W. Douglas Harris v. Gary McMichael

11/12/2021

IN THE COURT OF APPEALS OF TENNESSEE

AT KNOXVILLE

Assigned on Briefs July 1, 2021

W. DOUGLAS HARRIS v. GARY MCCMICHAEL ET AL.

Appeal from the Circuit Court for Knox County

No. 2-688-14 William T. Ailor, Judge

___________________________________

No. E2020-00817-COA-R3-CV

___________________________________

The trial court found that Appellant, a Florida attorney, breached his fiduciary duty to

Appellees, his clients, and disgorged Appellant of all fees paid by Appellees except for

$5,000. Appellant appeals. Discerning no error, we affirm.

Tenn. R. App. P. 3 Appeal as of Right;

Judgment of the Circuit Court Affirmed and Remanded

KENNY ARMSTRONG, J., delivered the opinion of the court, in which J. STEVEN STAFFORD,

P.J., W.S., joined. KRISTI M. DAVIS, J., not participating.

W. Douglas Harris, Panama City Beach, Florida, appellant, pro se.

James R. Moore, Knoxville, Tennessee, for the appellees, Gary McMichael and Lisa

McMichael.

OPINION

I. FACTUAL AND PROCEDURAL HISTORY

Appellees, Gary and Lisa McMichael, reside in Tennessee. The instant lawsuit

stems from representation provided to the McMichaels by Appellant W. Douglas Harris, a

Florida attorney. In connection with a commercial real estate development in Florida, the

McMichaels signed guarantees on certain loans for the Florida development, and then

allegedly defaulted on those loans. This precipitated a lawsuit against the McMichaels by

the bank and their former partners in the venture (“the Florida Litigation”). At the outset

of the Florida Litigation, the McMichaels were represented by attorney Gregory D. Smith.

Unfortunately, Mr. Smith fell ill prior to resolution of the Florida Litigation, and the

McMichaels engaged Mr. Harris as their attorney.

Giving rise to the instant appeal, on October 30, 2014, Mr. Harris filed a complaint

against the McMichaels in the Knox County Circuit Court (“trial court”), alleging a claim

for breach of contract, quantum meruit, and bad check. In the complaint, Mr. Harris

averred, inter alia, that: (1) he and Mr. McMichael entered into an attorney-client

agreement on June 2, 2014, which provided for a $30,000 retainer and hourly fees charged

at $350 per hour for attorney time and $100 per hour for legal assistant time; (2) the amount

owed on the June 2 agreement had been paid in full; (3) the parties entered into an amended

attorney-client representation agreement on August 25, 2015, which provided for the same

hourly fees as the prior agreement and for a $30,000 retainer which was “deemed earned

upon payment and non-refundable”; (4) Mr. Harris performed legal services pursuant to

the amended agreement and incurred hourly fees equal to or in excess of the $30,000

retainer; (5) on August 15, 2015, Mr. McMichael tendered a check to Mr. Harris for

$15,000 which was not honored when Mr. Harris presented it to the issuing bank; (6) the

amended agreement provided for a lien on Mr. McMichael’s real, personal, and intangible

property for any unpaid balance; and (7) Mr. McMichael failed to pay the $30,000 owed.

On December 8, 2014, the McMichaels filed an answer and counter-complaint, in

which they averred that: (1) they had paid Mr. Harris $41,775; (2) the fees Mr. Harris

sought were not justified; (3) they did not issue any bad checks; (4) Mr. Harris “failed to

properly document that he has earned the sums paid to him or that the amounts charged are

ethical or reasonable”; (5) Mr. Harris “used his position of trust, and advantage as an

attorney, to breach his original agreement with the [McMichaels] and improperly and

unethically demand two later fee agreements, which included additional ‘non-refundable’

fees, and an hourly rate increase of $100.00 and ‘liens’ on assets”; and (6) Mr. Harris

threatened to disclose the McMichaels’ confidential information if he was not paid. The

McMichaels requested that Mr. Harris be disgorged of the $41,775 they had paid.

The trial court heard the case on September 17, 2018. The evidence presented at

the hearing showed that the parties entered into an “Attorney-Client Representation

Agreement” (“the First Agreement”), with Mr. McMichael as the client. The First

Agreement states that Mr. Harris, will represent him “in regard to Charter Bank’s Motion

for Summary Judgment Case # 2010 CA 2267. . . .” It further states, “[T]his agreement

will allow Attorney to make a limited appearance just for the pending Motion for Summary

Judgment scheduled for March 6, 2014,” and “the Attorney may provide additional legal

services to the Client on which the Attorney and client may subsequently agree.” With

respect to fees, the First Agreement provided: “The current standard hourly rate for

attorneys is $250.00 and $100.00 for legal assistants. Time billed shall be in increments

of one quarter of an hour.” The First Agreement also required a $5,000 retainer, “deemed

earned upon payment and non-refundable.”

Pursuant to the First Agreement, on March 6, 2014, Mr. Harris appeared at the

summary judgment hearing in the Florida Litigation. At the hearing, the judge recused

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himself, and the hearing was continued. On March 12, 2014, Mr. Harris sent Mr.

