Tom Tucker v. Carl Bedgood and Laura Bedgood

• Court: Court of Appeals of Texas
• Decided: July 10, 2015
• Docket: 13-15-00127-CV
• Status: Published

Opinion

ACCEPTED 13-15-00127-CV THIRTEENTH COURT OF APPEALS CORPUS CHRISTI, TEXAS 7/10/2015 12:04:30 PM CECILE FOY GSANGER CLERK

No. 13-15-00127-CV FILED IN IN THE COURT OF APPEALS FOR THE 13th COURT OF APPEALS CORPUS CHRISTI/EDINBURG, TEXAS THIRTEENTH JUDICIAL DISTRICT 7/10/2015 12:04:30 PM CORPUS CHRISTI & EDINBURG,CECILE TEXASFOY GSANGER Clerk

TOM TUCKER, CROSS-APPELLEE V. CARL BEDGOOD & LAURA BEDGOOD, CROSS- APPELLANTS

On Appeal from the County Court at Law No. 1 of Victoria County, Texas

FIRST AMENDED BRIEF OF CROSS-APPELLANTS

Carl Bedgood and Laura Bedgood, Cross-Appellants

Rachel F. Klotzman State Bar No. 24049710 Klotzman Law Firm, PLLC 603 E. Mesquite Lane Victoria, TX 77901 Tel.: 361 485-9312 Fax: 361 237-3591 Attorney for Carl Bedgood and Laura Bedgood

ORAL ARGUMENT IS NOT REQUESTED IDENTITY OF PARTIES AND COUNSEL

The following is a complete list of all parties to the trial court’s final judgment, as well as the names and addresses of all trial and appellate counsel.

PARTIES COUNSEL

Plaintiff: Tom Tucker Hon. Robert P. Houston 30 Meadow View Victoria, TX 77904

Defendants: Carl Bedgood Hon. Amanda B. Pierce 603 E. Mesquite Ln. Victoria, TX 77901

Hon. Rachel F. Klotzman 603 E. Mesquite Ln. Victoria, TX 77901

Laura Bedgood Hon. Amanda B. Pierce 603 E. Mesquite Ln. Victoria, TX 77901

Hon. Rachel F. Klotzman 603 E. Mesquite Ln. Victoria, TX 77901

ii TABLE OF CONTENTS

IDENTITY OF PARTIES AND COUNSEL ............................................................... ii

INDEX OF AUTHORITIES ........................................................................................ iv

STATEMENT OF THE CASE ..................................................................................... 1

ISSUES PRESENTED .................................................................................................. 2

STATEMENT OF THE FACTS ................................................................................... 2

SUMMARY OF THE ARGUMENT ........................................................................... 4

ARGUMENT AND AUTHORITIES ........................................................................... 4

I. Appellate Issues and Standard of Review ..................................................... 4

II. Attorney’s Fees Properly Pled........................................................................ 5

III. Prevailing Party Provision Applicable to Tucker ......................................... 7

IV. Legal Proceeding Related to Earnest Money Contract ............................ 10

PRAYER ...................................................................................................................... 12

CERTIFICATE OF SERVICE.................................................................................... 13

CERTIFICATE OF COMPLIANCE .......................................................................... 14

APPENDIX .................................................................................................................. 15

iii INDEX OF AUTHORITIES

Texas Court of Appeals Fitzgerald v. Schroeder Ventures II, LLC, 345 S.W.3d 624 (Tex. App.—San Antonio 2011, no pet.).........................................................5, 9, 10 Lesieur v. Fryar, 325 S.W.3d 242 (Tex. App.—San Antonio 2010, pet. denied) ...................................................7, 8, 9 Rich v. Olah, 274 S.W.3d 878 (Tex. App.—Dallas 2008, no pet.) ............................................................................. 10

Texas Rules of Civil Procedure Tex. R. Civ. P. 67 .......................................................................................................5 Tex. R. Civ. P. 301 .....................................................................................................5

iv To the Honorable Thirteenth Court of Appeals:

STATEMENT OF THE CASE

This was an action for damages for 1) breach of contract, 2) breach of

fiduciary duty and common law fraud, 3) statutory fraud, 4) unjust enrichment and

