REVERSE and REMAND in part; AFFIRM in part and Opinion Filed December 19, 2018
S In The Court of Appeals Fifth District of Texas at Dallas No. 05-17-01333-CV
DAN WYDE, INDIVIDUALLY AND DAN WYDE & ASSOCIATES LLC, Appellants V. TATIANNA FRANCESCONI, Appellee
On Appeal from the County Court at Law No. 2 Dallas County, Texas Trial Court Cause No. CC-16-02902-B
OPINION Before Justices Bridges, Brown, and Whitehill Opinion by Justice Bridges After a bench trial, the trial court awarded appellants Dan Wyde, individually, and Wyde
& Associates LLC (together, “Wyde”) $7,500.00 in damages based on appellee Tatianna
Francesconi’s breach of contract for legal services. On appeal, Wyde challenges the award because
(1) the evidence does not support the trial court’s findings of fact and conclusions of law regarding
Francesconi’s affirmative defenses of failure to mitigate damages and fraud/equitable
estoppel; (2) the damages award is unreasonable, arbitrary, and capricious in light of evidence
establishing over $80,000 in damages; and (3) to the extent the trial court awarded attorney’s fees
to Wyde as the prevailing party in the underlying family lawsuit, such award is not supported by
the record and is not the proper basis for calculating damages in this case. Because we conclude
the record does not support Francesconi’s affirmative defenses, we affirm the trial court’s judgment in part, reverse the judgment in part, and remand to the trial court for a new trial on
damages based on Francesconi’s breach of contract.
Background
Francesconi first hired Wyde to represent her in an underlying criminal case involving
family violence against her husband. Wyde successfully obtained a no-bill for the offense of
aggravated assault with a deadly weapon in Collin County on her behalf. Following the no-bill,
Wyde continued to represent her in a contentious divorce involving Husband, who is a neurologist.
On April 8, 2014, Francesconi signed a contract agreeing to pay Wyde $475 an hour for
his litigation services. The agreement further provided, “in the event payment is not made as
specified in this agreement, Attorney may withdraw from representation of Client and will owe no
further duty as attorney for Client.”
At the time Francesconi signed the contract, she was a freelance artist, but this provided
her little income. She was never able to completely pay any invoice Wyde sent her, but she made
sporadic payments between $200 and $500 against the balance she owed. According to
Francesconi, Wyde never intended to hold her responsible for full payment. Instead, she believed
Husband would be responsible for the fees.
Despite Francesconi’s failure to pay under the fee agreement, Wyde continued to represent
her and never considered withdrawing from representation.
On November 10, 2015, the trial court signed a final divorce decree ordering Husband to
pay fifty percent of Francesconi’s attorney’s fees, which totaled over $77,000. However, the
judgment left blank the amount of reasonable and necessary attorney’s fees incurred and stated
that “50% of this amount is _________.” Wyde unsuccessfully tried to set a hearing for the trial
judge to fill in the blank.
–2– Subsequent to the divorce, the trial court scheduled a hearing regarding Husband’s possible
violations of the Electronic Communications Act based on information that surfaced during the
divorce proceedings. The hearing was scheduled for January 19, 2016.
On January 18, 2016, Francesconi and Husband entered into a Rule 11 Agreement stating,
in part, that the final divorce decree would be corrected with a nunc pro tunc decree and “[p]ursuant
to the [Decree], [Husband] is responsible for half of the debt owed to attorney, Dan Wyde totaling
$40,000. This will be paid in bi-monthly payments of $200 each, totaling $400 a month.” The
Rule 11 Agreement also provided, “Tatianna Francesconi shall be responsible for the remaining
balance of attorney fees that are presently due and owing to Wyde & Associates in relation to this
matter.” Later that same evening, Francesconi fired Wyde.
When Wyde appeared the next day for the hearing, he discovered Husband’s attorney had
filed a motion to show authority arguing Wyde no longer had a right to represent Francesconi or a
right to discuss or seek attorney’s fees as a third-party beneficiary to the Rule 11 Agreement. The
court agreed and continued to refuse any attempts by Wyde to resolve the outstanding attorney’s
fees issue, including his attempt to modify, reform, and correct the decree and a later filed motion
to enforce the decree.1
Despite the decree requiring Husband to pay fifty percent of the attorney’s fees, Wyde has
never collected any money from Husband.
