle differently.” Id. at 3 (also citing In re
17
Plaza, 363 B.R. 517, 521-522 (Bankr. S.D. Tex. 2007) (determining
that “clauses in a contract between attorney and client which prohibit
a settlement by the client without his attorney's consent are generally
held to be unenforceable as against public policy”) and Sanes v.
Clark, 25 S.W.3d 800, 805 (Tex.App.—Waco 2000, pet. denied)
(determining that contingent fee contract authorizing attorney to settle
clients' claims without consultation with clients was voidable by
clients because it violated rule 1.02(a)(2)).
This Court concluded that a provision stating “neither Client nor
Attorney will make a settlement of the claim herein or accept any sum
without consent of the other....” violates rule 1.02(a)(2) and is
unenforceable as against public policy. Davis Law Firm, 2014 WL
585855 at *3 (also citing Cruse v. O'Quinn, 273 S.W.3d 766, 775
(Tex.App.—Houston [14th Dist.] 2008, pet. denied) (holding that “a
court may deem [the Disciplinary Rules] to be an expression of public
policy, so that a contract violating them is unenforceable as against
public policy”)). This Court concluded in Davis Law Firm that the
attorney was not entitled to collect a contingency fee. Davis Law
Firm, 2014 WL 585855 at *3.
18
This Court is bound by its holding in Davis Law Firm. Absent a
decision from a higher court or the same court sitting en banc that is
on point and contrary to the prior panel decision or an intervening and
material change in the statutory law, this court is bound by the prior
holding of another panel of this court. Ross v. Union Carbide Corp.,
296 S.W.3d 206, 221 (Tex. App.—Houston [14th Dist.] 2009, pet.
denied).
PRAYER
Because Maldonado did not establish as a matter of law that he
is entitled to recover attorney’s fees or expenses in the divorce
proceeding, and his contingency fee contract is not enforceable under
Texas law, he is not entitled to summary judgment. Thus, this Court
must reverse the summary judgment.
19
RESPECTFULLY SUBMITTED,
THE ARMSTRONG FIRM
2600 Old Alice Road, Suite A
Brownsville, Texas 78521
Telephone: (956) 546-5556
Telecopier: (956) 546-0470
/s/ R. W. Armstrong
R. W. Armstrong
State bar No. 01323500
ATTORNEYS FOR APPELLANT
BELINDA LOPEZ
SPECIAL COUNSEL TO THE
ARMSTRONG FIRM:
TRACIA Y. LEE, P.L.L.C.
Tracia Y. Lee
State Bar No. 24013021
P.O. Box 171022
Austin, Texas 78717
Telephone: (512) 814-6167
Facsimile: (512) 271-6806
20
CERTIFICATE OF COMPLIANCE
I certify that I drafted Appellant’s Brief using Microsoft Word for
Mac 2011 using Arial 14-point font for the text and 12-point font for
footnotes and that the Brief contains 3425 words.
/s/ Tracia Y. Lee
Tracia Y. Lee
CERTIFICATE OF SERVICE
I certify that on this 20th day of July, 2015, a true and correct
copy of Appellant’s Brief was served on the following counsel of
record via facsimile, in accordance with the Texas Rules of Civil
Procedure:
/s/ Tracia Y. Lee
Tracia Y. Lee
21
No. 13-15-00042-CV
In the Thirteenth Court of Appeals
Corpus Christi, Texas
Belinda Lopez,
Appellant
v.
Santos Maldonado,
Appellee
APPELLANT’S APPENDIX
LIST OF DOCUMENTS
ITEM 1 Davis Law Firm v. Bates, 2014 WL 585855
(Tex. App.—Corpus Christi 2014, no pet.)
ITEM 2 Texas Disciplinary Rule of Professional Conduct
1.02(a)(2)
ITEM 3 Texas Disciplinary Rule of Professional Conduct
1.04
22
No. 13-15-00042-CV
Belinda Lopez,
Appellant
v.
Santos Maldonado,
Appellee
ITEM 1
Davis Law Firm v. Bates, 2014 WL 585855
(Tex. App.—Corpus Christi 2014, no pet.)
Davis Law Firm v. Bates, Not Reported in S.W.3d (2014)
was unenforceable as against public policy. State
Bar Rules, V.T.C.A., Government Code Title
2, Subtitle G App. A, Art. 10, § 9, Rules of
Prof.Conduct, Rule 1.02(a)(2).
Cases that cite this headnote
[2] Attorney and Client
Requisites and Validity of Contract
Assuming that the provision in contingency
fee contract prohibiting settlement without
attorney's consent was severable, law firm was
not entitled to enforcement of the agreement
because charging a $70,000 fee for no legal
services performed was an unconscionable fee;
law firm did not identify any legal services it
performed on client's behalf in the 24 hours
Synopsis or less that it represented her, and client was
Background: Law firm brought action against former client interviewed by a firm employee and did not at
and her insurer seeking to contingent fee payment. The any time meet or consult with an attorney from
County Court at Law, Cameron County, granted defendants the firm. State Bar Rules, V.T.C.A., Government
summary judgment. Law firm appealed. Code Title 2, Subtitle G App. A, Art. 10, § 9,
Rules of Prof.Conduct, Rule 1.04(a).
2 Cases that cite this headnote
Holdings: The Court of Appeals, Garza, J., held that:
[1] contingency fee contract that required client to obtain
attorney's consent to settle was unenforceable as against
On appeal from the County Court at Law No. 2 of Cameron
public policy, and
County, Texas.
[2] assuming unconscionable provision in contract was Attorneys and Law Firms
severable, law firm was not entitled to enforcement of the
agreement because charging a $70,000 fee for no legal Jeff Small, Mark Anthony Acuna, for the Davis Law Firm.
services performed was an unconscionable fee.
