Carl "Stacey" Neese, Individually and A/N/F of Logen Neese, Cameron Neese v. Ted B. Lyon, Marquette Wolf , 2015 Tex. App. LEXIS 8102 ( 2015 )


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  • AFFIRM in Part, REVERSE in Part, and REMAND; Opinion Filed July 31, 2015.
    Court of Appeals
    S      In The
    Fifth District of Texas at Dallas
    No. 05-13-01597-CV
    CARL “STACEY” NEESE, INDIVIDUALLY AND AS NEXT FRIEND OF L.N., C.N.,
    L.N., AND C.N., JAMES NEESE, DAVID NEESE, JENNIFER HUGHES, MITZI
    RENFROE, AND IRL HOOPER, Appellants
    V.
    TED B. LYON, JR., MARQUETTE W. WOLF, TED B. LYON & ASSOCIATES, P.C.,
    AND WILLIAM HEIDELBERG, Appellees
    On Appeal from the 382nd Judicial District Court
    Rockwall County, Texas
    Trial Court Cause No. 1-13-61
    OPINION
    Before Justices Lang and Brown 1
    Opinion by Justice Brown
    Appellants sued appellees on several theories of liability including barratry. The trial
    court granted a take-nothing summary judgment in favor of appellees. Appellants raise thirteen
    issues on appeal. We affirm the trial court’s judgment in part, reverse it in part, and remand for
    further proceedings consistent with this opinion.
    1
    The Honorable Kerry P. FitzGerald, Retired Justice, was a member of the panel at the time this case was submitted, but he retired from the
    Court on December 31, 2014, and did not participate in the issuance of this opinion. See TEX. R. APP. P. 41.1(a), (b).
    I.    BACKGROUND
    A.        Factual allegations
    Appellants alleged the following facts, which appellees assumed to be true solely for
    purposes of their summary-judgment motion.                               A natural-gas pipeline exploded in Johnson
    County, Texas, on June 7, 2010. The explosion seriously injured appellants Carl “Stacey”
    Neese 2 and Irl Hooper. It also killed Neese’s brother James Robert Neese. Appellant Mitzi
    Renfroe is James Robert Neese’s mother, and the remaining appellants are James Robert Neese’s
    children. We sometimes collectively refer to appellants as the “Clients.”
    Appellees Ted B. Lyon Jr. and Marquette W. Wolf are Texas lawyers. Lyon is the
    president and director of appellee Ted B. Lyon & Associates, P.C., and Wolf works for that law
    firm. Appellee William Heidelberg is a private investigator.
    Although Lyon, Wolf, and the Lyon law firm had no prior relationship with the Neeses,
    they hired Heidelberg to solicit the Neese family to hire Lyon and his firm as their attorneys.
    Heidelberg traveled to Oklahoma and contacted Neese. He falsely told Neese that he was
    investigating the pipeline explosion for an organization called the Danielle Smalley Foundation
    and that he was not associated with any law firm. Heidelberg also told Neese that he should
    consider hiring Lyon, who had previously obtained a verdict of several hundred million dollars
    for a victim of a different pipeline explosion. On June 25, 2010, Lyon and Wolf flew to Tulsa
    and met with Neese and other Neese family members. The Neeses hired the Lyon firm to
    represent them in any pipeline-explosion litigation for a 40% contingency fee.
    Heidelberg asked Neese if he knew anyone else who was injured in the explosion, and
    Neese referred him to Hooper. Heidelberg met with Hooper in the hospital and was introduced
    2
    We will sometimes refer to appellant Carl “Stacey” Neese in this opinion simply as “Neese.” We will use full names when referring to
    other individual members of the Neese family.
    –2–
    to Hooper as an investigator for the Danielle Smalley Foundation. According to Hooper’s
    summary-judgment affidavit, Neese told Hooper that Heidelberg was not associated with any
    law firm. Heidelberg did not deny these statements, and he told Hooper that he should consider
    hiring Lyon, again because of Lyon’s prior success. Another lawyer with the Lyon law firm later
    flew to Oklahoma and got Hooper to hire the Lyon law firm on a 40% contingency-fee basis.
    Hooper’s affidavit indicates this meeting took place on or after July 5, 2010. Heidelberg was
    paid a $50,000 bonus by the other appellees for successfully soliciting the Neeses and Hooper.
    Lyon, Wolf, and the Lyon law firm filed a lawsuit for the Neeses and Hooper. That
    lawsuit eventually settled. The Clients paid attorneys’ fees and expenses to the Lyon appellees.
    The Clients later learned of Heidelberg’s relationship with the Lyon appellees.
    B.     Procedural history
    The Clients sued appellees, asserting the following claims and requesting the following
    remedies in their fifth amended petition: (1) barratry and fee forfeiture, (2) breach of fiduciary
    duty, (3) fraud by nondisclosure, omission, or concealment, (4) rescission, (5) unjust enrichment,
    (6) legal malpractice, (7) conspiracy, (8) violations of the Texas Deceptive Trade Practices Act,
    (9) suspension from the practice of law and revocation of license, and (10) an accounting.
    Appellees then filed a second amended summary-judgment motion, which was expressly a
    “traditional” motion under Rule 166a(c). The Clients timely responded and also timely filed a
    sixth amended petition in which they added a claim for “money had and received and/or
    quantum valebant.” Appellees addressed the new claim in a “supplement” to their second
    amended motion for summary judgment, and the Clients filed a special exception and response
    to the supplement.
    After a hearing, the trial judge signed a take-nothing summary judgment in favor of
    appellees. The Clients timely perfected this appeal.
    –3–
    II. STANDARD OF REVIEW
    We review a traditional summary judgment under a de novo standard of review. Smith v.
    Deneve, 
    285 S.W.3d 904
    , 909 (Tex. App.—Dallas 2009, no pet.). When we review a traditional
    summary judgment for a defendant, we determine whether the defendant conclusively disproved
    an element of the plaintiff’s claim or conclusively proved every element of an affirmative
    defense. Am. Tobacco Co. v. Grinnell, 
    951 S.W.2d 420
    , 425 (Tex. 1997). We must take
    evidence favorable to the nonmovant as true, and we must indulge every reasonable inference
    and resolve every doubt in the nonmovant’s favor. Sysco Food Servs., Inc. v. Trapnell, 
    890 S.W.2d 796
    , 800 (Tex. 1994). A matter is conclusively established if ordinary minds could not
    differ as to the conclusion to be drawn from the evidence. In re Estate of Hendler, 
    316 S.W.3d 703
    , 707 (Tex. App.—Dallas 2010, no pet.).
    Although appellees attached some evidence to their summary-judgment motion, such as
    the fee agreements and some evidence regarding the course of the underlying pipeline-explosion
    litigation, they relied principally on the averments in appellants’ live petition, the truth of which
    appellees accepted solely for purposes of summary judgment. Although pleadings generally do
    not constitute summary-judgment evidence, a summary-judgment movant may rely on judicial
    admissions in the nonmovant’s live pleading. See Commercial Structures & Interiors, Inc. v.
    Liberty Educ. Ministries, Inc., 
    192 S.W.3d 827
    , 835 (Tex. App.—Fort Worth 2006, no pet.)
    (“[I]f a plaintiff’s pleadings contain judicial admissions negating a cause of action, summary
    judgment may properly be granted on the basis of the pleadings.”); see also Tex. Dep’t of Corr.
    v. Herring, 
    513 S.W.2d 6
    , 9 (Tex. 1974) (“It is recognized that a party may plead himself out of
    court; e.g., the plaintiff may plead facts which affirmatively negate his cause of action.”). When
    we review a summary judgment against a plaintiff based on the pleadings, we view the facts in
    –4–
    the pleadings in the light most favorable to the plaintiff. Murphy v. Gruber, 
    241 S.W.3d 689
    ,
    691 n.2 (Tex. App.—Dallas 2007, pet. denied).
    The Clients attached evidence to their summary-judgment response, principally affidavits
    by Neese, Hooper, and an attorney who worked for the Lyon law firm from 2007 until 2012.
    These affidavits largely repeat and elaborate on the facts pleaded in the Clients’ sixth amended
    petition.
    III. ANALYSIS
    The Clients raise thirteen issues on appeal. The first issue is a general averment, without
    substantive argument, that the trial court erroneously granted summary judgment. Issues two
    and three concern their barratry claims. Issues four through thirteen concern their other liability
    theories and requested remedies. We proceed directly to their second and third issues.
    A.      Barratry
    1.     Summary-judgment grounds and the Clients’ arguments on appeal
    Under the heading “Barratrous Conduct and fee forfeiture,” the Clients alleged that
    appellees committed barratry in violation of the Texas Penal Code and the Texas Disciplinary
    Rules of Professional Conduct. They further asserted that appellees’ barratry entitled the Clients
    to avoid their contingency-fee agreements and to recover all fees and expenses paid to appellees
    under the agreements.
    Appellees raised several summary-judgment grounds regarding the Clients’ barratry
    claims. They argued that Texas law did not recognize a private civil cause of action for barratry
    until the Texas Legislature statutorily recognized that cause of action effective September 1,
    2011. They further argued that, under the civil barratry statute in effect in 2010, clients could
    invoke barratry only defensively as a basis for avoiding an obligation to pay as-yet-unpaid legal
    fees. Applying the law to the facts, appellees argued that the Clients had no viable barratry claim
    –5–
    because the Clients alleged barratrous acts occurring only in 2010 and all legal fees due under
    the allegedly barratrous agreements had already been paid. Appellees also argued that the
    Clients’ barratry claims were barred by a two-year statute of limitations and by ratification.
    On appeal, the Clients argue that the civil barratry statute in effect before September 1,
    2011, created a private cause of action for barratry and that they successfully pleaded a claim
    under that statute. They also argue that they alleged facts stating a claim for barratry under the
    version of the statute in effect from September 1, 2011, through August 31, 2013. The Clients
    also argue that limitations does not bar their barratry claims because the discovery rule delayed
    accrual of their claims and because the applicable statute of limitations is four years rather than
    two. Finally, they argue that they did not ratify the alleged barratry because they were not aware
    of it until after the underlying case had settled.
    2.     Applicable law
    The ordinary meaning of barratry is vexatious incitement to litigation, especially by
    soliciting potential legal clients. See Barratry, BLACK’S LAW DICTIONARY (10th ed. 2014). It
    has long been a crime in Texas. See Ackerman v. State, 
    61 S.W.2d 116
    (Tex. Crim. App. 1933)
    (affirming barratry conviction). The criminal prohibition of barratry is now found in Chapter 38
    of the Texas Penal Code. See TEX. PENAL CODE ANN. § 38.12 (West Supp. 2014) (entitled
    “Barratry and Solicitation of Professional Employment”). The rules of professional conduct also
    address barratry. See TEX. DISCIPLINARY RULES PROF’L CONDUCT R. 7.03 (entitled “Prohibited
    Solicitations and Payments”), reprinted in TEX. GOV’T CODE ANN., tit. 2, subtit. G, app. A (West
    2013).
    In 1989, the legislature enacted a new statute, § 82.065 of the Texas Government Code,
    addressing contingent-fee contracts and barratry:
    (a)     A contingent fee contract for legal services must be in writing and
    signed by the attorney and client.
    –6–
    (b)      A contingent fee contract for legal services is voidable by the
    client if it is procured as a result of conduct violating the laws of this state or the
    Disciplinary Rules of the State Bar of Texas regarding barratry by attorneys or
    other persons.
    Act of May 27, 1989, 71st Leg., R.S., ch. 866, § 3, 1989 Tex. Gen. Laws 3855, 3857 (amended
    2011 and 2013) (current version at TEX. GOV’T CODE ANN. § 82.065 (West Supp. 2014)).
    In 2011, the legislature amended § 82.065 and enacted § 82.0651. The 2011 amendments
    to § 82.065 are not relevant to this appeal. New § 82.0651 contained the following provisions:
    (a)     A client may bring an action to void a contract for legal services
    that was procured as a result of conduct violating the laws of this state or the
    Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas
    regarding barratry by attorneys or other persons.
    (b)    A client who prevails in an action under Subsection (a) shall
    recover from any person who committed barratry:
    (1) all fees and expenses paid to that person under the contract;
    (2) the balance of any fees and expenses paid to any other person
    under the contract, after deducting fees and expenses awarded
    based on a quantum meruit theory as provided by Section
    82.065(c);
    (3) actual damages caused by the prohibited conduct; and
    (4) reasonable and necessary attorney’s fees.
    ....
    (e)     This section shall be liberally construed and applied to promote its
    underlying purposes, which are to protect those in need of legal services against
    unethical, unlawful solicitation and to provide efficient and economical
    procedures to secure that protection.
    (f)    The provisions of this subchapter are not exclusive. The remedies
    provided in this subchapter are in addition to any other procedures or remedies
    provided by any other law, except that a person may not recover damages and
    penalties under both this subchapter and another law for the same act or practice.
    –7–
    Act of May 5, 2011, 82d Leg., R.S., ch. 94, § 2, 2011 Tex. Sess. Law Serv. 535, 535–36
    (amended 2013) (current version at TEX. GOV’T CODE ANN. § 82.0651 (West Supp. 2014)). 3
    Section 82.0651, as adopted in 2011, and the 2011 amendments to § 82.065 do not apply
    to events occurring before September 1, 2011. Act of May 5, 2011, 82d Leg., R.S., ch. 94, § 3,
    2011 Tex. Sess. Law Serv. 535, 536.
    3.         Application of original § 82.065(b) to the facts
    a.         Background
    In their second issue, the Clients argue that original § 82.065(b) allows them to avoid
    their fee agreements and recover the consideration appellees received under them. Appellees
    respond that original § 82.065(b) does not create a cause of action allowing barratry victims to
    sue for legal fees and expenses paid after the legal services have been fully or substantially
    performed. The proper interpretation of original § 82.065(b) appears to be a question of first
    impression for this Court.
    Our objective in construing a statute is to effectuate the legislature’s intent. We look first
    to the statutory words’ plain and common meaning. City of San Antonio v. City of Boerne, 
    111 S.W.3d 22
    , 25 (Tex. 2003). If the statute is unambiguous, we enforce it according to its plain
    meaning, unless doing so would produce an absurd result. In re Curry, 
    407 S.W.3d 376
    , 379
    (Tex. App.—Dallas 2013, orig. proceeding). We read the statute as a whole and interpret it to
    give effect to every part. City of San 
    Antonio, 111 S.W.3d at 25
    .
    We may also consider, among other things, the circumstances under which the statute
    was enacted, the common law, former statutory provisions, and laws on the same or similar
    subjects. TEX. GOV’T CODE ANN. § 311.023(2), (4) (West 2013). We may thus consider that
    barratry has long been a crime in Texas and that barratry is also proscribed by the ethical rules
    3
    The legislature amended § 82.0651 in 2013, but those amendments have no effect on this case.
    –8–
    applicable to attorneys. See TEX. DISCIPLINARY RULES PROF’L CONDUCT R. 7.03. We have
    found no authority that Texas recognized a private cause of action for barratry in favor of an
    improperly solicited client before the adoption of original § 82.065 in 1989. See Moiel v.
    Sandlin, 
    571 S.W.2d 567
    , 571 (Tex. Civ. App.—Corpus Christi 1978, no writ) (“The offense of
    barratry as defined in the penal code is a public remedy and not a private one.”); cf. Pelton v.
    McClaren Rubber Co., 
    120 S.W.2d 516
    , 517 (Tex. Civ. App.—Waco 1938, writ ref’d) (allowing
    assertion of barratry as a defense and holding that claim-collector’s contract secured by illegal
    solicitation was “void and unenforceable”). See generally Metro. Reg’l Info. Sys., Inc. v. Am.
    Home Realty Network, Inc., 
    948 F. Supp. 2d 538
    , 568–69 (D. Md. 2013) (“[M]ost courts that
    have examined that issue . . . have concluded that a private cause of action for barratry cannot be
    implied from a criminal statute.”).
    Original § 82.065(b) states only one civil consequence for barratry—a contingent-fee
    contract procured by barratry “is voidable by the client.” With respect to contracts, “voidable”
    means that a contract is valid and effective unless and until the party entitled to avoid it takes
    steps to disaffirm it. See Cole v. McWillie, No. 11-12-00265-CV, 
    2015 WL 3485269
    , at *2 (Tex.
    App.—Eastland May 29, 2015, no pet. h.) (“[A] voidable contract continues in effect until active
    steps are taken to disaffirm the contract . . . .”); Mason v. Abel, 
    215 S.W.2d 377
    , 381–82 (Tex.
    Civ. App.—Dallas 1948, writ ref’d n.r.e.) (contract voidable under statute of frauds is valid
    unless avoided by a party); see also RESTATEMENT (SECOND) OF CONTRACTS § 7 (AM. LAW INST.
    1981) (“A voidable contract is one where one or more parties have the power, by a manifestation
    of election to do so, to avoid the legal relations created by the contract, or by ratification of the
    contract to extinguish the power of avoidance.”).
    Grounds that can make a contract voidable include fraudulent inducement, mistake,
    duress, and breach by the other party. Lee v. Rosen, Newey & Von Blon, P.C., No. 14-00-00759-
    –9–
    CV, 
    2002 WL 1953791
    , at *3 (Tex. App.—Houston [14th Dist.] Aug. 22, 2002, pet. denied)
    (mem. op., not designated for publication); see also Wilhite v. Davis, 
    298 S.W.2d 928
    , 932 (Tex.
    Civ. App.—Dallas 1957, no writ) (deed by insane person is voidable). By enacting original
    § 82.065(b), the legislature added barratry as a reason that makes a contract voidable.
    b.    Original § 82.065(b) is not purely defensive
    We agree with the Clients that original § 82.065(b) is not purely defensive but also
    entitles a client to sue to avoid a barratrous contingency-fee agreement.      By saying that the
    contract is voidable “by the client,” the legislature plainly meant that the client may act to have
    the contract voided. That is, the client may sue to have a court declare the contract voided and
    canceled. Nothing in the statute restricts this plain meaning. Cf. In re Myers, No. 07-06-0050-
    CV, 
    2006 WL 305033
    , at *2 (Tex. App.—Amarillo Feb. 9, 2006, orig. proceeding) (noting that
    rescission can be asserted either defensively or offensively).
    By providing that barratrous contracts are voidable by the client, the legislature plainly
    intended that an affected client can act to cancel the agreement if necessary. We conclude that in
    cases brought under original § 82.065(b), the client may sue to avoid a barratrous contingency-
    fee agreement.
    c.    Original § 82.065(b) also authorizes the remedy of rescission and
    restitution.
    The next question is whether the Clients are entitled to a monetary remedy under original
    § 82.065(b). Weighing against the Clients is the fact that the legislature did not expressly
    mention such a remedy in the statute. That fact contrasts with the legislature’s approach in other
    contexts. For example, the Texas Deceptive Trade Practices Act (DTPA) expressly allows a
    prevailing consumer to obtain orders restoring consideration acquired in violation of the DTPA.
    See TEX. BUS. & COM. CODE ANN. § 17.50(b)(3) (West 2011). Likewise, the Texas Property
    Code permits certain purchasers “to cancel and rescind” executory contracts and recover a “full
    –10–
    refund” of amounts paid under certain circumstances.                                             E.g., TEX. PROP. CODE ANN.
    §§ 5.069(d)(2), 5.070(b)(2) (West 2014).
    Moreover, the San Antonio Court of Appeals has opined that § 82.065(b) does not allow
    a plaintiff to avoid a barratrous contingency-fee agreement after the attorney has performed his
    legal services. See In re Estate of Arizola, 
    401 S.W.3d 664
    (Tex. App.—San Antonio 2013, pet.
    denied). 4 After a traffic accident left three people dead and one person severely injured, a
    probate court approved the employment of certain attorneys by the administrator for the estate of
    one of the decedents. 
    Id. at 667.
    That decedent’s father, who was not the administrator, later
    moved to set aside the contingent-fee agreement based on barratry. 
    Id. at 668–69.
    The probate
    court denied that motion, and the movant appealed. The court of appeals rejected the father’s
    argument for three reasons: (1) it was inadequately briefed, (2) the father was not the client, and
    (3) the attorneys had fully performed the contingent-fee agreement before the movant filed his
    motion to set aside. 
    Id. at 671–72.
    On the last point, the court of appeals explained as follows:
    The client may void a contingent fee contract that violates section 82.065 by
    expressing his intent to do so before the attorney has fully or substantially
    performed. . . . After the attorney has fully performed the contract, however, the
    client is estopped from voiding the contract.
    
