Court Opinion

ID: 2911796
Source: CourtListenerOpinion
Date Created: 2015-09-10 05:35:04.28185+00
Date Added: 2024-06-11T11:37:54.841042
License: Public Domain

IN THE
                         TENTH COURT OF APPEALS

                                No. 10-07-00376-CV

GISELLE RUTLEDGE,
                                                           Appellant
v.

JAMES G. LEONARD
AND THE LEONARD LAW FIRM, PLLC,
                                                           Appellees

                           From the 40th District Court
                               Ellis County, Texas
                              Trial Court No. 71171

                          MEMORANDUM OPINION

       This case began as a straightforward debt collection suit brought by James G.

Leonard (Leonard) and The Leonard Law Firm PLLC (LLF) against Giselle Rutledge to

collect attorney’s fees earned during the representation of Rutledge in her divorce. But,

during the pendency of this suit to collect attorney’s fees, Leonard “gave up” his law

license.   Raising four points, Rutledge appeals the trial court’s judgment that was

entered on a jury verdict in Leonard’s and LLF’s favor. We will affirm.
        In 2003, Rutledge signed a written retention agreement, entitled “Family Law

Attorney-Client Agreement,” that stated she retained LLF to represent her in a family

law matter described as “Divorce – TRO.” After an initial emergency matter was

handled, Rutledge signed a second retention agreement, again entitled “Family Law

Attorney-Client Agreement,” that stated she retained LLF to represent her in a family

law matter described as “Divorce Case Filed by Don Rutledge.” Both agreements

stated, “This contract is between you and the law firm, not with a particular attorney.”

In addition, the second agreement referenced the simultaneous signing of a Promissory

Note and Security Agreement by Rutledge “in consideration for this firm advancing

legal services and expenses in connection with your case, and in lieu of your paying a

retainer and monthly invoices.” Rutledge signed a Promissory Note for the fees that

had already accrued ($4,377.75), plus all additional services and expenses rendered on

or after that date in connection with her divorce. Rutledge also signed a Security

Agreement, listing as collateral four tracts of land and the manufacturing equipment

owned by Rutledge’s business. Leonard recorded the Security Agreement in the Ellis

County real estate records.

        Rutledge subsequently received monthly invoices of the services rendered by

Leonard and the staff of LLF, the time spent performing those services, and the amount

charged for that time. After the divorce was finalized, the unpaid balance on the

invoices totaled $20,585.00, which Rutledge refused to pay.

        Leonard and LLF thus filed this suit against Rutledge, alleging breach of contract

and, alternatively, quantum meruit.      Furthermore, Leonard and LLF alleged that,

Rutledge v. Leonard                                                                 Page 2
pursuant to the Security Agreement and applicable law, they were entitled to judicial

foreclosure of the liens securing the debt. The jury found: (1) Rutledge failed to pay

Plaintiffs’ attorney’s fees that she had agreed to pay; (2) $20,585.00 would fairly and

reasonably compensate Plaintiffs’ for Rutledge’s failure to pay attorney’s fees; and (3) a

reasonable fee for the necessary services of Plaintiffs’ attorney in this case is $15,000.00

for preparation and trial, $5,000.00 for an appeal to the court of appeals, and $5,000.00

for an appeal to the Texas Supreme Court. The trial court entered judgment on the

verdict and also ordered that Leonard and LLF are entitled to foreclosure of their liens

on the real properties located in Ellis County and the manufacturing equipment owned

by Rutledge’s business.

                                         Capacity to Sue

        In her first point, Rutledge contends that the trial court erred in granting

judgment for Leonard because he cannot recover individually for breach of a contract

that specifies the contract is with LLF and that specifically excludes any particular

attorney from being a party to the contract. In her second point, Rutledge asserts that

the trial court erred in granting judgment for LLF because Leonard was a non-lawyer at

the time of trial1 and therefore cannot be LLF’s “legally qualified representative.”

Rutledge characterizes each of these points as a challenge to the party’s standing, but

these matters are actually ones of capacity.

        1Rutledge does not dispute that Leonard was a licensed attorney during all times he performed
legal work on her divorce case.

Rutledge v. Leonard                                                                            Page 3
        The Texas Supreme Court has explained the difference between standing and

capacity:

        A plaintiff has standing when it is personally aggrieved, regardless of
        whether it is acting with legal authority; a party has capacity when it has
        the legal authority to act, regardless of whether it has a justiciable interest
        in the controversy.

Nootsie, Ltd. v. Williamson County Appraisal Dist., 925 S.W.2d 659, 661 (Tex. 1996). In this

case, Rutledge does not argue that Leonard and LLF have no justiciable interest in

payment for the legal work performed. Rather, she contends that Leonard has no

authority to sue in his individual capacity for a claim owed to LLF and that LLF has no

authority to sue as a legal services entity because its only named representative is a non-

lawyer. Thus, we conclude Rutledge’s complaints are challenges to Leonard and LLF’s

capacity, rather than standing.

