Robert D. Rapp v. Mandell & Wright, P.C.--Appeal from 221st District Court of Montgomery County

NUMBER 13-01-255-CV

COURT OF APPEALS

THIRTEENTH DISTRICT OF TEXAS

CORPUS CHRISTI

ROBERT D. RAPP, Appellant,

v.

MANDELL & WRIGHT, P.C., Appellee.

On appeal from the 221st District Court

of Montgomery County, Texas.

OPINION ON MOTION FOR REHEARING

Before Justices Ya ez, Dorsey // , and Amidei //

Opinion by Justice Amidei

Robert D. Rapp s motion for rehearing is granted. The opinion and judgment issued August 28, 2003, are withdrawn and the following is substituted.

Robert D. Rapp, appellant, appeals from a jury verdict and judgment in a trial of an intervention by Mandell & Wright, P. C., appellee, and appellant s conditional intervention, both asserting the right to receive attorney s fees and expenses in the underlying wrongful death personal injury case which had been previously settled. Although the Ross and Thornhill survivors, plaintiffs in the underlying case, were named as parties in appellee s intervention, they were not served with citation and were dismissed as parties prior to trial.

Appellant claims that as a matter of law he is entitled to the $401,110.89 deposited in the registry of the court, representing the contingent fees in question, as well as the $275,425 deposited for expenses, and that the trial court erred in denying his motion for judgment notwithstanding the verdict of the jury and motion for new trial which contain his grounds therefor. In five issues, appellant repeats the grounds of such motions that argue the trial court erred: (1) as a matter of law in denying appellant's motion for judgment notwithstanding the verdict of the jury (JNOV); (2) in allowing evidence of appellant's former employment status and shareholder agreement which led to the rendition of an improper verdict; (3) in denying appellant's motion for new trial because the answers to all material jury questions were either supported by insufficient evidence or so against the great weight and preponderance of the evidence as to be manifestly unjust; (4) alternatively, in not equitably splitting the Thornhill fee between appellant and appellee; and (5) alternatively, in not awarding appellant his attorney's fees as found by the jury.

Factual and Procedural Background

In 1987, while appellant was a shareholder and an employee of appellee, a professional corporation, he was contacted by two attorneys in the Midwest to handle wrongful death cases for the families of two truck drivers who lost their lives in a truck stop fire at Conroe, Texas. Appellant agreed to represent the plaintiffs and signed the contingent fee contracts, each of which provided a contingent fee of 33 1/3 percent of the recovery. The contracts designated appellant of counsel, but there was no other name or signature of any other attorney or agent thereon. Appellant was the lead attorney and legal strategist performing the great majority of the work in the case. Zoe Littlepage, a less-experienced lawyer, hired by appellee sometime in 1990, worked on some of the simpler matters. Littlepage and another appellee attorney assisted appellant until they left the corporation shortly after the trial court entered the final judgment. Being the legal strategist in this case was especially important because the arsonist who set the fire at the truck stop, as well as the truck stop owners, were judgment-proof. Even after appellant devised a unique theory of recovery (appellant asserts that the theory is unprecedented in the United States) against the owners' lender, the lender filed a bankruptcy in Pennsylvania and several years of maneuvering by appellant were required in order to secure guaranteed insurance coverage out of the bankruptcy. After the insurance coverage was obtained, the case was tried. The trial lasted one month and resulted in a jury verdict for the plaintiffs in excess of $4 million, and specifically implicated the owners' lender pursuant to appellant's unique theory that the lender was responsible for the operation of the truck stop with the owners and had a non-delegable duty to initiate and maintain safety features that probably would have prevented the fire or at least the deaths. However, the trial court granted the solvent defendants' motion for JNOV and awarded damages only against the insolvent defendants in August 1993.