Roger W. Hughes, Tom Lockhart, for James Bates and
Consumers County Mutual Insurance Company.
Affirmed.
Before Justices RODRIGUEZ, GARZA, and PERKES.
West Headnotes (2) MEMORANDUM OPINION
Memorandum Opinion by Justice GARZA.
[1] Attorney and Client
Requisites and Validity of Contract *1 By several issues, appellant, the Davis Law Firm
Contingency fee contract that required client to (“Davis”), contends the trial court erred in granting summary
obtain attorney's consent to settle violated rule judgment in favor of appellees, James Bates and Consumers
of professional conduct requiring an attorney to County Mutual Insurance Company (“Consumers”), and in
abide by a client's decision, and thus, contract denying Davis's motion for summary judgment. We affirm.
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 1
Davis Law Firm v. Bates, Not Reported in S.W.3d (2014)
see Tex. Gov't Code Ann. § 82.065(b) (West 2013); and
(2) Davis's attempt to collect a $70,000 fee for no useful
services to Tapia was an attempt to collect an unconscionable
I. BACKGROUND
fee. Consumers and Bates also asserted that Davis's tortious
On January 15, 2008, Marta Tapia and Bates were involved interference and conversion claims failed as a matter of law
in an automobile accident in Brownsville, Texas. Tapia because: (1) Tapia properly canceled the fee agreement before
sued Bates for injuries sustained in the accident. Consumers the alleged interference; and (2) Davis had no right to possess
defended Bates and, in May 2009, paid $200,000.00 to Tapia the funds at the time of the alleged conversion. 4
in settlement of her claims against Bates.
*2 Consumers attached the following evidence to its
Either the same day as the accident or the following day, traditional motion for summary judgment: (1) excerpts
Tapia visited Davis's Brownsville office. Tapia spoke with a from Tapia's deposition testimony; (2) Davis's responses to
Davis staff employee and signed a contingency fee contract. Consumers's discovery requests; and (3) an affidavit and
The agreement provided for Davis to receive a thirty- report prepared by Frank Costilla, a Brownsville attorney,
five percent (35%) contingency fee of any amount Tapia regarding the unconscionability of Davis's claim to the
recovered before filing suit. After leaving Davis's office, $70,000 fee. 5
Tapia felt uncomfortable and that she had not been treated
with consideration. A family friend called to check on her and Davis also filed a traditional motion for summary judgment
recommended that she retain Javier Villarreal to represent her. asserting that: (1) Tapia lacked good cause to discharge
The following day, Tapia visited Villarreal's office and asked Davis; (2) Consumers was liable to Davis for the amount
that he represent her. Tapia told Villarreal that she had signed of the fee because it had notice of Davis's interest in the
a contingency fee agreement with Davis. Villarreal prepared $70,000 fee; and (3) even if a provision of the contingency fee
a letter for her signature advising Davis that she did not want contract was unconscionable, the trial court erred in failing
to retain the firm's services. The letter was faxed to Davis's to eliminate the unconscionable provision and to enforce
office that day. 1 the remaining provisions of the contract. Davis attached
the following summary judgment evidence: (1) Tapia's
In February 2008, Davis advised Bates's insurer, Travelers deposition testimony; (2) the contingent fee agreement; (3)
Insurance, 2 that Tapia had released Davis from representing the February 2008 letter from Davis to Consumers; (4) the
her, but that Davis retained its interest in the claim. The deposition of William Edwards 6 ; (5) a copy of the settlement
letter requested that Davis be included in any settlement agreement; and (6) a copy of the settlement check.
check regarding Tapia's claims. In December 2009, after
the settlement, Davis sent a demand letter to Travelers Consumers and Bates filed objections to Edwards's deposition
demanding payment of its fee in the amount of 33.3 percent testimony and affidavit on grounds that Edwards offered
of the settlement amount. opinions on questions of law, failed to employ the correct
legal standard, and that his opinions were speculative and
Davis sued Bates and Consumers for interference with a conclusory. The trial court overruled Davis's objections to
contract, conversion, and enforcement of its fee agreement. 3 Consumers's and Bates's evidence, denied Davis's motion,
Bates and Consumers each filed a traditional motion for sustained Consumers' and Bates's objections to Davis's
summary judgment, asserting that they were entitled to evidence, and granted Consumers's and Bates's motions
summary judgment on grounds that: (1) the contingency without stating the basis for its ruling.
fee contract was unconscionable as a matter of law and
unenforceable because it required Davis's consent to any
settlement in violation of Texas Disciplinary Rule of II. STANDARD OF REVIEW
Professional Conduct 1.02(a)(2), see TEX. DISCIPLINARY AND APPLICABLE LAW
R. PROF'L CONDUCT 1.02(a)(2), reprinted in TEX. GOV'T
CODE ANN. tit. 2, subtit. G, app. A (West 2013) (Tex. In a summary judgment case, the movant must show that
State Bar R. art. X, § 9), and therefore, that the agreement there is no genuine issue of material fact and that the
was voidable pursuant to government code section 82.065(b), movant is entitled to judgment as a matter of law. TEX.R.
