Albert Lee Giddens v. Jarrett Huffman--Appeal from Co Civil Ct at Law No 1 of Harris County

Affirmed and Memorandum Opinion filed August 2, 2005

Affirmed and Memorandum Opinion filed August 2, 2005.

In The

Fourteenth Court of Appeals

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NO. 14-04-00709-CV

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ALBERT LEE GIDDENS, Appellant

V.

JARRETT HUFFMAN, Appellee

On Appeal from the County Civil Court at Law Number One

Harris County, Texas

Trial Court Cause No. 792,126

M E M O R A N D U M O P I N I O N

Albert Lee Giddens appeals from a judgment entered against him in favor of Jarrett Huffman, awarding damages of $19,000. Giddens raises five issues in which he asserts that the trial court erred in finding: that he was sued in the correct capacity; that the Statute of Frauds did not apply; that the evidence was sufficient to prove a standard referral fee in Pasadena, TX; and that $38,000 was the referral amount to be divided among the parties. We affirm.

Background

In 1998, Giddens and Huffman entered into an agreement whereby Huffman would begin to refer his personal injury cases to Giddens in exchange for a referral fee computed as a percentage of attorney=s fees recovered from the cases. Huffman testified that the agreed-upon percentage of referral fees was 50%. In July of 2000, Huffman referred LaWanda Barnhill to Giddens. Giddens testified that at the time of the referral, he was unaware that Huffman had referred the case. In June 2002, the Barnhill case settled for $115,000 and Giddens received 45%, or $51,750, in attorney fees. Giddens did not pay Huffman a referral fee at the time the case settled.

Some time later, Huffman discovered through Barnhill that her case had settled. Huffman and John Morgan, a mutual acquaintance of Giddens and Huffman, then contacted Giddens and questioned him about the settlement of the Barnhill case. During the course of the conversation, Giddens allowed that Huffman had Asome money coming on [the Barnhill case].@ Giddens did not state the exact amount that Huffman had Acoming@ during the conversation. After further pressure from Huffman, Giddens eventually forwarded him a check in the amount of $5,175, or 10% of the total fee he received from the Barnhill case. Huffman did not cash the check; instead, he responded with a demand letter, seeking 50% of the amount of attorney=s fees Giddens had received. Huffman waited 30 days from the date of the demand letter and then filed suit for $25,875, or 50% of the attorney=s fees Giddens received from the Barnhill settlement.

Following a bench trial, the court found that Huffman had sued Giddens in the proper capacity; that the Statute of Frauds did not apply; that 50% is the standard referral fee in Pasadena, Texas Aas between the parties@; and that the base amount of the settlement was $38,000. On that basis, the trial court granted judgment against Giddens in the amount of $19,000.

Capacity

In his first issue, Giddens argues that the trial court erred in finding that he was sued in the proper capacity as an individual; Giddens claims that he should have been sued as Albert Lee Giddens, P.C. This contention is essentially an attack on the legal sufficiency of the trial court=s finding that Giddens was sued in the proper capacity. We review challenges to the sufficiency of the evidence under the usual standards of review. See Volkswagon of Am. v. Ramirez, 159 S.W.3d 897, 903 (Tex. 2004); IKON Office Solutions, Inc. v. Eifert, 125 S.W.3d 113, 123B24 (Tex. App.CHouston [14th Dist.] 2003, pet. denied).

As part of Giddens=s original answer to Huffman=s claims, Giddens filed a verified denial pursuant to Tex. R. Civ. P. 93(2) alleging that he had not been sued in the proper capacity. Giddens asserts that this pleading automatically created a defect of parties that was fatal because it went uncorrected by Huffman. As support for the proposition that a failure to respond to a Rule 93(2) plea creates a defect of parties, Giddens cites Gunn v. Harris Methodist Affiliated Hosp., 887 S.W.2d 248, 249 (Tex. App.CFort Worth 1994, writ denied). Gunn simply does not stand for such a proposition.