    Id. Although the
    Estate of Arizola case supports appellees’ position, it does so without analyzing
    § 82.065(b)’s language. Moreover, that court’s discussion of § 82.065(b) follows its holding that
    the father waived the issue by failing to brief it. 
    Id. at 671.
    Accordingly, Arizola’s persuasive
    value is limited. 5
    4
    Although the court cited the version of § 82.065(b) in effect from 2011 to 
    2013, 401 S.W.3d at 671
    , the court’s statement of the facts
    makes it appear that any barratry must have occurred in or before 2010, so the original version of § 82.065(b) should have applied. The 2011
    amendments to § 82.065(b), however, merely expanded that provision’s scope to encompass all contracts for legal services, rather than only
    contingency-fee contracts, and so those amendments did not affect the court’s analysis.
    5
    The other decisions about § 82.065 that we have found—most of which involve the statute of frauds found in § 82.065(a) rather than
    § 82.065(b)—are not instructive. See Cobb v. Stern, Miller & Higdon, 
    305 S.W.3d 36
    , 43 (Tex. App.—Houston [1st Dist.] 2009, no pet.) (client
    successfully rescinded barratrous contract under § 82.065(b) a month after signing it, thereby negating client’s personal-jurisdiction contacts with
    Texas); see also Tillery & Tillery v. Zurich Ins. Co., 
    54 S.W.3d 356
    , 359 (Tex. App.—Dallas 2001, pet. denied) (client successfully rescinded
    contingent-fee contract that did not satisfy § 82.065(a)); Sanes v. Clark, 
    25 S.W.3d 800
    , 804–05 (Tex. App.—Waco 2000, pet. denied) (client
    successfully rescinded contingent-fee contract that did not satisfy § 82.065(a)); Enochs v. Brown, 
    872 S.W.2d 312
    , 316–19 (Tex. App.—Austin
    –11–
    On the other hand, rescission and restitution is a well-established remedy when a party
    sets aside a voidable contract. 6 See Gentry v. Squires Constr., Inc., 
    188 S.W.3d 396
    , 410 (Tex.
    App.—Dallas 2006, no pet.) (“Rescission is an equitable remedy that operates to extinguish a
    contract that is legally valid but must be set aside due to fraud, mistake, or for some other reason
    to avoid unjust enrichment.”); Lowrey v. Univ. of Tex. Med. Branch at Galveston, 
    837 S.W.2d 171
    , 174 (Tex. App.—El Paso 1992, writ denied) (same); see also Holt v. Robertson, No. 07-06-
    0220-CV, 
    2008 WL 2130420
    , at *5 (Tex. App.—Amarillo May 21, 2008, pet. denied) (mem.
    op.) (“After performance of the contract, the transaction remains voidable, and rescission
    remains a viable option, so long as the status quo of the parties prior to entry of the contract can
    be restored.”); Neill v. Pure Oil Co., 
    101 S.W.2d 402
    , 404 (Tex. Civ. App.—Dallas 1937, writ
    ref’d) (voidable deed is effective “until set aside in a suit for rescission or cancellation”). That
    is, a suit to set aside a contract is one for rescission and cancellation of the contract. See 
    Lowrey, 837 S.W.2d at 174
    (citing Bullock v. Tex. Emp’rs Ins. Ass’n, 
    254 S.W.2d 554
    , 556 (Tex. Civ.
    App.—Dallas 1952, writ ref’d); Tex. Emp’rs Ins. Ass’n v. Kennedy, 
    143 S.W.2d 583
    , 585–86
    (Tex. 1940)).
    “[W]e presume that the Legislature acted with knowledge of the common law and court
    decisions.” Phillips v. Beaber, 
    995 S.W.2d 655
    , 658 (Tex. 1999). Moreover, we interpret a
    statute to abrogate common-law principles only when the statute’s express terms or necessary
    implications clearly indicate such an intent by the legislature. Bruce v. Jim Walters Homes, Inc.,
    