5) civil conspiracy brought by Tom Tucker (hereinafter “Tucker”), cross-appellee,

against Carl Bedgood and Laura Bedgood (hereinafter “the Bedgoods”), cross-

appellants, in a Texas county court at law (I Suppl. at 421). The Bedgoods filed

motions for summary judgment, both traditional and no evidence (I Suppl. at 255-

256), and the court granted summary judgment in their favor on February 23, 2015,

finding no genuine issue of material fact and that the Bedgoods were entitled to

judgment as a matter of law (I Suppl. at 448). Attorney’s fees were not awarded (I

Suppl. at 448). The trial court denied Tucker’s motion for reconsideration on March

12, 2015 (I Suppl. at 453), and Tucker timely perfected his appeal on March 23,

2015 (I Suppl. at 454). The trial court also denied the Bedgoods’ motion to reform

judgment and take judicial notice filed on March 24, 2015 (I Suppl. at 456, 481).

The Bedgoods timely perfected their cross-appeal regarding the single issue of

attorney’s fees on April 20, 2015 (I Suppl. at 482).

1 ISSUE PRESENTED

Under the earnest money contract’s prevailing party provision did the trial

court err in denying the Bedgoods’ requests for an award of attorney’s fees when

summary judgment was granted in favor of the Bedgoods, the earnest money

contract states that “the prevailing party in any legal proceeding related to this

contract is entitled to recover reasonable attorney’s fees and all costs of such

proceeding incurred by the prevailing party”, Tucker was the listing broker

representing the Bedgoods and a beneficiary under the contract and Tucker’s suit is

a legal proceeding stemming from said earnest money contract?

STATEMENT OF FACTS

Tucker sued the Bedgoods in a county court at law for 1) breach of contract,

2) breach of fiduciary duty and common law fraud, 3) statutory fraud, 4) unjust

enrichment and 5) civil conspiracy under a 2006 unimproved property contract

(hereinafter “earnest money contract”) wherein the Bedgoods sold land to a third

party and Tucker was the listing broker (I Suppl. at 296-309, 421). The Bedgoods

were granted summary judgment without an award for attorney’s fees (I Suppl. at

448). The earnest money contract (I Suppl. at 296) states, regarding attorney’s fees,

that “[t]he prevailing party in any legal proceeding related to this contract is entitled

to recover reasonable attorney's fees and all costs of such proceeding incurred by the

prevailing party” (I Suppl. at 300). In the motions hearing held on February 18, 2015, 2 the Bedgoods’ attorney discussed this section of the earnest money contract (II R.R.

at 3,5). The Bedgoods’ attorney also attached an affidavit in support of the motion

for summary judgment stating that $12,000.00 represented a reasonable fee for her

services (I Suppl. at 392). Following the granting of summary judgment in favor of

the Bedgoods and the denial of attorney’s fees, the Bedgoods filed a motion to

reform judgment requesting that the trial court have a hearing to determine attorney’s

fees, citing the prevailing party provision of the earnest money contract, and

requested that the court take judicial notice of the contents of its file and of the usual

and customary attorney’s fees necessary for the prosecution of an appeal (I Suppl. at

456-457). Tucker filed a response to the Bedgoods’ motion alleging movants failed

to properly plead for attorney’s fees under the prevailing party prevision (I Suppl. at

476). Alternatively, Tucker states that he did not sue the Bedgoods under or pursuant

to the earnest money contract, but rather on the basis of an oral agreement between

the parties and that the earnest money contract was simply “some evidence of what

the agreement between Tucker and Bedgood was sufficient to satisfy the statute of

frauds” (I Suppl. at 478). The Bedgoods’ requests were denied and this cross-appeal

ensued regarding only the issue of attorney’s fees (I Suppl. at 481).

3 SUMMARY OF THE ARGUMENT

This suit arises from an alleged oral agreement incident to an earnest money

contract wherein the Bedgoods and Tucker sold land to a third party buyer and

Tucker both represented the Bedgoods as realtor and was a direct beneficiary under

the contract. As either a party to the sale or a third party beneficiary under the earnest

money contract, Tucker is obligated to pay attorney’s fees to the Bedgoods as the

prevailing party in his suit related to said contract. The court erred in denying said

relief.