In Gunn, the defendant hospital filed a sworn denial claiming that it was not liable in the capacity in which it was sued and, separately, that there was a fatal defect of the parties. Id. Contemporaneously, the hospital filed a summary judgment motion supported by summary judgment evidence asserting that it did not own or operate the premises on which the plaintiff was injured. Id. The plaintiff failed to timely respond to the summary judgment motion. The defendant hospital did not prevail on the basis of merely filing a Rule 93(2) pleading to which the plaintiff did not respond. Rather, the hospital moved for summary judgment and established as a matter of law, by competent and undisputed evidence, lack of capacity. The trial court granted summary judgment in favor of the hospital. Id. The court of appeals affirmed. Id at 251. There is no case in Texas which stands for the proposition that a failure to respond to a verified denial of capacity results in a fatal defect to a party=s claims; instead, Rule 93(2) is merely a procedural hurdle a party must satisfy in order to properly challenge capacity. See Pledger v. Schoellkopf, 762 S.W.2d 145, 146 (Tex. 1988) (per curiam).

In addition to filing a verified pleading, the party asserting that it has not been sued in the proper capacity must prove that fact. See Seth v. Meyer, 730 S.W.2d 884, 885 (Tex. App.BForth Worth 1987, no writ) (holding that defendant had failed to meet his burden in proving that he was not personally liable). Once the party properly raises the issue by satisfying Rule 93(2) and proving the facts asserted, like any objection, the party must obtain a ruling from the judge on the issue to preserve error on appeal. See Tex. R. App. P. 33.1.

At trial, both Giddens and Huffman testified as to the capacity issue. Huffman testified that he had no knowledge of the P.C.=s existence prior to Giddens=s having filed the verified denial; that he had never seen Giddens=s letterhead that used the P.C. name; and that the check sent to Huffman did not indicate that Giddens was part of a P.C. or an L.L.P. Huffman also testified that, in response to discovery requests, Giddens identified ASmyrl & Giddens, L.L.P.@ and AAlbert Lee Giddens, P.C.@ as potential parties rather than correct parties to the lawsuit.

We find that the above evidence is sufficient to support the trial court=s finding on capacity. Appellant=s first issue is overruled.

Statute of Frauds

In his second issue, Giddens argues that the referral fee agreement with Huffman was subject to the Statute of Frauds and therefore, was required to be in writing. Giddens references evidence that the referral fee agreement between him and Huffman took place in 1998 and the referral that is the subject of this dispute occurred in 2001. Giddens urges that because this period of time was longer than one year, the agreement was required to be in writing.

Giddens=s argument misconstrues the Statute of Frauds. That statute requires that an agreement that cannot be performed in one year must be in writing; otherwise, it is unenforceable. Tex. Bus. & Com. Code Ann. ' 26.01. Courts have interpreted the statute so that agreements which cannot be performed within one year from the date of the agreement must be in writing. Niday v. Niday, 643 S.W.2d 919, 920 (Tex. 1982) (per curiam). The actual period of performance is irrelevant. In Niday, the Texas Supreme Court made clear that the issue is not the actual period of performance; rather, the crucial inquiry is whether the agreement can possibly be performed within a year determined at the time the agreement is made. Id. The court further stated the general rule that if the parties do not fix the time of performance, and the agreement itself does not indicate that it cannot be performed in one year, then the contract does not violate the statute. Id. But, if the period of performance is not fixed, and the evidence conclusively proves that the agreement cannot be performed in one year, then the Statute of Frauds will apply. Id.

There was no evidence that the parties in this case fixed the time of performance or that the agreement itself indicated that it could not be performed in one year. There was no evidence that the agreement could not have been performed in one year. As such, the agreement was not subject to the Statute of Frauds. Issue number two is overruled.

Standard Referral Fee

In his third and fourth issues, Giddens raises arguments regarding standard referral fees in Pasadena, Texas. In his third issue, Giddens argues that expert testimony regarding standard referral fees should have been barred by Tex. R. Civ. P. 193.6. In his fourth issue, Giddens challenges the legal and factual sufficiency of the evidence to support the court=s Afinding a standard referral fee.@

At the conclusion of the trial, the trial court found that A50 percent is the standard fee in Pasadena, Texas, for referral fee as between the parties.@ (emphasis added). We interpret this to be a finding of what the agreement was between the parties, and not as a finding of the standard referral fee in Pasadena, Texas. Because the complained-of expert testified only as to the standard referral fees in Pasadena and did not offer evidence as to what the parties actually agreed, it is immaterial whether the trial court erred in admitting the testimony.