Wyde filed an original petition against Francesconi for breach of contract, and in the
alternative, quantum meruit, based on her failure to pay the debt owed under the fee agreement.
Francesconi answered and asserted numerous affirmative defenses, including equitable estoppel
and failure to mitigate damages. The case proceeded to a bench trial.
1 These issues are the subject of a separate appeal. See Wyde & Assoc., LLC. v. Francesconi, No. 05-17-00587-CV, 2018 WL 6273409 (Tex. App.—Dallas Nov. 30, 2018, no pet. h.) (mem. op.).
–3– During the bench trial, Wyde testified he was seeking $77,779 in attorney’s fees for the
breach of contract in addition to the fees incurred in attempting to collect the debt. He testified he
was not counting on Husband to pay part of the attorney’s fees but “just hoping that the judge
would see that he had the financial wherewithal to pay her reasonable and necessary attorney’s
fees for her to get a fair or a just result regarding the child custody issues.”
Although Wyde admitted he could have filed a motion to withdraw when she stopped
paying her bills, he explained he did not like taking a case and then filing motions to withdraw:
“We attempt to avoid that at all costs.” He did not believe Francesconi was in financial distress
because she had an income of $4,000 a month between child and spousal support and money
earned as a freelance artist. Rather, she simply chose not to pay him.
Francesconi testified she told Wyde several times she could not pay his bills, and he said
she would not have to because “[Husband] was going to have to pay for it. . . . That was always
the game plan.” She felt like she was in an inferior bargaining position when she signed the fee
agreement, and Wyde encouraged her to let him represent her in the family law matter because he
was familiar with the criminal case. He said, “[I]t would be unwise to have too many lawyers,
too many cooks in the kitchen.” She told Wyde up front she did not have any money to pay him
except for “maybe” using their tax refund to pay for the retainer.
She testified she relied on Wyde’s representation that Husband would be responsible for
her fees and “definitely” relied on that before signing the fee agreement. When she expressed her
concern about Wyde’s fee after the first hearing in the family law case, he told her not to worry
about it because Husband would have to pay.
The trial court took the matter under advisement and subsequently signed a final judgment
awarding Wyde $7,500.00 because “Plaintiffs have met their burden on some of their claims.”
The court issued findings of fact and conclusions of law in which the court determined Francesconi
–4– breached a valid and enforceable contract for legal services; however, Wyde had a duty to mitigate
his damages and failed to mitigate his damages by not terminating his services or withdrawing
from representation following her initial breach on or about April 8, 2014. The court further
concluded Wyde was estopped from recovering part of his damages because of his false or
fraudulent representations to Francesconi. This appeal followed.
Standard of Review
In an appeal from a bench trial, the trial court’s findings of fact have the same weight as a
jury verdict. Sheetz v. Slaughter, 503 S.W.3d 495, 502 (Tex. App.—Dallas 2016, no pet.). When
the appellate record contains a reporter’s record, as in this case, findings of fact are not conclusive
and are binding only if supported by the evidence. Id. We review a trial court’s findings of fact
under the same legal and factual sufficiency of the evidence standards used when determining if
sufficient evidence exists to support an answer to a jury question. Id. When an appellant
challenges the legal sufficiency of an adverse finding on which he did not have the burden of proof
at trial, he must demonstrate there is no evidence to support the adverse finding. Id. When
reviewing the record, we determine whether any evidence supports the challenged finding. Id. If
more than a scintilla of evidence exists to support the finding, the legal sufficiency challenge fails.
Id.; see also King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751 (Tex. 2003) (more than a scintilla
of evidence exists when evidence “rises to a level that would enable reasonable and fair-minded
people to differ in their conclusions”). When an appellant challenges the factual sufficiency of the
evidence on an issue, we consider all the evidence supporting and contradicting the finding. Id.
We set aside the finding for factual insufficiency only if the finding is so contrary to the evidence
as to be clearly wrong and manifestly unjust. Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986).
The trial court, as factfinder, is the sole judge of the credibility of the witnesses. Sheetz, 503
S.W.3d at 502. As long as the evidence falls “within the zone of reasonable disagreement,” we
–5– will not substitute our judgment for that of the fact-finder. Id. (quoting City of Keller v. Wilson,
168 S.W.3d 802, 822 (Tex. 2005)).
We review de novo a trial court’s conclusions of law. See BMC Software Belg., N.V. v.
