Borden, Inc. v. Martinez

19 S.W.3d 469, 2000 Tex. App. LEXIS 1801, 2000 WL 293677

• Court: Court of Appeals of Texas
• Decided: March 22, 2000
• Docket: 04-99-00204-CV
• Status: Published

Opinions

Opinion by: CATHERINE STONE, Justice.

This limited appeal concerns the propriety of the trial court’s award of guardian ad litem fees in an underlying personal injury case. On multiple grounds, Borden challenges the reasonableness of the award. In the absence of evidence to show the trial court abused its discretion, we affirm the judgment of the trial court.

Factual and PROCEDURAL Background

In 1996, a milk truck which displayed Borden’s logo, crossed over the center line on a wet highway and collided with a truck driven by Victor Manuel Casares Hernandez. Hernandez, along with his two passengers, Maria Hortencia Rivera Riojas and Maribel Salmas Martinez, sustained fatal injuries. On September 27, 1996, twenty-one claimants, including eleven minors, filed a wrongful death and survival action against Borden for the triple fatality. On September 19, 1997, the trial court appointed three guardians ad litem to represent the interests of the minors. The court appointed Sergio Martinez as ad li-tem for the two Hernandez minors, Alvino Morales for the five Martinez minors, and Arnulfo Gonzalez for the five Riojas minors. The parties reached a settlement in the amount of $7.5 million on June 19, 1998. Following an evidentiary hearing on the issue of guardian ad litem fees, the trial court allocated $200,000 to the three guardians ad litem as follows: $45,000 to Martinez, $75,000 to Morales, and $80,000 to Gonzales. The trial court awarded all three guardians ad litem additional fees for any subsequent appeals. Borden does not contest the appellate fees, but challenges the fees awarded for services rendered up to the settlement.

Standard of Review

We review the award of guardian ad litem fees under an abuse of discretion standard. Garcia v. Martinez, 988 S.W.2d 219, 222 (Tex.1999). The amount of an ad litem award is in the trial court’s sound discretion, and will not be set aside absent evidence of the trial court’s clear abuse of discretion. Id. A trial court abuses its discretion if there is no evidence or insufficient evidence to support the award. Dalworth Trucking Co. v. Bulen, 924 S.W.2d 728, 738 (Tex.App.-Texarkana 1996, no writ). The reviewing court may draw upon the common knowledge of the justices and their experience as lawyers and judges to view the matter in light of the evidence and the amount in controversy. Id. A trial court does not necessarily abuse its discretion in awarding fees to a court-appointed guardian ad litem if under the same facts, an appellate judge would decide the matter differently, or if the trial court commits a mere error in judgment. Valley Cocar-Cola Bottling Co., Inc. v. Molina, 818 S.W.2d 146, 148 (Tex.App.-Corpus Christi 1991, writ denied).

Discussion

Rule 173 of the Texas Rules of Civil Procedure governs guardian ad litem appointments. Rule 173 permits a trial court to appoint a guardian ad litem when a minor is represented by a guardian or next friend who appears to have an interest adverse to that of the minor. Tex.R.Civ. P. 173. Guardians ad litem are entitled to a reasonable fee for their services to be taxed as a part of the costs. Tex.R. Civ. P. 173.

Courts use the same eight factors to determine the reasonableness of attorney’s fees to ascertain the appropriate guardian ad litem fee. Garcia, 988 S.W.2d at 222. The eight factors are:

• the time and labor required, the novelty and difficulty of the questions involved, and the skill required to perform the legal service properly;

• the likelihood ... that the acceptance of the particular employment -will preclude other employment by the lawyer;

• the fee customarily charged in the locality for similar legal services;

• the amount involved and the results obtained;

• the time limitations imposed by the client or by the circumstances;

• the nature and length of the professional relationship with the client;

• the experience, reputation, and ability of the lawyer or lawyers performing the services; and

• whether the fee is fixed or contingent on results obtained or uncertainty of collection before the legal services have been rendered.

Id.; see Simon v. York Crane & Rigging Co., 739 S.W.2d 793, 794 (Tex.1987); Missouri Pac. R.R. Co. v. Alderete, 945 S.W.2d 148, 150 (Tex.App.-San Antonio 1996, no writ).

Sergio Martinez

The trial court awarded Martinez $45,000 in ad litem fees for 114 hours spent in the representation of the two Hernandez claimants (approximately $394.74/hr). Raising two primary complaints, Borden argues first, that the trial court erred in awarding fees for time Martinez spent on Norma Hernandez’s case after she attained majority, and second, that the trial court erred .in appointing Martinez guardian ad litem for Victor Hernandez, Jr.

