Sydow v. VERNER, LIIPFERT, BERNHARD

218 S.W.3d 162, 2007 Tex. App. LEXIS 469, 2007 WL 174408
CourtCourt of Appeals of Texas
DecidedJanuary 25, 2007
Docket14-05-00877-CV
StatusPublished
Cited by8 cases

This text of 218 S.W.3d 162 (Sydow v. VERNER, LIIPFERT, BERNHARD) 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
Sydow v. VERNER, LIIPFERT, BERNHARD, 218 S.W.3d 162, 2007 Tex. App. LEXIS 469, 2007 WL 174408 (Tex. Ct. App. 2007).

Opinion

OPINION

ADELE HEDGES, Chief Justice.

Both parties appeal from the trial court’s final judgment modifying and confirming an arbitration award. The arbitrator, in fact, issued two awards: an “original award” and a subsequent “amended award.” Michael D. Sydow requested that the trial court confirm the amended award. Verner Liipfert, Bernhard, McPherson and Hand, Chartered (“Verner Liipfert”) requested that the court confirm the original award. The trial court modified the original award and confirmed it as modified. On appeal, Sydow contends that the trial court should have confirmed the amended award instead of modifying and confirming the original award. Verner Liipfert contends that the trial court erred in modifying the original award in certain respects. We, in turn, modify the trial court’s judgment and affirm it as modified.

I. Background

Sydow is an attorney in Houston, Texas. In 1997, he negotiated with the law firm of Verner Liipfert to join its Houston office. As part of the negotiations, Sydow met with Lenard Parkins, a Verner Liipfert shareholder, regarding which of Sydow’s preexisting cases the firm was interested in pursuing. As part of this conversation, Sydow informed Parkins about the expenses he had already incurred in the cases. One of these cases was Miller v. Texas Women’s Hospital. See HCA, Inc. v. Miller, 36 S.W.3d 187 (Tex.App.-Houston [14th Dist.] 2000), aff'd, 118 S.W.3d 758 (Tex.2003). The parties disagree as to whether Sydow told Parkins that the preexisting expenses in Miller were $30,000 or $300,000. The parties also disagree as to whether Verner Liipfert agreed to reimburse Sydow for any preexisting case expenses or whether it simply agreed to pay for future expenses in certain of Sydow’s preexisting cases. The parties agree, however, that Verner Liip-fert did accept certain of Sydow’s preexisting cases for continued prosecution, including Miller.

In 2001, Verner Liipfert closed its Houston office. As part of his severance pack *165 age, Sydow signed a release, which left certain issues in dispute. In August 2004, the parties entered into a binding arbitration agreement regarding the remaining disputes, pursuant to which they proceeded to a full arbitration hearing on September 17-18, 2004. In both the original and amended awards, the arbitrator framed the issues between the parties as follows: (1) whether the release obligated Verner Liipfert to pay for attorney’s fees Sydow incurred defending against a grievance and an intervention filed by a former client; (2) whether Verner Liipfert was responsible for preexisting expenses on the cases Sy-dow brought into the firm; (3) whether the preexisting expenses in the Miller case were $80,000 or $300,000; and (4) whether Verner Liipfert faded to pay money due to Sydow under the release.

In the original award, regarding the first issue, the arbitrator found that the release obligated Verner Liipfert to pay Sydow’s attorney’s fees related to the intervention but not the grievance. 1 The arbitrator consequently awarded Sydow $18,883.83 for the intervention attorney’s fees plus interest. Regarding the second issue, the arbitrator found that Verner Li-ipfert had agreed to assume the preexisting expenses for the cases it accepted. In explaining this holding, the arbitrator stated that it would have made no sense for Sydow to agree to give Verner Liipfert 25% of his recovery in certain cases if they were going to pay only expenses incurred after he joined the firm. Regarding the third issue, the arbitrator held that Sydow was entitled to $57,003.32 of the requested $357,003.32 as preexisting expenses in Miller, which sum was within the reasonable range understood by Verner Liipfert. The arbitrator stated that “[t]he fault in the misunderstanding of this issue rests between Sydow and Parkins.” The arbitrator further found that because Verner Li-ipfert violated the contract, Sydow was entitled to certain of his attorney’s fees incurred in the present case. The arbitrator then entered a variety of calculations of case expenses, credits for resolved cases, and interest. Ultimately, the arbitrator awarded Sydow:

a. $18,883.83 for his out-of-pocket fees for the [intervention];
b. $167,579.92 plus interest thereon at 5% per annum following September 20, 2003; plus
c. $76,456.97 attorneys’ fees plus interest thereon at 5% per annum after ten (10) days from the date of this Award.
The total AWARD therefore is $267,920.72 in favor of Sydow against Verner, Liipfert, Bernhard, McPherson and Hand.

The arbitrator also ordered Sydow to help the firm collect in outstanding cases.

In the amended award, the arbitrator stated that Sydow filed a motion to reconsider urging that (1) the expenses in Miller were $300,000 not $30,000, and (2) in the alternative, plaintiffs exhibit 8 permitted “a recalculation of an error in that this document confirms that Sydow actually paid $290,420.75 after October 16, 1997” (emphasis added). The arbitrator further *166 said that “[t]his point is well taken and this award has been revised to correct that issue.” Next the arbitrator explained that Sydow also complained about a mathematical or typographical error in the original award, namely omitting prejudgment interest on the award of attorney’s fees incurred in the intervention. The arbitrator characterized this correction as of “a typographical error.” The arbitrator then added the following:

Sydow’s request that the arbitrator amend the Award on the basis that the decision is in clear contravention of the law is granted because, in part, the Agreement to Arbitrate provides that this Award shall comport with this standard. I do believe that § 171.054 Tex. Civ. Prac. & Rem.Code permits this change as a result of the post decision briefing that has occurred and in order to do equity in this matter necessitates the Award be amended to replace $57,003.32 with a revised amount and recast the associated interest. Section 171.054 permits the Arbitrator to amend the Award for the grounds therein stated including those in § 171.091. The parties by contract (the Arbitration Agreement) amended this standard by including another agreed standard — “in clear contravention of the law.” Case law and argument presented post the original Award decision would indicate this has occurred regarding the theory of “mistake” and other issues. Sydow has convinced the arbitrator that as a matter of law, the decision should be changed.

During the factual discussion related to the Miller case expenses, the arbitrator inserted Sydow’s testimony that Parkins did not tell him of the firm’s decision to reimburse only $30,000 of preexisting Miller expenses, and that as a consequence, Sydow expected a $300,000 reimbursement.

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Bluebook (online)
218 S.W.3d 162, 2007 Tex. App. LEXIS 469, 2007 WL 174408, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sydow-v-verner-liipfert-bernhard-texapp-2007.