Woodhaven Partners, Ltd. v. Norman

• Decision Date: 30 January 2014
• Docket Number: No. 05–11–01718–CV.,05–11–01718–CV.
• Citation: 422 S.W.3d 821
• Court: Texas Court of Appeals
• Parties: WOODHAVEN PARTNERS, LTD., WH Management, Inc., Mark Johns, PMR Partners I, Ltd., Sunetics International, L.P. a/k/a Sunetics International, Inc., and JCMJ Ventures, L.L.C., Appellants v. SHAMOUN & NORMAN, L.L.P. f/k/a Shamoun, Klatsky, Norman, Appellee.

422 S.W.3d 821

WOODHAVEN PARTNERS, LTD., WH Management, Inc., Mark Johns, PMR Partners I, Ltd., Sunetics International, L.P. a/k/a Sunetics International, Inc., and JCMJ Ventures, L.L.C., Appellants

v.SHAMOUN & NORMAN, L.L.P. f/k/a Shamoun, Klatsky, Norman, Appellee.

No. 05–11–01718–CV.

Court of Appeals of Texas, Dallas.

Jan. 30, 2014.

Evan Lane (Van) Shaw, Janet R. Randle, Law Offices of Van Shaw, Dallas, for Appellants.

Jonathan J. Cunningham, C. Gregory Shamoun, Kevin Morgan, Shamoun & Norman, LLP, Dallas, for Appellee.

Before Justices FITZGERALD, LANG, and MYERS.

OPINION

Opinion by Justice MYERS.

This is an appeal from a summary judgment granted in favor of appellee, Shamoun & Norman, L.L.P. f/k/a Shamoun, Klatsky, Norman, against appellants, Woodhaven Partners, Ltd., WH Management, Inc., Mark Johns, PMR Partners I, Ltd., Sunetics International, L.P. a/k/a Sunetics International, Inc., and JCMJ Ventures, L.L.C. In six issues, appellants argue the trial court erred by (1) striking a summary judgment affidavit filed by appellant Mark Johns; (2) granting appellee's traditional motion for summary judgment; (3) granting appellee's no-evidence summary judgment motion; (4) overruling appellants' objections to the summary judgment affidavit filed by C. Gregory Shamoun; (5) finding Mark Johns jointly and severally liable with Sunetics International, Inc.; and (6) finding that appellee did not prove it was entitled to the damages and attorneys' fees awarded by the trial court. We affirm the trial court's judgment in part, and reverse and remand for further proceedings.

Background and Procedural History

This appeal arises from a lawsuit brought by appellee, a Dallas law firm, for non-payment of various attorneys' fees incurred during four legal matters. In April of 2007, appellee was hired to represent appellant Sunetics International, Inc. (“Sunetics, Inc.,” unless otherwise indicated), in a complex patent infringement case against Lexington Lasercomb I.P.A.G. and Lexington International, L.L.C. (the “Sunetics litigation”). The agreement was signed by Mark Johns, Sunetics, Inc.'s president and secretary. Also in April of 2007, appellee was hired to represent appellant Woodhaven Partners, Ltd., in a real estate litigation and contract dispute against Marlin Land Development, L.L.C. (the “Marlin litigation”). The agreement was signed by Johns, the president of Woodhaven Partners. In August of 2007, appellants Woodhaven Partners, Ltd., WH Management, Inc., PMR Partners I, Ltd., and Johns hired appellee to represent them in litigation involving claims brought by Balch Springs Development II, L.P. (the “Balch Springs litigation”). The agreement was signed by Johns as the authorized agent for PMR Partners, Woodhaven, WH Management, and by Johns individually. The following April, appellee was hired by Johns to represent him in proceedings involving the conservatorship of Johns's child (the “Johns custody litigation”).

On February 10, 2010, appellee brought suit against Woodhaven Partners, Ltd., Mark Johns, WH Management, Inc., PMR Partners I, Ltd., Sunetics International, L.P., Sunetics International, Inc., and JCMJ Ventures, L.L.C. (collectively, “appellants”) asserting causes of action for sworn account, breach of contract, and, alternatively, promissory estoppel and quantum meruit, and fraud and fraud in the inducement,¹ based on appellants' failure to pay incurred attorneys' fees pursuant to the retainer agreements. Appellants answered. Appellants Mark Johns, Woodhaven Partners, Ltd., and WH Management counterclaimed against appellee for breach of contract, negligence, negligent misrepresentation, fraud, violations of the Texas Deceptive Trade Practices Act (DTPA), and breach of fiduciary duty, alleging that appellee overcharged appellants for legal services:

[Appellants] would show that [appellants] and [appellee] entered into an agreement whereby [appellee] agreed to provide legal services to [appellants] at a reasonable rate. Notwithstanding this agreement, [appellee] overcharged [appellants] for the legal services in issue, as the billings [appellants] received from [appellee] were not proper and were not accurate causing damages to [appellants] in excess of the minimum jurisdictional limits of this Court.

