Howard v. Lauren Adams & Brady & Jackson, P. L.L.C.

• Decision Date: 10 October 2012
• Docket Number: No. CA 11–566.,CA 11–566.
• Citation: 424 S.W.3d 337,2012 Ark. App. 562
• Parties: Gary HOWARD, Individually and as Administrator of the Estate of Odis Howard, Deceased, Appellant v. Lauren ADAMS and Brady & Jackson, P.L.L.C., Appellees.
• Court: Arkansas Court of Appeals

2012 Ark. App. 562

424 S.W.3d 337

Gary HOWARD, Individually and as Administrator of the Estate of Odis Howard, Deceased, Appellant

v.Lauren ADAMS and Brady & Jackson, P.L.L.C., Appellees.

No. CA 11–566.

Court of Appeals of Arkansas.

Oct. 10, 2012.

Harry McDermott, Fayetteville, for appellants.

Friday, Eldredge & Clark, LLP, Fayetteville, by: Clifford W. Plunkett and Seth Haines, for appellees.

JOSEPHINE LINKER HART, Judge.

Appellant Gary Howard, individually and as the administrator of his late father's estate, sued appellees Lauren Adams and her law firm, Brady & Jackson (collectively Adams), for breach of contract, professional negligence, and deceit. The gist of Howard's complaint was that Adams failed to pursue a legal-malpractice claim against another attorney, Bill Watkins, who had previously represented Howard and his father. Following our reversal of a summary judgment in Howard v. Adams, 2009 Ark.App. 621, 332 S.W.3d 24( Howard I ), the case went to trial, and the jury found that, although Watkins had committed deceit and breached his fiduciary duty during his period of legal representation, Adams did not agree to pursue a claim against Watkins, nor did she act deceitfully or negligently. Howard appeals and argues that the circuit court erred in (1) failing to instruct the jury on contract interpretation, contractual privity, and the statute of limitations; (2) precluding him from asserting damages in his individual capacity; (3) preventing him from trying the issue of Watkins's liability using the “case within a case” method; (4) directing a verdict against the estate on its claim for negligence; (5) introducing irrelevant and prejudicial evidence; (6) awarding attorney fees to Adams and her legal-malpractice insurance carrier; and (7) awarding the attorney for the estate, Harry McDermott, $21,296 for fees and costs.

I. Background

The history of this case is set out in Howard I, but we reiterate certain facts to explain our analysis. Howard's father and stepmother, Odis and Mabel Howard, hired attorney Bill Watkins in 1998 to create an estate plan. Watkins drafted a trust to hold the couple's assets, including forty-six acres that Odis owned. The trust provided that, upon the deaths of both settlors, the trust property would go to Howard, who was Odis's only child.

Mabel signed the trust documents in 1998, but Odis did not execute the trust or sign the deed conveying his forty-six acres. By June 2000, the family was concerned about Odis's health and asked Howard to serve as Odis's guardian. Howard agreed to do so and met with Watkins, who filed a guardianship petition on Howard's behalf. The court granted the petition on June 21, 2000, authorizing Howard to serve as guardian for a period of ninety days.

Howard met with Watkins in December 2000 where, according to him, Watkins advised him to sign the trust and the deed as Odis's guardian, despite the expiration of the ninety-day guardianship. Howard signed the documents but later claimed that Watkins backdated his signature to September 2000; that Watkins did not explain that Howard's and Mabel's interests were in conflict; and that Watkins did not inform Howard that, in the absence of the trust documents, he stood to inherit Odis's real property. Howard also averred that Watkins promised to alter the trust document to grant him, his daughter Samantha, and Mabel equal rights as co-trustees.

Odis died in January 2001. Thereafter, Watkins drafted several amendments to the trust, which diminished and eventually eliminated Howard's role as trustee. By July 2002, Mabel asserted that she was the sole trustee and that the trust property belonged to her.

These events led Howard to seek legal counsel from appellee Adams in an effort to recover the real property from the trust. Adams agreed to represent Howard and, at some point, spoke with Bill Watkins and his malpractice carrier about the circumstances surrounding the trust. Other than those basic facts, the terms of Adams's representation of Howard are in complete conflict. According to Howard, he did not sign a written representation contract with Adams when they first met in 2002; rather, they entered into an oral agreement that Odis's estate would be probated free of charge and that Adams would collect all of her fees from Watkins's malpractice carrier. Howard maintains that, when Adams presented him with a written contract in 2004, indicating that she would charge a one-third contingency fee to recover the trust property, she represented that the contract was a mere formality for Watkins's malpractice insurer. Howard contends that he signed the contract only after Adams wrote the following notation on the back of the contract: “will see malpractice insurance to re-pay attny fees & losses (probate & taxes)—Bill [Watkins] has 1m in coverage CNA has been notified—if insurance is insufficient to cover cost of litigation we agree to prorate reduction of fees.”

