Pravel, Wilson & Matthews v. Voss

• Decision Date: 18 January 1973
• Docket Number: No. 72-1991.,72-1991.
• Citation: 471 F.2d 1186
• Parties: PRAVEL, WILSON & MATTHEWS, Plaintiff-Appellee, v. Robert J. VOSS, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

471 F.2d 1186 (1973)

PRAVEL, WILSON & MATTHEWS, Plaintiff-Appellee, v. Robert J. VOSS, Defendant-Appellant.

No. 72-1991.

United States Court of Appeals, Fifth Circuit.

January 18, 1973.

Ronald L. Clower, Dallas, Tex., for defendant-appellant.

C.L. Ray, Jr., Ronald Ned Dennis, Jim Ammerman, Marshall, Tex., for plaintiff-appellee.

Before JOHN R. BROWN, Chief Judge, and THORNBERRY and MORGAN, Circuit Judges.

THORNBERRY, Circuit Judge:

This Texas diversity case plunges us into the murky waters of implied promises and "leading objects." We emerge convinced that the judgment should be affirmed.

The instant suit was brought by appellee law firm to recover the reasonable value of services rendered in connection with an unsuccessful patent infringement suit filed by V & S Ice Machine Company, a shell corporation organized solely to hold the patent on an "ice blade" and to conduct patent infringement litigation. Appellant Voss, president of the corporation and holder of twenty per cent of its stock, was the defendant below. In late 1969, Jere Albright, another V & S stockholder, consulted Guy Matthews, a partner in the law firm, about the pending infringement suit, and informed him that no patent attorney had been retained, although a pretrial conference was scheduled for two weeks hence and the trial was one month away. Matthews agreed to take the case, after informing Albright of the firm's customary fees and cautioning him that Matthews and another partner, Coke Wilson, would have to devote all their time to the case to insure any chance of success. Upon learning that V & S was a mere shell, Matthews sought an assurance from Albright that the firm would be paid for their services; Albright replied that neither he nor the corporation could pay the fee, and referred Matthews to Voss, who he said made all the corporation's decisions.

Following the pretrial conference, Matthews contacted Voss for the first time, telling him that the case was in "bad shape" and that the firm's fee for handling the case through trial would be between ten thousand and twenty thousand dollars. Voss told Matthews to "go for broke", and agreed to having a second partner work on the case. Voss attended several sessions of the trial, and indicated to Matthews that he was pleased with its progress. During the trial, Voss told Wilson, the other partner, that he viewed the litigation like any other investment, and that he was willing to spend as much as twenty-five thousand dollars in attorneys' fees because he expected that the litigation would yield a "return" of several hundred thousand dollars to him. He told Wilson that he would "take care" of the fee, and that if the lawyers were successful, they would be rewarded by a trip to Las Vegas which Voss said he had used as an incentive in some of his other business dealings.

During the course of the trial, the law firm was paid approximately five thousand dollars in checks drawn on V & S, signed "Robert J. Voss, president." Voss told the firm to postpone cashing the second of these checks until he could deposit sufficient funds in the V & S account.

V & S lost the patent infringement suit.¹ The law firm withdrew from the case, and sent several bills for approximately fourteen thousand dollars in attorneys' fees to Voss at both his home and business addresses. After the bill had gone unpaid for several months, Wilson telephoned Voss and told him that the firm was looking to him personally for payment. Voss did not dispute his personal liability, but said that the bill was larger than he had expected it to be.

In awarding appellees a quantum meruit recovery of $14,248.83, the trial court found that Voss "induced Coke Wilson and Guy Matthews to represent him and his interest in V & S Ice Machine Company" in the infringement suit and "implied a promise on his part to pay to said attorneys a sum of money equal to what their services rendered were reasonably worth. Robert J. Voss received and accepted these services." On appeal, Voss contends that he is not personally liable for the attorneys' fees. His argument is two-fold: first, that the undisputed facts do not satisfy the Texas rules governing recovery in quantum meruit; secondly, that he promised only to guarantee payment by the corporation, and since this promise was not in writing, the Texas statute of frauds² bars its enforcement against him.

Appellant's first argument is wholly without merit. The trial court's findings of fact, amply supported by the record, fully justified recovery in quantum meruit under the test stated by the Texas courts — rendition of valuable services to the defendant, and his acceptance of those services under circumstances that would reasonably notify him that the plaintiff expected compensation. Colbert v. Dallas Joint Stock Land Bank, 129 Tex. 235, 102 S.W.2d 1031 (1937); Montes v. Naismith and Trevino Construction Co., 459 S.W.2d 691 (Tex.Civ. App. — Corpus Christi 1970, writ ref'd n.r.e.). Relying on Radio Station KBUY, Inc. v. Lieurance, 390 S.W.2d 16 (Tex.Civ.App. — Amarillo 1965, no writ), and on the fact that the firm was partially paid in checks drawn on the corporation, appellant argues that the law firm's services were rendered to and benefitted directly only the corporation. Lieurance, supra, involved a corporation that was active and fully capitalized at the time the debt arose,...