Fleming & Associates, L.L.P. v. Barton
425 S.W.3d 560
| Tex. App. | 2014Background
- F&A and J&B formed a joint venture to handle Fen-Phen cases; contract divided 224 FDA cases and future cases with specified expense treatment.
- October 16, 2006 distribution deducted certain client non-reimbursable expenses; J&B contested deductions later reimbursed some amounts.
- November 4, 2008, Johnson and Fleming/F&A executed a Profits Interest Transfer Agreement (PITA) transferring Johnson’s profits interest to F&A without conveying J&B ownership.
- Barton Group sued in 2009 for breach of contract and sought statutory attorney’s fees; several pre-trial partial summary judgments were entered.
- Trial court awarded Barton Group damages for October 2006 deductions, additional damages for other reimbursements, and prejudgment interest; Fleming personally liability was adjudicated in Fleming’s favor.
- On appeal, the court modified to strike attorney’s fees against F&A, holding LLP is not subject to §38.001(8); otherwise affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Contract liability interpretation | Barton Group contends F&A liable under contract; contract viewed as joint venture with expenses to be charged to clients. | F&A argues contract forms a joint venture with losses/expenses shared; October 16 letter does not prove improper deductions were chargeable to clients. | Partial summary judgment affirmed against F&A; liability determined based on contract language. |
| PITA-based 45% extinguishment | F&A entitled to offset 45% of liability under PITA against Barton Group claims. | PITA transfers Johnson’s interest, not J&B’s partnership property; no basis to extinguish 45% of damages against J&B. | Trial court correct; no 45% extinguishment against Barton Group. |
| F Fleming’s personal liability | F&B sought personal liability based on addendum signing in individual capacity. | Fleming acted as agent for disclosed principal; addendum does not render him personally liable. | Fleming not personally liable. |
| Attorney’s fees under §38.001 against LLP | Barton Group seeks statutory attorney’s fees under §38.001(8) against F&A. | LLP is not an “individual or corporation” under §38.001; fees improper. | Sustain F&A; remove all attorney’s fees awards against the LLP. |
| Prejudgment interest start date | Interest should accrue from earliest claim notice. | Interest should commence on date defined by statute after notice or filing; date disputed. | Trial court’s start date not found to be an abuse of discretion; prejudgment interest affirmed as calculated. |
Key Cases Cited
- J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223 (Tex. 2003) (contract interpretation relies on the writing as a whole)
- Progressive Cnty. Mut. Ins. Co. v. Kelley, 284 S.W.3d 805 (Tex. 2009) (ambiguous contracts require broader interpretive consideration)
- Bank One Tex., N.A. v. Stewart, 967 S.W.2d 419 (Tex. App.-Hou. 1998) (partnership rules apply to joint ventures)
- Knowles v. Wright, 288 S.W.3d 136 (Tex. App.-Hou. 2009) (partnerships and loss sharing considerations under Texas law)
- Johnson & Higgins of Tex., Inc. v. Kenneco Energy, Inc., 962 S.W.2d 507 (Tex. 1998) (prejudgment interest and related notice principles)
- Eppler, Guerin & Turner, Inc. v. Kasmir, 685 S.W.2d 737 (Tex. App.-Dallas 1985) (agency and liability of disclosed agent)
- McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 337 (Tex. 1993) (grounds cannot be raised for first time on appeal; need preserve issue)