Deborah McDonald v. Donna A. Fox ( 2012 )

NUMBER 13-11-00479-CV
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI - EDINBURG
DEBORAH MCDONALD, Appellant,
v.
DONNA FOX, Appellee.
On appeal from the County Court at Law No. 2
of Nueces County, Texas.
MEMORANDUM OPINION
Before Justices Rodriguez, Garza, and Vela
Memorandum Opinion by Justice Rodriguez
This is an appeal from the jury's verdict that appellant Deborah McDonald
breached her mediated settlement agreement with appellee Donna Fox. By four issues,
McDonald argues that: (1) the evidence was insufficient to support the award of
attorneys' fees to Fox; (2) the evidence was insufficient to support the amount of contract
damages awarded to Fox; (3) the trial court abused its discretion in admitting the
mediator's report regarding the settlement; and (4) the mediated settlement agreement
was not enforceable as a matter of law. We affirm.
I. Background
McDonald and Fox are sisters. When their mother died in May 2009, Fox was
appointed temporary administrator of their mother's estate. McDonald then attempted to
probate their mother's will. Fox contested the will and obtained a temporary injunction to
stop distribution of the proceeds of their mother's life insurance policy to their brother
John Fox, the named beneficiary. The trial court ordered the parties to mediation to
resolve their disputes over the disposition of their mother's estate.
The mediation was held in early January 2010. At the conclusion of the
mediation, a settlement agreement was signed by the parties. The agreement
purportedly awarded to Fox the entire amount of the life insurance policy, a Wells Fargo
bank account, and an ING account. The name of the parties' other brother, Fred Fox,
had been crossed out as an additional recipient of the life insurance proceeds. The
agreement also provided that, upon releases signed by McDonald and John Fox to their
interests in the life insurance proceeds, Fox would deed her interest in the parties'
mother's house to John Fox.
In the days and weeks following the mediation, a dispute arose between the
parties over the terms of the agreement. McDonald and John Fox objected to the
deletion of Fred Fox as a recipient of the life insurance proceeds, contending they had
never agreed to the cross-out of his name in the settlement agreement. The parties
attempted further mediation over the phone, but negotiations eventually broke down
2
when McDonald and John Fox refused to sign their releases to the life insurance
proceeds. In April 2010, Fox filed suit against McDonald and John Fox for breach of the
settlement agreement.
In her suit, Fox alleged that McDonald and John Fox breached the settlement
agreement when they refused to sign their releases to the life insurance proceeds, which
prevented enforcement and execution of the remainder of the settlement agreement. In
January 2011, Fox's suit was tried to a jury, which found that: the settlement agreement
gave Fox the life insurance proceeds, the Wells Fargo bank account, and the ING
account; McDonald and John Fox failed to comply with the settlement agreement;
McDonald and John Fox's failure to comply was not excused; and $199,060.78 would
fairly and reasonably compensate Fox for her damages. The jury also awarded Fox
attorney's fees for the services of each of her attorneys in preparing for trial: $66,287.24
for Monte English's services; and $10,670.38 for Brenda Baker's services. 1
McDonald and John Fox filed a motion for judgment notwithstanding the verdict
and motion to disregard the jury's answer, arguing, in relevant part, that there was no
evidence to support the attorney's fees awarded for English's services; the jury's
damages finding should be reduced to reflect that Fox failed to perform her obligation
under the agreement to deed her interest in the mother's house to the defendants; and
the agreement was unenforceable as a matter of law. The trial court denied McDonald
and John Fox's motions and entered judgment for Fox in the amount of $281,608.00,
which included the damages award, the attorney's fees for both English and Baker, and
1
The jury also awarded fees for English's services in the event of an appeal, but McDonald does
not challenge that portion of the fee award.
3
$5,589.60 in prejudgment interest. This appeal followed.
II. Attorney's Fees
By her first issue, McDonald argues that the evidence was legally and factually
insufficient to support the reasonableness of the attorney's fees awarded for English's
services. Specifically, McDonald argues that there was no evidence offered of the work
performed by English or of the reasonableness of shifting the contingency fee English
and Fox agreed on to McDonald. McDonald also argues that Fox failed to segregate
English's fees.
