Tom Tucker v. Carl Bedgood and Laura Bedgood ( 2015 )

ACCEPTED
13-15-00127-CV
THIRTEENTH COURT OF APPEALS
CORPUS CHRISTI, TEXAS
7/10/2015 12:04:30 PM
CECILE FOY GSANGER
CLERK
No. 13-15-00127-CV
FILED IN
IN THE COURT OF APPEALS FOR THE
13th COURT OF APPEALS
CORPUS CHRISTI/EDINBURG, TEXAS
THIRTEENTH JUDICIAL DISTRICT
7/10/2015 12:04:30 PM
CORPUS CHRISTI & EDINBURG,CECILE
TEXASFOY GSANGER
Clerk
TOM TUCKER, CROSS-APPELLEE
V.
CARL BEDGOOD & LAURA BEDGOOD, CROSS- APPELLANTS
On Appeal from the County Court at Law No. 1
of Victoria County, Texas
FIRST AMENDED BRIEF OF CROSS-APPELLANTS
Carl Bedgood and Laura Bedgood, Cross-Appellants
Rachel F. Klotzman
State Bar No. 24049710
Klotzman Law Firm, PLLC
603 E. Mesquite Lane
Victoria, TX 77901
Tel.: 361 485-9312
Fax: 361 237-3591
Attorney for Carl Bedgood and Laura Bedgood
ORAL ARGUMENT IS NOT REQUESTED
IDENTITY OF PARTIES AND COUNSEL
The following is a complete list of all parties to the trial court’s final judgment, as
well as the names and addresses of all trial and appellate counsel.
PARTIES COUNSEL
Plaintiff:
Tom Tucker Hon. Robert P. Houston
30 Meadow View
Victoria, TX 77904
Defendants:
Carl Bedgood Hon. Amanda B. Pierce
603 E. Mesquite Ln.
Victoria, TX 77901
Hon. Rachel F. Klotzman
603 E. Mesquite Ln.
Victoria, TX 77901
Laura Bedgood Hon. Amanda B. Pierce
603 E. Mesquite Ln.
Victoria, TX 77901
Hon. Rachel F. Klotzman
603 E. Mesquite Ln.
Victoria, TX 77901
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TABLE OF CONTENTS
IDENTITY OF PARTIES AND COUNSEL ............................................................... ii
INDEX OF AUTHORITIES ........................................................................................ iv
STATEMENT OF THE CASE ..................................................................................... 1
ISSUES PRESENTED .................................................................................................. 2
STATEMENT OF THE FACTS ................................................................................... 2
SUMMARY OF THE ARGUMENT ........................................................................... 4
ARGUMENT AND AUTHORITIES ........................................................................... 4
I. Appellate Issues and Standard of Review ..................................................... 4
II. Attorney’s Fees Properly Pled........................................................................ 5
III. Prevailing Party Provision Applicable to Tucker ......................................... 7
IV. Legal Proceeding Related to Earnest Money Contract ............................ 10
PRAYER ...................................................................................................................... 12
CERTIFICATE OF SERVICE.................................................................................... 13
CERTIFICATE OF COMPLIANCE .......................................................................... 14
APPENDIX .................................................................................................................. 15
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INDEX OF AUTHORITIES
Texas Court of Appeals
Fitzgerald v. Schroeder Ventures II, LLC, 345 S.W.3d 624
(Tex. App.—San Antonio 2011, no pet.).........................................................5, 9, 10
Lesieur v. Fryar, 325 S.W.3d 242
(Tex. App.—San Antonio 2010, pet. denied) ...................................................7, 8, 9
Rich v. Olah, 274 S.W.3d 878
(Tex. App.—Dallas 2008, no pet.) ............................................................................. 10
Texas Rules of Civil Procedure
Tex. R. Civ. P. 67 .......................................................................................................5
Tex. R. Civ. P. 301 .....................................................................................................5
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To the Honorable Thirteenth Court of Appeals:
STATEMENT OF THE CASE
This was an action for damages for 1) breach of contract, 2) breach of
fiduciary duty and common law fraud, 3) statutory fraud, 4) unjust enrichment and
5) civil conspiracy brought by Tom Tucker (hereinafter “Tucker”), cross-appellee,
against Carl Bedgood and Laura Bedgood (hereinafter “the Bedgoods”), cross-
appellants, in a Texas county court at law (I Suppl. at 421). The Bedgoods filed
motions for summary judgment, both traditional and no evidence (I Suppl. at 255-
256), and the court granted summary judgment in their favor on February 23, 2015,
finding no genuine issue of material fact and that the Bedgoods were entitled to
judgment as a matter of law (I Suppl. at 448). Attorney’s fees were not awarded (I
Suppl. at 448). The trial court denied Tucker’s motion for reconsideration on March
12, 2015 (I Suppl. at 453), and Tucker timely perfected his appeal on March 23,
2015 (I Suppl. at 454). The trial court also denied the Bedgoods’ motion to reform
judgment and take judicial notice filed on March 24, 2015 (I Suppl. at 456, 481).
