Alexander v. Inman

• Decision Date: 08 February 1995
• Citation: 903 S.W.2d 686
• Court: Tennessee Court of Appeals
• Parties: Dave A. ALEXANDER and Maclin P. Davis, Jr., Plaintiffs/Appellees, v. Julia Ann White INMAN, Defendant/Appellant.

Page 686

903 S.W.2d 686

Dave A. ALEXANDER and Maclin P. Davis, Jr., Plaintiffs/Appellees, v. Julia Ann White INMAN, Defendant/Appellant.

Court of Appeals of Tennessee,

Middle Section.

Feb. 8, 1995.

Application for Permission to Appeal

Denied by Supreme Court

July 3, 1995.

Harlan Dodson, III, Anne C. Martin, Dodson, Parker & Behm, Nashville, for appellant.

Ward DeWitt, Jr., Trabue, Sturdivant & DeWitt, Nashville, for appellees.

OPINION

KOCH, Judge.

This appeal involves a dispute over a $501,000 attorneys' fee in a divorce case. Two attorneys filed suit against their former client in the Chancery Court for Davidson County after she refused to pay their final bill. A jury awarded the attorneys $263,985 in addition to the $159,000 they had already received. On this appeal, the client takes issue with the trial court's evidentiary rulings, the adequacy of the jury instructions, the sufficiency of the evidence, and the trial court's refusal to grant an additur or to make an independent determination of the reasonableness of the fee. We have determined that the judgment must be reversed because the trial court improperly excluded competent evidence concerning the reasonableness of the fee and because the jury instructions were incomplete.

I.

Julia Ann White Inman and Gordon Everett Inman were married in 1960. The first of their four children was born in 1963, and Ms. Inman remained at home for the next twelve years working as a wife and mother. After their children reached school age, both Mr. Inman and Ms. Inman obtained their real estate licenses and went to work for a realtor in Williamson County. Mr. Inman also continued to operate a service station in Nashville. The Inmans opened their own real estate business in 1979 in Franklin, and one year later, Mr. Inman invested in a Nutri-System franchise in Nashville.

The parties' hard work and successful investments yielded handsome returns. They moved into a large home in Williamson County known as "Magnolia Hall." Inman Realty became the largest real estate firm in Williamson County. Mr. Inman's partnership became Nutri-System's largest franchisee, and Mr. Inman became chairman of a local bank and acquired a mortgage company. By the mid-1980's, the Inmans were millionaires several times over and were among Williamson County's most prominent and influential couples.

The Inmans' marital fortunes declined as their financial fortunes rose. They separated in April 1987. Ms. Inman retained a Nashville law firm on a straight hourly basis and filed suit for divorce in September 1987 in the Chancery Court for Williamson County. Mr. Inman counterclaimed for divorce shortly thereafter. Trial preparations began in early 1988 after an attempted reconciliation failed. Ms. Inman became dissatisfied with her representation because junior attorneys were doing most of the work on her case and because she believed that they had not effectively prevented Mr. Inman from concealing martial assets. She eventually decided to obtain new counsel after her attorneys set the case for trial without consulting her. She had already paid $10,000 in attorneys' fees by that time.

Ms. Inman retained David A. Alexander on September 6, 1988. Mr. Alexander requested a $10,000 retainer but did not discuss any other specific billing arrangements with Ms. Inman. He also recommended associating Maclin P. Davis, Jr. to assist with the case. When Ms. Inman expressed concern about using multiple attorneys, Mr. Alexander explained that Mr. Davis was a highly regarded domestic relations attorney and that his firm could "staff up" the case. He also reassured her that "the case would be handled as one lawyer even though we were bringing Mr. Davis into the case."

Mr. Alexander informed Ms. Inman during their first meeting that he possessed evidence, obtained for another divorce client, that would help her case. He permitted Ms. Inman to read a private investigator's report concerning a liaison at a Dallas hotel between the other client's wife and Mr. Inman. Ms. Inman had not been aware of Mr. Inman's infidelity and immediately instructed Mr. Alexander to amend her complaint to add adultery as a ground for divorce.

Mr. Alexander discussed Ms. Inman's case with Mr. Davis by telephone after meeting with Ms. Inman. Several days later, he told Mr. Davis about Ms. Inman's difficulties with her original attorneys and explained that the trial was scheduled to begin in less than one month. Messrs. Alexander and Davis agreed to request a continuance and seek permission to reopen discovery. They also agreed to divide the fee equally, and Mr. Alexander asked Mr. Davis to provide him with a copy of the contract he used when representing wives on other than an hourly basis.

