Holt Texas, Ltd. v. Hale

• Decision Date: 12 May 2004
• Docket Number: No. 04-02-00795-CV.,04-02-00795-CV.
• Citation: 144 S.W.3d 592
• Parties: HOLT TEXAS, LTD., Appellant, v. Oscar HALE, Jr., Appellee.
• Court: Texas Court of Appeals

144 S.W.3d 592

HOLT TEXAS, LTD., Appellant, v. Oscar HALE, Jr., Appellee.

No. 04-02-00795-CV.

Court of Appeals of Texas, San Antonio.

May 12, 2004.

Appeal from the 49th Judicial District Court, Webb County, Manuel R. Flores, J Katherine D. Mackillop, John E. Cyr, Fulbright & Jaworski L.L.P., Houston, Eduardo Roberto Rodriguez, Jaime A. Saenz, Rodriguez, Colvin & Chaney, L.L.P., Brownsville, for appellant.

Kristina Laurel-Hale, Laredo, for appellee.

Oscar Hale, Jr., Jones & Gonzalez, P.C., Laredo, pro se.

Sitting: ALMA L. LÓPEZ, Chief Justice, SANDEE BRYAN MARION, Justice, PHYLIS J. SPEEDLIN, Justice.

OPINION ON APPELLANT'S MOTION FOR REHEARING

Opinion by PHYLIS J. SPEEDLIN, Justice.

The motion for rehearing filed by appellant, Holt Texas, Ltd. d/b/a Holt Company of Texas ("Holt"), is denied. This court's opinion and judgment dated March 3, 2004, are withdrawn, and this opinion and judgment are substituted. We substitute this opinion to remove any references to the confidential settlement amount.

Holt appeals the trial court's award to Oscar Hale, Jr. ("Hale") of $50,000 for his services as a guardian ad litem for two minor children. On appeal, Holt contends that the trial court abused its discretion because the fees awarded to Hale are excessive and are not supported by sufficient evidence. Holt contends that the trial court also erred in awarding fees incurred as a result of the dispute over Hale's ad litem fees. Because we sustain Holt's second and third issues, we suggest a remittitur of $ 27,500. If a remittitur is timely filed, the trial court's order awarding the guardian ad litem fees will be reformed, and we will affirm the trial court's judgment and the order as reformed.

BACKGROUND

In May 2000, Manuel Garcia Gatica ("Gatica") was fatally injured in a construction accident. Gatica's widow subsequently filed a wrongful death lawsuit against Holt seeking damages for herself, Gatica's estate, and their two minor children. Gatica's parents also sought damages. The plaintiffs alleged that an excavator's ruptured hydraulic hose caused a cannister to strike Gatica in the head and that a Holt employee had failed to properly inspect and service the excavator. Holt answered and filed a third-party petition against David Jones d/b/a Landmark Earth Moving Service ("Jones"), claiming Jones was responsible for the ruptured hose.

The attorneys for the parties negotiated a settlement. On April 11, 2002, the trial court appointed Hale to serve as the guardian¹ ad litem for Gatica's minor children. On June 4, 2002, Hale filed a sealed report with the trial court. A hearing was held on Hale's request for ad litem fees. On July 9, 2002, the trial court entered an order awarding Hale $50,000 for his services. The trial court also entered findings of fact regarding the award. A final judgment approving the settlement was entered on August 6, 2002. Holt appealed the trial court's order awarding the guardian ad litem fee, claiming the fee is excessive and includes hours expended by Hale during the fee dispute.

APPLICABLE LAW AND STANDARD OF REVIEW

Rule 173 of the Texas Rules of Civil Procedure permits a trial court to appoint a guardian ad litem when a minor is represented by a guardian or next friend who appears to have an interest adverse to the minor. See Tex.R. Civ. P. 173. Guardian ad litems are entitled to a reasonable fee for their services to be taxed as costs of court. Id. A trial court determines the appropriateness of an ad litem fee by examining the same factors that determine the reasonableness of all attorney's fees as set out in Rule 1.04 of the Texas Disciplinary Rules of Professional Conduct, including: (1) the time and labor required, the novelty and difficulty of the questions involved, and the skill required to perform the legal services properly; (2) the likelihood that the acceptance of the particular employment will preclude other employment by the lawyer; (3) the fee customarily charged in the locality for similar legal services; (4) the amount involved and the results obtained; (5) the time limitations imposed by the client or by the circumstances; (6) the nature and length of the professional relationship with the client; (7) the experience, reputation and ability of the lawyer or lawyers performing the services; and (8) whether the fee is fixed or contingent on results obtained or uncertainty of collection before the legal services have been rendered. See Tex. Disciplinary R. Prof'l Conduct 1.04(b), reprinted in Tex. Gov't Code Ann., tit. 2, subtit. G, app. A (Vernon 1998); Garcia v. Martinez, 988 S.W.2d 219, 222 (Tex.1999); Simon v. York Crane & Rigging Co., 739 S.W.2d 793, 794 (Tex.1987).

