Opinion issued May 28, 2015
In The
Court of Appeals
For The
First District of Texas
————————————
NO. 01-14-00204-CV
———————————
PHONG TRINH, Appellant
V.
FATHA ELMI AND MED SOLUTIONS PHARMACY, INC., Appellees
On Appeal from the 269th District Court
Harris County, Texas
Trial Court Case No. 2011-16459
MEMORANDUM OPINION
Appellant, Phong Trinh sued appellees, Fatha Elmi and Med Solutions
Pharmacy, Inc. for breach of contract, fraud, breach of fiduciary duty, and quantum
meruit based on an alleged breach of a partnership agreement. Based on the jury’s
answers to the questions in the jury charge, the trial court entered judgment
awarding Trinh $2,500 in damages on his quantum meruit claim but no damages
on his breach of contract, fraud, or breach of fiduciary duty claims, or an award of
attorney’s fees. In his first and second issues, Trinh contends that the trial court
erred in rendering judgment awarding him no damages on his breach of contract
claim or recovery of attorney’s fees because the award was outside the range of
evidence or, alternatively, against the great weight and preponderance of the
evidence. In his third issue, he argues that the trial court erred in rendering
judgment awarding him no attorney’s fees because he prevailed on his quantum
meruit claim and was, therefore, entitled to recover his reasonable attorney’s fees.
We affirm in part, and reverse and remand in part.
Background
In 2009, Trinh worked as an office manager for Dr. Bui, an obstetrical
gynecologist. Elmi, a pharmacist, owned a pharmacy called Med Solutions located
near Dr. Bui’s practice. In mid to late 2009, Trinh and Elmi discussed opening a
new pharmacy in the same building as Dr. Bui’s practice.1 Mitzi Rivero, a
transactional attorney, drafted an agreement for the parties’ new pharmacy which
was to be called BioMed. Elmi and Trinh, however, decided not to open BioMed
1
Dr. Bui owned the building on Jones Road in which her practice was located.
2
and opted instead to re-locate Elmi’s existing pharmacy, Med Solutions, next to
Dr. Bui’s practice.
Trinh testified that, in early 2010, he and Elmi orally agreed that Trinh
would purchase a 40% interest in Med Solutions for $30,000. Trinh further
testified that he paid $10,000 to Elmi, and that he and Elmi agreed that Trinh
would pay the remaining $20,000 once they signed a contract. According to Trinh,
he was responsible for the build-out of the pharmacy in the new building and spent
his own money to buy security cameras for the pharmacy, a safety film for the
front door, and some shelving.
In August 2010, Med Solutions relocated next to Dr. Bui’s practice. Trinh
testified that he agreed that Elmi could retain 100% of Med Solutions’s earnings
that month due to the financial hardship of relocating the pharmacy. When Elmi
told him that she was still having financial difficulties, he agreed that she could
retain 100% of the pharmacy’s profits for September. According to Trinh, of the
$25,000 in net profits that Med Solutions earned in October 2010, he received
$10,000 and Elmi received $15,000. Trinh testified, however, that when he met
with Elmi in November 2010, she ousted him from the partnership and refused to
re-purchase his 40% ownership interest in the pharmacy.
Elmi testified that she never entered into a verbal agreement to make Trinh a
partner in Med Solutions. According to Elmi, although she and Trinh discussed
3
the possibility of his purchasing 40% of Med Solutions for $30,000, they never
entered into an agreement. Elmi testified that Trinh paid her $10,000 but that she
later returned the $10,000 to him.
Rivero testified that in December 2009, Trinh contacted her to request that
she set up BioMed as a limited liability company. In August 2010, Trinh sent her
an email, on which he copied Elmi, asking Rivero to instead prepare a new
contract for them for Med Solutions. On September 30, 2010, Rivero met with
Trinh and Elmi to discuss possible ways to structure a transfer of 40% stock in
Med Solutions to Trinh. Rivero testified that the September 30, 2010 meeting was
an initial meeting to begin negotiations and to discuss different ways in which the
parties might structure the transaction but that there was no discussion regarding
how the $30,000 would be paid. Rivero testified that she never prepared a stock
purchase agreement, a promissory note, a security agreement, or a stock issuance
for Med Solutions.
