Charlie C. Williams v. Freddie N. Jackson

Opinion issued November 6, 2008

In The

Court of Appeals

For The

First District of Texas

____________

NO. 01-07-00850-CV

____________

CHARLIE C. WILLIAMS, Appellant

V.

FREDDIE N. JACKSON, Appellee

On Appeal from County Civil Court at Law No. 4

Harris County, Texas

Trial Court Cause No. 844301

MEMORANDUM OPINION ON REHEARING

Appellant, Charlie Williams, has filed a motion for rehearing of our opinion

issued on October 9, 2008. We deny rehearing, but withdraw our opinion and

judgment of October 9, 2008 and issue this opinion and a new judgment in their

stead.

This is suit to collect unpaid attorney's fees. Williams appeals from a

judgment that awarded appellee, Freddie N. Jackson, $8,446.76, plus interest and

costs, in accordance with jury findings that Williams did not comply with his

agreement to pay Jackson, that Williams's failure to pay was not excused by a

failure of Jackson to comply with a material obligation of the same agreement or

by duress by Jackson, and that $8,446.76 would fairly and reasonably compensate

Jackson for Williams's failure to pay. Williams's first issue challenges the

sufficiency of the evidence to support the jury's verdict. In four additional issues,

Williams contends that (1) Jackson created a conflict of interest by filing this

lawsuit and thereby breached the contract, (2) Jackson's alleged failure to bill

Williams monthly constituted an initial, material breach of the contract that

excused Williams's failure to pay, (3) Jackson is barred from recovering fees billed

for secretarial or paralegal work, and (4) Jackson's trial exhibits should have been

excluded based on Jackson's failure to respond to a discovery request. We affirm.

Background Williams and Jackson are both attorneys. This litigation derives from a

written agreement by which Williams retained Jackson to represent him in a real-property dispute that involved a cloud on property owned by Williams and

allegations that accused Williams of fraud and breach of fiduciary duty. On

August 13, 2004 the two men signed a fee agreement during that meeting.

Williams paid Jackson the $4,000 retainer required by the agreement, which

recited Jackson's rate for legal services as $200 per hour and required that

Williams pay all costs. The fee agreement required Jackson to bill "monthly" and

Williams to pay "promptly."

Jackson prepared a no-evidence motion for summary judgment in the real-property dispute; he prevailed on that motion, recovered a judgment in January

2005, and successfully defended the opponent's motion for new trial. After the

opponent appealed, Jackson attempted to check out the record to prepare an

appellee's brief and learned only then Williams had checked out the record and

intended to handle the appeal pro se. Jackson stopped working on the appeal after

Williams "fired" him.

This litigation ensued as a suit on a sworn account when Williams refused to

pay the outstanding balance due Jackson. Jackson and Williams were the only

witnesses who testified at trial, and the fee agreement and Jackson's billing

statements were the only evidentiary exhibits. Williams filed a motion for

judgment notwithstanding the verdict (JNOV) and also filed a motion for new trial,

which was overruled by operation of law.

Legal Sufficiency

In his first issue, Williams argues that the evidence is legally insufficient to

support the jury's response to question three of the charge because the record

conclusively establishes (1) that he was under duress when he signed the fee

agreement with Jackson and (2) that he was therefore not bound by that agreement.

Williams frames this issue as a challenge to the refusal of the trial court to grant

Williams's motion for JNOV. (1)

A. Standard of Review

A court may disregard a jury's verdict and render judgment notwithstanding

the verdict (JNOV) if no evidence supports the jury's findings, or if a directed

verdict would have been proper. Tiller v. McClure , 121 S.W.3d 709, 713 (Tex.

2003) (citing Brown v. Bank of Galveston, Nat'l Ass'n , 963 S.W.2d 511, 513 (Tex.

1998)); Williams v. Briscoe , 137 S.W.3d 120, 124 (Tex. App.--Houston [1st Dist.]

2004, no pet.). To determine whether a JNOV is appropriate, we apply the

standards that govern "no evidence," i.e., legal-sufficiency, review. See Wal-Mart

Stores, Inc. v. Miller , 102 S.W.3d 706, 709 (Tex. 2003); Williams , 137 S.W.3d at

124 ; see also City of Keller v. Wilson , 168 S.W.3d 802, 823 (Tex. 2005) ("[T]he

test for legal sufficiency should be the same for summary judgments, directed

verdicts, judgments notwithstanding the verdict, and appellate no-evidence

review.").

