Court Opinion

ID: 3122519
Source: CourtListenerOpinion
Date Created: 2015-10-16 14:25:50.855655+00
Date Added: 2024-06-11T10:20:53.409075
License: Public Domain

COURT OF APPEALS
                         SECOND DISTRICT OF TEXAS
                              FORT WORTH

                             NO. 02-10-00115-CV

GARDNER ALDRICH, LLP                                                APPELLANT

                                       V.

MICHAEL ROBERT TEDDER                                                APPELLEE

                                    ----------

          FROM THE 325TH DISTRICT COURT OF TARRANT COUNTY

                                    ----------

                        MEMORANDUM OPINION1

                                    ----------

      Appellant Gardner Aldrich, LLP (the law firm) appeals the trial court’s

judgment on the law firm’s suit on sworn account. The law firm intervened in the

divorce and suit affecting the parent-child relationship (SAPCR) of its former

client, Stacy Lee Tedder, and her estranged husband, Appellee Michael Robert

Tedder. In the divorce decree, the trial court awarded the law firm a judgment on

its suit on sworn account solely against Stacy for $151,747.28 in damages,
      1
       See Tex. R. App. P. 47.4.
together with postjudgment interest and conditional posttrial fee awards (all

amounts collectively ―client fee award‖). In four issues, the law firm contends (1)

that the trial court erred and abused its discretion by not expanding the client fee

award to hold not only Stacy liable but also hold her husband Michael jointly and

severally liable; (2) that the evidence is legally and factually insufficient to support

the trial court’s failure to grant the law firm a judgment that Michael is jointly and

severally liable for the client fee award; (3) that the trial court erred and abused

its discretion by granting a final judgment inconsistent with the judgment

rendered in open court on August 27, 2009; and (4) that the evidence is legally

and factually insufficient to support the trial court’s failure to grant the law firm a

final judgment consistent with the judgment rendered in open court on August 27,

2009. Within the law firm’s discussion of the issues on appeal is the complaint

that the client fee award should be expanded to include an award of reasonable

attorney’s fees incurred in pursuing the intervention at trial. Because we hold

that the trial court erred by (1) not including in the client fee award reasonable

and necessary attorney’s fees that the law firm expended in bringing its

intervention below and (2) extinguishing the law firm’s right to collect the client

fee award from Michael jointly and severally, we reverse the trial court’s

judgment as to the client fee award, render judgment that Michael and Stacy are

jointly and severally liable for the client fee award, and remand this case for a

new trial solely on the issue of the proper amount of reasonable and necessary

trial attorney’s fees that should be added to the client fee award.

                                           2
I. Statement of Facts

      The law firm represented Stacy from October 15, 2007, a week before

Michael filed the original petition for divorce, through a June 2009 jury trial on

conservatorship. After a jury decided that Stacy and Michael should be joint

managing conservators (JMCs) and that Stacy should have the exclusive right to

determine the children’s primary residence within the Arlington Independent

School District, the law firm withdrew from representation of Stacy and filed a

petition for intervention, serving the petition on Michael, Stacy, and the children

through their respective lawyers with the lawyers’ consent. The petition includes

claims of breach of contract and quantum meruit and a suit on sworn account.

The petition asserts that Stacy had executed and then breached a written

employment contract, that the law firm had provided services to Stacy for which it

had not been paid, and that in providing legal services to Stacy, the law firm had

incurred expenses on an open account. In its prayer, the law firm asked for

judgment against Stacy and Michael jointly and severally. No one filed a sworn

denial.

      At the hearing on the law firm’s petition for intervention, the law firm argued

that neither Michael nor Stacy had filed a sworn denial and that therefore the law

firm was entitled to judgment as a matter of law. The trial court stated that it

―w[ould] enter a judgment on the pleadings based on the sworn account in the

amount of $151,747.28.‖      Robert Aldrich (―Aldrich‖) then testified about his

                                         3
experience and attorney’s fees in bringing the intervention suit and appellate fees

regarding the intervention.

