Opinion
No. 05-18-00010-CV
06-19-2019
JOHN P. HAGAN, Appellant v. JAMES E. PENNINGTON, Appellee
On Appeal from the County Court at Law No. 5 Collin County, Texas
Trial Court Cause No. 005-00175-2017
MEMORANDUM OPINION
Before Justices Bridges, Partida-Kipness, and Carlyle
Opinion by Justice Bridges
The underlying proceedings of this appeal involve appellee James E. Pennington's breach of contract claim against appellant John P. Hagan and Hagan's subsequent legal malpractice counterclaim against Pennington. The trial court granted two summary judgments in favor of Pennington. A jury subsequently awarded Pennington $62,628 in attorney's fees for litigating his breach of contract claim. Hagan raises seven issues on appeal. He challenges the jury's $62,628 award of attorney's fees. He further challenges the trial court (1) granting the summary judgments, (2) denying a motion for new trial or motion for judgment notwithstanding the verdict, (3) denying an in camera motion for inspection of documents, (4) denying a motion to compel documents, (5) and failing to award post-judgment interest. We affirm the trial court's judgment.
Background
In early June of 2014, Hagan entered into a legal services agreement with Pennington in which Pennington agreed to represent Hagan "in a lawsuit and/or arbitration against [Hagan's] former partner, Gary D. Sarles, arising from Sarles' breach of an Income Partner Agreement between [Hagan] and Sarles, and a related matter involving a pending lawsuit/arbitration against Sarles' office manager, Kelly Wilcox." Hagan agreed to pay Pennington $400 an hour for his services. Hagan paid for some, but not all, of Pennington's legal fees. Specifically, he paid $45,120, but refused to pay the $17,320 Pennington billed for preparing and representing Hagan in the arbitration proceeding.
After Hagan refused to pay the demanded fees, Pennington withdrew as his attorney. His withdrawal occurred about a month before the final arbitration hearing. The final arbitration award provided, among other things, that Sarles breached the Income Partner Agreement and awarded Hagan attorney's fees pursuant to civil practice and remedies code section 38.001. Thus, despite Pennington withdrawing, Hagan achieved some success in arbitration.
Pennington subsequently filed a breach of contract lawsuit to recover the $17,320 in unpaid attorney's fees. Hagan answered and filed a legal malpractice counterclaim. Hagan alleged Pennington breached his duty of care by failing to advise him that a provision in the arbitration agreement prohibited the recovery of pro se attorney fees, meaning Hagan could not recover the $74,707 in damages he allegedly suffered as a result of his decrease in billable hours during the time he worked pro se on the arbitration.
Pennington filed a motion for summary judgment on Hagan's legal malpractice counterclaim, which the trial court granted. Pennington filed a second motion for summary judgment on his attorney's fees in the underlying arbitration, which the trial court also granted. The only remaining issue for trial was the reasonableness and necessity of Pennington's fees in pursuing his breach of contract claim in the trial court litigation. Pennington sought $162,000 in attorney's fees for pursuing his $17,320 breach of contract claim.
After a two-day trial, a jury awarded Pennington $62,628. Hagan filed a motion for new trial and a judgment notwithstanding the verdict, which the trial court denied. The court's second amended final judgment memorialized the prior $17,320 award for legal services in the underlying arbitration and that Hagan take nothing on his counterclaim and third-party petition for legal malpractice. It awarded $1,914 in sanctions against Pennington related to a gag order, which is not subject of this appeal. The trial court further awarded Pennington his appellate attorney's fees and post-judgment interest. Hagan filed a second motion for new trial and judgment notwithstanding the verdict, which the trial court again denied. This appeal followed.
Summary Judgment: Legal Malpractice
In his second issue, Hagan argues the trial court erred by granting Pennington's first motion for summary judgment on his legal malpractice counterclaim because the court disregarded expert testimony establishing Pennington owed Hagan a heightened duty of care, which Pennington breached thereby causing Hagan damages. Pennington responds the trial court properly granted summary judgment on traditional grounds because Hagan incorrectly interprets the relationship between the Civil Rights Attorney's Fee Award Act of 1976 and section 38.001 of the civil practice and remedies code in awarding attorney's fees. Pennington also contends the trial properly granted a no-evidence summary judgment because Hagan failed to timely designate his expert witness to support his arguments.
The standards of review for traditional and no-evidence summary judgments are well known. See Timpte Indus., Inc. v. Gish, 286 S.W.3d 306, 310 (Tex. 2009). In a traditional motion for summary judgment, the movant has the burden to demonstrate that no genuine issue of material fact exists, and it is entitled to judgment as a matter of law. TEX. R. CIV. P. 166a(c). We review a no-evidence summary judgment under the same legal sufficiency standard used to review a directed verdict. TEX. R. CIV. P. 166a(i); Gish, 286 S.W.3d at 310. To defeat a no-evidence summary judgment, the nonmovant is required to produce evidence that raises a genuine issue of material fact on each challenged element of its claim. Gish, 286 S.W.3d at 310; see also TEX. R. CIV. P. 166a(i).
In reviewing both a traditional and no-evidence summary judgment, we consider the evidence in the light most favorable to the nonmovant. Smith v. O'Donnell, 288 S.W.3d 417, 424 (Tex. 2009). We credit evidence favorable to the nonmovant if reasonable jurors could, and we disregard evidence contrary to the nonmovant unless reasonable jurors could not. Gish, 286 S.W.3d at 310.
When a party files a hybrid summary judgment motion on both no-evidence and traditional grounds, we generally first review the trial court's judgment under the no-evidence standard of review. Rico v. L-3 Commc'ns Corp., 420 S.W.3d 431, 439 (Tex. App.—Dallas 2014, no pet.). Should we determine summary judgment was appropriate under the no-evidence standard, we need not address issues related to the traditional summary judgment motion. Id.
To decide whether Pennington was entitled to a no-evidence summary judgment, we must consider what evidence, if any, the trial court considered in making its ruling. Hagan argues the trial court ignored controverting expert testimony of Tom C. Clark. Pennington argues a no-evidence summary judgment was appropriate because Hagan failed to timely designate Clark or secure a ruling on his motion to designate a late expert witness. Hagan responds he timely designated Clark because on April 7, 2017, the trial court moved the discovery deadline, thereby making his February 22, 2017 designation of Clark timely pursuant to Texas Rule of Civil Procedure 195.2(a). See TEX. R. CIV. P. 195.2(a) (expert designations due ninety days before the end of discovery).
Hagan, seemingly acknowledging he missed the deadline for designating an expert witness, filed his motion for leave to file late designation of expert witnesses on February 22, 2017. In the motion, he sought to designate Clark to testify about Pennington's failure to exercise reasonable care in the underlying breach of contract case. Hagan argued Pennington would not be unfairly prejudiced or unfairly surprised because there was no trial setting at that time, and Pennington would have ample time to depose Clark.
