Court Opinion

ID: 9659948
Source: CourtListenerOpinion
Date Created: 2023-08-23 21:59:17.403393+00
Date Added: 2024-06-11T18:14:13.331863
License: Public Domain

DUNCAN, Justice,
concurring and dissenting.
I concur in the judgment insofar as it reverses the trial court’s judgment and renders judgment in favor of the Lopez family. But I dissent from the majority’s refusal to compensate the Lopez family, and penalize their attorneys, in accordance with the measure of damages mandated by Texas law for all fiduciaries, including attorneys — “forfeit[ure][of] all right to compensation.” Royden v. Ardoin, 160 Tex. 338, 331 S.W.2d 206, 209 (1960).
Breach op Fiduciary Duty
The majority states “[e]ertainly, the Lawyers understood that ‘appealed to a higher court’ means more than initiating the appellate process,” and “[e]onstruing the employment contract in consideration of the parties’ intention,” there is “no evidence ... the Lo-pezes intended to pay their lawyers an additional $750,000.00 for doing nothing.” The majority incorrectly treats construction of the contract as a question of fact involving the parties’ intent and improperly imposes a burden of production on the attorneys to defeat the Lopez family’s motion for summary judgment. However, I concur in part in the judgment in favor of the Lopez family because the applicable substantive and procedural laws yield the same result.
In the circumstances presented, the contract provision at issue is subject to only one ethical and, therefore, plausible meaning: the additional five percent contingent fee payable “[i]f the case is appealed to a higher court” did not become due merely because Westinghouse, pending finalization of the settlement, filed a cash deposit to protect its right to appeal. See Texas Disciplinary Rules of Professional Conduct Rule 1.04(a)-(b) (prohibiting unconscionable fees). Accordingly, the disputed provision is unambiguous; its construction presents a question of law for the court; and extrinsic evidence of the parties’ subjective intent is immaterial. See Friendswood Dev. Co. v. McDade + Co., 926 S.W.2d 280, 282-83 (Tex.1996) (per cu-riam); Coker v. Coker, 650 S.W.2d 391, 393-94 (Tex.1983).
Damages and Penalties
Under well-settled Texas law, “ ‘[i]f an attorney ... commits a material breach of his contract of employment, he thereby forfeits all right to compensation.’ ” Royden v. Ardoin, 160 Tex. 338, 331 S.W.2d 206, 209 (1960) (quoting Beaumont v. J.H. Hamlen & Son, 190 Ark. 630, 81 S.W.2d 24 (1935)); see also Kinzbach Tool Co. v. Corbett-Wallace Corp., 138 Tex. 565, 160 S.W.2d 509, 514 (1942) (“if the fiduciary ‘takes any ... benefit in violation of his duty, ..., it is a betrayal of his trust and a breach of confidence, and he must account to his principal for all he has received’ ”) (quoting United States v. Carter, 217 U.S. 286, 306, 30 S.Ct. 515, 54 L.Ed. 769 (1910)); Moore v. Kelley, 162 S.W. 1034, 1037 (Tex.Civ.App.—Amarillo 1914, writ refd) (“if [an agent] acts adversely to his employer in any part of the transaction, ..., it amounts to such a fraud upon the principal as to forfeit any right to compensation for services”); see generally Restatement (Seoond) of Agency § 469 (1958); but see Arce v. Burrow, 958 S.W.2d 239, 249-51 (Tex.App.—Houston [14th Dist.] 1997, pet. granted) (without citing to or discussing Royden, court holds complete fee forfeiture mandated by Kinzbach Tool and Moore does not apply in the attorney-client context).
I recognize complete fee forfeiture is a harsh remedy. But it is not, in my view, *745unduly harsh. Rather, it is an appropriate means to vindicate beneficiaries’ and society’s legitimate expectations of fiduciaries — complete fee forfeiture ensures wronged beneficiaries are fully compensated for not only their monetary losses, but also for the non-economic damages associated with the betrayal of their trust; it inflicts upon the defendant fiduciary a swift and certain punishment for his or her breach of fiduciary duty; and, perhaps most importantly, it provides a sufficient disincentive to other fiduciaries to avoid similar misconduct.1
Conclusion
I would follow established Texas law in this case and render judgment in favor of the Lopez family for the full forty-five percent contingent fee collected by their attorneys ($6,750,000.00), pre-and postjudgment interest, and costs of court. To do otherwise, in my view, constitutes yet another example of the special rules made by lawyers for lawyers, and it will further erode public confidence in the legal profession as a whole and the elected Texas judiciary in particular.

. Even if the majority were correct in holding complete fee forfeiture is not mandated by established Texas law, its disposition of the issue is improper. If, as the majority concludes, complete forfeiture is not required, and the amount may vary with the facts and circumstances, then the amount of the forfeiture is a question of fact to be decided in the trial court. For this court to instead determine the appropriate forfeiture is an exercise of original rather than appellate jurisdiction and usurps the trial court's factfinding function. See International Security Life Ins. Co. v. Spray, 468 S.W.2d 347, 349 (Tex.1971); Arce, 958 S.W.2d at 251; Industrial Disposal Supply Co. v. Perryman Brothers Trash Service, Inc., 664 S.W.2d 756, 761-62 (Tex.App.—San Antonio 1983, writ ref’d n.r.e.); see generally W. Wendell Hall, Standards of Review In Texas, 29 St. Mary’s L.J. 351, 489 n. 911 (1998) and accompanying text.