Marchand, 83 S.W.3d 789, 794 (Tex. 2002). We are not bound by the trial court’s legal
conclusions, but conclusions of law will be upheld on appeal if the judgment can be sustained on
any legal theory supported by the evidence. Sheetz, 502 S.W.3d at 502. Incorrect conclusions of
law will not require reversal if the controlling findings of fact will support a correct legal theory.
Id. Moreover, conclusions of law may not be reversed unless they are erroneous as a matter of
law. Id.
Discussion
Before starting our analysis, we note Wyde’s opening brief fails to include a detailed
discussion of the findings of fact and conclusions of law he purports to challenge on appeal but
instead merely lists them as part of “Issue 3.” Despite any detailed discussion of evidence, we
nonetheless liberally construe his issue as challenging the sufficiency of the evidence to support
all the findings listed, which include both Francesconi’s affirmative defenses of failure to mitigate
damages and fraud/equitable estoppel. See TEX. R. APP. P. 38.9 (“briefing rules to be construed
liberally”); Sterner v. Marathon Oil Co., 767 S.W.2d 686, 690 (Tex.1989) (“[I]t is our practice to
construe liberally points of error in order to obtain a just, fair and equitable adjudication of the
rights of the litigants.”); Wise Elec. Coop., Inc. v. Am. Hat Co., 476 S.W.3d 671, 680 n.9 (Tex.
App.—Fort Worth 2015, no pet.).
We now consider whether the trial court erroneously concluded as a matter of law that
Wyde had a duty to mitigate his damages following Francesconi’s breach of contract. The trial
court supported its conclusion by finding the following:
Plaintiffs failed to mitigate their damages following Defendant’s breach of contract by not terminating their services and withdrawing –6– their representation of Defendant in a timely fashion following Defendant’s initial breach on or about April 8, 2014 and with each subsequent invoice, including their first invoice of April 22, 2014, which resulted in Defendant owing Plaintiffs a net amount of approximately $6,900.00.
Contract law broadly supports the idea that a plaintiff should minimize damages by taking
affirmative steps, when applicable, to stop the accumulation of losses. See, e.g., Gunn Infiniti, Inc.
v. O’Byrne, 996 S.W.2d 854, 857 (Tex. 1999) (plaintiff asserting claim under DTPA has duty to
mitigate damages); White v. Harrison, 390 S.W.3d 666, 675 (Tex. App.—Dallas 2012, no pet.)
(landlord has duty to mitigate damages if a tenant abandons leased premises and failure to do so
bars recovery to the extent damages reasonably could have been avoided); Alamo Cmty. Coll. Dist.
v. Miller, 274 S.W.3d 779, 788 (Tex. App.—San Antonio 2008, no pet.) (wrongfully discharged
employee must exercise reasonable diligence to mitigate damages by pursuing other employment
or else employee is barred from recovering those losses that could have been avoided). Such
rationale stems from economic considerations and avoidance of waste. Thus, the doctrine of
mitigation of damages prevents a party from recovering for damages resulting from a breach of
contract that could be avoided by reasonable efforts on the part of the plaintiff. Great Am. Ins. v.
N. Austin Mun. Util. Dist. No. 1, 908 S.W.2d 415, 426 (Tex. 1995); see RESTATEMENT (SECOND)
OF CONTRACTS ch. 16, § 350 cmt. b (“Once a party has reason to know that performance by the
other party will not be forthcoming, he is ordinarily expected to stop his own performance to avoid
further expenditures.”). As such, a claimant is required “to mitigate damages if it can do so with
trifling expense or with reasonable exertions.” Gunn Infiniti, Inc., 996 S.W.2d at 857.
Despite these general contract principles, neither party has cited, nor have we found, any
applicable case law regarding whether an attorney has a duty to mitigate damages by withdrawing
from representation when a client breaches an attorney-client fee agreement. However, the Texas
Disciplinary Rules of Professional Conduct indicate the mitigation of damages doctrine does not
–7– impose a duty on attorneys to mitigate their damages when a client breaches a contract by failing
to pay the agreed fee. Rule 1.15 dictates when a lawyer must or may withdraw from representing
a client.