    943 S.W.2d 121
    , 122–23 (Tex. App.—San Antonio 1997, writ denied). Because rescission and
    restitution is an established common-law remedy for a voidable contract, we conclude that the
    1994, no writ) (client could not rescind fully performed contingent-fee contract that did not fully satisfy § 82.065(a)), disapproved in part on
    other grounds by Roberts v. Williamson, 
    111 S.W.3d 113
    , 120 (Tex. 2003).
    6
    As previously noted, a voidable contract is one that is valid and enforceable unless and until a party entitled to avoid it, for reasons such as
    fraud, mistake, or lack of mental capacity, takes steps to disaffirm it. See Cole, 
    2015 WL 3485269
    , at *2; see also Part III.D, infra, for additional
    discussion of rescission and restitution.
    –12–
    legislature intended for that remedy to be available when it made barratrous contingency-fee
    contracts voidable under original § 82.065(b).
    The next question is whether appellees’ full performance of the fee agreements bars the
    Clients’ claims for rescission under original § 82.065(b), as the court held in Estate of Arizola.
    In answering this question, we find guidance in two recent Texas Supreme Court cases, Cruz v.
    Andrews Restoration, Inc., 
    364 S.W.3d 817
    (Tex. 2012), and Morton v. Nguyen, 
    412 S.W.3d 506
    (Tex. 2013). In both cases, the supreme court interpreted statutes that make rescission-like
    remedies available, and the court relied heavily on common-law rescission and restitution as
    explained in the Restatement (Third) of Restitution and Unjust Enrichment. These cases help us
    conclude that appellees’ full performance of the fee agreements does not bar the Clients’ claims
    for rescission under original § 82.065(b).
    In Cruz, a contractor sued a homeowner, Cruz, for breach of contract, and Cruz
    counterclaimed under the 
    DTPA. 364 S.W.3d at 821
    .      Although Cruz obtained a partial
    summary judgment on DTPA liability, the jury returned a zero damages finding. 
    Id. The court
    of appeals and supreme court affirmed the resulting judgment awarding Cruz nothing on his
    DTPA claim. A principal question on appeal was whether Cruz was entitled to the DTPA
    remedy of restoration of the consideration that had been paid to the contractor. 
    Id. at 824–27.
    To answer this question, the supreme court turned to the common law of rescission and
    restitution. See 
    id. The supreme
    court observed that under the common law, a rescission
    claimant generally must return the parties to the status quo ante by returning whatever the
    claimant has received from the defendant—what the court called “counter-restitution.” 
    Id. at 825–26.
    However, a defendant’s wrongdoing may excuse the claimant from this obligation
    when counter-restitution is not feasible.    
    Id. at 826.
      The supreme court concluded these
    principles apply to the DTPA remedy of restoration of consideration, but the claimant need not
    –13–
    make or tender counter-restitution as a prerequisite to relief as long as the award to the claimant
    can be reduced accordingly. 
    Id. at 826–27.
    Because Cruz had not deducted the value he
    received from the contractor, or proved how much he rather than his insurer had paid the
    contractor, the court held that Cruz had failed to prove conclusively that he was entitled to the
    sum he claimed as restoration of consideration under the DTPA. 
    Id. at 827.
    Morton involved a property code provision giving certain real estate buyers the right to
    cancel the contract and receive a full refund of payments 
    made. 412 S.W.3d at 507
    –08. The
    question presented was whether the buyer seeking such a remedy is obliged to make counter-
    restitution for the value of his occupation of the property. See 
    id. at 510.
    Relying on Cruz and
    the Restatement, the supreme court held that a prevailing buyer must make such counter-
    restitution. 
    Id. at 510–12.
    To summarize, then, rescission is generally limited to cases in which counter-restitution
    by the claimant—that is, the return to the defendant of whatever the claimant received in the
    transaction—will restore the defendant to the status quo ante. See 
    Cruz, 364 S.W.3d at 825
    –26
    (relying on RESTATEMENT (THIRD)      OF   RESTITUTION   AND   UNJUST ENRICHMENT § 54 (AM. LAW
    INST. 2011)). However, as stated in Cruz, “rescission is not a one-way street. It requires a
    mutual restoration and accounting, in which each party restores property received from the
    other.” 
    Id. at 825.
    Cases show that counter-restitution can be effectuated in various ways, even after full
    performance of a contract. This is exemplified by Sudderth v. Howard, 
    560 S.W.2d 511
    (Tex.
    Civ. App.—Amarillo 1977, writ ref’d n.r.e.). The Sudderths executed documents purporting to
    sell land to the Howards for $17,400, and they then successfully sued to rescind the deed on the
    ground that the transaction was in substance a forbidden home-equity loan. 
    Id. at 513–14.
    The
    trial court’s judgment rescinded the deed, but it also awarded the Howards a recovery of $17,400
    –14–
    plus interest. 
    Id. at 514.
    The Sudderths complained on appeal that this recovery was not
    supported by the pleadings, but the court of civil appeals rejected the argument because the duty
    to return benefits was inherent in the Sudderths’ claim for rescission. 
    Id. at 516.
    The court
    wrote, “[O]ne seeking cancellation of an instrument cannot repudiate it and retain the benefits
    received therefrom; he should offer or tender a restoration and the court can accomplish that
    result by its judgment. . . . By its judgment rendered here, the court did so.” 
    Id. (citation omitted).
    Thus, having reviewed the common law of rescission, we find no absolute rule that a
    defendant’s full performance of a contract, without more, is a defense to an otherwise proper
    claim for avoidance and rescission of a contract. See Holt, 
    2008 WL 2130420
    , at *5; see also
    City of Corpus Christi v. S.S. Smith & Sons Masonry, Inc., 
    736 S.W.2d 247
    , 251 (Tex. App.—
    Corpus Christi 1987, writ denied) (“[Rescission] is also not a remedy for a completed contract in
    the absence of fraud.” (emphasis added)).
    Finally, nothing in § 54 of the new Restatement, relied on heavily by the supreme court in
    Cruz, indicates that a defendant’s full performance of a voidable contract, without more, defeats
    a claim for rescission and restitution. See generally RESTATEMENT (THIRD) OF RESTITUTION AND
    UNJUST ENRICHMENT § 54 (AM. LAW INST. 2011).              Rather, the relevant considerations are
    whether the claimant can make counter-restitution of benefits received and, if not, whether the
    defendant’s conduct is such that it is appropriate for it to bear an uncompensated loss. See
    generally 
    Cruz, 364 S.W.3d at 826
    . Here, appellees did not undertake to prove conclusively that
    it is impossible for the Clients to make acceptable counter-restitution.
    For the foregoing reasons, we conclude that original § 82.065(b) authorizes the Clients to
    sue to avoid contingency-fee agreements procured by barratry and seek the remedy of rescission
    and restitution. By reaching this conclusion, we disagree with the Clients to the extent they
    –15–
    contend that original § 82.065(b) entitles them to total fee forfeiture—that is, the automatic
    recovery of all fees paid to appellees, with no counter-restitution at all—rather than traditional
    rescission and restitution. As we discuss more fully in Part III.D of this opinion, rescission is not
    forfeiture. We further conclude that the bare fact that the parties have fully performed an
    agreement that is voidable under original § 82.065(b) is not a bar to a claim for rescission and
    restitution. 7 To the extent it concludes to the contrary, we disagree with In re Estate of Arizola,
    
    401 S.W.3d 664
    (Tex. App.—San Antonio 2013, pet. denied).
    (1)        Harmonizing original § 82.065(b) with subsequent enactments
    We disagree with appellees’ suggestion that construing original § 82.065(b) to authorize
    rescission renders the legislature’s 2011 adoption of § 82.0651(a) a superfluous act. Unlike
    original § 82.065(b), § 82.0651(a) expressly authorizes clients to recover not only fees and
    expenses paid under a barratrous contract to any person who committed barratry, but also actual
    damages caused by the barratry and reasonable and necessary attorneys’ fees incurred in
    prosecuting the barratry action. Act of May 5, 2011, 82d Leg., R.S., ch. 94, § 2, 2011 Tex. Sess.
    Law Serv. 535, 535–36 (amended 2013) (current version at TEX. GOV’T CODE ANN. § 82.0651
    (West Supp. 2014)).               Moreover, § 82.0651(b)(1) and amended § 82.065(b) together clarify
    quantum-meruit protection for innocent lawyers working on the case.
    By adding new remedies such as actual damages and attorneys’ fees, the legislature
    changed existing law when it adopted § 82.0651. Accordingly, our interpretation of original
    § 82.065(b) does not make the adoption of § 82.0651 a meaningless act.
    7
    But performance with full knowledge of the facts making an agreement voidable can demonstrate ratification of a voidable agreement
    under some circumstances. We discuss ratification in Part III.C, infra.
    –16–
    (2)   Legislative history
    We also reject appellees’ reliance on certain legislative history regarding the 2011
    amendments. A bill analysis of those amendments contained the following statements under the
    heading “Author’s/Sponsor’s Statement of Intent”:
    Under Section 38.12, Penal Code, “barratry” is generally defined as the illegal
    solicitation of professional employment. The Texas Disciplinary Rules of
    Professional Conduct of the State Bar of Texas prohibit these solicitations as well.
    Adding a civil enforcement option would help curtail this practice.
    S.B. 1716 adds a cause of action for a client who has been unlawfully solicited to
    void the contract and recover any actual damages and any fees and expenses paid.
    Sen. Comm. on State Affairs, Bill Analysis, Tex. S.B. 1716, 82d Leg., R.S. (2011). This
    statement does not reflect any analysis of original § 82.065, which the legislature had adopted
    over twenty years earlier. One session of the legislature does not have the power to construe the
    acts or declare the intent of a past session. Rowan Oil Co. v. Tex. Emp’t Comm’n, 
    263 S.W.2d 140
    , 143 (Tex. 1953).
    Moreover, the bill analysis speaks conjunctively when it says that the statute “adds a
    cause of action for a client who has been unlawfully solicited to void the contract and recover
    any actual damages and any fees and expenses paid.” (Emphases added.) That is, § 82.0651
    provides a cause of action with additional remedies not available under the prior law. The
    client’s ability to void the barratrous contingent-fee contract was not new, but the remedies of
    actual damages and attorneys’ fees were added to the already-existing cancellation action.
    For these reasons, the legislative history relied on by appellees does not support
    construing original § 82.065(b) to exclude the remedy of rescission and restitution.
    We conclude that the Clients pleaded a viable claim under original § 82.065(b) to void
    the fee agreements and obtain rescission and restitution.
    –17–
    4.      Affirmative defenses
    a.      Limitations
    Appellees argued that any barratry claim the Clients possessed accrued in the summer of
    2010 and was barred by the two-year statute of limitations when the Clients sued in 2013. See
    TEX. CIV. PRAC. & REM. CODE ANN. § 16.003(a) (West Supp. 2014). The Clients, on the other
    hand, argue that a four-year statute of limitations and the discovery rule apply. We conclude that
    the four-year statute applies and thus do not reach the discovery-rule issue.
    With some exceptions not relevant here, a two-year limitations period applies to suits “for
    trespass for injury to the estate or to the property of another, conversion of personal property,
    taking or detaining the personal property of another, personal injury, forcible entry and detainer,
    and forcible detainer.” 
    Id. Under the
    residual statute of limitations, a four-year period applies to
    “[e]very action for which there is no express limitations period.” 
    Id. § 16.051
    (West 2015).
    A statutory claim to avoid and rescind an agreement for barratry does not fall into any of
    the categories of claims governed by the two-year statute of limitations found in § 16.003(a).
    Nor is such a claim identified in another statute of limitations. We thus conclude that a claim
    under original Government Code § 82.065(b) is a claim not covered by another express
    limitations period, and thus the four-year residual statute of limitations applies to the Clients’
    claims under original § 82.065(b). Cf. 
    Lowrey, 837 S.W.2d at 174
    (holding that four-year
    residual statute of limitations applied to claim for common-law rescission).
    Because the applicable limitations period is four years, we conclude that appellees did not
    conclusively prove that limitations bars the Clients’ claims under original § 82.065(b).
    b.      Ratification
    Appellees also argued that ratification barred any barratry claim because the Clients
    approved the underlying settlement. The Clients contend that ratification does not apply because
    –18–
    they did not know of the alleged barratry when they authorized the settlement and fee payment.
    We agree with the Clients that appellees did not conclusively prove ratification.
    Ratification is an affirmative defense. Italian Cowboy Partners, Ltd. v. Prudential Ins.
    Co. of Am., 
    341 S.W.3d 323
    , 344 (Tex. 2011). Its elements are (1) approval by act, word, or
    conduct, (2) with full knowledge of the facts of the earlier act, and (3) with the intent to validate
    the earlier act. White v. Harrison, 
    390 S.W.3d 666
    , 672 (Tex. App.—Dallas 2012, no pet.). “A
    party ratifies an agreement when—after learning all of the material facts—he confirms or adopts
    an earlier act that did not then legally bind him and that he could have repudiated.” 
    Id. The Clients
    argue there is no evidence that they had full knowledge of appellees’
    allegedly wrongful conduct before appellees finished their work on the underlying case, and
    appellees thus failed to conclusively prove the essential full-knowledge element of their
    ratification defense. Appellees counter that even if the Clients did not know that Heidelberg was
    secretly working for the other appellees when he solicited them, the Clients were still “aware of
    the facts they allege to constitute barratry by the Lawyers.” But appellees do not explain what
    these “facts” were, nor do they provide any record citations showing that the Clients knew
    appellees had committed barratry even if they did not know about Heidelberg’s deceit. At oral
    argument, appellees explained that the Clients knew that Heidelberg had solicited them on the
    other appellees’ behalf and that this was sufficient knowledge. We disagree.
    Ratification requires full knowledge of the facts of the earlier act allegedly ratified. See
    