      On cross-examination by Stacy’s new attorney, Aldrich testified that he

believed that $50,000 of the $87,500 or amount close to that which had already

been paid to the law firm for representing Stacy in the divorce had been from the

community funds under Michael’s control.          Michael’s counsel successfully

objected to a question from Stacy’s attorney inquiring why the fees in the divorce

case had reached such a high amount. Part of the answer is revealed in a letter

ruling issued a day after Stacy’s new counsel appeared in the case. In the letter

ruling, the trial court required that a parenting coordinator be appointed ―to

facilitate the parties’ co-parenting of the children and to lessen the high conflict

between the parties regarding issues affecting the parties and the children.‖

[Emphasis added.] The trial court left in place orders that Michael pay Stacy

$1,200 per month in child support.      Later that month, the trial court signed

modified temporary orders that required Michael to pay spousal support of

$1,000 (formerly $3,000 per month) during the pendency of divorce.

      On September 22, 2009, the trial court sent a letter ruling to the parties

awarding Aldrich a judgment of $151,747.28 against Stacy. But also in that letter

ruling, the trial court awarded Stacy a judgment against Michael in the sum of

$190,000 for attorney’s fees, as well as additional conditional appellate attorney’s

fees should he appeal the divorce decree. The trial court stated in the letter

ruling that Stacy’s attorney ―shall prepare the Decree of Divorce, the Wage

                                         4
Withholding Order, and QDRO’s to reflect this ruling and shall submit all orders to

the Court no later than October 23, 2009.‖

      But before such a decree could be signed, Michael and Stacy entered into

an agreement to the exclusion of the law firm that deleted the award of the

attorney’s fee judgment of $190,000 plus conditional appellate fees to Stacy from

Michael, and the trial court signed a divorce decree in accordance with the

couple’s agreement, awarding judgment in favor of the law firm against Stacy but

not Michael in the amount of $151,747.28, plus postjudgment interest and

conditional posttrial legal fees.   From our review of the letter ruling and the

signed decree, the decree also awards more time with the children to Michael,

reduces his periodic child support and medical support obligations, and reduces

Stacy’s assets by removing not only the $190,000 attorney fee judgment but also

a lien of $249,430 on Michael’s separate property.         The signed decree also

provides that Michael will pay a debt of $50,000, whereas the letter ruling

ordered Stacy to pay it, and states that the parents will ―split 50/50 reasonable

college expense and continued healthcare for the children, provided that the

children qualify for that coverage,‖ topics not covered by the letter ruling.

      The signed decree specifically provides,

             Debts to Wife

             IT IS ORDERED AND DECREED that the wife, Stacy . . . ,
      shall pay, as a part of the division of the estate of the parties, and
      shall indemnify and hold the husband and his property harmless
      from any failure to so discharge, these items:

                                          5
             ....

             W-5. The judgment awarded to [the law firm] for attorney’s
      fees in the amount of $151,747.28.

             ....

             Attorney’s Fees

             ....

             [The law firm] is awarded a judgment against STACY . . . in
      the amount of $151,747.28 for attorney’s fees, with post-judgment
      interest at the rate of five percent (5%) per annum. The sum of
      $5,000.00 is awarded in the event a motion for new trial is filed but
      denied, and the further sum of $20,000.00 in the event of an appeal
      to the Court of Appeals is made but is unsuccessful. The sum of
      $10,000.00 is awarded if a petition for review is filed but not granted
      by the Supreme Court of Texas, the sum of $10,000.00[] is awarded
      if the petition for review is granted but the appeal to the Supreme
      Court of Texas is unsuccessful. The further sum of $5,000.00 is
      awarded in the event a motion for rehearing is filed but not granted
      by the Supreme Court of Texas. In the event a petition for writ of
      certiorari is filed but not granted by the United States Supreme
      Court, the sum of $15,000.00 is awarded, and the sum of
      $15,000.00 is awarded in the event a petition for writ of certiorari is
      granted but the appeal to the United States Supreme Court is
      unsuccessful.

      In one of the law firm’s several pre- and postjudgment challenges to the

decree, Aldrich told the trial court,

             Now . . . in your ruling, I—I assumed that what you thought
      was, Okay, Stac[y] Tedder is going to have to pay this. I’m giving
      her a judgment for all these attorney’s fees, and I’m giving her a lien
      for the . . . improvements to the real property that was—that was his
      separate property. So I—Mr. Aldrich and anybody else with
      attorney’s fees can get paid through that lien if Stac[y] gets paid.
      You know, that is what I assumed your thinking was. But you can’t
      do that, because you granted me a judgment against both of them,
      and now look where we are.