Ms. Inman met with Messrs. Alexander and Davis on September 12, 1988. They did not discuss attorneys' fees until September 22, 1988 when Mr. Alexander handed Ms. Inman a one-page contract and told her, "[t]his is an agreement we need for you to sign." Neither Mr. Alexander nor Mr. Davis explained the agreement to Ms. Inman. Mr. Davis thought that Mr. Alexander had already discussed the agreement with Ms. Inman. Ms. Inman simply "looked down through the paper," signed it, and then returned it to Mr. Alexander. She testified that she did not receive a copy of the agreement until after this dispute arose.

The agreement's provisions relating to the fee and the billing arrangements are unclear. While the minimum fee is based on the retainer or on straight hourly billing, the maximum fee is contingent on the amount of alimony and marital property Ms. Inman received. ¹ The provision for billing required the attorneys to bill Ms. Inman within a reasonable time after the charges for the work exceeded $10,000. ² Ms. Inman understood that the agreement required Messrs. Alexander and Davis to begin billing her when the $10,000 retainer was used up.

The trial court agreed to continue the trial until November 15, 1988 but declined to reopen discovery. Accordingly, Ms. Inman's attorneys had approximately eight weeks to prepare for trial. They filed an amended complaint alleging adultery. They also obtained Ms. Inman's files from her former attorneys, subpoenaed bank records, and requested the trial court to order Mr. Inman to answer interrogatories that had not been answered. Since most of the work centered on identifying and valuing the martial estate, they decided to use the expert witness that had already been retained by Ms. Inman's former attorneys.

Mr. Alexander left most of the actual trial work to his partner, Ernest W. Williams, and Mr. Davis. During the next eight weeks, Messrs. Davis and Williams spent most of their time working on Ms. Inman's case. Mr. Williams met frequently with Ms. Inman. Ms. Inman was a demanding client, but Mr. Davis also found her to be very helpful because she provided documents and other information that enabled them to locate marital property that had gone unidentified during earlier discovery. Ms. Inman repeatedly told her attorneys that she expected to receive the divorce and one-half of the marital property and that she expected Mr. Inman to pay her attorneys' fees. Mr. Davis informed her that he was unaware of any case in which a wife had received one-half of a marital estate the size of the Inmans' and that obtaining 40-45% of the marital property would be a very good result.

The case went to trial on November 15-17, 1988, after Mr. Inman rejected two settlement offers. ³ Mr. Inman took the position at trial that the value of the marital estate was approximately $7.2 million and that Ms. Inman was entitled to real and personal property, including Magnolia Hall, worth $2,275,200. For her part, Ms. Inman insisted that she was entitled to real and personal property worth $4,555,741. She also insisted that Mr. Inman pay her $400,000 for her attorneys' fees and $8,000 per month in long-term spousal support.

The trial court filed its memorandum opinion in December 1988. It awarded the divorce to Mr. Inman, valued the marital estate at $8,000,000, and awarded Ms. Inman $2,300,200 in marital property--only $25,000 more than Mr. Inman's offer. ⁴ The trial court declined to award Ms. Inman long-term spousal support and determined not to make an additional award for her attorneys' fees in light of the value of the marital property she received. The trial court entered its final judgment on December 29, 1988.

Ms. Inman was extremely upset with the trial court's decision and instructed her attorneys to appeal. Mr. Inman paid over approximately $301,000 as part of the division of the marital property in January 1989. Messrs. Alexander and Davis decided to collect part of their fee, and so on January 19, 1989, Mr. Williams informed Ms. Inman that Messrs. Alexander and Davis "wanted her to pay $150,000 towards attorneys' fees" and approximately $16,000 in expenses and that these funds were "needed for the ongoing case." Ms. Inman agreed because she "just assumed that he [Mr. Williams] needed this as an ongoing retainer fee for the case." She did not ask for an accounting of her attorneys' services and expenses at that time.

Messrs. Alexander, Davis, and Williams shared the responsibility for preparing the brief filed with the Court of Appeals. The court heard Ms. Inman's appeal in July 1989 and filed an opinion on October 18, 1989 that substantially modified the trial court's decision. ⁵ We dismissed Mr. Inman's counterclaim for divorce because he had perjured himself concerning his extra-marital affair and awarded the divorce to Ms. Inman. In addition, we valued the marital estate at $8,850,000 and awarded Ms. Inman additional marital property worth $1,043,230. We also directed Mr. Inman to pay $5,000 per month in rehabilitative alimony for three years as well as fifty percent of Ms. Inman's attorneys' fees through the trial and seventy-five percent of her attorneys' fees on appeal.

The Tennessee Supreme Court granted...