A. Reasonableness of Fees
We review a jury's finding of the amount of reasonable and necessary attorney's
fees incurred for sufficiency of the evidence. Carlile v. RLS Legal Solutions, Inc., 138
S.W.3d 403, 409 (Tex. App.—Houston [14th Dist.] 2004, no pet.). "We must be mindful,
however, that we are reviewing a jury's verdict and may not substitute our judgment for
that of the fact[]finder." C.M. Asfahl Agency v. Tensor, Inc., 135 S.W.3d 768, 802 (Tex.
App.—Houston [1st Dist.] 2004, no pet.).
We will sustain a legal-sufficiency or no-evidence challenge if the record shows:
(1) the complete absence of evidence of a vital fact; (2) that the court is barred by the
rules of law or evidence from giving weight to the only evidence offered to prove a vital
fact; (3) that the evidence offered to prove a vital fact is no more than a scintilla; or (4) that
the evidence establishes conclusively the opposite of a vital fact. City of Keller v. Wilson,
168 S.W.3d 802, 810 (Tex. 2005). When reviewing a no-evidence challenge, we view
the evidence in the light favorable to the finding, crediting favorable evidence if a
reasonable fact-finder could and disregarding contrary evidence unless a reasonable
4
fact-finder could not. Id. at 807. The ultimate test for legal sufficiency is whether the
evidence would enable reasonable and fair-minded people to make the finding under
review. Id. at 827.
In reviewing a factual-sufficiency challenge to a jury finding on an issue on which
the appellant did not have the burden of proof, we consider and weigh all of the evidence
and set aside the verdict only if the evidence that supports the jury finding is so weak as to
make the verdict clearly wrong and manifestly unjust. Cain v. Bain, 709 S.W.2d 175, 176
(Tex. 1986) (per curiam); Ins. Network of Tex. v. Kloesel, 266 S.W.3d 456, 469-70 (Tex.
App.—Corpus Christi 2008, pet. denied).
In determining whether an attorney's fee award is reasonable, we consider the
following factors: (1) the time and labor required, novelty, and difficulty of the question
presented and the skill required to properly perform the legal service; (2) the likelihood
that the acceptance of employment precluded other employment by the lawyer; (3) the
fee customarily charged in the locality for similar 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 performing the services; and (8)
whether the fee is fixed or contingent. Arthur Andersen & Co. v. Perry Equip. Corp., 945
S.W.2d 812, 818 (Tex. 1997) (citing TEX. DISCIPLINARY R. PROF'L CONDUCT 1.04; Ragsdale
v. Progressive Voters League, 801 S.W.2d 880, 881 (Tex. 1990)). A litigant is not
required to present evidence on each of these factors. In re Estate of Vrana, 335 S.W.3d
322, 329-30 (Tex. App.—San Antonio 2010, pet. denied) (citing Burnside Air Conditioning
& Heating, Inc. v. T.S. Young Corp., 113 S.W.3d 889, 898 (Tex. App.—Dallas 2003, no
5
pet.); Acad. Corp. v. Interior Buildout & Turnkey Constr., Inc., 21 S.W.3d 732, 742 (Tex.
App.—Houston [14th Dist.] 2000, no pet.)). Rather, we look at the entire record, the
evidence presented on reasonableness, the amount in controversy, the common
knowledge of the participants as lawyers and judges, and the relative success of the
parties in determining the reasonableness of the fee award. Garrod Invs., Inc. v.
Schlegel, 139 S.W.3d 759, 767 (Tex. App.—Corpus Christi 2004, no pet.).
[A] contingency fee agreement alone cannot support an award of
attorney's fees. . . . [W]hile a contingent fee may be a reasonable fee from
the standpoint of the parties to the contract, i.e., a plaintiff and his
lawyer, . . . the mere fact that a party and a lawyer have agreed to a
contingent fee [does not] mean[] that the fee arrangement is in and of itself
reasonable for purposes of shifting that fee to the defendant. . . .