                                        6
              . . . [T]he effect of what you’ve done cheats me out of my
      ability to collect my judgment, and here’s how: You can’t control—
      you . . . nor any other court can control what parties do to settle
      matters amongst themselves. Now what they’ve done is, because
      they want to settle this matter, Ms. Tedder no longer is going—is no
      longer going to take a judgment against Mr. Tedder, and in return for
      that, he’s going to let her do something else with the—the—the
      children. Therefore, because . . . if you don’t enter my judgment,
      then—then all of a sudden I’ve just got this one judgment—I mean,
      this judgment against this one person, and she has no avenue to
      collect anything from him anymore.

      A week after the trial court signed the order denying the law firm’s motion

to modify, correct, or reform the judgment, Stacy filed for chapter 7 bankruptcy.

She was discharged from bankruptcy on June 30, 2010. Afterward, this court

reinstated the law firm’s appeal.

II. Award of Attorney’s Fees for Prosecuting the Law Firm’s Suit

      Included in its discussion of its issues in its briefs is the law firm’s

contention that the trial court should have awarded reasonable attorney’s fees to

the law firm for prosecuting its intervention.   At trial, the law firm presented

uncontroverted testimony concerning the attorney’s fees it incurred in bringing

the intervention.   Stacy objected, arguing that an attorney (as opposed to a

nonattorney party) cannot recover fees for prosecuting a case. This court has

already rejected that premise.2 Michael raised no objection specifically targeting

      2
       See AMX Enters., L.L.P. v. Master Realty Corp., 283 S.W.3d 506, 517
(Tex. App.—Fort Worth 2009, no pet.) (op. on reh’g) (citing Tesoro Petroleum
Corp. v. Coastal Ref. & Mktg., Inc., 754 S.W.2d 764, 766 (Tex. App.—Houston
[1st Dist.] 1988, writ denied), and Beckstrom v. Gilmore, 886 S.W.2d 845, 847
(Tex. App.—Eastland 1994, writ denied)).

                                        7
the attorney’s fees that the law firm incurred in prosecuting the suit, nor does he

raise such argument on appeal.

      Section 38.001 of the civil practice and remedies code provides that ―[a]

person may recover reasonable attorney’s fees from an individual . . . , in

addition to the amount of a valid claim and costs, if the claim is for . . .

(1) rendered services; (2) performed labor; . . . (7) a sworn account; or (8) an oral

or written contract.‖3 As this court has previously explained,

            An award of reasonable attorney’s fees is mandatory under
      section 38.001 if there is proof of the reasonableness of the fees.
      The amount of the award lies within the discretion of the court, but it
      does not have the discretion to deny attorney’s fees if they are
      proper. When a claim for attorney’s fees is based on chapter 38, it is
      presumed that the usual and customary attorney’s fees are
      reasonable, although that presumption may be rebutted.

             Factors the trier of fact should consider in determining the
      amount of reasonable attorney’s fees include the following: (1) the
      time and labor required, the novelty and difficulty of the questions
      involved, and the skill required to perform the legal service properly;
      (2) the likelihood that the acceptance of the particular employment
      will preclude other employment by the lawyer; (3) the fee customarily
      charged in the locality for similar legal services; (4) the amount
      involved and the results obtained; (5) the time limitations imposed by
      the client or by the circumstances; (6) the nature and length of the
      professional relationship with the client; (7) the experience,
      reputation, and ability of the lawyer or lawyers performing the
      services; and (8) whether the fee is fixed or contingent on results
      obtained or uncertainty of collection before the legal services have
      been rendered.4

      3
Tex. Civ. Prac. & Rem. Code Ann. § 38.001 (West 2008).
      4
       AMX Enters., L.L.P., 283 S.W.3d at 516–17 (citations omitted).

                                         8
      The law firm’s fee agreement with Stacy and billing records are attached to

its petition for intervention. At the hearing on the intervention, Aldrich testified

about his experience level, his hourly rate, the hourly rates of associates and

paralegals at the law firm, and the hours incurred:

      I’m an attorney licensed to practice law in the State of Texas, and
      have been so licensed since November the 6th, 1978. I have tried
      and handled many divorce cases [and] many civil matters . . . . I’m
      board certified in civil trial law and have been for some years. . . .