Pennington filed his first hybrid motion for summary judgment on February 28, 2017 and argued the trial court should dismiss Hagan's counterclaim and third party claim because there was no evidence supporting essential elements of a legal malpractice claim, and Hagan's claim failed as a matter of law because Texas law allows for recovery of pro se attorney's fees.
On April 7, 2017, the trial court, "having considered the motion, response, and evidence filed with the Court," granted summary judgment in favor of Pennington on Hagan's counterclaim for malpractice/negligence and ordered Hagan take nothing "on his counterclaim or his third party petition." The trial court did not specify the grounds on which it granted summary judgment. It also did not indicate it granted Hagan leave to file his expert designation of Clark.
Approximately two months later, on June 6, 2017, Hagan filed a motion to reconsider the trial court's first summary judgment order. In the motion, he argued the trial court erred in granting the motion for summary judgment by considering Pennington's new (and untimely) evidence and by considering Pennington's new arguments raised in his reply to Hagan's response to summary judgment. Hagan again requested leave to submit the Declaration of Expert Tom Clark on the issue of malpractice. Hagan asked the court to reconsider its summary judgment ruling and allow him to file his sur-reply, in which he included the expert Declaration of Tom Clark on Negligence/Malpractice, among other attached exhibits.
On July 6, 2017, the trial court held a hearing on Hagan's motion for reconsideration. At the conclusion of the hearing, the court stated, "In an abundance of caution, I am going to grant the motion to reconsider and allow the surreply." The trial court did not indicate it was considering the evidence attached to the sur-reply or the expert Declaration of Tom Clark. The written order states, "The Court, after considering said Motion, Pennington's Response, the argument of counsel, and the case law submitted by the Parties, finds that Hagan's Motion for Reconsideration is well-taken and should be, in all things, GRANTED."
On July 17, 2017, the trial court signed another order in which it again "ORDERED that Plaintiff's First Motion for Summary Judgment is granted and that Defendant John Hagan shall take nothing on his counterclaims or his third party petition." The order stated the trial court made its ruling "after careful and impartial consideration of Plaintiff's First Motion for Summary judgment and evidence attached thereto, Defendant's response and evidence attached thereto, Plaintiff's reply, Defendant's Sur-reply, Plaintiff's Objection to and Motion to Strike the Untimely Declaration of Tom Clark, Plaintiff's Evidentiary Objections to the Evidence Attached to Defendant's Sur-reply, and all relevant case authorities presented therein." Like the order granting the motion for reconsideration, the July 17, 2017, order did not indicate the trial court considered the evidence attached to Hagan's sur-reply or the expert Declaration of Tom Clark.
When a motion to reconsider is filed after the rendition of summary judgment, a trial court has discretion to consider the grounds in the post-judgment motion and supporting proof and reaffirm its summary judgment based on the entire record. PNP Petroleum I, LP v. Taylor, 438 S.W.3d 723, 729 (Tex. App.—San Antonio 2014, pet. denied). The trial court also has the discretion to simply deny a motion filed after entry of summary judgment without considering its substance. Id. "The efficacy of a post-summary judgment motion to preserve a complaint for appellate review depends upon whether the trial court affirmatively considers the new grounds and proof as memorialized by a written order." Id. (quoting Timothy Patton, Summary Judgments in Texas § 7.06[1] (3d ed. 2012)). Thus, a trial court may accept summary judgment evidence filed late, even after summary judgment, as long as the court affirmatively indicates in the record that it accepted or considered it. Stephens v. Dolcefino, 126 S.W.3d 120, 133 (Tex. App.—Houston [1st Dist.] 2003, pet. denied). But ordinarily, when a motion for reconsideration is filed after a summary judgment motion is heard and ruled upon, the trial court may only consider the record as it existed before hearing the motion for the first time. See Circle X Land & Cattle Co. v. Mumford Ind. Sch. Dist., 325 S.W.3d 859, 863 (Tex. App. —Houston [14th Dist.] 2010, pet. denied).
For example, an order stating, "The Court has considered the motion for new trial and motion for reconsideration of [Defendants] Traditional Motion for Summary Judgment filed by [Plaintiff], any response, the arguments of counsel, and the papers on file" did not affirmatively indicate the trial court accepted or considered the later-filed evidence attached to plaintiff's motions for new trial and reconsideration. NMRO Holdings, LLC v. Williams, No. 01-16-00816-CV, 2017 WL 4782793, at *5 (Tex. App.—Houston [1st Dist.] Oct. 24, 2017, no pet.) (mem. op.) (denying motion for rehearing of motion for summary judgment). Thus, the appellate court did not consider the evidence and was limited in its review of the summary judgment to the arguments and evidence presented in the initial summary judgment. Id. But see also Circle X Land & Cattle Co., 325 S.W.3d at 863 (appellate court reviewed evidence attached to motion to reconsider where order reflected affidavits and exhibits were considered by trial court).
This Court reached a similar result in Morris v. Unified Housing Foundation Inc., No. 05-13-01425-CV, 2015 WL 4985599, at *6 (Tex. App.—Dallas Aug. 21, 2015, no pet.) (mem. op.). In that case, the plaintiffs filed a motion to set aside a summary judgment and filed a supplement including a letter from a psychologist. "Because that letter was filed after the trial court granted summary judgment and there is no indication that the trial court considered it," we did not consider the letter when reviewing the propriety of that judgment. Id. But see Stephens, 126 S.W.3d at 134 (trial court verbally ruled it would include the evidence offered at the hearing on the motion to reconsider the summary judgment thereby affirmatively indicating he accepted the evidence before reaffirming its prior ruling).
Here, neither the order granting Hagan's motion for reconsideration of Pennington's first motion for summary judgment nor the subsequent order reaffirming summary judgment in Pennington's favor indicate the trial court considered any evidence attached to Hagan's sur-reply. To the extent Hagan argued during the July 6, 2017 hearing that the court should allow him to file the sur-reply and consider his expert's declaration, listening to arguments is not an indication that a trial court considered evidence. See, e.g., Soloman v. Whataburger Restaurants, LLC, No. 04-17-00255-CV, 2018 WL 2121360, at *2 (Tex. App.—San Antonio May 9, 2018, no pet.) (mem. op.) (trial court listening to arguments presented at a hearing on a motion for new trial was not an affirmative indication the trial court considered evidence attached to motion for new trial); see also Wakefield v. Ayers, No. 01-14-00648-CV, 2016 WL 4536454, at *7 n.6 (Tex. App.—Houston [1st Dist.] Aug. 30, 2016, no pet.) (mem. op.) (trial court did not affirmatively indicate at hearing on a motion to vacate summary judgment that it considered late-filed affidavit in reaching its decision). Hagan did nothing to insure that the trial court "affirmatively indicated on the record" it considered the new evidence. It was his burden to obtain a ruling on his motion for leave to designate Clark and ensure the record reflects either the trial court's ruling or refusal to rule on his motion. TEX. R. APP. P. 33.1; Cruz v. Schell, Beene & Vaughn, L.L.P., No. 05-01-00565-CV, 2012 WL 3194074, at *3 (Tex. App.—Dallas Aug. 7, 2012, pet. denied) (mem. op.).