[A]lthough a party's contingent fee agreement should be considered by the
fact[]finder, a determination of the reasonableness of the fee must [still] take
into consideration the factors required by [Texas Disciplinary Rule of
Professional Conduct 1.04 and Arthur Andersen].
Mercier v. Sw. Bell Yellow Pages, Inc., 214 S.W.3d 770, 777-78 (Tex. App.—Corpus
Christi 2007, no pet.) (citing TEX. DISCIPLINARY R. PROF'L CONDUCT 1.04; Arthur Andersen,
945 S.W.2d at 818-19). In other words, "[t]he plaintiff cannot simply ask the jury to award
a percentage of the recovery as a fee; without evidence of the [Arthur Andersen factors],
the jury has no meaningful way to determine if the fees were in fact reasonable and
necessary." Transcont'l Gas Pipeline Corp. v. Texaco, Inc., 35 S.W.3d 658, 675 (Tex.
App.—Houston [1st Dist.] 2000, pet. denied) (citing Arthur Andersen, 945 S.W.2d at
818-19).
Here, the attorney's fees question submitted to the jury specified the eight Arthur
Andersen factors as factors the jury may have considered in determining what a
reasonable fee would be for English's services. The jury awarded $66,287.24 for
6
English's fees for preparation and trial. And having reviewed the trial record, we believe
there was sufficient evidence of most of the Arthur Andersen factors such that the jury
could have determined that $66,287.24 was reasonable.
The testimony at trial established that English became involved with the dispute in
January 2010 when it became apparent to Fox that McDonald and John Fox were
disputing the terms of the settlement agreement. This is evidence of the sixth factor, the
nature and length of the professional relationship between English and Fox.
Brenda Baker, Fox's probate attorney who had represented Fox in the mediation,
testified that she referred Fox to English for representation in the breach-of-contract suit
because English had unique experience trying cases involving the enforcement of
settlement agreements. Baker testified that English's reputation as a trial lawyer was
"sterling" and that he had tried hundreds of cases in his thirty years as a lawyer. This is
evidence of the first and seventh factors.
Baker testified that Fox and English entered into a contingency fee agreement in
which Fox agreed to pay English one-third of any award she recovered in her suit; Baker
testified Fox would not have been able to afford English's services without a contingency
agreement. Baker also testified that the one-third contingency fee was a customary fee
in cases like Fox's. The contract between Fox and English outlining the contingency fee
was admitted into evidence. The jury's award of $66,287.24 for English's fees in
preparing for trial was approximately one-third of the $199,060.78 in damages awarded to
Fox. The foregoing is all evidence relating to the third and eighth factors.
Baker then testified that the amount of money involved in the case was significant;
other evidence at trial established that the value of the life insurance policy and bank
7
accounts involved exceeded $200,000. This is evidence relating to the fourth factor.
Finally, Baker testified that the circumstances of the case made time of the
essence. She testified that the dispute over the settlement agreement prevented any
resolution of the will contest and that the estate's assets were depleting as the dispute
between the siblings continued. This is evidence relating to the fifth factor.
McDonald argues that because there was no testimony about the time English
spent on the case, the jury's award was not reasonable. We note that, while there was
no specific testimony about the hours English spent on the case, time spent working on
the case is only one consideration for the first Arthur Andersen factor. There was
testimony that enforcement of settlement agreements is a novel and difficult
subject-matter and that English had the particular skills to handle such a case.
Regardless, evidence need not be submitted to support every factor. See In re Estate of
Vrana, 335 S.W.3d at 329-30; see also Bank of Tex. v. VR Elec., Inc., 276 S.W.3d 671,
684-85 (Tex. App.—Houston [1st Dist.] 2008, pet. denied) (holding that evidence of
attorneys' fees was sufficient despite failure of evidence to address each Arthur Andersen
factor); see also McAlester Fuel Co. v. Carpenter, No. 01-07-00653-CV, 2009 WL
417301, at *6 (Tex. App.—Houston [1st Dist.] Feb. 19, 2009, pet. dism'd) (mem. op.)
