REBECCA WILSON, ET AL. v. GEORGE FLEMING AND FLEMING & ASSOCIATES, L.L.P.
NO. 14-17-00223-CV
Fourteenth Court of Appeals
December 21, 2018
On Appeal from the 189th District Court, Harris County, Texas, Trial Court Cause No. 2010-25097
Reversed and Remanded and Opinion filed December 21, 2018.
In The Fourteenth Court of Appeals
OPINION
Appellants, approximately 4,000 former clients of George Fleming and Fleming & Associates (collectively, “the Fleming Firm“), appeal a summary judgment granted in favor of the Fleming Firm. Appellants claimed that the law firm breached contractual and fiduciary duties. Based on a jury verdict favorable to1 the Fleming Firm in a related case,2 the Fleming Firm moved for traditional summary judgment in this case, asserting affirmative defenses of collateral estoppel, waiver, and release. The trial court granted the Fleming Firm‘s summary judgment motion without stating reasons.
Concluding that the Fleming Firm failed to establish conclusively its right to judgment as a matter of law on each affirmative defense, we reverse and remand for further proceedings.
Background
The present appeal arises from the same facts as those detailed in Harpst v. Fleming, which we also issue today. See Harpst v. Fleming, No. 14-17-00209-CV, ---S.W.3d--- (Tex. App.—Houston [14th Dist.] Dec. 21, 2018, no pet. h.). We summarize the pertinent background here.3
Appellants later sued the Fleming Firm, alleging that the firm wrongfully deducted certain expenses from appellants’ settlements and misrepresented or concealed a number of material facts during the settlement process. Specifically, appellants claim that the Fleming Firm deducted from their respective settlement amounts the cost of a large-scale echocardiogram program, which the firm utilized to qualify a small percentage of claimants (including appellants) to bring individual suits against Wyeth.4 Although the Fleming Firm tested more than 40,000 potential claimants, most individuals’ echocardiograms did not reveal heart damage (and the parties refer to those results as “negative” or “rejected” echocardiograms). Fen-phen users with negative echocardiograms could not assert individual claims against Wyeth. The Fleming Firm deducted the cost of the entire program from the settlement payments due to their clients who did assert individual claims, including appellants. Thus, each of the Fleming Firm‘s clients bore a proportionate share of the expense of the entire echocardiogram program, including the negative echocardiograms, in addition to the cost of their own echocardiogram tests. According to appellants, this deduction was impermissible under the terms of their fee agreements and, further, the firm did not fairly and fully disclose to them the nature and extent of the deduction.
Appellants sued the Fleming Firm and asserted claims for (a) breach of fiduciary duty/constructive fraud/suit for accounting, (b) breach of contract, (c) statutory theft, (d) conversion, (e) common-law and constructive fraud, and (f) unjust enrichment/money had and received. At the request of both sides, the trial court severed the claims of a small group of plaintiffs into a separate cause number. The six plaintiffs in the severed cause (the “Harpst plaintiffs“) proceeded to jury trial on their claims, which resulted in a verdict and judgment favorable to the Fleming Firm.5 See Harpst, No. 14-17-00209-CV, slip op. at 5.
Following the judgment in Harpst, the Fleming Firm moved for traditional summary judgment against appellants (the approximately 4,000 non-severed plaintiffs), arguing that the Harpst judgment collaterally estopped appellants’ claims or, alternatively, that the settlement documents appellants signed and accepted, which included waiver and release language, foreclosed their claims. In support of the motion, the Fleming Firm attached uncertified copies of the jury verdict and final judgment from the Harpst case (to establish collateral estoppel) and Kathy Harpst‘s settlement packet (to establish waiver and release). Appellants responded to the merits and also objected to all three exhibits on lack of authentication
Issues on Appeal
Appellants raise four issues. In their first issue, appellants argue that the Fleming Firm submitted no competent summary judgment evidence, and that the trial court‘s consideration of objectionable evidence was an abuse of discretion. In their second, third, and fourth issues, appellants contend that the Fleming Firm failed to prove conclusively its entitlement to judgment on the merits of each asserted affirmative defense: collateral estoppel, waiver, and release.
Standard of Review
A movant for traditional summary judgment must prove that no genuine issue of material fact exists and it is entitled to judgment as a matter of law.