In contrast, at the conclusion of the July 21, 2017 hearing, Hagan's counsel specifically asked the trial court, "Did you consider Mr. Pennington's reply and the evidence he attached to his reply in making your determination on his second motion for summary judgment?"
To the extent Hagan argues his expert designation became timely when the trial court moved the discovery deadline during the April 7, 2017 hearing, thereby eliminating his requirement to seek leave of court, we are unpersuaded. As explained above, nothing in the trial court's orders indicate it considered any additional evidence after it granted the original motion for summary judgment. As such, we find no basis in the record to compel review of the evidence attached to Hagan's sur-reply, which included Clark's expert declaration. Accordingly, we are limited in our review of the evidence presented in the initial summary judgment. See, e.g., PNP Petroleum I, LP., 438 S.W.3d at 730; Circle X Land & Cattle Co., 325 S.W.3d at 863.
During the April 7, 2017 hearing, the trial court moved the discovery deadline to June 28, 2017.
Our conclusion is further supported by the trial court's order specifically including language that it considered "Plaintiff's Motion for Summary Judgment and evidence attached thereto, Defendant's response and evidence attached thereto," but excluding/omitting any language regarding evidence attached to the other documents referred to in the order.
In Texas, a plaintiff in a legal malpractice suit is required to present expert testimony regarding causation and the standard of skill and care ordinarily exercised by an attorney. See Cantu v. Horany, 195 S.W.3d 867, 873 (Tex. App.—Dallas 2006, no pet.). Although Hagan filed a motion for leave to designate Clark as an expert prior to Pennington filing his no-evidence motion for summary judgment, Hagan failed to obtain a ruling on his motion prior to filing his response on March 29, 2017 or the trial court ruling on the summary judgment on April 7, 2017. By not providing any expert testimony in his summary judgment response, Hagan failed to produce evidence raising a genuine issue of material fact on each challenged element of his legal malpractice cause of action. See TEX. R. CIV. P. 166a(i); see also Gish, 286 S.W.3d at 310. Accordingly, the trial court properly granted Pennington's no-evidence motion for summary judgment. Because the trial court did not err by granting a no-evidence summary judgment, we need not address Hagan's arguments related to the traditional summary judgment motion. Rico, 420 S.W.3d at 439.
Finally, Hagan argues the trial court erred by granting summary judgment in favor of third party defendant, the Law Offices of James E. Pennington, P.C. (JEP), because neither Pennington nor JEP moved for summary judgment on Hagan's third-party claims. He argues "that was error and Hagan did not waive this argument by not objecting to the trial court," citing Dillard v. NCNB Texas National Bank, 815 S.W.2d 356, 359 (Tex. App.—Austin 1991, no writ), disapproved of on other grounds by Amberboy v. Societe de Banque Privee, 831 S.W.2d 793, 797 (Tex. 1992). In Dillard, the court determined "no such objection was required in the present case in order to preserve error" because "[w]e cannot sustain a theory of waiver based upon a party's failure to object to a matter concerning which his opponent's motion for summary judgment is silent, and . . . without a motion therefor to which a response could be filed." Id. First, this is not a case in which Pennington's motion was silent regarding his challenges to Hagan's legal malpractice claim. His motion explained Hagan's failure to produce any evidence supporting his legal malpractice claim. Although Hagan filed his third party petition against JEP after Pennington filed his motion for summary judgment, Hagan did not raise any distinct complaints against JEP that were not encompassed by Hagan's claim against Pennington, individually.
More importantly, the facts of this case indicate both parties proceeded as if the trial court had in fact granted summary judgment in favor of JEP. The trial court's April 7, 2017, order stated summary judgment "is hereby granted against John Hagan on this counterclaim for malpractice/negligence and that John Hagan shall take nothing on his counterclaim or his third party petition." The trial court's July 17, 2017 order included the same language that Hagan "take nothing on his counterclaim or his third party petition." Hagan never raised an objection or asked the trial court to reconsider its ruling based on granting more relief than Pennington requested.
In the July 21, 2017 hearing, Pennington's attorney commented, "[the trial court has] already ruled on summary judgment, and the only issue left for trial is now on attorney's fees." The case then went to trial on attorney's fees. The procedural posture of the case was again memorialized, without objection, in the trial court's second amended final judgment, in relevant part, as follows:
On August 28, 2017, the Court called this case for trial to determine the last remaining issue in this case regarding the amount of Plaintiff's attorney's fees in this lawsuit (the Court previously disposed of all other issues by summary judgment). . . .Hagan had repeated opportunities to raise his objection to the trial court but did not. We do not find Dillard persuasive under these facts. We overrule Hagan's first issue.
The court has also previously ordered that Hagan shall take nothing on his counterclaim and his third-party petition for malpractice/professional negligence against Pennington and Law Offices of James E. Pennington.
Summary Judgment: Breach of Contract
In his third issue, Hagan argues the trial court erred by granting Pennington's second traditional motion for summary judgment because he raised a genuine issue of material fact on at least one element of Pennington's breach of contract claim. Hagan relies on the "Second Declaration of Tom Clark: Reasonableness and Necessity of Fees Sought by James E. Pennington in the 2015 Arbitration" and other evidence to raise a fact issue regarding the reasonableness of attorney's fees. Pennington responds summary judgment was proper because (1) Hagan failed to timely designate Clark; (2) his later attempt to designate was inadequate; (3) the declaration he filed violated the sham affidavit doctrine; and (4) Hagan's other responsive evidence is inadequate to raise a fact issue.
Pennington filed a second motion for summary judgment arguing the legal services he provided Hagan in the underlying arbitration were reasonable as a matter of law. According to the contract for legal services, Hagan agreed to pay Pennington an hourly rate of $400 per hour. The contract further provided, "Although Attorney will only perform legal services which he deems reasonably necessary to represent Client in this matter, Attorney cannot promise or make any guarantee concerning the number of hours spent on this matter, or the amount of the fees which may be incurred by Client." Pennington billed Hagan for $22,040, but only received $4,720 leaving $17,320 outstanding.
