Opinion issued November 6, 2008
In The
Court of Appeals
For The
First District of Texas
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NO. 01-07-00850-CV
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CHARLIE C. WILLIAMS, Appellant
V.
FREDDIE N. JACKSON, Appellee
On Appeal from County Civil Court at Law No. 4
Harris County, Texas
Trial Court Cause No. 844301
Appellant, Charlie Williams, has filed a motion for rehearing of our opinion issued on October 9, 2008. We deny rehearing, but withdraw our opinion and judgment of October 9, 2008 and issue this opinion and a new judgment in their stead.
This is suit to collect unpaid attorney's fees. Williams appeals from a judgment that awarded appellee, Freddie N. Jackson, $8,446.76, plus interest and costs, in accordance with jury findings that Williams did not comply with his agreement to pay Jackson, that Williams's failure to pay was not excused by a failure of Jackson to comply with a material obligation of the same agreement or by duress by Jackson, and that $8,446.76 would fairly and reasonably compensate Jackson for Williams's failure to pay. Williams's first issue challenges the sufficiency of the evidence to support the jury's verdict. In four additional issues, Williams contends that (1) Jackson created a conflict of interest by filing this lawsuit and thereby breached the contract, (2) Jackson's alleged failure to bill Williams monthly constituted an initial, material breach of the contract that excused Williams's failure to pay, (3) Jackson is barred from recovering fees billed for secretarial or paralegal work, and (4) Jackson's trial exhibits should have been excluded based on Jackson's failure to respond to a discovery request. We affirm.
Background Williams and Jackson are both attorneys. This litigation derives from a written agreement by which Williams retained Jackson to represent him in a real-property dispute that involved a cloud on property owned by Williams and allegations that accused Williams of fraud and breach of fiduciary duty. On August 13, 2004 the two men signed a fee agreement during that meeting. Williams paid Jackson the $4,000 retainer required by the agreement, which recited Jackson's rate for legal services as $200 per hour and required that Williams pay all costs. The fee agreement required Jackson to bill "monthly" and Williams to pay "promptly."
Jackson prepared a no-evidence motion for summary judgment in the real-property dispute; he prevailed on that motion, recovered a judgment in January 2005, and successfully defended the opponent's motion for new trial. After the opponent appealed, Jackson attempted to check out the record to prepare an appellee's brief and learned only then Williams had checked out the record and intended to handle the appeal pro se. Jackson stopped working on the appeal after Williams "fired" him.
This litigation ensued as a suit on a sworn account when Williams refused to pay the outstanding balance due Jackson. Jackson and Williams were the only witnesses who testified at trial, and the fee agreement and Jackson's billing statements were the only evidentiary exhibits. Williams filed a motion for judgment notwithstanding the verdict (JNOV) and also filed a motion for new trial, which was overruled by operation of law.
Legal Sufficiency
In his first issue, Williams argues that the evidence is legally insufficient to support the jury's response to question three of the charge because the record conclusively establishes (1) that he was under duress when he signed the fee agreement with Jackson and (2) that he was therefore not bound by that agreement. Williams frames this issue as a challenge to the refusal of the trial court to grant Williams's motion for JNOV. (1)
A. Standard of Review
A court may disregard a jury's verdict and render judgment notwithstanding the verdict (JNOV) if no evidence supports the jury's findings, or if a directed verdict would have been proper. Tiller v. McClure, 121 S.W.3d 709, 713 (Tex. 2003) (citing Brown v. Bank of Galveston, Nat'l Ass'n, 963 S.W.2d 511, 513 (Tex. 1998)); Williams v. Briscoe, 137 S.W.3d 120, 124 (Tex. App.--Houston [1st Dist.] 2004, no pet.). To determine whether a JNOV is appropriate, we apply the standards that govern "no evidence," i.e., legal-sufficiency, review. See Wal-Mart Stores, Inc. v. Miller, 102 S.W.3d 706, 709 (Tex. 2003); Williams, 137 S.W.3d at 124; see also City of Keller v. Wilson, 168 S.W.3d 802, 823 (Tex. 2005) ("[T]he test for legal sufficiency should be the same for summary judgments, directed verdicts, judgments notwithstanding the verdict, and appellate no-evidence review.").
