ACCEPTED 03-13-00124-CV 5240055 THIRD COURT OF APPEALS AUSTIN, TEXAS 5/11/2015 8:10:34 PM JEFFREY D. KYLE CLERK NO. 03-13-00124-CV
IN THE FILED IN 3rd COURT OF APPEALS COURT OF APPEALS AUSTIN, TEXAS THIRD DISTRICT OF TEXAS 5/11/2015 8:10:34 PM JEFFREY D. KYLE Clerk
WILLIAM B. GAMMON, Appellant,
V.
HENRY I. HANK HODES AND DIAGNOSTIC EXPERTS OF AUSTIN, INC., Appellees.
APPEAL FROM THE COUNTY COURT AT LAW NO. 2 OF TRAVIS COUNTY, TEXAS Trial Court Cause No. C-1-CV-10-007188
APPELLANT’S MOTION FOR RECONSIDERATION EN BANC
William B. Gammon Texas Bar No. 07611280 GAMMON LAW OFFICE, PLLC 1201 Spyglass Drive Suite 100 Austin, TX 78746 Telephone: 512-472-8909 Fax: 888-545-4279
ATTORNEY FOR WILLIAM B. GAMMON
ORAL ARGUMENT REQUESTED NO. 03-13-00124-CV
IN THE COURT OF APPEALS THIRD DISTRICT OF TEXAS
HENRY I. HANK HODES AND DIAGNOSTIC EXPERTS OF AUSTIN, INC., Appellees.
APPEAL FROM THE COUNTY COURT AT LAW NO. 2 OF TRAVIS COUNTY, TEXAS Trial Court Cause No. C-1-CV-10-007188
William B. Gammon Texas Bar No. 07611280 GAMMON LAW OFFICE, PLLC 1201 Spyglass Drive Suite 100 Austin, TX 78746 Telephone: 512-472-8909 Fax: 888-545-4279
ORAL ARGUMENT REQUESTED APPELLANT’S MOTION FOR RECONSIDERATION CAUSE NO.: 03-13-00124-CV PAGE 1 IDENTITY OF PARTIES AND COUNSEL
The following is a complete list of all parties, as well as the names and addresses of all counsel:
PARTIES COUNSEL
Appellant: Counsel for Appellant: William B. Gammon William B. Gammon State Bar No. 07611280 GAMMON LAW OFFICE, PLLC 1201 Spyglass Drive, Suite 100 Austin, Texas 78746 Telephone: 512-472-8909 Facsimile: 888-545-4279 billgammon@gammonlawoffice.com
Appellees: Counsel for Appellees: Hank I. Hodes and Timothy J. Herman Diagnostic Experts of Austin, Inc. State Bar No. 09513700 HOWRY BREEN & HERMAN, L.L.P. 1900 Pearl Street Austin, Texas 78705-5408 Telephone: 512-474-7300 Facsimile: 512-474-8557 therman@howrybreen.com
APPELLANT’S MOTION FOR RECONSIDERATION CAUSE NO.: 03-13-00124-CV PAGE 2 TABLE OF CONTENTS
IDENTITY OF PARTIES AND COUNSEL................................................................2 TABLE OF CONTENTS ...............................................................................................3 TABLE OF AUTHORITIES .........................................................................................4 BACKGROUND .............................................................................................................6 SUMMARY .....................................................................................................................7 ARGUMENT & AUTHORITIES .................................................................................8 CERTIFICATE OF SERVICE ...................................................................................17 CERTIFICATE OF COMPLIANCE .........................................................................17 APPENDIX....................................................................................................................18
APPELLANT’S MOTION FOR RECONSIDERATION CAUSE NO.: 03-13-00124-CV PAGE 3 TABLE OF AUTHORITIES
CASES:
Brookshire Bros. v. Smith, 176 S.W.3d 30 (Tex. App. Houston 1st Dist. 2005)…...9
Burrow v. Arce, 997 S.W.2d 229 (Tex. 1999)………………………….…………15
Cherne Indus., Inc. v. Magallanes,763 S.W.2d 768 (Tex. 1989)………….……...10
