Herter v. Wolfe

961 S.W.2d 1, 1995 Tex. App. LEXIS 1111, 1995 WL 302490
CourtCourt of Appeals of Texas
DecidedMay 18, 1995
Docket01-94-00669-CV
StatusPublished
Cited by18 cases

This text of 961 S.W.2d 1 (Herter v. Wolfe) 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
Herter v. Wolfe, 961 S.W.2d 1, 1995 Tex. App. LEXIS 1111, 1995 WL 302490 (Tex. Ct. App. 1995).

Opinions

OPINION

O’CONNOR, Justice.

The issue in this case is whether Tom Herter, an attorney, breached his contract with his clients, Lillian Wolfe and Stephen Murdoch, the liquidating trustees of W & D Investment Corporation (W & D). We reverse and render.

W & D sued Herter for an accounting, breach of contract, breach of fiduciary duty, fraud, and breach of express, resulting, and constructive trust. After a non-jury trial, the court awarded W & D $5,000 from the original $10,000 retainer for the breach of contract claim. The court also awarded W & D $19,200 in attorney fees, but denied W & D other relief it sought in its motion for judgment.

Herter appeals the sufficiency of the evidence to support the finding that he breached the contract, the sufficiency of the evidence to support damages, and the reasonableness of the attorney fees. W & D contends in cross-points that the trial court erred by: (1) failing to find that Herter breached his fiduciary duties, (2) not awarding it the full $10,000 retainer, (3) not awarding it additional attorney fees, (4) failing to award it prejudgment interest.

Fact Summary

W & D hired Herter in 1987, to protect its security interest in a film known as Hanau-ma Bay. The film was owned by Hanauma Bay Productions, Inc., (Hanauma) a bankrupt Hawaii corporation. Hanauma planned to contract with International Spectrafilm Distribution (Spectrafilm), a Hollywood company, to distribute the film. Spectrafilm demanded that W & D subordinate its lien before it distributed the film.1 W & D wanted Herter to find another company to distribute the film so it did not have to subordinate its lien.

On August 24, 1987, W & D met with Herter,2 and Herter’s friend, Sid Gall, who was touted as the “movie man” with contacts in Hollywood.3 In his retainer agreement with W & D, Herter agreed to “place you (W & D) in the most favorable position possible through utilization of industry knowledge and contacts as well as the legal process, to procure the completion and distribution of the subject film as well as the realization of financial return.” W & D agreed to the contract terms and paid Herter $10,000 up front, and secured the remaining $40,000 retainer fee through a lien on a house in Friendswood.

Herter testified he met with Lillian Wolfe twice in August and twice in September, and talked by phone with her for about 15-20 hours during that time period. He testified that he did not account for his time in log books or any other writings. He testified that he wrote letters and made a lot of phone calls to fulfill the terms of the contract. He [3]*3testified that he started outlining pleadings for a lawsuit and did about 35 hours of research on causes of action. Herter testified that he did not keep any records of the work he did or the phone calls he made. Two pages of notes he took at the August 24, 1994, meeting were admitted into evidence. Another page of notes Herter took is in the record. Herter testified that he had not traveled to California, but that Gall had gone there twice. Herter testified that Gall made a number of telephone calls in California. Herter did not provide any copies of airplane tickets or receipts for Gall’s travels.

On September 24,1987, Wolfe testified she flew to California on Herter’s representation that Gall would join her in a meeting with Mike Greco, one of the principals in the project. Wolfe testified Gall did not show up in California and she had to meet with Greco on her own. Wolfe said she spent $1,830 on her trip. Wolfe testified that after the California trip fell through, she called Herter to tell him she had no choice but to sign the subordination agreement with Spectrafilm. Wolfe signed the subordination agreement on September 29,1987.

On October 11, 1987, W & D demanded that Herter account for expenses and return the unused portion of the retainer. Herter did not provide an accounting. On November 5, 1987, Herter sent Wolfe and Murdoch a letter in which he reviewed the terms of the contract. In that letter, Herter said their agreement provided that the retainer was earned when paid; he concluded with the statement that he would consult with Gall and inform them if their services had exceeded the $50,000 retainer. Murdoch called Herter in November and told him not to do any more work on the project.

In January 1988, Wolfe and Murdoch met in Herter’s office and had a confrontation with Herter that resulted in his asking them to leave his office. On March 18,1988, W & D sent another letter to Herter in which it stated that the “retainer described in the engagement letter was just that — an advance payment in order to retain your services, and against which engagement-related time and expenses would be charged.” In May, Herter released the lien on the house, which secured the remaining $40,000 of his retainer. Again, on October 20,1988, W & D sent Herter a letter asking for an accounting. On March 7,1990, W & D’s counsel sent Herter another letter again demanding an accounting. In 1991, W & D sent another letter demanding an accounting. Herter responded that his retainer was not subject to an accounting and was deemed earned when paid.

Breach of contract

In point of error one, Herter contends there was no evidence or, alternatively, insufficient evidence, adduced at trial to support the trial court’s finding of breach of contract.

Herter did not request the trial court file findings of fact or conclusions of law. When we review a non-jury trial in which no findings of fact or conclusions of law were requested or filed, we presume the trial court made all necessary findings to support the judgment. Worford v. Stamper, 801 S.W.2d 108, 109 (Tex.1990); In re Estate of Johnson, 781 S.W.2d 390, 391-92 (Tex.App.-Houston [1st Dist.] 1989, writ denied). Without findings of fact, we will affirm the judgment if it can be upheld on any legal theory that has support in the evidence. Worford, 801 S.W.2d at 109; Johnson, 781 S.W.2d at 392.

An appellant may challenge implied findings of fact by legal and factual sufficiency points, just as jury findings and a trial court’s findings of fact may be challenged. Roberson v. Robinson, 768 S.W.2d 280, 281 (Tex.1989). When an appellant challenges the legal sufficiency of the evidence to support an adverse finding, we consider only the evidence and inferences, when viewed in their most favorable light, that tend to support the finding, and disregard all evidence and inferences to the contrary. Catalina v. Blasdel, 881 S.W.2d 295, 297 (Tex.1994); Pizzitola v. Galveston County, 808 S.W.2d 244, 246-47 (Tex.App.-Houston [1st Dist.] 1991, no writ). If there is any evidence of probative force (more than a scintilla) to support the finding, the point must be overruled and the finding upheld. Catalina, 881 S.W.2d at 297.

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Herter v. Wolfe
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Bluebook (online)
961 S.W.2d 1, 1995 Tex. App. LEXIS 1111, 1995 WL 302490, Counsel Stack Legal Research, https://law.counselstack.com/opinion/herter-v-wolfe-texapp-1995.