A legal sufficiency point must be sustained: (1) when there is a complete

absence of a vital fact; (2) when rules of law or evidence preclude according

weight to the only evidence offered to prove a vital fact; (3) when the evidence

offered to prove a vital fact is no more than a scintilla; or (4) when the evidence

conclusively establishes the opposite of the vital fact. See id. , 168 S.W.3d at 810 .

Under the legal-sufficiency standard, we must credit evidence that supports the

judgment if reasonable jurors could, and we must disregard contrary evidence

unless reasonable jurors could not. See City of Keller , 168 S.W.3d at 827 . If the

evidence falls within the zone of reasonable disagreement, we may not invade the

fact-finding role of the jurors, who alone determine the credibility of the witnesses,

the weight to give their testimony, and whether to accept or reject all or any part of

that testimony. See id. at 822 . Unless "there is no favorable evidence" to support

the challenged finding or "if contrary evidence renders supporting evidence

incompetent . . . or conclusively establishes the opposite" of the finding, we must

affirm. See id. at 810-11 .

B. Duress by Jackson not Shown

Williams challenges the jury's failure to find, in response to question 3 of

the jury charge, that duress by Jackson invalidated their fee agreement. Coercion

or taking an unjust advantage by one party to a contract may invalidate the contract

and render it unenforceable. See Brown v. Cain Chem., Inc. , 837 S.W.2d 239, 244

(Tex. App.--Houston [1st Dist.] 1992, writ denied). To establish economic duress

sufficient to invalidate a contract, three elements must be present: (1) a threat to do

something a party has no legal right to do, (2) an illegal exaction of some fraud or

deception, and (3) an imminent restraint that destroys the victim's free agency

without a present means for protection. Wright v. Sydow , 173 S.W.3d 534, 544

(Tex. App.--Houston [14th Dist.] 2004, pet. denied) (citing Dale v. Simon , 267

S.W. 467, 470 (Tex. Comm'n App. 1924)); Simpson v. MBank Dallas, N.A. , 724

S.W.2d 101 , 109 (Tex. App.--Dallas 1987, writ ref'd n.r.e.). Duress must derive

from acts or conduct of the party accused of duress; the emotions of the purported

victim do not suffice. See Brown , 837 S.W.2d at 244 . Because "[t]he compulsion

must be actual and imminent, and not merely feigned or imagined," the acts of the

defendant must be "such as to destroy free agency without present means of

protection." Sudan v. Sudan , 145 S.W.3d 280, 292 (Tex. App.--Houston [14th

Dist.] 2004) (quoting Ward v. Scarborough , 236 S.W. 434, 437 (Tex. 1922)), rev'd

on other grounds , 199 S.W.3d 291 (Tex. 2006).

As in Brown , there is no evidence in this case that Jackson coerced or

threatened Williams and, thus, no evidence of the first element that Williams had

to prove in order to prevail on the affirmative defense. See Brown , 837 S.W.3d at

244. Williams also failed to show that the alleged coercion by Jackson was

imminent and effectively removed his freedom not to sign the fee agreement that

Jackson proposed. See Sudan , 199 S.W.3d at 292 . Williams negated that element

by his own testimony that he signed the agreement "voluntarily." Though

Williams claims he was "distraught," and Jackson agreed that Williams was

distraught, the emotional state of the complaining party does not establish duress.

See Brown , 837 S.W.2d at 244 .

When viewed in the requisite light, which must favor the jury's verdict, the

evidence is legally insufficient to establish that Williams signed the fee agreement

only because of duress directed at him by Jackson. We overrule issue one.

B. Williams's Failure to Pay Jackson Not Excused

In issue three, Williams challenges the jury's failure to find, in response to

question two of the jury charge, that Jackson breached the fee agreement and thus

discharged Williams of his duty to pay Jackson. (2) According to Williams, the

record establishes that Jackson did not bill Williams monthly and therefore

establishes an initial breach that discharged Williams from any liability for failing

to pay Jackson as a matter of law.

Williams's arguments invoke the well-settled principle that a material breach

by one party to a contract can excuse the other party from any obligation to

perform. See Mustang Pipeline Co. v. Driver Pipeline Co. , 134 S.W.3d 195, 196

(Tex. 2004) ("It is a fundamental principle of contract law that when one party to a

contract commits a material breach of that contract, the other party is discharged or

excused from further performance."). We construe Williams's point of error as

challenging the legal sufficiency of the evidence to support the jury's failure to

find that a breach of the fee agreement by Jackson discharged Williams's

obligation to pay. See City of Keller , 168 S.W.3d at 810 (stating that evidence may

be legally insufficient when rules of law or evidence preclude according weight to

only evidence offered to prove vital fact).

