Joel Flores, Individually and in a Representative Capacity and Criselda Flores, Individually and in a Representative Capacity v. Gonzalez & Associates Law Firm, Ltd.
13-15-00205-CV
| Tex. App. | Oct 6, 2016Background
- In July 2013 the Flores family’s four-year-old son drowned at McAllen Country Club (MCC); they retained Jaime Gonzalez (Gonzalez & Associates) under a written contingency-fee agreement (31% after 60 days; 25% if settled within 60 days; no fee if settled before Aug. 1).
- Gonzalez filed suit against MCC (Aug. 5, 2013). MCC ultimately offered policy limits: $6,000,000 plus $250,000 for a charity; the Floreses executed a Rule 11 settlement on Dec. 26, 2013.
- The Floreses discharged Gonzalez (May 9, 2014) and then sued him for breach of fiduciary duty, common-law fraud, and fraud by nondisclosure, seeking disgorgement and rescission; Gonzalez intervened to enforce his contract and sought contract damages and declaratory relief.
- Gonzalez moved for traditional and no-evidence summary judgment on the Floreses’ affirmative claims; the trial court granted summary judgment dismissing those claims (the appeal challenges only the breach-of-fiduciary-duty dismissal).
- After summary judgment, the court tried Gonzalez’s breach-of-contract claim (Floreses’ attempt to add a good-cause-for-discharge defense was denied as untimely). The trial court entered judgment for Gonzalez awarding damages, prejudgment interest, and attorneys’ fees. The Floreses appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether summary judgment on breach of fiduciary duty was improper | Flores: genuine fact issues exist (misrepresentations of MCC counsel’s letter; undisclosed conflicts—Gonzalez’s wife’s MCC membership and ownership in vendor APT; failure to recover son’s belongings; misstatements about MCC net worth; alleged oral 25% fee promise). | Gonzalez: no evidence of an actionable breach or improper benefit; many alleged omissions were disclosed or immaterial; some matters were outside scope of representation; fee issue is contract enforcement, not fiduciary breach. | Affirmed: no-evidence burden met. Court found disclosures or lack of improper benefit, and that contested facts did not show fiduciary breach. |
| Whether trial court abused discretion by excluding evidence that Floreses fired Gonzalez for cause at bench trial | Flores: exclusion prevented them from defending contractual liability and proving discharge for cause. | Gonzalez: good-cause discharge is an affirmative defense that was not timely pleaded; thus waived and properly excluded. | Affirmed: exclusion proper because defense was not pleaded; even if error, offered proof was cumulative and would not have changed result. |
| Whether award of unsegregated attorneys’ fees and amount were improper/unsupported | Flores: fees were not properly segregated between recoverable contract/declaratory claims and unrecoverable/frivolous-pleading work; mount of fees lacks legal sufficiency. | Gonzalez: claims and defenses were intertwined (fees to defeat Floreses’ claims were recoverable); billing evidence and expert opinion support reasonableness and amount. | Affirmed: trial court did not abuse discretion in awarding unsegregated fees because services were intertwined; fee award supported by legally sufficient evidence under Arthur Andersen factors. |
Key Cases Cited
- Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844 (Tex. 2009) (standard of review for summary judgment)
- City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (standards for reviewing evidence in legal-sufficiency analysis)
- Johnson v. Brewer & Pritchard, P.C., 73 S.W.3d 193 (Tex. 2002) (attorney fiduciary duties and summary-judgment principles)
- Frost Nat'l Bank v. Fernandez, 315 S.W.3d 494 (Tex. 2010) (defendant movant may conclusively negate an element or establish an affirmative defense)
- Timpte Indus., Inc. v. Gish, 286 S.W.3d 306 (Tex. 2009) (no-evidence summary judgment is like directed verdict)
- Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299 (Tex. 2006) (requirement to segregate attorney’s fees and when fees may be treated as intertwined)
- Varner v. Cardenas, 218 S.W.3d 68 (Tex. 2007) (fees to defeat counterclaims necessary to recover on contract are recoverable)
- Arthur Andersen & Co. v. Perry Equip. Corp., 945 S.W.2d 812 (Tex. 1997) (factors for reasonableness of attorney’s fees)