Although the reasonableness of attorney's fees is generally a question of fact, "[w]ell-settled law recognizes that the affidavit of the attorney representing a claimant constitutes expert testimony that will support an award of attorney's fees in a summary judgment proceeding." Haden v. David J. Sacks, P.C., 332 S.W.3d 503, 513 (Tex. App.—Houston [1st Dist.] 2009, pet. denied); Tesoro Petroleum Corp. v. Coastal Refining and Mktg., Inc., 754 S.W.2d 764, 767 (Tex. App.—Houston [1st Dist.] 1988, writ denied). In the absence of controverting evidence, the affidavit will support summary judgment. Tesoro, 754 S.W.2d at 767.
Pennington included an affidavit along with attached exhibits in support of his motion for summary judgment. Hagan challenged the invoices and final arbitration award attached to Pennington's affidavit as inadmissible hearsay. Hagan raised his objections to the trial court, but failed to secure a written ruling on them. Because he failed to obtain written rulings on the objections, he cannot raise these alleged defects on appeal. See Silverado Truck & Diesel Repair, LLC v. Lawson, No. 05-18-00540-CV, 2019 WL 1467966, at *3 (Tex. App.—Dallas Apr. 3, 2019, no pet.) (mem. op.); S&I Mgmt., Inc. v. Choi, 331 S.W.3d 849, 855 (Tex. App.—Dallas 2011, no pet.).
Hagan also objected to Pennington's affidavit as conclusory and self-serving. Objections that statements in an affidavit are conclusory assert a defect in substance, which may be raised on appeal despite a party's failure to obtain a ruling from the trial court. See Univ. of Tex. Health Science Ctr. at Houston v. McQueen, 431 S.W.3d 750, 763 (Tex. App.—Houston [14th Dist.] 2014, no pet.). "A conclusory statement is one that does not provide the underlying facts to support the conclusion." Choi, 331 S.W.3d at 855.
Hagan alleges the following statements are conclusory:
• "I did not charge Mr. Hagan for time which is excessive or unnecessary."
• "In my opinion, $400 per hour is a reasonable hourly rate for time spent on Mr. Hagan's case . . . the attorneys' fees I charged Mr. Hagan to perform the legal services which I performed on his behalf are within the range of fees customarily charged by other lawyers for similar legal services in Dallas, Texas."
Pennington explained in his affidavit that he has been licensed in Texas since 1986 and focused primarily on litigation. For fifteen years he has held an "AV" rating from Martindale Hubble. In 2015 and 2016, he was voted a "Best Lawyer" in Dallas for professional liability litigation. Based on his thirty year of experience in Dallas, he was familiar with the reasonable and customary rates charged by other lawyers in the area for professional liability claims. In addition to litigation experience, he had expert witness experience in cases involving professional liability and attorney's fees. He stated, "I have experience in reviewing invoices and fees charged by other lawyers in Dallas, Texas. As a result of this experience, I have also become familiar with the hourly rates charged by other lawyers in Dallas, Texas." Based on his experience, reputation, and ability, he opined $400 an hour was a reasonable rate for his legal services. He attached invoices to his affidavit in support of his fees.
Pennington considered the factors set forth in rule 1.04 of the Texas Disciplinary Rules of Professional Conduct in determining the reasonableness of his fees. He explained Sarles and his attorney were uncooperative during the arbitration, which contributed to additional legal services in the underlying case. Because of the number of claims and counterclaims involved, "the case was moderately complex and required an experienced litigator to represent Mr. Hagan." He spent a "fairly significant amount of time" on the case preventing him from accepting or performing certain work for other clients. He explained that he was required to act "fairly quickly" in pursuing arbitration in the underlying case because of statute of limitations concerns. Hagan was a new client and Pennington charged him an hourly rate consistent with what he charged other new clients at the time. An affidavit, such as Pennington's, that sets forth his qualifications, his opinion regarding reasonable attorney's fees, and the basis for his opinion is not conclusory and will be sufficient to support summary judgment if uncontroverted. See Brewer v. Green Lizard Holdings, L.L.C. Series SR, 406 S.W.3d 399, 403 (Tex. App.—Fort Worth 2013, pet. denied).
Hagan argues Clark's declaration, attached to his summary judgment response, provided controverting evidence thereby creating a fact issue regarding whether Pennington's fees in the underlying arbitration were reasonable. Pennington responds Hagan failed to timely designate Clark as an expert witness; therefore, Clark's declaration could not controvert Pennington's affidavit and create a fact issue precluding summary judgment.
According to excerpts from the April 7, 2017 status conference hearing, the parties agreed to an August 28 trial date. The trial court then stated, "So, based on your trial date, you'll know when your discovery deadlines are due. Everything's 60 days prior to." Thus, the new discovery deadline was sixty days before trial, meaning June 29, 2017. Rule 195.2(b) required Hagan to designate Clark sixty days before the discovery deadline, meaning April 30, 2017. See TEX. R. CIV. P. 195.2(b). Hagan admitted in his response to plaintiff's second motion for summary judgment that he did not designate Clark as an expert witness regarding the reasonableness and necessity of Pennington's arbitration fees until May 26, 2017. Hagan argued the timeliness of Clark's designation based on a miscalculation of discovery deadlines in which he believed the trial court ordered that the new discovery cutoff was thirty days before trial, which would have been July 28. Thus, Hagan erroneously believed his deadline for expert designation was May 29, 2017. As such, the record establishes Hagan failed to timely designate Clark as an expert witness. Under rule 193.6, discovery that is not timely disclosed and witnesses that are not timely identified are inadmissible as evidence. See TEX. R. CIV. P. 193.6(a); see also Fort Brown Villas III Condo. Ass'n v. Gillenwater, 285 S.W.3d 879, 881 (Tex. 2009). Accordingly, Clark's declaration was inadmissible and, therefore, we may not consider it in our summary judgment review.
To the extent Hagan challenges the trial court's exclusion of Clark despite the untimely designation, his argument fails. A trial court's exclusion of an expert who has not been properly designated can be overturned only for an abuse of discretion. Gillenwater, 285 S.W.3d at 881. The rules requiring an expert to be designated before any testimony from that expert can be admitted apply in summary judgment proceedings, such that a non-designated expert's affidavit cannot be considered as summary judgment evidence absent a showing of good cause or a lack of unfair surprise or prejudice. See TEX. R. CIV. P. 193.6; Cunningham v. Columbia/St. David's Healthcare Sys., L.P., 185 S.W.3d 7, 13 (Tex. App.—Austin 2005, no pet.).
Hagan had the burden of establishing good cause or a lack of unfair surprise or prejudice to Pennington. Gillenwater, 285 S.W.3d at 881; see also TEX. R. CIV. P. 193.6(b). Hagan has not presented any such argument on appeal; therefore, he has waived any complaint. See TEX. R. APP. P. 38.1(i) (brief must contain a clear and concise argument for contentions made with appropriate citations to authorities and record); Flores v. Grayson Cty. Cent. Appraisal Dist., No. 05-16-00180-CV, 2016 WL 7384161, at *2 (Tex. App.—Dallas Dec. 21, 2016, no pet.) (mem. op.) (concluding appellant waived complaint regarding exclusion of evidence under rule 193.6 by failing to present any argument challenging the trial court's ruling).