McMichael an email that stated:

Please find attached my legal invoice. There is no money due. I did not

charge you for any of my expenses in traveling back to Okaloosa County or

for drafting the motion to disqualify Judge Brown. Thank you for the

opportunity to be of assistance to you in this matter. Good luck in the future.

The email included a block bill (which Mr. Harris calls a “skinny bill”), showing “20 hours

@$250.00 = $5000.00” for “reviewing the Motion for summary judgment filed by Charter

Bank, researching available defenses, writing a memorandum in opposition to MSJ[,]

[t]raveling from Palm Beach County to Okaloosa County and attending the SJ hearing and

preparing a motion for disqualification of Judge Brown.” It also stated, “Under the terms

of our agreement this will comp[l]ete our agreement.” The statement did not provide

quarter-hour itemization of Mr. Harris’ work as contemplated in the agreements, see

further discussion infra.

The hearing on the motion for summary judgment in the Florida Litigation was

rescheduled to May 1, 2014. Mr. Harris informed Mr. McMichael that he would not appear

at that hearing without further payment. So, Mr. McMichael paid Mr. Harris $1,500 on

April 30, 2014, and Mr. Harris represented the McMichaels at the May 1 hearing.

Concerning the April 30, 2014 payment, the Statement of Evidence in the instant case

provides:

During the trial of this matter, [Mr. Harris] called Defendant, Gary

McMichael, to the stand to testify. [Mr. McMichael] testified that on April

30, 2014, [Mr. Harris] demanded another payment of $1,500.00 or he would

not appear at a Motion for Summary Judgment hearing, and which amount

was paid by [Mr. McMichael]’s sister. [Mr. and Mrs. McMichael] never

signed any other fee agreement or received a detailed billing statement for

any of this money paid to [Mr. Harris] for work to be performed for this

amount. There was another hearing on the Foreclosure suit scheduled for

May 1, 2014, which [Mr. Harris] admits was scheduled without his

participation.

Additionally, [Mr. McMichael] testified that [Mr. Harris] demanded

an additional $5,000.00 payment, which was supported by emails dated May

14 and 15, wherein [Mr. Harris] asked [Mr. McMichael] if he had made

arrangements for the $5,000.00 payment and [Mr. McMichael] replied that

he (was) considering options such as using an “AMX (sic) card” or paying

by check as stated in emails dated May 15 and 16, 2014. [Mr. McMichael]

further states, “I am relying on you for the long haul here to help me and my

wife.” [Mr. McMichael] sent a payment of $5,000.00 via Pay Pal to [Mr.

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Harris] on May 16, 2014 at 22:27 (10:27 p.m.) which incurred a service

charge of $275.00 to [the McMichaels].

(Parentheticals in original.) On May 27, 2014, Mr. Harris sent a letter to Mr. McMichael.

In relevant part, the letter states:

When we met in late February, you were facing a hearing date of

March 6, 2014, and needed to make sure that no money judgment would be

entered that might affect your ability to obtain funding for your project in

downtown Ft. Walton Beach. You stated that you needed 60 days to

complete that closing. That date would have been May 1st, 2014.

With that in mind, I prepared for and attended the hearing on March

6, 2014, and instead of arguing against Charter Bank’s Motion for Summary

Judgment, an opportunity presented itself to seek to have Judge Brown

recuse himself and I drafted and filed a motion, . . . [which] was granted, and

I had achieved your desired result. [1]

***

Without my participation in the scheduling, another hearing was set

on May 1st to hear Charter Bank’s Motion for Summary Judgment. You

requested that I attend, and I prepared for that hearing and attended in front

of Judge Flowers in Crestview. After the hearing, Judge Flowers requested

proposed orders, and I have reviewed Charter Bank’s proposed order and

have drafted and delivered to the judge my proposed order. Both Charter

Bank’s and my proposed orders do not attach any money judgment to you or

Lisa, thereby your desire not to have a money judgment against you whereby

you can close on your new deal was accomplished.

As far as the mediation on the 19th of May, you requested that I attend

with you. . . . After discussing the case with [opposing counsel], he stated

that without your discovery, now due by the 31st of May, he would not be

able to negotiate with you to reach a settlement and he thought that your

attending would be a waste of time and money. . . .

***

I agreed to assist you in your effort to give you more time to close

your downtown deal, and I have accomplished that task and far more. I am

1

Mr. McMichael disputes that recusal of the judge in the Florida Litigation was his “desired result.”

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willing to discuss with you continued representation that would be based on

a value[-]based billing with lost opportunity factored in. . . .

Attached to the May 27 letter was a “Statement for Professional Fees” for the period of

March 7, 2014 through May 27, 2014. The statement showed 33.5 hours of work at $250

per hour for a total of $8,375. The statement concludes with “Thank you for the

opportunity to represent you in this matter. Under the terms of our agreement this will

conclude our agreement. Good Luck with the remaining issues in the case.” Mr.

McMichael responded by email, wherein he expressed his dissatisfaction with the level of

communication from Mr. Harris.

The parties subsequently discussed Mr. Harris’ further representation, and on June

4, 2014, Mr. Harris emailed Mr. McMichael, stating, “Attached please find fee agreement.