Trinh’s expert witness, Bryne Liner, testified that Trinh incurred between
$554,168 and $590,614 in economic damages based on a 40% share of the
pharmacy’s fair market value and of its profits from November 2010 to the date of
trial. Trinh’s expert witness, Paul Simon, testified that Trinh’s attorney’s fees
based on the contingency fee agreement entered into between Trinh and Simon’s
firm was either $277,084 or $295,307, depending on the damages award, or
4
$244,283.75 based on his firm’s hourly rates. He further testified that the firm’s
costs were $13,943.09, and that $25,000 was a reasonable appellate fee.
The jury returned its verdict awarding Trinh $2,500 on his quantum meruit
claim but awarding no damages on his claims for breach of contract, fraud, and
breach of fiduciary duty, or recovery of attorney’s fees. Trinh subsequently filed
motions for entry of judgment notwithstanding the verdict and for new trial which
the trial court denied. Trinh timely filed this appeal.
Breach of Contract Claim
In his first two issues, Trinh contends that the trial court erred in rendering
judgment on the jury’s verdict awarding him no damages on his breach of contract
claim and no attorney’s fees based on this claim. He argues that because the jury
found that a partnership agreement existed, appellees had breached that agreement,
and Trinh’s expert witnesses provided uncontroverted testimony regarding Trinh’s
damages and attorney’s fees, the jury’s award of no damages or attorney’s fees is
outside the range of evidence or, alternatively, against the great weight and
preponderance of the evidence.
At the outset, we note that the parties dispute the meaning of the jury’s
answers to the questions in the jury charge. Specifically, Trinh contends that the
jury’s answers to Questions 1 and 2 clearly demonstrate that the jury found that a
partnership agreement existed and that appellees breached it. Appellees, however,
5
argue that the jury’s answers to those questions represent a finding that although
the parties had agreed to form a partnership, a partnership agreement was never
consummated.
To address these arguments, we must review the jury’s findings. When
reviewing jury findings, we must try to interpret them in a manner that supports the
judgment. Hous. Med. Testing Servs., Inc. v. Mintzer, 417 S.W.3d 691, 696 (Tex.
App.—Houston [14th Dist.] 2013, no pet.); W & F Transp., Inc. v. Wilhelm, 208
S.W.3d 32, 44 (Tex. App.—Houston [14th Dist.] 2006, no pet.). The trial court’s
duty, and ours, is to ascertain the intention of the jury’s answers, harmonize or
reconcile the answers and issues, and render a judgment in conformity with them.
Rice Food Mkts., Inc. v. Ramirez, 59 S.W.3d 726, 733 (Tex. App.—Amarillo 2001,
no pet.) (citing State v. Hale, 136 Tex. 29, 146 S.W.2d 731, 739 (1941)). To do so,
we may examine the record in order to ascertain the jury’s intent. Mintzer, 417
S.W.3d at 696.
Questions 1 and 2 asked the jury as follows:
Question No. 1
Did either of the parties listed below agree with Trinh that Trinh would own
a 40% interest in the pharmacy?
In deciding whether the parties reached an agreement, you may
consider what they said and did in light of the surrounding
circumstances, including any earlier course of dealing. You
may not consider the parties’ unexpressed thought or intentions.
6
Answer “Yes” or “No” for each of the following:
a) Elmi: Yes
b) The Pharmacy: Yes
Question No. 2
Did either of the parties listed below fail to comply with the agreement?
Answer “Yes” or “No” for each of the following:
a) Elmi: Yes
b) The Pharmacy: Yes
The jury awarded no damages to Trinh on his breach of contract claim.