Without Clark's declaration, the only evidence left to create a fact issue regarding the reasonableness of Pennington's attorney fees is the "Declaration of John Hagan," attached to Hagan's summary judgment response. However, Hagan never designated himself as an expert to testify regarding the reasonableness of fees; therefore, to the extent his affidavit discusses the reasonableness of any fees, he offered such testimony as a lay witness. See, e.g., Woodhaven Partners, Ltd. v. Shamoun & Norman, L.L.P., 422 S.W.3d 821, 830 (Tex. App.—Dallas 2014, no pet.). Lay witness testimony regarding the reasonableness and necessity of attorney's fees is not competent, admissible summary judgment evidence. Id. Accordingly, Hagan failed to present any evidence raising a genuine issue of material fact regarding the reasonableness of Pennington's attorney's fees. The trial court properly granted Pennington's second summary judgment motion as a matter of law. We overrule Hagan's third issue.
Second Motion for New Trial: Segregation of Attorney's Fees
In his first issue, Hagan argues the trial court erred by denying his second motion for new trial or judgment notwithstanding the verdict because the trial court failed to require segregation of attorney's fees Pennington incurred solely in connection with his breach of contract claim. Pennington responds the trial court properly denied the motion because fees incurred in defeating affirmative defenses and counterclaims are recoverable without segregation.
The question of whether segregation is required in a particular case is a legal inquiry subject to de novo review. See Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 312-13 (Tex. 2006); see also Transcon. Realty Invs., Inc. v. McGuire, Craddock, Strother & Hale, P.C., No. 05-09-00884-CV, 2011 WL 1493985, at *5 (Tex. App.—Dallas Apr. 20, 2011, pet. denied) (mem. op.).
The Texas Supreme Court held in Chapa that a prevailing party must segregate recoverable from unrecoverable attorney's fees in all cases. Chapa, 212 S.W.3d at 313. However, the supreme court later held fees incurred defending counterclaims and affirmative defenses are recoverable without segregation. See Varner v. Cardenas, 218 S.W.3d 68, 70-71 (Tex. 2007) (concluding that to recover full amount of the note, the Varners had to overcome Cardenases' defense and counterclaim); see also Chapa, 212 S.W.3d at 314 (segregation not required to "overcome any and all affirmative defenses" to a breach of contract claim). The opposing party who raises affirmative defenses to a contract claim should not be allowed to suggest to the factfinder that overcoming those defenses was unnecessary. Chapa, 212 S.W.3d at 314. Similarly, "when a defendant asserts a counterclaim that the plaintiff must overcome in order to fully recover on its contract claim, the attorneys' fees necessary to defeat that counterclaim are likewise recoverable." 7979 Airport Garage, L.L.C. v. Dollar Rent A Car Sys., Inc., 245 S.W.3d 488, 507 (Tex. App.—Houston [14th Dist.] 2007, pet. denied) (citing Varner, 218 S.W.3d at 70).
Here, Pennington's breach of contract claim arose from his representation of Hagan in the underlying litigation regarding breach of a partnership agreement, which included an arbitration agreement entered into in January 1, 2009. Pennington sued for recovery of fees Hagan failed to pay him for representing him in the underlying dispute.
Hagan's counterclaim for legal malpractice was based on Pennington's alleged failure to read and analyze the four-page arbitration agreement included in the partnership agreement, which governed the recovery of attorney's fees. Hagan asserted Pennington never advised him the Civil Rights Attorney's Fees Award Act of 1976 included in the arbitration agreement controlled the award of attorney's fees rather than section 38.001 of the civil practice and remedies code. Hagan contended that had Pennington actually read the arbitration agreement, as he claimed to have done in his billing statements, he would have realized the Civil Rights Attorney's Fees Award Act of 1976 applied. Hagan further raised the affirmative defense, among others, of offset "in the amount of damages he incurred as a result of Plaintiff's malpractice." He also asserted Pennington committed an anticipatory breach of the contract for legal services.
When a defendant alleges the same theory as both an affirmative defense and a counterclaim in order to reduce or eliminate the plaintiff's recovery on a contract claim, the plaintiff does not need to segregate fees. Here, for Pennington to recover on his breach of contract for legal fees owed by Hagan, Pennington had to overcome Hagan's affirmative defenses and counterclaim for legal malpractice. See, e.g., Transcon. Realty Inv'rs, Inc., 2011 WL 1493985, at *5. Thus, the claims had factual overlap.
In reaching this conclusion, we are unpersuaded by Hagan's reliance on McMahon v. Zimmerman, 433 S.W.3d 680, 691 (Tex. App.—Houston [1st Dist.] 2014, no pet.) and Campbell Harrison & Dagley, L.L.P. v. Blue, 843 F.Supp.2d 673, 692 (N.D.Tex. 2011).
First, we note Blue is a federal case, which is not binding precedent on this Court, but may be considered persuasive authority. See Damian v. Bell Helicopter Textron, Inc., 352 S.W.3d 124, 136 (Tex. App.—Fort Worth 2011, pet. denied). In Blue, the court concluded the attorneys that sued their client for breach of contract based on unpaid legal fees were required to segregate fees incurred in defending against the client's legal malpractice claims because the breach of contract claim and counterclaim for professional negligence "have little, if any, factual overlap." Id. at 693-94 ("[T]he allegations pertaining to Hill III's professional negligence counterclaim are different from the allegations at issue in the fee dispute and it cannot be said that BAM needed to defend against or defeat Hill III's professional negligence counterclaim in order to recover on the BAM Fee Agreement."). The client's counterclaim alleged the attorneys (1) failed to diligently pursue claims against other entities and damages against certain defendants; (2) presented legally damaging arguments to a state court, which other defendants used to reduce a settlement offer; (3) failed to adequately represent his interest; and (4) failed to adequately assess the merits of certain claims. Id. at 693. These allegations were different from allegations in the contract dispute. The facts of the present case are distinguishable, as the basis of Pennington's breach of contract claim (failure to pay for legal services in underlying litigation/arbitration) overlaps Hagan's legal malpractice counterclaim (failure to analyze the arbitration agreement and advise accordingly). Moreover, unlike the client in Blue, Hagan's counterclaim did not involve numerous other allegations of professional malpractice that were not tied to the fee dispute.