    id. Although the
    Clients obviously knew that Heidelberg had recommended appellees, there is
    no conclusive proof that they knew any of the additional facts that would make his
    recommendation a barratrous solicitation, such as Heidelberg’s financial interest in soliciting the
    Clients for the other appellees.       Furthermore, for summary-judgment purposes appellees
    accepted as true the allegations in the Clients’ live petition, which state that the Clients “were not
    –19–
    aware that the Lyon Defendants had solicited their representation and paid Heidelberg to solicit
    their representation for the Lyon Defendants . . . until shortly before the filing of this lawsuit.”
    Moreover, there is no evidence that the Clients committed any conduct manifesting
    approval of the alleged barratry after they learned all the pertinent facts. They instead sued
    appellees shortly after learning of the alleged barratry.
    In sum, appellees did not conclusively prove ratification’s “full knowledge” element. We
    thus conclude that ratification does not support appellees’ summary judgment.
    5.      Application of original § 82.0651 to the facts
    In their third issue, the Clients argue that original § 82.0651 also supports their barratry
    claims. Appellees contend that § 82.0651 was enacted after the alleged barratry occurred and
    thus as a matter of law does not apply. We agree with appellees.
    As stated above, § 82.0651(a) was enacted in 2011 and provided as follows from
    September 1, 2011, through August 31, 2013:
    A client may bring an action to void a contract for legal services that was
    procured as a result of conduct violating the laws of this state or the Texas
    Disciplinary Rules of Professional Conduct of the State Bar of Texas regarding
    barratry by attorneys or other persons.
    Act of May 5, 2011, 82d Leg., R.S., ch. 94, § 2, 2011 Tex. Sess. Law Serv. 535, 535–36
    (amended 2013) (current version at TEX. GOV’T CODE ANN. § 82.0651 (West Supp. 2014)).
    Original § 82.0651(b) expressly authorizes a client who prevails in an action under subsection (a)
    to recover all fees and expenses paid under the barratrous contract to the person who committed
    barratry, plus other remedies such as actual damages and attorney’s fees. 
    Id. Original §
    82.0651 does not apply to conduct that occurred before September 1, 2011.
    
    Id. §§ 3–4,
    2011 Tex. Sess. Law Serv. at 536. The Clients nonetheless argue that they have a
    claim under original § 82.0651 because (1) appellees committed conduct after August 31, 2011
    that allegedly violated Texas’s barratry laws, or (2) the November 2011 settlement agreements in
    –20–
    the underlying pipeline-explosion case constituted “contracts for legal services” within the
    meaning of the original version of § 82.0651(a). We reject both arguments.
    First, the Clients argue that they have a viable § 82.0651 claim because they alleged that
    appellees violated several rules of professional conduct regarding barratry after August 31, 2011:
    •       appellees continued their employment by the Clients, procured through
    barratry, in violation of Rule 7.06;
    •       appellees committed criminal barratry, in violation of Rule 8.04(a)(2);
    •       appellees committed barratry, in violation of Rule 8.04(a)(9); and
    •       appellees charged for and collected a fee for professional employment
    obtained in violation of the barratry rules, in violation of Rule 7.03(d).
    But the cause of action created by original § 82.0651 requires a client to prove more than that the
    defendant violated the laws or disciplinary rules regarding barratry after August 31, 2011. The
    client must also prove that the lawyer “procured” a legal-services contract due to such conduct.
    Here, the Clients do not support any of the four alleged rule violations listed above with factual
    allegations showing that appellees procured a contract for legal services by barratry committed
    after August 31, 2011. Thus, the Clients’ first argument fails.
    The Clients argue alternatively that the November 2011 settlement agreements in the
    underlying case were “contracts for legal services” procured by barratry within the meaning of
    original § 82.0651(a). The settlement agreements themselves are not in the record. Rather, the
    Clients filed affidavits by Neese and Hooper stating the following facts:
    •       the pipeline-explosion case settled at mediation on or about September 20,
    2011; and
    •       on or about November 1, 2011, Neese and Hooper were required to sign
    documents whereby Lyon, Wolf, and the law firm charged them attorneys’
    fees and expenses and required them to state that they were satisfied with
    the results of the distribution of the settlement proceeds, including the
    payment of attorneys’ fees.
    This is the only evidence the Clients provided regarding the settlement agreements.
    –21–
    The question is whether those documents constitute contracts for legal services
    “procured” by barratry as required by original § 82.0651(a). We conclude they do not. The
    plain meaning of the statutory term “contract for legal services” is a contract whereby an
    attorney agrees to provide legal services to a client for a fee or other consideration. Cf. Contract
    for services, BLACK’S LAW DICTIONARY (10th ed. 2014) (defining “contract for services” as “[a]
    contract for a job undertaken by an independent contractor, as opposed to an employee”). The
    November 2011 documents, as described by Neese and Hooper, involved no promises by
    appellees to provide legal services. Rather, they addressed the division of settlement proceeds
    and the payment of fees and expenses for legal services already performed. As such, the
    November 2011 documents were not contracts for legal services within the meaning of original
    § 82.0651(a).
    The trial court properly granted summary judgment against the Clients on their barratry
    claims based on the 2011 version of § 82.0651. We thus reject the Clients’ third appellate issue.
    We conclude that the trial court erred by granting summary judgment on the Clients’
    barratry claims based on the original version of Government Code § 82.065. The trial court did
    not err by granting summary judgment on the Clients’ barratry claims based on the original
    version of § 82.0651.
    B.         Breach of fiduciary duty
    In their fourth issue, the Clients urge that the trial court erred by summarily dismissing
    their fiduciary-duty claims. Appellees obtained summary judgment by arguing that an essential
    element of these claims was that appellees derived an “improper benefit” from their conduct, and
    that, as a matter of law, an agreed-upon and earned fee is not an improper benefit. 8
    8
    In the part of their summary-judgment motion addressing the Clients’ fiduciary-duty claims, appellees included a footnote in which they
    said, “Mr. Heidelberg is an investigator, not a lawyer. He was not a fiduciary, and Plaintiffs’ claim that he breached a fiduciary duty is
    groundless.” Appellees do not repeat this assertion in their appellate brief. We conclude that this footnote, which is devoid of citation to proof,
    –22–
    1.        Applicable law
    “The elements of a breach-of-fiduciary-duty claim are: (1) a fiduciary relationship existed
    between the plaintiff and defendant; (2) the defendant breached its fiduciary duty to the plaintiff;
    and (3) the defendant’s breach resulted in injury to the plaintiff or benefit to the defendant.”
    Anderton v. Cawley, 
    378 S.W.3d 38
    , 51 (Tex. App.—Dallas 2012, no pet.). An attorney owes
    his client a fiduciary duty as a matter of law, but the attorney–client relationship must first exist
    before a fiduciary duty arises. See Kiger v. Balestri, 
    376 S.W.3d 287
    , 290 (Tex. App.—Dallas
    2012, pet. denied).
    In the attorney–client context, a fiduciary-duty claim focuses on whether the attorney’s
    conduct involved his or her integrity and fidelity, and whether the attorney obtained an improper
    benefit from representing the client. Gibson v. Ellis, 
    126 S.W.3d 324
    , 330 (Tex. App.—Dallas
    2004, no pet.). An attorney thus commits a fiduciary breach when he or she benefits improperly
    from the attorney–client relationship by, among other things, subordinating his or her client’s
    interests to his or her own, retaining the client’s funds, engaging in self-dealing, improperly
    using client confidences, failing to disclose conflicts of interest, or making misrepresentations to
    achieve those ends. 
    Id. An attorney
    also owes a client a duty to inform the client of matters
    material to and within the scope of the representation. Joe v. Two Thirty Nine Joint Venture, 
    145 S.W.3d 150
    , 159–60 (Tex. 2004); see also Hernandez v. Sovereign Cherokee Nation Tejas, 
    343 S.W.3d 162
    , 175 (Tex. App.—Dallas 2011, pet. denied) (attorney’s duty to make a full and
    accurate confession of all fiduciary activities, transactions, profits, and mistakes).
    2.        Application of the law to the facts
    Our first step is to identify which element of the claim appellees attacked. Near the
    beginning of the relevant section of their motion, appellees stated, “To raise even the possibility
    was not sufficient to raise an independent ground for summary judgment on Heidelberg’s behalf, and we express no opinion about whether
    Heidelberg was a fiduciary to the Clients. For purposes of this appeal, we assume that he was.
    –23–
    of fee forfeiture, Plaintiffs must first show a breach of fiduciary duty. . . . They cannot. Their
    fiduciary duty claim fails because Defendants did not receive an improper benefit.”                                                      The
    remainder of their argument focused on whether their fee was an improper benefit. We conclude
    that appellees attacked only the third element, which requires a plaintiff to show either (i)
    damages to himself or (ii) a benefit to the defendant. We therefore do not address the merits of
    the second element, which is the element of breach.
    The question then is whether appellees conclusively negated the third element of the
    Clients’ fiduciary-duty claims. In this regard, the Clients argue that they are entitled to pursue
    the remedy of fee forfeiture for appellees’ fiduciary breaches under Burrow v. Arce, 
    997 S.W.2d 229
    (Tex. 1999). 9 In Burrow, the plaintiffs sued their former attorneys for breach of fiduciary
    duty and other causes of action. 
    Id. at 232.
    Factually, the plaintiffs alleged, among other things,
    that the defendant attorneys had improperly solicited their business through a “lay intermediary.”
    