Between 1994 and 1996, appellee repeatedly contemplated claiming the plaintiffs case as a loss for tax purposes and dropping the case, but appellant strongly opposed these efforts. In 1996, appellant and appellee had disputes over appellant's employment contract, which he refused to sign. In March 1997, unable to reach an agreement, appellee terminated appellant. By agreement, the client files were divided between appellant and appellee, with appellant accepting seven files, including the plaintiffs case, all of which appellee viewed as having little prospect of recovery. The remaining cases were retained by appellee. As to the divided cases, no express agreement was made as to fee or expense-sharing between appellee and appellant.

Appellant appealed the trial court judgment, and in May of 1997, the Ninth Court of Appeals in Beaumont reversed the trial court's judgment and reinstated the jury's verdict.

At this time, after learning appellant was no longer with appellee, the plaintiffs, through the Midwest attorneys who referred the cases to appellant, sent letters to appellee directing that the file be turned over to appellant to ensure access for necessary work left to be done. The letters expressed the plaintiffs' desire that appellant continue to be in charge of the case as he had been for ten years, but did not discharge or request appellee to withdraw from the case. No additional written contingent fee contracts were made, but after appellant was fired by appellee, the plaintiffs reaffirmed their agreement to pay appellant the originally-agreed-to contingent fee. Appellant continued representing the plaintiffs during the defendants attempted appeal of the case to the Texas Supreme Court. While the case was pending in the Ninth Court of Appeals, on July 25, 1997 without any prompting by the Midwest attorneys, the plaintiffs, or the appellant appellee voluntarily and unilaterally filed a motion to withdraw from the plaintiffs' case. The court of appeals considered the motion moot since the plaintiffs already had designated the appellant as their attorney of record, and appellee was not listed as an attorney for the plaintiffs.

Appellant convinced the plaintiffs and the Midwest attorneys to agree to mediation rather than risk potential review in the Texas Supreme Court. In November 1997, appellant successfully mediated the plaintiffs' case by obtaining a settlement with the lender's insurance company in the amount of $1.9 million, which was $1.8 million more than the insurer had previously offered.

Prior to the January 5, 1998, scheduled funding of the settlement, appellee filed an intervention in the underlying case, alleging it was entitled to all of the $676,535.89 on deposit, but did not name an adverse party. The trial court ordered the $676,535.89 to be deposited into the registry of the court, and allowed the plaintiffs to receive the balance of the $1.9 million settlement. Pursuant to the agreement of the plaintiffs, appellee, and appellant, the amended final judgment included the order as follows: No party to these proceedings waives any position by agreeing to place these funds in the Registry of the Court. After appellant answered and moved to strike appellee's intervention on the grounds he was entitled to the fees as the primary attorney of record at the time the case was settled, appellee amended and claimed appellant had no standing because he had not intervened. Thereafter, appellant filed his "conditional" petition in intervention asserting his claim to the fees should such plea be necessary. Both parties' motions for summary judgment were denied. Appellee filed an amended intervention and although the plaintiffs were named as parties, with breach of contract and unjust enrichment claims asserted against them, they were never served with the intervention. Appellant answered appellee's amended intervention alleging waiver, estoppel, accord and satisfaction, abandonment of the plaintiffs, and the invalidity of the intervention under the fee agreements; he also pointed out that the plaintiffs had not been served with citation on the intervention. Appellee filed a Second Amended Petition in Intervention, alleging it was entitled to the fees because of the previous employment agreement and shareholder agreement between appellee and appellant. Appellant answered the Second Amended Intervention, realleging his previous defenses and specifically alleging that any obligation he had under the shareholder agreement to turn over any fees he earned ended when he was terminated by appellee, and that there was a defect of parties because appellee had no claim against appellant, and the plaintiffs had not been served. The trial court proceeded to trial over appellant's objections that he was not making a claim as a former employee, but as a second lawyer who successfully concluded a case, and that the plaintiffs, the only parties against whom appellee s claim could have been made, had not been served and were not properly before the court. Instead, the trial court dismissed the plaintiffs from the intervention proceedings with a ruling that the appellee s claim attached to the fund in the registry of the court. The interventions were tried and the jury answered the questions in favor of appellee, except appellant was awarded $25,000.