City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005)……………….….………..16
Epps v. Fowler, 351 S.W.3d 862 (Tex. 2011)…………………………………….12
IKB Indus. (Nigeria) Ltd. v. Pro-Line Corp., 938 S.W.2d 440 (Tex.1997)………..9
Intercontinental Group P'ship v. KB Home Lone Star L.P., 295 S.W.3d 650 (Tex. 2009)……………………………………………………...11
Larry F. Smith, Inc. v. The Weber Co., 110 S.W.3d 611 (Tex. App. – Dallas 2003, pet. denied)………………………………………..13, 14
Liberty Mut. Fire Ins. V. Laca, 243 S.W.3d 791, 2007 Tex. App. LEXIS 9510 (Tex. App. El Paso 2007)…………………………………………...14
Operation Rescue-Nat’l v. Planned Parenthood, 937 S.W.2d 60 (Tex. App. – Houston [14th Dist.] aff’d as modified. 975 S.W.2d 546 (Tex. 1998)…………………………………………………….....9
Ray v. McFarland, 97 S.W.3d 728 (Tex. 2003)…………………………………..13
Regal Finance Co., Ltd. v. Tex Star Motors, Inc., 355 S.W.3d 595 (Tex. 2010)……………………………………………………...16
Sixth RMA Partners, L.P. v. Sibley, 111 S.W.3d 46 (Tex. 2003)…………………14
Spir Star AG v. Kimich, 310 S.W.3d 868 (Tex. 2010)……………………………14
APPELLANT’S MOTION FOR RECONSIDERATION CAUSE NO.: 03-13-00124-CV PAGE 4 STATUTES AND RULES: TEX. R. APP. P. 19.1………………………………………………………………...8
TEX. R. APP. P. 41.2(C)……………………………………………………….......8,9
TEX. R. APP. P. 49.1…………………………………………………………...... 8, 9
TEX. R. APP. P. 49.7………………………………………………………………...8
TEX. R. CIV. P. 49.3………………………………………………………………...9
TEX. R. CIV. P. 49.5…………………………………………………………..........9
TEX. R. CIV. P. 296……………………………………………………...……...9, 10
TEX. R. CIV. P. 297………………………………………………………….…….10
TEX. R. CIV. P. 301………………………………………………………….…….13
SECONDARY SOURCE:
6 McDonald & Carlson, TEXAS CIVIL PRACTICE 2d § 18:3 (1998)……………….10
APPELLANT’S MOTION FOR RECONSIDERATION CAUSE NO.: 03-13-00124-CV PAGE 5 TO THE HONORABLE THIRD DISTRICT COURT OF APPEALS:
COMES NOW Appellant, William B. Gammon, hereinafter (“Gammon”),
and files this Appellant’s Brief and shows as follows:
BACKGROUND
1. Gammon filed suit against Henry I. “Hank” Hodes (Hodes) and Diagnostic
Experts of Austin, Inc. (DEA) seeking payment for legal work performed by
Gammon on behalf of Hodes and his air-conditioning repair company, DEA,
spanning fifteen years.
2. The case was first tried to a jury in Travis County Court at Law No. 1 on
October 10, 2011. The trial resulted in a verdict for Gammon of $143,691.60 plus
attorneys’ fees. Appellees’ motion for new trial was granted. [Exhibit A, Final
Judgment from First Trial]. The case was tried to a second jury on October 15,
2012, in Travis County Court at Law No. 2. [Exhibit B, Final Judgment Nunc Pro
Tunc (CR 773-775)]
3. The second jury returned a finding that Gammon prevailed on his quantum
meruit claim and valued it at $30,000.00. The jury also found that Gammon did not
comply with his fiduciary duty but found no damages as a result.
4. On October 29, 2012, Defendants’ filed a Motion for Judgment [Exhibit E,
(CR 739-744)(CR 764-770)].
APPELLANT’S MOTION FOR RECONSIDERATION CAUSE NO.: 03-13-00124-CV PAGE 6 5. The trial court reversed the jury verdict. The Court found unspecified
fiduciary breaches of a “clear and serious nature” and entered judgment on
November 20, 2012 that Gammon take nothing by quantum meruit and that he
further forfeit $27,379.19 in fees already received.