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 2
Davis Law Firm v. Bates, Not Reported in S.W.3d (2014)
CIV. P. 166a(c); Provident Life & Acc. Ins. Co. v. Knott, Davis's fee interest; (4) Consumers failed to prove that the
128 S.W.3d 211, 215–16 (Tex.2003). The movant has the contingency fee contract was unconscionable at the time of its
burden of proof. Sw. Elec. Power Co. v. Grant, 73 S.W.3d formation; and (5) even if the clause requiring Davis's consent
211, 215 (Tex.2002); City of Houston v. Clear Creek Basin to settlement was invalid, the trial court erred in failing to
Auth., 589 S.W.2d 671, 678 (Tex.1979). A defendant who sever the invalid clause and in failing to enforce the remainder
conclusively negates at least one essential element of the of the contract.
plaintiff's cause of action, or who conclusively establishes
all of the elements of an affirmative defense, is entitled
to summary judgment. Frost Nat'l Bank v. Fernandez, 315 A. The Summary Judgment Motions
S.W.3d 494, 508 (Tex.2010). The burden to raise a fact [1] Bates and Consumers moved for summary judgment
issue shifts to the non-movant only after the movant has on the ground that the contingency fee agreement was
established that it is entitled to summary judgment as a voidable by Tapia because it included a clause prohibiting
matter of law. Rhone–Poulenc, Inc. v. Steel, 997 S.W.2d settlement without Davis's consent in violation of Texas
217, 222 (Tex.1999); Casso v. Brand, 776 S.W.2d 551, 556 Disciplinary Rule of Professional Conduct 1.02(a)(2). See
(Tex.1989). TEX. DISCIPLINARY R. PROF'L CONDUCT 1.02(a)(2).
Rule 1.02(a)(2) requires an attorney to “abide by a client's
We review a traditional motion for summary judgment de decision” regarding whether to accept a settlement offer. Id.
novo. Frost Nat'l Bank, 315 S.W.3d at 508. To determine if Comment 5 following the rule provides, in pertinent part:
the non-movant raised a fact issue, we review the evidence “An agreement concerning the scope of representation must
in the light most favorable to the non-movant, crediting accord with the Disciplinary Rules of Professional Conduct
favorable evidence if reasonable jurors could do so and and other law. Thus, the client may not be asked ... to
disregarding contrary evidence unless reasonable jurors could surrender ... the right to settle or continue litigation that the
not. See Mann Frankfort Stein & Lipp Advisors, Inc. v. lawyer might wish to handle differently.” Id. cmt. 5; see In re
Fielding, 289 S.W.3d 844, 848 (Tex.2009). Plaza, 363 B.R. 517, 521–22 (2007) (“Clauses in a contract
between attorney and client which prohibit a settlement by
*3 When both sides move for summary judgment, and the the client without his attorney's consent are generally held to
trial court grants one and denies the other, we review both be unenforceable as against public policy.”) (quoting Lewis
sides' evidence and determine all questions presented. See v. S.S. Baume, 534 F.2d 1115, 1122 (5th Cir.1976)); Sanes
FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868, v. Clark, 25 S.W.3d 800, 805 (Tex.App.-Waco 2000, pet.
872 (Tex.2000); Lumbreras v. Rocha, No. 13–10–00459–CV, denied) (holding that contingent fee contract authorizing
2012 WL 29215, at *1 (Tex.App.-Corpus Christi Jan.5, 2012, attorney to settle clients' claims without consultation with
no pet.) (mem.op.). The reviewing court must then render clients was voidable by clients because it violated rule 1.02(a)
the judgment that the trial court should have rendered. See (2)). Here, the contingency fee contract required Tapia to
FM Props. Operating Co., 22 S.W.3d at 872. “When a trial obtain Davis's consent to settle (“Neither Client nor Attorney
court's order granting summary judgment does not specify will make a settlement of the claim herein or accept any
the grounds relied upon, the reviewing court must affirm sum without consent of the other....”). We conclude that the
summary judgment if any of the summary judgment grounds provision violates rule 1.02(a)(2) and is unenforceable as
are meritorious.” Id. against public policy. See TEX. DISCIPLINARY R. PROF'L
CONDUCT 1.02(a)(2) cmt. 5; In re Plaza, 363 B.R. at 521–
22; Sanes, 25 S.W.3d at 805; see also Cruse v. O'Quinn, 273
S.W.3d 766, 775 (Tex.App.-Houston [14th Dist.] 2008, pet.
III. DISCUSSION denied) (holding that “a court may deem [the Disciplinary
Rules] to be an expression of public policy, so that a contract
Davis characterizes its issues as follows: (1) the trial court
violating them is unenforceable as against public policy”).
erred by granting summary judgment in favor of Bates and
We hold that the trial court did not err in granting summary
Consumers and by denying summary judgment in Davis's
judgment in favor of Bates and Consumers on this basis.
favor; (2) Consumers had no standing to challenge the validity
of the contingency fee contract; 7 (3) Davis was entitled *4 In its motion, Davis argued that it was entitled to
to collect its contingency fee because Tapia terminated the summary judgment because Consumers had notice of Davis's
agreement without good cause and Consumers knew of claim to the 35% contingency fee, but Consumers nonetheless
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 3
Davis Law Firm v. Bates, Not Reported in S.W.3d (2014)
unconscionable at the time Tapia signed the agreement. We
failed to protect the firm's interest. Davis argues that
have already determined that the agreement is unenforceable
Consumers is therefore liable for the $70,000 fee. Davis
as against public policy and that Davis was therefore not
also argues that in determining whether a 35% fee is
entitled to the fee. We overrule Davis's third and fourth issues
unconscionable, we should look to the circumstances at the
as moot.
time the parties executed the agreement, “rather than using
hindsight to see what work was actually done on the case.”
