Newman v. Link

• Decision Date: 10 November 1993
• Docket Number: No. C14-92-01062-CV,C14-92-01062-CV
• Citation: 866 S.W.2d 721
• Parties: E.W. NEWMAN, Appellant, v. Scott R. LINK, Appellee. (14th Dist.)
• Court: Texas Court of Appeals

Page 721

866 S.W.2d 721

E.W. NEWMAN, Appellant, v. Scott R. LINK, Appellee.

No. C14-92-01062-CV.

Court of Appeals of Texas,

Houston (14th Dist.).

Nov. 10, 1993.

Rehearing Denied Dec. 9, 1993.

Herbert Finkelstein, Houston, E.W. Newman, Houston, for appellant.

John Milutin, Sugarland, Joan M. Denton, Houston, for appellee.

Before ROBERTSON, CANNON and BOWERS, JJ.

OPINION

ROBERTSON, Justice.

E.W. Newman appeals from a judgment awarding appellee, Scott R. Link, $50,950.26 in actual damages and $150,000.00 in exemplary damages. Appellant raises twenty-five points of error. We affirm.

Appellant is an attorney who represented the father of a child injured in an accident. During the course of this case, the trial court appointed appellee as guardian ad litem for the child. The parties eventually reached a settlement agreement. At the hearing to approve the settlement, the court awarded appellee a fee of $38,080.00 of which the defendant was to pay $20,000.00 and the plaintiff's attorney, appellant, was to pay $18,080.00. The trial court later amended this judgment, providing that the ad litem fee was to be paid as follows:

a. $20,000.00 by Defendants Houston Coca Cola Bottling Company and Mark Hyland.

b. $18,080.00 directly from Plaintiff's attorneys' fees by reason of the following good cause:

(i) at the time of the appointment of the ad litem, this case was on the verge of being dismissed for want of prosecution;

(ii) it was predominantly through the efforts of the ad litem that the case was vigorously prosecuted and successfully resolved on behalf of Plaintiffs;

(iii) that as a result of the ad litem's efforts, he was forced to expend an inordinate amount of time performing duties which are normally performed by the attorney for plaintiffs in the usual course of the prosecution of the lawsuit;

(iv) it is the opinion of this court that it would be manifestly unjust to require the defendants to bare [sic] the costs of the attorney's fees for the defense and prosecution of this lawsuit.

Appellant did not object at the hearing and did not appeal from this judgment. Appellant also never paid appellee the $18,080.00 from the $103,000.00 fee he deducted from the lump sum received by the plaintiff. Appellee moved for a judgment nunc pro tunc which provided for execution. Appellant received a copy of this motion and notice of the hearing. Although he did not appear, appellant filed a motion for leave to file a petition for writ of prohibition in this court requesting an order prohibiting the trial judge from holding a hearing on the motion. Appellant also asked this court to prohibit appellee from filing any writ to obtain satisfaction of the judgment. A panel of this court denied appellant's motion on December 6, 1990.

In February 1991, appellant filed suit in Montgomery County against appellee. The court granted appellee's motion to transfer venue and appellant took a non-suit. On April 30, 1991, appellant re-filed the lawsuit in Harris County. Appellant first sought a temporary restraining order and temporary injunction, which the trial court denied. Appellant then appealed the denial to this court. A panel of this court upheld the denial of the injunction finding no evidence of a probable right to recover or of a probable injury. Furthermore, the court found that appellant had an adequate remedy, but chose not to appeal the trial court's order.

Appellant then filed a second amended original petition seeking a declaration that the judgment was null and void as to him and seeking actual and exemplary damages. Appellee filed an answer claiming that appellant was estopped to deny the validity of the judgment and that appellant had waived any right to complain about the judgment. Appellee also raised the affirmative defense of fraud. Appellee filed a second amended counterclaim alleging conversion, unjust enrichment, actual and constructive fraud, breach of contract, quantum meruit, and constructive trust.

The case proceeded to trial. Appellee moved for instructed verdict after appellant rested, but the trial court denied it. After appellee rested his case, he re-urged his motion for instructed verdict in which he had claimed that appellant had presented no evidence justifying an award of damages against appellee and no evidence justifying entry of an injunction. The trial court granted this motion stating that the trial court had the right to create a trust and to order how the minor's funds would be disbursed. The trial court then re-aligned the parties and submitted only three questions regarding damages. In response to these questions, the jury awarded appellee $25,000.00 in damages for mental anguish. The jury also found that appellant had acted with malice in retaining the $18,080.00 and thus, they awarded appellee $150,000.00 in exemplary damages.