(holding that the absence of evidence for two factors did not render the evidence of fees
insufficient). And in contingency fee cases, in particular, courts do not always require
evidence of hours spent on the case in order for a jury to be able to determine a
reasonable amount of attorney's fees.2 See Brazos Elec. Power Co-op., Inc. v. Weber,
2
McDonald directs us to Ford Motor Co. v. Garcia, a March 2012 Texas Supreme Court case in
which the Court reversed an award of guardian ad litem attorney's fees where the evidence showed that the
ad litem did not perform all tasks listed on his invoice, the invoice did not set out the amount of time each
8
238 S.W.3d 582, 586-87 (Tex. App.—Dallas 2007, no pet.) (holding that there was
sufficient evidence of the Arthur Andersen factors to support shifting contingency fee
where there was testimony about the number of months the attorney had spent on the
case, the length and nature of the relationship between the attorney and client, the
attorney's expertise in the subject-matter of the case and that the contingency fee was a
customary fee in this type of case); Vingcard A.S. v. Merrimac Hospitality Systems, Inc.,
59 S.W.3d 847, 869-70 (Tex. App.—Fort Worth 2001, pet. denied) (holding that there was
sufficient evidence to support shifting contingency fee where there was testimony: that a
contingency arrangement was customary in these type of cases and that the percentage
being charged was, in fact, less than other cases of the same type; explaining how the fee
would be used to pay costs and co-counsel fees; and explaining the jury how to calculate
the percentage).
Viewing the evidence in the light most favorable to the verdict, we conclude that a
reasonable and fair-minded jury could have found that $66,287.24 was a reasonable fee
for English's services. See City of Keller, 168 S.W.3d at 807, 827. We also conclude
that the evidence supporting the jury's finding on English's fees was not so weak as to
make the verdict clearly wrong and manifestly unjust. See Cain, 709 S.W.2d at 176.
task took, and many of the tasks listed were not compensable under the rule of civil procedure governing
the compensation of guardians ad litem. 363 S.W.3d 573, 580-82 (Tex. 2012). McDonald asserts that
Ford Motor Company v. Garcia "reaffirmed the principle that the fact finder must determine attorney's fees
in light of the work performed in the very case for which the fee is sought." In another recent case, the
Texas Supreme Court weighed in on the proof required for fees awarded based on the lodestar method,
holding that "the fee application and record must include proof documenting the performance of specific
tasks, the time required for those tasks, the person who performed the work, and his or her specific rate."
El Apple I, Ltd. v. Olivas, 370 S.W.3d 757, 765 (Tex. 2012). We do not find either of these cases
dispositive of this appeal as both involve specific fee arrangements not present in this case—guardian ad
litem fees and lodestar method fees—and neither involve contingency fee agreements and the unique
standard involved in proving the reasonableness of shifting a contingency fee.
9
B. Segregation
Next, noting that Fox's "attorneys pursued several claims, including a will contest,
an interpleader involving life insurance proceeds, a temporary administration with several
contests, motions to enforce the purported settlement agreement filed under the will
contest cause of action, and the case at hand," McDonald argues that Fox failed to
segregate English's fees between the services for which fees were recoverable and those
for which they were unrecoverable. See Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d
299, 313 (Tex. 2006) ("[W]e reaffirm the rule that if any attorney's fees relate solely to a
claim for which such fees are unrecoverable, a claimant must segregate recoverable from
unrecoverable fees."). However, the evidence shows that English was only involved
with the breach-of-contract suit to enforce the settlement agreement. Baker was Fox's
attorney for the remaining claims indentified by McDonald, and McDonald does not
challenge Fox's segregation of Baker's fees. The settlement agreement specifically
provides that the prevailing party in any dispute over the enforcement of the agreement
shall recover attorney's fees, and McDonald does not dispute this. Because all of
English's services involved Fox's efforts to enforce the settlement agreement, there was
no need to segregate his fees.
C. Summary
Having determined that the evidence was sufficient to support the reasonableness
of the jury's attorney's fee award and that Fox was not required to segregate English's
fees, we overrule McDonald's first issue.