Rule 1.15(a) provides the circumstances under which an attorney’s withdrawal is required,
and rule 1.15(b) lists specific instances under which an attorney may seek withdrawal. See TEX.
DISCIPLINARY RULES PROF’L CONDUCT R. 1.15(a), (b). A client’s failure to pay an agreed fee falls
under rule 1.15(b)(5); therefore, an attorney may file a motion to withdraw in such circumstances,
but nothing within the disciplinary rules of professional conduct mandates an attorney to withdraw
and mitigate damages. In fact, after accepting representation, a lawyer should endeavor to handle
a matter to completion. TEX. DISCIPLINARY RULES PROF’L CONDUCT R. 1.15 cmt 1. The option
to withdraw from representation belongs to the lawyer. TEX. DISCIPLINARY RULES PROF’L
CONDUCT R. 1.15 cmt 7 (“A lawyer may withdraw if the client refuses, after being duly warned,
to abide by the terms of an agreement relating to the representation . . . .”). Thus, the fact that
Francesconi had limited resources during the divorce did not automatically mandate Wyde’s
withdrawal as her attorney.
Here, Wyde explained he did not like taking cases and then filing motions to withdraw. He
“attempt[ed] to avoid that at all costs.” He was “dedicated to her cause” and “firmly believed” she
had been a victim of domestic abuse and wanted to help her get primary custody of the children.
He opposed the “Rambo litigation that the opposing counsel was attempting to do” and remained
dedicated to Francesconi.
He further testified, “[W]hen we take on a client, we’re loathed [sic] to make it a purely
financial relationship, okay. We don’t do business that way.” Thus, rather than immediately filing
a motion to withdraw after Francesconi failed to pay his fees, Wyde continued with his duty to
represent his client. See Alpert v. Crain, Caton & James, P.C., 178 S.W.3d 398, 405 (Tex. App.—
–8– Houston [1st Dist.] 2005, pet. denied) (attorney has duty to zealously represent client within
bounds of law). As he said, “we stuck it out . . . we aren’t just lawyers who say pay us or to hell
with you.” This philosophy should be encouraged given the nature of the attorney–client
relationship, which is one encompassing a fiduciary duty and confidentiality, thereby making it
different from other relationships such as landlord-tenant that apply the mitigation of damages
doctrine. Moreover, requiring or encouraging attorneys to file a motion to withdraw as soon as a
client fails to pay conflicts with the aspirational goals of the Texas Lawyer’s Creed, which reminds
attorneys that “[a]s members of a learned art we pursue a common calling in the spirit of public
service” and are “responsible to assure that all persons have access to competent representation.”
See Texas Lawyer’s Creed–A Mandate for Professionalism (adopted November 7, 1989); see also
TEX. DISCIPLINARY RULES PROF’L CONDUCT R. 1.15 cmt 1 (“Having accepted the representation,
a lawyer normally should endeavor to handle the matter to completion.”). Accordingly, the trial
court erroneously concluded as a matter of law that Wyde had a duty to mitigate his damages.
We now consider whether the damages award can be sustained under Francesconi’s second
affirmative defense of fraud/equitable estoppel. The trial court made the following relevant
finding of fact (finding 24): “Plaintiffs expressed to Defendant that she should pay the amount of
Plaintiffs’ invoices that she could afford and then Plaintiffs would look to Defendant’s ex-husband
to pay the remainder of Defendant’s outstanding balance owed to Plaintiffs.” Because Wyde
challenges the sufficiency of an adverse finding on which he did not have the burden of proof at
trial, he must demonstrate there is no evidence to support the adverse finding. Sheetz, 503 S.W.3d
at 502.
Equitable estoppel is an affirmative defense that is established when: (1) a false
representation or concealment of material facts; (2) is made with knowledge, actual or
constructive, of those facts; (3) with the intention that it should be acted upon; (4) to a party without
–9– knowledge or means of obtaining knowledge of the facts; (5) who detrimentally relies on the
representations. Johnson & Higgins of Tex., Inc. v. Kenneco Energy, Inc., 962 S.W.2d 507, 515–
16 (Tex. 1998); Sefzik v. City of McKinney, 198 S.W.3d 884, 895 (Tex. App.—Dallas 2006, no
pet.). The elements of equitable estoppel are substantially the same as the elements of fraud.