The Bedgoods timely perfected their cross-appeal regarding the single issue of
attorney’s fees on April 20, 2015 (I Suppl. at 482).
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ISSUE PRESENTED
Under the earnest money contract’s prevailing party provision did the trial
court err in denying the Bedgoods’ requests for an award of attorney’s fees when
summary judgment was granted in favor of the Bedgoods, the earnest money
contract states that “the prevailing party in any legal proceeding related to this
contract is entitled to recover reasonable attorney’s fees and all costs of such
proceeding incurred by the prevailing party”, Tucker was the listing broker
representing the Bedgoods and a beneficiary under the contract and Tucker’s suit is
a legal proceeding stemming from said earnest money contract?
STATEMENT OF FACTS
Tucker sued the Bedgoods in a county court at law for 1) breach of contract,
2) breach of fiduciary duty and common law fraud, 3) statutory fraud, 4) unjust
enrichment and 5) civil conspiracy under a 2006 unimproved property contract
(hereinafter “earnest money contract”) wherein the Bedgoods sold land to a third
party and Tucker was the listing broker (I Suppl. at 296-309, 421). The Bedgoods
were granted summary judgment without an award for attorney’s fees (I Suppl. at
448). The earnest money contract (I Suppl. at 296) states, regarding attorney’s fees,
that “[t]he prevailing party in any legal proceeding related to this contract is entitled
to recover reasonable attorney's fees and all costs of such proceeding incurred by the
prevailing party” (I Suppl. at 300). In the motions hearing held on February 18, 2015,
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the Bedgoods’ attorney discussed this section of the earnest money contract (II R.R.
at 3,5). The Bedgoods’ attorney also attached an affidavit in support of the motion
for summary judgment stating that $12,000.00 represented a reasonable fee for her
services (I Suppl. at 392). Following the granting of summary judgment in favor of
the Bedgoods and the denial of attorney’s fees, the Bedgoods filed a motion to
reform judgment requesting that the trial court have a hearing to determine attorney’s
fees, citing the prevailing party provision of the earnest money contract, and
requested that the court take judicial notice of the contents of its file and of the usual
and customary attorney’s fees necessary for the prosecution of an appeal (I Suppl. at
456-457). Tucker filed a response to the Bedgoods’ motion alleging movants failed
to properly plead for attorney’s fees under the prevailing party prevision (I Suppl. at
476). Alternatively, Tucker states that he did not sue the Bedgoods under or pursuant
to the earnest money contract, but rather on the basis of an oral agreement between
the parties and that the earnest money contract was simply “some evidence of what
the agreement between Tucker and Bedgood was sufficient to satisfy the statute of
frauds” (I Suppl. at 478). The Bedgoods’ requests were denied and this cross-appeal
ensued regarding only the issue of attorney’s fees (I Suppl. at 481).
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SUMMARY OF THE ARGUMENT
This suit arises from an alleged oral agreement incident to an earnest money
contract wherein the Bedgoods and Tucker sold land to a third party buyer and
Tucker both represented the Bedgoods as realtor and was a direct beneficiary under
the contract. As either a party to the sale or a third party beneficiary under the earnest
money contract, Tucker is obligated to pay attorney’s fees to the Bedgoods as the
prevailing party in his suit related to said contract. The court erred in denying said
relief.