        The failure to raise the issue of capacity through a verified plea results in waiver

of that issue both at trial and on appeal. TEX. R. CIV. P. 93; see Pledger v. Schoellkopf, 762
S.W.2d 145, 145-46 (Tex. 1988); Spurgeon v. Coan & Elliott, 180 S.W.3d 593, 597 (Tex.

App.—Eastland 2005, no pet.); Champion v. Wright, 740 S.W.2d 848, 851 (Tex. App.—San

Antonio 1987, writ denied).        Because Rutledge did not file a verified pleading

challenging Leonard or LLF’s capacity to sue, she has waived these complaints. See,

e.g., Spurgeon, 180 S.W.3d at 597-98; Stephenson v. Lynch, No. 05-99-01874-CV, 2001 WL
126403, at *2-3 (Tex. App.—Dallas Feb. 15, 2001, pet. denied). We therefore overrule

Rutledge’s first two points.

Rutledge v. Leonard                                                                       Page 4
                                     Judicial Foreclosure

        We now turn to Rutledge’s fourth point, in which she argues that the trial court’s

judgment allowing foreclosure of the security interests should be set aside because

Leonard failed to submit any jury question on the “distinct cause of action for

foreclosure of security interest.” Rutledge bases this argument on the presumption that

foreclosure of a security interest is a separate cause of action, but it is not. Judicial

foreclosure is a remedy. See Garza v. Allied Fin. Co., 566 S.W.2d 57, 62 (Tex. App.—

Corpus Christi 1978, no writ) (“Judicial foreclosure is an additional remedy to that of

seeking a personal judgment against a debtor.”). Furthermore, Rutledge identifies no

factual dispute establishing the need for a jury question. See Sullivan v. Barnett, 471
S.W.2d 39, 44 (Tex. 1971) (“Submission of an issue on an undisputed fact is

unnecessary.”); GuideOne Lloyds Ins. Co. v. First Baptist Church of Bedford, 268 S.W.3d 822,

834 (Tex. App.—Fort Worth 2008, no pet.). Because no jury question was necessary, the

trial court did not err in ordering that Leonard and LLF are entitled to foreclosure of

their liens. We overrule Rutledge’s fourth point.

        In her third point, Rutledge conclusorily asserts that the trial court’s judgment

allowing foreclosure of the security interests should be set aside because there was no

evidence or insufficient evidence submitted on the cause of action. But as explained

above, judicial foreclosure is a remedy, not a separate cause of action. See Garza, 566
S.W.2d at 62.         Moreover, the retention agreements, the Promissory Note, and the

Security Agreement, all signed by Rutledge, were admitted at trial. Under the Default

and Remedies section, the Security Agreement provides:

Rutledge v. Leonard                                                                   Page 5
        2.      If a default exists, Secured Party may –

                a.     demand, collect, convert, redeem, settle, compromise, receipt
        for, realize on, sue for, and adjust the Collateral either in Secured Party’s
        or Debtor’s name, as Secured Party desires, or take control of any
        proceeds of the Collateral and apply the proceeds against the Obligation;

               b.    take possession of any Collateral not already in Secured
        Party’s possession, without demand or legal process, and for that purpose
        Debtor grants Secured Party the right to enter any premises where the
        Collateral may be located;

               c.     without taking possession, sell, lease, or otherwise dispose
        of the Collateral at any public or private sale in accordance with the law;

              d.      exercise any rights and remedies granted by law or this
        agreement;

               e.     notify obligors on the Collateral to pay Secured Party
        directly and enforce Debtor’s rights against such obligors; and

              f.    as Debtor’s agent, make any endorsements in Debtor’s name
        and on Debtor’s behalf.

        3.      Foreclosure of this security interest by suit does not limit Secured
        Party’s remedies, including the right to sell the Collateral under the terms
        of this agreement. Secured Party may exercise all remedies at the same or
        different times, and no remedy is a defense to any other. Secured Party’s
        rights and remedies include all those granted by law and those specified
        in this agreement.

In light of the foregoing, we conclude that there is sufficient evidence to support the

trial court’s judgment allowing foreclosure of the security interests, and we thus

overrule Rutledge’s third point.

Rutledge v. Leonard                                                                     Page 6
                                       Conclusion

        Having overruled all Rutledge’s points, we affirm the trial court’s judgment.

                                                 REX D. DAVIS
                                                 Justice

Before Chief Justice Gray,
       Justice Reyna, and
       Justice Davis
Affirmed
Opinion delivered and filed May 20, 2009
[CV06]

Rutledge v. Leonard                                                                 Page 7