John E. Stockton v. Cotton Bledsoe Tighe & Dawson ( 2005 )

In The

Court of Appeals

Ninth District of Texas at Beaumont

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NO. 09-03-586 CV ____________________

JOHN E. STOCKTON, Appellant

V.

COTTON BLEDSOE TIGHE & DAWSON, P.C., Appellee

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On Appeal from the 75th District Court Liberty County, Texas Trial Cause No. 64,194

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MEMORANDUM OPINION ⁽¹⁾  

Cotton Bledsoe Tighe & Dawson, P.C. represented John E. Stockton in a lawsuit arising out of the partnership dissolution of a longhorn cattle operation. The jury in that case found for Stockton, but he has not collected on his judgment because the defendant, Russell Fairchild, filed bankruptcy. We abated the appeal of that litigation, styled Fairchild v. Stockton, No. 09-03-200 CV. See Tex. R. App. P. 8. In an effort to collect outstanding invoices for its legal fees, Cotton Bledsoe initiated the case now on appeal. Stockton filed a counterclaim against Cotton Bledsoe for deceptive trade practices and fraud in a real estate transaction, along with other claims not at issue on appeal. After granting Cotton Bledsoe's motion for partial summary judgment on Stockton's counterclaims, the trial court submitted Cotton Bledsoe's breach of contract claim to a jury, which found for the plaintiff but made a zero damages finding on the question regarding Cotton Bledsoe's attorney's fees for trial of the instant case. The trial court disregarded that particular finding and awarded $66,000.00 in addition to the breach of contract damages found by the jury. Both Stockton and Cotton Bledsoe appealed.   

Stockton challenges venue in his first issue. When examining a venue ruling, we review the entire record, including the trial on the merits, to determine whether venue was proper in the ultimate county of suit. Tex. Civ. Prac. & Rem. Code Ann. § 15.064(b) (Vernon 2002). If probative evidence supports the trial court's determination, we must uphold the trial court's venue determination even if the preponderance of the evidence is to the contrary. Ruiz v. Conoco, Inc., 868 S.W.2d 752, 758 (Tex. 1993). We view the record in the light most favorable to the trial court's ruling, but we do not defer to the trial court's application of the law to the facts of the case. Id.

Cotton Bledsoe argues that venue was proper in Liberty County under the general venue statute because all or a substantial part of the events giving rise to the suit occurred there. Tex. Civ. Prac. & Rem. Code Ann. § 15.002(a)(1) (Vernon 2002). Stockton argues that venue was proper in the county of his residence, San Jacinto County, under the general venue statute. See Tex. Civ. Prac. & Rem. Code Ann. § 15.002(a)(2) (Vernon 2002). However, the issue is not whether venue would have been proper in another county, but whether venue was proper in the county where the plaintiff filed its suit. In Kay v. North Tex. Rod & Custom, 109 S.W.3d 924, 925-26 (Tex. App.--Dallas 2003, no pet.), the trial court properly transferred a case to the county of the defendant's residence because no part of the contract for services was performed in the county where the plaintiff filed the suit. In Levine v. Bayne, Snell & Krause, Ltd., 92 S.W.3d 1, 8 (Tex. App.--San Antonio 1999), rev'd on other grounds, 40 S.W.3d 92 (Tex. 2001), the court held the cause of action in a suit to recover legal fees accrued in the county where the contingency fee contract was signed and fully performed. In our case, the contract was executed elsewhere, but Cotton Bledsoe filed the Fairchild suit in Liberty County, conducted its personal client meetings with Stockton in Liberty County, took depositions there, and prosecuted a ten-day-long jury trial in that county. Thus, a substantial part of the legal services rendered under the contract were performed in the same county in which Cotton Bledsoe filed its suit. Therefore, venue was proper under Section 15.002. Issue one is overruled.

In his second issue, Stockton contends the trial court erred in granting summary judgment on his claim for deceptive trade practices because the Cotton Bledsoe lawyer representing Stockton in the Fairchild litigation "quoted an estimate of $25,000-$35,000 and yet he still charged appellant over $350,000." A claim for damages based upon the rendering of a professional service, the essence of which is the providing of advice, judgment, opinion, or similar professional skill, is exempt from the DTPA. Tex. Bus. & Com. Code Ann. § 17.49(c) (Vernon Supp. 2005). An exception to the exemption applies to: (1) an express misrepresentation of a material fact that cannot be characterized as advice, judgment, or opinion; (2) a failure to disclose information concerning goods or services which was known at the time of the transaction if such failure to disclose such information was intended to induce the consumer into a transaction into which the consumer would not have entered had the information been disclosed; or (3) an unconscionable action or course of action that cannot be characterized as advice, judgment, or opinion. Id., see also Tex. Bus. & Com. Code Ann. § 17.46(b)(24) (Vernon Supp. 2005). Stockton argues he relied on the estimate and the attorney knew he did not wish to proceed if the fees were to exceed $50,000, but Stockton failed to dismiss Cotton Bledsoe and continued to accept its services long after monthly billing disclosed that the accrued legal fees exceeded the estimate. An estimate of legal fees to prosecute a suit is by its nature an expression of professional opinion. There is no evidence that Cotton Bledsoe failed to disclose when the fees exceeded that estimate, and no evidence or allegation that the attorney knew the fees would exceed his estimate when he made it. Issue two is overruled.