ARGUMENT AND AUTHORITIES

I. Appellate Issues and Standard of Review

This is a single issue cross-appeal regarding the trial court’s failure to award

mandatory attorney’s fees pursuant to an earnest money contract. Said contract states

that “[t]he prevailing party in any legal proceeding related to this contract is entitled

to recover reasonable attorney's fees and all costs of such proceeding incurred by the

prevailing party” (I Suppl. at 300). The appellate issues include 1) whether the

request for attorney’s fees was properly pled, 2) whether the prevailing party

provision in the earnest money contract applied to Tucker and 3) whether this lawsuit

was a legal proceeding related to the earnest money contract. An abuse of discretion

standard of review applies to a trial court’s award of attorney’s fees, however, when

attorney’s fees are proper and denied by the trial court, the issue is to be reviewed

4 de novo. Fitzgerald v. Schroeder Ventures II, LLC, 345 S.W.3d 624, 627 (Tex.

App.—San Antonio 2011, no pet.)(“An issue concerning the availability of

attorney’s fees under a statute or a contract presents a question of law that appellate

courts review de novo.”). For the reasons detailed below, the Bedgoods request that

this Court reverse the portion of the judgment denying attorney’s fees and remand

the issue of reasonable fees to the trial court.

II. Attorney’s Fees Properly Pled

Tucker asserts in answer to the Bedgoods’ motion to reform judgment that the

Bedgoods failed to request summary judgment and did not properly plead attorney’s

fees stemming from the earnest money contract (I Suppl. at 475). The court may

award attorney’s fees if they are pled or the issue was waived or tried by consent.

See Tex. R. Civ. P. 301 (“The judgment of the court shall conform to the pleadings,

the nature of the case proved and the verdict, if any, and shall be so framed as to give

the party all the relief to which he may be entitled either in law or equity.”); Tex. R.

Civ. P. 67 (“When issues not raised by the pleadings are tried by express or implied

consent of the parties, they shall be treated in all respects as if they had been raised

in the pleadings.”). In the Bedgoods’ summary judgment motion they requested that

“movant be granted summary judgment in the amount of $12,000.00 for attorney's

fees as proven herein; or alternatively, the Court set a hearing on the matter of

attorney's fees, to be held immediately following the summary judgment on this

5 cause, and after the hearing Movant be granted an order setting the amount of

attorney's fees to be awarded” (I Suppl. at 273). Amanda Pierce (hereinafter

“Pierce”), the Bedgoods’ attorney, also attached as exhibits to the summary

judgment motion the earnest money contract and her own affidavit that stated

“considering the nature of this case, the amount of money involved, and the time and

skills required of Movant's attorneys, I am of the opinion that $12,000.00 represents

a reasonable fee for the services of Amanda Pierce in conjunction with this case” (I

Suppl. at 392). During the summary judgment hearing held on February 18, 2015,

Pierce specifically requested recovery of attorney’s fees stemming from the

prevailing party provision of the earnest money contract (II R.R. at 3,5). At said

hearing, Robert Houston (hereinafter “Houston”), Tucker’s counsel, stated “I think

it’s interesting, you know, they sued for attorney fees and they didn’t ask for attorney

fees globally” (II R.R. at 29). Following the granting of summary judgment in favor

of the Bedgoods and the denial of attorney’s fees, the Bedgoods requested that the

trial court have a hearing to determine attorney’s fees citing the prevailing party

provision of the earnest money contract (I Suppl. at 456).

The Bedgoods assert that the evidence above shows that both a “global”

request for attorney’s fees as well as a specific request for fees under the earnest

money contract were pled. Furthermore, Houston failed to object to Pierce’s

argument regarding attorney’s fees under the earnest money contract, rather, he

6 argues that she was engaging in “double talk” by both denying that the earnest

money contract was a contract between the Bedgoods and Tucker while relying on

the earnest money contract for attorney’s fees (II R.R. at 32). The Bedgoods not only

requested summary judgment regarding attorney’s fees, but brought the issue to the

court’s attention during the summary judgment hearing and again with the post

judgment motion to reform. Therefore, the issue of attorney’s fees was both pled and

preserved for appeal.