In his first point of error, appellant contends that the judgment assessing costs against him was null and void because he was the attorney for plaintiffs and not a party. Appellant also argues that the assessment of costs against an attorney is statutorily prohibited by TEX.CIV.PRAC. & REM.CODE ANN. § 7.011 (Vernon 1986).

We turn first to appellant's argument that the Bennett judgment is void because the trial court's ruling was statutorily prohibited. Section 7.011 provides:

An attorney who is not a party to a civil proceeding is not liable for payment of costs incurred by a party to the proceeding.

TEX.CIV.PRAC. & REM.CODE ANN. § 7.011 (Vernon 1986).

Appellee contends that Rule 141 allows the trial court discretion to adjudge costs other than as provided in § 7.011. Rule 141 provides:

The court may, for good cause, to be stated on the record, adjudge the costs otherwise than as provided by law or these rules.

TEX.R.CIV.P. 141. In the instant case, the trial court asserted good cause in the judgment for assessing part of appellee's attorney's fees from the fees to be paid appellant. We agree with appellee that Rule 141 authorized the trial court under the facts of this case to assess part of the ad litem's fees out of the plaintiff's attorney's fees despite the § 7.011 prohibition.

Appellant also argues that the Bennett judgment is void as to him because he was not a party to the suit. In support of this proposition, appellant cites a number of cases that are not on point because they do not regard the issue of whether a judgment awarding attorney's fees is void. ¹ We believe that the cases cited by appellee are on point and persuasive.

In Akin v. Akin, 276 S.W.2d 323, 326 (Tex.Civ.App.--Austin 1955, writ dism'd), the court held that the attorneys representing the Akins were parties to the suit. The court noted that the attorneys "were named in the pleadings, their employment alleged and a recovery specifically prayed for in their behalf." Id. The court also found the attorneys to be parties under the following rule:

The courts look beyond the nominal parties, and treat all those whose interests are involved in the litigation and who conduct and control the action or defense as real parties, and hold them concluded by any judgment which may be rendered.... In other words, by participating in the proceedings one is estopped by the judgment as to any questions actually litigated and decided therein.

Id. The Akin court further held that this rule applied to attorneys regarding their fees. Id. The Akin court quotes from Roberts v. Roberts, 144 Tex. 603, 192 S.W.2d 774, 777-78 (1946), which held that a judgment awarding attorney fees was fully binding on the attorneys as if they had been parties to the suit.

Based on Akin and Roberts, we hold that appellant was bound by the Bennett judgment as if he were a party to the suit. Therefore, appellant's remedy for challenging the judgment was to appeal. A judgment is not subject to collateral attack in another court of equal jurisdiction unless the judgment is void. Browning v. Placke, 698 S.W.2d 362, 363 (Tex.1985). Because we have found the Bennett judgment is not void, appellant's causes of action constitute an impermissible collateral attack. We find no error in the trial court's grant of an instructed verdict to appellee on appellant's claims. We overrule point of error one.

In points of error three and four, appellant claims the trial court erred in holding that appellant's failure to pay the $18,080.00 was, as a matter of law, a breach of a constructive trust. Appellee, as counter-plaintiff, moved for an instructed verdict that, as a matter of law, a constructive trust arose in favor of appellee as to the $18,080.00 fee. The trial court granted this motion.

An instructed verdict is proper:

(1) when a defect in the opponent's pleadings makes them insufficient to support a judgment; (2) when the evidence conclusively proves a fact that establishes a party's right to judgment as a matter of law; or (3) when the evidence offered on a cause of action is insufficient to raise an issue of fact.

Anderson v. Vinson Exploration, Inc., 832 S.W.2d 657, 661 (Tex.App.--El Paso 1992, writ denied). In reviewing a grant of instructed verdict, we must determine whether there is any evidence of probative force to raise fact issues on the material questions presented. Collora v. Navarro, 574 S.W.2d 65, 68 (Tex.1978). We must consider all of the evidence in a light most favorable to the party against whom the verdict was instructed, disregarding all contrary evidence and inferences. White v. Southwestern Bell Tel. Co., 651 S.W.2d 260, 262 (Tex.1983).

The equitable remedy of constructive trust is broad and flexible. First Nat'l Bank v. Bauert, 622 S.W.2d 464, 466 (Tex.App.--Amarillo 1981, no writ) "It is imposed by law because the person holding the title to property would profit by a wrong or would be unjustly enriched if he were permitted to keep the property." Omohundro v. Matthews, 161 Tex. 367, 341 S.W.2d 401, 405 (1960). To justify imposing a constructive trust on property, actual or constructive fraud must...