Motion to Dismiss

Appellee filed a motion to dismiss appellant's appeal as moot because appellant accepted the $25,000 he was awarded by the trial court judgment. Appellant redeposited the $25,000 plus interest after nine months. Appellee did not change its position, nor was it otherwise injured because of the withdrawal and redeposit.

The acceptance of benefits of a judgment can only affect an appeal where it is barred by an estoppel. Carle v. Carle, 149 Tex. 469, 234 S.W.2d 1002, 1004 (Tex. 1950). The acceptance of the $25,000, which appellant would have been entitled to regardless of the outcome of the appeal, did not create an estoppel, and was not unconscionable even if appellant had not redeposited the $25,000. Bristol-Myers Squibb Co. v. Barner, 964 S.W.2d 299, 302 (Tex. App. Corpus Christi 1998, no pet.)

Appellee's motion to dismiss is overruled.

Standard of Review

The standard of review for a trial court s denial of a motion for judgment notwithstanding the verdict is to determine whether the evidence conclusively proves a fact that establishes a party s right to a judgment as a matter of law. Fort Bend County Drainage Dist. v. Sbrusch, 818 S.W.2d 392, 394 (Tex. 1991). If so, then the trial court erred in denying the motion for judgment notwithstanding the verdict. Id.

The judgment of the court shall conform to the pleadings, the nature of the case proved and the verdict, if any, and shall be so framed as to give the party all the relief to which he may be entitled either in law or in equity. Provided, that upon motion and reasonable notice the court may render judgment non obstante veredicto if a directed verdict would have been proper, and provided further that the court may, upon like motion and notice, disregard any jury finding on a question that has no support in the evidence.

Tex. R. Civ. P. 301.

The standard for reversible error in civil cases is provided in rule 44.1 of the Texas Rules of Appellate Procedure as follows:

(a) Standard for reversible error. No judgment may be reversed on appeal on the ground that the trial court made an error of law unless the court of appeals concludes that the error complained of:

(1) probably caused the rendition of an improper judgment; or

(2) probably prevented the appellant from properly presenting the case to the court of appeals.

Tex. R. App. P. 44.1(a).

The court on its own motion may disregard the jury s answer to an immaterial question. Brown v. Armstrong, 713 S.W.2d 725, 728 (Tex. App. Houston [14th Dist.] 1986, writ ref d n.r.e.).

To preserve appellate complaints, the record must show that

(1) the complaint was made to the trial court by a timely request, objection or motion that:

(A) stated the grounds for the ruling the complaining party sought from the trial court with sufficient specificity to make the trial court aware of the complaint, unless the specific grounds were apparent from the context; and

(B) complied with the requirements of the Texas Rules of Civil or Criminal Evidence or the Texas Rules of Civil or Appellate Procedure; and

(2) the trial court:

(A) ruled on the request, objection or motion, either expressly or implicitly; or

(B) refused to rule on the request, objection or motion, and the complaining party objected to the refusal.

Tex. R. App. P. 33.1(a)(1)(2).

Motion to Strike Intervention

Appellant filed a motion to strike appellee s intervention, alleging that appellee had no right to intervene because the contingent fee contract(s) appellee was claiming under only constituted a contingent fee interest, not an assignment. Appellee argues that the language, . . . assigns . . . that portion of any final recovery realized or recovered by the client which represents the attorney s fee computed in accordance with this agreement, was an assignment. Although a properly worded contingent fee contract may effect an assignment, Dow Chemical Co. v. Benton, 163 Tex. 477, 357 S.W.2d 565, 568 (1962), the language in this case does not assign or transfer an interest in the cause of action or subject matter. Wheeler v. Fronhoff, 270 S.W. 887, 888 (Tex. Civ. App. Texarkana 1925, writ dism d). The language at issue in the Wheeler case, [a]ppellants are to have one-third of any sum of money or property, or both or either that may be recovered or paid as a compromise of said suit for their services therein, was held not to evidence an intent to transfer the title to a cause of action, and the attorney was not entitled to intervene. The language in this case likewise does not evidence an intent to assign or transfer an interest in a cause of action. Assuming, arguendo, that the contingent fee contract was an assignment of plaintiffs cause of action to appellee, appellee assigned its interest to appellant upon appellant s termination and the division of the client cases, and appellee no longer would have had a justiciable interest in the matter. See River Consulting, Inc. v. Sullivan, 848 S.W.2d 165, 169 (Tex. App. Houston [1st Dist.] 1992, writ. denied).

