Celmer v. McGarry
| Decision Date | 21 November 2013 |
| Docket Number | No. 05–10–01133–CV.,05–10–01133–CV. |
| Citation | 412 S.W.3d 691 |
| Parties | Elizabeth W. CELMER, Appellant v. Charles McGARRY, Appellee. |
| Court | Texas Court of Appeals |
OPINION TEXT STARTS HERE
Bruce K. Thomas, Law Office of Bruce K. Thomas, Dallas, TX, for Appellants.
Michael F. Linz, Linz & Chandler, P.C., Frank D. Chandler, Dallas, TX, for Appellees.
Before Justices O'NEILL, FITZGERALD, and LANG–MIERS.
This is a fee dispute between an attorney and his client. The case began when appellant Elizabeth W. Celmer's former spouse interpleaded funds into the registry of the trial court after the conclusion of their divorce litigation. Appellee Charles McGarry, who represented Celmer in the divorce litigation, asserted claims for breach of contract and quantum meruit against Celmer. Following a jury trial, the court rendered a judgment for McGarry after it suggested a remittitur to reduce the actual damages awarded by the jury.
Before Celmer and her former spouse Edward O. Bufkin, Jr., were married, they entered into an antenuptial contract in which they agreed to their relative rights to property. See Bufkin v. Bufkin, 259 S.W.3d 343, 348 (Tex.App.-Dallas 2008, pet. denied)( Bufkin II ).1 Under the contract, all property owned before marriage or acquired during the first five years of marriage was the respective spouse's separate property. Id. The contract also provided that “a community property estate will accumulate from and after a date which is five years from the date of the marriage of the parties.” Id. As interpreted by the El Paso Court of Appeals and this Court in previous appeals, the contract provided that increases in the value of separate property, as well as income accumulating on separate property, would become community property after the parties' fifth wedding anniversary. See id.;Bufkin v. Bufkin, No. 08–02–00025–CV, 2003 WL 22725522 (Tex.App.-El Paso Nov. 20, 2003, pet. denied) (mem. op.) ( Bufkin I ). There were four assets at issue in the jury trial of Celmer and Bufkin's divorce: a residence in Dallas County, a ranch in Oklahoma, shares of stock in Campeon Pipeline Corporation, and shares of stock in Norgasco, Inc.
McGarry represented Celmer in both Bufkin I and Bufkin II, as will be explained in more detail below. Although McGarry and Celmer had entered into a written contingency fee contract before Bufkin I, McGarry's claims were not based on this contract, but rather on a series of emails he later exchanged with Celmer. The written contingency fee contract, dated December 5, 2001, provided, “In compensation for Attorney's services, Client agrees to pay Attorney a fee equal to the greater of: (a) forty five percent (45%) of Client's interest in the Norgasco stock or the proceeds or settlement thereof; or (b) fifty percent (50%) of Client's interest in the Norgasco stock or the proceeds or settlement thereof, if any filing is made in the Supreme Court of Texas in this case.” McGarry contends that the parties later agreed by e-mail that his contingency fee would no longer be limited to Celmer's interest in the Norgasco stock; instead, he would be entitled to 50% of Celmer's total recovery, plus $200 per hour for his services, plus expenses. The difference is significant because at the second trial of Celmer's divorce, the jury's findings resulted in a judgment awarding nothing to Celmer for her interest in the Norgasco stock, but awarding her $367,095.62 2 for her interest in other assets. This is the amount interpleaded by Celmer's former spouse in this action.
The jury in this case found that McGarry and Celmer intended to be bound by an agreement for McGarry to receive 50% of Celmer's total recovery, an additional $200 per hour for his services, and reimbursementof expenses. Because we conclude that the evidence was insufficient to support this finding, we reverse the trial court's judgment in part and render judgment for McGarry.
Celmer presents five issues.3 First, she contends there is no evidence of an enforceable contingency fee agreement which provided for 50% of her total recovery, plus $200 per hour for McGarry's services, plus expenses, and no evidence of any breach of contract to support the trial court's judgment. Second, she contends in the alternative that the judgment for breach of contract is against the great weight and preponderance of the evidence. Third, she contends that the trial court's judgment awards excessive damages unsupported by the evidence. She also argues that McGarry should forfeit any fees owed because of his breaches of fiduciary duty. Fourth, she argues that the trial court erred in dismissing her claim for tortious interference. And fifth, she contends that the trial court abused its discretion by striking her third amended petition and claim for breach of fiduciary duty.
