D. Patrick Smitherman v. Commission for Lawyer Discipline

463 S.W.3d 97, 2015 Tex. App. LEXIS 1869, 2015 WL 832405
CourtCourt of Appeals of Texas
DecidedFebruary 26, 2015
DocketNO. 01-13-00635-CV
StatusPublished
Cited by3 cases

This text of 463 S.W.3d 97 (D. Patrick Smitherman v. Commission for Lawyer Discipline) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
D. Patrick Smitherman v. Commission for Lawyer Discipline, 463 S.W.3d 97, 2015 Tex. App. LEXIS 1869, 2015 WL 832405 (Tex. Ct. App. 2015).

Opinion

OPINION

Rebeca Huddle, Justice

The Commission for Lawyer Discipline sued David Patrick Smitherman, an attorney. It alleged that Smitherman failed to provide a client with an accounting of funds received in settlement of the client’s claims and failed to distribute the undisputed portion of those funds to the client, in violation of Rules 1.14(b) and 1.14(c) of the Texas Disciplinary Rules of Professional Conduct, respectively. See Tex. Disciplinary R. Prof’l Conduct 1.14(c), reprinted in Tex. Gov’t Code Ann. tit. 2, subtit. G, app’x A, art. 10, § 9, R. 1.14(c) (West 2013). After a jury found in favor of Smitherman, the trial court granted the Commission’s motion for judgment notwithstanding the verdict and entered a judgment of partially-probated suspension of Srriitherman’s license to practice law. Smitherman appeals, and we affirm.

Background

A. Smitherman’s Representation of Brad Perry

The case before us arises out of Smith-erman’s representation of three clients— *99 Brad Perry, John Ogren, and Chester Smitherman, Smitherman’s father — in litigation against PetroSearch Energy Corporation, a company in which each of the clients owned an interest. For Smither-man’s representation, he charged the clients an hourly fee. Each client held an interest in the suit and bore costs and attorney’s fees in proportion to his ownership of PetroSearch. Perry and Chester, however, later acquired Ogren’s interest in the suit. As a result, Perry held a 66.675 percent stake in the litigation, while Chester held the remaining 33.325 percent.

During the course of the PetroSearch litigation, Perry offered to pay Smither-man a bonus on top of his hourly fee, upon resolution of the litigation. According to Smitherman, this discussion arose in the context of a discussion of unpaid invoices that Smitherman had sent to Perry for his services. Perry and Smitherman did not discuss any amount for the bonus when Perry first mentioned the possibility of paying one.

The clients ultimately settled their dispute with PetroSearch for $550,000. In early October 2008, PetroSearch’s insurer paid that amount to Perry and Chester in the form of a check to Smitherman’s law firm. After Smitherman deducted his fees and expenses related to the litigation from the settlement funds, Perry’s share of the settlement came to approximately $271,000.

B. Smitherman and Perry’s Bonus Dispute

On October 4, 2008, Smitherman sent an email to Perry and Chester, in which he complained that Perry owed a balance on his fees 1 and wrote:

Brad, you mentioned to me several months ago that when this was all said and done you were going to pay me a bonus. Do you recall that conversation on the phone? How much will you be paying to me in the form of a bonus as you indicated to me. [sic] I obviously relied upon this promise in doing all the hard work I did and foregoing other jobs during the past several months.

That same day, in another email, Smither-man wrote,

Brad, please advise as to what bonus you propose to pay me. Unless we reach an agreement (which I am sure we will), I might have to withhold your funds until we can agree on an amount.

On October 6, 2008, Perry and Smither-man discussed the amount of the bonus via telephone. The next day, Smitherman wrote in an email,

This e-mail is a follow-up to our conversation yesterday.
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You mentioned a $5K bonus. I laughed and told you $20K. Posturing, you said that was “staggering”. And yet in the same breath you extoll how great my services were in this case. Thank you. But you don’t get something for nothing.
.... In the end, perhaps sensing my displeasure with you, on several occas-sions [sic] you said that you would work something out with me to cover the thousands you failed and refused to pay me. You then mentioned the bonus, which I said ok to. You never said that you would only pay me a bonus if we got a multi-million dollar settlement as you mentioned yesterday. That is revisionist history. Your exact words were that *100 you would pay me a bonus when “this was all over”. You are now reneging on that promise.
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You said you “would sleep on it”. I hoped [sic] you didn’t sleep at all. $20K was not a request Brad. That is the very least of what you owe me. You think I would forego thousands in fees, jput thousands more in expenses on my card, risk my professional reputation, and endure great personal stress for a paltry $5K bonus? That is a joke.
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I will not be releasing your funds to you until this is resolved. Of that I am not joking, rest assured.

In a subsequent exchange, Smitherman raised the amount of his demand:

I received the settlement sum today. It will take five business days to clear. If we have not resolved this, I will not release your funds to you. Rather, I will put them in escrow.
I now thing [sic] that I deserve at least a $30K bonus from you. You should not attempt to barter with me. I have earned it.

Perry responded by sending Smither-man a letter on October 12, 2008, in which he wrote,

With regard to my offer to give you a bonus at the end of the case, I did make such an offer, but no amount was offered nor discussed. It is my belief that such a bonus is completely discretionary on my part, both as to whether one is paid and as to how much, if paid, will be given. That being said, I will honor my verbal offer of $5,000 which I made you on the telephone last week. At the time I told you that I thought you deserved a bonus, I did and do believe that you did a very good job on the law suit and I was proud of your efforts.
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I consider your demand first for $20,000 and then subsequently $30,000 bonus to be at best, unprofessional, and [at] worst attempted extortion.

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[Y]ou are authorized by me to withhold, in addition to your legitimate legal fees and documented expenses a total bonus of $5,000 plus $2,738.47 [for previously-invoiced fees] for a total of $7,738.47. I believe this is a fan* offer. I expect the balance of my portion of the settlement funds and a corrected set of invoices with a settlement sheet showing all disbursements not later than Wednesday, October 14, 2008 at 5:00 PM.
I will be happy to discuss any part of this letter, but it does not change my demand for timely payment.

Smitherman responded later that day, accusing Perry of being “a fraudster” and writing,

You are so full of bull.
I now believe the bonus should be $50K. I am very disappointed in you Brad.

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Bluebook (online)
463 S.W.3d 97, 2015 Tex. App. LEXIS 1869, 2015 WL 832405, Counsel Stack Legal Research, https://law.counselstack.com/opinion/d-patrick-smitherman-v-commission-for-lawyer-discipline-texapp-2015.