    Id. The supreme
    court held that fee forfeiture was a potential remedy for breach of fiduciary
    duty, even in the absence of any actual damages to the clients. 
    Id. at 240.
    Given the posture of the case, we must accept as true the Clients’ claims that (i) appellees
    breached their fiduciary duties by failing to disclose that they had obtained the right to represent
    the Clients through a deceptive barratry scheme and (ii) appellees benefited from their fiduciary
    breaches by collecting their fees in the underlying case. If these allegations are true, then under
    Burrow the Clients may be entitled to recover some or all of those fees through fee forfeiture.
    We thus conclude that appellees did not conclusively negate the third element of the Clients’
    fiduciary-duty claims.
    9
    The Clients also observe that appellees did not address whether appellees breached their duty of full disclosure by not disclosing their
    alleged prior fraud on the Clients. That point, however, addresses the breach element, which appellees did not attack. We accordingly do not
    discuss the Clients’ argument on the breach element.
    –24–
    Appellees argue that they did not receive an improper benefit because they earned the
    fees and because the Clients do not complain about the quality of the legal services or the results
    obtained in the underlying case. For support, they rely on cases holding that legal fees received
    for negligently rendered legal services, without more, are not an improper benefit that transforms
    a negligence claim into a fiduciary-duty claim. See Reneker v. Offill, No. 3:08-CV-1394-D,
    
