Madeksho v Abraham

• Decision Date: 15 March 2001
• Docket Number: No. 14-98-01462-CV,14-98-01462-CV
• Citation: 57 S.W.3d 448
• Parties: <!--57 S.W.3d 448 (Tex.App.-Houston 2001) LAWRENCE MADEKSHO, Appellant v. ABRAHAM, WATKINS, NICHOLS & FRIEND, AND THE LAW OFFICE OF ROBERT E. BALLARD, P. C., Appellees Court of Appeal of Texas, Houston (14th Dist.)
• Court: Texas Court of Appeals

Page 448

57 S.W.3d 448 (Tex.App.-Houston [14th Dist.] 2001)

LAWRENCE MADEKSHO, Appellant v ABRAHAM, WATKINS, NICHOLS & FRIEND, AND THE LAW OFFICE OF ROBERT E. BALLARD, P. C., Appellees

No. 14-98-01462-CV

Court of Appeal of Texas, Houston (14th Dist.)

March 15, 2001.

Rehearing Overruled May 10, 2001.

On Appeal from the 165th District Court. Harris County, Texas. Trial Court Cause No. 97-23595. Ray, Elizabeth, Judge.

Panel consists of Cannon, Draughn, and Lee, JJ.^*

OPINION

BILL CANNON, Justice (Assigned).

Lawrence Madeksho appeals from a summary judgment in favor of appellees for attorney's fees due under an oral fee-splitting agreement. In four issues, or points of error, appellant contends: (1) the trial court erred in granting appellees' motion for partial summary judgment; (2) the trial court erred in denying appellant's motion for summary judgment; (3) the trial court erred in granting appellees' summary judgment because they had no right to attorney's fees under the September 13, 1995 letter agreement; and (4) appellees forfeited their rights to attorney's fees because they abandoned their clients by withdrawing from their cases in 1995 without just cause. We affirm.

FACTUAL BACKGROUND

In the 1970's, appellee Robert E. Ballard (Ballard) was a member of the law firm of Kronzer, Abraham, Watkins, Nichols, Ballard & Friend, the predecessor to appellees' law firm of Abraham, Watkins, Nichols & Friend (AWN&F). Appellant and Ballard entered into an oral fee-splitting arrangement whereby each attorney would receive fifty percent (50%) of the attorney's fees collected in asbestos injury claims. Appellant referred most of his injured clients to Ballard, and Ballard did most of the legal work for these clients. Appellant and Ballard worked together for seventeen years on this oral fee-splitting agreement without any problems.

In May 1994, appellant and Ballard reached a settlement with Fibreboard Corporation (Fibreboard) for about two hundred asbestos claimants. A settlement agreement dated May 31, 1994, was signed by Fibreboard and Continental Casualty Company (Continental), as the defendants, and "Law Offices of Lawrence Madeksho and Abraham, Watkins, Nichols, Ballard & Friend as Representative (the "Representative") for itself and on behalf of all the asbestos personal injury and death claimants who filed claims against Fibreboard before August 27, 1993." Appellant signed the agreement "as representative of the claimants."

The pertinent portions of the settlement agreement provided:

2.1 Fibreboard, Continental and Claimants, by and through the Representative, agree to compromise and settle, finally and fully, each and all of the claims of each and all of the Claimants on the following terms and conditions. In addition to other good and valuable consideration, the receipt and adequacy of which are confirmed by Claimants, Fibreboard and Continental agree to pay as follows (emphasis added).

* * * * *

2.4 The amounts due on Before-1959 claims will be paid and distributed as follows.

(a) Payment of non refundable 50% cash component to Claimants with Before-1959 Claims.

Continental will pay 50% of the amounts set forth in Section 2 [listing names and settlement amounts for individual claimants] in two cash payments.

The first 50% payment was paid by Continental as set out in the settlement agreement. Appellant and appellees split the attorney's fees according to their long-standing oral agreement. The second payment is the subject of this lawsuit. The agreement refers to the second payment as the "Deferred Principal Component." The agreement provides that Continental shall pay the second payment "subject to the limitations set forth" in the agreement. The "limitations" described the manner of payment by Continental and/or Fibreboard in the event of (1) a "Global Settlement" or (2) an "Insurance Settlement" or a "Final Decision" in pending litigation between Fibreboard and Continental concerning Continental's obligations to Fibreboard on its liability insurance policy.