McMahon involved an attorney who succeeded on a no-evidence motion for summary judgment on a client's legal malpractice claim and subsequently obtained judgment on remaining counterclaims, including the attorney's breach of contract counterclaim. McMahon, 433 S.W.3d at 684. Although the attorney argued the claims were too intertwined to segregate, the trial court made its own findings and conclusions based on invoices it reviewed and awarded $6,000 to the attorney. On appeal, McMahon argued, among other things, the evidence was legally and factually insufficient to support the award because the attorney failed to segregate fees. Id. at 689-90. The court concluded the trial court's factual findings supported the $6,000 award for breach of contract, and "[w]hile trial courts have no obligation to delve into billing records to segregate fees on behalf of litigants who do not offer segregation testimony, the trial court did not err in electing to do so." Id. at 691. At first blush, this case appears to support Hagan's position; however, the posture of this appeal is distinguishable. In McMahon, the attorney did not attempt to segregate the work performed "relying instead on the argument—which the trial court rejected and which she does not contest—that the claims were too intertwined to segregate." Id. at 691 (emphasis added). As such, the attorney did not challenge the trial court's award of fees based on the segregated amount; therefore, the court of appeals was not presented with the issue of whether segregation was in fact appropriate. Here, the trial court agreed with Pennington that segregation was unnecessary, and Hagan has challenged the ruling. Given the distinction in appellate postures between McMahon and the present case, we do not find McMahon relevant to our analysis. Accordingly, we conclude segregation of fees was unnecessary under these facts.
We likewise conclude segregation was unnecessary for fees Pennington incurred for the potential designation of responsible third parties to Hagan's legal malpractice counterclaim and Pennington's fees for defending against Hagan's third-party petition against JEP.
Hagan argues Pennington's fees for attempting to designate Cynthia Lambert and Jeff Crouch, Hagan's other two attorneys in the arbitration, as responsible third parties are not recoverable "because suing third parties on Hagan's negligence counterclaim was not necessary for Pennington to succeed on his breach of contract claim." Pennington was not attempting to "sue" Lambert and Crouch. Rather, the definition of a "responsible third party" broadly reads "any person who is alleged to have caused or contributed to causing in any way the harm for which recovery of damages is sought, whether by negligent act or omission, by any defensive or unreasonable dangerous product, by other conduct or activity that violates an applicable legal standard, or by any combination of these." TEX. CIV. PRAC. & REM. CODE ANN. § 33.011(6). In fact, the "common understanding" of a "third party" is "a person who is not a named party to the litigation." In re CVR Energy, Inc., 500 S.W.3d 67, 75 (Tex. App.—Houston [1st Dist.] 2016, orig. proceeding) (op. on reh'g) (citing BLACK'S LAW DICTIONARY 10th ed. 2014); see also Galbraith Eng'g Consultants, Inc. v. Pochucha, 290 S.W.3d 863, 865 (Tex. 2009) ("Chapter 33 provides, among other things, that a defendant in such an action may seek to designate a person, who has not been sued as a claimant, as a responsible third party."). Instead, a defendant who seeks to designate a responsible third party claims the third party is responsible to the plaintiff, not the defendant. See J.M.K. 6, Inc. v. Gregg & Gregg, P.C., 192 S.W.3d 189, 201 (Tex. App.—Houston [14th Dist.] 2006, no pet.). Therefore, under the present facts, Pennington's fees incurred in considering the potential of designating certain responsible third parties in order to defend against the identical legal malpractice claim against him and his law firm related to and were necessary to defeat or reduce his liability (or "offset" as Hagan called it) against Hagan's malpractice claim.
Segregation was also unnecessary regarding Hagan's third-party petition against JEP, which alleged the same facts in support of legal malpractice as his suit against Pennington. Neither party has cited to any case in which a defending party to a breach of contract suit for legal services added a third-party suit against the attorney's law firm in which the attorney is the sole owner and the sole attorney. Hagan cites to three cases to support his proposition that a party is required to segregate fees incurred in connection with a third-party petition; however, none of the cases involve facts in which a third-party petition alleged the same facts in support of the same cause of action against a business entity as already alleged against the sole, individual business owner.
In WWW.URBAN.INC. v. Drummond, 508 S.W.3d 657, 672 (Tex. App.—Houston [1st Dist.] 2016, no pet.), Drummond signed an agreement in which he agreed to "work exclusively through [Urban] in acquiring property." Id. at 663. After Drummond purchased a home through another realtor, Urban filed a breach of contract claim to collect commission and attorney's fees. Id. Drummond answered and asserted numerous affirmative defenses and ten counterclaims. Id. Drummond also filed a third-party petition against Urban's legal counsel, Urban's president and CEO, and an Urban employee, but later nonsuited the third-party actions without prejudice. Id. Drummond argued he was entitled to recover attorney's fees incurred with respect to his third-party petitions because they were part of the same "legal proceeding" as Urban. Id. at 672. The court concluded Drummond was required to segregate his fees based on interpretation of the underlying contract which "only authorizes an award of fees against 'the non-prevailing party,' and Urban is not the non-prevailing party with respect to Drummond's third-petitions." Id. Thus, the court reached its conclusion based on interpretation of a contractual provision, not the broader holding encouraged by Hagan that attorney's fees incurred in defending against a third-party petition must be segregated.
In IBP, Inc. v. Klump, 101 S.W.3d 461, 478 (Tex. App.—Amarillo 2001, pet. denied), the court concluded summary judgment was improper because the fees sought as damages were not fees incurred in prosecution of or defense of the suit before the court. The court did not reverse because the party failed to segregate fees. Id.
In Powell v. Narried, 463 S.W.2d 43, 46 (Tex. App.—El Paso 1971, writ ref'd n.r.e.), the original action involved recovery by a workman for injuries sustained in the course of his employment against Narried, the employer, for common law negligence. Narried, the non-subscribing workman's compensation employer, by third party action, recovered damages sustained against his insurance brokers relating to their failure to procure workmen's compensation coverage. Id. at 43. The appellate court reversed an attorney's fee award against third-party defendants (the insurance company) because there was no attempt at any break-down or testimony as to the amount of any attorney's fees being charged Narried for that portion relating only to the defense of an employee's suit for negligence arising from a work accident; nor was there any testimony produced as to whether or not the fee was reasonable or necessary. Id.
Accordingly, the trial court did not err in denying Hagan's second motion for new trial and motion for judgment notwithstanding the verdict. We overrule Hagan's first issue.
Reasonableness of Jury's Award of Attorney's Fees
In his fourth issue, Hagan argues the attorney's fees awarded to Pennington for pursuing his breach of contract claim were excessive and against the great weight and preponderance of the evidence. Pennington responds the evidence is sufficient to support the award.