If the movant establishes its entitlement to judgment as a matter of law, the burden shifts to the non-movant to respond with evidence raising a genuine issue of material fact. If the non-movant fails to show that a genuine issue of material fact exists, the moving party is entitled to judgment as a matter of law and the summary judgment should be granted. See
We review the grant of summary judgment de novo. Katy Venture, Ltd. v. Cremona Bistro Corp., 469 S.W.3d 160, 163 (Tex. 2015) (per curiam). We review the evidence presented by the motion and response in the light most favorable to the non-movant, crediting evidence favorable to the non-movant if reasonable jurors could, and disregarding contrary evidence unless reasonable jurors could not. See Painter v. Amerimex Drilling I, Ltd., 561 S.W.3d 125, 2018 WL 2749862, at *3 (Tex. Apr. 13, 2018). We must affirm the judgment if any one of the Fleming Firm‘s affirmative defenses is meritorious. See Sheller v. Corral Tran Singh, LLP, 551 S.W.3d 357, 362 (Tex. App.—Houston [14th Dist.] 2018, pet. denied).
Analysis
A. Collateral estoppel
The Fleming Firm attached three exhibits to its summary judgment motion: (1) an unofficial and uncertified copy of the Harpst jury verdict; (2) an unofficial and uncertified copy of the Harpst final judgment; and (3) Kathy Harpst‘s settlement packet. Appellants contend that the summary judgment cannot stand because none of the exhibits was authenticated. We conclude that the uncertified jury verdict and uncertified judgment in Harpst are not authenticated and cannot support summary judgment in the firm‘s favor on its collateral estoppel defense. Our conclusion is dispositive of appellants’ challenge to collateral estoppel. We address the authenticity of Kathy Harpst‘s settlement packet below in connection with the waiver and release defenses.
“Under the summary judgment standard, copies of documents must be authenticated in order to constitute competent summary judgment evidence.” In Estate of Guerrero, 465 S.W.3d 693, 703 (Tex. App.—Houston [14th Dist.] 2015, pet. denied) (en banc); see also
Neither the jury verdict nor the judgment from the Harpst case (Exhibits 1 and 2) were sealed and signed or otherwise certified in accordance with
The Fleming Firm argues that we may presume the trial court took judicial notice of the Harpst jury verdict and judgment. On this record, we disagree. A trial court may take judicial notice of records in its own court “filed in the same case.” In re K.F., 402 S.W.3d 497, 505 (Tex. App.—Houston [14th Dist.] 2013, pet. denied) (“A trial court may take judicial notice of the records in its own court filed in the same case, with or without the request of a party.“). Here, however, the Harpst verdict and judgment were not filed in the same case as the present appeal. The Harpst case and the present case originated as the same suit, but the trial court severed the six Harpst plaintiffs’ claims into a separate cause number. The Harpst case then became a different action. See In re E.I. duPont de Nemours & Co., 92 S.W.3d 517, 523 (Tex. 2002) (“A severed action becomes a different action“). Therefore, we may not presume the trial judge took judicial notice in this case of the Harpst verdict and judgment. Additionally, no party requested the trial court to take judicial notice of the documents and the trial court did not indicate verbally or in writing that it did so.
Moreover, though a trial court may judicially notice its own records filed in the same case, the proponent must still provide them to the court “in a form acceptable for summary judgment proceedings, i.e. either sworn to or certified,” which did not occur here. Albert Lee Giddens, 2017 WL 4159263, at *4 (internal quotation omitted, emphasis original); see also GE Capital Corp. v. Hunt Cty. Appraisal Dist., No. 05-97-02192-CV, 2000 WL 348562, at *3 (Tex. App.—Dallas Apr. 5, 2000, no pet.) (not designated for publication) (“[R]ule 166a does not allow for judicial notice of the pleadings and judgment in a prior case, even in the same court.“) (citing Gardner v. Martin, 345 S.W.2d 274, 276 (Tex. 1961); Chandler v. Carnes Co., 604 S.W.2d 485, 486-87 (Tex. Civ. App.—El Paso 1980, writ ref‘d n.r.e.); Gist v. Stamford Hosp. Dist., 541 S.W.2d 510, 511 (Tex. Civ. App.—Eastland 1976, writ ref‘d n.r.e.) (op. on reh‘g)).
The Fleming Firm alternatively contends Exhibits 1 and 2 are authentic under
(4) Distinctive Characteristics and the Like. The appearance, contents, substance, internal patterns, or other distinctive characteristics of the item, taken together with all the circumstances.
. . .
(7) Evidence About Public Records. Evidence that:
(A) a document was recorded or filed in a public office as authorized by law; or
(B) a purported public record or statement is from the office where items of this kind are kept.