A legal sufficiency point must be sustained: (1) when there is a complete absence of a vital fact; (2) when rules of law or evidence preclude according weight to the only evidence offered to prove a vital fact; (3) when the evidence offered to prove a vital fact is no more than a scintilla; or (4) when the evidence conclusively establishes the opposite of the vital fact. See id., 168 S.W.3d at 810. Under the legal-sufficiency standard, we must credit evidence that supports the judgment if reasonable jurors could, and we must disregard contrary evidence unless reasonable jurors could not. See City of Keller, 168 S.W.3d at 827. If the evidence falls within the zone of reasonable disagreement, we may not invade the fact-finding role of the jurors, who alone determine the credibility of the witnesses, the weight to give their testimony, and whether to accept or reject all or any part of that testimony. See id. at 822. Unless "there is no favorable evidence" to support the challenged finding or "if contrary evidence renders supporting evidence incompetent . . . or conclusively establishes the opposite" of the finding, we must affirm. See id. at 810-11.
B. Duress by Jackson not Shown
Williams challenges the jury's failure to find, in response to question 3 of the jury charge, that duress by Jackson invalidated their fee agreement. Coercion or taking an unjust advantage by one party to a contract may invalidate the contract and render it unenforceable. See Brown v. Cain Chem., Inc., 837 S.W.2d 239, 244 (Tex. App.--Houston [1st Dist.] 1992, writ denied). To establish economic duress sufficient to invalidate a contract, three elements must be present: (1) a threat to do something a party has no legal right to do, (2) an illegal exaction of some fraud or deception, and (3) an imminent restraint that destroys the victim's free agency without a present means for protection. Wright v. Sydow, 173 S.W.3d 534, 544 (Tex. App.--Houston [14th Dist.] 2004, pet. denied) (citing Dale v. Simon, 267 S.W. 467, 470 (Tex. Comm'n App. 1924)); Simpson v. MBank Dallas, N.A., 724 S.W.2d 101, 109 (Tex. App.--Dallas 1987, writ ref'd n.r.e.). Duress must derive from acts or conduct of the party accused of duress; the emotions of the purported victim do not suffice. See Brown, 837 S.W.2d at 244. Because "[t]he compulsion must be actual and imminent, and not merely feigned or imagined," the acts of the defendant must be "such as to destroy free agency without present means of protection." Sudan v. Sudan, 145 S.W.3d 280, 292 (Tex. App.--Houston [14th Dist.] 2004) (quoting Ward v. Scarborough, 236 S.W. 434, 437 (Tex. 1922)), rev'd on other grounds, 199 S.W.3d 291 (Tex. 2006).
As in Brown, there is no evidence in this case that Jackson coerced or threatened Williams and, thus, no evidence of the first element that Williams had to prove in order to prevail on the affirmative defense. See Brown, 837 S.W.3d at 244. Williams also failed to show that the alleged coercion by Jackson was imminent and effectively removed his freedom not to sign the fee agreement that Jackson proposed. See Sudan, 199 S.W.3d at 292. Williams negated that element by his own testimony that he signed the agreement "voluntarily." Though Williams claims he was "distraught," and Jackson agreed that Williams was distraught, the emotional state of the complaining party does not establish duress. See Brown, 837 S.W.2d at 244.
When viewed in the requisite light, which must favor the jury's verdict, the evidence is legally insufficient to establish that Williams signed the fee agreement only because of duress directed at him by Jackson. We overrule issue one.
B. Williams's Failure to Pay Jackson Not Excused
In issue three, Williams challenges the jury's failure to find, in response to question two of the jury charge, that Jackson breached the fee agreement and thus discharged Williams of his duty to pay Jackson. (2) According to Williams, the record establishes that Jackson did not bill Williams monthly and therefore establishes an initial breach that discharged Williams from any liability for failing to pay Jackson as a matter of law.