ARGUMENT AND AUTHORITIES
I. Appellate Issues and Standard of Review
This is a single issue cross-appeal regarding the trial court’s failure to award
mandatory attorney’s fees pursuant to an earnest money contract. Said contract states
that “[t]he prevailing party in any legal proceeding related to this contract is entitled
to recover reasonable attorney's fees and all costs of such proceeding incurred by the
prevailing party” (I Suppl. at 300). The appellate issues include 1) whether the
request for attorney’s fees was properly pled, 2) whether the prevailing party
provision in the earnest money contract applied to Tucker and 3) whether this lawsuit
was a legal proceeding related to the earnest money contract. An abuse of discretion
standard of review applies to a trial court’s award of attorney’s fees, however, when
attorney’s fees are proper and denied by the trial court, the issue is to be reviewed
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de novo. Fitzgerald v. Schroeder Ventures II, LLC, 345 S.W.3d 624, 627 (Tex.
App.—San Antonio 2011, no pet.)(“An issue concerning the availability of
attorney’s fees under a statute or a contract presents a question of law that appellate
courts review de novo.”). For the reasons detailed below, the Bedgoods request that
this Court reverse the portion of the judgment denying attorney’s fees and remand
the issue of reasonable fees to the trial court.
II. Attorney’s Fees Properly Pled
Tucker asserts in answer to the Bedgoods’ motion to reform judgment that the
Bedgoods failed to request summary judgment and did not properly plead attorney’s
fees stemming from the earnest money contract (I Suppl. at 475). The court may
award attorney’s fees if they are pled or the issue was waived or tried by consent.
See Tex. R. Civ. P. 301 (“The judgment of the court shall conform to the pleadings,
the nature of the case proved and the verdict, if any, and shall be so framed as to give
the party all the relief to which he may be entitled either in law or equity.”); Tex. R.
Civ. P. 67 (“When issues not raised by the pleadings are tried by express or implied
consent of the parties, they shall be treated in all respects as if they had been raised
in the pleadings.”). In the Bedgoods’ summary judgment motion they requested that
“movant be granted summary judgment in the amount of $12,000.00 for attorney's
fees as proven herein; or alternatively, the Court set a hearing on the matter of
attorney's fees, to be held immediately following the summary judgment on this
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cause, and after the hearing Movant be granted an order setting the amount of
attorney's fees to be awarded” (I Suppl. at 273). Amanda Pierce (hereinafter
“Pierce”), the Bedgoods’ attorney, also attached as exhibits to the summary
judgment motion the earnest money contract and her own affidavit that stated
“considering the nature of this case, the amount of money involved, and the time and
skills required of Movant's attorneys, I am of the opinion that $12,000.00 represents
a reasonable fee for the services of Amanda Pierce in conjunction with this case” (I
Suppl. at 392). During the summary judgment hearing held on February 18, 2015,
Pierce specifically requested recovery of attorney’s fees stemming from the
prevailing party provision of the earnest money contract (II R.R. at 3,5). At said
hearing, Robert Houston (hereinafter “Houston”), Tucker’s counsel, stated “I think
it’s interesting, you know, they sued for attorney fees and they didn’t ask for attorney
fees globally” (II R.R. at 29). Following the granting of summary judgment in favor
of the Bedgoods and the denial of attorney’s fees, the Bedgoods requested that the
trial court have a hearing to determine attorney’s fees citing the prevailing party
provision of the earnest money contract (I Suppl. at 456).
The Bedgoods assert that the evidence above shows that both a “global”
request for attorney’s fees as well as a specific request for fees under the earnest
money contract were pled. Furthermore, Houston failed to object to Pierce’s
argument regarding attorney’s fees under the earnest money contract, rather, he
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argues that she was engaging in “double talk” by both denying that the earnest
money contract was a contract between the Bedgoods and Tucker while relying on
the earnest money contract for attorney’s fees (II R.R. at 32). The Bedgoods not only
requested summary judgment regarding attorney’s fees, but brought the issue to the
court’s attention during the summary judgment hearing and again with the post
judgment motion to reform. Therefore, the issue of attorney’s fees was both pled and
preserved for appeal.