The Fleming Firm argues that the verdict and judgment are “exceptionally distinctive” and “authentic on their face as public records,” rendering them authenticated under either
We sustain appellants’ first issue in part regarding the Fleming Firm‘s Exhibits 1
B. Waiver and release
1. Authenticity of Exhibit 3, the settlement packet
Appellants challenge the authenticity of the Fleming Firm‘s third exhibit, a copy of Kathy Harpst‘s settlement packet.7 Like Exhibits 1 and 2, Exhibit 3 was not supported by any authenticating affidavit or testimony. Nonetheless, the Fleming Firm argues that the trial court did not err in considering the packet because all the plaintiffs’ settlement packets are materially identical in substance (differing only in regards to each client‘s individual settlement amount), and an authenticated copy of another claimant‘s settlement packet was on file before the trial court granted summary judgment.
The Fleming Firm states that it attached Rebecca Wilson‘s settlement packet and George Fleming‘s affidavit authenticating the packet to an earlier summary judgment motion on waiver, and that the trial court could have considered this earlier evidence to support the present motion. We agree. The Supreme Court of Texas recently held that the rules of civil procedure “require a trial court to grant a summary-judgment motion if the evidence ‘on file at the time of the hearing, or filed thereafter and before judgment with permission of the court,’ establishes that the movant is ‘entitled to judgment as a matter of law.‘” Lance v. Robinson, 543 S.W.3d 723, 732 (Tex. 2018) (quoting
undisputed that Rebecca Wilson‘s authenticated settlement packet was on file in the present case at the time of the summary judgment hearing. The packet thus qualified as proper summary judgment evidence, and the trial court did not err by considering its provisions. See, e.g., Evans v. First Nat‘l Bank, 946 S.W.2d 367, 376 (Tex. App.—Houston [14th Dist.] 1997, writ denied) (trial court‘s consideration of proper summary judgment evidence attached to previous motion is not reversible error). The parties do not dispute that the relevant contract provisions in each settlement packet are identical.
We overrule appellants’ first issue in part regarding the Fleming Firm‘s Exhibit 3.
The Fleming Firm raised two affirmative defenses based on provisions in the settlement packets: waiver and release. We address the firm‘s arguments that appellants waived their claims (expressly and impliedly) or otherwise released their claims.
2. Express waiver
Waiver may be asserted as an affirmative defense against a party who intentionally relinquishes a known right or engages in intentional conduct inconsistent with claiming that right. Trelltex, Inc. v. Intecx, L.L.C., 494 S.W.3d 781, 790 (Tex. App.—Houston [14th Dist.] 2016, no pet.);
Whether appellants expressly waived their claims against the Fleming Firm by signing the settlement packets requires us to review the agreements’ language. When interpreting a contract, our primary concern is to ascertain and give effect to the written expression of the parties’ intent. Plains Expl. & Prod. Co. v. Torch Energy Advisors Inc., 473 S.W.3d 296, 305 (Tex. 2015); Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am., 341 S.W.3d 323, 333 (Tex. 2011). We strive to honor the parties’ agreement as expressed in the instrument, and we will not remake their contract by reading additional or different provisions into it. See Gilbert Tex. Constr., L.P. v. Underwriters at Lloyd‘s London, 327 S.W.3d 118, 126 (Tex. 2010). The parties’ intent is governed by the language they chose, not by what one side contends they intended but failed to say. See id. at 127. We afford terms their plain and ordinary meaning unless the contract indicates that the parties intended a different meaning. Dynegy Midstream Servs., Ltd. P‘ship. v. Apache Corp., 294 S.W.3d 164, 168 (Tex. 2009). We consider the entire contract, respecting all provisions so that none are rendered meaningless. Plains Expl. & Prod., 473 S.W.3d at 305. We also bear in mind the particular business activity to be served, and when possible and proper to do so, we avoid a construction that is unreasonable, inequitable, and oppressive. Nat‘l City Bank v. Ortiz, 401 S.W.3d 867, 878 (Tex. App.—Houston [14th Dist.] 2013, pet. denied) (op. on reh‘g) (citing Frost Nat‘l Bank v. L&F Distribs., Ltd., 165 S.W.3d 310, 312 (Tex. 2005) (per curiam)).