B. Severability of Unconscionable Provision
We are unpersuaded by Davis's arguments. We have [2] By its fifth issue, Davis argues that even if the provision
already determined that because the contingent fee prohibiting settlement without its consent is invalid, the
agreement prohibited settlement without Davis's consent, provision is severable and the remainder of the agreement is
it was unenforceable as against public policy. See TEX. enforceable. Davis cites Hoover Slovacek in support of the
DISCIPLINARY R. PROF'L CONDUCT 1.02(a)(2) cmt. principle that if a term within a contract is unconscionable
5; In re Plaza, 363 B.R. at 521–22; Sanes, 25 S.W.3d at at the time the contract is made, a court may enforce the
805. Moreover, Tapia properly terminated the agreement less remainder of the contract or may limit the application of
than twenty-four hours after she signed the agreement. It the objectionable clause. See 206 S.W.3d at 565 (holding
is undisputed that Tapia terminated the agreement before that a termination fee provision was unconscionable, but that
she met or consulted with any attorney at the Davis firm. remainder of the fee agreement was enforceable). Assuming,
Davis has not identified any legal work that it performed without deciding, that the provision prohibiting settlement
on Tapia's behalf. “Public policy strongly favors a client's without Davis's consent was severable, we nonetheless
freedom to employ a lawyer of his choosing and, except conclude that Davis is not entitled to enforcement of the
in some instances where counsel is appointed, to discharge agreement because charging a $70,000 fee for no legal
the lawyer during the representation for any reason or services performed is an unconscionable fee. “A fee is
no reason at all.” Hoover Slovacek LLP v. Walton, 206 unconscionable if a competent lawyer could not form a
S.W.3d 557, 562 (Tex.2006); see TEX. DISCIPLINARY reasonable belief that the fee is reasonable.” Tex. Disciplinary
R. PROF'L CONDUCT 1.15 cmt. 4 (“A client has the R. Prof'l Conduct 1.04(a). Here, Davis has not identified any
power to discharge a lawyer at any time, with or without legal services it performed on Tapia's behalf in the twenty-
cause, subject to liability for payment for the lawyer's four hours or less that it represented her. As noted, Tapia was
services....”). Regardless, because the trial court could have interviewed by a Davis employee and did not at any time meet
properly determined that the contingency fee contract was or consult with a lawyer from the Davis firm. Thus, even if we
unenforceable as against public policy, it did not err in assume, without deciding, that Davis was discharged without
denying Davis's motion for summary judgment. We overrule cause, its right to seek compensation in quantum meruit or
Davis's first issue. in a suit to enforce the contract is subject to the prohibition
against charging or collecting an unconscionable fee. See id.;
By its second issue, Davis contends that neither Bates Hoover Slovacek, 206 S.W.3d at 561. We conclude that Davis
nor Consumers had standing to step into Tapia's shoes is not entitled to enforcement of the remainder of the contract.
and challenge the validity of her contingency fee contract We overrule Davis's fifth issue.
with Davis. We agree with Consumers and Bates that
Davis's standing argument is irrelevant and without merit.
Davis is only entitled to its 35% contingency fee if the
contract is enforceable, and we have determined that it was IV. CONCLUSION
unenforceable as against public policy. We overrule Davis's
*5 We affirm the trial court's judgment.
second issue.
By its third issue, Davis contends it was entitled to collect its All Citations
contingency fee because Tapia terminated her agreement with
Davis without good cause. By its fourth issue, it contends that Not Reported in S.W.3d, 2014 WL 585855
Consumers has not shown that the 35% contingency fee was
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 4
Davis Law Firm v. Bates, Not Reported in S.W.3d (2014)
Footnotes
1 We note that the contingency fee agreement and the letter to Davis are both dated the same day, January 16, 2008.
2 Although the record does not explain the relationship between Travelers and Consumers, we note that Davis's Third
Amended Petition refers to Davis's notice and demand letters as having been sent to Consumers.
3 Davis's Third Amended Petition states that it brings its suit “by and through” its former client, Tapia.
4 We note that Bates's and Consumers's motions for summary judgment asserted the same grounds and relied on the
same evidence except that Bates's motion also asserted that: (1) Davis named Bates as a party but did not assert that
he did anything wrong; and (2) Davis did not request issuance of citation and service on Bates until four months after the
statute of limitations had expired on all claims against Bates. Because we conclude that the trial court properly granted
summary judgment on grounds asserted by both parties, we address Bates's and Consumers's motions together.
5 Bates's motion attached the excerpts of Tapia's deposition testimony and Davis's discovery responses.
6 William Edwards, a personal injury litigator and Davis's retained expert, stated in his deposition testimony that the fee
agreement was not unconscionable because the 35% fee was fair when Tapia signed the agreement.
7 Davis asserts that neither Consumers nor Bates had “standing” to challenge Tapia's contingency fee contract with Davis.
“[S]tanding focuses on the question of who may bring an action.” The M.D. Anderson Cancer Ctr. v. Novak, 52 S.W.3d
704, 708 (Tex.2001) (quoting Patterson v. Planned Parenthood, 971 S.W.2d 439, 442 (Tex.1998)); see Nootsie, Ltd.
v. Williamson County Appraisal Dist., 925 S.W.2d 659, 661 (Tex.1996) (“A plaintiff has standing when it is personally
aggrieved.”). “Questions of standing turn upon the status of the plaintiff rather than the status of the defendant.” Robinson
v. Neeley, 192 S.W.3d 904, 912 (Tex.App.-Dallas 2006, no pet.). Here, Davis, the plaintiff, sued Bates and Consumers,
and then challenged their standing. We conclude Davis's second issue is without merit, and we overrule it.
End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 5
No. 13-15-00042-CV
Belinda Lopez,
Appellant
v.
Santos Maldonado
Appellee
ITEM 2
Texas Disciplinary Rule of Professional Conduct 1.02(a)(2)
Rule 1.02. Scope and Objectives of Representation, TX ST RPC Rule 1.02
(a) Subject to paragraphs (b), (c), (d), and (e), (f), and (g), a lawyer shall abide by a client's decisions:
(1) concerning the objectives and general methods of representation;
(2) whether to accept an offer of settlement of a matter, except as otherwise authorized by law;
(3) In a criminal case, after consultation with the lawyer, as to a plea to be entered, whether to waive jury trial, and whether
the client will testify.
(b) A lawyer may limit the scope, objectives and general methods of the representation if the client consents after consultation.