An appellate court will not set aside an award of guardian ad litem fees absent evidence of a clear abuse of discretion. Garcia, 988 S.W.2d at 222. The trial court's discretion in setting an ad litem fee, however, is not unbridled. Simon, 739 S.W.2d at 794. A trial court abuses its discretion in its award of ad litem fees if there is no evidence or insufficient evidence to support the award. See Borden, Inc. v. Martinez, 19 S.W.3d 469, 471 (Tex.App.-San Antonio 2000, no pet.); Dalworth Trucking Co. v. Bulen, 924 S.W.2d 728, 738 (Tex.App.-Texarkana 1996, no writ).

GUARDIAN AD LITEM FEE

1. The Evidence

The trial court specifically found that Hale engaged in 90 hours of work as a guardian ad litem. The court found that a minimum fee of $300 per hour is a customary ad litem fee in the community. The court found that an award of $50,000 is reasonable and consistent with the customary ad litem fees in the community.

At the hearing, Hale testified that he had been licensed since 1995. After his appointment as guardian ad litem, he performed at least 80 hours of work which included interviewing the children's parents and family members. Hale made two trips to Mexico to discuss the settlement agreement with the adult plaintiffs. He admitted that the settlement agreement had already been drafted, but stated he helped resolve the matter by further explaining the settlement terms, particularly the need for an annuity, to the adult plaintiffs in Spanish. Hale also wrote letters to other attorneys involved in the case, and researched and reviewed the proposed annuity plans. Furthermore, he assisted the plaintiffs in obtaining visas so they could enter the U.S. to attend settlement hearings. Hale testified that he gave up the opportunity to work on other contingency fee cases to work on this case. He stated that an award of $50,000 in ad litem fees was reasonable based on his time and labor, his extended exposure to liability given the age of the minor children, the amount of responsibility, the amount in controversy, and his ability to facilitate a final resolution of the case.

On cross-examination, Hale conceded that he had only practiced civil law for three of the seven years he had been licensed. Hale admitted he served as guardian ad litem for two months and nine days. In that time, he had worked "68 to 70 hours" as an ad litem. Additionally, he probably "had been forced to work another 15 hours" to recover his ad litem fees. In total, he had spent "no less than 80 hours on the case ..., maybe even closer to 90." Hale estimated that he missed 10 to 12 hours of work on other cases. Hale also testified that his usual fee was $200 per hour; however, he stated the "average" guardian ad litem fee in the community is $300 per hour. He also admitted that he had not directly contacted annuity companies in conducting his research. Moreover, he did not attend the mediation on the case because it occurred prior to his appointment. A written summary of Hale's work through June 4, 2002, reflected that he engaged in approximately 67 hours of work on the case.

Holt's counsel, Patrick Rodriguez ("Rodriguez"), also testified at the hearing. He testified that approximately 51.8 hours were expended by his firm on the case over an eight month period. Rodriguez further noted that the attorneys at his firm charged $200 per hour for their services to Holt, and that a reasonable guardian ad litem fee was $200 per hour. The total bill for his firm's services amounted to $10,320.

2. Reasonableness of Fee Amount

An award of $50,000 to Hale for 90 hours of legal services mathematically equates to an hourly rate of $555 per hour, or nearly double the "average" ad litem fee of $300 per hour which Hale testified was customary in the community. Nevertheless, Hale contends that the award is justified based upon his time expended on the case, his responsibilities, his role in facilitating the settlement, the complexity of the case, the amount in controversy, and his extended exposure to liability.

A trial court must consider both the number of hours claimed to have been worked and the hourly rate claimed to have been reasonable in setting an attorney's hourly rate. See Garcia, 988 S.W.2d at 222. Here, the trial court accepted as necessary the entire 90 hours of work claimed by Hale notwithstanding Hale's conflicting testimony on cross-examination as to the number of hours worked, and notwithstanding the fact that 90 hours spent as an ad litem in two months substantially exceeds the 51 hours spent by Holt's defense counsel over the entire eight-month life of the case. See Thrift v. Hubbard, 974 S.W.2d 70, 77 (Tex.App.-San Antonio 1998, pet. denied) (reviewing court does not pass upon the credibility of witnesses). Therefore, we must assume the trial court believed other factors justified the difference between Hale's usual hourly rate ($200), the customary ad litem rate in the community ($300), and the hourly rate ultimately applied ($555).

Hale acknowledged that this was the first time he served as a guardian ad litem. As such, he spent time talking to other attorneys who had served as ad litems. Given the timing of his appointment, Hale did not attend depositions or mediation. Hale acknowledged that a settlement agreement...