The parties advance competing interpretations of the relevant contract language. For example, the parties dispute whether the waiver language in the settlement packets waived appellants’ claims against Wyeth only or, alternatively, waived all of their claims and potential claims against Wyeth and the firm. Whether a contract is ambiguous is a question of law for the court. J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003). A contract is not ambiguous if it can be given a definite or certain legal meaning. El Paso Field Servs., L.P. v. MasTec N. Am., Inc., 389 S.W.3d 802, 806 (Tex. 2012); Universal Health Servs., Inc. v. Renaissance Women‘s Grp., P.A., 121 S.W.3d 742, 746 (Tex. 2003); Columbia Gas Transmission Corp. v. New Ulm Gas, Ltd., 940 S.W.2d 587, 589 (Tex. 1996). If a contract is unambiguous, we enforce it as written without considering parol evidence for the purpose of creating an ambiguity or giving the contract “a meaning different from that which its language imports.” David J. Sacks, P.C. v. Haden, 266 S.W.3d 447, 450 (Tex. 2008) (per curiam).
A contract is ambiguous, however, when its meaning is uncertain and doubtful or when it is reasonably susceptible to more than one meaning. Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983). When contract provisions appear to conflict,
The Fleming Firm argued below that appellants expressly waived any claim relating to the firm‘s settlement allocation because the settlement packets they signed include language waiving appellants’ right to contest “the settlement in any particular.” In their third issue, appellants argue that the trial court erred to the extent it granted summary judgment on the Fleming Firm‘s waiver defense.
The settlement packets disclosed to each client: (a) the gross settlement amount to be paid by Wyeth; (b) deductions for miscellaneous costs associated with the settlement; (c) an amount reserved for claimants who suffered worsening symptoms in the future; (d) attorney‘s fees; (e) “Client expenses“; and (f) the net amount each client would receive. “Client expenses,” as explained in the packets, purported to represent each client‘s “proportionate share of expenses that [the Fleming Firm] incurred in developing the liability and damage issues against [Wyeth], and the expenses associated with settling [the] litigation.” The expenses included filing fees, service fees, court fees, postage, courier costs, medical records fees, deposition expenses, travel expenses, investigative fees, expert witness fees, and costs associated with epidemiology and cardiology studies. The “Client expenses” were listed as a lump sum number (without detail or explanation as to what specific expenses comprised the aggregate sum) and deducted from the gross settlement amount.
Directly underneath the calculation of the gross settlement amount, deductions, and net settlement amount, the settlement packets stated that each client agreed to the following:
I hereby approve and authorize the above settlement and distribution of settlement proceeds. It is my wish to compromise and settle this claim now as set out in this settlement statement and the release contained in Packet 1.
I have been informed that the defendants have agreed to settle 8,050 other Fleming & Associates clients’ claims as part of their agreement to settle my claim. I have consented to my settlement and all the other Fleming settlements after disclosure of the existence and nature of all the claims involved and of the nature and extent of the participation of each person in the settlement. I expressly agree to accept the settlement
and to settle my case according to the terms stated above, and I hereby waive any right whatsoever to contest the settlement in any particular, including but not limited to, the aggregate nature of the settlement. (Capitalization normalized) (emphasis added).
The Fleming Firm argues that by agreeing to the statement, “I hereby waive any right whatsoever to contest the settlement in any particular,” appellants unequivocally and intentionally waived any claims they had or might ever have against the Fleming Firm based on its role and actions in connection with the settlement of appellants’ claims against Wyeth. In response, appellants argue that they merely agreed to waive any right to contest the settlement with Wyeth; they did not settle any claims against the Fleming Firm and did not know about (and hence did not intend to waive) any claims they may have had against the Fleming Firm. The document‘s reference to waiving a right “to contest the settlement,” appellants say, means a waiver of claims against Wyeth only, and it does not include a waiver of any claims against the Fleming Firm.
Appellants’ interpretation of the waiver clause is reasonable considering the settlement packet as a whole and reading its provisions together. References to appellants’ desire to “settle this claim” and the acknowledgment that the Fleming Firm “settle[d] 8,050 other Fleming & Associates clients’ claims as part of their agreement to settle my claim” suggest that the parties intended “the settlement” to mean the termination of the claims asserted by appellants against Wyeth—the only claims pleaded. As appellants note, other parts of the settlement packets stated that the agreement was “a settlement with Wyeth.” Further, the settlement packets state that “[t]he total gross settlement is the amount upon which your settlement is based.”