(c) A lawyer shall not assist or counsel a client to engage in conduct that the lawyer knows is criminal or fraudulent. A lawyer
may discuss the legal consequences of any proposed course of conduct with a client and may counsel and represent a client in
connection with the making of a good faith effort to determine the validity, scope, meaning or application of the law.
(d) When a lawyer has confidential information clearly establishing that a client is likely to commit a criminal or fraudulent
act that is likely to result in substantial injury to the financial interests or property of another, the lawyer shall promptly make
reasonable efforts under the circumstances to dissuade the client from committing the crime or fraud.
(e) When a lawyer has confidential information clearly establishing that the lawyer's client has committed a criminal or
fraudulent act in the commission of which the lawyer's services have been used, the lawyer shall make reasonable efforts under
the circumstances to persuade the client to take corrective action.
(f) When a lawyer knows that a client expects representation not permitted by the rules of professional conduct or other law,
the lawyer shall consult with the client regarding the relevant limitations on the lawyer's conduct.
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 1
Rule 1.02. Scope and Objectives of Representation, TX ST RPC Rule 1.02
(g) A lawyer shall take reasonable action to secure the appointment of a guardian or other legal representative for, or seek other
protective orders with respect to, a client whenever the lawyer reasonably believes that the client lacks legal competence and
that such action should be taken to protect the client.
Credits
Adopted by order of Oct. 17, 1989, eff. Jan. 1, 1990.

Editors' Notes
COMMENT:
2013 Main Volume
Scope of Representation
1. Both lawyer and client have authority and responsibility in the objectives and means of representation. The client has ultimate
authority to determine the objectives to be served by legal representation, within the limits imposed by law, the lawyer's
professional obligations, and the agreed scope of representation. Within those limits, a client also has a right to consult with
the lawyer about the general methods to be used in pursuing those objectives. The lawyer should assume responsibility for the
means by which the client's objectives are best achieved. Thus, a lawyer has very broad discretion to determine technical and
legal tactics, subject to the client's wishes regarding such matters as the expense to be incurred and concern for third persons
who might be adversely affected.
2. Except where prior communications have made it clear that a particular proposal would be unacceptable to the client, a lawyer
is obligated to communicate any settlement offer to the client in a civil case; and a lawyer has a comparable responsibility with
respect to a proposed plea bargain in a criminal case.
3. A lawyer should consult with the client concerning any such proposal, and generally it is for the client to decide whether or
not to accept it. This principle is subject to several exceptions or qualifications. First, in class actions a lawyer may recommend
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 2
Rule 1.02. Scope and Objectives of Representation, TX ST RPC Rule 1.02
a settlement of the matter to the court over the objections of named plaintiffs in the case. Second, in insurance defense cases a
lawyer's ability to implement an insured client's wishes with respect to settlement may be qualified by the contractual rights of
the insurer under its policy. Finally, a lawyer's normal deference to a client's wishes concerning settlement may be abrogated
if the client has validly relinquished to a third party any rights to pass upon settlement offers. Whether any such waiver is
enforceable is a question largely beyond the scope of these rules. But see comment 5 below. A lawyer reasonably relying on
any of these exceptions in not implementing a client's desires concerning settlement is, however, not subject to discipline under
this Rule.
Limited Scope of Representation
4. The scope of representation provided by a lawyer may be limited by agreement with the client or by the terms under which the
lawyer's services are made available to the client. For example, a retainer may be for a specifically defined objective. Likewise,
representation provided through a legal aid agency may be subject to limitations on the types of cases the agency handles.
Similarly, when a lawyer has been retained by an insurer to represent an insured, the representation may be limited to matters
related to the insurance coverage. The scope within which the representation is undertaken also may exclude specific objectives
or means, such as those that the lawyer or client regards as repugnant or imprudent.
5. An agreement concerning the scope of representation must accord with the Disciplinary Rules of Professional Conduct and
other law. Thus, the client may not be asked to agree to representation so limited in scope as to violate Rule 1.01, or to surrender
the right to terminate the lawyer's services or the right to settle or continue litigation that the lawyer might wish to handle
differently.
6. Unless the representation is terminated as provided in Rule 1.15, a lawyer should carry through to conclusion all matters
undertaken for a client. If a lawyer's representation is limited to a specific matter or matters, the relationship terminates when
the matter has been resolved. If a lawyer has represented a client over a substantial period in a variety of matters, the client may
sometimes assume that the lawyer will continue to serve on a continuing basis unless the lawyer gives notice to the contrary.
Doubt about whether a client-lawyer relationship still exists should be clarified by the lawyer, preferably in writing, so that
the client will not mistakenly suppose the lawyer is looking after the client's affairs when the lawyer has ceased to do so. For
example, if a lawyer has handled a judicial or administrative proceeding that produced a result adverse to the client but has
not been specifically instructed concerning pursuit of an appeal, the lawyer should advise the client of the possibility of appeal
before relinquishing responsibility for the matter.
Criminal, Fraudulent and Prohibited Transactions
7. A lawyer is required to give an honest opinion about the actual consequences that appear likely to result from a client's
conduct. The fact that a client uses advice in a course of action that is criminal or fraudulent does not, of itself, make a lawyer
a party to the course of action. However, a lawyer may not knowingly assist a client in criminal or fraudulent conduct. There
is a critical distinction between presenting an analysis of legal aspects of questionable conduct and recommending the means
by which a crime or fraud might be committed with impunity.
8. When a client's course of action has already begun and is continuing, the lawyer's responsibility is especially delicate. The
lawyer may not reveal the client's wrongdoing, except as permitted or required by Rule 1.05. However, the lawyer also must
avoid furthering the client's unlawful purpose, for example, by suggesting how it might be concealed. A lawyer may not continue
assisting a client in conduct that the lawyer originally supposes is legally proper but then discovers is criminal or fraudulent.