Once we have it executed and I have the retainer, we can talk and I will do a detailed

schedule and plan of attack.”2 Attached to the email was an “Amended Agreement” (“the

Second Agreement”). The Second Agreement bore Mr. Harris’ signature, was dated June

14, 2014, and provided for Mr. Harris “to represent [Mr. McMichael] in regard to Case #

2010 CA 2267, pending in Okaloosa County, Florida, and . . . the exclusive right to take

all legal steps to represent the client’s interests in those matters.” It set attorney fees at

$350 per hour, $100 more than charged under the First Agreement; provided for billing in

one-quarter-hour increments; and required a $30,000 retainer fee “deemed earned upon

payment and nonrefundable.” On receipt of the Second Agreement, Mr. McMichael stated

in email to Mr. Harris, “We need to talk today. Please call me.” Mr. Harris replied by

email, “Read my email. Once you have signed the agreement and sent the $30,000, we can

talk.” The parties executed the Second Agreement on June 10, and the McMichaels paid

Mr. Harris the $30,000 in three $10,000 installments on June 10, June 18, and June 24,

2014.

On August 25, 2014, a few days before a scheduled motion hearing in the Florida

Litigation, the parties executed yet another agreement, titled “Amendment to Attorney-

Client Representation Agreement Dated in June 2014,” (the “Third Agreement”). In

relevant part, the Third Agreement provided:

Client shall pay Attorney $30,000 for his services under this amended

agreement. Client shall deliver $15,000 of said fee to Attorney upon

execution of this contract or August 25th 2014, whichever is later, the

remaining $15,000 shall be due by September 15, 2014 and will be deemed

earned upon payment and nonrefundable. It is anticipated that said $30,000

will cover Fees and expenses up to and including the deficiency hearing on

October 7, 2014.

2

According to the Statement of Evidence, “[t]he uncontroverted testimony was that [Mr. Harris]

failed to follow through with his promise and no such schedule or plan of attack was ever provided.”

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The Third Agreement provided for attorney fees of $350 per hour. On August 29, 2014,

Mr. Harris appeared as counsel for the McMichaels at a hearing on several motions in the

Florida Litigation. Mr. Harris requested a continuance, and stated to the court multiple

times that he was not prepared. Correspondence from Mr. Harris to Mr. McMichael

suggests that Mr. Harris continued representing the McMichaels through September 2014.

On September 30, 2014, Mr. McMichael emailed Mr. Harris to inform him that the

McMichaels were retaining other counsel, and stated, “I will get with you to resolve the

bill and payment.” On October 21, 2014, Mr. Harris withdrew as the McMichaels’ counsel

of record in the Florida Litigation.

It is undisputed that the McMichaels paid Mr. Harris a total of $41,500 and that Mr.

Harris demanded an additional $30,000 under the Third Agreement. Prior to the hearing

in the instant case, Mr. Harris tendered a statement alleging that the McMichaels owed a

balance of $40,027.50, comprised of 50.2 hours of work by Mr. Harris and 33.3 hours of

work by a paralegal from August 7, 2014, though October 24, 2014.

By order of June 21, 2019, the trial court held that Mr. Harris did not prove his bad-

check claim. The trial court further held that Mr. Harris “procured agreements subsequent

to the initial agreement through coercion,” which rendered the subsequent agreements void.

Finally, the trial court held that the doctrine of quantum meruit was inapplicable because

the parties had express contracts. The trial court disgorged Mr. Harris of all fees and

removed the liens on the McMichaels’ property. In a subsequent order of January 7, 2020,

the trial court granted the McMichaels discretionary costs of $1,537.60 for court reporter

fees and $3,720 for expert witness fees.

On July 19, 2019, Mr. Harris filed a Motion to Alter or Amend the Judgment,

wherein he asserted, inter alia, that the trial court “contradicted itself by finding that the

fee agreements were voidable, and yet [q]uantum [m]eruit is not available in this case

because there were fee agreements.” In an amended order filed on January 3, 2020, the

trial court held, “This court is of the opinion that [the McMichaels] were coerced as a result

of the unethical conduct of [Mr. Harris][,] but, because there was consideration for the

services to be rendered, the agreements are not void.” On January 7, 2020, the trial court

entered an order on Mr. Harris’ motion to alter or amend, wherein it found that

[w]hen considering all the evidence and weighing it accordingly, the court is

of the opinion that [Mr. Harris] has failed to present any new evidence or law

that the court should consider amending its ruling. However, the court is of

the opinion that [Mr. Harris] did attend some hearings, was somewhat

prepared for some of them, did correspond with opposing counsel and the

[McMichaels], and should be compensated for some of his time. As the court

stated, it is impossible for the court to make a clear determination as to the

amount that the [Mr. Harris] should receive. As a result, the court is of the

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opinion that [Mr. Harris] should receive the initial five thousand ($5,000.00)

retainer for his services and that [his] Motion to Alter or Amend should be

Denied in all other respects.

In response to the trial court’s orders of January 3 and 7, Mr. Harris filed a second motion

to alter or amend judgment on February 2, 2020, wherein he argued, inter alia, that “the

trial court’s rationale for disgorgement of fees is no longer sustainable after its finding that

the fee agreements were valid contracts.” By order of May 13, 2020, the trial court denied

the motion. Mr. Harris filed his notice of appeal on June 11, 2020.