Appellants also alleged affirmative defenses of ratification, waiver, fraud, estoppel, laches, unclean hands, set-off, prior material breach, and the economic loss rule.

On October 4, 2010, appellee filed a traditional and no-evidence motion for partial summary judgment. The summary judgment motion was supported, in part, by an affidavit from C. Gregory Shamoun, appellee's president and managing partner. After various pleadings were supplemented and amended by the parties, appellants filed their response to the motion for summary judgment and objected to Shamoun's affidavit. Affidavits from Mark Johns and Janet Randle, one of the attorneys of record for appellants, were included with appellants' response to appellee's summary judgment motion.

After another round of amended and supplemented pleadings, appellee filed, on April 19, 2011, an amended traditional and no-evidence motion for partial summary judgment. On May 11, 2011, along with their response to the amended motion for partial summary judgment, appellants filed a “Supplement to All Existing Answers,” which purported to be a verified denial of appellee's claim for suit on a sworn account. Appellee objected to and moved to strike Mark Johns's and Janet Randle's affidavits.

On June 2, 2011, the trial court granted, in part, appellee's amended motion for partial summary judgment. The trial court sustained appellee's objections to Johns's affidavit and overruled its objections to Janet Randle's affidavit. The court then concluded that, given deficiencies in appellee's pleadings and proof, granting summary judgment against all appellants would be reversible error. The trial court thus granted summary judgment as to all of appellee's claims against (1) Sunetics, Inc. for the Sunetics litigation, and all of its affirmative defenses and counterclaims; (2) Woodhaven Partners for the Marlin litigation, and all of its affirmative defenses and counterclaims; (3) Woodhaven Partners, WH Management, PMR Partners, and Johns for the Balch Springs litigation, and all of their affirmative defenses and counterclaims; and (4) Johns, individually, for the Johns custody litigation, and all of his affirmative defenses and counterclaims. The trial court did not grant summary judgment against Johns for the Sunetics litigation or against WH Management for the Marlin litigation. The trial court also declined to award attorneys' fees because it could not determine the appropriate amount of fees to award, given that appellee's “attorney's fees affidavit involves fees against certain Defendants against whom Judgment has not been achieved,” and that there was no “adequate segregation of fees.”

After supplementing its Fourth Amended Petition on June 30, 2011, appellee filed a second summary judgment motion. The motion sought attorneys' fees and to hold Johns jointly and severally liable with Sunetics, Inc. for the Sunetics litigation, and WH Management jointly and severally with Woodhaven for the Marlin litigation. It was supported by an affidavit filed by Shamoun, along with numerous attached documents. Appellee also provided a segregation of its attorneys' fees in the Marlin and Sunetics litigation, supported by a second Shamoun affidavit. In their response, appellants objected to Shamoun's first affidavit and moved to strike certain exhibits that accompanied the affidavit.

In the final judgment signed on September 29, 2011, the trial court granted appellee's second motion for summary judgment in its entirety. The court struck one sentence of the Shamoun affidavit, but overruled all of appellants' other objections. The court's final judgment found, inter alia, (1) against Sunetics, Inc. and Mark Johns, jointly and severally, for $244,732.95 in actual damages based on the Sunetics litigation, and $53,207.17 in attorneys' fees; (2) against Woodhaven Partners and WH Management, jointly and severally, for $61,163.46 in actual damages attributable to the Marlin litigation, and $18,853.30 in attorneys' fees; (3) against Woodhaven Partners, WH Management, PMR Partners, and Mark Johns, jointly and severally, for $11,102.38 in actual damages based on the Balch Springs litigation, and $11,546.41 in attorneys' fees; and (4) against Mark Johns, individually, for $89,773.89 in actual damages attributable to the Johns custody litigation, and $23,456.65 in attorneys' fees. Appellants filed a motion for new trial that was overruled by operation of law, followed by the instant notice of appeal.

Discussion

1. Affidavit of Mark Johns

In their first issue, appellants argue that the trial court erred by striking the affidavit testimony of Mark Johns because the testimony “was admissible under governing case law and the applicable retainer agreements.”

Background

After appellee filed its traditional and no-evidence motion for summary judgment seeking summary judgment as to its causes of action and appellants' counterclaims, appellants' response included an affidavit from Mark Johns disputing the reasonableness and necessity of the attorneys' fees that are the subject of this lawsuit. Appellee moved to strike paragraphs 4, 8, 12, and 16 of the Johns affidavit as it applied to the reasonableness and necessity of the attorneys' fees and services.

In each of the challenged paragraphs, Johns began by quoting the following language that is found in all of the relevant retainer agreements between appellants and appellee:

For purposes of this Engagement Letter, the Engagement means rendering of reasonable and necessary legal services including, without limitation, conducting a preliminary investigation; drafting documents, correspondence and pleadings; motion practice; conducting and defending...