We review Borden’s complaints in terms of conflict of interest. Where a next friend exhibits adverse interests to the minor, a court must appoint a guardian ad litem under Texas Rule of Civil Procedure 173. Hall v. Birchfield, 718 S.W.2d 313, 319 (Tex.App.-Texarkana 1986), rev’d on other grounds, 747 S.W.2d 361, 364 (Tex.1987). The determination of the existence of a conflict of interest requires exercise of judicial discretion. Gibson v. Blanton, 483 S.W.2d 372, 373 (Tex.Civ. App.-Houston [1st Dist.] 1972, no writ). When the natural parents are parties to the suit, a judge may exercise judicial discretion if the judge believes that a potential conflict exists and could arise during a negotiation of settlement or prosecution of the suit, and the ad litem costs can be taxed against the defendants. Coleman v. Donaho, 559 S.W.2d 860, 864 (Tex.Civ.App.-Houston [14th Dist.] 1977, writ dism’d). When the conflict of interest between the minor and the next friend ceases, the trial court should remove the guardian ad litem. Broumsville-Valley Reg. Med. Ctr. v. Gamez, 894 S.W.2d 753, 755 (Tex.1995); Estate ofCatlin v. General Motors Corp., 936 S.W.2d 447, 452 (Tex.App.—Houston [14th Dist] 1996, no writ); Rio Grande Valley Gas Co. v. Lopez, 907 S.W.2d 622, 625 (TexApp.—Corpus Christi 1995, no writ).

Here, Borden argues that any conflict between Norma Hernandez and the surviving spouse ceased when Norma attained majority. Counsel for the Hernandez plaintiffs provided full representation on Norma’s behalf. As such, Borden contends Martinez’s continued representation and fee award was improper. With regard to Victor Hernandez, Jr., Borden similarly argues that no conflict of interest existed to justify Martinez’s appointment and subsequent fee award. Shortly after the suit was filed, the parties discovered that Victor Jr., was Victor Hernandez’s son out of wedlock. Borden asserts the trial court erred in making a needless ad litem appointment because Victor Jr. was ably represented by an attorney, his mother had no standing to sue as either a common law or legal spouse, and thus no 'conflict of interest arose. See Leigh v. Bishop, 678 S.W.2d 572, 573 (Tex.App.-Houston [14th Dist.] 1984, no writ)(holding the trial court abused its discretion in appointing a guardian ad litem where father requested that entire settlement award be placed in the court registry for son’s benefit, appointment accrued unnecessary attorney’s fees, and minor lost interest on potential settlement monies); Jones v. Martin, 481 S.W.2d 467, 472 (Tex.Civ.App.-Texarkana 1972, no writ)(dispensing with guardian ad litem appointment where natural parent exhibited no adverse interests to those of the child).

Despite Borden’s complaint on appeal, the record shows that no efforts were made by Borden to remove Martinez as guardian ad litem for either Norma Hernandez or Victor Jr. See generally Coleson v. Bethan, 931 S.W.2d 706, 711-12 (Tex. App.-Fort Worth 1996, no writ)(outlining procedures for removal of guardian ad li-tem); Jones, 481 S.W.2d at 472 (recognizing that in the absence of any motion for mistrial or objections to qualifications, guardian ad litem appointment was proper). Borden never cross-examined Martinez on these issues at the evidentiary hearing on the issue of fees. As such, the trial court considered the evidence Martinez presented based upon the Garcia reasonableness factors. Specifically, Martinez pointed to agency and respondeat superior issues concerning the imposition of liability on Borden, which hired the independent contractor that collided with the decedents’ truck. Martinez further argued that disputes over insurance issues arose between the independent contractor and Borden’s carriers, and these disputes, coupled with new attorneys, made settlement difficult. Martinez maintained that even after the tender of settlement monies by Borden, problems persisted with distribution among the minors. He asserted that disputes arose among the ad litems themselves as to an equitable allocation of the money. He discussed the problems which arose in creating a trust which was acceptable to all parties involved. Martinez testified at the evidentiary hearing that as a practicing lawyer for seventeen years, his basic hourly rate ranged from $200-$350 per hour. He further testified that time spent at depositions, hearings, and mediations in the instant case precluded him from expending efforts in his criminal law practice.

In light of the evidence the trial court considered, we cannot hold that the trial court’s award constituted an abuse of discretion. Although a trial court does not have unbridled discretion in awarding attorney’s fees, Martinez maintained a combined billing statement for both Norma and Victor Jr., precluding the trial court from segregating any specific fees. As such, it is reasonable that the trial court considered past time spent on Norma’s case prior to her attaining majority in making its fee determination. In any event, no abuse of discretion exists where Borden failed to alert the trial court to any objection to Martinez’s continued representation or to request his removal.