II. ISSUES

Mr. Harris presents the following issues for review:

1. Does this Court have jurisdiction over this appeal, since [Appellant] filed

a Second Motion to Alter or Amend Judgment based upon the trial court

entering an Amended Judgment and the second Motion to Alter or Amend

raised new issues related to the Amendment?

2. Did the trial court err in finding that [Appellant] breached his fiduciary

duty to [Appellees] by requiring them to sign a vague initial Limited

Appearance fee agreement and not giving them sufficient notice of his

intention to terminate his representation?

3. Did the trial court err in finding that [Appellant] breached his fiduciary

duty to [Appellees] by not compiling his billing records

contemporaneously?

4. Did the trial court err in finding that [Appellant] breached his fiduciary

duty by not sending out billing statements on a regular basis?

5. Did the trial court abuse its discretion by initially finding that there were

no valid fee agreements and no quantum meruit available, and then

amending its judgment to find that the fee agreements were valid but that

Appellant was only entitled to $5,000.00 for his legal work?

6. Did the trial court err in holding that [Appellant] [v]iolated his [e]thical

[d]uty in increasing his hourly rate and asking for a substantial retainer in

the June 4, 2014 Attorney[-]Client Representation Agreement?

7. Did the trial court abuse its discretion by ordering disgorgement of

attorney fees by [Appellant] where disgorgement is not an appropriate

remedy under the facts and circumstances of this case?

8. Did the trial court err in ordering that [Appellant] disgorge attorney fees

to both Gary and Lisa McMichael where [Appellant’s] agreement was

only with Gary McMichael and no evidence was presented at trial that

Lisa McMichael directly paid any attorney fees?

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III. STANDARD OF REVIEW

We review the trial court’s findings of fact de novo on the record of the trial court,

accompanied by a presumption of the correctness of these findings, unless the evidence

preponderates otherwise. Tenn. R. App. P. 13(d); Kelly v. Kelly, 445 S.W.3d 685, 691–92

(Tenn. 2014). Contract interpretation is a question of law that we review de novo on the

record, with no presumption of correctness. Guiliano v. Cleo, Inc., 995 S.W.2d 88, 95

(Tenn. 1999). The decision to award equitable relief is generally within the discretion of

the trial court. Morrow v. Jones, 165 S.W.3d 254, 258 (Tenn. Ct. App. 2004) (citing Early

v. Street, 241 S.W.2d 531, 536 (Tenn. 1951)). We review a trial court’s discretionary

decisions under the “abuse of discretion” standard of review. Lee Med., Inc. v. Beecher,

312 S.W.3d 515, 524 (Tenn. 2010).

IV. ANALYSIS

Before turning to the substantive issues, we first note that the appellants are

responsible for providing this Court with a record that is sufficient for review of their

issues. Williams v. Williams, 286 S.W.3d 290, 297 (Tenn. Ct. App. 2008) (citing Tenn. R.

App. P. 24; McDonald v. Onoh, 772 S.W.2d 913, 914 (Tenn. Ct. App. 1989)). Here, the

appellate record contains no transcript of the September 17, 2018 hearing. When a

transcript is not available, the Rules of Appellate Procedure require that appellants prepare

a statement of the evidence that “convey[s] a fair, accurate and complete account of what

transpired with respect to those issues that are the bases of appeal.” Tenn. R. App. P. 24(c).

Mr. Harris submitted a statement of the evidence to the trial court; however, by order of

October 28, 2020, the trial court refused to adopt Mr. Harris’ statement because it “is full

of statements that are neither accurate, fair, nor complete, and include statements that were

not evidence admitted in this case.” Rather, the trial court adopted the factual findings in

its January 3, 2020 amended order as the Statement of Evidence. Hall v. Hall, 772 S.W.2d

432, 435 (citing Tenn. R. App. P. 24(c), (e) (“Any question as to the accuracy of a . . .

statement of the evidence is to be submitted to and settled by the [t]rial [c]ourt, whose

determination is conclusive absent extraordinary circumstances.”)). In his appellate brief,

Mr. Harris makes factual assertions that are not corroborated in the record.3 Because this

Court “may consider [only] those facts established by the evidence in the trial court and set

forth in the record,” Tenn. R. App. P. 13, we will not consider extraneous factual assertions

that are not contained in the record or in the trial court’s January 3, 2020 amended order.

Furthermore, facts that are not ascertainable through a review of the Statement of Evidence

in combination with the remainder of the record are presumed to favor Appellee. See

Tanner v. Whiteco, L.P., 337 S.W.3d 792, 796 (Tenn. Ct. App. 2010) (“[I]n the absence

of a transcript or statement of the evidence, we must conclusively presume that every fact

3

For example, Mr. Harris states that his expert witness “testified that she had reviewed Appellant’s

billing statements and had not seen anything in the statements that appeared to reflect excessive or

unreasonable billing.” This was not part of her testimony as described by the Statement of Evidence.

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admissible under the pleadings was found or should have been found favorably to the

appellee.” (quoting In re Rockwell, 673 S.W.2d 512, 516 (Tenn. Ct. App.1983); Wilson v.

Hafley, 226 S.W.2d 308, 311 (Tenn. 1949); Kyritsis v. Vieron, 382 S.W.2d 553 (Tenn. Ct.