The documents’ definitions of the terms “settlement agreement” and “settlement amount” support appellants’ interpretation of the waiver language.8 For instance, the release stated: “Wyeth and Claimant‘s Counsel have entered into a settlement agreement (the ‘Settlement Agreement‘), under which Wyeth and Claimant‘s Counsel have agreed on a single, total amount to be paid by Wyeth, subject to certain conditions, in settlement of the Diet Drug claims of all clients of Claimant‘s Counsel who agree to participate in such settlement (the ‘Settlement Amount‘).” These definitions explicitly refer to the claims being settled as the “diet drug claims” asserted by appellants against Wyeth. The underlying dispute was between appellants and Wyeth. Appellants asserted no claims against the Fleming Firm during the pendency of the underlying case. Appellants agreed to abandon their claims against Wyeth in exchange for the settlement payout funded by Wyeth. The Fleming Firm then prepared the settlement packets, which showed, inter alia, how much the firm deducted for client expenses from the gross settlement amount
and the “net” settlement amount. By signing the settlement packets, appellants agreed to waive the right “to contest the settlement.”
Because appellants’ interpretation of the waiver language is reasonable, the Fleming Firm has not established conclusively an unambiguous “certain or definite legal meaning” in its favor. See El Paso Field Servs., 389 S.W.3d at 806; Clark v. Cotten Schmidt, L.L.P., 327 S.W.3d 765, 774-75 & n.11 (Tex. App.—Fort Worth 2010, no pet.)
We need not and do not decide whether the Fleming Firm‘s interpretation of the waiver language is also reasonable (thus creating ambiguity), or whether appellants’ interpretation is the only reasonable one.9 See, e.g., S. Austin Mkt. Place, Inc. v. James F. Parker Interests, Inc., No. 03-99-00144-CV, 2000 WL 374064, at *4 (Tex. App.—Austin Apr. 13, 2000, no pet.) (not designated for publication)
(“Without deciding whether an ambiguity exists in the contract, we hold that South Austin has not conclusively proven that its interpretation of the agreement is the only reasonable interpretation.“); Clark, 327 S.W.3d at 775 n.11. Appellants have not moved for summary judgment in their favor on the issue. We hold merely that the Fleming Firm is not entitled to summary judgment on its waiver defense based on the argument that appellants expressly waived their claims against the firm under the settlement packets’ terms. Whether appellants are entitled to summary judgment on the question, or whether a jury must determine whether appellants expressly waived their claims, are matters the trial court may consider on remand.
3. Implied waiver
The Fleming Firm also argued that appellants impliedly waived their claims by accepting the benefits of the settlement.
Waiver is largely a matter of intent, and for implied waiver to be found through a party‘s conduct, intent must be clearly demonstrated by the surrounding facts and circumstances. Crosstex Energy Servs., L.P. v. Pro Plus, Inc., 430 S.W.3d 384, 393 (Tex. 2014); In re Gen. Elec. Capital Corp., 203 S.W.3d 314, 316 (Tex. 2006) (per curiam); Jernigan v. Langley, 111 S.W.3d 153, 156-57 (Tex. 2003) (per curiam). “Silence or inaction, for so long a period as to show an intention to yield the known right, is also enough to prove waiver.” Tenneco Inc. v. Enter. Prods. Co., 925 S.W.2d 640, 643 (Tex. 1996). Waiver is ordinarily a question of fact, but when the surrounding facts and circumstances are undisputed, the question becomes one of law. Trelltex, 494 S.W.3d at 790-91.
Here, the Fleming Firm argues that appellants’ knowledge of and intent to waive any claims against the firm is clearly demonstrated because they accepted the settlement distributions without complaint. Therefore, the firm argues, whatever it “did or did not do regarding the settlement, or whatever they disclosed or failed
For waiver to apply, a party must be aware of all pertinent facts. See id. at 793. Our court examined this issue in Clear Lake Center, L.P. v. Garden Ridge, L.P., 416 S.W.3d 527, 535 (Tex. App.—Houston [14th Dist.] 2013, no pet.). There, a party to a contract, Garden Ridge, sued the other contracting party, Clear Lake, for charging Garden Ridge a management fee that was miscalculated under the contract‘s terms, and Clear Lake unsuccessfully argued on summary judgment that Garden Ridge waived its claim by paying the fee each year. Id. We affirmed, noting that Garden Ridge paid the entire fee without actually knowing that part of the fee was not authorized under the contract: “Garden Ridge‘s lack of knowledge is crucial.” Id. at 543. Thus, we held Garden Ridge was not conclusively shown to have waived its claims. The Fourth Court of Appeals has held similarly in a comparable setting. See Enterprise-Laredo Assocs. v. Hachar‘s, Inc., 839 S.W.2d 822, 836 (Tex. App.—San Antonio 1992, writ denied) (settlement agreement whereby parties agreed to “waive any other violations of the Lease” occurring before a particular date did not establish affirmative defense of waiver when the plaintiff “was not aware of the CAM overcharges at the time it signed the agreement“; thus, the plaintiff did not waive the right to sue for CAM overcharges).