Even if we interpret the court=s pronouncement as a finding of the standard fee in Pasadena, Texas, as opposed to a finding of the fee as between the parties, that finding is immaterial to the judgment and should be disregarded. Standard referral fees are only of import in this case as extrinsic evidence of what the intended agreement was between the parties with respect to the referral fee amount. See Commercial Union Ins. Co. v. Martinez, 635 S.W.2d 611, 614 (Tex. App.CDallas 1982, writ ref=d n.r.e.) (discussing importance of custom as extrinsic evidence). Extrinsic evidence of the terms of an intended agreement should be allowed only when the terms are ambiguous. See Texas Gas Exploration Corp. v. Broughton Offshore Ltd. II, 790 S.W.2d 781, 785 (Tex. App.CHouston [14th Dist.] 1990, no writ) (holding that testimony regarding custom is admissible when a contract=s terms are ambiguous). The primary inquiry in this case is the parties= intentions as to the referral fee amount.

Huffman testified at trial that the parties agreed on a 50% referral fee. Giddens did not directly dispute that the agreed referral fee amount was 50% but instead, chose to circumstantially attack the fee amount by offering evidence of the standard referral fee in Pasadena, Texas. In fact, Giddens admitted that he normally gives a 50% referral fee. Thus, the only evidence we have as to the intended agreement between the parties as to referral fees is the uncontroverted evidence by Huffman that the parties agreed to a 50% fee. As such, the terms of the agreement are unambiguous, and extrinsic evidence was unnecessary.[1] We overrule Giddens=s third and fourth issues.

  Base Amount of the Settlement Fee

In his fifth and final point of error, Giddens argues that the evidence is legally and factually insufficient to support the court=s finding that $38,000 was the base amount from which the referral fee would be apportioned.

The Barnhill case ultimately settled for $115,000. Giddens testified that Mrs. Barnhill was unwilling to pay the 45% contingent fee despite the terms of their contract. Giddens further testified that he came to an agreement with Mrs. Barnhill that he would take his normal 45% attorney=s fee while collapsing into that total certain fees for unrelated criminal matters. Giddens argued at trial that because the total fees he received from his client, $51,000, included compensation for the criminal matters, a portion of that total should have been allocated to the criminal matters and deducted from the base amount to be split with Huffman. Giddens offered evidence at trial as to the exact fees for some of the criminal matters. The judge ultimately deducted $13,000 for the criminal matters, leaving a total amount of $38,000 as the base amount from which Huffman=s referral fee was apportioned.

Both parties are uncertain as to how the judge arrived at the figure of $38,000; however, the trier of fact has the discretion to award damages within the range of evidence presented at trial. Anderson, Greenwood & Co. v. Martin, 44 S.W.3d 200, 219 (Tex. App.CHouston [14th Dist.] 2001, pet. denied). Huffman offered evidence that the amount of attorney=s fees from which his referral fee should have been apportioned was $51,000. Giddens offered evidence of $13,750 for the criminal matters which he claims should have been deducted from the total amount of his settlement fee.[2] Clearly the judge was within the range of evidence presented at trial in arriving at the figure of $38,000. See id. We cannot speculate as to the manner in which the trier of fact reached its award. Peterson v. Reyna, 908 S.W.2d 472, 476 (Tex. App.CSan Antonio 1995), modified on other grounds, 920 S.W.2d 288 (Tex. 1996) (per curiam). Furthermore, we are not permitted to disregard the trier of fact=s damages award on the basis that the trier of fact=s reasoning in arriving at its figure is unclear. Anderson, Greenwood & Co., 44 S.W.3d at 219. As a result, Giddens=s fifth issue is overruled.

We affirm the judgment of the trial court.

/s/ Adele Hedges

Chief Justice

Judgment rendered and Memorandum Opinion filed August 2, 2005.

Panel consists of Chief Justice Hedges, Justice Frost, and Senior Chief Justice Paul C. Murphy.*

[1] A large portion of the trial was devoted to testimony regarding standard referral fees in Pasadena, Texas. It is unclear why this evidence was allowed, especially considering the judgment which found that A50 percent is the standard fee in Pasadena, Texas, for referral fee as between the parties.@

[2] Huffman has not cross-appealed on the basis that he should have been awarded 50% of the total fees, rather than 50% of $38,000. Therefore, because Huffman does not raise this issue, we do not address it.

* Senior Chief Justice Paul C. Murphy sitting by assignment.