Skaggs v. Guerra

704 S.W.2d 51, 1985 Tex. App. LEXIS 11670
CourtCourt of Appeals of Texas
DecidedJune 13, 1985
DocketNo. 13-84-078-CV
StatusPublished
Cited by2 cases

This text of 704 S.W.2d 51 (Skaggs v. Guerra) 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
Skaggs v. Guerra, 704 S.W.2d 51, 1985 Tex. App. LEXIS 11670 (Tex. Ct. App. 1985).

Opinion

[52]*52OPINION

PER CURIAM.

This is an appeal from a judgment can-celling a deed executed in consideration for legal services rendered pursuant to a contingency fee contract. Appellees are Independent Executors of the estate of R.R. (Ruben) Guerra, Deceased. Ruben Guerra had employed the law firm of Carter, Stiernberg, Skaggs & Koppel, from whom appellants’ interest succeeds, to represent him in the dissolution of M. Guerra and Son, a partnership. In return for the legal services, appellants were assigned a deed entitling them to an undivided seven per cent interest in all the property to be received by Ruben Guerra upon dissolution of the partnership or final settlement. Appellants did not fully perform the contract of employment, but did file the deed. Ap-pellees brought this suit seeking a declaratory judgment that the deed is void.

The five general partners in the M. Guerra and Son partnership were: Ruben Guerra; Virgil Guerra; Joe Guerra; Horace Guerra; and M.A. Guerra. Virginia Jefferies was a limited partner. The primary asset held by the partnership was approximately 72,000 acres of ranch land in Starr and Jim Hogg Counties. Differences arose between the partners; some wanted to sell their interests but others did not. Ruben Guerra, who occupied some 13,000 acres of partnership land known as “Rancho Nue-vo,” did not want to sell and sought “Ran-cho Nuevo” to be partitioned to him as his pro-rata share of the ranch lands. All of the general partners had incurred substantial debts to the partnership, which were treated as “internal debts.” In August of 1968, Virgil and Joe Guerra conveyed their undivided partnership interests to Clinton Manges, reserving their respective partnership interests in an undivided one-half of the minerals in the partnership properties. Thereafter, Manges and Virgil Guerra petitioned the district court for the appointment of a receiver in order to partition the partnership properties. The requested appointment was vigorously contested by appellants on behalf of Ruben Guerra. The trial court made the requested appointment. That judgment was appealed by Ruben Guerra, but it was affirmed. See, M. Guerra and Son v. Manges, 442 S.W.2d 441 (Tex.Civ.App.—Waco 1969, writ dism’d).

The appellants’ representation of Ruben Guerra was governed by a letter agreement dated October 7, 1968 which reads as follows:

Gentlemen:

At the present time the undersigned are general partners in a limited partnership known as M. Guerra and Son. Certain disputes have arisen between the partners and certain outsiders which is the subject matter of certain pending litigation in Hidalgo County, Texas, and Gol-iad County, Texas, and a variety of other reasons exist which make it necessary in our opinion to dissolve the M. Guerra and Son partnership.
We have previously employed you to ... represent us generally in any way necessary and to take any action which you may deem advisable on our behalf to bring about a dissolution of the M. Guerra and Son partnership and a distribution and partition to us of our pro rata share of the partnership assets or in the alternative, to obtain for each of us a settlement of such partnership interests which each of us may consider to be satisfactory.
In return for legal services rendered and to be rendered by you as attorneys ... in regard to all matters set forth herein until final conclusion of such matters to our satisfaction, each of us has this date assigned to you and by this agreement assigns to you an undivided seven (7%) per cent interest in and to all properties which each of us may hereafter receive from the M. Guerra and Son limited partnership upon dissolution or final settlement.
It is understood that the foregoing assignment constitutes payment in full to you ... for such services as herein set [53]*53forth and that we will not owe you anything for attorneys services ... unless and until we obtain such final partition and distribution or (sic) such final settlement.

By a deed dated October 9, 1968, Ruben Guerra conveyed to appellants’ law firm a undivided 7% interest in and to "all properties, real, personal and mixed which I, my family or any of my heirs or assigns may hereafter receive by reason of any interest in the limited partnership known as M. Guerra and Son....”

For the next two years, appellants performed significant legal services on behalf of Ruben Guerra. On February 27, 1970, a settlement agreement was reached between Manges and Ruben Guerra. Among other things, it was agreed that Ruben Guerra would receive Rancho Nuevo as his pro-rata share of M. Guerra and Son’s ranch lands together with one-half of the minerals thereunder, including the executive rights on such minerals; and his proportionate undivided interest in one-half the minerals under the remaining ranch lands of M. Guerra & Son.

In December of 1970, appellant began to represent Manges in legal matters unrelated to the partnership litigation and dispute. By February of 1971, Manges had reached separate agreements with each of the other partners by which he would purchase much of the partnership’s ranch land (approximately 40,000 acres) except for three tracts, one being Rancho Nuevo. On March 16 and August 20, 1971, Ruben Guerra received deeds to the surface of Ran-cho Nuevo and a mineral deed for half the mineral rights thereunder with executive rights. At this point, all that remained to be done was the preparation of an accounting and a Receiver’s Final Report, which was necessary to close out the receivership. As late as October of 1972, the Receiver’s accountants were still preparing the accounting.

In late summer of 1972, some of the partners obtained a copy of a proposed receiver’s final accounting and report which revealed that there were insufficient funds on hand to pay existing internal and external partnership debts. The report suggested that an undivided one-half of the partnership’s mineral interests be sold to Manges for $300,000, the amount of the deficit (admittedly a bargain price), to provide money for the payment of the debts. Ruben Guerra noted that Manges had previously acquired the partnership interest of M.A. Guerra by assuming M.A.’s debt to the partnership, which was $568,000. Manges had not paid this indebtedness to the partnership. Ruben was outraged at the proposed sale and argued that had Manges actually paid M.A.’s debt there would be no need to sell any partnership assets.

In light of this proposed sale, Skaggs informed the Guerras that it might be advisable “from a strategic point of view” to undertake the disqualification of the trial judge in the receivership suit, Judge O.P. Carrillo, as he felt that Judge Carrillo would follow the receiver’s recommendation to sell the mineral interests.

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704 S.W.2d 51, 1985 Tex. App. LEXIS 11670, Counsel Stack Legal Research, https://law.counselstack.com/opinion/skaggs-v-guerra-texapp-1985.