Case Information

*0 FILED IN 3rd COURT OF APPEALS AUSTIN, TEXAS 5/11/2015 8:10:34 PM JEFFREY D. KYLE Clerk NO. 03-13-00124-CV THIRD COURT OF APPEALS 5/11/2015 8:10:34 PM JEFFREY D. KYLE AUSTIN, TEXAS *1 ACCEPTED ^[5240055] CLERK IN THE

COURT OF APPEALS THIRD DISTRICT OF TEXAS WILLIAM B. GAMMON,

Appellant,

V. HENRY I. HANK HODES AND DIAGNOSTIC EXPERTS OF AUSTIN, INC., Appellees.

APPEAL FROM THE COUNTY COURT AT LAW NO. 2 OF TRAVIS COUNTY, TEXAS Trial Court Cause No. C-1-CV-10-007188 APPELLANT’S MOTION FOR RECONSIDERATION EN BANC William B. Gammon Texas Bar No. 07611280 G AMMON L AW FFICE , PLLC 1201 Spyglass Drive Suite 100 Austin, TX 78746 Telephone: 512-472-8909 Fax: 888-545-4279 ATTORNEY FOR WILLIAM B. GAMMON

ORAL ARGUMENT REQUESTED *2 NO. 03-13-00124-CV

IN THE

COURT OF APPEALS THIRD DISTRICT OF TEXAS WILLIAM B. GAMMON,

Appellant,

V. HENRY I. HANK HODES AND DIAGNOSTIC EXPERTS OF AUSTIN, INC., Appellees.

APPEAL FROM THE COUNTY COURT AT LAW NO. 2 OF TRAVIS COUNTY, TEXAS Trial Court Cause No. C-1-CV-10-007188 APPELLANT’S MOTION FOR RECONSIDERATION EN BANC William B. Gammon Texas Bar No. 07611280 G AMMON L AW O FFICE , PLLC 1201 Spyglass Drive Suite 100 Austin, TX 78746 Telephone: 512-472-8909 Fax: 888-545-4279 ATTORNEY FOR WILLIAM B. GAMMON ORAL ARGUMENT REQUESTED *3

IDENTITY OF PARTIES AND COUNSEL The following is a complete list of all parties, as well as the names and addresses

of all counsel:

PARTIES COUNSEL

Appellant: Counsel for Appellant:

William B. Gammon William B. Gammon State Bar No. 07611280 GAMMON LAW OFFICE, PLLC 1201 Spyglass Drive, Suite 100 Austin, Texas 78746 Telephone: 512-472-8909 Facsimile: 888-545-4279 billgammon@gammonlawoffice.com Appellees: Counsel for Appellees:

Hank I. Hodes and Timothy J. Herman Diagnostic Experts of Austin, Inc. State Bar No. 09513700 HOWRY BREEN & HERMAN, L.L.P. 1900 Pearl Street Austin, Texas 78705-5408 Telephone: 512-474-7300 Facsimile: 512-474-8557 therman@howrybreen.com *4 TABLE OF CONTENTS

IDENTITY OF PARTIES AND COUNSEL................................................................2 TABLE OF CONTENTS ...............................................................................................3 TABLE OF AUTHORITIES .........................................................................................4 BACKGROUND .............................................................................................................6 SUMMARY .....................................................................................................................7 ARGUMENT & AUTHORITIES .................................................................................8 CERTIFICATE OF SERVICE ...................................................................................17 CERTIFICATE OF COMPLIANCE .........................................................................17 APPENDIX....................................................................................................................18 *5 TABLE OF AUTHORITIES CASES :

Brookshire Bros. v. Smith , 176 S.W.3d 30 (Tex. App. Houston 1 st Dist. 2005)…...9

Burrow v. Arce, 997 S.W.2d 229 (Tex. 1999)………………………….…………15

Cherne Indus., Inc. v. Magallanes, 763 S.W.2d 768 (Tex. 1989)………….……...10

City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005)……………….….………..16

Epps v. Fowler , 351 S.W.3d 862 (Tex. 2011)…………………………………….12

IKB Indus. (Nigeria) Ltd. v. Pro-Line Corp. , 938 S.W.2d 440 (Tex.1997)………..9

Intercontinental Group P'ship v. KB Home Lone Star L.P. ,

295 S.W.3d 650 (Tex. 2009)……………………………………………………...11

Larry F. Smith, Inc. v. The Weber Co. , 110 S.W.3d 611

(Tex. App. – Dallas 2003, pet. denied)………………………………………..13, 14

Liberty Mut. Fire Ins. V. Laca , 243 S.W.3d 791, 2007 Tex. App.