             In this matter . . . I was the attorney for Mrs. Tedder up until
      sometime at the first part of . . . July, . . . after that first part of July I
      filed this petition [in] intervention, that— . . . I have incurred
      attorney’s fees in bringing it, and I would expect to incur attorney’s
      fees in the event of an appeal of this matter. We have kept—kept a
      record of the attorney’s fees, that as of yesterday afternoon, when I
      got back from the motion to recuse hearing, there were $7,187.50
      worth of attorney’s fees and paralegal time involved in this lawsuit.

             ....

             . . . It is my testimony that those fees were reasonable and
      necessary in prosecuting this action to collect this debt and to bring
      this claim and get this judgment.

             I expect . . . that I have spent three hours since yesterday
      afternoon and including my time in here . . . on this matter, and for a
      total of $8,537.50[], which I believe to be [] reasonable . . . attorney’s
      fees in Tarrant County, Texas, for prosecuting this claim through
      today.

      He testified that he had spent ten or eleven hours on the case at an hourly

rate of $450, that his legal assistant had billed for her time on the case at $125

per hour, that the law firm’s associate lawyers had spent the most time on the

case and billed at $225 per hour. Given the uncontroverted evidence, we hold

that the trial court’s implicit finding that the law firm was entitled to zero attorney’s

                                            9
fees for pursuing its intervention is against the great weight and preponderance

of the evidence and, likewise, regarding the trial court’s implicit legal conclusion

that the law firm was entitled to zero attorney’s fees for pursuing its intervention,

that the contrary is established as a matter of law. 5 We therefore hold that the

trial court erred by not including in the client fee award an award of reasonable

and necessary attorney’s fees for the prosecution of the law firm’s intervention.

We sustain this subissue.

III. Joint and Several Liability of Michael for the Client Fee Award

      Contrary to the law firm’s allegations on appeal, the absence of a sworn

denial from Michael does not automatically entitle the law firm to a judgment on

sworn account against him. As the Supreme Court of Texas has explained,

      There being a fact question as to whether the defendant was a party
      to the transaction evident from the face of the plaintiff’s own
      invoices, the sworn account is not considered as prima facie proof of
      the debt. Therefore, a sworn denial is not required in order for the
      respondent to controvert or disprove the account. 6

      The evidence supporting the law firm’s pleadings demonstrates that it was

Stacy who signed the contract, Stacy who was billed, and Stacy who failed to pay

the debt. Even if the evidence that Michael had previously paid a large portion of

attorney’s fees to the law firm on the account is evidence that Michael was not a

stranger to the transaction, it presented at most a fact issue, not proof as a

      5
         See id. at 520.
      6
         Sundance Oil Co. v. Aztec Pipe & Supply Co., 576 S.W.2d 780, 781 (Tex.
1978).

                                         10
matter of law. Accordingly, we cannot say that the trial court erred or abused its

discretion by excluding Michael from the judgment on the suit on sworn account

on the ground that he failed to file a verified denial.

         The attorney’s fees, however, were a community debt. Debts contracted

during the marriage are presumed to be community unless it is shown that the

creditor agreed to look solely to the separate estate of the contracting spouse for

payment of the debt.7 The party seeking to overcome the presumption must do

so by clear and convincing evidence. 8 Michael offered no proof in the appellate

record before us that the attorney’s fees were not a debt of the community.

Further, given the trial court’s placement of the debt to the law firm in the

community debts section, the trial court implicitly found that the attorney’s fees

were a community debt.

         A finding that attorney’s fees are a debt of the community establishes joint

and several liability of both spouses. 9 In Blake v. Amoco Federal Credit Union,

the Fourteenth Court of Appeals of Texas held,

         It is well-settled law in Texas that divorce courts cannot disturb the
         rights of a creditor to collect from either of the divorcing parties on a
         joint obligation. Johnnie admitted that the debt at issue is a

         7
        Hawkins v. Ehler, 100 S.W.3d 534, 541 (Tex. App.—Fort Worth 2003, no
pet.); Morris v. Morris, 894 S.W.2d 859, 863 (Tex. App.—Fort Worth 1995, no
writ).
         8
         Sprick v. Sprick, 25 S.W.3d 7, 13 (Tex. App.—El Paso 1999, pet. denied).
         9
         Wileman v. Wade, 665 S.W.2d 519, 520–21 (Tex. App.—Dallas 1983, no
writ).

                                            11
      community debt. Texas courts have consistently held that a division
      of the community estate may not prejudice the rights of a creditor to
      satisfy a community debt.