Trinh contends that the jury was not free to ignore the uncontroverted expert
testimony of Trinh’s economic damages “because the evidence conclusively
established those amounts, subject only to the jury finding (as it did) of the
existence of a partnership agreement that Appellees breached.” Appellees argue,
however, that the jury’s answer to Question No. 1—that appellees agreed with
Trinh that Trinh would own a 40% interest in the pharmacy—evidences only that
the parties agreed that they would enter into a partnership agreement but that an
agreement was never consummated.
Our review of the record leads us to conclude that the jury’s answers, while
seemingly conflicting, are not irreconcilable. At trial, Trinh testified that he
entered into an agreement with Elmi under which he was to pay Elmi $30,000 for a
7
40% ownership interest in the pharmacy, he only paid Elmi $10,000, and Elmi
never conveyed the interest in the pharmacy to him. In its answer to Question No.
1, the jury found that the parties had reached an agreement that Trinh would own a
40% interest in the pharmacy; however, the jury was never asked about Trinh’s
concomitant obligations under the agreement. See Texas Pattern Jury Charges,
Business Consumer Insurance Employment PJC 101.1 (2012) (question asking
jury about existence of agreement should include disputed terms of agreement).
Although the jury found that Elmi breached the agreement presumably when she
failed to convey the ownership interest to Trinh (Question No. 2), it could also
have found that a partnership was never created because Trinh did not perform his
obligations under the agreement (Question No. 13). Thus, the jury could have
determined that there was an agreement and that Elmi breached the agreement but
that Trinh was not entitled to damages because he did not perform his obligations
under the agreement. See Cooper v. Lyon Fin. Svcs., Inc., 65 S.W.3d 197, 204 n.5
(Tex. App.—Houston [14th Dist.] 2001, no pet.) (concluding jury answers
favorable to party on liability and answers of zero dollars on damages did not put
answers in conflict); Am. Recreational Mkts. Gen. Agency, Inc. v. Hawkins, 846
S.W.2d 476, 478 (Tex. App.—Houston [14th Dist.] 1993, no writ) (noting finding
favorable to party on liability does not render conflict with finding of zero
damages). The jury’s answers are not irreconcilable; rather, they are consistent
8
with the evidence. Mintzer, 417 S.W.3d at 697 (noting that when reviewing jury
findings, courts must try to interpret them in manner that supports judgment). 2 Our
conclusion is further supported when we consider the question the jury submitted
to the court during its deliberations—“In [the] State of Texas[,] at what point does
a verbal agreement become binding/effective? Does full cash consideration as
defined in the verbal agreement have to be made for the agreement to become a
legal contract?”
The jury’s award of no damages to Trinh on his breach of contract claim and
no award of attorney’s fees based on this claim were neither outside the range of
evidence nor against the great weight and preponderance of the evidence.
Consequently, the trial court did not err in rendering judgment on the jury’s
verdict. We overrule Trinh’s first and second issues.
2
The jury also awarded Trinh $2,500 in damages on his quantum meruit claim
against Med Solutions. Quantum meruit is an equitable remedy that allows
payment for beneficial services rendered and knowingly accepted in the absence
of an explicit contract. See In re Kellogg Brown & Root, Inc., 166 S.W.3d 732,
740 (Tex. 2005). Thus, when the parties themselves create a valid contract, there
can be no recovery under a contract implied by law. Hous. Med. Testing Servs.,
Inc. v. Mintzer, 417 S.W.3d 691, 696 (Tex. App.—Houston [14th Dist.] 2013, no
pet.). Here, although the quantum meruit questions were not predicated in the
charge, the jury’s findings in Trinh’s favor on his quantum meruit claim against
Med Solutions and its award of $2,500 damages for compensable work performed
by him are consistent with evidence offered at trial that Trinh performed work in
anticipation of the pharmacy’s relocation and may also explain the jury’s award of
no damages on Trinh’s breach of contract claim. See id. at 697.
9
Attorney’s Fees Based on Quantum Meruit Claim
In his third issue, Trinh contends that he is entitled to attorney’s fees of at
least $244,283.75, plus $13,943.09 in costs, because he prevailed on his quantum
meruit claim and presented uncontradicted evidence regarding the reasonableness
and necessity of the fees. Elmi argues that the jury was entitled to disbelieve the
uncontradicted testimony of Trinh’s expert and award no attorney’s fees.