App. 1964))); see also Williams, 286 S.W.3d at 297 (“[W]e must assume that the record,

had it been preserved, would have contained sufficient evidence to support the trial court’s

factual findings.” (quoting Sherrod v. Wix, 849 S.W.2d 780, 783 (Tenn. Ct. App. 1993))).

With this in mind, we turn to Mr. Harris’ arguments on appeal.

A. Waiver of issues

In addition to the inclusion of facts not contained in the record, Mr. Harris’ brief

also fails to comply with certain briefing requirements as set out in the Rules of Appellate

Procedure and the Rules of the Court of Appeals. Rule 27 of the Tennessee Rules of

Appellate Procedure provides:

The brief of the appellant shall contain . . . [a]n argument . . . setting forth . . .

the contentions of the appellant with respect to the issues presented, and the

reasons therefor, including the reasons why the contentions require appellate

relief, with citations to the authorities and appropriate references to the

record (which may be quoted verbatim) relied on[.]

Tenn. R. App. P. 27(a)(7)(A). Furthermore, the Rules of the Court of Appeals require that

“[w]ritten argument in regard to each issue on appeal shall contain . . . [a] statement of each

determinative fact relied upon with citation to the record where evidence of each such fact

may be found,” Tenn. Ct. App. R. 6(a)(4), and “[n]o assertion of fact will be considered on

appeal unless the argument contains a reference to the page or pages of the record where

evidence of such fact is recorded,” Tenn. Ct. App. R. 6(b); e.g., Flowers v. Bd. of Prof’l

Responsibility, 314 S.W.3d 882, 899 (Tenn. 2010) (“Parties are required to provide citation

and support identifying where in the record evidence can be found” as “judges are not

like pigs, hunting for truffles buried in the record.” (quotation omitted)). We have “held

on several occasions that where a party in its brief on appeal has . . . set forth what he or

she alleged to be facts without any citation to the record, this court is not under a duty to

minutely search the record to verify these unsupported allegations.” Long v. Long, 957

S.W.2d 825, 828 (Tenn. Ct. App. 1997).

Here, Mr. Harris’ appellate brief contains only sporadic citations to the record.

Indeed, there is a full page and a half in Mr. Harris’ “Statement of the Facts” that contains

no citations to the record. More significant, however, is Mr. Harris’ failure to cite authority,

which is required by Rule 27. In his discussion of issues 2, 4, 5, and 6, Mr. Harris cites no

legal authority whatsoever. It is well settled that failure to cite authority for propositions

in arguments submitted on appeal constitutes waiver of the issue. E.g., Cleveland Custom

Stone v. Acuity Mut. Ins. Co., No. E2013-02132-COA-R3-CV, 2014 WL 2586374, at *8

(Tenn. Ct. App. June 10, 2014); SecurAmerica Bus. Credit v. Schledwitz, No. W2012-

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02605-COA-R3-CV, 2014 WL 1266121, at *14 (Tenn. Ct. App. Mar. 28, 2014); McGarity

v. Jerrolds, 429 S.W.3d 562, 566 n.1 (Tenn. Ct. App. 2013); Messer Griesheim Indus.,

Inc. v. Cryotech of Kingsport, Inc., 131 S.W.3d 457, 474 (Tenn. Ct. App. 2003); Lett v.

Collis Foods, Inc., 60 S.W.3d 95, 105 (Tenn. Ct. App. 2001); see also Forbess v. Forbess,

370 S.W.3d 347, 355 (Tenn. Ct. App. 2011) (“[A] party’s failure to cite authority for its

arguments or to argue the issues in the body of its brief constitute a waiver on appeal.”);

Newcomb v. Kohler Co., 222 S.W.3d 368, 401 (Tenn. Ct. App. 2006) (failure “to cite to

any authority or to construct an argument regarding [a] position on appeal” constitutes a

waiver of the issue); Bean v. Bean, 40 S.W.3d 52, 55 (Tenn. Ct. App. 2000) (“[F]ailure to

comply with the Rules of Appellate Procedure and the rules of this Court waives the issues

for review.”). Therefore, those issues for which Mr. Harris has cited no legal authority,

i.e., issues 2, 4, 5, and 6, are deemed to be waived. We now turn to address the remaining

issues.

B. Subject-matter jurisdiction

We ordered the parties to brief the issue of whether this Court has jurisdiction to

consider this appeal considering the timing of the filing of appeal and the requirements of

the Tennessee Rules of Civil Procedure and the Tennessee Rules of Appellate Procedure.

In order to be timely, a notice of appeal “shall be filed with the clerk of the appellate

court within 30 days after the date of entry of the judgment appealed from.” Tenn. R. App.

P. 4(a). “The thirty-day time limit for filing a notice of appeal is mandatory and

jurisdictional in civil cases.” Albert v. Frye, 145 S.W.3d 526, 528 (Tenn. 2004). Rule 59

of the Tennessee Rules of Civil Procedure, which allows for the filing of a motion to alter

or amend, provides: “Motions to reconsider [Rule 59] motions are not authorized and will

not operate to extend the time for appellate proceedings.” Tenn. R. Civ. P. 59.01.

