Godwin White & Gruber PC v. Deuschle , 87 F. App'x 338 ( 2004 )

United States Court of Appeals
Fifth Circuit
F I L E D
UNITED STATES COURT OF APPEALS
FIFTH CIRCUIT January 21, 2004
Charles R. Fulbruge III
Clerk
No. 03-10630
Summary Calendar
GODWIN WHITE & GRUBER PC,
Plaintiff-Appellee,
versus
BRIAN C. DEUSCHLE; ET AL
Defendants,
BRIAN C. DEUSCHLE, Chartered; DEUSCHLE & ASSOCIATES PA,
Defendants-Appellants.
Appeal from the United States District Court
for the Northern District of Texas
(3:00-CV-17-L)
Before BARKSDALE, EMILIO M. GARZA, and DENNIS, Circuit Judges
PER CURIAM:*
Defendants Deuschle, Chartered and Deuschle & Associates
(Deuschle) appeal the denial of their Rule 59(e) motion to amend
the damage award for plaintiff in the bench trial final judgment.
Plaintiff Godwin White & Gruber’s (Godwin) predecessor law
firm agreed to serve as a consultant to Deuschle in a class action
in return for a portion of Deuschle’s contingency fee. In June
1995, Deuschle and that predecessor firm signed a Consulting
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
Agreement whereby Deuschle agreed to share with Godwin “the
contingent fee in this matter to the extent of one-third (1/3rd)
thereof”. This Consulting Agreement referred to a proposed letter
of engagement (Fee Agreement) with the class action plaintiffs;
that letter was attached to the agreement signed by Godwin.
That attached letter was a memorandum of the Fee Agreement
between the class action plaintiffs and Deuschle. It stated that
Deuschle would receive “[f]orty percent (40%) of gross recovery
regardless of amount and regardless of whether secured by
settlement or collection of final judgment”. The Fee Agreement
noted further that Godwin’s predecessor firm had been retained as
a consultant in exchange for “one third (1/3rd) of any contingency
fee received by [Deuschle]”.
Subsequently, however, Deuschle amended several times the Fee
Agreement with the class action plaintiffs, without notice to
Godwin. Essentially, these changes deducted costs from the
calculation of Deuschle’s fee, thereby substantially reducing the
total amount of the fee; and Deuschle agreed eventually to accept
a flat fee.
The class action settled in November 1999 for $1.75 million.
Godwin claims it is owed $233,333.33 (1/3 of 40% of $1.75 million);
Deuschle, that, pursuant to the Consulting Agreement, it owes
Godwin only 1/3 of the $268,000 fee it received (1/3 is
$89,333.33). The district court awarded Godwin $233,333.33, based
on its conclusion that the Fee Agreement provided that Godwin
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receive 1/3 of 40% of the gross recovery and it had been
incorporated by reference into the Consulting Agreement.
We generally review decisions to alter or amend judgment under
Rule 59(e) for abuse of discretion. Midland West Corp. v. FDIC,
911 F.2d 1141, 1145 (5th Cir. 1990). To the extent that the ruling
was a reconsideration on a question of law, however, review is de
novo. Tyler v. Union Oil Co., 304 F.3d 379, 405 (5th Cir. 2002).
The district court’s refusal to alter or amend the judgment rests
in part on its conclusion that the Fee Agreement was incorporated
by reference into the Consulting Agreement; therefore, our review
is arguably de novo. In any event, the result is the same under
either standard. Jurisdiction is based on diversity, and the
district court’s decision that Texas law governs has not been
challenged. Therefore, we look to Texas contract law.
Deuschle contends: our primary concern should be to give
effect to the intent of the parties; and the clear intent of the
Consulting Agreement was for Godwin to receive 1/3 of the fee
Deuschle received. While this may be true of the Consulting
Agreement alone, it referred to the Fee Agreement; both agreements
were attached and submitted together for Godwin’s approval. For
incorporation by reference under Texas law, “[t]he language used is
not important provided the document signed by defendant plainly
refers to another writing”. Owen v. Hendricks, 433 S.W.2d 164, 166
(Tex. 1968). The Consulting Agreement stated: “Consistent with
our conversation, you will find enclosed a copy of the proposed
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letter of engagement by the Plaintiffs....” Therefore, the
Consulting Agreement incorporated the Fee Agreement by reference;
these two documents must be read together to ascertain the parties’
intent. Wolfe v. Speed Fab-Crete Corp. Int’l, 507 S.W.2d 276, 278
(Tex.Civ.App. - Fort Worth 1974, no writ).
The Fee Agreement provides that Deuschle would receive
“[f]orty percent (40%) of gross recovery” and that “one-third
(1/3rd) of any contingency fee received by [Deuschle]” would go to
Godwin. Specific provisions control over general ones, Forbau v.
Aetna Life Ins., 876 S.W.2d 132, 133 (Tex. 1994); and “40% of gross
recovery” is more specific than “1/3 of any contingency fee”.
Therefore, the intent of the parties was for Godwin to receive 1/3
of 40% of the amount recovered in the class action. Godwin was not
notified of the subsequent changes to the Fee Agreement; therefore
those changes are irrelevant. Safeway Managing Gen. Agency for
State and County Mut. Fire Ins. Co. v. Cooper, 952 S.W.2d 861, 867
(Tex. Ap. - Amarillo 1997, no pet.) (holding that a party cannot
make unilateral modifications to a contract).
Deuschle further asserts that the district court erred in
considering parol evidence to support its conclusion. Based on the
foregoing, both the holding of incorporation by reference and the
damage award to Godwin are correct, irrespective of the parol
evidence. Therefore, we do not reach this contention.
AFFIRMED
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