III. Contract Damages
By her second issue, McDonald argues that the damages awarded by the jury
10
were supported by legally and factually insufficient evidence because the damages were
not properly offset by the costs Fox avoided by not conveying her interest in the mother's
house, as required by the settlement agreement. The jury was charged as follows on
damages:
What sum of money, if any, if paid now in cash, would fairly and
reasonably compensate Donna Fox for her damages, if any, that resulted
from [McDonald and John Fox's] failure to comply [with the settlement
agreement].
Consider the following elements of damages, if any, and none other.
The difference in value, if any, between the value of the obligations
agreed to by the parties and the value of the obligations performed
by John E. Fox and Deborah McDonald. The difference in value, if
any, shall be determined at the time and place the obligations were
performed.
The jury then answered that $199,060.78 was a reasonable amount for damages
sustained by Fox. McDonald argues that, under the charge, it was unreasonable for the
jury to not reduce the amount it awarded Fox by the value of her one-third interest in the
house, which interest she was obligated to convey under the settlement agreement but
undisputedly never did. We disagree—the amount of damages awarded by the jury
complied with the charge and was supported by the evidence at trial.
Here, the jury specifically found that Fox was entitled, under the settlement
agreement, to the proceeds from the mother's life insurance policy, a Wells Fargo bank
account, and an ING account. At trial, there was evidence that: the life insurance policy
was valued at approximately $185,000; the Wells Fargo account had a balance of
approximately $12,000; and the ING account had a balance of approximately $1,600.
These figures totaled almost $199,000, very near the amount awarded by the jury.
11
McDonald argues that the jury should have reduced its award by the value of Fox's
one-third interest in the mother's home.3 But the charge, to which McDonald lodged no
objections, did not require the jury to make the offset McDonald urges. Rather, under the
charge, it was reasonable for the jury to disregard the value of Fox's interest in the house
because, in the settlement agreement admitted as evidence at trial, Fox's obligation to
deed her interest in the house was conditioned on McDonald and John Fox's execution of
releases regarding the life insurance proceeds. In other words, because there was
evidence that McDonald and John Fox never executed those releases, it was reasonable
for the jury to conclude that Fox's obligation to deed her interest was never triggered and,
therefore, was not a cost avoided by Fox that needed to be reflected in the damages
awarded. We believe this apparent finding is further supported by the jury's finding that
McDonald and John Fox's failure to comply with the settlement agreement was not
excused by any breach of the agreement by Fox. Ultimately, juries have considerable
latitude in making damages awards within the evidence presented at trial. See Gulf
States Utils. Co. v. Low, 79 S.W.3d 561, 566 (Tex. 2002) (citation omitted). And we will
not disturb the jury's award in this case as it was clearly supported by the evidence and
authorized by the charge.
In sum, viewing the evidence in the light most favorable to the verdict, we conclude
that a reasonable and fair-minded jury could have found that Fox suffered $199,060.78 in
damages as a result of McDonald's failure to comply with the settlement agreement.
See City of Keller, 168 S.W.3d at 807, 827. We also conclude that the evidence
3
The evidence at trial showed the home to be valued at approximately $234,000; one-third of this
amount would have been approximately $78,000.
12
supporting the jury's finding on Fox's damages was not so weak to make the verdict
clearly wrong and manifestly unjust. See Cain, 709 S.W.2d at 176. McDonald's second
issue is overruled.
IV. Validity of Settlement Agreement
By her fourth issue, McDonald argues that the settlement agreement in this case
was unenforceable as a matter of law because: (1) the deletion of Fred Fox as a
recipient of the life insurance proceeds materially altered McDonald's initial settlement
offer to Fox, was therefore not a valid acceptance, and thus no legally enforceable
contract formed; and (2) the ratification of the alteration by McDonald's attorney did not
bind McDonald.
[A] written settlement agreement may be enforced though one party
withdraws consent before judgment is rendered on the agreement. See
Padilla v. LaFrance, 907 S.W.2d 454, 461 (Tex. 1995). Where consent is
lacking, however, a court may not render an agreed judgment on the
settlement agreement, but rather may enforce it only as a written contract.
