CECIL STEPHENSON, JR v. DIANN LEBOEUF

• Decision Date: 06 April 2000
• Citation: 16 S.W.3d 829
• Parties: <!--16 S.W.3d 829 (Tex.App.-Houston 2000) CECIL B. STEPHENSON, JR., Appellant v. DIANN LEBOEUF, Appellee NO. 14-98-00723-CV In The Fourteenth Court of Appeals
• Court: Texas Court of Appeals

Page 829

16 S.W.3d 829 (Tex.App.-Houston[14th Dist.] 2000)

CECIL B. STEPHENSON, JR., Appellant v. DIANN LEBOEUF, Appellee

NO. 14-98-00723-CV

In The Fourteenth Court of Appeals

April 6, 2000.

Rehearing Overruled May 25, 2000.

January 20, 2000 Withdrawn.

On Appeal from the 189th District Court Harris County, Texas Trial Court Cause No. 94-39354

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[Copyrighted Material Omitted] Panel consists of Justices Amidei, Edelman and Wittig.

OPINION ON REHEARING

MAURICE E. AMIDEI, Justice.

Appellee's motion for rehearing is overruled, our previous opinion issued January 20, 2000 is withdrawn, an the following opinion is issued in its place.

Appellant, Cecil B. Stephenson, Jr. appeals the trial court's judgment entered in favor of appellee, DiAnn LeBoeuf. We affirm in part as modified and reverse and render in part.

I. Background

Stephenson represented LeBoeuf in divorce proceedings in 1983. At the beginning of the representation, LeBoeuf paid Stephenson a $1,000.00 retainer and later payments of $900.00 and $350.00. After that, LeBoeuf was no longer able to make any payments to Stephenson. In March 1983, Stephenson had LeBoeuf sign a promissory note in the amount of $900.00 for his unpaid attorney's fees and a deed of trust on her home to secure the note. The note also covered any additional fees that might become due and owing. By September 1983, Stephenson had negotiated a property settlement for LeBoeuf. Under the property settlement, LeBoeuf's husband, Joe LeBoeuf, was to receive the house and LeBoeuf was to receive a $38,800.00 note due in six months, secured by a deed of trust on the home, on which Stephenson named himself trustee. Joe was to refinance the house and pay LeBoeuf's note. Also, in September 1983, Stephenson had LeBouef sign another note in the amount of $8,100.00 for unpaid attorney's fees, secured by the same deed of trust as she had signed with the $900.00 note.

The divorce became final in October 1983. In December 1983, Joe unexpectedly passed away before he had refinanced the house and paid LeBoeuf. Pursuant to the divorce decree, Joe was to pay Stephenson $1,200.00 in attorney's fees. Before his death, Joe had paid Stephenson $600.00. Stephenson attempted to collect the $8,100.00, which LeBoeuf owed him, by filing a claim against Joe's estate for the entire $8,100.00. Stephenson's claim against Joe's estate was denied. Stephenson also filed a claim against the estate of Amanda and Kyle LeBoeuf, the LeBoeuf's children. This claim was also denied.

Stephenson asked LeBoeuf to sign a partial transfer of lien, assigning a portion of the $38,800.00 note to him to secure payment of his fees. LeBoeuf refused to sign the transfer, and Stephenson, subsequently sued LeBoeuf for his unpaid attorney's fees. In 1989, Stephenson received a judgment in his favor for $7,500.00, plus interest. Stephenson filed an abstract of judgment in the Harris County Real Property Records' Office.

In March 1986, LeBoeuf moved to Las Vegas, Nevada. In December 1989, she filed for bankruptcy in Las Vegas. In March 1990, LeBoeuf received a discharge in bankruptcy.

In August 1992, the property was sold to tenants who had been renting it. On May 28, 1992, at the request of Texas American Title Company, Stephenson advised it he was due $24,396.97 for the 1989 judgment he had received against LeBoeuf. In order to allow the sale of the property to go through, the parties agreed to place the proceeds from the sale of the property in an escrow account.

LeBouef hired a new attorney, who wrote Stephenson in September and October 1993, notifying him of LeBoeuf's discharge in bankruptcy and asking him to release his claim to the proceeds of the sale. In 1994, when Stephenson refused to release his claim to the escrow funds, LeBoeuf filed suit for declaratory judgment on the funds in the escrow account.

LeBoeuf's claims against Stephenson for breach of fiduciary duty and fraud were tried to a jury. The jury found Stephenson (1) had assumed the fiduciary duty of an attorney to LeBouef by naming himself trustee of the deed of trust securing the $38,800.00 note while serving as her attorney, and (2) had "knowingly" breached that fiduciary duty when he made a claim to the proceeds from the sale of the property. The jury, however, found Stephenson had not committed fraud against LeBoeuf. Based on its affirmative finding of breach of fiduciary duty, the jury awarded Leboeuf $51,511.05 from the escrow account, $7,750.00 for past mental anguish, and $25,000.00 in exemplary damages. The jury awarded LeBoeuf $100,000.00 in attorney's fees for trial, $10,000.00 for appeal to the court of appeals, and $10,000.00 for appeal to the Texas Supreme Court.

