Dardas v. Fleming, Hovenkamp & Grayson, P.C.

194 S.W.3d 603, 2006 Tex. App. LEXIS 3668, 2006 WL 1217211
CourtCourt of Appeals of Texas
DecidedApril 27, 2006
Docket14-03-00538-CV
StatusPublished
Cited by44 cases

This text of 194 S.W.3d 603 (Dardas v. Fleming, Hovenkamp & Grayson, P.C.) 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
Dardas v. Fleming, Hovenkamp & Grayson, P.C., 194 S.W.3d 603, 2006 Tex. App. LEXIS 3668, 2006 WL 1217211 (Tex. Ct. App. 2006).

Opinions

MAJORITY OPINION ON REHEARING

KEM THOMPSON FROST, Justice.

We overrule “Appellees’ Further Motion for Rehearing.” We withdraw the opinion issued in this case on August 18, 2005, and we issue the following majority opinion on rehearing.

This appeal arises out of a dispute between two groups of attorneys as to entitlement to attorney’s fees in class-action litigation. Appellants/plaintiffs Thomas A. Dardas, individually and d/b/a Dardas & Associates and Bill Ogletree, P.C. a/k/a Ogletree Law Firm appeal the trial court’s summary judgment dismissing their claims against appellees/defendants Fleming, Ho-venkamp & Grayson, P.C., Fleming Law Firm, PLLC, and Fleming & Associates, L.L.P. We affirm in part and reverse and remand in part.

I. Factual and PROCEDURAL Background

Thomas A. Dardas, individually and d/b/a Dardas & Associates (hereinafter “Dardas”) is a Texas attorney who filed numerous lawsuits against insurance companies on behalf of policyholders who sought to recover diminished-value damages under their auto insurance policies. The term “diminished-value damages” refers to a loss in the market value of a vehicle allegedly caused by market perceptions that a vehicle involved in an accident, though fully repaired, is worth less than the same vehicle that has never been damaged. See American Mfrs. Mut. Ins. Co. v. Schaefer, 124 S.W.3d 154, 156 (Tex.2003). Although it is now clear that insureds cannot recover diminished-value damages under a Texas Standard Personal Auto Policy, this was not clear until October 17, 2003, when the Texas Supreme Court issued its opinion in Schaefer. See id.

In 1997, several years before Schaefer, Dardas decided that he wanted to assemble a legal team to pursue claims for the recovery of diminished-value damages on a class-action basis, and so he enlisted the assistance of Michael Sprain, who was then an attorney at Bill Ogletree, P.C., a/k/a Ogletree Law Firm (hereinafter “Ogle-tree”). In late 1997, Sprain contacted Debra Hayes, who was then an attorney at the Fleming Firm.1 Shortly thereafter, Dardas and Sprain met with Hayes. Before disclosing to Hayes the idea of pursuing claims for diminished-value damages on a class-action basis, Dardas required Hayes, on behalf of the Fleming Firm, to sign a contract dated December 17, 1997 (the “December 1997 contract”), between Dardas and the Fleming Firm. This handwritten contract reads, in its entirety, as follows:

This agreement is entered into by and between Fleming, Hovenkamp & Gray-son and Thomas A. Dardas. The purpose of this agreement is to define the relationship between Fleming, Hoven-kamp & Grayson and Dardas.
Dardas hereby agrees to disclose to Fleming, Hovenkamp & Grayson a cause of action that Dardas believes is suitable for a class action.
[607]*607Fleming [sic] Hovenkamp & Grayson hereby agrees to evaluate the cause of action for suitability as a class action.
This agreement is executed with the understanding that if the Law Firm of Fleming, Hovenkamp & Grayson decide [sic] not to pursue the cause of action on a class action basis with Dardas, Fleming, Hovenkamp & Grayson agree [sic] not to pursue dimunition [sic] in value cases for a period of two (2) years from the date of termination of this agreement.

After the Fleming Firm signed the December 1997 contract, Dardas and Sprain discussed with Hayes the idea of filing diminished-value claims on a class-action basis. After evaluating this idea, the Fleming Firm agreed to pursue diminished-value claims on a class-action basis with Dardas and Ogletree. The Fleming Firm, Dardas, and Ogletree then negotiated a contract among the three of them as to how they would proceed with these claims, and on January 12, 1998, all three parties signed a contract (the “January 1998 contract”). On February 3, 1998, the same three parties signed a slightly modified contract (the “February 1998 contract”) which states that it supersedes “any previous agreements.” It is undisputed that the February 1998 contract superseded the January 1998 contract. The main dispute in this case is the scope of the February 1998 contract.

Dardas and Ogletree contend that the February 1998 contract applies to all diminished-value class-action cases in which the Fleming Firm is involved. The Fleming Firm asserts that this contract applies only to diminished-value class-action cases in which Dardas or Ogletree referred clients or worked on the case. The provisions of this contract are discussed in more detail below; however, the contract states, among other things, the following:

The Fleming Firm and Ogletree “will jointly handle this matter as co-lead counsel.”
• “Ogletree will be responsible for obtaining clients for each case.”
• Dardas “will continue to consult as the ease develops.”
• Attorney’s fees on the class action mil be divided as follows: 70% to the Fleming Firm and 30% to Dardas and Ogletree “to be divided between them as they agree.”

Dardas and Ogletree agreed between themselves that, as to their 30% share of any such attorney’s fees, 18% would go to Dardas and 12% would go to Ogletree. Furthermore, Bill Ogletree and Michael Sprain agreed that each of them would receive half of Ogletree’s 12% share. On March 5, 1999, Fleming, Dardas, and Michael Sprain entered into a contract (the “March 1999 contract”) regarding diminished-value litigation involving clients referred by Sprain.

Dardas and Ogletree referred various clients as proposed class representatives for diminished-value class actions. Although the attorneys who signed the February 1998 contract pursued class-action claims as to some of these clients, none of these cases resulted in any attorney’s fees.

In 1999, the Fleming Firm began pursuing diminished-value class-action claims in states other than Texas without including Dardas or Ogletree. The Fleming Firm reported to Dardas and Ogletree that it believed the February 1998 contract did not cover diminished-value class actions in which the clients were not referred by Dardas or Ogletree and in which Dardas and Ogletree had not performed any legal services. The Fleming Firm received fees from the settlement of a Georgia diminished-value class-action case in which Dardas and Ogletree did not refer the client or [608]*608provide any legal services. Dardas and Ogletree have not received any attorney’s fees relating to the Georgia case.

Dardas and Ogletree asserted that they were entitled to work on and receive fees from all diminished-value class actions in which the Fleming Firm was involved. Dardas and Ogletree filed the underlying suit against the Fleming Firm, asserting the following claims:

Contract Claims
The Fleming Firm has breached its oral agreements pertaining to class-action claims concerning diminished-value damages as well as the December 1997 contract, the January 1998 contract, the February 1998 contract, and March 1999 contract, by taking the following actions:

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Bluebook (online)
194 S.W.3d 603, 2006 Tex. App. LEXIS 3668, 2006 WL 1217211, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dardas-v-fleming-hovenkamp-grayson-pc-texapp-2006.