The trial court entered the final order on June 21, 2019. Mr. Harris then timely filed

a motion to alter or amend. The trial court sua sponte amended its judgment on January 3,

2020. The trial court then entered its order on Mr. Harris’ motion to alter or amend on

January 7, 2020. On February 5, 2020, Mr. Harris filed a second motion to alter or amend,

which the trial court denied by order entered May 13, 2020. Mr. Harris then filed a notice

of appeal on June 11, 2020.

Mr. Harris’ second Rule 59 motion was based on the trial court’s findings in its

amended order and on the trial court’s order on Mr. Harris’ first Rule 59 motion.

Specifically, Mr. Harris argued in his second motion that “[t]he trial court’s rational for

disgorgement of fees is no longer sustainable after its finding that the fee agreements were

valid contracts.” This Court has held that when a party files a second Rule 59 motion in

response to an amended judgment, the time period for filing the notice of appeal is tolled

if the second motion addresses issues raised by the amended decision and is not simply a

motion to reconsider previously asserted grounds. Legens v. Lecornu, No. W2013-01800-

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COA-R3-CV, 2014 WL 2922358, at *13–14 (Tenn. Ct. App. June 26, 2014); Davis v.

Wells Fargo Home Mortgage, No. W2016-02278-COA-R3-CV, 2018 WL 1560077, at *3

(Tenn. Ct. App. Mar. 29, 2018). We conclude that Mr. Harris’ second Rule 59 motion was

not simply a motion to reconsider previously asserted grounds because it addresses issues

raised by the amended order; therefore, Mr. Harris’ second Rule 59 motion operated to toll

the period for filing his notice of appeal. Thus, Mr. Harris’ June 11, 2020 notice of appeal

was effective to confer jurisdiction this Court with jurisdiction over the appeal.

C. Breach of fiduciary duty

Mr. Harris asserts that the trial court erred in finding that he breached his fiduciary

duty to the McMichaels “by not compiling his billing records contemporaneously.”

Specifically, he argues:

The trial court erred in finding that it was necessary for [Mr. Harris] [to]

compile his billing contemporaneously. Florida law does not so require.

Florida law allows reconstruction of the time billed through notes taken

contemporaneously, which is what [Mr. Harris] did.

Mr. Harris’ argument mischaracterizes the trial court’s findings and ignores the fact that

Mr. Harris did not comply with the requirements outlined in the fee agreements. The trial

court’s amended order notes that,

[a]lthough Florida imposes no absolute requirement of contemporaneous

records, Mr. Harris’ fee agreement states that the [McMichaels] would

receive a billing statement setting forth time expended in quarter hour

increments. This did not happen.

Furthermore, the trial court held that Mr. Harris breached the duty to “be competent,

prompt, and diligent . . . [and to] maintain communication with a client concerning the

representation.” R. Regulating Fla. Bar, Preamble. The Florida Bar recommends that:

Billing should be done promptly after the work for which the bill is sent is

completed, and should be detailed. The client is entitled to know what items

are covered by the bill and to have current billing so that the cost of the

litigation can be overseen as it progresses.

***

When billing a client, the lawyer should detail the legal services performed

in the matter and the expenses incurred for each legal service. The “narrative”

statements assist the client in understanding the reason for the amount of the

bill.

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The Fla. Bar, Florida Civil Practice Before Trial, ch.3 (13th ed. 2020), available at

Westlaw CIVPRAC FL-CLE 1-1.

Contrary to Mr. Harris’ assertion, the trial court did not hold that Mr. Harris

breached his fiduciary duty due to his failure to abide by any Florida rule that required

contemporaneous billing; rather, the court held “that [Mr. Harris’] failure to comply with

the provisions of his fee agreement was a breach of his duty under the rules of professional

conduct.” (Emphasis added). We agree. All three fee agreements provide, “Time billed

shall be in increments of one quarter of an hour.” The Florida Supreme Court has stated

that “although there is no fixed construction of the word ‘shall,’ it is normally meant to be

mandatory in nature.” Allstate Ins. Co. v. Orthopedic Specialists, 212 So. 3d 973, 978

(Fla. 2017) (quoting S.R. v. State, 346 So.2d 1018, 1019 (Fla. 1977)) (brackets omitted).4

Nothing in the parties’ agreements indicates that this Court should construe the word

“shall” contrary to its normal usage. In his brief, Mr. Harris argues that he “did provide

billing in quarter hour increments.[,] [a]lthough such billing was not contemporaneous[.]”

It is true that, in addition to several “skinny bills,” the record contains three detailed billing

statements that bill in quarter-hour increments: the first covers the period of February 26,

2014 through March 6, 2014; the second covers the period of March 7, 2014 through May

27, 2014; and the third covers the period of June 4, 2014 through August 7, 2014. At the

September 2018 hearing, Mr. Harris testified that he: (1) prepared these statements just

prior to the hearing; (2) had not submitted them when he sent the “skinny bills” to the

McMichaels; and (3) submitted the detailed bills to the McMichaels shortly before the

hearing. This belated and ad hoc compliance with the billing provisions of the parties’

agreements simply does not reflect the promptness, diligence or appropriate

communication required of a Florida attorney, or any other attorney. We conclude that the

trial court did not err in holding that Mr. Harris’ failure to comply with the terms of his fee

agreement constitute a breach of the fiduciary duty he owed to the McMichaels.5

4

The trial court applied Florida’s substantive law to this dispute. This decision was correct because

there is no choice of law provision in the parties’ agreements, the contracts were executed in Florida, and

the place of performance was Florida. See Williams v. Smith, 465 S.W.3d 150, 153 (Tenn. Ct. App. 2014)

(“Tennessee follows the rule of lex loci contractus[,] [which] provides that a contract is presumed to be

governed by the law of the jurisdiction in which it was executed absent a contrary intent.”); Edgington v.

