Stuart v. Bayless

945 S.W.2d 131, 1996 WL 697842
CourtCourt of Appeals of Texas
DecidedNovember 27, 1996
Docket01-93-00235-CV
StatusPublished
Cited by10 cases

This text of 945 S.W.2d 131 (Stuart v. Bayless) 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
Stuart v. Bayless, 945 S.W.2d 131, 1996 WL 697842 (Tex. Ct. App. 1996).

Opinions

OPINION ON MOTIONS FOR REHEARING

HEDGES, Justice.

We grant appellant’s motion for rehearing, and we grant the appellees’ motion for rehearing directed only at the disposition of their cross-point of error one on original submission. We withdraw our January 29, 1996, opinion, and substitute the following opinion in its place.

The judgment about which appellant Kae Stuart (“Stuart”) complains arose out of her attorney-client relationship with Berta Rhodes Raborn (“Raborn”), Bobbie Bayless (“Bayless”), and the law firm of Bayless & Stokes (“B & S”). In 28 points of error on rehearing, Stuart challenges the judgment on various grounds.

Rabom and Bayless represented Stuart in a divorce proceeding and in two subsequent eases arising partly out of that divorce. Ultimately, Bayless, B & S, and Rabom (“plaintiffs”) sued Stuart to recover their due and unpaid fees and expenses and asserted causes of action for breach of contract, quantum meruit, fraud, and defamation. Stuart counterclaimed for breach of contract, breach of fiduciary duty, breach of duty of good faith and fair dealing, and breach of duty of loyalty; she also requested the imposition of sanctions against the plaintiffs under Tex.R. Civ. P. 13. The jury found that Stuart had breached her contracts with the plaintiffs and had committed fraud against them. It answered Stuart’s counterclaim issues negatively. On Stuart’s motion, the trial court disregarded jury findings that plaintiffs recover $339,002 in attorney’s fees for B & S’s and Rabom’s preparation in this case and entered judgment against Stuart for $3,093,085. Stuart raises complaints concerning the fraud findings and the awards of actual and punitive damages and attorneys’ fees; several evidentiary rulings; and an order that allowed plaintiffs to withdraw funds from the registry of the court. In two cross-points, plaintiffs assert that the trial court erred in disregarding certain jury findings and in refusing to submit to the jury plaintiffs’ issues concerning conversion, breach of fiduciary duty, and conspiracy. We affirm in part and reverse and render in part.

FACTS

Divorce Proceeding

In February 1984, Stuart filed for divorce from Charles Chamberlain. When she decided to change counsel in July 1987, she approached Rabom. They entered into a written agreement based on an hourly fee. By Stuart’s own account, Rabom “turned the divorce case around” and obtained cash, property, and a $311,000 judgment for Stuart.1 Of that amount, $19,000 was an award of attorneys’ fees in Stuart’s name for Rabom’s benefit.

Bayless Representation

Rabom referred Stuart to Bayless when shortly after that judgment, Stuart learned that Chamberlain was preparing to file bankruptcy. Stuart and Bayless agreed in writing that Bayless would represent Stuart (a) in the collection of the divorce judgment from Chamberlain, and (b) in a suit against Chamberlain’s divorce lawyer for breach of trust.2 In the collection suit, their agreement called for an hourly fee arrangement, while their agreement in the breach of trust lawsuit called for a contingent fee. Both agreements called for Stuart to pay certain litigation expenses in response to monthly invoices from Bayless, due upon receipt.

Chamberlain’s Bankruptcy

As expected, Chamberlain filed bankruptcy. In early 1991, Stuart and Chamberlain reached an “agreement in principle” to settle her claims against him in that proceeding. In June 1992, Stuart received approximately $278,000 from the Chamberlain bankruptcy [135]*135settlement. Because of Bayless’ pending suit for attorneys’ fees, Stuart did not pay Bay-less’ bankruptcy fees from the settlement proceeds.

Breach of Trust Suit

Before the bankruptcy settlement was reduced to writing, the breach of trust trial began in the 11th District Court of Harris County. The defendant in that proceeding made several settlement proposals during the trial. Although Stuart was reluctant to settle, she ultimately did settle at Bayless’ urging — but only after Bayless acceded to a new arrangement.3 The court rendered judgment in accordance with the settlement read into the record on April 8, 1991, which called for the defendant to pay Stuart $450,-000 plus “taxable court costs.” Within a week, Bayless received a check from the defendant’s insurance carrier, made payable to both Stuart and B & S, to hold in trust pending the execution of formal settlement documents.

Fee Dispute

A fee dispute arose on April 21,1991, when Bayless called Stuart to discuss Stuart’s coming to Houston the next day to endorse the settlement check. When she informed Stuart of the specific amount she was requesting for litigation expenses to be reimbursed from the settlement proceeds, Stuart insisted that the breach of trust defendant be made to pay those expenses. Stuart also protested Bayless’ declared intention to pay unpaid legal fees to her and to Rabom from the breach of trust settlement proceeds. The parties forcefully disagreed about the amount of money due Bayless from the settlement proceeds as reimbursed expenses. The conversation deteriorated and abruptly ended. Both women sent follow-up letters stating their respective positions. Stuart replaced Bayless with new counsel in all matters. Bayless, B & S, and Rabom intervened in the breach of trust case for unpaid legal fees and unreimbursed expenses.4 The breach of trust defendant and/or his insurance carrier paid $450,000 into the court’s registry, without prejudice to B & S’s right to make a claim against Stuart or the funds. On July 29, 1991, the trial court entered judgment in the breach of trust suit and severed the interventions.

Suit for Legal Fees and Expenses

Bayless’, B & S’s, and Rabom’s claims were consolidated in a single action in the 190th District Court of Harris County, and Stuart counterclaimed against Bayless, B & S, and Rabom. The suit was tried in October 1992.5 Immediately after the verdict, B & S, Bayless, and Rabom filed a motion to withdraw the remaining funds from the district court’s registry, which the court granted three weeks later. On December 1,1992, the court amended that order, principally to delete provisions requiring that a bond be posted before withdrawal. On that date, the court also signed the judgment complained of on appeal.

FRAUD

In points of error one, two, four, and five, Stuart contends that the awards of punitive damages were erroneous because there is no evidence, or alternatively, insufficient evidence, to support the jury’s finding that Stuart had committed fraud that was a proximate cause of damage to B & S, to Bayless, and to Rabom. In point of error six, Stuart [136]*136contends that the awards of punitive damages were erroneous because at least one of the two fraud theories plaintiffs asserted is “legally, factually, or procedurally defective.” Our analysis of this point persuades us that the argument is actually one of legal insufficiency — that the fraud instruction should not have been submitted to the jury because there was no evidence to support it. In point of error three, Stuart contends that, because as a matter of law, she owed no duty other than a contractual duty to pay fees and expenses to plaintiffs, the awards of punitive damages were erroneous. We interpret this contention as a legal sufficiency challenge as well.

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Stuart v. Bayless
945 S.W.2d 131 (Court of Appeals of Texas, 1996)

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