Madeksho v. Abraham, Watkins, Nichols Etc.

• Decision Date: 10 July 2003
• Docket Number: No. 14-01-00453-CV.,14-01-00453-CV.
• Parties: Lawrence MADEKSHO, Roy and Mary Malone, Thomas Gillespie, and Patricia Garefalos, Appellants, v. ABRAHAM, WATKINS, NICHOLS & FRIEND, Robert Ballard and the Law Office of Robert E. Ballard, P.C., Appellees.
• Court: Texas Court of Appeals

112 S.W.3d 679

Lawrence MADEKSHO, Roy and Mary Malone, Thomas Gillespie, and Patricia Garefalos, Appellants, v. ABRAHAM, WATKINS, NICHOLS & FRIEND, Robert Ballard and the Law Office of Robert E. Ballard, P.C., Appellees.

No. 14-01-00453-CV.

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

July 10, 2003.

Lawrence Madeksho, Houston, pro se.

Charles B. Frye, Houston, for appellants.

Don Weitinger, Houston, for appellees.

Before the court en banc.

EN BANC PLURALITY OPINION ON REHEARING

SCOTT BRISTER, Chief Justice.

This case is part of the debris from a falling-out between attorneys who worked together on asbestos cases for almost twenty years. Generally, attorney Lawrence Madeksho signed up the clients and did the pretrial work, while Robert Ballard and the law firm of Abraham, Watkins, Nichols & Friend ("the law firm") did most of the trial work. They orally agreed to split any contingency fees earned.

Four of their clients (Roy Malone, Mary Malone, Thomas Gillespie, and Patricia Garefalos) sued Owens-Corning Fiberglas Corporation in 1988. The clients signed a contract with Madeksho providing for a 40% contingency fee, increasing to 45% if an appeal was filed. The clients won a $4.5 million verdict at trial, which grew to more than $10 million by the time the judgment became final. The First Court of Appeals affirmed.¹

While the case was pending in the Texas Supreme Court, a separate dispute arose between Madeksho and the law firm. When the law firm decided to withdraw from future asbestos litigation, Madeksho stopped payment on the firm's share of fees from past litigation, including a $1 million fee from a settlement with Fibreboard Corporation. At the end of that dispute, we affirmed summary judgment against Madeksho enforcing the law firm's oral fee-splitting agreement.²

After these developments, the clients wrote a letter with Madeksho's assistance (the law firm claims it was at his instigation) asserting a conflict of interest, firing the law firm in the Owens-Corning appeal, and instructing the firm not to contact them.

The Supreme Court affirmed the clients' judgment against Owens-Corning on June 5, 1998.³ Within a week, counsel for the law firm wrote Owens-Corning claiming a portion of the judgment, and requesting that any payment include the firm's name, or be made by interpleader in the trial court. Soon thereafter, Madeksho notified Owens-Corning the entire judgment should be paid to the clients, and nothing should be paid to the law firm.

Having received these conflicting claims, Owens-Corning filed an interpleader in the underlying case in the trial court three days after the Supreme Court's mandate issued. At a hearing seventeen days after the mandate issued, all parties agreed the clients were entitled to 55% of the final judgment, which was paid directly to them. The trial court ordered the remainder paid into the court's registry pending resolution of the fee dispute. Everyone signed releases in favor of Owens-Corning, which was dismissed with prejudice. A month later, an agreed order authorized payment from the registry of about $1 million to the appellate attorneys who handled the successful appeals.

The law firm filed a cross-claim against Madeksho for breach of contract and quantum meruit, seeking 50% of the amount remaining in the registry plus consequent attorney's fees and costs. Madeksho filed a plea to the jurisdiction challenging the trial court's power to decide the matter, and cross-claimed against the law firm asserting breach of contract, breach of fiduciary duty, and fee forfeiture. The clients filed a response to the interpleader, a motion to dismiss, and a motion to enforce the mandate requesting that all funds be paid to them.

On its own motion, the trial court severed all claims filed after the original interpleader, and set a trial for January 30, 2001, on the sole issue of allocating the funds in the registry between the attorneys. The day before trial, Madeksho sought a writ of prohibition and an emergency stay from the Texas Supreme Court, both of which were denied the day they were filed. When called to trial, both parties waived a jury, and the trial court awarded each party half the funds remaining in the registry (by now almost $4 million).

Madeksho and the clients appealed, but did not supersede the judgment; on May 24, 2001, the funds were disbursed. A panel of this Court held the trial court had no subject-matter jurisdiction to conduct the post-judgment proceedings. The panel pointed to Harris County Children's Protective Services v. Olvera,⁴ in which this Court said trial courts have no jurisdiction to do anything except what is stated in an appellate mandate. Here, the Supreme Court mandate stated:

Roy Malone, et al. shall recover from Owens-Corning Fiberglas Corporation and surety Aetna Casualty & Surety Company, who shall pay the costs in this Court and in the court of appeals.