             Just because Amoco was named a party, answered, and
      appeared at the hearing on the clarification and enforcement motion
      does not necessarily mean that the court could modify its rights
      under the facts presented here. In Broadway Drug, the creditor,
      having intervened in the divorce suit, was obviously a party to the
      suit. This court recognized that the divorce court had discretion in
      dividing property between the spouses, and to provide that one
      spouse should pay the debt of the other. We held, however, that the
      divorce court could not prejudice the creditor’s right to take a
      judgment against both spouses when dividing responsibility for
      payment of debts.10

Additionally, section 2.501 of the family code provides,

      (a) Each spouse has the duty to support the other spouse.

      (b) A spouse who fails to discharge the duty of support is liable to
      any person who provides necessaries to the spouse to whom
      support is owed.11

      A spouse is personally liable for the other spouse’s acts if the other spouse

incurs a debt for necessaries.12 Further, all community property is subject to a

liability for which both spouses are personally liable.13 A spouse’s attorney’s fees

may be regarded as necessaries to protect his legal rights as long as he acts in

      10
         900 S.W.2d 108, 111–12 (Tex. App.—Houston [14th Dist.] 1995, no writ)
(citations omitted).
      11
        Tex. Fam. Code Ann. § 2.501 (West 2006).
      12
        Id. § 3.201.
      13
        See id. § 3.202 (West Supp. 2010).

                                        12
good faith and on probable cause. 14          The good faith and probable cause

requirements are met by a favorable verdict and orders of the trial court.15

      Here, Michael sought sole managing conservatorship, alternatively joint

managing conservatorship with the right to determine the children’s primary

residence, and alternatively a geographic restriction.        He also sought child

support.   The jury named the parents JMCs and gave Stacy the right to

determine the children’s primary residence within the confines of Arlington

Independent School District; the trial court awarded Stacy, not Michael, child

support.    Accordingly, we hold that the good faith and probable cause

requirements are met.16 Consequently, we hold that Stacy’s attorney’s fees due

to the law firm were necessaries.        We also therefore hold that Michael is

personally liable for their payment. 17 Finally, because Michael and Stacy were

each personally liable for the client fee award, we hold that the trial court erred by

extinguishing the law firm’s right to collect the client fee award from Michael

jointly and severally. We sustain the law firm’s first two issues in part. Because

      14
         Navarro v. Brannon, 616 S.W.2d 262, 263 (Tex. Civ. App.—Houston [1st
Dist.] 1981, writ ref’d n.r.e.).
      15
         Roberts v. Roberts, 193 S.W.2d 707, 709 (Tex. Civ. App.—Dallas 1945,
no writ).
      16
        See id.
      17
        See Tex. Fam. Code Ann. §§ 2.501, 3.201.

                                         13
of our disposition of these portions of the first two issues and the unnumbered

subissue, we do not reach the law firm’s remaining issues and subissues. 18

IV. Conclusion

      Having held that the trial court erred (1) by excluding from the client fee

award the reasonable and necessary attorney’s fees that the law firm expended

in bringing its intervention below and (2) by insulating Michael from any liability

for paying the client fee award, we reverse the trial court’s judgment on Gardner

Aldrich, LLP’s suit on sworn account in part and affirm it in part. We affirm the

judgment as to the amounts awarded as damages, postjudgment interest, and

conditional posttrial attorney’s fees. We reverse the judgment to the extent that it

awards Gardner Aldrich, LLP zero attorney’s fees for prosecuting its claim below

and to the extent that it excludes Michael from all liability. We render judgment

that (1) Michael and Stacy are jointly and severally liable to Gardner Aldrich, LLP

for the damages, postjudgment interest, and conditional posttrial attorney’s fees

and (2) Michael and Stacy are also jointly and severally liable to Gardner Aldrich,

LLP for reasonable and necessary attorney’s fees incurred by Gardner Aldrich,

LLP in prosecuting its claim below. We remand this case for a new trial solely for

the determination of the proper amount of reasonable and necessary attorney’s

fees incurred by Gardner Aldrich, LLP in pursuing its intervention.

      18
        See Tex. R. App. P. 47.1.

                                        14
                                    LEE ANN DAUPHINOT
                                    JUSTICE

PANEL: DAUPHINOT, MEIER, and GABRIEL, JJ.

DELIVERED: August 11, 2011

                               15