Appellee admitted it had no claim or cause of action against appellant. As a matter of law, appellant s contract with appellee, which is the basis of appellee s claim for the fees, terminated before appellant concluded the plaintiffs case, leaving appellee without a justiciable interest, or an actual controversy with appellant. Hanna v. Godwin, 876 S.W.2d 454, 457 (Tex. App. El Paso 1944, no writ) (Texas courts only have power over litigants with justiciable interests). Appellee s prayer for declaratory relief does not support an action against appellant because it is merely a procedural device and does not create any substantive rights or causes of action. Sid Richardson Co. v. Interenergy Res. Ltd, 99 F.3d 746, 752 (5th Cir. 1996). Appellee s intervention petition alleges appellee was discharged without good cause by the plaintiffs, and that plaintiffs breached their contract, but alleges no cause of action against appellant. Appellee could assert no claim against plaintiffs as they had been dismissed from the intervention proceedings. The trial court s dismissal of the plaintiffs and ruling that appellee s invalid claim attached to the fund in the registry of the court was an abuse of discretion because such action was without reference to any guiding rules and principles. McDaniel v. Yarborough, 898 S.W.2d 251, 253 (Tex. 1995). The appellant reserved all rights to the deposit by the provision in the judgment which orders that he did not waive any position by agreeing to deposit the funds in the registry of the court.

Prior to the submission of the charge to the jury, appellant objected to the submission of any issue on behalf of appellee on the grounds that appellee has no standing to intervene because appellee was claiming under a contingent fee contract rather than an assignment of a cause of action, and because there are no pleadings to support any issue for any recovery on behalf of appellee. Appellant stated the same reasons in his motion to dismiss and his motion for directed verdict. The trial court overruled all of appellant s objections. The same substantive objections were made in appellant s motion for JNOV.

The trial court implicitly overruled appellant s motion to strike by proceeding to trial and granting relief to appellee, Tex. R. App. P. 33.1(a)(2)(A), and expressly by the Mother Hubbard order in the final judgment, which denied all relief not granted. Lehmann v. Har-Con Corp., 39 S.W.3d 191, 193 (Tex. 2001). As the appellee had no standing to intervene, the trial court erred in overruling appellant s motion to strike the intervention and in holding that appellee s claim attached to the fund in the registry of the court. Tex. R. Civ. P. 60. Had the appellee s intervention pleadings been properly stricken by the trial court as appellant requested in his motion to strike, there would have been no pleadings to support or conform to the trial court judgment. Tex. R. Civ. P. 301. Although appellee argues the procedure is similar to an interpleader action, it is not an interpleader because the proceedings were instigated by the appellee, not the plaintiffs who held or had control over the funds. Appellee could not allege that it could or may be exposed to double or multiple liability. See Tex. R. Civ. P. 43. Further, appellee, appellant, and the plaintiffs could not have been stakeholders because in order to interplead, one must have no interest in the subject matter of the litigation. Taliferro v. Tex. Commerce Bank, 660 S.W.2d 151, 155 (Tex. App. Fort Worth 1983, no writ). The sole issue between appellee, appellants and the plaintiffs would have been whether plaintiffs fulfilled their burden of establishing that they are subjected to multiple liability. Id. The proceeding could not have been an interpleader because the stakeholder must be a party to the proceedings, but plaintiffs were dismissed by the court prior to the commencement of trial. Maverick County Water Control & Improv. Dist. v. Laredo, 346 S.W.2d 886, 889 (Tex. Civ. App. San Antonio 1961, writ ref d n.r.e.); 1 McDonald Texas Civil Practice 5.64 (1992). Also, another requirement to an interpleader is that the funds be deposited unconditionally into the registry of the court. Tri State Pipe & Equip. v. S. Mut., 8 S.W.3d 394, 402 (Tex. App. Texarkana 1999, no pet.). However, the deposit in this case was not unconditional because it was made without any waiver of rights by the parties and there was no disinterested party to qualify as a stakeholder. Taliferro, 660 S.W.2d at 153; 47 Tex. Jur.3d Interpleader 1 (1986).