Williams's arguments invoke the well-settled principle that a material breach by one party to a contract can excuse the other party from any obligation to perform. See Mustang Pipeline Co. v. Driver Pipeline Co., 134 S.W.3d 195, 196 (Tex. 2004) ("It is a fundamental principle of contract law that when one party to a contract commits a material breach of that contract, the other party is discharged or excused from further performance."). We construe Williams's point of error as challenging the legal sufficiency of the evidence to support the jury's failure to find that a breach of the fee agreement by Jackson discharged Williams's obligation to pay. See City of Keller, 168 S.W.3d at 810 (stating that evidence may be legally insufficient when rules of law or evidence preclude according weight to only evidence offered to prove vital fact).
Whether a party to a contract has breached the contract is generally a question of law for the court, which determines as a matter of law what the contract requires of the parties. See Meek v. Bishop Peterson & Sharp, P.C., 919 S.W.2d 805, 808 (Tex. App.--Houston [14th Dist.] 1996, writ denied). When the terms of a contract are clear and unambiguous, and the facts concerning breach or performance are undisputed or conclusively established, the trial court decides, as a matter of law, whether the facts show performance or breach. See id. Resolution by the fact-finder is appropriate to resolve underlying factual disputes that pertain to the alleged breach, but not the breach itself. See id.
Materiality of a breach--the question whether a party's breach of a contract will render the contract unenforceable--generally presents a dispute for resolution by the trier of fact. See Continental Dredging, Inc. v. De-Kaizered, Inc., 120 S.W.3d 380, 394-95 (Tex. App.--Texarkana 2003, pet. denied) (citing Hudson v. Wakefield, 645 S.W.2d 427, 430 (Tex. 1983)). Materiality of a breach and the resulting unenforceability of the agreement breach can, however, present questions for the court to resolve as a matter of law. See Mustang Pipeline Co., 134 S.W.3d at 198-200 (holding that material breach occurred as matter of law, given that contract stated that "'all time limits . . . are of the essence"; further holding that breach discharged Mustang from further performance).
In Mustang Pipeline, the supreme court relied on two provisions of the Restatement of Contracts relating to materiality of a breach of contract. See id. (citing Restatement (Second) of Contracts §§ 241-242 (1981)). Section 241 of the Restatement lists five "circumstances" that are "significant in determining when a failure to perform is material," and section 242 lists two additional factors that are "significant in determining whether a party's duties are discharged . . . due to the other party's material breach." Id. (Emphases added.)
Pertinent to this case, in which Williams challenges the jury's failure to find that he was discharged from his duty to pay Jackson, section 242 of the Restatement (Second) of Contracts addresses the implications of time deadlines stated in a contract for deciding whether alleged breach of a deadline by the party seeking enforcement of a contract--here Jackson, who did not bill Williams monthly--will discharge the other party to the contract--here, Williams--of any duty to comply with the contract. See id. Pursuant to subsection (2) of section 242 of the Restatement, "the extent to which the agreement provides for performance without delay" is a circumstance that affects materiality of lack of timely performance. Mustang Pipeline Co., 134 S.W.3d at 199 (citing Restatement (Second) of Contracts § 242). More specifically, and pertinent to the controversy here, section 242(2) further states that
[A] material failure to perform or to offer to perform on a stated day does not of itself discharge the other party's remaining duties unless the circumstances, including the language of the agreement, indicate that performance or an offer to perform by that day is important.
Id. (Emphasis added.)
The record establishes that Jackson described his billing requirement at trial as a monthly obligation, and the fee agreement required that he "bill [Williams] promptly," which then required Williams to "pay . . . promptly." In contrast to the Mustang Pipeline contract, the Jackson-Williams fee agreement does not impose a duty of compliance on either a stated day or without delay. See Mustang Pipeline Co.134 S.W.3d at 199. Likewise, nothing in the fee agreement suggests that the requirement of "monthly" billing is of the essence, to the extent that it serves as a predicate to compliance by Williams with his duty to pay Jackson. See id. The fee agreement provides no basis, therefore, to support Williams's contention that Jackson's lack of compliance, if any, with his duty of "monthly" billing discharged Williams as a matter of law from any duty to comply with the fee agreement by paying Jackson. See id. (citing Restatement (Second) of Contracts § 242(2)).
We overrule issue three.
