Tracy Hollister v. Maloney, Martin & Mitchell LLP, Mike Martin, P.C. and Mike Martin, Individually and Frank W. Mitchell

Affirmed and Memorandum Opinion filed May 16, 2013.
In The
Fourteenth Court of Appeals
NO. 14-12-00529-CV
TRACY HOLLISTER, Appellant
V.
MALONEY, MARTIN & MITCHELL LLP, MIKE MARTIN, P.C. AND
MIKE MARTIN, INDIVIDUALLY AND FRANK W. MITCHELL, Appellees
On Appeal from the 10th District Court
Galveston County, Texas
Trial Court Cause No. 03-CV-0950
MEMORANDUM OPINION
Appellant, Tracy Hollister, contends the trial court erred by granting
summary judgment in favor of Maloney, Martin & Mitchell LLP, Mike Martin
P.C., and Mike Martin, individually and Frank W. Mitchell (collectively,
“appellees”).1 We affirm.
1
For simplicity, we sometimes use the term “appellees” even when the relevant facts
I. BACKGROUND2
Sometime before 2001, certain real property was polluted and required
environmental remediation. According to Hollister, Southeast Texas
Environmental, LLC (“STE”), and other related individuals and entities
(collectively, “the STE Group”) contracted with Ken Bigham for him to manage
the remediation plan and a portion of the corresponding litigation. On February 5,
2003, Bigham and the STE Group entered into an attorney-client contract with
appellees (“Contract 1”); Hollister was not a party to this contract. Pursuant to
Contract 1, the STE Group retained appellees to represent it in environmental
litigation against polluting defendants (“the Underlying Litigation”).
Additionally, some or all of the STE Group and Bigham entered into an
agreement (not an attorney-client contract) providing that Bigham would receive
26.5%, and Hollister would receive 7%, of the net proceeds recovered in the
Underlying Litigation (“Contract 2”). Apparently, Hollister was an important fact
witness who had worked in some capacity for STE, and STE Group agreed to give
Hollister a percentage of net proceeds to ensure his cooperation in the Underlying
Litigation.
In June 2003, appellees filed a lawsuit in Galveston County district court on
behalf of the STE Group. The STE Group settled its claims against several
defendants, and settlement funds were distributed to Bigham and Hollister as
specified in Contract 2. Nevertheless, according to Hollister, the STE Group and
appellees “left [Bigham] completely out of the settlement and trial process” “just
as substantial monies were to be recovered.” Bigham threatened to sue the STE
involve less than all appellees.
2
Some of the facts provided in this section were alleged in various pleadings and are not
necessarily supported by summary-judgment evidence. We include them for factual and
procedural context.
2
Group. In turn, the STE group sued Bigham and Hollister in Harris County district
court. In September 2007, the Harris County trial court granted Bigham a
temporary restraining order against the STE Group, ordering them not to encumber
settlement funds collected in the Underlying Litigation. Hollister alleges the
duration of this order was extended by agreement of the parties.3
Before the October 2007 trial date in the Underlying Litigation, the STE
Group settled its claims against several other defendants. Bigham and Hollister
were allegedly denied their share of the settlement funds. It appears appellees
interpleaded these funds into the registry of the Galveston district court. Bigham
and Hollister filed a response to appellees’ interpleader, in which they also asserted
claims against appellees for breach of fiduciary duty and legal malpractice.
Appellees filed motions for traditional summary judgment, which the trial court
granted, resulting in final judgment against Hollister on his claims.
II. SUMMARY JUDGMENT
In two issues, Hollister contends the trial court erred by granting summary
judgment in favor of appellees because appellees did not conclusively disprove the
existence of an implied attorney-client relationship between them and Hollister
(Issue 1) and that Hollister suffered damages (Issue 2). We note Hollister
expressly states in his brief that he is appealing only the summary judgment on his
breach-of-fiduciary-duty claim, not his legal-malpractice claim.
A. Standard of Review
A party moving for traditional summary judgment must establish there is no
genuine issue of material fact and it is entitled to judgment as a matter of law. See
3
Bigham and Hollister appealed the judgment in the Harris County suit to our court. See
Ken Bigham and Tracy Hollister v. Southeast Texas Environmental, LLC, No. 14-12-00084-CV.
At the time of this opinion, we had abated the Harris County appeal for mediation.
3
Tex. R. Civ. P. 166a(c); Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d
211, 215–16 (Tex. 2003). A defendant moving for traditional summary judgment
must conclusively negate at least one essential element of the plaintiff’s cause of
action or conclusively establish each element of an affirmative defense. Frost
Nat’l Bank v. Fernandez, 315 S.W.3d 494, 508 (Tex. 2010). We review a
summary judgment de novo. Knott, 128 S.W.3d at 215. We take all evidence
favorable to the nonmovant as true and indulge every reasonable inference and
resolve any doubts in his favor. Id.
B. Analysis
In their respective motions for summary judgment, appellees argued, and
presented evidence supporting, that Hollister suffered no damages because he has
been fully paid monies owed to him pursuant to Contract 2. In his responses to the
motions, Hollister asserted,
It is true that Hollister ultimately received funds that were rightfully
his. These funds should have been turned over to Hollister by
[appellees] in the ordinary course of their representation of Hollister.
However, Hollister was forced to hire counsel and incur attorney’s
fees to pursue the funds wrongfully kept from him by the acts of
[appellees]. . . . As such, Hollister has suffered damage and
[appellees’] Motion[s] for Summary Judgment should be denied.
Hence, Hollister argues that appellees’ wrongful failure to timely distribute
settlement funds caused him damages because he was required to retain counsel
and file suit against appellees.4
Generally, a plaintiff may not recover attorney’s fees for a breach-of-
fiduciary-duty claim. See Willis v. Donnelly, 118 S.W.3d 10, 44 (Tex. App.—
Houston [14th Dist.] 2003), aff’d in part on other grounds, rev’d in part on other
4
Hollister does not assert any other reason regarding why appellees caused him actual
damages.
4
grounds, 199 S.W.3d 262 (Tex. 2006); Potter v. GMP, L.L.C., 141 S.W.3d 698,
705 (Tex. App.—San Antonio 2004, pet. dism’d). Nevertheless, Hollister relies on
Akin, Gump, Strauss, Hauer & Feld, L.L.P. v. National Development and Research
Corp. as authority that he may recover attorney’s fees as actual damages. 299
S.W.3d 106, 122 (Tex. 2009). In Akin Gump, the supreme court held a legal-
malpractice plaintiff may recover, as actual damages, attorney’s fees he incurred in
the underlying suit to remedy his attorney’s malpractice. Id.; see also Camp
Mystic, Inc. v. Eastland, 390 S.W.3d 444, 461–62 (Tex. App.—San Antonio 2012,
pet. granted, judgm’t vacated w.r.m.). According to Hollister, this principle
applies equally in his breach-of-fiduciary-duty action.
Hollister incurred attorney’s fees, not to remedy attorney malfeasance in the
underlying suit as in Akin Gump, but in pursuing his breach-of-fiduciary-duty
action against appellees. Thus, the present situation is clearly distinguishable.
Allowing Hollister to bring his breach-of-fiduciary-duty action solely to recover
attorney’s fees incurred by bringing the action would circumvent the general rule
that fees are not recoverable for breach-of-fiduciary claims. Accordingly, we
overrule Hollister’s second issue, do not consider his first issue, and conclude the
trial court properly granted appellees’ motions for summary judgment.
We affirm the trial court’s judgment.
/s/ John Donovan
Justice
Panel consists of Chief Justice Hedges and Justices Boyce and Donovan.
5