McRay v. Dow Golub Remels & Beverly, LLP

554 S.W.3d 702
CourtCourt of Appeals of Texas
DecidedApril 26, 2018
DocketNO. 01-17-00149-CV
StatusPublished
Cited by5 cases

This text of 554 S.W.3d 702 (McRay v. Dow Golub Remels & Beverly, LLP) 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
McRay v. Dow Golub Remels & Beverly, LLP, 554 S.W.3d 702 (Tex. Ct. App. 2018).

Opinion

Jane Bland, Justice

This is a law firm's suit against its former clients for unpaid attorney's fees. The trial court granted summary judgment to the law firm for the fees, plus the additional fees that the law firm incurred in collecting its contract damages. The clients appeal, contending that the law firm did not conclusively establish liability for the amount of fees owed, nor for the fees incurred in collecting the debt. The clients further contend that the trial court erred in striking one of their late-designated expert witnesses. Because the summary-judgment evidence does not conclusively establish the amounts owed, we reverse and remand.

BACKGROUND

Dow Golub Remels & Beverly, LLP, represented Laurie Ann McRay; Infinity Capital, LLC; and McRay Money Management, LLC (collectively, McRay) in two lawsuits. In the first, Dow Golub defended Infinity Capital against claims arising out of mold in a rental property and pursued a counterclaim against Infinity Capital's tenants, who allegedly had damaged the property. In the second, Dow Golub defended Laurie Ann McRay, McRay Money Management, and Infinity Capital against claims brought by investors in McRay's entities for breach of fiduciary duty, professional malpractice, and violations of the Texas Securities Act.

In engagement agreements for the two lawsuits, McRay agreed to pay Dow Golub fees for its professional services. McRay had the right to terminate the representation at any time by written notice, at which time she would owe the charges incurred to that point, plus post-termination fees associated with transfer of the files. The engagement agreements say: "It is difficult to predict exactly how much time will be required to complete our legal work. The Firm will devote, however, the time which we deem necessary to carry out the representation."

The engagement agreements also entitle Dow Golub to seek the fees that it might incur in pursuing payment of its unpaid invoices: "[Dow Golub] is entitled to reasonable attorney's fees and costs if collection activities are necessary for the failure of [McRay] to pay any indebtedness to the Firm."

In February 2015, McRay terminated Dow Golub's representation. At the time, McRay did not pay amounts charged in certain of Dow Golub's invoices. Dow Golub later issued two invoices for additional legal work, in July 2015 and in August *7042015, which McRay also did not pay. Dow Golub sued McRay and her entities to recover its unpaid fees, alleging causes of action for breach of contract and quantum meruit. McRay answered, denying the amount owed, and she asserted a counterclaim for professional negligence.

After the time for designating expert witnesses had passed, Dow Golub moved for a traditional summary judgment on its breach of contract claim for unpaid fees. It attached an affidavit from Sanford Dow, to which he attached the unpaid invoices, noting that they reflected the legal fees and expenses incurred by McRay.

McRay responded to the motion by stating that "the attorneys' fees for which Dow Golub seeks to be paid were excessive as are the fees for which they seek to be compensated to recover those fees." She noted that some entries in the invoices were heavily redacted, so that "it is not possible to tell what legal services were performed."

McRay also moved in the trial court to allow a late designation of expert witnesses. With the motion, McRay proffered affidavits from two experts, John P. Venzke, on the reasonableness of the fees, and Eugene B. Wilshire, on the standard of care. Dow Golub moved to strike the late-designated experts. The trial court struck Wilshire, but it allowed Venzke.

Venzke is a practicing lawyer who has "handled and submitted invoices for legal services for thousands of files," and he has "audited invoices for legal services." He stated that he is "familiar with reasonable billing rates and time entries in Harris County, Texas." Venzke averred that he had reviewed the entire file, including "the billing records submitted by [Dow Golub]." He opined that "the fees sought are not reasonable and necessary for the services performed."

McRay nonsuited her professional-negligence counterclaim, but she filed an amended answer adding affirmative defenses of "credit and/or setoff" and "breach of fiduciary duty."

The trial court granted final summary judgment to Dow Golub. McRay moved to modify the judgment and for a new trial. The trial court denied the motions.

DISCUSSION

McRay challenges the legal sufficiency of the summary-judgment evidence supporting Dow Golub's contract damages. Noting that no one from Dow Golub proffered an affidavit that the amount of fees that it charged in the two engagements was reasonable, she contends that Dow Golub has failed to conclusively establish that the amount it claims it is owed was reasonable and necessary and, in particular, that Dow Golub improperly seeks amounts for fees that it charged after McRay had terminated the representation. Thus, McRay argues, genuine issues of material fact exist as to the amount owed under the fee agreements. Dow Golub responds that it proffered copies of its unpaid invoices and that it did not have a burden to demonstrate that the fees it sought were reasonable to establish its contract damages.

I. Contract Damages

A. Standard of Review

We review summary judgments de novo. Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding , 289 S.W.3d 844, 848 (Tex. 2009). In doing so, we take as true all evidence favorable to the nonmovant, indulge every reasonable inference in the nonmovant's favor, and resolve any doubts in the nonmovant's favor. Provident Life & Accident Ins. Co. v. Knott , 128 S.W.3d 211, 215 (Tex. 2003). The movant must show that no genuine issue of material *705fact exists and that the movant is entitled to judgment as a matter of law. TEX. R. CIV. P . 166a(c) ; Provident Life , 128 S.W.3d at 215-16. If the movant seeks summary judgment finding liability and awarding damages on its cause of action, then it must prove all elements of the cause of action as a matter of law. Ayele v. Jani-King of Houston, Inc. , 516 S.W.3d 630, 634 (Tex. App.-Houston [1st Dist.] 2017, no pet.). Once the movant shows it is entitled to judgment as a matter of law, the burden shifts to the nonmovant to present evidence raising a fact issue to defeat summary judgment. Green v. Lowe's Home Ctrs., Inc. ,

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Bluebook (online)
554 S.W.3d 702, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mcray-v-dow-golub-remels-beverly-llp-texapp-2018.