6. On December 4, 2012, Gammon filed Plaintiff’s Request For Findings of
Fact and Conclusions of Law. (CR 776-778).
7. On December 31, 2012, Gammon filed Plaintiff’s Notice of Past Due
Findings of Fact and Conclusions of Law. (CR 788-789).
8. To date, the trial court has not made findings of fact or conclusions of law.
9. A three–member panel of this Court affirmed the trial court’s judgment on
April 24, 2015. [Exhibit C, Memorandum Opinion].
SUMMARY
10. The panel’s decision is based upon the notion that the Court is not required
to submit findings of facts and conclusions of law even when the court rendered
judgment non obstante veredicto (JNOV). The jury did not award damages to
Hodes. There was no finding of any improper benefit to Gammon. There was no
finding by the jury or the Court that forfeiture of a portion of fees previously paid
to Gammon is necessary to satisfy the public’s interest in protecting the attorney-
client relationship.
APPELLANT’S MOTION FOR RECONSIDERATION CAUSE NO.: 03-13-00124-CV PAGE 7 11. However, in contradiction to the jury’s findings, the trial court determined
that Gammon committed “clear and serious breaches of his fiduciary duty”
damaging Hodes and ordered that Gammon forfeit $27,379.19. Gammon is entitled
to findings of fact and conclusions of law based on the court’s JNOV. Gammon
properly requested factual findings but they were never provided. (CR 776-778;
788-789). This is harmful error as it effectively deprives Gammon of his right to
appeal the judgment. Gammon is entitled to know what “clear and serious” acts or
omissions amounted to a breach of his fiduciary duty to Hodes. He is further
entitled to know how the Court calculated the amount of the forfeiture.
12. The panel erred in finding that the Court is not required to submit findings of
fact and conclusions of law where the court reversed the jury’s verdict and
rendered JNOV.
ARGUMENT & AUTHORITIES
I. The Court should grant En Banc Reconsideration
A motion for rehearing differs from and serves a different purpose than a motion for en banc reconsideration. For example, stricter time limits govern the motion for rehearing than govern the motion for en banc reconsideration. Compare TEX. R. APP. P. 49.1 (must file motion for rehearing within 15 days after court-of-appeals judgment is rendered) with TEX. R. APP. P. 49.7 (may file motion for en banc reconsideration while court of appeals has plenary jurisdiction); see also TEX. R. APP. P. 19.1(plenary power of court of appeals expires 60 days after judgment if no timely filed motion to extend time or motion for rehearing is then pending);TEX. R. APP. P. 41.2(c) (stating that en banc reconsideration is disfavored and listing standards); TEX. R. APP. P. 49.7 (reconsideration en APPELLANT’S MOTION FOR RECONSIDERATION CAUSE NO.: 03-13-00124-CV PAGE 8 banc suspends finality of panel's judgment or order). Whether seeking rehearing, pursuant to rule 49.1, or further rehearing, pursuant to rule 49.5, a party's sole purpose is to convince the panel of justices who considered the case to change the decision because it was erroneous--for whatever reason. See TEX. R. APP. P. 49.1, [41] 49.5; see also TEX. R. APP. P. 49.3 (authorizing majority of justices who participated in the case to grant rehearing). In contrast, en banc reconsideration is limited to situations in which (1) en banc reconsideration is necessary to secure or maintain uniformity of the Court's decisions or (2) extraordinary circumstances require en banc consideration. See TEX. R. APP. P. 41.2(c).
Brookshire Bros. v. Smith, 176 S.W.3d 30, 40-41 (Tex. App. Houston 1st Dist. 2005) (internal footnote omitted.)
13. The panel erred. The panel’s error requires en banc reconsideration to secure
or maintain uniformity of the Court’s decisions, as the panel’s opinion conflicts
with established Texas case law. See Operation Rescue-Nat’l v. Planned
Parenthood, 937 S.W.2d 60, 82 (Tex. App. – Houston [14th Dist.] aff’d as
modified. 975 S.W.2d 546 (Tex. 1998) (holding that a findings of fact and
conclusions of law is proper when a portion of the cause of action is decided by a
jury and another portion is decided by the trial court.)