Except for the issue of attorney s fees to be awarded pursuant to the Declaratory Judgment Act, // there was no necessity for a jury trial had the trial court granted appellant s motion to strike appellee s intervention. Appellant was entitled to the relief he sought as a matter of law, there being no alleged claims or causes of action against him that obligated him to defend against or which raised a fact issue for the jury. The status of the plaintiffs case remains the same as before appellee tried to intervene. The plaintiffs and appellant who concluded their case were and are entitled to finally settle between them the settlement funds without any interference from the appellee.

Issues Presented

Appellant's issues numbers one and three claim the trial court erred as a matter of law by denying his motion for JNOV and motion for new trial because he was at all times during the prosecution of the plaintiffs' case the lead attorney in charge who successfully concluded the case pursuant to the intent and direction of the plaintiffs. According to appellant, he was entitled to the fee and expense deposit, notwithstanding appellee s claim that appellant's rights were governed by his previous employment contract and shareholder agreement, because appellee withdrew, abandoned, and/or was terminated from any connection with the case prior to its conclusion. Appellant's issue number two complains that the trial court erred in allowing, over appellant's objection, evidence of appellant's former employment status and the shareholder agreement, which led to the rendition of an improper verdict.

Was a division of fees prohibited after appellee terminated appellant?

Appellant argues that rule 1.04 of The Texas Disciplinary Rules of Professional Conduct prohibits a division of fees between appellee and appellant because (1) appellant, who concluded the case pursuant to a contract with the clients, was not in the same firm, i.e., appellee's firm; (2) the proposed division of fees was not in proportion to the professional services performed by each lawyer nor was the division made with a forwarding lawyer, or made by written agreement with the client with a lawyer who assumed joint responsibility for the representation; and (3) the client was not advised of the nature and extent of appellee s participation and was not given the opportunity to object to appellee's participation. We agree. Appellant was terminated by appellee, but continued to represent the plaintiffs in the case pursuant to plaintiffs request. Appellee relinquished any claim it had to attorney's fees in the plaintiffs' case when it terminated appellant and agreed that he take plaintiffs' case among other cases to handle without any reservation of its rights as to fees or expenses. Even if appellee believed the May 1997 letters from the Midwest attorneys meant it was discharged, such letters not only could not have discharged appellee because appellee had already abandoned the case voluntarily when it fired appellant and agreed to assign plaintiffs case to appellant and such letters did not contain any language discharging appellee or requesting appellee s withdrawal. The letters requested that appellant continue as counsel in the case he had worked on for over ten years and that appellee release the file to appellant. Further, the Midwest attorneys testified they did not terminate or discharge appellee and had no intention to do so, and appellee s shareholders admitted they did not ask the Midwest attorneys if they should consider themselves terminated. Appellee s response to the Midwest attorneys letters was merely a self-serving statement that it was ready, willing and able, and that it agreed to turn over the file to appellant, and gave notice it was retaining its fee interest. One of appellee s shareholders told appellant the case was his sole responsibility.

Even if appellee s intervention was proper, there was no evidence that the plaintiffs discharged appellee, or requested appellee s withdrawal, with or without just cause. Appellee failed its burden of proving just cause to withdraw. See Augustson v. Linea Aerea Nacional-Chile S.A., 76 F.3d 658, 663 (5th Cir. 1996). There was no agreement that appellee would share in any joint responsibility or fees with appellant or any other lawyer after appellant was terminated by appellee. Since the plaintiffs were not bound by the terms and conditions of the employment contract between appellee and appellant, even when appellant was employed by appellee, rule 1.04 prohibits any division of the fees in question with appellee, but does not prevent appellant from recovering the fees he seeks in this case because he continued the prosecution of the case with the knowledge and consent of the plaintiffs and the Midwest attorneys, after he was fired by appellee.