In his third issue, Stockton contends the trial court erred in granting summary judgment on his claim of fraud in a real estate transaction. See Tex. Bus. & Com. Code Ann. § 27.01 (Vernon 2002). Here, the appellant argues that he may pursue a claim for statutory fraud under Section 27.01 because Cotton Bledsoe billed him $600 for conducting title research in the county clerk's office. "Section 27.01 only applies to misrepresentations of material fact made to induce another to enter into a contract for the sale of land or stock." Burleson State Bank v. Plunkett, 27 S.W.3d 605, 611 (Tex. App.--Waco 2000, pet. denied). The transaction at issue in this litigation is for legal services, and as a matter of law is not a "real estate transaction." Issue three is overruled.

Stockton's fourth issue presents his complaint that the trial court should have granted additional time for amending pleadings. He also complains about the entry of a motion in limine, which he suggest limited his claims and defenses. The case upon which he relies, Knox v. Long, 152 Tex. 291, 298, 257 S.W.2d 289, 293 (1953), involved a sanction for failing to appear for a deposition. That case is inapposite to our case, in which the trial court struck an amended answer filed after the deadline for amending pleadings set by the scheduling order. The trial court has broad discretion in managing its docket, and the appellate court will not interfere with the exercise of that discretion absent a showing of clear abuse. Clanton v. Clark, 639 S.W.2d 929, 931 (Tex. 1982). The appellant argues that the case involved "convoluted fact issues and counterclaims" but he does not explain why he could not comply with the scheduling order agreed to by the parties. Stockton did file a motion to reschedule due to back surgery performed on counsel after the deadline for amending pleadings, but that motion only requested additional time to replead his counterclaim. Stockton did amend his counterclaim, and that document was not affected by the order striking the late-filed amended answer. Finding no abuse of discretion by the trial court, we overrule issue four.

The fifth issue contends the trial court erred in granting summary judgment of Stockton's deceptive trade practices claim for unconscionable acts, when Cotton Bledsoe sued Stockton outside of his county of residence and egregiously overcharged attorney's fees. Stockton alleged Cotton Bledsoe's conduct was unconscionable because it violated two provisions of the "laundry list," namely Sections 17.46(b)(23) and (24). See Tex. Bus. & Com. Code Ann. § 17.46(b)(23), (24) (Vernon Supp. 2005). Cotton Bledsoe's motion for summary judgment averred there was no evidence that Cotton Bledsoe's filing of suit against him in Liberty County was a producing cause of damages or that Stockton sustained damages as a result of Cotton Bledsoe's filing suit against him in Liberty County. In his response, Stockton mentions transportation expenses to Liberty County, 45 minutes from Stockton's home, but the affidavit attached to the response mentions neither what those transportation expenses might be, nor how much they would exceed transportation expenses had the suit been filed in Stockton's county of residence. ⁽²⁾ Thus, the trial court did not err in granting summary judgment as to the claim relating to Section 17.46(b)(23). The trial court did not err in granting summary judgment as to the claim relating to Section 17.46(b)(24) for the reasons explained in our discussion of the appellant's second issue. Issue five is overruled.

Stockton's seventh issue contends the trial court erred in granting summary judgment on his claim for deceptive trade practices, where the lawyer at Cotton Bledsoe made express representations to Stockton that Fairchild had sufficient assets to cover any judgment and attorney's fees. Although he did not allege that the attorney knew Fairchild lacked the assets to pay the judgment, Stockton's first amended petition alleged that had he "correctly researched the records" the attorney could have discovered Fairchild has only an undivided interest in a particular 500 acre tract, that "if he had done a title search it would have cost John Stockton thousands" and that the representations violated Section 17.46(b)(24). In its motion for summary judgment, Cotton Bledsoe argued that the alleged representations were statements of opinion, and that Stockton had no evidence that the representations were false, that the speaker knew they were false, that Stockton relied on the representations, or that he suffered damages as a result of his reliance. Stockton's summary judgment response does not address the knowledge element of a Section 17.46(b)(24) claim.   

On appeal, Stockton urges the exception expressed in Section 17.49(c)(1) for express misrepresentations of material facts precludes summary judgment in this case. The exception applies to representations "that cannot be characterized as advice, judgment, or opinion." Tex. Bus. & Com. Code Ann. § 17.49(c)(1) (Vernon Supp. 2005). A lawyer's assessment of a potential defendant's ability to satisfy a judgment can be characterized as advice, judgment, or opinion. In addition, the allegations in Stockton's pleadings were that Cotton Bledsoe should have discovered Fairchild did not have extensive assets, not that it knew but failed to disclose the facts to its client. We conclude the trial court did not err in granting summary judgment on Stockton's claim for deceptive trade practices. Issue seven is overruled.