LEXIS 9510 (Tex. App. El Paso 2007)…………………………………………...14

Operation Rescue-Nat’l v. Planned Parenthood ,

937 S.W.2d 60 (Tex. App. – Houston [14th Dist.] aff’d as modified.

975 S.W.2d 546 (Tex. 1998)…………………………………………………….....9

Ray v. McFarland, 97 S.W.3d 728 (Tex. 2003)…………………………………..13

Regal Finance Co., Ltd. v. Tex Star Motors, Inc.,

355 S.W.3d 595 (Tex. 2010)……………………………………………………...16

Sixth RMA Partners, L.P. v. Sibley, 111 S.W.3d 46 (Tex. 2003)…………………14

Spir Star AG v. Kimich, 310 S.W.3d 868 (Tex. 2010)……………………………14

STATUTES AND RULES:

T EX . R. A PP . P. 19.1………………………………………………………………...8

T EX . R. A PP . P. 41.2( C )……………………………………………………….......8,9

T EX . R. A PP . P. 49.1…………………………………………………………...... 8, 9

T EX . R. A PP . P. 49.7………………………………………………………………...8

T EX . R. C IV . P. 49.3………………………………………………………………...9

T EX . R. C IV . P. 49.5…………………………………………………………..........9

T EX . R. C IV . P. 296……………………………………………………...……...9, 10

T EX . R. C IV . P. 297………………………………………………………….…….10

T EX . R. C IV . P. 301………………………………………………………….…….13

SECONDARY SOURCE:

6 McDonald & Carlson, T EXAS C IVIL P RACTICE 2d § 18:3 (1998)……………….10

TO THE HONORABLE THIRD DISTRICT COURT OF APPEALS:

COMES NOW Appellant, William B. Gammon, hereinafter (“Gammon”), and files this Appellant’s Brief and shows as follows:

BACKGROUND

1. Gammon filed suit against Henry I. “Hank” Hodes (Hodes) and Diagnostic

Experts of Austin, Inc. (DEA) seeking payment for legal work performed by

Gammon on behalf of Hodes and his air-conditioning repair company, DEA,

spanning fifteen years.

2. The case was first tried to a jury in Travis County Court at Law No. 1 on

October 10, 2011. The trial resulted in a verdict for Gammon of $143,691.60 plus

attorneys’ fees. Appellees’ motion for new trial was granted. [Exhibit A, Final

Judgment from First Trial]. The case was tried to a second jury on October 15,

2012, in Travis County Court at Law No. 2. [Exhibit B, Final Judgment Nunc Pro

Tunc (CR 773-775)]

3. The second jury returned a finding that Gammon prevailed on his quantum

meruit claim and valued it at $30,000.00. The jury also found that Gammon did not

comply with his fiduciary duty but found no damages as a result.

4. On October 29, 2012, Defendants’ filed a Motion for Judgment [Exhibit E,

(CR 739-744)(CR 764-770)].

5. The trial court reversed the jury verdict. The Court found unspecified

fiduciary breaches of a “clear and serious nature” and entered judgment on

November 20, 2012 that Gammon take nothing by quantum meruit and that he

further forfeit $27,379.19 in fees already received.

6. On December 4, 2012, Gammon filed Plaintiff’s Request For Findings of

Fact and Conclusions of Law. (CR 776-778).

7. On December 31, 2012, Gammon filed Plaintiff’s Notice of Past Due

Findings of Fact and Conclusions of Law. (CR 788-789) .

8. To date, the trial court has not made findings of fact or conclusions of law.

9. A three–member panel of this Court affirmed the trial court’s judgment on

April 24, 2015. [Exhibit C, Memorandum Opinion].

SUMMARY

10. The panel’s decision is based upon the notion that the Court is not required

to submit findings of facts and conclusions of law even when the court rendered

judgment non obstante veredicto (JNOV). The jury did not award damages to

Hodes. There was no finding of any improper benefit to Gammon. There was no

finding by the jury or the Court that forfeiture of a portion of fees previously paid

to Gammon is necessary to satisfy the public’s interest in protecting the attorney-

client relationship.

11. However, in contradiction to the jury’s findings, the trial court determined

that Gammon committed “clear and serious breaches of his fiduciary duty”

damaging Hodes and ordered that Gammon forfeit $27,379.19. Gammon is entitled

to findings of fact and conclusions of law based on the court’s JNOV. Gammon

properly requested factual findings but they were never provided. (CR 776-778;

788-789). This is harmful error as it effectively deprives Gammon of his right to

appeal the judgment. Gammon is entitled to know what “clear and serious” acts or

omissions amounted to a breach of his fiduciary duty to Hodes. He is further

entitled to know how the Court calculated the amount of the forfeiture.