Id. at 462. [In such a case], the party seeking enforcement must pursue a
separate breach-of-contract claim, which is subject to the normal rules of
pleading and proof. Id.
Mantas v. Fifth Court of Appeals, 925 S.W.2d 656, 658 (Tex. 1996). To prevail in a
breach-of-contract suit, a plaintiff must prove: (1) existence of a valid contract; (2)
performance or tendered performance by the plaintiff; (3) a breach by the defendant; and
(4) damages sustained by the plaintiff as a result of the breach. Sauceda v. GMAC
Mortgage Corp., 268 S.W.3d 135, 140 (Tex. App.—Corpus Christi 2008, no pet.).
Here, McDonald challenges the existence of a valid and enforceable contract. In
order for a contract to be enforceable, there must be an offer, an acceptance in strict
compliance with the terms of the offer, a meeting of the minds, consideration, each party's
13
consent to the terms, and execution and delivery of the contract with the intent that it be
mutual and binding. ABB Kraftwerke Aktiengesellschaft v. Brownsville Barge & Crane,
Inc., 115 S.W.3d 287, 291 (Tex. App.—Corpus Christi 2003, pet. denied) (citing Fed. Sign
v. Tex. So. Univ., 951 S.W.2d 401, 408-09 (Tex. 1997); Labor Ready Cent. III, L.P. v.
Gonzalez, 64 S.W.3d 519, 522 (Tex. App.—Corpus Christi 2001, no pet.)). Whether a
contract is enforceable is a question of law we review de novo. Perry Homes v. Cull, 258
S.W.3d 580, 598 (Tex. 2008).
McDonald contends that, during the mediation, she tendered an offer to Fox in the
form of a type-written draft settlement document.4 In relevant part, the draft agreement
provided that the life insurance policy would be paid "in its entirety to Donna A. Fox and
Fred Fox." In the settlement document that eventually became the subject of this suit,
Fred Fox's name had been crossed out. There was conflicting testimony at trial
concerning the negotiations that led to the deletion of Fred Fox's name. McDonald
testified that she never agreed to the deletion of Fred Fox's name as a recipient of the life
insurance funds; she testified that she was unaware of the deletion until her lawyer made
her aware of the alteration the day after the mediation. Both John Fox's attorney,
Vaughn Westheimer, and Fox's attorney, Brenda Baker, testified that Fred Fox's name
was eliminated early in the negotiations. Westheimer testified that, although McDonald
and John Fox signed their names to the settlement document before any hand-written
deletions or other alterations were made, he specifically pointed out the deletion of Fred
Fox's name to everyone in the room, including McDonald, before the conclusion of the
4
Fox does not dispute this characterization of the negotiations and it is supported by the record.
See TEX. R. APP. P. 38.1(g).
14
mediation. Westheimer testified that, at the end of the mediation, he was under the
impression an agreement had been reached. Finally, the settlement agreement was
admitted into evidence. The agreement, which included the deletion, included the
signatures of both McDonald and her attorney. Further, the initials of McDonald's
attorney appear by the deletion of Fred Fox's name.
Both of McDonald's arguments in this issue center on her contention that she
never agreed to the deletion of Fred Fox as a recipient of the life insurance proceeds.
First, McDonald argues that the deletion by Fox was not in strict compliance with the
terms of her offer and, thus, was not a valid acceptance by Fox. See ABB Kraftwerke
Aktiengesellschaft, 115 S.W.3d at 291. We are not persuaded by this argument.