The appellee s position is based on the employment contract and shareholder agreement to which appellant was bound from the time he signed the contingent fee contracts until he was terminated by appellee in March 1997. However, upon appellant s termination: (1) he was no longer bound under the employment contract and shareholder agreement; (2) appellant and appellee had no contractual obligation to each other to continue the plaintiffs' case; (3) by agreement, appellee assigned to appellant all of its rights and obligations to the plaintiffs cases, which included all the fees and expenses as provided in the written contracts with the plaintiffs. See Univ. of Tex. Med. Branch v. Allan, 777 S.W.2d 450, 453 (Tex. App. Houston [14th Dist.] 1989, no writ) ( The assignor, after an unqualified assignment and notice to the obligor, generally loses all control over the chose, and can do nothing to defeat the rights of the assignee. (Emphasis supplied)); (4) no agreement was made which reserved any rights to appellee in the plaintiffs' case; (5) with knowledge of appellant s termination, plaintiffs affirmatively assented to appellant continuing to represent them in their case for the one-third (1/3) contingent fee; (6) appellant could not have divided the fees earned in the plaintiffs' case because: (a) he was no longer a member of appellee's law firm, (b) no other attorney who was a member of appellee's law firm performed any work in the plaintiffs' case after appellant was terminated, and (c) appellee made no agreement with a forwarding lawyer or the clients to divide the fees in return for appellee's agreement to assume joint responsibility for the representation; // and (7) the agreement to the division of client cases and assignment was an accord and satisfaction as the facts proved irresistibly point to such conclusion, see Jenkins v. Henry C. Beck Co., 449 S.W.2d 454, 455 (Tex. 1969), and the accord and satisfaction constitutes a bar to any action by appellee on its previous contracts with appellant. See Harris v. Rowe, 593 S.W.2d 303, 306 (Tex. 1979). The facts and circumstances surrounding the execution of the new agreement are sufficient to establish the existence of an accord and satisfaction. Id.

Appellee's connection with the plaintiffs' case was effectively severed at the time it terminated appellant, and assigned him the plaintiffs case and six other cases without a reservation of rights therein. Appellee withdrew from the plaintiffs' case without being requested to do so by the plaintiffs. Appellee wanted no responsibility for the case, and made plans to claim the case as a loss for tax purposes. Appellee wanted to withdraw after the unfavorable trial court judgment, but appellant objected and maintained the case had merit. Even if withdrawal for just cause was an issue, appellee's separation from the plaintiffs' case was voluntary and without just cause. See Royden v. Ardoin, 160 Tex. 338, 331 S.W.2d 206, 208 (1960) ("If an attorney, without just cause, abandons his client before the proceeding for which he was retained has been conducted to its termination, or if such attorney commits a material breach of his contract of employment, he thereby forfeits all right to compensation." (Emphasis supplied)). In any event, appellee failed to meet its burden to prove its withdrawal was for just cause. See Auguston, 76 F.3d at 662-63. To the contrary, as a matter of law, appellee cannot claim it withdrew for just cause after it fired appellant, assigned him the case, and effected an accord and satisfaction without reserving any responsibility or rights therein, filed a motion to withdraw without the agreement of the clients with the belief the case had no value, and later, as an afterthought, when it discovered the court of appeals reversed the case in favor of the plaintiffs, tried to bootstrap its way back into the case in order to collect the contingent fee without earning it. Appellee had no justifiable cause to withdraw without plaintiffs' consent. Therefore, appellee has no right to recover any fees from plaintiffs, even if the plaintiffs were parties to the intervention. Appellee had no cause of action against appellant as there was no existing contract between them. Appellee having no interest in the plaintiffs' case by contract, and no complaint against the plaintiffs, failed to allege any cause of action against appellant which supports the judgment of the trial court. Cunningham v. Parkdale Bank, 660 S.W.2d 810, 813 (Tex. 1983) (a party may not be granted relief in absence of pleading to support that relief); see also Tex. R. Civ. P. 301. Appellee claims its prayer for declaratory relief supports the judgment, but a declaratory judgment proceeding is merely a procedural device and does not create any substantive rights or causes of action. Sid Richardson Co., 99 F.3d at 752.

