Staples v. McKnight, 05-88-00184-CV

• Decision Date: 30 December 1988
• Docket Number: No. 05-88-00184-CV,05-88-00184-CV
• Citation: 763 S.W.2d 914
• Parties: Ernest L. STAPLES, Joyce R. Staples, and Twix, Inc., Appellants, v. Mary D. McKNIGHT and McKnight & Fouts, P.C., Appellees.
• Court: Texas Court of Appeals

Page 914

763 S.W.2d 914

Ernest L. STAPLES, Joyce R. Staples, and Twix, Inc., Appellants, v. Mary D. McKNIGHT and McKnight & Fouts, P.C., Appellees.

No. 05-88-00184-CV.

Court of Appeals of Texas Dallas.

Dec. 30, 1988.

Rehearing Denied Feb. 10, 1989.

Kenneth R. Stein, Jerry L. Carlton, Dallas, for appellants.

Donald J. Maison, Jr., Dallas, for appellees.

Before STEPHENS, STEWART and ROWE, JJ.

ROWE, Justice.

Appellees, Mary D. McKnight and McKnight & Fouts, P.C., sued appellants, Ernest L. Staples, Joyce R. Staples, and Twix, Inc., to recover under a contingent fee agreement for legal services rendered to appellants in the course of a prior lawsuit. The trial court entered judgment on a jury verdict in favor of appellees for the full contingent fee. In their second point of error, appellants complain that the trial court erred in granting judgment for appellees because there was no evidence of just cause excusing McKnight's voluntary withdrawal from the case. For the reasons stated below, we agree that the evidence was legally insufficient. Accordingly, we reverse the trial court's judgment and render judgment that appellees take nothing from appellants.

In deciding a no evidence point, we must consider only the evidence and inferences tending to support the jury's findings and disregard all evidence and inferences to the contrary. Alm v. Aluminum Co. of America, 717 S.W.2d 588, 593 (Tex.1986). The record shows that in June of 1983, Staples hired McKnight to represent him in prosecuting a suit for wrongful discharge from employment against his former employer, Rutishauser of America, Inc. Staples and McKnight entered into an oral contingent fee agreement whereby McKnight would receive one-third of any recovery in the Rutishauser case after costs were deducted from the gross amount recovered. McKnight performed various services for Staples in litigating the Rutishauser case until February of 1985. At that time, Staples and McKnight had a disagreement concerning certain anticipated testimony that Staples might have been called upon to give in his upcoming oral deposition. McKnight stopped performing services, and Staples hired another attorney who successfully settled the Rutishauser case. McKnight then demanded that Staples pay her one-third of the settlement as her fee under the agreement.

Although we find no reported Texas case so holding, we adopt the generally prevailing rule that in the absence of a manifest contrary intent, an attorney who is retained to conduct a legal proceeding presumably enters into a contract to conduct the proceeding to its conclusion. Matheny v. Farley, 66 W.Va. 680, 66 S.E. 1060, 1061 (1910). Other jurisdictions, however, allow an attorney who withdraws for a justifiable cause to recover compensation for his services. Upgrade Corp. v. Michigan Carton Co., 87 Ill.App.3d 662, 43 Ill.Dec. 159, 160, 410 N.E.2d 159, 160 (1980); Ambrose v. Detroit Edison Co., 65 Mich.App. 484, 237 N.W.2d 520, 523 (1975); Stall v. First Nat'l Bank, 375 N.W.2d 841, 845-46 (Minn.Ct.App.1985); Schwartz v. Jones, 58 misc.2d 998, 297 N.Y.S.2d 275, 276 N.Y.Sup.Ct. 1969); May v. Seibert, 164 Va. 673, 264 S.E.2d 643, 647 (1980). On the other hand, an attorney who abandons a case without just cause before completing the task for which his client hired him breaches his contract of employment and forfeits all right to compensation. Royden v. Ardoin, 160 Tex. 338, 331 S.W.2d 206, 209 (1960); accord In re Thomasson's Estate, 346 Mo. 911, 144 S.W.2d 79, 83 (1940); Schwartz 297 N.Y.S.2d at 276; May 264 S.E.2d at 647. The critical question, then, is did McKnight have just cause to withdraw. ¹

McKnight alleges that she voluntarily withdrew from the Rutishauser case when Staples indicated that he would deny responsibility for "turning in" Rutishauser to the IRS in his upcoming oral deposition. McKnight considered this anticipated testimony to be untruthful as revealed by her testimony:

Q. Did Mr. Staples in December of 1984 represent to you that his testimony would be other than truthful in his oral deposition?

A. He did.

* * *

* * *

Q. Can you tell the Jury what he stated to you that would have been untruthful?

A. In relation to the issue of whether or not he was the person responsible for turning the Rutishausers in to the IRS, Mr. Staples said to me, quote, "I will deny it", unquote.

Q. What did you say to him when he said that to you?

A. I said to Mr. Staples: I cannot let you do that. I know that you did. Ken Butler knows you did. Louis Carrillo knows you did. I sat there with you while the bounty was discussed. The people in the 193rd are aware that you did. I cannot let you do that. ²

McKnight contends that the Code of Professional Responsibility required her to withdraw from representing Staples because it was obvious to her that Staples intended to give untruthful testimony in his deposition. ³ We agree that a client's intention to give perjured testimony provides just cause for an attorney to withdraw. The burden is upon the attorney, however, to establish the falsity of the testimony threatened to be given, and such burden was not met in this case.

The only perjury at issue herein is that Staples said he would deny that he was "responsible" for "turning in" Rutishauser to the IRS. The record discloses no other statement that Staples intended to give in his oral deposition that McKnight considered untruthful. In testing the untruth of this statement, we note initially that the terms "responsible" and "turning in" apply secondarily to underlying facts and are therefore conclusory. Thus, under the facts of this case, Staples' denial can be untruthful only if he intentionally misstated his true opinion as to the effect of his conduct or if the evidence established that the opinion he professed was against all reason. See Gibson v. State, 15 S.W. 118, 119 (Tex.Ct.App.1890). Staples' denial cannot be deemed to be untruthful merely because some of the underlying facts suggest that his opinion was not the best. Similarly, it cannot be deemed to be untruthful because McKnight held a different opinion based upon what she knew, where the underlying facts establish as a matter of law that Staples' opinion was not against all reason. In short, one does not commit perjury by expressing an honest albeit a bad opinion. See Savage v. Herrin Transfer & Warehouse Co., 219 S.W.2d 101, 103 (Tex.Civ.App.--Galveston 1949, no writ); see generally, 70 C.J.S. Perjury § 7 (1987).

Staples admitted at trial his involvement with the IRS respecting the Rutishauser matter. There is no evidence, however, that he ever characterized this involvement as making him "responsible" for "turning in" Rutishauser, or that he took any action tending to negate his asserted position that he lacked such responsibility. Further, although both Butler and Carrillo testified at trial, neither witness gave any testimony from which the jury could reasonably have inferred that Staples had concluded that he was "responsible" for ...