Breach of Contract Defenses
In issues two and four, Williams challenges and raises defenses to enforcement of the fee agreement against him, as follows: in issue two, he claims that a conflict of interest barred Jackson from initiating this lawsuit; in issue four, Williams argues that Jackson's work included billing entries for clerical or secretarial duties, for which Williams contends he had no duty to compensate Jackson, and, in addition, that Jackson's fees were unreasonable.
A trial court "shall submit the questions, instructions[,] and definitions" that "are raised by the written pleadings and the evidence." Tex. R. Civ. P. 278. Williams raised the issues addressed in his second and fourth issues as affirmative defenses to Jackson's suit to enforce their fee agreement as a sworn account. To the extent that the evidence raised those issues, Williams was entitled to a jury's determination of any factual disputes regarding those issues. See id. We need not address whether the evidence raised material issues of fact for the jury to decide regarding these issues in this case, however, because Williams did not request that the trial court include either questions or instructions regarding the issues as part of the jury charge.
A party waives "all independent grounds of recovery or of defense" when that party does not submit its claim of recovery or defense to the jury or request that the jury determine any element of its claim or defense, unless the evidence "conclusively establishe[s]" the claim or defense. See Tex. R. Civ. P. 279 (emphasis added). In this case, Williams did not propose that the jury determine pertinent dates relating to Jackson's representation in support of his claim that a conflict precluded this lawsuit. Likewise, Williams did not request that the trial court instruct the jury that, in determining whether Williams failed to comply with the fee agreement, in response to question one of the jury charge, the jury exclude from its consideration any work that Williams challenged as "secretarial" and any fees that Williams challenged as "unreasonable." The evidence does not conclusively establish either defense, and Williams does not contend otherwise. See id. Accordingly, Williams waived jury consideration of those issues. See id. (3)
We overrule issues two and four.
Admissibility of Jackson's Trial Exhibits
In his fifth issue, Williams argues that the trial court erred by admitting Jackson's two trial exhibits into evidence because of pretrial discovery violations by Jackson. Jackson's two exhibits are the fee agreement and his billing invoices. Williams has waived any challenge to either exhibit because the record reflects that his counsel confirmed on the record that both exhibits were to be admitted without objection. See Tex. R. App. P. 33.1 (a); see also Tex. R. Evid. 103(a)(1) (stating requirement of objection); In re C.O.S.S., 988 S.W.2d 760, 765 (Tex. 1999) (quoting Pirtle v. Gregory, 629 S.W.2d 919, 920 (Tex. 1982)).
We overrule issue five.
Conclusion
We affirm the judgment of the trial court.
Sherry Radack
Chief Justice
Panel consists of Chief Justice Radack and Justices Nuchia and Higley.
1.
Williams filed his motion for JNOV on June 25, 2007, two days before the trial court signed the judgment in favor of Jackson. As supplemented pursuant to this Court's notice, the record on appeal shows that the trial court never ruled on Williams's motion for JNOV.
In Chilkewitz v. Hyson, as here, the trial court signed a judgment in favor of the
prevailing party after the complaining party sought to set aside a jury's verdict by
filing a motion for JNOV. 22 S.W.3d 825, 828 (Tex. 1999). The supreme court
stated that the trial court had impliedly overruled the complaining party's motion for
JNOV by rendering judgment in favor of the prevailing party. Id. Under the
Chilkewitz reasoning, we may infer from the judgment rendered in favor of Jackson
in this case on June 27, 2007 that the trial court implicitly overruled Willams's motion
for JNOV. See id. We therefore hold that Williams preserved his challenge to the
trial court's failure to grant that motion and thus complied with rule 33.1(a)(2).
2. Question two of the jury charge asked whether Williams's "failure to comply with the
agreement [was] excused" and instructed the jurors that "Failure to comply by
[Williams] is excused by [Jackson's] previous failure to comply with a material
obligation of the same agreement." The jury answered "No." Williams's contentions
do not include a challenge to the jury's implied finding that any breach by Jackson
was not a material breach.
3. We note further that Williams did not raise any issue regarding Jackson's alleged
conflict of interest in the trial court in order that the trial court resolve that issue as a
matter of law.