    2009 WL 804134
    , at *10 (N.D. Tex. Mar. 26, 2009); Vara v. Williams, No. 03-10-00861-CV,
    
    2013 WL 1315035
    , at *4 n.4 (Tex. App.—Austin Mar. 28, 2013, no pet.) (mem. op.). This case,
    however, is distinguishable from Reneker and Vara because the Clients’ fiduciary-duty claims
    are not founded on negligently provided legal services, but rather on appellees’ alleged failure to
    disclose their own alleged prior misconduct.
    The trial court erred by granting summary judgment on the Clients’ fiduciary-duty
    claims. We resolve the Clients’ fourth issue in their favor.
    C.         Fraud
    In their fifth issue, the Clients urge that the trial court erred by granting summary
    judgment on their fraud claims. Appellees asserted two grounds for summary judgment on those
    claims: (i) the Clients ratified the alleged fraud and (ii) the Clients have no recoverable
    damages. 10
    On appeal, the Clients address only the second ground for summary judgment. Because
    the Clients do not address an independent ground for summary judgment on their fraud claims,
    we must affirm the judgment as to those claims. Adams v. First Nat’l Bank of Bells/Savoy, 
    154 S.W.3d 859
    , 875 (Tex. App.—Dallas 2005, no pet.) (“[A] reviewing court will affirm the
    10
    Appellees ask us to hold that the Clients have waived their fifth, ninth, and eleventh issues because the Clients often cite the evidence
    attached to their response to appellees’ first amended summary-judgment motion rather than the evidence attached to their response to appellees’
    second amended summary-judgment motion. But the Clients attached essentially the same evidence, including identical affidavits, to both
    responses, and the Clients’ citations to the earlier response have not unduly hampered our ability to find the corresponding evidence attached to
    the later response. We thus reject appellees’ argument that the Clients have waived their issues through deficient briefing.
    –25–
    summary judgment as to a particular claim if an appellant does not present argument challenging
    all grounds on which the summary judgment could have been granted.”). We therefore reject the
    Clients’ fifth issue.
    D.      Rescission
    The Clients pleaded an “[a]lternative claim for rescission,” alleging that they were
    entitled to rescind the contingency-fee agreements as a remedy for appellees’ wrongful conduct
    such as breach of fiduciary duty, barratry, and fraud. Specifically, they sought the return of all
    the fees and expenses appellees received, plus the Clients’ attorneys’ fees incurred in prosecuting
    their suit against appellees. Appellees argued that rescission is unavailable to one who retains
    the benefits of the contract to be rescinded. In their sixth issue, the Clients argue, as they did in
    their summary-judgment response, that the trial court can, as part of a restitution remedy,
    determine the value of appellees’ services that appellees will retain for providing those services
    to the Clients. We agree.
    “Rescission” is a common shorthand for the composite remedy of rescission and
    restitution. Cruz v. Andrews Restoration, Inc., 
    364 S.W.3d 817
    , 825 (Tex. 2012). Rescission is
    an equitable remedy that operates to extinguish a contract that is legally valid, but must be set
    aside because of fraud, mistake, or some other reason to avoid unjust enrichment. Gentry v.
    Squires Constr., Inc., 
    188 S.W.3d 396
    , 410 (Tex. App.—Dallas 2006, no pet.).
    In Cruz, the Texas Supreme Court relied heavily on the Restatement (Third) of
    Restitution and Unjust Enrichment in explaining the law of 
    rescission. 364 S.W.3d at 825
    –27.
    The court held that rescission is “generally limited to cases in which counter-restitution by the
    claimant will restore the defendant to the status quo ante.” 
    Id. at 826
    (citing RESTATEMENT
    (THIRD)   OF   RESTITUTION   AND   UNJUST ENRICHMENT § 54(3)).        The court also held that a
    defendant’s wrongdoing may factor into whether it should bear an uncompensated loss in
    –26–
    situations in which the claimant cannot restore the defendant to the status quo ante, but a
    defendant’s wrongdoing does not excuse the claimant from counter-restitution when counter-
    restitution is feasible. 
    Id. (citing RESTATEMENT
    § 54(3)(b) & cmt. c). Finally, incorporating
    Restatement principles into its interpretation of the rescission remedy available under the DTPA,
    the court held that a DTPA claimant does not have to make restitution or a tender of restitution to
    the defendant before seeking the remedy “as long as the affirmative relief to the consumer can be
    reduced by (or made subject to) the consumer’s reciprocal obligation of restitution.” 
    Id. at 827
    (citing RESTATEMENT § 54(5)); see also Morton v. Nguyen, 
    412 S.W.3d 506
    , 511 (Tex. 2013)
    (incorporating RESTATEMENT § 54(5) into rescission remedies available under the Property
    Code); RESTATEMENT § 54 cmt. g (“Rescission is not forfeiture . . . .”).
    Based on Cruz and Morton’s reliance on § 54(5), we conclude that Texas’s common law
    of rescission does not require a claimant to make restitution or a tender of restitution as a
    prerequisite to relief as long as any affirmative relief to the claimant can be reduced by or made
    subject to the claimant’s reciprocal obligation of restitution.
    Appellees urge that rescission is unavailable because the Clients are retaining the
    settlement funds they recovered in the underlying case, making restoration of the status quo ante
    impossible. The Clients respond that appellees misunderstand the rescission requirement that the
    claimant not retain the benefits of the transaction. According to the Clients, if they are retaining
    any benefits for purposes of rescission analysis, those benefits are appellees’ services, not the
    settlement proceeds the Clients have received. We agree with the Clients. For rescission, the
    claimant generally must return the defendant to the status quo ante. See 
    Cruz, 364 S.W.3d at 826
    . We find no authority that a claimant in the Clients’ position must return benefits it received
    from third parties not before the court as a prerequisite for rescission.
    –27–
    The Clients argue that they are excused from restoring benefits to appellees because the
    Clients’ inability to restore them was caused by appellees’ own wrongdoing. They alternatively
    argue that the trial court can effect an equitable restoration of benefits in conjunction with an
    award of rescission, if the court finds that appellees’ services had value.
    We conclude that, under Cruz and the Restatement, a rescission claimant must either
    (i) make counter-restitution of benefits to the defendant or (ii) show that the defendant’s
    wrongdoing is such that the claimant’s inability to make counter-restitution should be excused.
    See 
    id. (citing RESTATEMENT
    § 54(3)(b) & cmt. c). The Cruz court further held that a claimant
    can make counter-restitution for services received by deducting the value of the services from the
    ultimate rescission award. 
    Id. at 827
    (rescission DTPA award was erroneous because there was
    no deduction for the value the claimant received under the contracts).
    On traditional summary judgment, then, appellees had to conclusively prove that the
    Clients could not make counter-restitution of benefits received from appellees and that appellees’
    wrongdoing was not sufficient to excuse counter-restitution. Because they did not attempt to
    prove these matters, appellees did not carry either burden. The trial court thus erred by granting
    summary judgment that the Clients are not entitled to a rescission remedy, and we resolve the
    Clients’ sixth issue in their favor.
    E.      Money had and received
    In their seventh issue, the Clients argue that the trial court erred by summarily dismissing
    their money-had-and-received claims.
    1.      Timeliness of appellees’ “supplement”
    The Clients added their money-had-and-received claims by amending their pleadings
    seven days before the summary-judgment hearing. Appellees addressed these new claims in a
    “supplement” filed five days before the hearing. The Clients filed a special exception and
    –28–
    response in which they complained that they had not received twenty-one days’ notice of the
    hearing as to appellees’ supplement. The special exception was discussed at the hearing, and the
    trial court said that it would hear the supplement. It granted summary judgment on the money-
    had-and-received claims along with the rest of the Clients’ claims.
    The Clients argue that this summary judgment was improper because appellees’
    summary-judgment motion did not address the Clients’ money-had-and-received claims and
    because appellees addressed those claims only in a supplement filed within twenty-one days of
    the hearing. The Clients preserved their complaint about the timeliness of the supplement via
    their special exception. See Luna v. Estate of Rodriguez, 
    906 S.W.2d 576
    , 582 (Tex. App.—
    Austin 1995, no writ) (nonmovant must object to hearing of summary-judgment motion on less
    than twenty-one days’ notice). But on appeal, the Clients present no argument or authorities that
    the trial court erred by implicitly overruling their special exception or that they were harmed by
    the ruling. We thus reject the Clients’ inadequate-notice argument. See TEX. R. APP. P. 38.1(i)
    (requiring argument, supported by authorities and record citations); see also In re Estate of Snow,
    No. 12-11-00055-CV, 
    2012 WL 3793273
    , at *2–3 (Tex. App.—Tyler Aug. 30, 2012, no pet.)
    (mem. op.) (affirming trial court’s decision to shorten notice of summary-judgment hearing, in
    part because nonmovants failed to show they were harmed by the ruling).
    2.      Analysis of the merits
    The Clients also argue that the trial court erred on the merits. Appellees obtained
    summary judgment on the Clients’ money-had-and-received claims by arguing that the claim is
    not viable when a contract covers the transaction in question. The Clients argue that their claims
    are viable because the barratrous fee agreements were void as against public policy.
    We disagree with the Clients’ position. The law treats void and voidable instruments
    differently. When a party seeks to recover money paid under a void instrument, its remedy is not
    –29–
    rescission, but a recovery in quantum valebant for money had and received. Country Cupboard,
    Inc. v. Texstar Corp., 
    570 S.W.2d 70
    , 74 (Tex. Civ. App.—Dallas 1978, writ ref’d n.r.e.). If the
    instrument is voidable rather than void, the party must sue for rescission and cannot sue for
    money had and received. 
    Id. Barratrous contracts
    were considered void before the adoption of
    § 82.065(b). See Pelton v. McClaren Rubber Co., 
    120 S.W.2d 516
    , 517 (Tex. Civ. App.—Waco
    1938, writ ref’d) (claim-collector’s contract secured by personal solicitation in violation of
    criminal statute was “void and unenforceable”). But when it adopted § 82.065(b) in 1989, the
    legislature plainly declared that barratrous contingency-fee agreements were voidable, and it
    changed any contrary common-law rule. See City of Galveston v. State, 
    217 S.W.3d 466
    , 473
    (Tex. 2007) (“The Legislature, of course, may change the common law . . . .”). Accordingly, the
    Clients’ allegations, taken as true, show only that the fee agreements were voidable, not void,
    and do not support a cause of action for money had and received.
    For support, the Clients rely on Quintero v. Jim Walter Homes, Inc., 