III. Prevailing Party Provision Applicable to Tucker

It is undisputed that the Bedgoods are the prevailing party in this proceeding

as the court granted summary judgment in their favor. What is at issue is whether

the prevailing party provision of the earnest money contract applies to Tucker. The

earnest money contract between the Bedgoods and the third party buyer states, on

the first page, “PARTIES: Carl Bedgood, and wife Laura Bedgood (Seller) agree[ ]

to sell and convey to J P Bryan (Buyer) and Buyer agrees to buy from Seller the

property described below[,]” and later “ATTORNEY’S FEES: the prevailing party

in any legal proceeding related to this contract is entitled to recover reasonable

attorney's fees and all costs of such proceeding incurred by the prevailing party” (I

Suppl. at 296, 300).

In Lesieur v. Fryar, 325 S.W.3d 242, 243 (Tex. App.—San Antonio 2010,

pet. denied), a buyer sued both the seller and the seller’s real estate agent for claims

7 arising from a home sale; the trial court granted summary judgment in favor of

defendants and also granted attorney’s fees to the real estate agent under the

prevailing party provision of the earnest money contract. The San Antonio Court of

Appeals found that that the trial court erred in granting attorney’s fees to the real

estate agent finding that the said agent was not a party or third-party beneficiary to

the earnest money contract. Id. at 253. The court found that “parties” in the earnest

money contract with identical boilerplate language to that the subject of this suit are

limited to only the buyer and seller. Id. at 252. The realtor in Lesieur benefitted from

the contract only in that she was entitled to brokers’ fees from the sale of the

property, “an incidental benefit flowing from the contract, which . . . was insufficient

to confer third-party beneficiary status.” Id. at 253. The parties to a contract must

intend to confer a direct benefit upon the alleged third party beneficiary in order for

the party to enforce the contract. Id. at 252-53.

The case before the court is clearly distinguishable from the fact pattern in

Lesieur. Tucker is not listed in the earnest money contract as a seller (I Suppl. at

296), he is, however, the realtor in the transaction and the owner of Lot 10, which is

referenced in the special provisions section; “Lot A-9 will be enlarged to 70 feet by

decreasing Lots 10 and 11 by five feet each” (I Suppl. at 299). Tucker received two

payments for this transaction. His first payment was a four-thousand dollar ($4,000)

commission for his services as a realtor (I Suppl. at 191). Tucker also received a

8 twenty-five thousand dollar payment ($25,000) for sale of the five feet he owned in

Lot 10 pursuant to the special provisions section of this earnest money contract (I

Suppl. at 190-192). Unlike the broker in Lesieur, Tucker received more than a

commission from the sale of the property; he directly benefitted from the earnest

money contract by selling five feet of land he owned and receiving money as

consideration for said sale. Cf. Lesieur, 325 S.W.3d at 253 (“. . . there was no intent

the realtors directly benefit from the contract; rather, there was a separate agreement

for their benefit.”). It is the Bedgoods’ position that, for the purposes of interpreting

the prevailing party provision, Tucker was both a party under the earnest money

contract and a third party beneficiary as he was conferred a direct benefit of $25,000

from the sale.

The San Antonio Court of Appeals finds in Fitzgerald that the prevailing party

under an earnest money contract, be that the plaintiff or defendant, is entitled to

attorney’s fees and that the trial court erred in refusing to award attorney’s fees to

sellers and their real estate agent who successfully defended claims arising from a

similar earnest money contract. 345 S.W.3d at 630-31. In Fitzgerald, the earnest

money contract’s prevailing party provision eliminates the question as to whether

the real estate agent is a party by specifically listing the agent in the prevailing party

provision. Id. at 630 (“if buyer, seller, any broker, or any escrow agent is a prevailing

party in any legal proceeding brought under or with relation to this contract. . .”).

9 Having found that the language of the contract defined the sellers and real estate

agent as parties, the court found that the prevailing party could be either the plaintiff

or defendant in the litigation. Id. at 630.

The Bedgoods assert that like the sellers in Fitzgerald, they are entitled to

attorney’s fees as the prevailing party. Tucker is suing the Bedgoods under the guise

of an oral contract supported by the written earnest money contract alleging that he

was damaged by not receiving an oral benefit, namely 5 feet of lot A-11, promised

him from this transaction (I Suppl. at 192). Tucker, separate and apart from his

$4,000 commission as realtor, received $25,000 as the seller of 5 feet of lot A-10.