Johnson & Higgins of Tex., Inc., 962 S.W.2d at 524. Thus, Francesconi was required to establish
that Wyde falsely represented, with his knowledge of such falsity, that he expected Husband and
not her to pay the legal fees. Id. at 515.
Here, the record indicates Wyde encouraged Francesconi to continue their attorney-client
relationship after he successfully no-billed her criminal case because he was familiar with the
underlying facts. Francesconi told Wyde up front she did not have any money to pay him except
for “maybe” using their tax refund to pay for the retainer. She testified she relied on Wyde’s
representation that Husband would be responsible for her fees and “definitely” relied on that before
signing the fee agreement. She had the impression and was told Husband would have to pay for
everything.
Wyde testified he explained to Francesconi that if there is any legal basis or remedy to
recover attorney’s fees, he tries to collect them as “part of [my] fiduciary obligation.” He told
Francesconi he would attempt to minimize costs and fees and recover as much as he could from
Husband: “That’s our duty in providing competent legal representation to her.”
None of this testimony establishes any false representations by Wyde. Nothing indicates
that at the time Wyde told Francesconi “he would look to Defendant’s ex-husband to pay the
remainder” of the fees his statement was false or made recklessly without knowledge of the truth.
Id. at 526. To the contrary, it is routine in family law cases for attorneys to seek recovery of their
fees from a spouse and for the trial court to award such fees. See TEX. FAM. CODE ANN. § 6.708(c)
(“In a suit for dissolution of a marriage, the trial court may award reasonable fees and expenses.”),
–10– § 106.002(a) (court may render judgment for reasonable attorney’s fees in a SAPCR proceeding);
see also In re T.L.T., No. 05-16-01367-CV, 2018 WL 1407098, at *4 (Tex. App.—Dallas Mar. 21,
2018, no pet.) (mem. op.) (recognizing trial court’s broad discretion to award attorney’s fees in
suit for dissolution of marriage); Tull v. Tull, 159 S.W.3d 758, 760 (Tex. App.—Dallas 2005, no
pet.) (recognizing trial court’s broad discretion to award attorney’s fees under section 106.002).
Moreover, paragraph 15 of the legal services contract, which Francesconi initialed,
provided the following:
It is expressly agreed and understood that NO PROMISES OR GUARANTEES as to the outcome of the case have been made to Client by Attorney. It is further expressly agreed and understood that no other representations have been made to Client, except for those set out in this Employment Contract.
As such, the record contains no evidence supporting the trial court’s finding Wyde made any false
representations. Because we conclude there is no evidence Wyde made any false representations,
we do not consider whether there is evidence satisfying the other elements of fraud. See TEX. R.
APP. P. 47.1. Likewise, because there is no evidence supporting Francesconi’s affirmative defense
of fraud/equitable estoppel, the evidence is legally insufficient to support the damages award.
Accordingly, we sustain Wyde’s third issue. Because of our disposition of this issue, we need not
consider Wyde’s first and second issues challenging the amount of damages awarded. TEX. R.
APP. P. 47.1.
Conclusion
We reverse the trial court’s judgment awarding $7,500 in damages, and remand the case to
the trial court for a new trial on damages based on Francesconi’s breach of contract.
–11– We affirm the judgment in all other respects.
/David L. Bridges/ DAVID L. BRIDGES JUSTICE
171333F.P05
–12– S Court of Appeals Fifth District of Texas at Dallas JUDGMENT
DAN WYDE, INDIVIDUALLY AND On Appeal from the County Court at Law DAN WYDE & ASSOCIATES LLC, No. 2, Dallas County, Texas Appellants Trial Court Cause No. CC-16-02902-B. Opinion delivered by Justice Bridges. No. 05-17-01333-CV V. Justices Brown and Whitehill participating.
TATIANNA FRANCESCONI, Appellee
In accordance with this Court’s opinion of this date, the judgment of the trial court is AFFIRMED in part and REVERSED in part. We REVERSE that portion of the trial court’s judgment awarding damages and REMAND to the trial court for a new trial to determine damages based on appellee Tatianna Francesconi's breach of contract. In all other respects, the trial court's judgment is AFFIRMED.
It is ORDERED that appellants DAN WYDE, INDIVIDUALLY AND DAN WYDE & ASSOCIATES LLC recover their costs of this appeal from appellee TATIANNA FRANCESCONI.
Judgment entered December 19, 2018.
–13–