Although appellants unquestionably agreed to a settlement with Wyeth from which the Fleming Firm deducted some client expenses, the firm presented no summary judgment evidence demonstrating appellants’ actual knowledge of their claims against the firm, such as evidence appellants were aware that the Fleming Firm included the cost of the full echocardiogram program in the deductions. The firm relies only upon the following language in the settlement packets:
The expenses identified on this Settlement Statement reflect your proportionate share of the expenses that Fleming & Associates, L.L.P. incurred in developing the liability and damage issues against [Wyeth], and the expenses associated with settling this litigation. Expenses include . . . experts retained to do epidemiology and cardiology studies to assist the plaintiffs in the fen-phen litigation, including costs associated with those studies (for example, echocardiograms).
This language does not clearly and unequivocally inform appellants that the deductions included the cost for the entire echocardiogram program, as opposed to the cost for each individual‘s echocardiogram. Thus, the Fleming Firm has not conclusively proven that appellants were aware of all pertinent facts. Additionally, appellants’ acceptance of the settlement from Wyeth does not clearly indicate a knowledge of and desire to waive any claims against the firm. The Fleming Firm cites appellants’ generic conduct toward Wyeth, which might evince acceptance of the settlement and waiver of claims against Wyeth. But accepting Wyeth‘s settlement of appellants’ claims against Wyeth does not clearly demonstrate for summary judgment purposes an intent to waive any claims appellants may have had against the firm. We conclude that the Fleming Firm did not establish its waiver defense as a matter of law based on an argument of implied waiver. See Clear Lake Ctr., 416 S.W.3d at 543.
The Fleming Firm relies heavily on a case from our sister court in Corpus Christi. See Flores v. Skaro, No. 13-03-00358-CV, 2005 WL 2885841 (Tex. App.—Corpus Christi Nov. 3, 2005, no pet.)
a fee in excess of the percentage distribution provided for by the parties’ fee agreement. Id. at *1. The attorney moved for summary judgment on the defense of waiver, which the trial court granted. Id. at *2.
The court of appeals affirmed, noting that the client signed an itemized settlement statement approving distribution of the settlement proceeds and initialed each page of the court‘s final judgment approving the settlement. Id. at *6. The client also “voiced no objection and remained silent with respect to the propriety of the settlement.” Id. Based on those circumstances, the court concluded that the client‘s conduct established his intent to relinquish his right to challenge the distribution of the settlement proceeds. Id.
Skaro certainly supports the legal tenet that a party‘s silence or inaction may establish waiver, see Tenneco, 925 S.W.2d at 643, but Skaro is factually distinguishable. In Skaro, it was clear from the face of the settlement statement that the appellant‘s attorney deducted a fee in an amount allegedly greater than permitted under the fee agreement. See Skaro, 2005 WL 2885841, at *1 & n.3 (fee agreement allowed fee of 50% of settlement; attorney deducted fees totaling nearly 90% of settlement). Here, in contrast, while the settlement packets disclose the total client expense deductions in aggregate dollar amount, the packets do not make clear that the amount included each clients’ proportionate share of the entire echocardiogram program cost for all potential claimants tested. Accordingly, Skaro does not control our analysis.
We sustain appellants’ third issue.
4. Release
In their fourth issue, appellants argue that the trial court erred to the extent it granted summary judgment on the basis of the firm‘s release defense.
To effectively release a claim in Texas, the releasing instrument must “mention” the claim to be released. Victoria Bank & Trust Co. v. Brady, 811 S.W.2d 931, 938 (Tex. 1991). Even if the claims exist when the release is executed, any claims not clearly within the subject matter of the release are not discharged. Id.; Vela v. Pennzoil Producing Co., 723 S.W.2d 199, 204 (Tex. App.—San Antonio 1986, writ ref‘d n.r.e.); see Baker v. City of Fort Worth, 146 Tex. 600, 210 S.W.2d 564, 567-68 (1948). General categorical release clauses are narrowly construed. Victoria Bank & Trust Co., 811 S.W.2d at 938; Duncan v. Cessna Aircraft Co., 665 S.W.2d 414, 422 (Tex. 1984).