Alvino Morales

The trial court awarded Morales $75,000 ($579.15/hr) for 129.5 hours of service as ad litem fees for the five Martinez minors.

Borden’s arguments as to Morales’ award do not differ significantly from those Borden raises with regard to Martinez. These two attorneys shared offices and Borden contends that their services as guardians ad litem paralleled one another. Borden objects to the number of hours Morales spent in preparation for the evi-dentiary hearing to defend his ad litem award. Borden relies on a number of cases which reduced ad litem fees where the record failed to support the award. See Simon, 739 S.W.2d at 794; Gamez, 894 S.W.2d at 754-57; Dalworth Trucking Co., 924 S.W.2d at 731.

Guided once again by an abuse of discretion, we decline to engage in second-guessing the trial court’s review of the hours Morales spent reviewing documents and preparing for the evidentiary hearing. See Molina, 818 S.W.2d at 148 (recognizing that no abuse of discretion exists where appellate judge would decide a matter differently). Further, we recognize that with the appointment of the guardian ad litem role comes extended exposure to liability. A guardian ad litem stands in a precarious position as the statute of limitations for malpractice actions is tolled until, the minor attains majority plus any applicable limitations period thereafter. See Tex. Civ. PRAC. & Rem.Code Ann. § 16.001 (Vernon 1986) (tolling limitations for causes of action brought by minors); Alderete, 945 S.W.2d at 150; Byrd v. Woodruff, 891 S.W.2d 689, 695 (Tex.App.-Dallas 1994, writ dism’d by agr.)(imposing liability for negligence on guardian ad litem in suit brought by minor). We acknowledge the trial court’s reliance on the Garcia fee factors during the evidentiary hearing. Morales introduced evidence of tailored trust provisions (higher education incentives, jurisdictional issues, and investment provisions) which he took an active role in securing, as additional grounds for finding that his fee was reasonable. The record recites the court’s attention to the legal complexities in the case, most notably the changing law in independent contractor liability, conflicts among insurance carriers, and coverage disputes. Finally, as noted by Martinez, no efforts were made to remove Morales in his role as guardian ad litem. Accordingly, we cannot hold the trial court abused its discretion in awarding Morales’ fees.

Arnulfo Gonzalez, Jr.

The trial court awarded Gonzalez $80,000 in ad litem fees ($358/hr) for 222.95 hours of service for the five minors related to the Riojas decedent.

Borden conceded both in its brief and during oral argument that Gonzalez took a significant role as spokesperson for the guardians ad litem in the lawsuit. However, Borden objects to the fee award on the grounds that it is unreasonable and excessive. Borden argues the vast bulk of hours were spent in preparation for the evidentiary fee hearing. Further, Borden notes Gonzalez only actually prepared two documents — the rest he merely reviewed. Borden challenges specific billing entries, contending, for example, that twelve minutes to review a six-line order of appointment constitutes excessive billing.

We decline to second-guess the trial court’s review of the details of Gonzalez’s billing statement to find an abuse of discretion. See Molina, 818 S.W.2d at 148. At the hearing, Gonzalez argued that he took the lead role in arriving at an acceptable settlement formula for all the plaintiffs and he curtailed a substantial amount of legal work to attend to the instant case. Gonzalez also pointed out Borden’s failure to cross-examine him on the reasonableness of his fee at the hearing. The record reveals that the trial court considered testimony from two practicing attorneys in Webb County who testified that the fee charged for the work rendered by all three guardians ad litem was reasonable for the complexity of the case. We note that an attorney’s degree of experience and reputation are significant components in determining the reasonableness of a fee. Garcia,, 988 S.W.2d at 222. In light of the affirmative evidence regarding the Garcia factors, and in the absence of any cross-examination into the Garcia factors by Borden, we cannot find that the trial court abused its discretion in awarding Gonzalez’s fee.

Motion for New Trial

Borden argues the trial court abused its discretion in overruling its motion for new trial on the issue of ad litem fees. The granting or denial of a motion for new trial is within the trial court’s sound discretion and will not be disturbed on appeal in the absence of an abuse of discretion. Strackbein v. Prewitt, 671 S.W.2d 37, 39 (Tex.1984). Because we hold that no abuse of discretion occurred in the trial court’s award, we further hold that no abuse of discretion occurred in overruling Borden’s motion for new trial on this issue.

We affirm the trial court’s judgment.

Concurring opinion by: TOM RICKHOFF, Justice. Dissenting opinion by: PAUL W. GREEN, Justice.