Bright v. Addison

• Decision Date: 28 September 2005
• Docket Number: No. 05-04-00170-CV.,05-04-00170-CV.
• Citation: 171 S.W.3d 588
• Parties: Steven F. BRIGHT, Steven F. Bright, P.C., Crysta Entertainment, N.V., and Graham, Bright & Smith, P.C., Appellants, v. Howard ADDISON, Charles B. Lowe, and Questcom, Inc. f/k/a Quest Wireless Communications, Inc., Appellees.
• Court: Texas Supreme Court

171 S.W.3d 588

Steven F. BRIGHT, Steven F. Bright, P.C., Crysta Entertainment, N.V., and Graham, Bright & Smith, P.C., Appellants, v. Howard ADDISON, Charles B. Lowe, and Questcom, Inc. f/k/a Quest Wireless Communications, Inc., Appellees.

No. 05-04-00170-CV.

Court of Appeals of Texas, Dallas.

August 3, 2005.

Rehearing Overruled September 28, 2005.

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R. Spencer Shytles, Gary E. Smith, Graham, Bright & Smith P.C., G. Leroy Street, Street & Rudy, LLC, Dallas, for Appellants.

Edward P. Perrin, Jr., C. Christian Frederiksen, Jr., Hallett & Perrin, P.C., Dallas, for Appellees.

Before Justices MORRIS, WHITTINGTON, and O'NEILL.

OPINION

Opinion by Justice WHITTINGTON.

After a trial before the court, the trial judge found appellants had usurped appellees' opportunity to manage a casino in Aruba. Steven F. Bright, Steven F. Bright, P.C., Crysta Entertainment, N.V., and Graham, Bright & Smith, P.C. appeal the trial court's judgment awarding Howard Addison, Charles B. Lowe, and Questcom Inc. f/k/a Quest Wireless Communications, Inc. damages for breach of fiduciary duty, interference with prospective business relations, usurpation of business opportunity, and fraud. Bright, Steven F. Bright, P.C., and Crysta, in forty-four issues, urge reversal of the trial court's judgment. In nine issues, Graham, Bright & Smith, P.C. also urges reversal of the trial court's judgment. We affirm.

BACKGROUND

Appellees Addison, Lowe, and QuestCom sued appellants for usurping a business opportunity to manage a casino in Aruba. Appellant Bright is an attorney who practiced law as a member or shareholder of appellant professional corporations Steven F. Bright, P.C. and Graham, Bright & Smith, P.C. Appellant Crysta Entertainment N.V. is an Aruban corporation set up by Bright through which to manage the casino. Bright, Steven F. Bright, P.C., and Crysta Entertainment N.V. filed a joint brief on appeal and will be referred to as the Bright appellants. Graham, Bright & Smith, P.C. filed a separate brief on appeal and will be referred to as GB & S. The parties dispute most of the facts material to their claims. Because many of appellants' issues challenge the sufficiency of the evidence, we will not summarize facts here but will review the evidence relevant to particular issues as we address them.

STANDARDS OF REVIEW

The Bright appellants raise issues challenging whether the evidence adduced at trial supports the trial judge's findings. A party who challenges the legal sufficiency of the evidence to support an issue upon which he did not have the burden of proof at trial must demonstrate on appeal that there is no evidence to support the adverse finding. Luce v. Interstate Adjusters, Inc., 26 S.W.3d 561, 566 (Tex.App.-Dallas 2000, no pet.) (citing Croucher v. Croucher, 660 S.W.2d 55, 58 (Tex.1983)). When reviewing a "no evidence" point, we determine "whether the evidence at trial would enable reasonable and fair-minded people to reach the verdict under review." City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex.,2005).

A trial judge's findings of fact are reviewed for factual sufficiency of the evidence under the same legal standards as applied to review jury verdicts for factual sufficiency of the evidence. See Ortiz v. Jones, 917 S.W.2d 770, 772 (Tex.1996)(per curiam). When challenging the factual sufficiency of the evidence supporting an adverse finding upon which the appealing party did not have the burden of proof, the appellant must demonstrate that there is insufficient evidence to support the adverse finding. Dallas County v. Holmes, 62 S.W.3d 326, 329 (Tex.App.-Dallas 2001, no pet.) (citing Croucher, 660 S.W.2d at 58). In reviewing a factual sufficiency challenge, we consider and weigh all the evidence in support of and contrary to the finding, and will set aside the verdict only if it is so contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust. See Cain v. Bain, 709 S.W.2d 175, 176 (Tex.1986)(per curiam).