Whether a party to a contract has breached the contract is generally a

question of law for the court, which determines as a matter of law what the contract

requires of the parties. See Meek v. Bishop Peterson & Sharp, P.C. , 919 S.W.2d

805, 808 (Tex. App.--Houston [14th Dist.] 1996, writ denied). When the terms of

a contract are clear and unambiguous, and the facts concerning breach or

performance are undisputed or conclusively established, the trial court decides, as a

matter of law, whether the facts show performance or breach. See id. Resolution

by the fact-finder is appropriate to resolve underlying factual disputes that pertain

to the alleged breach, but not the breach itself. See id.

Materiality of a breach--the question whether a party's breach of a contract

will render the contract unenforceable--generally presents a dispute for resolution

by the trier of fact. See Continental Dredging, Inc. v. De-Kaizered, Inc ., 120

S.W.3d 380, 394-95 (Tex. App.--Texarkana 2003, pet. denied) (citing Hudson v.

Wakefield , 645 S.W.2d 427, 430 (Tex. 1983)). Materiality of a breach and the

resulting unenforceability of the agreement breach can, however, present questions

for the court to resolve as a matter of law. See Mustang Pipeline Co. , 134 S.W.3d

at 198-200 (holding that material breach occurred as matter of law, given that

contract stated that "'all time limits . . . are of the essence"; further holding that

breach discharged Mustang from further performance).

In Mustang Pipeline , the supreme court relied on two provisions of the

Restatement of Contracts relating to materiality of a breach of contract. See id.

(citing Restatement (Second) of Contracts §§ 241-242 (1981)). Section 241 of the

Restatement lists five "circumstances" that are "significant in determining when a

failure to perform is material ," and section 242 lists two additional factors that are

"significant in determining whether a party's duties are discharged . . . due to the

other party's material breach." Id. (Emphases added.)

Pertinent to this case, in which Williams challenges the jury's failure to find

that he was discharged from his duty to pay Jackson, section 242 of the

Restatement (Second) of Contracts addresses the implications of time deadlines

stated in a contract for deciding whether alleged breach of a deadline by the party

seeking enforcement of a contract--here Jackson, who did not bill Williams

monthly--will discharge the other party to the contract--here, Williams--of any

duty to comply with the contract. See id. Pursuant to subsection (2) of section

242 of the Restatement, "the extent to which the agreement provides for

performance without delay" is a circumstance that affects materiality of lack of

timely performance. Mustang Pipeline Co. , 134 S.W.3d at 199 (citing Restatement

(Second) of Contracts § 242). More specifically, and pertinent to the controversy

here, section 242(2) further states that

[A] material failure to perform or to offer to perform on a stated day

does not of itself discharge the other party's remaining duties unless

the circumstances, including the language of the agreement, indicate

that performance or an offer to perform by that day is important.

Id. (Emphasis added.)

The record establishes that Jackson described his billing requirement at trial

as a monthly obligation, and the fee agreement required that he "bill [Williams]

promptly," which then required Williams to "pay . . . promptly." In contrast to the

Mustang Pipeline contract, the Jackson-Williams fee agreement does not impose a

duty of compliance on either a stated day or without delay. See Mustang Pipeline

Co. 134 S.W.3d at 199 . Likewise, nothing in the fee agreement suggests that the

requirement of "monthly" billing is of the essence, to the extent that it serves as a

predicate to compliance by Williams with his duty to pay Jackson. See id. The fee

agreement provides no basis, therefore, to support Williams's contention that

Jackson's lack of compliance, if any, with his duty of "monthly" billing discharged

Williams as a matter of law from any duty to comply with the fee agreement by

paying Jackson. See id. (citing Restatement (Second) of Contracts § 242(2)).

We overrule issue three.

Breach of Contract Defenses

In issues two and four, Williams challenges and raises defenses to

enforcement of the fee agreement against him, as follows: in issue two, he claims

that a conflict of interest barred Jackson from initiating this lawsuit; in issue four,

Williams argues that Jackson's work included billing entries for clerical or

secretarial duties, for which Williams contends he had no duty to compensate

Jackson, and, in addition, that Jackson's fees were unreasonable.