II. The trial court committed reversible error by failing to issue findings of fact and conclusions of law as timely requested.
14. Parties to a lawsuit have a right to a written findings of fact and conclusions
of law after a trial judge rules on the merits. Tex. R. Civ. P. 296; IKB Indus.
(Nigeria) Ltd. v. Pro-Line Corp., 938 S.W.2d 440, 442 (Tex.1997). Therefore, if a
party properly requests them, the trial court must make and file them. IKB Indus., APPELLANT’S MOTION FOR RECONSIDERATION CAUSE NO.: 03-13-00124-CV PAGE 9 938 S.W.2d at 442. Without the lower court’s findings of fact and conclusions of
law, it becomes difficult for the appellate court to determine what legal theory
forms the basis of the trial court’s judgment. The purpose of requesting written
findings of fact and conclusions of law from the Court is to "narrow the bases of
the judgment to only a portion of [the multiple] claims and defenses, thereby
reducing the number of contentions that the appellant must raise on appeal." 6
McDonald & Carlson, TEXAS CIVIL PRACTICE 2d § 18:3 (1998).
15. On December 4, 2012, Gammon timely filed his Request for Findings of
Fact and Conclusions of Law pursuant to Rule 296 of the Texas Rules of Civil
Procedure. TEX. R. CIV. P. 296 (“In any case tried in the district or county court
without a jury, any party may request the court to state in writing its findings of
fact and conclusions of law.”). The trial court failed to file its findings of fact and
conclusions of law within twenty (20) days after Gammon’s timely request was
filed. On December 31, 2012, within thirty (30) days of when Gammon’s original
request was filed, Gammon subsequently filed his Notice of Past-Due Findings,
thus extending the trial court’s deadline by an additional forty (40) days from the
original request. TEX. R. CIV. P. 297. Ultimately, the trial court failed to file any
findings of facts and conclusions of law.
16. The trial court’s failure to file its mandatory findings of fact and conclusions
of law has resulted in great harm to Gammon. See, Cherne Indus., Inc. v.
APPELLANT’S MOTION FOR RECONSIDERATION CAUSE NO.: 03-13-00124-CV PAGE 10 Magallanes, 763 S.W.2d 768, 772 (Tex. 1989) (holding a trial court’s duty to file
findings of facts and conclusions of law is mandatory when all requests have been
properly made).
17. The crux of this lawsuit is the contractual obligations between the parties. In
Gammon’s suit against Hodes, Hodes countersued Gammon with a series of
accusations that Gammon breached his fiduciary duty to Hodes. The litigation that
followed resulted in two drastically different final judgments. In the latter, the jury,
in relevant part, made the following findings: First, the jury found that Gammon
prevailed in his claim for quantum meruit in that he had performed compensable
work for which he had not been paid. Furthermore, the jury awarded Gammon
thirty thousand dollars ($30,000.00) as the reasonable value for the compensable
work in Gammon’s quantum meruit claim. Second, the jury found that Gammon
did not comply with his fiduciary duty with regard to Hodes and DEA. However,
the jury found that Hodes and DEA were entitled to recover zero dollars ($0.00)
compensation for Gammon’s alleged “breach.”
18. The jury found that Hodes was not damaged, and therefore was not the
prevailing party in the lawsuit. See, Intercontinental Group P'ship v. KB Home
Lone Star L.P., 295 S.W.3d 650, 655 (Tex. 2009) (holding that a plaintiff who
obtained a jury finding that the defendant breached its contract but was awarded no
APPELLANT’S MOTION FOR RECONSIDERATION CAUSE NO.: 03-13-00124-CV PAGE 11 damages was not a prevailing party) (emphasis added). See also, Epps v. Fowler,
351 S.W.3d 862 (Tex. 2011) (following KB Home).
19. Nonetheless, without any explanation or reasoning that can be derived from
the record, the trial court decided to issue a contradictory “Final Judgment” on
November 19, 2012, followed by a Judgment Nunc Pro Tunc issued the following
day. [Exhibit D; Exhibit B]. The trial court’s judgments contained the following
changes from the jury verdict: First, the trial court found that “it appears to the
court that the verdict of the jury was for the Defendants and against the Plaintiff”
and therefore, “judgment should be rendered on the verdict in favor of Henry I.