12. The panel erred in finding that the Court is not required to submit findings of

fact and conclusions of law where the court reversed the jury’s verdict and

rendered JNOV.

ARGUMENT & AUTHORITIES I. The Court should grant En Banc Reconsideration

A motion for rehearing differs from and serves a different purpose than a motion for en banc reconsideration. For example, stricter time limits govern the motion for rehearing than govern the motion for en banc reconsideration. Compare TEX. R. APP. P. 49.1 (must file motion for rehearing within 15 days after court-of-appeals judgment is rendered) with TEX. R. APP. P. 49.7 (may file motion for en banc reconsideration while court of appeals has plenary jurisdiction); see also TEX. R. APP. P. 19.1(plenary power of court of appeals expires 60 days after judgment if no timely filed motion to extend time or motion for rehearing is then pending);TEX. R. APP. P. 41.2(c) (stating that en banc reconsideration is disfavored and listing standards); TEX. R. APP. P. 49.7 (reconsideration en *10 banc suspends finality of panel's judgment or order). Whether seeking rehearing, pursuant to rule 49.1, or further rehearing, pursuant to rule 49.5, a party's sole purpose is to convince the panel of justices who considered the case to change the decision because it was erroneous--for whatever reason. See TEX. R. APP. P. 49.1, ^[41] 49.5; see also TEX. R. APP. P. 49.3 (authorizing majority of justices who participated in the case to grant rehearing). In contrast, en banc reconsideration is limited to situations in which (1) en banc reconsideration is necessary to secure or maintain uniformity of the Court's decisions or (2) extraordinary circumstances require en banc consideration. See TEX. R. APP. P. 41.2(c).

Brookshire Bros. v. Smith, 176 S.W.3d 30, 40-41 (Tex. App. Houston 1 st Dist.

2005) (internal footnote omitted.)

13. The panel erred. The panel’s error requires en banc reconsideration to secure

or maintain uniformity of the Court’s decisions, as the panel’s opinion conflicts

with established Texas case law. See Operation Rescue-Nat’l v. Planned

Parenthood , 937 S.W.2d 60, 82 (Tex. App. – Houston [14 th Dist.] aff’d as

modified . 975 S.W.2d 546 (Tex. 1998) (holding that a findings of fact and

conclusions of law is proper when a portion of the cause of action is decided by a

jury and another portion is decided by the trial court.)

II. The trial court committed reversible error by failing to issue findings of fact and conclusions of law as timely requested.

14. Parties to a lawsuit have a right to a written findings of fact and conclusions

of law after a trial judge rules on the merits. Tex. R. Civ. P. 296; IKB Indus.

(Nigeria) Ltd. v. Pro-Line Corp., 938 S.W.2d 440, 442 (Tex.1997). Therefore, if a

party properly requests them, the trial court must make and file them. IKB Indus.,

938 S.W.2d at 442. Without the lower court’s findings of fact and conclusions of

law, it becomes difficult for the appellate court to determine what legal theory

forms the basis of the trial court’s judgment. The purpose of requesting written

findings of fact and conclusions of law from the Court is to "narrow the bases of

the judgment to only a portion of [the multiple] claims and defenses, thereby

reducing the number of contentions that the appellant must raise on appeal." 6

McDonald & Carlson, T EXAS C IVIL P RACTICE 2d § 18:3 (1998).

15. On December 4, 2012, Gammon timely filed his Request for Findings of

Fact and Conclusions of Law pursuant to Rule 296 of the Texas Rules of Civil

Procedure. T EX . R. C IV . P. 296 (“In any case tried in the district or county court

without a jury, any party may request the court to state in writing its findings of

fact and conclusions of law.”). The trial court failed to file its findings of fact and

conclusions of law within twenty (20) days after Gammon’s timely request was

filed. On December 31, 2012, within thirty (30) days of when Gammon’s original

request was filed, Gammon subsequently filed his Notice of Past-Due Findings,

thus extending the trial court’s deadline by an additional forty (40) days from the

original request. T EX . R. C IV . P. 297. Ultimately, the trial court failed to file any

findings of facts and conclusions of law.

16. The trial court’s failure to file its mandatory findings of fact and conclusions

of law has resulted in great harm to Gammon. See, Cherne Indus., Inc. v.

Magallanes , 763 S.W.2d 768, 772 (Tex. 1989) (holding a trial court’s duty to file

findings of facts and conclusions of law is mandatory when all requests have been

properly made).