A party may recover reasonable attorney’s fees if it prevails and recovers
damages on a cause of action for which attorney’s fees are recoverable. See TEX.
CIV. PRAC. & REM. CODE ANN. § 38.001 (West 1997); Green Int’l, Inc. v. Solis,
951 S.W.2d 384, 390 (Tex. 1997). Section 38.001 of the Civil Practice and
Remedies Code authorizes the award of attorney’s fees in a suit for quantum
meruit. Cordova v. Sw. Bell Yellow Pages, Inc., 148 S.W.3d 441, 446 (Tex.
App.—El Paso 2004, no pet.); see also TEX. CIV. PRAC. & REM. CODE ANN.
§ 38.001 (1)-(3) (stating that person may recover reasonable fees in addition to
amount of valid claim and costs if claim is for services rendered, performed labor,
or furnished material). An award of attorney’s fees is mandatory under section
38.001 if there is proof of the reasonableness of the fees. See MEMC Elec.
Materials, Inc. v. Albemarle Corp., 318 S.W.3d 405, 413 (Tex. App.—[1st Dist.]
2010, no pet.) (citing Hassell Constr. Co. v. Stature Commercial Co., 162 S.W.3d
664, 668 (Tex. App.—Houston [14th Dist.] 2005, no pet.)).
10
The reasonableness of attorney’s fees is ordinarily left to the factfinder, and
a reviewing court may not substitute its judgment for the jury’s. Smith v. Patrick
W.Y. Tam Trust, 296 S.W.3d 545, 547 (Tex. 2009). In awarding attorney’s fees,
the trial court must take into account various factors such as the nature and
complexity of the case; the nature of the services provided by counsel; the time
required for trial; the amount of money involved; the client’s interest that is at
stake; the responsibility imposed upon counsel; and the skill and expertise
required. Ragsdale v. Progressive Voters League, 801 S.W.2d 880, 881 (Tex.
1990). In Arthur Andersen & Co. v. Perry Equipment Co., 945 S.W.2d 812 (Tex.
1997), the Texas Supreme Court added the corollary that the factfinder should
consider “the amount involved and the results obtained,” among other things. Id.
at 818.
Although uncontroverted testimony about attorney’s fees by an interested
party may be established as a matter of law under some circumstances,
uncontroverted testimony that “is unreasonable, incredible, or its belief is
questionable,” “only raise[s] a fact issue to be determined by the trier of fact.”
Smith, 296 S.W.3d at 547–48 (quoting Ragsdale, 801 S.W.2d at 882). In such
cases, the reviewing court should remand for a new trial on attorney’s fees. See
Smith, 296 S.W.3d at 548–49.
11
Here, Trinh sought at least $244,283.75 in attorney’s fees based on his
firm’s hourly rate, as well as $13,943.09 in costs, and $25,000 in appellate fees,
but the jury awarded nothing. As the prevailing party, Trinh is entitled to a
recovery of fees based on his quantum meruit claim. See Cordova, 148 S.W.3d at
446; see also MEMC Elec. Materials, Inc., 318 S.W.3d at 413 (noting award of
reasonable attorney’s fees is mandatory under section 38.001). However, the
amount of requested fees is unreasonable in light of the amount involved and the
results obtained. See Smith, 296 S.W.3d at 548. Therefore, Trinh has not
established that he is entitled to an award of attorney’s fees as a matter of law. See
id. at 548–49.
We reverse the portion of the trial court’s judgment as to attorney’s fees and
remand that part of the case for a new trial.
Conclusion
We reverse and remand for a new trial on the question of attorney’s fees
based on Trinh’s quantum meruit claim, and affirm the trial court’s judgment in all
other respects.
Russell Lloyd
Justice
Panel consists of Chief Justice Radack and Justices Brown and Lloyd.
12