The settlement packets provided that each client “release[d] and forever discharge[d], and agree[d] . . . not to sue, Wyeth and the other Released Parties of and from all Diet Drug Claims.” As defined in the agreement, “Released Parties” includes any person “against whom Claimant has asserted or could attempt to assert any claim, liability, or right to payment . . . arising out of or related in any way to the alleged ingestion of Diet Drugs by Claimant.” The Fleming Firm contends that it is included within this definition of “Released Parties,” and that by agreeing to the release clause, appellants released the Fleming Firm from all liability stemming from its role in allocating the settlement funds.
But even if the parties unequivocally intended to include the Fleming Firm within the scope of the “Released Parties,” the firm has not shown that the releases are valid as a matter of law, which was the firm‘s burden to prove. See Keck, Mahin & Cate v. Nat‘l Union Fire Ins. Co., 20 S.W.3d 692, 699 (Tex. 2000).
The relationship between the Fleming Firm and appellants is fiduciary in nature. Id. Contracts negotiated during the existence of an attorney-client relationship are closely scrutinized and presumed invalid or unfair. Id. The Fleming Firm had the burden to prove on summary judgment that the release was fair and reasonable, and that appellants were informed of all material facts relating to the release. Id. In establishing the fairness of a transaction involving a fiduciary, some of the most important factors are whether there was full disclosure regarding the transaction, whether the consideration (if any) was adequate, and whether the beneficiary had the benefit of independent advice. Estate of Townes v. Townes, 867 S.W.2d 414, 417 (Tex. App.—Houston [14th Dist.] 1993, writ denied); see also Lee v. Hasson, 286 S.W.3d 1, 21 (Tex. App.—Houston [14th Dist.] 2007, pet. denied).
“Another crucial inquiry is whether the fiduciary has benefited at the expense of the beneficiary.” Townes, 867 S.W.2d at 417.
The Fleming Firm made no attempt in its motion for summary judgment to rebut the presumption of invalidity or unfairness by demonstrating that the releases were fair and reasonable. Though the firm raises several arguments on appeal in an attempt to buttress its release defense, it did not do so in the trial court, and a motion for traditional summary judgment must stand or fall on its own merit. See Tex. Windstorm Ins. Ass‘n v. Dickinson Indep. Sch. Dist., ---S.W.3d---, 2018 WL 4781526, at *5 (Tex. App.—Houston [14th Dist.] 2018, no pet. h.).
The Fleming Firm therefore failed to conclusively prove that the releases were fair and reasonable to the extent they purport to release the Fleming Firm. See Keck, 20 S.W.3d at 699 (holding that movant did not maintain its burden of proof to show release agreement was fair and reasonable when it did not rebut presumption of unfairness attaching to contracts between
We sustain appellants’ fourth issue.
Conclusion
The Fleming Firm failed to prove that it was entitled to summary judgment as a matter of law on the firm‘s affirmative defenses of collateral estoppel, waiver, and release. Accordingly, we reverse the trial court‘s summary judgment in cause number 2010-25097, and we remand the case to the trial court for further proceedings.
Kevin Jewell
Justice
Panel consists of Justices Busby, Brown, and Jewell.
Appendix A — Full list of appellants in Cause No. 14-17-00223-CV