III. Prevailing Party Provision Applicable to Tucker
It is undisputed that the Bedgoods are the prevailing party in this proceeding
as the court granted summary judgment in their favor. What is at issue is whether
the prevailing party provision of the earnest money contract applies to Tucker. The
earnest money contract between the Bedgoods and the third party buyer states, on
the first page, “PARTIES: Carl Bedgood, and wife Laura Bedgood (Seller) agree[ ]
to sell and convey to J P Bryan (Buyer) and Buyer agrees to buy from Seller the
property described below[,]” and later “ATTORNEY’S FEES: the prevailing party
in any legal proceeding related to this contract is entitled to recover reasonable
attorney's fees and all costs of such proceeding incurred by the prevailing party” (I
Suppl. at 296, 300).
In Lesieur v. Fryar, 325 S.W.3d 242, 243 (Tex. App.—San Antonio 2010,
pet. denied), a buyer sued both the seller and the seller’s real estate agent for claims
7
arising from a home sale; the trial court granted summary judgment in favor of
defendants and also granted attorney’s fees to the real estate agent under the
prevailing party provision of the earnest money contract. The San Antonio Court of
Appeals found that that the trial court erred in granting attorney’s fees to the real
estate agent finding that the said agent was not a party or third-party beneficiary to
the earnest money contract. Id. at 253. The court found that “parties” in the earnest
money contract with identical boilerplate language to that the subject of this suit are
limited to only the buyer and seller. Id. at 252. The realtor in Lesieur benefitted from
the contract only in that she was entitled to brokers’ fees from the sale of the
property, “an incidental benefit flowing from the contract, which . . . was insufficient
to confer third-party beneficiary status.” Id. at 253. The parties to a contract must
intend to confer a direct benefit upon the alleged third party beneficiary in order for
the party to enforce the contract. Id. at 252-53.
The case before the court is clearly distinguishable from the fact pattern in
Lesieur. Tucker is not listed in the earnest money contract as a seller (I Suppl. at
296), he is, however, the realtor in the transaction and the owner of Lot 10, which is
referenced in the special provisions section; “Lot A-9 will be enlarged to 70 feet by
decreasing Lots 10 and 11 by five feet each” (I Suppl. at 299). Tucker received two
payments for this transaction. His first payment was a four-thousand dollar ($4,000)
commission for his services as a realtor (I Suppl. at 191). Tucker also received a
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twenty-five thousand dollar payment ($25,000) for sale of the five feet he owned in
Lot 10 pursuant to the special provisions section of this earnest money contract (I
Suppl. at 190-192). Unlike the broker in Lesieur, Tucker received more than a
commission from the sale of the property; he directly benefitted from the earnest
money contract by selling five feet of land he owned and receiving money as
consideration for said sale. Cf. Lesieur, 325 S.W.3d at 253 (“. . . there was no intent
the realtors directly benefit from the contract; rather, there was a separate agreement
for their benefit.”). It is the Bedgoods’ position that, for the purposes of interpreting
the prevailing party provision, Tucker was both a party under the earnest money
contract and a third party beneficiary as he was conferred a direct benefit of $25,000
from the sale.
The San Antonio Court of Appeals finds in Fitzgerald that the prevailing party
under an earnest money contract, be that the plaintiff or defendant, is entitled to
attorney’s fees and that the trial court erred in refusing to award attorney’s fees to
sellers and their real estate agent who successfully defended claims arising from a
similar earnest money contract. 345 S.W.3d at 630-31. In Fitzgerald, the earnest
money contract’s prevailing party provision eliminates the question as to whether
the real estate agent is a party by specifically listing the agent in the prevailing party
provision. Id. at 630 (“if buyer, seller, any broker, or any escrow agent is a prevailing
party in any legal proceeding brought under or with relation to this contract. . .”).
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Having found that the language of the contract defined the sellers and real estate
agent as parties, the court found that the prevailing party could be either the plaintiff
or defendant in the litigation. Id. at 630.
The Bedgoods assert that like the sellers in Fitzgerald, they are entitled to
attorney’s fees as the prevailing party. Tucker is suing the Bedgoods under the guise
of an oral contract supported by the written earnest money contract alleging that he
was damaged by not receiving an oral benefit, namely 5 feet of lot A-11, promised
him from this transaction (I Suppl. at 192). Tucker, separate and apart from his
$4,000 commission as realtor, received $25,000 as the seller of 5 feet of lot A-10.