If a "Global Settlement" (a class action settlement of national scope to which Fibreboard and Continental are parties) occurred first, Continental would pay all of the second payment. If Continental and Fibreboard settled their difficulties, then both had an unconditional obligation to pay the claims according to the "Insurance Settlement." In the absence of a "Global Settlement" or and "Insurance Settlement," both Continental and Fibreboard had an unconditional obligation to pay the claimants according to the "Final Decision" disposing of all litigation pending in all asbestos coverage cases between Fibreboard and Continental.

The settlement agreement provided that any amounts due would be paid to the Representative [appellant] "as Trustee as defined in the Trust Agreement, attached hereto as Exhibit F." The parties were required to furnish releases of their clients' claims to Fibreboard and Continental before payments would be made.

On September 13, 1995, Ballard wrote a letter to appellant indicating that he and his law firm were withdrawing from "future involvement in the asbestos litigation." The pertinent portions of the letter provide:

I think it would be a good idea to put down on paper our discussions concerning this firm's future involvement in the asbestos litigation. As I told you, I have become convinced that this litigation is, if not a losing proposition, then certainly it is not a profitable one. In short, I want out of these lawsuits as soon as possible. I recognize that there are some cases that came to this firm and that you may not want to deal with them. I will deal later in this letter with them.

Our withdrawal, of necessity, requires notification to the clients and filing of pleadings in the various courts authorizing the substitution of counsel. There will be no continuing interest in each others cases except as stated in this letter. I am drafting a letter to the clients and will get your input before it goes out. Also, I will prepare all pleadings for filing with the various courts but they will need your signature of approval.

If the remainder of the Fibreboard settlement materializes, I will be glad to assist in closing it out. The Malone group is still on appeal and we will do whatever is necessary to protect the rights in these cases. We would expect our portion of the fee from these cases. Also, the Dartez group and the Sturdivant cases are still pending regarding Fibreboard. We would expect to help finalize those, if and when they mature, at the existing arrangement. You will also assist in finalizing any of my cases with Fibreboard if settlements with Fibreboard ever mature.

* * * *

On the remaining cases that originated in your office, we would expect no fee providing we can get the withdrawal effected and the files transferred back to you. I understand that you are looking for storage space to take care of the files. Please let me know when you get it so we can transfer the files.

Appellant refused to sign the letter indicating his acceptance. In his deposition, Appellant testified that the "letters were somewhat ambiguous, and still are. That's the reason I didn't sign that." Appellant received the second payment on April 21, 1997, pursuant to the previous Fibreboard settlement agreement. Appellant refused to pay appellees their 50% of the attorney fees of over $ 1,000,000.00, and appellees filed this lawsuit.

THE PARTIAL SUMMARY JUDGMENT FOR APPELLEES

In his first issue, appellant contends that the trial court erred in granting summary judgment for the appellees based on the September 13, 1995, letter agreement from Ballard withdrawing from further asbestos litigation. Appellant argues that Ballard's letter terminated the previous oral fee-splitting agreement between Ballard and appellant and created the parties' new agreement.

Procedural History

Appellant filed his motion for summary judgment claiming: (1) by withdrawing from the litigation in September 1995, appellees abandoned their clients and forfeited all right to compensation; (2) the oral fee-splitting contract was unenforceable because it violated rule 1.04 of the Texas Disciplinary Rules of Professional Conduct concerning division of fees between lawyers; (3) Ballard was not a proper party; (4) appellees had no evidence to support their claims because they had no enforceable agreement between them; and (5) any alleged contract was barred by the statute of frauds.

Appellees responded and then filed their motion for partial summary judgment on the grounds of breach of contract and breach of fiduciary duty as a joint venturer. Appellees also alleged that appellant's affirmative defenses failed as a matter of law, addressing appellant's defenses of accord and satisfaction, abandonment and forfeiture of attorney's fees, new agreement with respect to the second Fibreboard payment, acceptance of payment, and waiver and forfeiture. Appellant responded alleging that there was no contract and appellees "abandoned" their clients by withdrawing. He further argued that the fee-splitting arrangement was invalid because it was contrary to rule 1.04, Texas Disciplinary Rules of Professional Conduct. Appellant did not respond to appellees' motion for summary judgment on the grounds that each of appellant's affirmative defenses failed as a matter of law.

The trial court entered an order denying appellant's motion for summary judgment and granting appellees' motion for partial summary judgment on liability issues. Appellant then filed a motion for reconsideration which the court granted. On September 4, 1998, the trial court entered final judgment for appellees on their motion for partial summary judgment and awarded damages in the sum of $ 1,029,756.00 plus prejudgment and postjudgment interest. The final judgment also denied appellant's motion for summary judgment.

Standard of Review

A movant for summary judgment has the burden of...