Edgington, 162 S.W.2d 1082, 1086 (Tenn. 1942) (“[W]here there is nothing to show that the parties had in

view, in respect to the execution of the contract, any other law than the law of the place of performance,

that law must determine the rights of the parties.”). We apply Tennessee’s procedural law, which includes

the standard of review. See Boswell v. RFD-TV the Theater, LLC, 498 S.W.3d 550, 556–7 (Tenn. Ct.

App. 2016). Neither party raised a choice of law issue on appeal.

5

The trial court also concluded that Mr. Harris breached his fiduciary duty in other respects: for

example, the duty to “provide competent representation to a client[,] . . . [which] requires the legal

knowledge, skill, thoroughness, and preparation reasonably necessary for the representation.” R.

Regulating Fla. Bar 4-1.1. Mr. Harris does not raise any issue concerning these additional findings, and

we will not address them on appeal.

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D. Disgorgement of attorney fees

Mr. Harris asserts that the trial court abused its discretion by ordering disgorgement

of attorney fees. In its Amended Order, the trial court ordered that Mr. Harris “is disgorged

of all fee charges” to the McMichaels. The trial court reconsidered this remedy in its Order

on Motion to Alter or Amend, filed January 7, 2020, wherein it held that although “the fee

agreements are vague and ambiguous as to the work to be performed by the attorney for

the fees charged and that [Mr. Harris] failed to meet his obligations as an attorney,” he was

entitled to some of his fees because he “did attend some hearings, was somewhat prepared

for some of them, did correspond with opposing counsel and the [McMichaels], and should

be compensated for some of his time.” However, the trial court gave “very little weight”

to Mr. Harris’ testimony with respect to “whether the amounts [he] charged accurately

reflect the work performed, 6 [and] . . . . [t]here is no way for the court to make such a

finding based on the weight of the evidence.” Therefore, the trial allowed Mr. Harris to

retain five thousand dollars but disgorged him of all other payments received from the

McMichaels.

Disgorgement is an equitable remedy. See King Mountain Condo. Ass’n v.

Gundlach, 425 So. 2d 569, 572 (Fla. Dist. Ct. App. 1982). As such, our review is limited

to whether the trial court abused its discretion in granting or denying disgorgement. See

Morrow, 165 S.W.3d at 258. The abuse of discretion standard “reflects an awareness that

the decision being reviewed involved a choice among several acceptable alternatives.” Lee

Med., Inc., 312 S.W.3d at 524. Thus, there is a lower likelihood of reversal of discretionary

decisions on appeal. Id. Indeed, the Tennessee Supreme Court has directed that we “allow

discretionary decisions to stand even though reasonable judicial minds can differ

concerning their soundness.” Tatham v. Bridgestone Americas Holding, Inc., 473 S.W.3d

734, 743 (Tenn. 2015). A trial court abuses its discretion only when it “applies an incorrect

legal standard, or reaches a decision which is against logic or reasoning that causes an

injustice to the party complaining.” Eldridge v. Eldridge, 42 S.W.3d 82, 85 (Tenn. 2001)

(quotation marks and brackets omitted). With these principles in mind, we turn to the issue.

The trial court considered the testimony of two expert witnesses. Mr. Harris called

Florida attorney Nancy Lynn Hartjen.7 The trial court found her credible but did not find

6

“The trial court’s determinations regarding witness credibility are entitled to great weight on

appeal and shall not be disturbed absent clear and convincing evidence to the contrary.” Duke v. Duke,

563 S.W.3d 885, 894 (Tenn. Ct. App. 2018) (citing Morrison v. Allen, 338 S.W.3d 417, 426 (Tenn. 2011)).

This includes such determinations as are “implicit in its holdings.” Williams v. City of Burns, 465 S.W.3d

96, 120 (Tenn. 2015). We have identified no evidence—and certainly not clear and convincing evidence—

in the instant case that the trial court’s credibility determinations were in error.

7

Her surname also appears as “Harchin” in the record. For purposes of this appeal, we will use

“Hartjen,” with apologies if this is the incorrect spelling.

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her testimony of much aid due to her limited experience. Notably, however, the Statement

of Evidence reveals that Ms. Hartjen testified that “the retainer agreements were vague,

and [that] she could see how they could be confusing as to when the representation ended.”

Ms. Hartjen further testified that “the statements that [Mr. Harris] gave to her conflicted

with other statements.” The McMichaels called University of Tennessee College of Law

Professor Paula Schaefer, whom the trial court qualified as an expert in the area of legal

ethics. Professor Schaefer testified that: (1) an attorney has the ethical obligation to “make

sure that their fee agreements are fair, fully explained, and easily understandable”; (2)

“liens must be fair and explained to the client, and there is a presumption that they are

voidable”; and (3) “[n]on-refundable retainers still must be earned and are therefore

problematic.” Professor Schaefer opined that Mr. Harris breached his fiduciary duty to his

clients. The trial court found “this witness to be the most credible of all of the witnesses

as she had no financial interest in the outcome of case as well as [due to] her credential[s].”