By this lawsuit Tucker places himself in the role of third party beneficiary, whether
we agree that he is or not, one cannot sue to enforce a contract as a party or third
party beneficiary and at the same time deny that the contract provisions regarding
mandatory attorney’s fees apply. Tucker is either a party or third party beneficiary
in the earnest money contract for the purposes of his lawsuit against the Bedgoods
and therefore cannot escape the arm of the prevailing party provision. Therefore, the
trial court erred in denying the Bedgood’s request for attorney’s fees based on said
provision.
IV. Legal Proceeding Related to Earnest Money Contract
This case is a legal proceeding related to the earnest money contract. In Rich
v. Olah, 274 S.W.3d 878, 888 (Tex. App.—Dallas 2008, no pet.), the trial court
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denied the prevailing party’s request for attorney’s fees by narrowly construing the
language “related to this contract”. The appellate court emphasized the word related
in their analysis concluding that “although based in tort and statutory causes of
action, the litigated claims all relate to the sales contract.” Id. Tucker filed this
lawsuit, which is by definition a legal proceeding, and this lawsuit stems from the
earnest money contract. According to Tucker’s affidavit filed with the court, this
lawsuit against the Bedgoods arises from a sale of land from the Bedgoods to a third
party in which Tucker acted as realtor and beneficiary (I Suppl. at 191). The earnest
money contract was drafted by Tucker and presented to Bedgood and Tucker also
states in the same affidavit that he received $25,000 from the transaction for the
portion of the property he sold in this transaction (I Suppl. at 191). Furthermore,
Tucker’s counsel points to said earnest money contract as the only written instrument
giving rise to Tucker’s claims against Bedgood (I Suppl. at 434)(“The Bedgoods
contend that Tucker has offered no evidence of a written contract. However, he has
offered, as have the Bedgoods, the written earnest money contract signed by the
Bedgoods, which contains the Bedgoods' agreement to reduce the size of Lot A-ll
and A-10 and to increase the size of Lot A-9.”). The Bedgoods asserted and the trial
court agreed that Tucker’s claims were unfounded in law and fact, granting summary
judgment to the Bedgoods, but unfounded claims in a lawsuit brought under a
contract do not make the prevailing party portion of the contract invalid. For
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clarification, the Bedgoods’ position is not that the earnest money contract was a
valid contract between the parties, but rather, the fact that Tucker sued the Bedgoods
using the earnest money contract as the only written proof of an alleged oral
agreement means that Tucker cannot deny that he is a party to the earnest money
contract. This is, on its face, a legal proceeding related to the earnest money contract.
PRAYER
For these reasons, the Bedgoods, Cross-Appellants, request that this court
grant the Bedgoods’ request for attorney’s fees, reverse the portion of the trial court’s
judgment refusing to award attorney’s fees, render judgment that the Bedgoods
recover reasonable attorneys’ fees from Tucker and remand to the trial court for
determination of reasonable fees. The Bedgoods also request any other relief to
which they may be entitled.
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Respectfully submitted,
KLOTZMAN LAW FIRM, PLLC
603 E. Mesquite Ln.
Victoria, TX 77901
Tel: (361) 485-9312
Fax: (361) 237-3591
By:
____________________________
Rachel F. Klotzman
State Bar No. 24049710
Attorney for Appellant
CERTIFICATE OF SERVICE
This certifies that the undersigned served this First Amended Brief of Cross-
Appellants on Tom Tucker, Cross-Appellee, by sending it to lead counsel for Cross-
Appellee, Robert P. Houston, at 30 Meadow View, Victoria, TX 77904, by
electronic service by transmission to an electronic filing service provider for service
through the state’s electronic filing manager on July 10, 2015.
_________________________
Rachel F. Klotzman
Attorney for Cross-Appellants
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CERTIFICATE OF COMPLIANCE WITH APPELLATE RULE 9.4(i)
I certify that this document contains 2241 words, as indicated by the word-
count function of the computer program used to prepare it, and excluding the caption,
identity of parties and counsel, statement regarding oral argument, table of contents,
index of authorities, statement of the case, statement of issues presented, statement
of jurisdiction, statement of procedural history, signature, proof of service,
certification, certificate of compliance, and appendix, as provided by Appellate Rule
9.4(i).
_________________________
Rachel F. Klotzman
Attorney for Cross-Appellants
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APPENDIX