A. SUFFICIENCY OF THE EVIDENCE
In her first issue, Celmer contends there is no evidence of an enforceable contingency fee agreement which provided for 50% of her total recovery, plus $200 per hour for McGarry's services, plus expenses. She argues that therefore there is no evidence of any breach of contract to support the trial court's judgment.
To establish a contract between the parties for a 50% contingency fee plus $200 per hour for his services, plus expenses, McGarry relies on a series of e-mails he exchanged with Celmer in May, 2004. This exchange occurred after Celmer prevailed in her first appeal arising out of the divorce litigation. See generally Bufkin I, 2003 WL 22725522. McGarry represented Celmer in Bufkin I, under the terms of the parties' 2001 written contingency fee agreement (the First Agreement). Although Celmer did not recover any money as a result of the first appeal, the court of appeals interpreted the prenuptial contract between Celmer and her spouse to allow her to assert a claim for certain increases in value in the Norgasco stock. Id. at *5–6;see also Bufkin II, 259 S.W.3d at 349 (describing El Paso court's ruling). The El Paso court remanded the case “for a just and right property division” of not only the Norgasco stock but also the entire community estate.
The First Agreement provided that “[i]f Attorney is successful in obtaining a new trial, Attorney will not represent Client in the trial court, but will assist Client in obtaining new trial counsel.” 4 Any fee to McGarry, however, would only be due and paid if Celmer received any recovery for her interest in the Norgasco stock after the new trial. The First Agreement expresslystated, “[n]o contingent fee shall be payable to Attorney if no recovery is received by Client in this matter.”
McGarry relies on a series of four e-mails to establish a second agreement. He contends that this second agreement entitles him to 50% of Celmer's total recovery plus $200.00 per hour for his services, plus expenses. These e-mails were exchanged in 2004, after the El Paso Court of Appeals remanded the case for new trial to give Celmer the opportunity to prove her claims to the community estate. See Bufkin I, 2003 WL 22725522, at *6.
On May 14, 2004, in Plaintiff's Exhibit (PX) 5, Celmer wrote 5 the first of the e-mails to McGarry on which he relies:
In reference to our original contract, I believe the addendum is required for us to sign to clarify the situation with the progress of our case and cost involved.
In the original contract you state that you will not represent me in a trial. However that has changed. You want to do it yourself with the consultant divorce attorney on board associated with the Court 330. That is necessary for us to cover all grounds, politically and by law.
We need to address further, that any additional costs to proceed with our case have to be split among us 50%/50% from the top of our portion of proceeds received by us. We both have the same steak at the case. We should limit sharing the proceeds with anyone else, unless is absolutely necessary like a divorce attorney practicing well with the 330 court.
According to my understanding of the situation and the original contract at this time I owe you 45% of proceeds from the case for winning the appeal plus the expenses you have incurred so far listed on your invoice. I believe it is very fair for you to receive additional 5% of the proceeds to represent us at the divorce court, as you would have received, if representing me at the Supreme Court.
Within the hour on the same day, McGarry replied (PX6):
You're right that we need to work something out.... I took another look at our existing agreement, and you are right that it did not contemplate me representing you further in the trial court. So you are free to choose your attorney at this point. I believe I know the issue involved very well and can prove it as well as anyone.
Our existing agreement went to 50% when the case was filed in the supreme court. I do not believe it is right or fair to you to seek any additional percentage. In fact, since the appeal has been won, it is probably unethical for any lawyer to ask for a percentage for the new trial. So I think a deferred hourly rate is the only fair option for you. This would be true both for my additional work and for any new lawyer.
The existing contract also called for you to cover the out-of-pocket expenses. However, you were never able to do that. In the trial court, there will be many thousands of dollars in expenses incurred for various expert witnesses. So, unless you have the finances available, you will have to either find someone to loan it to you, or get me to finance it.
Either way, you have to realize at this point, you are going to end up with less than 50%, because the expenses and new hourly fees would come out of your 50%....
Please think this over and let me know how you want to proceed. You probably have a couple of weeks to make a decision.
And, later on the same day, Celmer replied (PX 7):
OK...
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