‘Hank’ Hodes and Diagnostic Experts of Austin, Inc. and against William
Gammon.” Second, “[t]he Court also finds that breaches of fiduciary duty
committed by Gammon constitute clear and serious breaches of duty by [an]
attorney” (emphasis added). The trial court ruled that Gammon’s breach warranted
forfeiture of fees and prevented Gammon from being entitled to any equitable
relief, including his $30,000.00 recovery contemplated by the jury’s declaration as
to the value of Gammon’s uncompensated work. Instead, the Court ruled that
Gammon forfeit $27,279.19.1 This forfeiture amount nonetheless would leave
Gammon a $2,720.81 judgment for damages against Hodes. The judgment,
however, states that Gammon is denied all equitable relief.
1This number appears out of thin air as no evidence or testimony of any kind appears in the record to support it. Such an award is inherently arbitrary and capricious and must be reversed. APPELLANT’S MOTION FOR RECONSIDERATION CAUSE NO.: 03-13-00124-CV PAGE 12 20. The Court’s ruling disregarded the jury’s findings and granted Hodes and
DEA a judgment non obstante veredicto pursuant to TEX. R. CIV. P. 301. See,
Exhibit E; See Ray v. McFarland, 97 S.W.3d 728, 729 (Tex. 2003)(“ A trial
court may disregard a jury's verdict and render judgment n.o.v. if there is no
evidence to support the jury's findings or if a directed verdict would have been
proper.”)
21. Neither the final judgment nor the trial record specify the basis for the trial
court’s ruling, nor does the judgment refer to any statements made at trial.
Furthermore, the trial court did not even provide a reason in open court when it
orally announced its decision.
22. “When there are two or more possible grounds of recovery or defense, as in
this case, an appellant is forced to guess what the trial court found unless the trial
court's findings are provided to him.”2 See also, Larry F. Smith, Inc. v. The Weber
Co., 110 S.W.3d 611, 614 (Tex. App. – Dallas 2003, pet. denied). Absent a
findings of fact and conclusions of law, Gammon must guess on what basis the
trial court reversed the jury verdict and ruled against him, including what acts or
omissions were deemed by the Court as a breach of his fiduciary duty to Hodes.
23. Since Gammon is obligated to guess, the Court’s refusal to submit findings
of fact and conclusions of law constitutes harm to Gammon. Liberty Mut. Fire Ins. 2Hodes claimed at least seven separate breaches of fiduciary duty. Neither the trial court nor the jury specified which, if any, of these accusations they found credible. See, Exhibit E, Defendants’ Memorandum in Support of Motion for Judgment on the Verdict (CR 764-770). APPELLANT’S MOTION FOR RECONSIDERATION CAUSE NO.: 03-13-00124-CV PAGE 13 V. Laca, 243 S.W.3d 791, 2007 Tex. App. LEXIS 9510 (Tex. App. El Paso 2007);
See also, Larry F. Smith, Inc., 110 S.W.3d at 614 (holding that the general rule is
that an appellant has been harmed if, under the circumstances of the case, he has to
guess at the reason the trial court ruled against him).
24. Generally, when no findings of fact or conclusions of law are filed, the trial
court's judgment implies all findings of fact necessary to support it. Spir Star AG v.
Kimich, 310 S.W.3d 868, 871–72 (Tex.2010). The implied findings are not
conclusive, and an appellant may challenge the findings by raising sufficiency of
the evidence issues. Sixth RMA Partners, L.P. v. Sibley, 111 S.W.3d 46, 52
(Tex.2003). Gammon is being “forced to attack all the possible grounds supporting
the judgment instead of the grounds actually found by the court. Id. at 615-616.
This is especially true given that Gammon has brought several causes of action
against Hodes and Hodes has brought several causes of action against Gammon in
their counterclaims.