Withdrawal from the representation, therefore, may be required. See Rule 1.15(a)(1).
9. Paragraph (c) is violated when a lawyer accepts a general retainer for legal services to an enterprise known to be unlawful.
Paragraph (c) does not, however, preclude undertaking a criminal defense incident to a general retainer for legal services to
a lawful enterprise.
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 3
Rule 1.02. Scope and Objectives of Representation, TX ST RPC Rule 1.02
10. The last clause of paragraph (c) recognizes that determining the validity or interpretation of a statute or regulation may
require a course of action involving disobedience of the statute or regulation or of the interpretation placed upon it by
governmental authorities.
11. Paragraph (d) requires a lawyer in certain instances to use reasonable efforts to dissuade a client from committing a crime
or fraud. If the services of the lawyer were used by the client in committing a crime or fraud, paragraph (e) requires the lawyer
to use reasonable efforts to persuade the client to take corrective action.
Client Under a Disability
12. Paragraph (a) assumes that the lawyer is legally authorized to represent the client. The usual attorney-client relationship
is established and maintained by consenting adults who possess the legal capacity to agree to the relationship. Sometimes the
relationship can be established only by a legally effective appointment of the lawyer to represent a person. Unless the lawyer is
legally authorized to act for a person under a disability, an attorney-client relationship does not exist for the purpose of this rule.
13. If a legal representative has already been appointed for the client, the lawyer should ordinarily look to the representative
for decisions on behalf of the client. If a legal representative has not been appointed, paragraph (g) requires a lawyer in some
situations to take protective steps, such as initiating the appointment of a guardian. The lawyer should see to such appointment
or take other protective steps when it reasonably appears advisable to do so in order to serve the client's best interests. See Rule
1.05(c)(4), d(1) and (d)(2)(i) in regard to the lawyer's right to reveal to the court the facts reasonably necessary to secure the
guardianship or other protective order.
Notes of Decisions (19)
V. T. C. A., Govt. Code T. 2, Subt. G App. A, Art. 10, § 9 Rule 1.02, TX ST RPC Rule 1.02
Current with amendments received through 3/15/2015
End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 4
No. 13-15-00042-CV
Belinda Lopez,
Appellant
v.
Santos Maldonado,
Appellee
ITEM 3
Texas Disciplinary Rule of Professional Conduct 1.04
!
Rule 1.04. Fees, TX ST RPC Rule 1.04
(a) A lawyer shall not enter into an arrangement for, charge, or collect an illegal fee or unconscionable fee. A fee is
unconscionable if a competent lawyer could not form a reasonable belief that the fee is reasonable.
(b) Factors that may be considered in determining the reasonableness of a fee include, but not to the exclusion of other relevant
factors, the following:
(1) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the
legal service properly;
(2) the likelihood, if apparent to the client, 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.
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 1
Rule 1.04. Fees, TX ST RPC Rule 1.04
(c) When the lawyer has not regularly represented the client, the basis or rate of the fee shall be communicated to the client,
preferably in writing, before or within a reasonable time after commencing the representation.
(d) A fee may be contingent on the outcome of the matter for which the service is rendered, except in a matter in which a
contingent fee is prohibited by paragraph (e) or other law. A contingent fee agreement shall be in writing and shall state the
method by which the fee is to be determined. If there is to be a differentiation in the percentage or percentages that shall accrue
to the lawyer in the event of settlement, trial or appeal, the percentage for each shall be stated. The agreement shall state the
litigation and other expenses to be deducted from the recovery, and whether such expenses are to be deducted before or after
the contingent fee is calculated. Upon conclusion of a contingent fee matter, the lawyer shall provide the client with a written
statement describing the outcome of the matter and, if there is a recovery, showing the remittance to the client and the method
of its determination.
(e) A lawyer shall not enter into an arrangement for, charge, or collect a contingent fee for representing a defendant in a criminal
case.
(f) A division or arrangement for division of a fee between lawyers who are not in the same firm may be made only if:
(1) the division is:
(i) in proportion to the professional services performed by each lawyer; or
(ii) made between lawyers who assume joint responsibility for the representation; and
(2) the client consents in writing to the terms of the arrangement prior to the time of the association or referral proposed,
including:
(i) the identity of all lawyers or law firms who will participate in the fee-sharing agreement, and
(ii) whether fees will be divided based on the proportion of services performed or by lawyers agreeing to assume joint
responsibility for the representation, and
(iii) the share of the fee that each lawyer or law firm will receive or, if the division is based on the proportion of services
performed, the basis on which the division will be made; and
(3) the aggregate fee does not violate paragraph (a).
(g) Every agreement that allows a lawyer or law firm to associate other counsel in the representation of a person, or to refer the
person to other counsel for such representation, and that results in such an association with or referral to a different law firm
or a lawyer in such a different firm, shall be confirmed by an arrangement conforming to paragraph (f). Consent by a client or
a prospective client without knowledge of the information specified in subparagraph (f)(2) does not constitute a confirmation
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Rule 1.04. Fees, TX ST RPC Rule 1.04
within the meaning of this rule. No attorney shall collect or seek to collect fees or expenses in connection with any such
agreement that is not confirmed in that way, except for:
(1) the reasonable value of legal services provided to that person; and
(2) the reasonable and necessary expenses actually incurred on behalf of that person.
(h) Paragraph (f) of this rule does not apply to payment to a former partner or associate pursuant to a separation or retirement
agreement, or to a lawyer referral program certified by the State Bar of Texas in accordance with the Texas Lawyer Referral
Service Quality Act, Tex. Occ. Code 952.001 et seq., or any amendments or recodifications thereof.