Assuming that the deletion of Fred Fox constituted a counter-offer by Fox to McDonald's
initial offer, there was evidence that this deletion was agreeable to the parties. There
was testimony that the deletion of Fred Fox's name was discussed by the parties early in
the negotiations and that the deletion was pointed out to all the parties by one of the
attorneys before the end of the mediation. We are also mindful of the agreement itself,
which included the complained-of deletion and McDonald's signature. Had McDonald
disagreed with the hand-written deletion of Fred Fox's name that occurred after she
initially signed the document, she could have removed her signature before the end of the
mediation. Instead, in light of the fact that McDonald does not contend that the deletion
was made surreptitiously or otherwise fraudulently, and because we presume that parties
know the contents of contracts they sign, we presume that McDonald agreed to the terms
of this document which contains her signature. See In re Bank of Am., N.A., 278 S.W.3d
342, 344-45 (Tex. 2009) (holding that courts presume a party that signs a contract knows
15
its contents, and absent fraud or imposition, a party's failure to read an instrument before
signing is not a ground for avoiding it). In short, there was evidence that the parties
ultimately had a meeting of the minds and consented to the terms. See ABB Kraftwerke
Aktiengesellschaft, 115 S.W.3d at 291. In determining that an enforceable agreement
existed, the trial court was free to disregard McDonald's self-serving testimony that she
would never have agreed to the deletion and credit the foregoing evidence that the parties
ultimately reached an agreement, which included the deletion of Fred Fox's name. In
light of the conflicting evidence, we will not disturb the trial court's determination in that
regard.
Next, McDonald argues that the initials of her attorney by the deletion, alone, did
not bind her to the contract. McDonald argues that her attorney, Brad Bunting, had no
authority to approve the deletion of Fred Fox's name because McDonald never consented
to the deletion. See Sw. Bell Tel. Co. v. Vidrine, 610 S.W.2d 803, 805 (Tex. Civ.
App.—Houston [1st Dist.] 1980, writ ref'd n.r.e.) ("It has long been settled that the mere
employment of counsel does not clothe the counsel with authority to settle the cause
without the specific consent of the client."). Again, we are not persuaded. As discussed
above, Bunting's initials were not the only evidence of McDonald's assent that was before
the trial court. There was other evidence that all parties, including McDonald, were
aware of the deletion before the end of the mediation. This is evidence that McDonald
herself agreed to the terms in the settlement agreement as she left her signature on the
agreement even after being made aware of the deletion. We believe the foregoing
makes Bunting's initials—and whether he had McDonald's specific consent—irrelevant.
We conclude that the trial court did not err in determining, as a matter of law, that
16
the settlement agreement was enforceable. We overrule McDonald's fourth issue.
V. Admission of Mediator's Statement
By her third issue, McDonald argues that the trial court abused its discretion in
admitting as evidence the mediator's report to the court, in which the mediator indicated
that the case had been settled. McDonald argues that Fox failed to lay the proper
predicate for the mediator's report to be used as expert testimony and that the report was
hearsay that did not fall into the public records exception of rule 803. See TEX. R. EVID.
702, 703, 803(8). McDonald argues she was harmed by the admission of the evidence
because Fox relied on the mediator's statement that a settlement had been reached as
part of her theory at trial that a contract had formed between the parties.
Assuming without deciding that the trial court erred in admitting the mediator's
report, we cannot agree that McDonald was harmed by its admission. Erroneously
admitted evidence warrants reversal only if the error probably resulted in the rendition of
an improper judgment. TEX. R. APP. P. 44.1(a); Nissan Motor Co. v. Armstrong, 145
S.W.3d 131, 144 (Tex. 2004). To determine whether the admission of evidence was
harmful, "we must evaluate the entire case from voir dire to closing argument, considering
the evidence as a whole, the strength or weakness of the case, and the verdict." U-Haul
Int'l, Inc. v. Waldrip, No. 10-0781, 2012 WL 3800220, at *14 (Tex. Aug. 31, 2012) (citing
Reliance Steel & Aluminum Co. v. Sevcik, 267 S.W.3d 867, 871 (Tex. 2008); Spohn
Hosp. v. Mayer, 104 S.W.3d 878, 883-84 (Tex. 2003)). "In determining whether the
erroneous admission of evidence probably led to an improper judgment, courts look to the
role the evidence played in the context of the trial and the efforts made by counsel to
emphasize the erroneous evidence, as well as whether contrary evidence existed that the
17
improperly admitted evidence was calculated to overcome." Id. (citations omitted).
Here, the mediator's report was introduced by Fox and admitted by the trial court
during the testimony of Brenda Baker, Fox's probate attorney. The exchange relevant to
the admission of the report was as follows:
[Counsel for Fox]: Now, we talked about, in the Court's [order referring
the parties to mediation], when the the Court ordered
the case to be mediated, one of the things the Court
also ordered is to — said the mediator shall file a report
with this court within 48 hours after the completion of
the mediation indicating only whether the case settled
in whole or in part, correct?