The jury determined Stephenson was entitled to $6,530.00 of the funds in the escrow account. The jury also awarded Stephenson $34,000.00 in attorney's fees for trial, $10,000.00 for appeal to a court of appeals, and $10,000.00 for appeal to the Texas Supreme Court.

In its judgment, the trial court, stating that the declaratory judgment action had been tried to the court, declared that LeBoeuf has all rights in the escrow account and Stephenson has no rights in those funds. Based on the declaratory judgment, the court entered judgment for LeBoeuf for attorney's fees in the same amount as that which the jury had awarded her. The court also granted LeBoeuf's motion notwithstanding the verdict on the jury's findings that Stephenson was entitled to a portion of the escrow funds and attorney's fees on the basis that there were no pleadings to support the jury's findings and the issue was not tried by consent. Finally, the trial court entered judgment on the jury's award of $7,750.00 in mental anguish damages and $25,000 in punitive damages.

II. Fiduciary Duty

Stephenson challenges the legal sufficiency of the evidence in support of the jury's finding that he assumed a fiduciary duty.¹ When reviewing a challenge to the legal sufficiency of the evidence, i.e., a "no evidence" point of error, the reviewing court may consider only the evidence and inferences that support the challenged findings and should disregard all evidence and inferences to the contrary. See ACS Inv., Inc. v. McLaughlin, 943 S.W.2d 426, 430 (Tex. 1997); Leitch v. Hornsby, 935 S.W.2d 114, 118 (Tex. 1996). If there is more than a scintilla of evidence to support the finding, the claim is sufficient as a matter of law, and any challenges merely go to the weight of the evidence. See Browning-Ferris, Inc. v. Reyna, 865 S.W.2d 925, 928 (Tex. 1993). The court may sustain a "no evidence" point if the record reveals one of the following:

(1) a complete absence of a vital fact;

(2) the court is barred by rules of law or evidence from giving weight to the only evidence offered to prove a vital fact;

(3) the evidence offered to prove a vital fact is no more than a scintilla; and

(4) the evidence established conclusively the opposite of the vital fact.

See Uniroyal Goodrich Tire Co. v Martinez, 977 S.W.2d 328, 334 (Tex. 1998), cert. denied, 526 U.S. 1040, 119 S. Ct. 1336, 143 L.ED.2D 500 (1999); Merrell Dow Pharm., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997), cert. denied, 523 U.S. 1119, 118 S. Ct. 1799, 140 L.ED.2D 939 (1998). When the reviewing court sustains a "no evidence" point, it is the court's duty to render judgment for the appellant because that is the judgment the trial court should have rendered. See Vista Chevrolet, Inc. v. Lewis, 709 S.W.2d 176 (Tex. 1986); National Life & Accident Ins. Co. v. Blagg, 438 S.W.2d 905, 909 (Tex. 1969).

LeBoeuf based her assertion that Stephenson owed her a fiduciary duty on two relationships: (1) as her attorney, and (2) as trustee on her deed of trust. A fiduciary duty requires the fiduciary to place the interest of the other party above his own. See Hoggett v. Brown, 971 S.W.2d 472, 487 (Tex. App.-Houston [14th Dist.] 1997, writ denied). There are two types of fiduciary relationships. The first is a formal fiduciary relationship, which arises as a matter of law, including attorney-client relationships. See Insurance Co. of N. Am. v. Morris, 981 S.W.2d 667, 674 (Tex. 1998); Texas Bank & Trust Co. v. Moore, 595 S.W.2d 502, 507 (Tex. 1980). The second is an informal fiduciary relationship, which may arise "from a moral, social, domestic or purely personal relationship called a confidential relationship." Associated Indem. Corp. v. CAT Contracting, Inc., 964 S.W.2d 276, 287 (Tex. 1998). A confidential relationship exists in cases in which "'influence has been acquired and abused, in which confidence has been reposed and betrayed.'" Id. (quoting Crim Truck & Tractor Co. v. Navistar Int'l Transp. Corp., 823 S.W.2d 591, 594 (Tex. 1992)).

Stephenson argues his representation of Leboeuf in her divorce could not give rise to a fiduciary duty with respect to the escrow account because that representation terminated upon her divorce in 1983. We agree. The attorney-client relationship is based a contractual relationship in which the attorney agrees to render professional services for the client. See Vinson & Elkins v. Moran, 946 S.W.2d 381, 405 (Tex. App.-Houston [14th Dist.] 1997, writ dism'd by agr.) (citing Yaklin v. Glusing, Sharpe & Krueger, 875 S.W.2d 380, 383 (Tex. App.-Corpus Christi, 1994, no writ); Parker v. Carnahan, 772 S.W.2d 151, 156 (Tex. App.-Texarkana 1989, writ denied)). To establish the relationship, the parties must explicitly, or by their conduct, manifest an intention to create it. See id. (citing Terrell v. State, 891 S.W.2d 307, 313 (Tex. App.-El Paso 1994, pet. ref'd)). In the absence of an agreement to the contrary, an attorney-client relationship generally terminates upon the completion of the purpose of the employment. See Simpson v. James, 903 F.2d 372, 376 (5th Cir. 1990); Dillard v. Boyles, 633 S.W.2d 636, 643 (Tex. App.-Corpus Christi 1982, writ ref'd n.r.e.).

LeBoeuf...