Credits
Adopted by order of Oct. 17, 1989, eff. Jan. 1, 1990. Amended by order of Jan. 28, 2005, eff. Mar. 1, 2005.

Editors' Notes
COMMENT:
2013 Main Volume
1. A lawyer in good conscience should not charge or collect more than a reasonable fee, although he may charge less or no
fee at all. The determination of the reasonableness of a fee, or of the range of reasonableness, can be a difficult question, and a
standard of “reasonableness” is too vague and uncertain to be an appropriate standard in a disciplinary action. For this reason,
paragraph (a) adopts, for disciplinary purposes only, a clearer standard: the lawyer is subject to discipline for an illegal fee or
an unconscionable fee. Paragraph (a) defines an unconscionable fee in terms of the reasonableness of the fee but in a way to
eliminate factual disputes as to the fee's reasonableness. The Rule's “unconscionable” standard, however, does not preclude use
of the “reasonableness” standard of paragraph (b) in other settings.
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Rule 1.04. Fees, TX ST RPC Rule 1.04
Basis or Rate of Fee
2. When the lawyer has regularly represented a client, they ordinarily will have evolved an understanding concerning the basis or
rate of the fee. If, however, the basis or rate of fee being charged to a regularly represented client differs from the understanding
that has evolved, the lawyer should so advise the client. In a new client-lawyer relationship, an understanding as to the fee
should be promptly established. It is not necessary to recite all the factors that underlie the basis of the fee, but only those that
are directly involved in its computation. It is sufficient, for example, to state that the basic rate is an hourly charge or a fixed
amount or an estimated amount, in order to identity the factors that may be taken into account in finally fixing the fee. When
developments occur during the representation that render an earlier estimate substantially inaccurate, a revised estimate should
be provided to the client. A written statement concerning the fee reduces the possibility of misunderstanding, and when the
lawyer has not regularly represented the client it is preferable for the basis or rate of the fee to be communicated to the client in
writing. Furnishing the client with a simple memorandum or a copy of the lawyer's customary fee schedule is sufficient if the
basis or rate of the fee is set forth. In the case of a contingent fee, a written agreement is mandatory.
Types of Fees
3. Historically lawyers have determined what fees to charge by a variety of methods. Commonly employed are percentage
fees and contingent fees (which may vary in accordance with the amount at stake or recovered), hourly rates, and flat fee
arrangements, or combinations thereof.
4. The determination of a proper fee requires consideration of the interests of both client and lawyer. The determination of
reasonableness requires consideration of all relevant circumstances, including those stated in paragraph (b). Obviously, in a
particular situation not all of the factors listed in paragraph (b) may be relevant and factors not listed could be relevant. The fees
of a lawyer will vary according to many factors, including the time required, the lawyer's experience, ability and reputation, the
nature of the employment, the responsibility involved, and the results obtained.
5. When there is a doubt whether a particular fee arrangement is consistent with the client's best interest, the lawyer should
discuss with the client alternative bases for the fee and explain their implications.
6. Once a fee arrangement is agreed to, a lawyer should not handle the matter so as to further the lawyer's financial interests
to the detriment of the client. For example, a lawyer should not abuse a fee arrangement based primarily on hourly charges
by using wasteful procedures.
Unconscionable Fees
7. Two principal circumstances combine to make it difficult to determine whether a particular fee is unconscionable within
the disciplinary test provided by paragraph (a) of this Rule. The first is the subjectivity of a number of the factors relied on to
determine the reasonableness of fees under paragraph (b). Because those factors do not permit more than an approximation of
a range of fees that might be found reasonable in any given case, there is a corresponding degree of uncertainty in determining
whether a given fee is unconscionable. Secondly, fee arrangements normally are made at the outset of representation, a
time when many uncertainties and contingencies exist, while claims of unconscionability are made in hindsight when the
contingencies have been resolved. The “unconscionability” standard adopts that difference in perspective and requires that a
lawyer be given the benefit of any such uncertainties for disciplinary purposes only. Except in very unusual situations, therefore,
the circumstances at the time a fee arrangement is made should control in determining a question of unconscionability.
8. Two factors in otherwise borderline cases might indicate a fee may be unconscionable. The first is overreaching by a lawyer,
particularly of a client who was unusually susceptible to such overreaching. The second is a failure of the lawyer to give at the
outset a clear and accurate explanation of how a fee was to be calculated. For example, a fee arrangement negotiated at arm's
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length with an experienced business client would rarely be subject to question. On the other hand, a fee arrangement with an
uneducated or unsophisticated individual having no prior experience in such matters should be more carefully scrutinized for
overreaching. While the fact that a client was at a marked disadvantage in bargaining with a lawyer over fees will not make
a fee unconscionable, application of the disciplinary test may require some consideration of the personal circumstances of the
individuals involved.
Fees in Family Law Matters
9. Contingent and percentage fees in family law matters may tend to promote divorce and may be inconsistent with a lawyer's
obligation to encourage reconciliation. Such fee arrangements also may tend to create a conflict of interest between lawyer and
client regarding the appraisal of assets obtained for client. See also Rule 1.08(h). In certain family law matters, such as child
custody and adoption, no res is created to fund a fee. Because of the human relationships involved and the unique character of
the proceedings, contingent fee arrangements in domestic relations cases are rarely justified.
Division of Fees
10. A division of fees is a single billing to a client covering the fee of two or more lawyers who are not in the same firm. A
division of fees facilitates association of more than one lawyer in a matter in which neither alone could serve the client as well,
and most often is used when the fee is contingent and the division is between a referring or associating lawyer initially retained
by the client and a trial specialist, but it applies in all cases in which two or more lawyers are representing a single client in the
same matter, and without regard to whether litigation is involved. Paragraph (f) permits the lawyers to divide a fee either on
the basis of the proportion of services they render or if each lawyer assumes joint responsibility for the representation.