In making this review, we are not a fact finder. Thus, we will not pass upon the credibility of the witnesses or substitute our judgment for that of the trier of fact, even if a different answer could be reached upon review of the evidence. See Holmes, 62 S.W.3d at 329; Tex. Farmers Ins. Co. v. Cameron, 24 S.W.3d 386, 392 (Tex.App.-Dallas 2000, pet. denied). The amount of evidence necessary to affirm a judgment is far less than that necessary to reverse a judgment. Barnett v. Coppell North Texas Court Ltd., 123 S.W.3d 804, 813-14 (Tex.App.-Dallas 2003, pet. denied).

Appellants also challenge the constructive trust imposed and the declaratory judgment entered by the trial judge, as well as the admission of expert testimony. We review these rulings for abuse of discretion. See Medford v. Medford, 68 S.W.3d 242, 249 (Tex.App.-Fort Worth 2002, no pet.)(whether constructive trust should be imposed is within discretion of trial court); Ter-Vartanyan v. R & R Freight, Inc., 111 S.W.3d 779, 781 (Tex.App.-Dallas 2003, pet. denied) (evidentiary rulings, including rulings on expert testimony, reviewed for abuse of discretion); Bonham State Bank v. Beadle, 907 S.W.2d 465, 468 (Tex.1995)(trial court has discretion to enter declaratory judgment as long as it will serve useful purpose or will terminate the controversy between the parties). The trial court abuses its discretion only if it acts without reference to any guiding rules or principles. Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex.1985).

Finally, appellants challenge the award of punitive damages. We will discuss the relevant standards of review when we address the issues relating to the award of punitive damages.

BREACH OF FIDUCIARY DUTY

In their first three issues, the Bright appellants challenge the legal and factual sufficiency of the evidence supporting the trial judge's findings that they owed fiduciary duties to appellees, breached those duties, or failed to act in good faith in acquiring rights in the Aruba casino. Appellees urge Bright was their lawyer, and as their lawyer, owed them fiduciary duties. Bright contends he was their business associate but never their attorney.

The attorney-client relationship is a contractual relationship whereby an attorney agrees to render professional services for the client. Honeycutt v. Billingsley, 992 S.W.2d 570, 581 (Tex.App.-Houston [1st Dist.] 1999, pet. denied). The relationship may be expressly created through a contract or it may be implied from the actions of the parties. Honeycutt, 992 S.W.2d at 581. To determine whether there was a meeting of the minds, a fact finder uses an objective standard examining what the parties said and did and does not look at their subjective states of mind. Roberts v. Healey, 991 S.W.2d 873, 880 (Tex.App.-Houston [14th Dist.] 1999, pet. denied).

There was evidence Bright acted both as appellees' attorney and as their business associate. Bright points to the evidence showing he oversaw construction at the casinos, purchased furniture, bought equipment, met with contractors, and undertook other activities relating to the operation of the casinos. Appellees point to evidence Bright incorporated corporations, conducted due diligence, negotiated contracts, worked on licensing issues, advised on regulatory issues, and other activities related to the practice of law.

All parties point to Bright's billing as supporting their arguments. Bright argues his invoices were consistent with the "consulting fees" agreed to in a non-binding term sheet signed by the parties to invest in and operate a casino in the Costa Caribe Hotel in Juan Dolio, Dominican Republic, and did not represent legal work he undertook for appellees. Appellees point to the designation on the bills for "professional services," and argue the only "professional services" Bright could offer were legal services. The bills were on Graham, Bright & Smith, P.C. letterhead. Appellees' funds were deposited into Graham Bright & Smith P.C.'s client trust account.

Although Bright maintains most of his activities on Addison and Lowe's behalf were not legal services, he did admit at trial that some of the work he performed for Addison and Lowe was legal work; he was uniquely qualified to perform certain work for Addison and Lowe because he was a lawyer; and his consulting fee did cover some activity he would describe as normal legal work. He admitted he advised Addison and Lowe regarding the attorney-client privilege. Lowe and Addison both testified they retained Bright as their lawyer. After working with Bright for several months, Lowe sent Bright an engagement letter, based on Bright's advice about preserving the attorney-client privilege. The letter was written on behalf of all appellees. Bright did not respond to the letter or advise appellees they were mistaken about the nature of the relationship between them. Although the term sheet provided the parties would enter into a shareholders' agreement, agreement on the terms was never reached and no written agreement was ever signed creating a contractual relationship among the parties as joint shareholders. After a review of the record, we hold there was legally and factually sufficient evidence to support the trial judge's finding of an attorney-client relationship between Bright and appellees.

The relationship existing between attorney and client is characterized as "highly fiduciary," and requires proof of "perfect fairness" on the part of the attorney. See Jackson Law Office, P.C. v. Chappell, 37 S.W.3d 15, 22 (Tex.App.-Tyler 2000, pet. denied) (citing Archer v. Griffith, 390 S.W.2d 735, 739 (Tex.1964)). As appellees' attorney, Bright owed them the duty of full disclosure. Chappell, 37 S.W.3d at 22. As noted in Chappell, "[a] fiduciary has much more than the traditional obligation not to make any...