In a factual sufficiency review, we consider and weigh all of the evidence, both supporting and contradicting the finding. Mar. Overseas Corp. v. Ellis, 971 S.W.2d 402, 406-07 (Tex. 1998). We may set aside the finding only if it is so contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust. Id. at 407; see also Aztec Sys., Inc. v. Prevett, No. 05-18-00183-CV, 2019 WL 1417172, at *3 (Tex. App.—Dallas Mar. 29, 2019, no pet.) (mem. op.). The factfinder is the sole judge of witness credibility and the weight to be given their testimony. Golden Eagle Archery, Inc. v. Jackson, 116 S.W.3d 757, 761 (Tex. 2003). We may not substitute our own judgment for that of the factfinder merely because we might reach a different result. Id.
Hagan contends the evidence is factually insufficient because (1) Pennington failed to provide any impartial testimony or objective third-party studies to support the reasonableness of his hourly rate; (2) Pennington pursued frivolous motions and resisted Hagan's good faith motions; (3) Pennington and David Clouston spent an unreasonable time on simple tasks; and (4) Pennington offered no evidence in support of his August fees. He also asserted the trial court erred by failing to instruct the jury on Pennington's burden of proof.
We first consider whether the trial court abused its discretion by allowing Pennington to present evidence of his August fees because Pennington failed to supplement and produce August billing statements per rule 193.6(a). See TEX. R. CIV. P. 193.6(a). Rule 193.6(a) provides that "[a] party who fails to make, amend, or supplement a discovery response in a timely manner may not introduce in evidence the material or information that was not timely disclosed" unless there was "good cause for the failure to timely make . . . the discovery response" or the timely failure to respond does not "unfairly surprise or unfairly prejudice the other parties." Id. "The burden of establishing good cause or lack of unfair surprise is on the party seeking to introduce the evidence or call the witness," and such a finding must be supported by the record. Id. The trial court has discretion to determine whether the offering party met its burden of showing good cause. Aluminum Co. of Am. v. Bullock, 870 S.W.2d 2, 3 (Tex. 1994).
Prior to Pennington testifying, Hagan objected to his testimony "to the extent that he talks about any fees incurred in the month of August." Pennington asserted he had not prepared August invoices because he did not normally do it until the end of the month. He argued Hagan was not unfairly surprised by his August work as they both attended a pretrial hearing, Hagan knew of the filed motions Pennington responded to, and Hagan knew he was testifying. Based on Pennington's explanation, the trial court acted within its discretion by overruling Hagan's objection and allowing Pennington to testify regarding August fees.
To the extent Hagan contends Pennington offered no evidence to support $20,000 in fees for August, he is incorrect. Pennington explained to the jury he spent ten hours in connection with a pretrial hearing, which included several motions. He spent five hours responding to a motion to limit his role in trial and spent twenty-three hours preparing for the trial, which included preparing witness outlines, voir dire, and his opening statement. Thus, the jury heard some evidence supporting the August fees.
We now consider the entire testimony of Pennington and Clark, the only two witnesses at trial. Pennington testified he graduated from SMU law school in 1986 and has practiced litigation for over thirty years. About twenty years ago, he focused on legal malpractice cases and suing other attorneys over fee disputes. He has been voted one of the best attorneys in Dallas/Fort Worth for professional liability litigation and has been AV-rated by Martindale-Hubbell for over twenty years (a rating based on peer evaluation). He has testified as an expert on numerous occasions regarding attorney's fees.
Pennington explained his attempts to minimize his fees in the case. In December 2016, Pennington sent Hagan a letter stating his fees thus far totaled $8,800 and emphasized continuing to litigate would only increase the fees. He offered to waive a jury trial and allow the trial court to determine the fees, but Hagan refused. Pennington testified that Hagan complicated the original breach of contract claim by raising twelve affirmative defenses and a legal malpractice counterclaim. Pennington explained the numerous motions he filed and responded to and the time spent challenging a protective order Hagan tried to obtain regarding certain discovery documents. He testified that Hagan filed motions for continuance, a motion to abate, motions to compel, an in camera motion, and a motion to prevent Pennington from representing himself.
He offered his invoices as evidence and explained his billing to the jury. Fees through July totaled $140,000. Although Pennington did not believe any of his time was duplicative or unnecessary, he conceded to subtracting $14,456 in fees thereby leaving approximately $126,000 through July. However, adding back his time for August, the fees again totaled $162,000.
He believed all his fees were reasonable and necessary. He considered his time and labor, the novelty and difficulty of the case, his credentials handling legal malpractice cases, his skills, and preclusion of other employment because of the case. He testified he had an active docket and lost billing time on those cases because of his time on the present case. He believed $400 an hour, a rated he has charged since 2012, was customary for an attorney with his experience and special skill set. Further, Hagan signed the fee agreement and agreed to pay that hourly rate.
Clouston assisted Pennington with the suit. He was an attorney with years of experience in legal malpractice and also an SMU law professor. He reduced his hourly rate from $520 to $400 after leaving a big firm and has charged that rate since 2000. Pennington believed Clouston's time was reasonable and necessary.
Clark testified he graduated from Baylor law school in 1989 and practiced his entire career in Dallas and Collin Counties. His practice focused mostly on business litigation. He testified in detail about Pennington's billing statements and repeatedly pointed out tasks he believed were unreasonably billed. For example, he asserted it should have taken an hour to draft the original petition instead of three, and there was no need to research discovery levels because cases have been designated as a 1, 2, or 3 discovery level for over eight years. Clark testified it was unreasonable for an attorney with Pennington's experience to research venue rules and recovery of attorney's fees under section 38.001 of the civil practice and remedies code because "its parameters are well-known." He asserted that every entry which identified time Pennington and Clouston talked to each other was "double billing." Any entries that said "discuss case strategy" was so vague that Pennington should not recover for them. He accused Pennington of reviewing and researching issues that were unnecessary, which made the case "more complicated." He testified to tasks better suited for Pennington's assistant.
Clark believed it was unreasonable to charge $400 an hour for a $17,000 case, but if someone did, "[T]hey better be dang good and they better not charge for stupid stuff like this." He considered the case a collection case, and he would have charged $225 to $250 an hour. Even going "out on a limb," he might charge $300. He suggested the jury should reduce Pennington's fee by twenty-five percent. Alternatively, he suggested a maximum of $300 an hour.
Clark considered the Arthur Anderson factors and did not believe any of them supported Pennington's $162,000 fee request. The fees were unreasonable for the facts at issue, and any loss of other employment was Pennington's fault for "the stuff that he did. . . . or he chose not to take other work." A $400 fee was not customary, and an attorney of Pennington's alleged caliber should have found the case undesirable. "He could've handed it off to any of those attorneys that does [sic] collection cases, and it would've been over and done with."
Clark admitted the jury was required to award some fees so he opined the low end was around $2,100 and the high end was $12,600. He suggested $5,080 was a reasonable amount.