[Baker]: That's correct.
[Counsel for Fox]: And that's a normal thing in a mediation to have
happen, right?
[Baker]: Yes, it is.
[Counsel for Fox]: Now, we'll mark Plaintiff's Exhibit 6 which is in
evidence, this is dated January 15[, 2010]. So that's
three days after January 12, the letterhead is Michael
Elliott, the mediator, and it was to Judge Lisa
Gonzales, regarding the estate of Rose Marie, and it
says: "The above case on file was subject to
mediation conducted by me on Tuesday, January 12.
I am pleased to announce that the parties have
entered into a settlement of the case and will be
submitting the appropriate orders within the next 10
days." And that's signed by Michael Elliott.
[Baker]: Yes, that's correct.
[Counsel for Fox]: And it was carbon copied to all three attorneys,
correct?
[Baker]: Yes, it was.
[Counsel for Fox]: So did you also feel at the time that an agreement had
been reached?
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[Baker]: Yes.
The foregoing is the only testimony regarding the mediator's report presented at the
three-day trial. The report was next mentioned in closing argument by Fox's counsel:
After the mediation, the mediator, Mike Elliott says: "I am pleased
to announce that the parties have settled the case." So the mediator is
saying, hey, Judge, we settled the case. So [John Fox's] attorney Vaughn
Westheimer feels they settled so does the mediator who was in there. So
we got four people that say the case was settled; the mediator, Vaughn
Westheimer, attorney, Brenda Baker, and Donna Fox all say the case
settled.
Remember we were talking about those scales of justice when we
started the case? If you want to just talk about the scales of justice, it's four
against three. Their attorney, Brad Bunting says it wasn't settled. John
Fox says it wasn't settled. Deborah McDonald said not settled. But there
are more people saying it settled. And the real interesting thing is one of
them is on their side, Vaughn Westheimer. And the other guy is totally
impartial, Mike Elliott. So, Brad Bunting, three days later says, oh, I just
realized that "and Fred Fox's" name was scratched out. So he sends a
letter to Brenda Baker and says, Ms. Baker, I've got something I want Fred
Fox to sign. So he says, okay, I've just noticed this. Let me send
something for him to sign. Kind of the — the [implication] is, well, if you'll
just sign it then everything's fine, we'll go on. So, here's Fred Fox. I put
his picture here. He signs a release on January 24th showing that we did
what they asked [us] to do. Fred signed it. . . .
Having reviewed the entire record, we do not believe the foregoing probably
caused the rendition of an improper verdict. As discussed in our resolution of
McDonald's fourth issue, there was other evidence that the parties reached a settlement
agreement, including testimony that the deletion of Fred Fox's name had been discussed
early in the negotiations and that the deletion was pointed out to all parties before the
conclusion of the mediation. McDonald's signature on the document, absent any
allegations of fraud or other impropriety, is also strong evidence that an agreement was
reached. And even if we were to focus singularly on counsel's closing argument,
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counsel emphasized the opinion of John Fox's attorney that an agreement had been
reached just as forcefully as the mediator's report. Following his mention of the
mediator's report, counsel then immediately emphasized further evidence of an
agreement between the parties—that McDonald's attorney, Brad Bunting, requested that
Fred Fox sign a release, which implied that the terms of the settlement document were
agreeable to McDonald.
In other words, it appears that the mediator's report was but a small part of Fox's
evidentiary arsenal, which included ample other strong evidence that the parties had
reached an agreement. See U-Haul Int'l, Inc., 2012 WL 3800220, at *14. Thus, we
cannot conclude that the mediator's report probably caused the rendition of an improper
verdict by the jury. See TEX. R. APP. P. 44.1(a). McDonald's third issue is overruled.
VI. Conclusion
We affirm the judgment of the trial court.
NELDA V. RODRIGUEZ
Justice
Delivered and filed the 15th
day of November, 2012.
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