By this lawsuit Tucker places himself in the role of third party beneficiary, whether

we agree that he is or not, one cannot sue to enforce a contract as a party or third

party beneficiary and at the same time deny that the contract provisions regarding

mandatory attorney’s fees apply. Tucker is either a party or third party beneficiary

in the earnest money contract for the purposes of his lawsuit against the Bedgoods

and therefore cannot escape the arm of the prevailing party provision. Therefore, the

trial court erred in denying the Bedgood’s request for attorney’s fees based on said

provision.

IV. Legal Proceeding Related to Earnest Money Contract

This case is a legal proceeding related to the earnest money contract. In Rich

v. Olah, 274 S.W.3d 878, 888 (Tex. App.—Dallas 2008, no pet.), the trial court

10 denied the prevailing party’s request for attorney’s fees by narrowly construing the

language “related to this contract”. The appellate court emphasized the word related

in their analysis concluding that “although based in tort and statutory causes of

action, the litigated claims all relate to the sales contract.” Id. Tucker filed this

lawsuit, which is by definition a legal proceeding, and this lawsuit stems from the

earnest money contract. According to Tucker’s affidavit filed with the court, this

lawsuit against the Bedgoods arises from a sale of land from the Bedgoods to a third

party in which Tucker acted as realtor and beneficiary (I Suppl. at 191). The earnest

money contract was drafted by Tucker and presented to Bedgood and Tucker also

states in the same affidavit that he received $25,000 from the transaction for the

portion of the property he sold in this transaction (I Suppl. at 191). Furthermore,

Tucker’s counsel points to said earnest money contract as the only written instrument

giving rise to Tucker’s claims against Bedgood (I Suppl. at 434)(“The Bedgoods

contend that Tucker has offered no evidence of a written contract. However, he has

offered, as have the Bedgoods, the written earnest money contract signed by the

Bedgoods, which contains the Bedgoods' agreement to reduce the size of Lot A-ll

and A-10 and to increase the size of Lot A-9.”). The Bedgoods asserted and the trial

court agreed that Tucker’s claims were unfounded in law and fact, granting summary

judgment to the Bedgoods, but unfounded claims in a lawsuit brought under a

contract do not make the prevailing party portion of the contract invalid. For

11 clarification, the Bedgoods’ position is not that the earnest money contract was a

valid contract between the parties, but rather, the fact that Tucker sued the Bedgoods

using the earnest money contract as the only written proof of an alleged oral

agreement means that Tucker cannot deny that he is a party to the earnest money

contract. This is, on its face, a legal proceeding related to the earnest money contract.

PRAYER

For these reasons, the Bedgoods, Cross-Appellants, request that this court

grant the Bedgoods’ request for attorney’s fees, reverse the portion of the trial court’s

judgment refusing to award attorney’s fees, render judgment that the Bedgoods

recover reasonable attorneys’ fees from Tucker and remand to the trial court for

determination of reasonable fees. The Bedgoods also request any other relief to

which they may be entitled.

12 Respectfully submitted,

KLOTZMAN LAW FIRM, PLLC 603 E. Mesquite Ln. Victoria, TX 77901 Tel: (361) 485-9312 Fax: (361) 237-3591

By: ____________________________ Rachel F. Klotzman State Bar No. 24049710 Attorney for Appellant

CERTIFICATE OF SERVICE

This certifies that the undersigned served this First Amended Brief of Cross-

Appellants on Tom Tucker, Cross-Appellee, by sending it to lead counsel for Cross-

Appellee, Robert P. Houston, at 30 Meadow View, Victoria, TX 77904, by

electronic service by transmission to an electronic filing service provider for service

through the state’s electronic filing manager on July 10, 2015.

_________________________ Rachel F. Klotzman Attorney for Cross-Appellants

13 CERTIFICATE OF COMPLIANCE WITH APPELLATE RULE 9.4(i)

I certify that this document contains 2241 words, as indicated by the word-

count function of the computer program used to prepare it, and excluding the caption,

identity of parties and counsel, statement regarding oral argument, table of contents,

index of authorities, statement of the case, statement of issues presented, statement

of jurisdiction, statement of procedural history, signature, proof of service,

certification, certificate of compliance, and appendix, as provided by Appellate Rule

9.4(i).

_________________________ Rachel F. Klotzman Attorney for Cross-Appellants

14 APPENDIX