25. The panel determined that the lower court did not err in its refusal to provide
findings of fact and conclusions of law, because “[i]n a fee forfeiture case, once
any relevant, disputed facts are resolved by the jury, the trial court exercises its
discretion to determine. . . whether fee forfeiture should be imposed.” Given the
lower court’s discretion, the panel concluded that it was not required to provide
findings of fact and conclusions of law. However, the panel failed to acknowledge
APPELLANT’S MOTION FOR RECONSIDERATION CAUSE NO.: 03-13-00124-CV PAGE 14 that the lower court took the case away from the jury and entered a JNOV verdict.
Therefore, this in fact is not a verdict by jury as the panel concluded in its decision.
26. The Texas Supreme Court has held that “fee forfeiture” can never be
appropriate in the absence of a “clear and serious” violation of the attorney’s
duties. Burrow v. Arce, 997 S.W.2d 229, 245-46 (Tex. 1999). The trial court in this
case found that a “clear and serious” breach of Gammon’s fiduciary duty occurred,
but offered no rationalization as to how that conclusion was derived. In reaching its
decision, the lower court was required to resolve underlying fact questions. The
entire Charge of the Court does not contain any instruction or guidance for the jury
to determine whether Gammon’s breach of fiduciary to Hodes raised to the level of
“clear and serious.” Underlying factual disputes must be resolved by a trier of fact
before such legal pronouncements can be made. Id. The Court in Burrow further
provided guidance on what issues are necessary for the trier of fact to determine
whether a fiduciary duty breach raises to the level of both “clear and serious.”: 1)
whether, and if so, to what extent, a client was injured by the breach of duty; 2)
whether, and if so, when, the wrongful conduct happened, and; 3) whether the
attorney acted negligently, recklessly or intentionally in breaching the duty. Id.
27. The trial court provided no explanation as to how it reached its
determination of “clear and serious” and failed to address the foregoing factual
determinations made by the Court in order to reach its final judgment. The trial
APPELLANT’S MOTION FOR RECONSIDERATION CAUSE NO.: 03-13-00124-CV PAGE 15 court reached this conclusion with no evidence of any kind to show that this legal
standard had been met. "For evidence to conclusively establish the opposite of a
vital fact, the evidence must be the type that could not lead reasonable people to
different conclusions." Regal Finance Co., Ltd. v. Tex Star Motors, Inc., 355
S.W.3d 595, 603 (Tex. 2010) (citing City of Keller, 168 S.W.3d at 815-16).
Findings of fact and conclusions of law is proper to specify the basis for the trial
court’s ruling of “clear and serious” breach, as well as the arbitrary $27,279.19
award. Absent said findings of fact and conclusions of law is harmful error.
PRAYER
WHEREFORE, PREMISES CONSIDERED, Appellant, William B. Gammon
respectfully requests that the Court reverse the judgment of the County Court in all
things and remand for retrial consistent with its opinion.
Respectfully submitted,
/s/ William B. Gammon William B. Gammon State Bar No. 07611280 GAMMON LAW OFFICE PLLC 1201 Spyglass Drive, Suite 100 Austin, Texas 78746 Telephone: 512-472-8909 Facsimile: 888-545-4279 billgammon@gammonlawoffice.com
Attorney for Appellant
APPELLANT’S MOTION FOR RECONSIDERATION CAUSE NO.: 03-13-00124-CV PAGE 16 CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the foregoing Appellant’s Brief was served upon counsel of record for Appellees on this the 11th day of May, 2015, via this Court’s online filing system, to:
Timothy J. Herman State Bar No. 09513700 HOWRY BREEN & HERMAN, L.L.P. 1900 Pearl Street Austin, Texas 78705-5408 Telephone: 512-474-7300 Facsimile: 512-474-8557 therman@howrybreen.com Attorney for Appellees
/s/ William B. Gammon William B. Gammon
CERTIFICATE OF COMPLIANCE
Pursuant to Texas Rule of Appellate Procedure 9.4(i), I hereby certify that this document contains 2,708 words.
APPELLANT’S MOTION FOR RECONSIDERATION CAUSE NO.: 03-13-00124-CV PAGE 17