Therefore, the contracts between appellee and appellant, i.e., the employment contract and shareholder s agreement, are not relevant to any issue in this case, even assuming appellee s intervention was properly before the court. The trial court erred in holding such contracts controlled the rights of appellee and appellant. Appellant s objections to the trial of the case, the admission of evidence and submission of jury questions on the basis such contracts were relevant and controlling, were proper objections and were erroneously overruled by the trial court, thereby preserving error. Appellant s motion for JNOV was erroneously overruled by the trial court. Tex. R. App. R. 33.1(a)(1).

The trial court should have dismissed appellee s intervention and ordered that plaintiffs and appellant were entitled to finally distribute the settlement funds pursuant to their agreement without the necessity of intervention or other proceedings filed by appellant or mere intermeddlers. See Royden, 331 S.W.2d at 208; Augustson, 76 F.3d at 662.

Appellant s issue number one is granted. Our disposition of issue number one renders the other issues immaterial except appellant s issue number five, which complains he was not awarded the attorney s fees as found by the jury in answer to jury question number six. We may ignore the immaterial jury questions as the trial court should have. Brown, 713 S.W.2d at 728. By trying the case, admitting evidence of and about the employment contract and shareholder agreement between appellee and appellant, and submitting jury questions pursuant to appellee s theory that it could rely on such contracts, the trial court confused the jury and caused it to provide improper answers. The jury neither knew the legal effect of the terminated contracts nor that the contracts terminated when appellant was fired by appellee. We also grant appellant s issue number five.

On rehearing, appellant requests that the judgment be modified or clarified because $651,525.89 of the original $676,535.89 which was on deposit in the registry of the court was disbursed to appellee on April 2, 2001. The trial court originally granted appellant s motion to prevent disbursement, but thereafter, in its December 20, 2000 judgment, ordered the district clerk to immediately disburse the deposited funds. Appellant filed in this Court on April 20, 2001, a motion for an emergency stay of execution of the trial court judgment, but this motion was dismissed as moot on May 10, 2001.

Appellee claims the appellant s pleadings only support a judgment for the deposited fund, but not a judgment against the appellee for the amount of the fund. Appellant s Amended Conditional Petition in Intervention properly prayed for a superior interest in the fund held in the registry of the court, and for such other and further relief as was appropriate. Tex. R. Civ. P. 47(c). Appellee waived any issue as to defective pleading by failing to cite authorities to support its argument. Tex. R. App. P. 38.1(g),(h). Appellee only cites this Court s opinion in the instant case for the general proposition that the judgment must conform to the pleading, which is not controlling. Tex. R. App. P. 38.1(h). Moreover, when issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised in pleadings. Tex. R. Civ. P. 67. Had appellee objected to appellant s pleadings, appellant had the right to make the necessary amendment. Id.

We reverse and render the judgment of the trial court because it made an error of law which caused the rendition of an improper judgment. Tex. R. App. P. 43.3; 44.1(a)(1). Judgment is rendered for appellant against appellee in the sum of $651,525.89, plus interest at the rate of ten percent per annum from January 5, 1998, until the day preceding the date the judgment is paid; see Tex. Fin. Code Ann. 304.003-004, 304.104 (Vernon Supp. 2003), and appellant shall have judgment against appellee in the sum of $70,000 as found by the jury for attorney fees, plus $5,000 if there is an appeal to the Texas Supreme Court, and costs; and the appellee shall take nothing. In addition, the appellant is immediately entitled to and shall have the $24,990 on deposit in the registry of the court without any further court proceedings, and we order the clerk of the trial court to deliver these funds to appellant.

________________________________

MAURICE AMIDEI,

Assigned Justice

Opinion delivered and filed

this 5th day of February, 2004.