Woodhaven Partners, LTD v. Shamoun & Norman, LLP F/K/A Shoumoun Klatsky Norman
2014 Tex. App. LEXIS 1112
| Tex. App. | 2014Background
- Shamoun & Norman (law firm) sued Woodhaven, WH Management, PMR Partners, Sunetics (Inc. & L.P.), JCMJ, and Mark Johns for unpaid legal fees across four matters (Sunetics patent litigation, Marlin real-estate litigation, Balch Springs matter, and Johns's custody matter).
- Multiple retainer agreements signed (often by Johns as officer/agent); appellee asserted sworn-account, breach-of-contract, quantum meruit/promissory estoppel claims; fraud claims later nonsuited.
- Appellee moved for traditional and no-evidence partial summary judgment supported by affidavits of C. Gregory Shamoun; appellants submitted affidavits of Mark Johns and attorney Janet Randle; trial court struck parts of Johns’s affidavit and sustained/overruled various objections in stages.
- Trial court ultimately granted appellee’s second motion in full, awarding principal sums and attorney’s fees against various defendants; Johns was held jointly and severally liable with Sunetics, Inc. for Sunetics fees.
- On appeal, appellants challenged (inter alia) exclusion of Johns’s affidavit, grant of traditional and no-evidence summary judgment, admissibility of Shamoun’s affidavit and redacted invoices, Johns’s personal liability, and sufficiency/segregation of attorneys’ fees. Court affirmed in part, reversed and remanded in part.
Issues
| Issue | Plaintiff's Argument (Shamoun) | Defendant's Argument (Appellants) | Held |
|---|---|---|---|
| 1) Striking Mark Johns’s affidavit (testimony on reasonableness/necessity of fees) | Johns’s statements are admissible to dispute invoices under the retainer terms and Anglo-Dutch guidance | Johns can testify from client perspective that services were not "reasonable and necessary" as defined in fee agreements | Striking affirmed: lay testimony on reasonableness/necessity of attorney fees is incompetent; expert (attorney) testimony required |
| 2) Traditional SJ on sworn-account claim | Shamoun provided verified affidavit and itemized (though redacted) billing records establishing liquidated debts | Appellants argued factual disputes (breach, who signed, reasonableness) and filed a verified denial | SJ affirmed as to sworn-account: appellee proved prima facie account; appellants’ verified denial was a general denial insufficient to defeat SJ |
| 3) No-evidence SJ on appellants’ counterclaims (breach, negligence, DTPA, etc.) | No recoverable actual damages shown by appellants other than attorneys’ fees; thus no evidence on damages element | Appellants relied on Johns and Randle affidavits alleging breaches and failures to invoice; argued triable fact issues exist | SJ affirmed: appellants produced no competent evidence of recoverable damages (attorney fees alone not recoverable), so no-evidence SJ proper |
| 4) Admissibility of Shamoun’s affidavit and redacted invoices | Shamoun, as managing partner, has personal knowledge and custody of records; redacted invoices are originals/duplicates and support claims | Appellants argued lack of foundation, hearsay, excessive redaction making fees unreasonable/unverifiable, and affiant was interested/self-serving | Trial court did not abuse discretion: Shamoun affidavit provided adequate foundation; objections largely overruled except one sentence struck regarding jointly-and-severally language |
| 5) Personal (joint and several) liability of Mark Johns under Tex. Tax Code §171.255 | Johns (as officer) is liable because Sunetics forfeited corporate privileges, so officers are liable for debts incurred during forfeiture | Appellants: Sunetics is a Nevada corporation; Texas §171.255 applies only to forfeiture under Texas law, not foreign-state revocation | Reversed in part: appellee failed to establish applicability of Texas §171.255 to a Nevada corporation’s revocation; Johns’s joint/several liability for Sunetics fees vacated and remanded |
| 6) Sufficiency and segregation of attorneys’ fees awarded under §38.001 | Shamoun’s segregated fee affidavit (exhibit 4) established reasonable, necessary fees per Arthur Andersen factors; appellants failed to controvert | Appellants attacked redactions and reasonableness and raised segregation concerns where Johns’s personal liability was tied to Sunetics fees | Mixed: fees denied only to extent they were not properly segregated for the reversed Johns/Sunetics portion; otherwise award of §38.001 fees upheld due to Shamoun affidavit and lack of controverting expert evidence |
Key Cases Cited
- Anglo–Dutch Petroleum Int’l v. Greenberg Peden, P.C., 352 S.W.3d 445 (Tex. 2011) (interpretation of fee agreements from client's perspective; not a license for lay testimony on fee reasonableness)
- Twin City Fire Ins. Co. v. Vega–Garcia, 223 S.W.3d 762 (Tex. App.—Dallas 2007) (reasonableness and necessity of attorney fees requires expert testimony)
- Tana Oil & Gas Corp. v. McCall, 104 S.W.3d 80 (Tex. 2003) (attorney’s fees are not recoverable as actual damages by themselves)
- Burrow v. Arce, 997 S.W.2d 229 (Tex. 1999) (forfeiture of attorney fees for breach of fiduciary duty; claimant need not prove other actual damages when seeking forfeiture)
- Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299 (Tex. 2006) (attorney-fee awards must segregate fees between recoverable and nonrecoverable claims)
- Vance v. Holloway, 689 S.W.2d 403 (Tex. 1985) (verified sworn account is prima facie evidence unless properly and specifically denied)