Reynolds v. Nagely

262 S.W.3d 521, 2008 Tex. App. LEXIS 6338, 2008 WL 3867425
CourtCourt of Appeals of Texas
DecidedAugust 21, 2008
Docket05-06-00856-CV
StatusPublished
Cited by12 cases

This text of 262 S.W.3d 521 (Reynolds v. Nagely) 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
Reynolds v. Nagely, 262 S.W.3d 521, 2008 Tex. App. LEXIS 6338, 2008 WL 3867425 (Tex. Ct. App. 2008).

Opinion

OPINION

Opinion by

Justice RICHTER.

This appeal concerns interpleaded uninsured motorist (UIM) proceeds deposited in the trial court’s registry after a dispute arose among the insured Karen C. Reynolds, her former attorney Neal Nagely d/b/a Law Firm of Neal Nagely, and her current attorney Mosser Mailers, P.L.L.C. (“Mosser”). It also involves a suit for declaratory relief, breach of contract, and attorney’s fees brought by Nagely against Reynolds. Ultimately, the trial court granted the interpleader action, discharged the interpleader, dismissed Mos-ser, and denied the suit for declaratory judgment. The trial court also rendered judgment on the verdict by the jury, which heard the breach of contract claim and finding Reynolds had breached the contract, awarded Nagely damages and attorney’s fees. In four issues, Reynolds argues (a) the evidence is legally insufficient to support Nagely’s breach of contract claim and award of attorney’s fees; (b) the trial court erred in failing to render judgment and faffing to file findings of facts and conclusions of law in either the inter-pleader or declaratory judgment actions; (c) the trial court erred in faffing to find she was entitled to the interpleader funds; and (d) Mandell & Wright v. Thomas, 441 S.W.2d 841 (Tex.1969) should be overruled. We modify the judgment and, as modified, affirm.

Background

Reynolds retained Nagely to represent her “for personal injuries sustained” in a hit-and-run accident in June of 1999. The terms of the representation were contained in a contingent fee contract signed August 10, 1999. In relevant part, the contract provided that Reynolds

[f]or and in consideration of the services to be rendered by [Nagely] ... agree[d] and obligated herself] to give and allow him as his compensation 33 1/3% of all that he recovered] herein if a settlement [was] reached before lawsuit [was] filed; or 40% of all that he recovered] herein if settlement [was] reached after lawsuit [was] filed; or 45% of all that he recovered] herein after trial.

Additionally, Reynolds “assigned Nagely] his interest out of avails of the recovery and agree[d] it [was] not necessary that he become a party to any suit.”

*524 Over the next eight months, Nagely and his insurance adjuster Steve Frazier worked with Reynolds’s automobile insurer USAA Casualty Insurance Company to secure $9148.76 in personal injury protection (PIP) benefits for Reynolds and to persuade Reynolds’s health insurance carrier “to pay [Reynolds’s] medical, hospital, and surgical bills [related to the accident]” and “to abandon any effort to seek credit for USAA’s PIP payment.” Additionally, they pursued an UIM claim for Reynolds as the driver who hit her was never located. However, on April 28, 2000, before any UIM benefits could be secured, Reynolds terminated Nagely “for not taking care of her properly” and “not doing his job.” Bills were mounting, she was unable to work as much as she did prior to the accident, and she believed she was entitled to her UIM benefits immediately.

Twenty months later, USAA offered to settle Reynolds’s claim for the $100,000 UIM policy limit. At the time, Reynolds was not represented by counsel, but having been earlier informed by Nagely that he was retaining a “lien” on her claim, USAA informed Reynolds that the settlement check would be payable to both her and Nagely. Refusing to pay Nagely his one-third contingent fee, Reynolds refused the UIM proceeds and informed USAA to contact Mosser. USAA attempted to negotiate the terms of payment with Nagely and Mosser, but in September 2002, when its efforts had failed, it filed its interpleader action against Reynolds, Nagely, and Mosser and deposited the UIM proceeds into the court’s registry. See Tex.R. Civ. P.43.

Nagely answered the suit and counterclaimed against Reynolds for declaratory relief, breach of contract, and attorney’s fees under chapter 38 of the Texas Civil Practice and Remedies Code. Reynolds answered and filed claims against USAA for bad faith and breach of contract. Reynolds’s claims were subsequently settled and dismissed, and Mosser was also dismissed. Without hearing evidence, the trial court then signed an order granting USAA’s interpleader action, discharging USAA from the suit, and leaving Nagely’s claims against Reynolds to be resolved. See Avila v. Lone Star Radiology, 183 S.W.3d 814, 816 (Tex.App.-Waco 2005, no pet.) (if interpleader suit appropriate, innocent stakeholder is discharged from liability with respect to the funds, leaving for the court to decide who is entitled to the funds).

After Nagely’s declaratory action was orally denied by the trial court following a non-evidentiary hearing, Nagely’s breach of contract claim was tried to the jury. Testifying at trial were two USAA claim adjusters, Reynolds, Frazier, and Nagely. 1

The claim adjusters testified that Reynolds was demanding, uncooperative, and “difficult.” She used profanity, communicated directly with USAA despite being repeatedly told that all communications should go through Nagely, threatened to have one of the claims adjusters fired, and revoked her authorization for medical records. Although Nagely had not made a “formal” request for UIM benefits, the adjusters knew he was seeking those benefits for Reynolds. The adjusters testified their evaluation of the claim was “slow” because her case was complex and could *525 not have been resolved in the eight months Nagely represented Reynolds. They explained Reynolds had been in a car accident in 1997 and received $100,000 in UIM benefits for that accident. The injuries she sustained in that accident were similar to the injuries sustained in the hit-and-run accident, and as a result, the evaluation of medical records was critical. 2 She was still under medical care when she terminated Nagely and did not provide all the necessary records in support of her claim until the middle of 2001.

Nagely and Frazier testified as to their work for Reynolds, including work on the UIM claim, and concurred with the claim adjusters’ testimony that Reynolds’s claim was complex because of the various issues involved. They were aware and sympathetic of Reynolds’s financial difficulties and “advanced” her $300 from her anticipated PIP recovery for her rent. Additionally, knowing of Reynolds’s financial situation, Nagely opted not to collect his fee on the PIP proceeds. Although they did not copy Reynolds on correspondence they sent to USAA and did not advise her in writing as to the status of her case, they kept her informed by telephone. Because of the complexity of her claim, they did not believe it could have been resolved in the eight months of Nagely’s representation but they were confident it would be resolved favorably and would have pursued the claim until it was resolved if Reynolds had not terminated Nagely.

Reynolds admitted she was frustrated with USAA, a frustration that began with the handling of her 1997 claim, and admitted revoking her authorization for medical records.

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262 S.W.3d 521, 2008 Tex. App. LEXIS 6338, 2008 WL 3867425, Counsel Stack Legal Research, https://law.counselstack.com/opinion/reynolds-v-nagely-texapp-2008.