Haden v. Sacks, No. 01-01-00200-CV (Tex. App. 9/7/2006)
| Decision Date | 07 September 2006 |
| Docket Number | No. 01-01-00200-CV.,01-01-00200-CV. |
| Parties | CHARLES McINTYRE HADEN, JR., INDIVIDUALLY, and CHARLES MCINTYRE HADEN, JR. & COMPANY D/B/A HADEN & COMPANY, Appellants, v. DAVID J. SACKS, P.C. D/B/A SACKS & ASSOCIATES, Appellee. |
| Court | Texas Court of Appeals |
On Appeal from County Civil Court at Law No. 2, Harris County, Texas, Trial Court Cause No. 722,791.
Panel consists of Chief Justice RADACK and Justices KEYES and ALCALA.
This appeal derives from a dispute over whether and how a client agreed to pay a law firm for legal services. The client, appellants, Charles M. Haden, Jr., individually (Haden), and Charles McIntyre Haden, Jr. & Company d/b/a Haden & Company (the company), challenge a series of summary judgments and an eventual judgment rendered in favor of appellee, David J. Sacks, P.C. (Sacks) d/b/a Sacks & Associates (collectively referred to as the law firm). In three issues, the company contends that the law firm did not establish its entitlement to judgment as a matter of law (1) for breach of contract to pay $30,314.38 for legal services performed, (2) for $120,887.50 in attorney's fees awarded the law firm in connection with pursuing the breach of contract claim, or (3) on the company's counterclaims for violations of the Deceptive Trade Practices and Consumer Protection Act (DTPA),1 breach of fiduciary duty, breach of contract, and fraud. We affirm.
Haden and his predecessor company had an appeal pending to the United States Court of Appeals for the Fifth Federal Circuit (the Fifth Circuit) from an adverse judgment rendered in the United States District Court for the Southern District of Texas, Houston Division. That controversy involved a commercial landlord-tenant dispute and resulted in an adverse judgment that not only assessed liability, but also eliminated the company's counterclaims. Trial counsel who represented the company in the federal case had prepared a preliminary draft of an appellate brief when Sacks and Haden discussed the merits of hiring independent appellate counsel for the appeal instead of relying on trial counsel. As a result of the conversation, the company hired Sacks and his law firm for the appeal. Sacks is board certified in civil appellate law by the Texas Board of Legal Specialization.
The parties began their working relationship through a written engagement letter sent from the law firm and dated August 4, 1997. The letter, in its entirety, states as follows:
I am honored to represent you with regard to the above-referenced matter. At this point, you have requested that I assist with the writing of the Appellant's Brief and any reply. If oral arguments are granted by the Fifth Circuit, a decision will have to be made on who should argue the case.
My normal rate is $300.00 per hour, but my rate for this particular matter will be $200.00 per hour. The other lawyers in my firm range from $150.00 to $200.00 per hour, and paralegals range from $50.00 to $100.00 per hour. You are responsible for all costs and expenses in the case as incurred. These expenses include, but are not limited to, copies; binding; fax transmissions; travel; lodging; parking; etc.
Please submit a $10,000 retainer to be applied to fees and expenses.
Please sign in the space provided below and return the original to my office as soon as possible.
Thank you for your cooperation and attention.
Sacks's signature appears at the close of the letter. Below Sacks's signature is the statement, "Your signature below indicates acceptance of the terms of this fee agreement." The face of this letter shows that, on endorsing it, individually and as president of the company on August 21, 1997 and returning it to the law firm, Haden had altered the original $10,000 amount proposed by striking through that amount, superscripting the amount of $5,000 over the original typewritten numerals in handwriting, and adding his initials beside that change.
In addition to endorsing the law firm's letter, Haden, again individually and on behalf of the company, forwarded a check for the $5,000 retainer by an August 21, 1997 letter, which stated the following:
Pursuant to our telephone conversation, enclosed herewith is a check in the amount of five thousand dollars ($5,000) to be applied to fees and expenses in assisting with the writing of the Appellants' Brief and reply. Also enclosed is an executed copy of your August 4, 1997 letter indicating that I have acknowledged acceptance of your fee agreement on behalf of Haden & Company and myself, except that the initial retainer amount has been reduced to $5,000 per our agreement. Thank you for your assistance in this matter. I look forward to reading your appellant [sic] brief.