The trial court also based its disgorgement decision on the following factual

findings:

[Mr. Harris] failed to follow the most basic of terms of his own agreement

by failing to keep a record of his time and provide that record to his clients

to account for the time he spent in his representation of them as was set out

in the retainer agreement that he authored. He did not explain what he meant

in the Agreement by “limited appearance.” His fee agreements are vague

according to the testimony of his own witness, the [McMicheals’] expert

witness . . . , and in the opinion of this Court, thus creating confusion between

himself and his clients. He further failed to put his clients’ needs before his

own by demanding additional payments close to deadlines or due dates or

close to the time of a court appearance. Additionally, he took advantage of

his clients’ situation by changing the fee agreement, demanding more money,

and never justifying the work he had performed even though he promised

that he would supply [the] documents [that] he [had] produced and a “plan

of attack.” [Mr. Harris] was in a superior position which put his clients in an

extremely difficult position considering all the surrounding

circumstances. . . .

[Mr. Harris] waited for deadlines to be close, at which time he

demanded additional funds and promised, but never fully delivered, the

representation that he convinced [the McMichaels] that [he] could perform.

This created a situation for [the McMichaels] that put them in an

unmanageable position after already having been put in a problematic

position by [their previous counsel].

The trial court found credible the McMichaels’ testimony that they were pressured into

signing the second and third agreements due to Mr. Harris’ unwillingness to speak to

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them about their case until they signed. Accordingly, the court held that the McMichaels

“were coerced as a result of the unethical conduct of [Mr. Harris].” The trial court further

concluded that Mr. Harris did not comply with the duties imposed by the Rules of

Professional Conduct to represent clients with the “thoroughness and preparation

reasonably necessary for the representation” and to “make reasonable efforts to ensure that

the client . . . possesses information reasonably adequate to make an informed decision.”

See R. Regulating Fla. Bar, Rule 4-1.1 and Preamble, Comments. Based on the available

evidence, we conclude that the trial court’s findings are supported by the evidence and are

not otherwise contrary to logic or reasoning. See Eldridge, 42 S.W.3d at 85.

Under Florida law, when a fiduciary commits a breach of his or her duty, “the

beneficiary can obtain redress either at law or in equity for the harm done[,] [or]. . . . is

entitled to obtain the benefits derived by the fiduciary through the breach of duty,” i.e.,

disgorgement. King Mountain Condo. Ass’n, 425 So. 2d at 571 (citing Restatement of

Restitution § 138 cmt a (Am. Law Inst. 1937); Restatement (Second) of Torts § 874 cmt b

(Am. Law Inst. 1979)). Although the trial court recognized that Mr. Harris completed some

work on behalf of the McMichaels, it ultimately concluded that

there was no competent evidence of what [Mr. Harris] did in this case based

on all of the circumstances surrounding this matter: specifically, that [Mr.

Harris] failed or refused to comply with his own contract and supply a

breakdown of his “skinny bill” until some 4 years after suit was brought in

this matter.

The trial court’s equitable solution was to allow Mr. Harris $5,000, the amount

contemplated in the First Agreement, and to disgorge him of the remainder of the fees paid

him. Under the specific facts of this case, the trial court’s decision constitutes an acceptable

resolution, see Lee Med., Inc., 312 S.W.3d at 524; as such, we conclude that the trial court

did not abuse its discretion or otherwise err in allowing Mr. Harris to retain only $5,000.00.

E. Lisa McMichael

Finally, Mr. Harris asserts that “the trial court err[ed] in ordering that [he] disgorge

attorney fees to both Gary and Lisa McMichael where [his] agreement was only with Gary

McMichael and no evidence was presented at trial that Lisa McMichael directly paid any

attorney fees[.]” Mr. Harris argues that because Mrs. McMichael “didn’t pay any attorney

fees, or even contract to pay attorney fees to [Mr. Harris] there are no demonstrable

attorney fees to ‘disgorge’ to her.” The McMichaels maintain that in view of Mr. Harris’

joint representation of them, the trial court did not err in ordering the return of the fees to

them jointly.

Our review of the record did not yield any evidence that Mr. Harris raised this issue

at trial. It is well-settled that issues not raised before the trial court may not be raised for

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the first time on appeal. Baugh v. Novak, 340 S.W.3d 372, 381 (Tenn. 2011); see also

Tenn. Ct. App. R. 6(a)(2). However, even allowing, arguendo, that the trial court erred in

entering judgment for the McMichaels jointly, having concluded, supra, that the trial court

did not err in disgorging Mr. Harris of fees over $5,000, its decision to award those fees to

both appellees was, at most, harmless error; as such, the joint award does not constitute

reversible error.

IV. CONCLUSION

For the foregoing reasons, we affirm the judgment of the trial court. The case is

remanded to the trial court for further proceedings as may be necessary and are consistent

with this opinion. Costs of this appeal are assessed to the Appellant, W. Douglas Harris,

for which execution may issue if necessary.

s/ Kenny Armstrong

KENNY ARMSTRONG, JUDGE

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