11. Contingent fee agreements must be in a writing signed by the client and must otherwise comply with paragraph (d) of
this Rule.
12. A division of a fee based on the proportion of services rendered by two or more lawyers contemplates that each lawyer is
performing substantial legal services on behalf of the client with respect to the matter. In particular, it requires that each lawyer
who participates in the fee have performed services beyond those involved in initially seeking to acquire and being engaged by
the client. There must be a reasonable correlation between the amount or value of services rendered and responsibility assumed,
and the share of the fee to be received. However, if each participating lawyer performs substantial legal services on behalf of
the client, the agreed division should control even though the division is not directly proportional to actual work performed. If
a division of fee is to be based on the proportion of services rendered, the arrangement may provide that the allocation not be
made until the end of the representation. When the allocation is deferred until the end of the representation, the terms of the
arrangement must include the basis by which the division will be made.
13. Joint responsibility for the representation entails ethical and perhaps financial responsibility for the representation. The
ethical responsibility assumed requires that a referring or associating lawyer make reasonable efforts to assure adequacy
of representation and to provide adequate client communication. Adequacy of representation requires that the referring or
associating lawyer conduct a reasonable investigation of the client's legal matter and refer the matter to a lawyer whom
the referring or associating lawyer reasonably believes is competent to handle it. See Rule 1.01. Adequate attorney-client
communication requires that a referring or associating lawyer monitor the matter throughout the representation and ensure
that the client is informed of those matters that come to that lawyer's attention and that a reasonable lawyer would believe
the client should be aware. See Rule 1.03. Attending all depositions and hearings or requiring that copies of all pleadings and
correspondence be provided a referring or associating lawyer is not necessary in order to meet the monitoring requirement
proposed by this rule. These types of activities may increase the transactional costs, which ultimately the client will bear and
unless some benefit will be derived by the client, they should be avoided. The monitoring requirement is only that the referring
lawyer be reasonably informed of the matter, respond to client questions, and assist the handling lawyer when necessary. Any
referral or association of other counsel should be made based solely on the client's best interest.
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Rule 1.04. Fees, TX ST RPC Rule 1.04
14. In the aggregate, the minimum activities that must be undertaken by referring or associating lawyers pursuant to an
arrangement for a division of fees are substantially greater than those assumed by a lawyer who forwarded a matter to other
counsel, undertook no ongoing obligations with respect to it, and yet received a portion of the handling lawyer's fee once the
matter was concluded, as was permitted under the prior version of this rule. Whether such activities, or any additional activities
that a lawyer might agree to undertake, suffice to make one lawyer participating in such an arrangement responsible for the
professional misconduct of another lawyer who is participating in it and, if so, to what extent, are intended to be resolved by
Texas Civil Practice and Remedies Code, ch. 33, or other applicable law.
15. A client must consent in writing to the terms of the arrangement prior to the time of the association or referral proposed. For
this consent to be effective, the client must have been advised of at least the key features of that arrangement. Those essential
terms, which are specified in subparagraph (f)(2), are 1) the identity of all lawyers or law firms who will participate in the fee-
sharing agreement, 2) whether fees will be divided based on the proportion of services performed or by lawyers agreeing to
assume joint responsibility for the representation, and 3) the share of the fee that each lawyer or law firm will receive or the
basis on which the division will be made if the division is based on proportion of service performed. Consent by a client or
prospective client to the referral to or association of other counsel, made prior to any actual such referral or association, but
without knowledge of the information specified in subparagraph (f)(2) does not constitute sufficient client confirmation within
the meaning of this rule. The referring or associating lawyer or any other lawyer who employs another lawyer to assist in the
representation has the primary duty to ensure full disclosure and compliance with this rule.
16. Paragraph (g) facilitates the enforcement of the requirements of paragraph (f). It does so by providing that agreements that
authorize an attorney either to refer a person's case to another lawyer, or to associate other counsel in the handling of a client's
case, and that actually result in such a referral or association with counsel in a different law firm from the one entering into the
agreement, must be confirmed by an arrangement between the person and the lawyers involved that conforms to paragraph (f).
As noted there, that arrangement must be presented to and agreed to by the person before the referral or association between
the lawyers involved occurs. See subparagraph (f)(2). Because paragraph (g) refers to the party whose matter is involved as a
“person” rather than as a “client,” it is not possible to evade its requirements by having a referring lawyer not formally enter
into an attorney-client relationship with the person involved before referring that person's matter to other counsel. Paragraph
(g) does provide, however, for recovery in quantum meruit in instances where its requirements are not met. See subparagraphs
(g)(1) and (g)(2).P
17. What should be done with any otherwise agreed-to fee that is forfeited in whole or in part due to a lawyer's failure to comply
with paragraph (g) is not resolved by these rules.
18. Subparagraph (f)(3) requires that the aggregate fee charged to clients in connection with a given matter by all of the lawyers
involved meet the standards of paragraph (a)--that is, not be unconscionable.
Fee Disputes and Determinations
19. If a procedure has been established for resolution of fee disputes, such as an arbitration or mediation procedure established
by a bar association, the lawyer should conscientiously consider submitting to it. Law may prescribe a procedure for determining
a lawyer's fee, for example, in representation of an executor or administrator, or when a class or a person is entitled to recover a
reasonable attorney's fee as part of the measure of damages. All involved lawyers should comply with any prescribed procedures.
(Comment amended by Supreme Court Jan. 28, 2005, eff. March 1, 2005.)
Notes of Decisions (77)
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Rule 1.04. Fees, TX ST RPC Rule 1.04
V. T. C. A., Govt. Code T. 2, Subt. G App. A, Art. 10, § 9 Rule 1.04, TX ST RPC Rule 1.04
Current with amendments received through 3/15/2015
End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.
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