The final two issues concern Cotton Bledsoe's attorney's fees incurred in filing this suit. Stockton's sixth issue contends the trial court erred in disregarding the jury's "zero" finding to the issue of Cotton Bledsoe's recovery of attorney's fees for prosecuting its suit to recover attorney's fees. Cotton Bledsoe brings a point of error that the trial court erred in awarding it only $66,000 for its attorney's fees, when the uncontroverted evidence established it was entitled to $85,797. Both issues present an issue of legal sufficiency of the evidence on attorney's fees, as opposed to one of the factual sufficiency of that evidence. Cotton Bledsoe argues no evidence supports the "zero" finding and that it conclusively established a greater amount of attorney's fees than that awarded by the trial court. Stockton argues the "zero" finding is justified because the jury could have found the testimony regarding fees to not be credible.

A trial court may disregard a jury's verdict and render judgment non obstante veredicto if there is no evidence to support the jury's findings or if an instructed or directed verdict would have been proper. In determining whether there is no evidence to support the jury's finding, and thus uphold the trial court's judgment non obstante veredicto, we consider the evidence and the reasonable inferences therefrom in the light most favorable to the verdict. Brown v. Bank of Galveston, Nat'l Ass'n, 963 S.W.2d 511, 513 (Tex. 1998). An instructed verdict is proper only where no evidence of probative force raises a fact issue on the material questions in the suit. See Prudential Ins. Co. of Am. v. Fin. Review Servs., Inc., 29 S.W.3d 74, 77 (Tex. 2000). Even though the evidence is uncontradicted, "if it is unreasonable, incredible, or its belief is questionable, then such evidence would only raise a fact issue to be determined by the trier of fact." Ragsdale v. Progressive Voters League, 801 S.W.2d 880, 882 (Tex. 1990). "In order for the court to award an amount of attorneys' fees as a matter of law, the evidence from an interested witness must not be contradicted by any other witness or attendant circumstances and the same must be clear, direct and positive, and free from contradiction, inaccuracies and circumstances tending to case [sic] suspicion thereon." Id. In Brown v. Bank of Galveston, 963 S.W.2d at 515, the court held uncontradicted testimony on the amount of attorney's fees conclusively established the amount, where the opposing party "had the means and opportunity of disproving the testimony and failed to do so."

Cotton Bledsoe recovered on its claim on a written contract; therefore, it is entitled to reasonable attorney's fees. Tex. Civ. Prac. & Rem. Code Ann. § 38.001 (Vernon 1997). The $85,797 in legal fees testified to at trial consisted of 230.4 hours at $225 per hour by the attorney and 377.3 hours at $90 for the paralegal. An attorney testified that the fees were reasonable and necessary. Although Cotton Bledsoe submitted detailed billing records, no attempt was made to identify the time expended in defense of Stockton's claims against Cotton Bledsoe as opposed to pursuit of Cotton Bledsoe's claim against Stockton. Some of the entries clearly relate to only the claim or to the defense, but many others are not discernable from the exhibit, and none of the testimony in the record addresses the matter.

When a lawsuit involves multiple claims, the plaintiff has a duty to segregate non-recoverable fees from recoverable fees. Stewart Title Guar. Co. v. Sterling, 822 S.W.2d 1, 11 (Tex. 1991). Nonetheless, evidence of unsegregated attorney's fees is more than a scintilla of evidence of segregated fees. See id. An award of attorney's fees was mandatory, and Cotton Bledsoe produced evidence of the value of services rendered. Therefore, no evidence supports the jury's "zero" finding, and the trial court did not err in disregarding that finding. Because Cotton Bledsoe failed to segregate recoverable fees from unrecoverable fees, it failed to conclusively establish the value of its services. Therefore, the trial court did not err in failing to award $85,797 in attorney's fees. In Minnesota Min. and Mfg. Co. v. Nishika Ltd., 953 S.W.2d 733, 739 (Tex. 1997), the Supreme Court remanded the case for a redetermination of attorney's fees. That case differed from this one in two important respects: in that case, the failure to segregate had been raised in the trial court, while in this case the failure to segregate was not raised, and Cotton Bledsoe has not requested a remand. In this case, the trial court may have perused the billing records to determine what portion of those records were attributable to the contract claim as a matter of law. Neither litigant presents an argument that the trial court would have erred in so doing. As both Stockton's and Cotton Bledsoe's legal challenges to the award fail, we overrule Stockton's sixth issue and the sole issue raised by Cotton Bledsoe. The judgment is affirmed.

AFFIRMED.

PER CURIAM

Submitted on October 14, 2004

Opinion Delivered January 13, 2005

Before McKeithen, C.J., Burgess and Gaultney, JJ.

1. Tex. R. App. P. 47.4.

2. According to the plaintiff's original petition, Stockton resides in Cleveland, San Jacinto County, Texas.

Cleveland is roughly equidistant from the county seats of San Jacinto County and Liberty County.