17. The crux of this lawsuit is the contractual obligations between the parties. In

Gammon’s suit against Hodes, Hodes countersued Gammon with a series of

accusations that Gammon breached his fiduciary duty to Hodes. The litigation that

followed resulted in two drastically different final judgments. In the latter, the jury,

in relevant part, made the following findings: First, the jury found that Gammon

prevailed in his claim for quantum meruit in that he had performed compensable

work for which he had not been paid. Furthermore, the jury awarded Gammon

thirty thousand dollars ($30,000.00) as the reasonable value for the compensable

work in Gammon’s quantum meruit claim. Second, the jury found that Gammon

did not comply with his fiduciary duty with regard to Hodes and DEA. However,

the jury found that Hodes and DEA were entitled to recover zero dollars ($0.00)

compensation for Gammon’s alleged “breach.”

18. The jury found that Hodes was not damaged, and therefore was not the

prevailing party in the lawsuit. See , Intercontinental Group P'ship v. KB Home

Lone Star L.P. , 295 S.W.3d 650, 655 (Tex. 2009) (holding that a plaintiff who

obtained a jury finding that the defendant breached its contract but was awarded no

damages was not a prevailing party) (emphasis added). See also, Epps v. Fowler ,

351 S.W.3d 862 (Tex. 2011) (following KB Home ).

19. Nonetheless, without any explanation or reasoning that can be derived from

the record, the trial court decided to issue a contradictory “Final Judgment” on

November 19, 2012, followed by a Judgment Nunc Pro Tunc issued the following

day. [Exhibit D; Exhibit B]. The trial court’s judgments contained the following

changes from the jury verdict: First, the trial court found that “it appears to the

court that the verdict of the jury was for the Defendants and against the Plaintiff”

and therefore, “judgment should be rendered on the verdict in favor of Henry I.

‘Hank’ Hodes and Diagnostic Experts of Austin, Inc. and against William

Gammon.” Second, “[t]he Court also finds that breaches of fiduciary duty

committed by Gammon constitute clear and serious breaches of duty by [an]

attorney” (emphasis added). The trial court ruled that Gammon’s breach warranted

forfeiture of fees and prevented Gammon from being entitled to any equitable

relief, including his $30,000.00 recovery contemplated by the jury’s declaration as

to the value of Gammon’s uncompensated work. Instead, the Court ruled that

Gammon forfeit $27,279.19. ^[1] This forfeiture amount nonetheless would leave

Gammon a $2,720.81 judgment for damages against Hodes. The judgment,

however, states that Gammon is denied all equitable relief.

*14 20. The Court’s ruling disregarded the jury’s findings and granted Hodes and

DEA a judgment non obstante veredicto pursuant to T EX . R. C IV . P. 301. See ,

Exhibit E; See Ray v. McFarland , 97 S.W.3d 728, 729 (Tex. 2003)(“ A trial

court may disregard a jury's verdict and render judgment n.o.v. if there is no

evidence to support the jury's findings or if a directed verdict would have been

proper.”)

21. Neither the final judgment nor the trial record specify the basis for the trial

court’s ruling, nor does the judgment refer to any statements made at trial.

Furthermore, the trial court did not even provide a reason in open court when it

orally announced its decision.

22. “When there are two or more possible grounds of recovery or defense, as in

this case, an appellant is forced to guess what the trial court found unless the trial

court's findings are provided to him.” ^[2] See also, Larry F. Smith, Inc. v. The Weber

Co. , 110 S.W.3d 611, 614 (Tex. App. – Dallas 2003, pet. denied). Absent a

findings of fact and conclusions of law, Gammon must guess on what basis the

trial court reversed the jury verdict and ruled against him, including what acts or

omissions were deemed by the Court as a breach of his fiduciary duty to Hodes.

23. Since Gammon is obligated to guess, the Court’s refusal to submit findings

of fact and conclusions of law constitutes harm to Gammon. Liberty Mut. Fire Ins.

*15 V. Laca , 243 S.W.3d 791, 2007 Tex. App. LEXIS 9510 (Tex. App. El Paso 2007);

See also, Larry F. Smith, Inc. , 110 S.W.3d at 614 (holding that the general rule is

that an appellant has been harmed if, under the circumstances of the case, he has to

guess at the reason the trial court ruled against him).

24. Generally, when no findings of fact or conclusions of law are filed, the trial

court's judgment implies all findings of fact necessary to support it. Spir Star AG v.