Aaron, Joyce A; Abbott, Glenda D.; Abney, Barbara D.; Abraham, Jacquelyn M. (f/k/a Deleon, Jacquelyn M.); Acree, Connie S.; Adams, Julie A.; Adams, Lynn A.; Adams, Nadine; Addison, Victoria; Adey, Laurie J.; Ahern, Patricia J.; Ai, Lien K.; Aldrete, Vicki A.; Aldrich, Judith A.; Aldridge, Mary A.; Barnes, Pauline o/b/o Alexander, Debra K.; Alexander, Kathy O.; Allen, Karen D.; Allen, Mary G.; Allen, Stephanie P.; Allred, Kayelyn; Alvey, Tammy J.; Andersen, Judy A. (f/k/a Cancila-Andersen, Judy A.); Anderson Carpenter, Delaine A.; Anderson, Barbara; Anderson, Catherine J.; Anderson, Deidra F.; Anderson, Holly J.; Anderson, Melissa; Anderson, Melissa L.; Anderson, Nathaline; Anderson, Patsy B.; Anderson, Ruth E.; Anderson, Sharon L.; Anderson, Terri L.; Andre, Moira F.; Andres, Sarah; Anfield, Anna; Angius, Sandra; Anthony, Olivia M.; Appleton, Janet L.; Aragon, Dolores Y.; Arah, Joy A.; Arango, Ricardo; Arensberg, Caron R.; Armstrong, Lolita S.; Arnim, Lisa D.; Asbery, Kathleen M.; Ashton, Gary L.; Atkins, Brenda J.; Atkins, Edith E.; Atkinson, Julia D.; Atwell-Vasko, Shelley E.; Ausley, Maurice S.; Avoledo, Verna J.; Ayala, Mary K.; Ayler, Deborah L.; Ayler, Mary E.; Bailey, Edra V. (f/k/a Moore-Bailey, Edra V.); Bailey, Mary A.; Bailey, Patti L.; Baker, Arlene; Baker, Claudia; Baker, Daina; Baker, Janice H.; Baker, Joy L.; Baker, KellyAnn K.; Baker, Kimberly K.; Bale, Connie D.; Banks, Randy J.; Banta, Shirley H.; Barfield, Connie; Barker, Richard L.; Barnard, Kristy L; Barnes, Mona L.; Barnes, Paul; Barnes-Hoggard, Deborah A; Barnett, Sharon K.; Barney, Barbara A.; Barns, Teresa o/b/o Barns, Elva M.; Barrett, Sandra; Barrios, Donna L.; Barry, Georgia; Bashaw, Hayley L. (f/k/a Markham, Hayley L.); Baskerville, Jodi A.; Bass, Shirley; Bassett, Denise M.; Bates, LaRay S.; Battaglia, Edie M.; Batte, Betty; Bauer, Kimberly; Baxter, Cecile A.; Beaudette, Linda G.; Bedgood, Martha; Beever, Connie K.; Behn, Lorene S.; Bejarano, Nancy J.; Belcher, Loretta C.; Belew, Debbi K.; Bell, Frances J.; Bell, Joy o/b/o Sakowski, Julianna C.; Benavidez, Jose A.; Benham, Sandra E.; Bennett,
Taylor, Ruth L.; Taylor, Una J.; Teague, Jean C.; Teal, David A.; Templet, Linda A.; Terry, Dee A.; Tervort, Carole D.; Tessena, Sharon L.; Thacker, Debra J.; Tharp, Wanda Ann C.; Theis, Renna R.; Thibault, Rosemarie; Thibodeaux, Crystal D.; Thigpen, Carol L.; Thomas, Adrianetta; Thomas, Debbie L.; Thomas, Frank H.; Thomas, Jeanette; Thomas, Jennifer J.; Thomas, Mary L.; Thomas, Ramona J.; Thompson, Charlesetta C.; Thompson, Cheryl J.; Thompson, Linda D.; Thompson, Sharon E.; Thompson, Sharon W.; Thompson, Sheila A. (f/k/a Romero, Sheila A.); Thompson, Suzanne L.; Thompson-Lester, Fannie M.; Thorn, Sharon K.; Thum, Barbara; Thurmond, Lorraine; Tilghman, Misty L.; Tindel, Sherry E.; Tintes, Mary A.; Tischmak, Judy A.; Martin, Reva (o/b/o Toney, Delilah); Torgramsen, Patty A.; Townsend, Marion D.; Trammel, Danielle L.; Travis, Janet L.; Trevino, David; Trovillion, Deborah D.; Troyan, Caryn D.; Trulson-Hovde, Pennie M.; Truman, Jean R.; Poling, Patricia o/b/o Trusler, Pamela S.; Truxillo, Barbara L. (f/k/a Trauth, Barbara L.); Tubbs, Matilda B.; Tucker, Sandra L.; Turbeville, Carol D.; Turley, Jennifer L.; Turnbow, Rachel A.; Turner, Deborah J.; Turner, Minnie L.; Turner, Shirley T.; Tweedy, Sherl A.; Tyler, Janice M.; Ugles, Stacey R.; Ulibarri, Gloria; Un, Dawn M.; Upton, Noel W.; Urbanek, Michael H.; Utsler, Sandra M.; Vailes, Ginger G.; Valentine, Velda F.; Valiente-Garcia, Ada; Van Keuren, Alice M.; Van Meter, Margaret; Van Volkenburg, Roberta J.; Vanderford, Debbie (f/k/a McCullars, Debbie); Vannoy, Linda J.; Vanskiver, Colleen D.; Vares, Jerome (o/b/o Vares, Joyce); Varnado, Carolyn D.; Vasquez, Noemi; Vaughn, Delories L.; Velez, Lynda; Vernon, Donna L.; Vest, Teri L. (f/k/a Cummings, Teri L.); Vigil, Linda M.;