Adams denies making an agreement to recover her fees from Watkins's malpractice carrier or to pursue a claim against Watkins. She asserts that Howard asked her to take the case on a contingency basis because he could not afford her hourly rate. She also claims that Howard signed a representation contract in 2002, which was lost, and later signed the above mentioned 2004 contract, agreeing to pay a contingency fee. According to Adams, the handwriting on the back of the contract constituted notes she made to herself at a later time.

Regardless of the parties' competing versions of these events, it is undisputed that Adams represented Howard successfully. In February 2005, she obtained a summary judgment in a lawsuit against Mabel, removing the forty-six-acre tract from the trust and placing it in the Odis Howard estate. Thereafter, according to Howard, he asked Adams how the suit against Bill Watkins was going. Adams replied that she was not planning to sue Watkins, and she indicated to Howard that he would owe her, as a contingency fee, one-third of the $1.8 million sale price of the real property.

At this juncture, Howard hired his current attorney, Harry McDermott, who fired Adams and demanded that she relinquish her fees. Adams responded with a claim against the Odis Howard estate for “33% of the real property recovered or the sum of $613,333.”

II. Howard's Lawsuit against Adams

On August 8, 2005, Howard sued Adams, claiming that she committed negligence, deceit, and breach of contract when she sought attorney fees from Odis Howard's estate rather than obtaining her fees from Bill Watkins's malpractice carrier. Howard later amended his complaint to reflect that he was suing as administrator of his father's estate as well as in his individual capacity. Adams counterclaimed against Howard for her contingency fee, which remained unpaid.

On February 16, 2007, the circuit court determined that Adams's lien against the estate was properly filed. The court, however,allowed Howard to pursue his complaint against Adams to offset the amount of the lien. Howard tried his case to a jury in early 2011 on theories of breach of an oral contract, legal malpractice, and deceit. The circuit court bifurcated the liability and damages portions of the trial.

During the liability phase, Howard put forth, as part of his malpractice proof, evidence that his claim against Watkins would have succeeded if Adams had pursued it (often referred to as proving a case within a case). The jury was therefore instructed to determine Watkins's liability as well as Adams's liability.

At the conclusion of the proof, the jurors found that a suit against Watkins would have been successful but that Adams did not agree to pursue such a claim, nor did she act with negligence or deceit. The circuit court entered judgment in favor of Adams, leading to this appeal.

III. Jury Instructions

Howard argues that the circuit court erred in failing to give several proffered jury instructions. A party is entitled to an instruction when it is a correct statement of the law and when there is some basis in the evidence to support giving it. Bedell v. Williams, 2012 Ark. 75, 386 S.W.3d 493. We will not reverse a trial court's refusal to give a proffered instruction unless there was an abuse of discretion. Id. Additionally, the appellant must demonstrate how he was prejudiced by the trial court's failure to give the proffered instruction. See Pope v. Overton, 2011 Ark. 11, 376 S.W.3d 400;Armstrong Remodeling & Constr., LLC v. Cardenas, 2012 Ark. App. 387, 417 S.W.3d 748.

The first instructions at issue concern the contract cause of action. Howard proffered four instructions that, taken together, told the jury that the parties disputed the meaning of the written contingency-fee contract and the handwriting on the back of the contract; that the front and back of the contract should be interpreted to “give effect to what the parties intended”; that weight should be given to the meaning placed on the contract by the parties, as shown by their statements, acts, or conduct after the contract was made; and that the contract must be interpreted as a whole, with different clauses being read together. In short, Howard proffered instructions that were predicated on the existence of a contractual ambiguity to be resolved by the jury.

We affirm the trial court's decision not to give these proffered instructions. Howard's theory at trial was that he wanted to “throw out” the 2004 written contingency-fee contract and rely on an alleged oral agreement in which Adams promised to seek her fees from Watkins's malpractice carrier. Howard cited the handwriting on the back of the written contract merely as proof that the oral contract existed. The essential question at trial, therefore, was not the meaning of the written contingency-fee contract; rather, the question was which contract governed—the oral contract, on which Howard relied, or the written one, on which Adams relied. The jury was called upon to choose...