Kimich, 310 S.W.3d 868, 871–72 (Tex.2010). The implied findings are not

conclusive, and an appellant may challenge the findings by raising sufficiency of

the evidence issues. Sixth RMA Partners, L.P. v. Sibley, 111 S.W.3d 46, 52

(Tex.2003). Gammon is being “forced to attack all the possible grounds supporting

the judgment instead of the grounds actually found by the court. Id . at 615-616.

This is especially true given that Gammon has brought several causes of action

against Hodes and Hodes has brought several causes of action against Gammon in

their counterclaims.

25. The panel determined that the lower court did not err in its refusal to provide

findings of fact and conclusions of law, because “[i]n a fee forfeiture case, once

any relevant, disputed facts are resolved by the jury, the trial court exercises its

discretion to determine. . . whether fee forfeiture should be imposed.” Given the

lower court’s discretion, the panel concluded that it was not required to provide

findings of fact and conclusions of law. However, the panel failed to acknowledge

that the lower court took the case away from the jury and entered a JNOV verdict.

Therefore, this in fact is not a verdict by jury as the panel concluded in its decision.

26. The Texas Supreme Court has held that “fee forfeiture” can never be

appropriate in the absence of a “clear and serious” violation of the attorney’s

duties. Burrow v. Arce , 997 S.W.2d 229, 245-46 (Tex. 1999). The trial court in this

case found that a “clear and serious” breach of Gammon’s fiduciary duty occurred,

but offered no rationalization as to how that conclusion was derived. In reaching its

decision, the lower court was required to resolve underlying fact questions. The

entire Charge of the Court does not contain any instruction or guidance for the jury

to determine whether Gammon’s breach of fiduciary to Hodes raised to the level of

“clear and serious.” Underlying factual disputes must be resolved by a trier of fact

before such legal pronouncements can be made. Id . The Court in Burrow further

provided guidance on what issues are necessary for the trier of fact to determine

whether a fiduciary duty breach raises to the level of both “clear and serious.”: 1)

whether, and if so, to what extent, a client was injured by the breach of duty; 2)

whether, and if so, when, the wrongful conduct happened, and; 3) whether the

attorney acted negligently, recklessly or intentionally in breaching the duty. Id .

27. The trial court provided no explanation as to how it reached its

determination of “clear and serious” and failed to address the foregoing factual

determinations made by the Court in order to reach its final judgment. The trial

court reached this conclusion with no evidence of any kind to show that this legal

standard had been met. "For evidence to conclusively establish the opposite of a

vital fact, the evidence must be the type that could not lead reasonable people to

different conclusions." Regal Finance Co., Ltd. v. Tex Star Motors, Inc ., 355

S.W.3d 595, 603 (Tex. 2010) (citing City of Keller , 168 S.W.3d at 815-16).

Findings of fact and conclusions of law is proper to specify the basis for the trial

court’s ruling of “clear and serious” breach, as well as the arbitrary $27,279.19

award. Absent said findings of fact and conclusions of law is harmful error.

PRAYER

WHEREFORE, PREMISES CONSIDERED, Appellant, William B. Gammon

respectfully requests that the Court reverse the judgment of the County Court in all

things and remand for retrial consistent with its opinion.

Respectfully submitted, /s/ William B. Gammon William B. Gammon State Bar No. 07611280 G AMMON L AW O FFICE PLLC 1201 Spyglass Drive, Suite 100 Austin, Texas 78746 Telephone: 512-472-8909 Facsimile: 888-545-4279 billgammon@gammonlawoffice.com Attorney for Appellant *18 CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the foregoing Appellant’s Brief was served upon counsel of record for Appellees on this the 11 th day of May,

2015, via this Court’s online filing system, to:

Timothy J. Herman

State Bar No. 09513700

HOWRY BREEN & HERMAN, L.L.P.

1900 Pearl Street

Austin, Texas 78705-5408

Telephone: 512-474-7300

Facsimile: 512-474-8557

therman@howrybreen.com

Attorney for Appellees

/s/ William B. Gammon William B. Gammon CERTIFICATE OF COMPLIANCE Pursuant to Texas Rule of Appellate Procedure 9.4(i), I hereby certify that this document contains 2,708 words.

/s/ William B. Gammon William B. Gammon

[1] This number appears out of thin air as no evidence or testimony of any kind appears in the record to support it. Such an award is inherently arbitrary and capricious and must be reversed.

[12]

[2] Hodes claimed at least seven separate breaches of fiduciary duty. Neither the trial court nor the jury specified which, if any, of these accusations they found credible. See , Exhibit E, Defendants’ Memorandum in Support of Motion for Judgment on the Verdict (CR 764-770).

[13]