    709 S.W.2d 225
    (Tex. App.—Corpus Christi 1985, writ ref’d n.r.e.). That case is distinguishable. In Quintero,
    the court held that an aggregate settlement agreement violating the disciplinary rules was void
    and 
    unenforceable. 709 S.W.2d at 229
    –30. But there is no indication in Quintero that the
    legislature had adopted a statute declaring aggregate settlement agreements to be voidable, as
    opposed to void. Here, a statute declares barratrous contingency-fee agreements to be voidable,
    and we must implement the legislature’s intent. Because the barratry alleged by the Clients
    would make the fee agreements voidable, not void, their claims for money had and received fail
    as a matter of law.
    We therefore reject the Clients’ seventh issue.
    –30–
    F.     Unjust enrichment
    In their eighth issue, the Clients argue that the trial court erred by summarily dismissing
    their unjust-enrichment claims because the fee agreements are allegedly void as against public
    policy. But, as we have just held, original § 82.065(b) makes barratrous fee agreements voidable
    rather than void. We thus reject the Clients’ eighth issue on appeal.
    G.     Legal malpractice
    In their ninth issue, the Clients argue that the trial court erroneously dismissed their
    malpractice claims. Appellees argued that (i) the Clients judicially admitted in a prior summary-
    judgment response that they had no malpractice claim, and (ii) the Clients had no recoverable
    damages. On appeal, the Clients address only the second ground. Because the Clients do not
    address an independent ground for summary judgment on their malpractice claims, we must
    affirm the judgment as to that claim. See 
    Adams, 154 S.W.3d at 875
    .
    H.     Conspiracy and accounting
    In their tenth issue, the Clients argue that the trial court erroneously dismissed their civil-
    conspiracy claims. In their twelfth issue, they argue the trial court erroneously denied their
    request for an accounting. Appellees argued that the Clients had no viable tort claims to support
    a derivative conspiracy claim or an accounting remedy. Because we reverse the summary
    judgment as to barratry and breach of fiduciary duty, we also reverse the summary judgment as
    to civil conspiracy. See Porter v. Sw. Christian Coll., 
    428 S.W.3d 377
    , 384 (Tex. App.—Dallas
    2014, no pet.) (reversing summary judgment on civil conspiracy under similar circumstances).
    And because we reverse the summary judgment as to barratry and rescission, we reverse the
    summary judgment as to the Clients’ request for an accounting. See 
    Cruz, 364 S.W.3d at 825
    (rescission requires “a mutual restoration and accounting” (emphasis added)).
    –31–
    I.          Deceptive Trade Practices Act
    In their eleventh issue, Carl “Stacey” Neese, James Neese, David Neese, Jennifer
    Hughes, and Mitzi Renfroe (the “DTPA appellants”) argue that the trial court erred by
    dismissing their claims under the DTPA. 11 See TEX. BUS. & COM. CODE ANN. § 17.50(a)(1), (3)
    (West 2011).
    Appellees sought dismissal of these claims because: (i) the Clients had no damages, and
    (ii) the transactions in question involved consideration exceeding $500,000, making the DTPA
    inapplicable under § 17.49(g).                      On appeal, appellees attempt to assert additional grounds
    supporting summary judgment on the DTPA claims, but we cannot consider those new
    arguments. See McConnell v. Southside Indep. Sch. Dist., 
    858 S.W.2d 337
    , 341 (Tex. 1993) (“A
    motion [for summary judgment] must stand or fall on the grounds expressly presented in the
    motion.”).
    The DTPA appellants argue that appellees did not conclusively prove that the DTPA
    appellants have no recoverable DTPA damages. We agree. The DTPA appellants pleaded for
    mental-anguish damages, which are potentially recoverable under the DTPA. See TEX. BUS. &
    COM. CODE ANN. § 17.50(b)(1) (authorizing recovery of mental-anguish damages if the
    defendant’s conduct was committed knowingly); Carpenter v. De La Cruz, No. 04-11-00285-
    CV, 
    2012 WL 3025842
    , at *3 (Tex. App.—San Antonio July 25, 2012, no pet.) (mem. op.)
    (affirming award of mental-anguish damages under the DTPA). On their traditional motion for
    summary judgment, appellees bore the burden of conclusively negating the existence of
    damages. See Shaun T. Mian Corp. v. Hewlett-Packard Co., 
    237 S.W.3d 851
    , 868 (Tex. App.—
    Dallas 2007, pet. denied) (stating that movant’s “burden on a traditional motion for summary
    judgment is to negate an essential element of [claimant’s] cause of action as a matter of law”).
    11
    Appellant Hooper and the minor children of James Robert Neese did not assert a DTPA claim in the live petition.
    –32–
    Appellees did not carry that burden. Summary judgment thus cannot be sustained on appellees’
    no-damages ground.
    The DTPA appellants also argue that appellees did not conclusively prove the DTPA
    exception for transactions involving “total consideration by the consumer of more than
    $500,000.” See BUS. & COM. § 17.49(g) (West Supp. 2014). Appellees based this ground on
    averments in the fifth amended petition that appellees received millions of dollars in attorneys’
    fees based on the transactions. But in the Clients’ sixth amended petition—their live pleading at
    the time of the summary-judgment hearing—appellant Hooper and the minor children of James
    Robert Neese dropped their DTPA claims, and the remaining appellants specifically averred that
    “[t]he total consideration paid by each of the DTPA Plaintiffs for the representation was less than
    $500,000.” The text of § 17.49(g) supports the DTPA appellants’ argument that the $500,000
    cap must be applied on an individual-consumer basis. We conclude that appellees did not
    conclusively prove the § 17.49(g) exception and that the trial court erred by granting summary
    judgment on the DTPA claims.
    J.     Suspension and disbarment
    In their thirteenth and final issue, the Clients challenge the trial court’s dismissal of their
    request for an order suspending or revoking appellee Lyon’s law license pursuant to Texas
    Government Code § 82.062. Appellees argued that § 82.062 does not create a private cause of
    action. We agree with appellees.
    Section 82.062 provides in pertinent part:
    Any attorney who is guilty of barratry, any fraudulent or dishonorable
    conduct, or malpractice may be suspended from practice, or the attorney’s license
    may be revoked, by a district court of the county in which the attorney resides or
    in which the act complained of occurred.
    TEX. GOV’T CODE ANN. § 82.062 (West 2013).              We find no cases holding that § 82.062
    authorizes a private citizen to sue an attorney in district court for license suspension or
    –33–
    revocation. Cf. Merritt v. Davis, 
    331 S.W.3d 857
    , 862–63 (Tex. App.—Dallas 2011, pet. denied)
    (rejecting for inadequate briefing appellant’s request that court of appeals disbar appellee).
    The Clients contend that they did not assert § 82.062 as a cause of action but rather raised
    it so that the court could consider suspension or disbarment as proper responses to Lyon’s
    misconduct. But they invoked § 82.062 in their live pleading under the general heading “Causes
    of Action” and requested that the trial court suspend or disbar Lyon under that statute.
    Suspension and disbarment proceedings are generally undertaken by the Texas
    Commission for Lawyer Discipline. See, e.g., Bitter v. Comm’n for Lawyer Discipline, No. 02-
    12-00197-CV, 
    2014 WL 1999315
    (Tex. App.—Fort Worth May 15, 2014, no pet.) (mem. op.);
    Long v. Comm’n for Lawyer Discipline, No. 14-11-00059-CV, 
    2012 WL 5333654
    (Tex. App.—
    Houston [14th Dist.] Oct. 30, 2012, no pet.) (mem. op.). Although § 82.062 states that district
    courts may suspend or disbar attorneys for various kinds of malfeasance, it does not state who
    has the right to seek such relief from the courts.
    Our sister court has held that an individual attorney may not sue to have another attorney
    disbarred. That power rests solely with the state bar. State ex rel. Chandler v. Dancer, 
    391 S.W.2d 504
    , 505 (Tex. Civ. App.—Corpus Christi 1965, writ ref’d n.r.e.). Since Chandler was
    decided, other courts of appeals have recognized the state bar’s authority in this area. See
    McGregor v. Clawson, 
    506 S.W.2d 922
    , 928 (Tex. Civ. App.—Waco 1974, no writ) (by
    adopting State Bar Act, the legislature intended “to provide for a full and comprehensive set of
    laws to cover completely the practice of law, and regulation of and disciplining of lawyers”); see
    also Bradt v. State Bar of Tex., 
    905 S.W.2d 756
    , 759 (Tex. App.—Houston [14th Dist.] 1995, no
    writ) (holding that private individual could not bring a claim to remove a judge’s name from the
    roll of attorneys); Galindo v. State, 
    535 S.W.2d 923
    , 925 (Tex. Civ. App.—Corpus Christi 1976,
    no writ) (“When misconduct on the part of an attorney is alleged to have occurred, the Grievance
    –34–
    Committee [of the state bar] has the task to conduct an investigation.”). We conclude that there
    is no private cause of action for suspension or disbarment.
    We reject the Clients’ thirteenth issue on appeal.
    IV.   DISPOSITION
    For the foregoing reasons, we reverse the trial court’s judgment as to the following
    claims and remedies: barratry under the original version of Texas Government Code § 82.065,
    breach of fiduciary duty, rescission, civil conspiracy, DTPA violations, and an accounting. We
    affirm the remainder of the trial court’s judgment, and we remand the case for further
    proceedings consistent with this opinion.
    /Ada Brown/
    ADA BROWN
    JUSTICE
    131597F.P05
    –35–
    S
    Court of Appeals
    Fifth District of Texas at Dallas
    JUDGMENT
    CARL “STACEY” NEESE,                                   On Appeal from the 382nd Judicial District
    INDIVIDUALLY AND AS NEXT FRIEND                        Court, Rockwall County, Texas
    OF L.N., C.N., L.N., AND C.N., JAMES                   Trial Court Cause No. 1-13-61.
    NEESE, DAVID NEESE, JENNIFER                           Opinion delivered by Justice Brown. Justice
    HUGHES, MITZI RENFROE, AND IRL                         Lang participating.
    HOOPER, Appellants
    No. 05-13-01597-CV         V.
    TED B. LYON, JR., MARQUETTE W.
    WOLF, TED B. LYON & ASSOCIATES,
    P.C., AND WILLIAM HEIDELBERG,
    Appellees
    In accordance with this Court’s opinion of this date, the judgment of the trial court is
    AFFIRMED in part and REVERSED in part.
    We REVERSE that portion of the trial court’s judgment granting summary judgment as
    to appellants Carl “Stacey” Neese, Individually and as Next Friend of L.N., C.N., L.N., and C.N.,
    James Neese, David Neese, Jennifer Hughes, Mitzi Renfroe, and Irl Hooper’s claims for barratry
    under the original version of Texas Government Code § 82.065, breach of fiduciary duty,
    rescission, civil conspiracy, and an accounting. We also REVERSE that portion of the trial
    court’s judgment granting summary judgment as to appellants Carl “Stacey” Neese, Individually,
    James Neese, David Neese, Jennifer Hughes, and Mitzi Renfroe’s claims for DTPA violations.
    In all other respects, we AFFIRM the trial court’s judgment. We REMAND this cause to the
    trial court for further proceedings consistent with the opinion.
    It is ORDERED that each party bear its own costs of this appeal.
    Judgment entered this 31st day of July, 2015.
    –36–
    