A trial court "shall submit the questions, instructions[,] and definitions" that

"are raised by the written pleadings and the evidence." Tex. R. Civ. P. 278.

Williams raised the issues addressed in his second and fourth issues as affirmative

defenses to Jackson's suit to enforce their fee agreement as a sworn account. To

the extent that the evidence raised those issues, Williams was entitled to a jury's

determination of any factual disputes regarding those issues. See id. We need not

address whether the evidence raised material issues of fact for the jury to decide

regarding these issues in this case, however, because Williams did not request that

the trial court include either questions or instructions regarding the issues as part of

the jury charge.

A party waives "all independent grounds of recovery or of defense " when

that party does not submit its claim of recovery or defense to the jury or request

that the jury determine any element of its claim or defense, unless the evidence

"conclusively establishe[s]" the claim or defense. See Tex. R. Civ. P. 279

(emphasis added). In this case, Williams did not propose that the jury determine

pertinent dates relating to Jackson's representation in support of his claim that a

conflict precluded this lawsuit. Likewise, Williams did not request that the trial

court instruct the jury that, in determining whether Williams failed to comply with

the fee agreement, in response to question one of the jury charge, the jury exclude

from its consideration any work that Williams challenged as "secretarial" and any

fees that Williams challenged as "unreasonable." The evidence does not

conclusively establish either defense, and Williams does not contend otherwise.

See id. Accordingly, Williams waived jury consideration of those issues. See id. (3)

We overrule issues two and four.

Admissibility of Jackson's Trial Exhibits

In his fifth issue, Williams argues that the trial court erred by admitting

Jackson's two trial exhibits into evidence because of pretrial discovery violations

by Jackson. Jackson's two exhibits are the fee agreement and his billing invoices.

Williams has waived any challenge to either exhibit because the record reflects that

his counsel confirmed on the record that both exhibits were to be admitted without

objection. See Tex. R. App. P. 33.1 (a); see also Tex. R. Evid. 103(a)(1) (stating

requirement of objection); In re C.O.S.S. , 988 S.W.2d 760, 765 (Tex. 1999)

(quoting Pirtle v. Gregory , 629 S.W.2d 919, 920 (Tex. 1982)).

We overrule issue five.

Conclusion

We affirm the judgment of the trial court.

Sherry Radack

Chief Justice

Panel consists of Chief Justice Radack and Justices Nuchia and Higley.

1.

To preserve a complaint for review on appeal, a party must present to the trial court

a timely request, motion, or objection that states the specific grounds for the ruling

requested and conforms to the requirements of the Rules of Procedure and Evidence.

See Wal-Mart Stores, Inc. v. McKenzie , 997 S.W.2d 278, 280 (Tex. 1999); Tex. R.

App. P. 33.1(a)(1)(A)-(B). The complaining party must also show that the trial court

ruled on the request, objection, or motion "either expressly or impliedly." Tex. R.

App. P. 33.1(a)(2)(A).

Williams filed his motion for JNOV on June 25, 2007, two days before the trial

court signed the judgment in favor of Jackson. As supplemented pursuant to this

Court's notice, the record on appeal shows that the trial court never ruled on

Williams's motion for JNOV.

In Chilkewitz v. Hyson , as here, the trial court signed a judgment in favor of the

prevailing party after the complaining party sought to set aside a jury's verdict by

filing a motion for JNOV. 22 S.W.3d 825, 828 (Tex. 1999). The supreme court

stated that the trial court had impliedly overruled the complaining party's motion for

JNOV by rendering judgment in favor of the prevailing party. Id. Under the

Chilkewitz reasoning, we may infer from the judgment rendered in favor of Jackson

in this case on June 27, 2007 that the trial court implicitly overruled Willams's motion

for JNOV. See id. We therefore hold that Williams preserved his challenge to the

trial court's failure to grant that motion and thus complied with rule 33.1(a)(2).

2. Question two of the jury charge asked whether Williams's "failure to comply with the

agreement [was] excused" and instructed the jurors that "Failure to comply by

[Williams] is excused by [Jackson's] previous failure to comply with a material

obligation of the same agreement." The jury answered "No." Williams's contentions

do not include a challenge to the jury's implied finding that any breach by Jackson

was not a material breach.

3. We note further that Williams did not raise any issue regarding Jackson's alleged

conflict of interest in the trial court in order that the trial court resolve that issue as a

matter of law.