The law firm filed the 48-page brief with the Fifth Circuit on September 10, 1997. The brief sought a remand on the merits and a new trial for Haden's and the company's counterclaims.
On September 15, 1997, the law firm finalized its invoice for work on the brief at a total due of $37,259.71. The invoice reflected 28 hours' work by Sacks, 161.75 hours' work by an associate, and 37 hours' work by a paralegal, as well as expenses and disbursements. On the same day, Sacks wrote to Haden concerning the brief and forwarded the invoice. Concerning the brief and the invoice, Sacks's letter states,
I hope you are happy with the Brief. There is an enormous amount of blood, sweat, and tears that went into it. I think it gives us the best possible chance of getting your case turned around.
In that regard, given the state of the record that we were eventually able to retrieve from the Court, putting together winning arguments took considerable [sic] more time than I anticipated after giving the cursory review of the initial documents. I have attached our bill for service rendered and expenses incurred through the completion of the Brief.
We are committed to excellence and will generally spend whatever time is necessary to develop a winning brief given the state of the record. Sometimes that gets a little more expensive than anticipated.
If you can take care of this bill within the next thirty (30) days, I will agree to do the work we have done so far for a flat fee of $30,000. With your $5,000, the balance due would be $25,000.
On November 24, 1997, an associate of the law firm sent a letter to Haden, along with a copy of the opponent's appellee's brief. The letter stated, as follows:
Please find enclosed for your review a copy of the Brief of Appellee. A reply brief must be filed no later than Tuesday, December 2, 1997. If you are interested in having our firm submit a reply brief, you must contact me as soon as possible; otherwise, I will presume you do not wish to submit a reply brief.
I look forward to hearing from you.
The law firm filed the reply brief on December 4, 1997.
On December 17, 1997, the law firm sent an invoice reflecting an outstanding debt of $32,259.71 for the initial brief. The total was the amount due after the $5,000 retainer was credited against the original debt of $37,259.71. That invoice also included an additional $3,045 fee for work done by the law firm to prepare the reply brief. The total outstanding balance shown due on that invoice was $35,304.71. The company paid $5,000 to the law firm by a check dated December 31, 1997, which the law firm deposited in its account on January 13, 1998. On March 17, 1998, when only the $5,000 retainer and the additional $5,000 had been paid, and the outstanding balance due was $30,314.38, Sacks sent a letter to Haden. The complete text of the letter follows:
Dear Charles:
In November you told me that you were going to start paying $5,000.00 a month. I did receive December's payment sometime in January, but I have received nothing for January, February, or March. A few weeks ago when we spoke, you reassured me that you were going to resume paying on this account. I had the impression that the first payment would be within a few days, but nothing has been received. I have tried to work with you over the last seven months or so, but it does not appear that any consistent effort is being made to pay this bill.
If you really do not intend to pay for my services, please let me know, and we can deal with that accordingly. Otherwise, I am interested in hearing your plan for payment. It needs to be some firm consistent schedule that pays this off in a reasonably short period of time. In any event, prior to oral arguments before the Fifth Circuit.
Please let me know how you wish to proceed.
On September 9, 1998, the Fifth Circuit issued an 18-page, unpublished opinion in Haden's and the predecessor company's appeal. The disposition affirmed the adverse judgment of $66,363.03 that had been rendered as a matter of law against Haden and the predecessor company and, in addition, granted them partial favorable relief by vacating dismissal of their promissory-estoppel counterclaim and remanding those claims for trial.
Eleven months later, on August 2, 1999, Sacks sent the following demand letter, by certified mail, return receipt requested, to Haden and the company:
Dear Charles:
As you are aware, your account with my firm is over nineteen (19) months past due, with a current outstanding balance of $30,314.38. Please send me, at the [letterhead] address, the full amount due and unpaid by cashier's check or money order. Your cashier's check or money order should be made payable to David J. Sacks, P.C.
If I have not received payment from you within thirty (30) days after your receipt of this letter, I will take all legal actions necessary to collect this debt. The lawsuit will seek court costs, legal interest and attorney's fees in addition to the amount of the debt.
Continuing correspondence between the parties proved unproductive in resolving their differences.
The law firm's live pleadings asserted claims for (1) "suit...
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