Document Info

Docket Number: 05-13-01597-CV

Citation Numbers: 479 S.W.3d 368, 2015 Tex. App. LEXIS 8102

Judges: Lang, Brown

Filed Date: 7/31/2015

Precedential Status: Precedential

Modified Date: 11/14/2024

Authorities (38)

Texas Employers Insurance v. Kennedy , 135 Tex. 486 ( 1940 )

Rowan Oil Co. v. Texas Employment Commission , 152 Tex. 607 ( 1953 )

Smith v. Deneve , 2009 Tex. App. LEXIS 4004 ( 2009 )

Joe v. Two Thirty Nine Joint Venture , 47 Tex. Sup. Ct. J. 1058 ( 2004 )

Sanes v. Clark , 25 S.W.3d 800 ( 2000 )

Sudderth v. Howard , 1977 Tex. App. LEXIS 3768 ( 1977 )

Burrow v. Arce , 42 Tex. Sup. Ct. J. 932 ( 1999 )

Luna v. Estate of Rodriguez , 1995 Tex. App. LEXIS 1865 ( 1995 )

Bruce v. Jim Walters Homes, Inc. , 943 S.W.2d 121 ( 1997 )

Country Cupboard, Inc. v. Texstar Corp. , 1978 Tex. App. LEXIS 3503 ( 1978 )

City of Galveston v. State , 50 Tex. Sup. Ct. J. 513 ( 2007 )

Shaun T. Mian Corp. v. Hewlett-Packard Co. , 237 S.W.3d 851 ( 2007 )

American Tobacco Co., Inc. v. Grinnell , 951 S.W.2d 420 ( 1997 )

Mason v. Abel , 1948 Tex. App. LEXIS 1232 ( 1948 )

Enochs v. Brown , 1994 Tex. App. LEXIS 565 ( 1994 )

Roberts v. Williamson , 46 Tex. Sup. Ct. J. 944 ( 2003 )

State Ex Rel. Chandler v. Dancer , 1965 Tex. App. LEXIS 2213 ( 1965 )

McGregor v. Clawson , 1974 Tex. App. LEXIS 2145 ( 1974 )

Gibson v. Ellis , 2004 Tex. App. LEXIS 991 ( 2004 )

Murphy v. Gruber , 2007 Tex. App. LEXIS 9707 ( 2007 )

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