The panel held this mandate meant the trial court could do nothing but order Owens-Corning to pay the clients.⁵ The panel also relied on Wong v. Smith,⁶ in which we prohibited post-judgment interpleaders of any kind as untimely.

No one was happy with the panel opinion—all parties filed motions for rehearing en banc. The law firm argued the panel had gone too far, interpreting the Supreme Court mandate too strictly. The clients and Madeksho argued the panel had not gone far enough, refusing to order the law firm to return any money to them (a result of their "no jurisdiction" argument they perhaps had not anticipated).

This is not the first time we have been asked to review post-mandate claims to a judgment. On at least four occasions, we have reviewed post-judgment claims to all or part of a judgment by attorneys or other creditors, without once indicating any jurisdictional concerns.⁷ Numerous other courts have as well.⁸

Our dissenting colleagues find the conflict between these cases and the panel opinion "illusory" because (1) the conflict is not explicit and (2) our earlier cases merely concerned creditors' post-judgment attempts to attach property. But jurisdiction is an issue in all cases whether explicitly mentioned or not; we cannot distinguish our other cases on the presumption that jurisdiction was waived or that we failed to think about it.⁹ And if the law firm's claim here is a collateral attack on a judgment, so were all our earlier post-judgment cases; in each case, creditors were asking that a judgment mandating payment to one party should instead be paid to them. All of us agree a trial court judgment is property that creditors may seize; our dissenting colleagues would hold an appellate judgment is something more.

Because we have sometimes allowed trial courts to adjudicate post-mandate claims to a judgment, but the panel opinion did not, we granted rehearing en banc to settle the conflict.¹⁰

Jurisdiction and Olvera

In Olvera, we reached the unimpeachable conclusion that a final mandate assessing appellate costs does not authorize the trial court to enter a new judgment adding attorney's fees to the old one.¹¹ The opinion is somewhat ambiguous on whether this was a question of jurisdiction or a question of simple error. Although we stated the trial court had "no jurisdiction" to do anything beyond the appellate mandate, we also found the trial court "abused its discretion" in entering the new awards.¹² Jurisdictional matters are reviewed de novo, not for abuse of discretion;¹³ if the trial court had no jurisdiction, it had no discretion in the case to abuse. Further, the proper disposition in jurisdictional cases is to set aside the trial court's judgment and dismiss the appeal;¹⁴ in Olvera, we reversed and rendered judgment.¹⁵

The Olvera court quoted our older sister's opinion in Myers v. Myers¹⁶ for the proposition that trial courts on remand have "no jurisdiction to review, interpret or enforce" an appellate mandate.¹⁷ This language—often quoted by intermediate appellate courts¹⁸—comes from Conley v. Anderson,¹⁹ a 1913 opinion in which the Supreme Court stated "no district court ha[s] jurisdiction to review [our] judgment, nor to interpret and enforce it, but must observe it as it was framed by this court."

Perhaps that statement was true in 1913, but it cannot possibly be true today. If trial courts cannot "enforce" appellate judgments, why has the Supreme Court said they must?²⁰ If lower courts cannot "interpret" appellate mandates, why has the Court authorized us to use its related opinion to do just that?²¹

Myers itself shows this language has never been applied literally. There, the First Court of Appeals affirmed a judgment awarding Mrs. Myers $20,000 in attorneys' fees.²² The trial court ordered this sum (held in the registry of the court) to be paid to her attorneys, not Mrs. Myers. The First Court refused to exercise jurisdiction in the matter, finding this order ancillary to the merits, and not an interference with its jurisdiction.²³ If anything, the case stands for the proposition that a judgment ordering "payment to Mrs. Myers" can be satisfied by paying her attorneys.

In this case, the Supreme Court's mandate required Owens-Corning to pay "Roy Malone, et al." (emphasis added). Interpreting "et al." to mean his three co-plaintiffs may be easy, but it is an interpretation nonetheless. If no one can interpret Supreme Court mandates, then the panel opinion violated its own rule.

Moreover, if defendants must pay the person named in the mandate—and no one else—they will sometimes have to pay the dead.²⁴ If the judgment has been assigned to someone else, they will have to pay twice.²⁵ In the past, we have not construed mandates so strictly.²⁶

Clearly, trial courts must obey appellate mandates, and they abuse their discretion if they do not. But it is not a matter of jurisdiction—they do not suddenly step out into thin air. Trial courts retain their constitutional jurisdiction to perform duties collateral to and consistent...