The jury heard two witnesses essentially pointing a finger back and forth and blaming the other for increasing the cost of attorney's fees. It was within the jury's role as the sole judge of credibility to determine the weight to be given their testimony. Golden Eagle Archery, Inc., 116 S.W.3d at 761. The jury was free to consider the testimony and determine whether Pennington pursued frivolous motions, resisted Hagan's good faith motions, or spent unreasonable time on simple tasks. Pennington was not required, as Hagan suggests, to provide any independent third party studies to support his fees.
Importantly, the jury awarded $62,628 in reasonable fees despite Pennington asking for $162,000. See, e.g., Stewart Title Guar. Co. v. Aiello, 941 S.W.2d 68, 73 (Tex. 1997) (a jury may award less fees than requested). Moreover, although Clark testified as an expert, an expert's opinion is not conclusive, and the factfinder is not bound by such testimony. See United Enters., Inc. v. Erick Racing Enters., Inc., No. 07-01-0467-CV, 2002 WL 31899067, at *13 (Tex. App.—Amarillo, Dec. 31, 2002, pet. denied) (mem. op.). Accordingly, the evidence was factually sufficient to support the jury's award of reasonable and necessary attorney's fees.
In reaching this conclusion, we are mindful Hagan's brief did not include any mention of the applicable standard of review; however, he repeatedly argued the jury's award was "against the great weight and preponderance of the evidence" and asked this Court to reverse and remand to the trial court for an accurate assessment of reasonable and necessary fees. Generally, we would construe such language to indicate only a factual sufficiency challenge. See, e.g., Peerless Indem. Ins. Co. v. GLS Masonry, Inc., No. 05-16-00875-CV, 2018 WL 3491045, at *4 (Tex. App.—Dallas July 20, 2018, no pet.) (mem. op.) ("Because appellants ask us to reverse and remand for a new trial rather than to reverse and render, we construe their issues as factual sufficiency challenges."); Heritage Res., Inc. v. Hill, 104 S.W.3d 612, 619 (Tex. App.—El Paso 2003, no pet.) (appellant's prayer for reversal and remand raises factual sufficiency challenge). However, the Texas Supreme has "firmly mandated courts to broadly construe issues to encompass the core questions and to reach all issues subsidiary to and fairly included within them." See Rohrmoos Venture v. UTSW DVA Healthcare, LLP, No. 16-0006, 2019 WL 1873428, at *5 (Tex. Apr. 29, 2019). Hagan argued in a single sentence that the jury's award was based on "insufficient, and in fact non-existence, evidence." To the extent his argument can be broadly construed to encompass a legal sufficiency challenge, we likewise conclude it is without merit.
The Texas Supreme Court recently clarified the proper way to establish an attorney's fee award so as to withstand a legal sufficiency challenge on appeal. See id. at *22-23 (lodestar figure is calculated by multiplying reasonable hours worked by a reasonable hourly rate and the factfinder may consider Arthur Andersen factors to justify an adjustment). Id. at *22. In concluding the evidence was legally insufficient to support the attorney's fee award, the court focused on the substance of the attorney's testimony, which was "too general to establish that the requested fees were reasonable and necessary." Id. at *25 ("Without detail about the work done, how much time was spent on the tasks, and how he arrived at the $800,000 sum, [attorney]'s testimony is legally insufficient to support the attorney's fee award."). Unlike the attorney in Roormoos Venture, Pennington provided specific testimony about his time drafting and responding to numerous motions, among other legal tasks. Additionally, he also offered and the trial court admitted his billing invoices, which detailed the time and work he performed. See id. at *23 (recognizing contemporaneous billing records are not required to prove requested fees are reasonable and necessary but emphasizing billing records are "strongly encouraged"). Accordingly, to the extent Hagan raises a legal sufficiency challenge, his argument fails.
Finally, we reject Hagan's argument that the trial court committed reversible error by not instructing the jury that Pennington had the burden of proof to demonstrate his fees were reasonable and necessary. Trial courts have broad discretion in formulating a charge to submit disputed issues to the jury. See Wal-Mart Stores Tex., LLC v. Bishop, 553 S.W.3d 648, 673 (Tex. App.—Dallas 2018, pet. dism'd by agr.). We review jury charge error for an abuse of discretion. Id. A trial court abuses its discretion if it acts in an arbitrary and unreasonable manner or if it acts without reference to any guiding rules or principles. Id. To determine whether an alleged error in a charge is reversible, we must consider the pleadings, the evidence at trial, and the charge in its entirety. Id. For harm to result, the error must have probably caused the rendition of an improper judgment. Id.; see also TEX. R. APP. P. 44.1(a)(1).
The rules of civil procedure require the trial court to submit instructions and definitions "as shall be proper to enable the jury to render a verdict." TEX. R. CIV. P. 277. A proper instruction is one that assists the jury, correctly states the law, and is supported by the pleadings and evidence. Bishop, 553 S.W.3d at 674. The trial court has broad discretion in submitting explanatory instructions. Id. Explanatory instructions should be submitted when they will help the jurors understand the meaning and effect of the law and the presumptions the law creates. See Sam Rayburn Mun. Power Agency v. Gillis, 2018 WL 3580159, at *12 (Tex. App.—Beaumont July 26, 2018, pet. denied) (mem. op.). The court should not burden the jury with surplus instructions. Acord v. Gen. Motors Corp., 669 S.W.2d 111, 116 (Tex. 1984). Consequently, every correct statement of law does not necessarily belong in the jury charge. Gillis, 2018 3580159, at *12.
Such instructions are not limited to only inferential rebuttable questions, as Pennington alleges.
The question on appeal is whether the proposed instruction on Pennington's burden of proof was reasonably necessary to enable the jury to render a proper verdict. See McIntyre v. Comm'n for Lawyer Discipline, 247 S.W.3d 434, 446 (Tex. App.—Dallas 2008, pet. denied). "The Texas Rules of Civil Procedure contemplate that the jury can be instructed on applying the burden of proof in one of two ways: an admonitory instruction or by placement of the burden through the question." See In re Commitment of Hill, 2013 WL 772834, at *15 (Tex. App.—Beaumont Feb. 28, 2013, pet. denied) (mem. op.). Here, the jury instructions provided that a "Yes" answer "must be based on a preponderance of the evidence. . . . The term 'preponderance of the evidence' means the greater weight and degree of credible evidence admitted in this case." Hagan, however, submitted and requested the following instruction: "You are instructed that Mr. Pennington has the burden of proof to demonstrate that the fees he incurred are reasonable and necessary [citations omitted]."
On this record, we cannot say the trial court abused its discretion by not including Hagan's requested instruction. The jury did not need his instruction to understand the meaning or effect of law. The submitted instruction and question on reasonable fees tracked language from the Texas Pattern Jury Charges. See Texas Pattern Jury Charges: Business, Consumer, Insurance, Employment § 115.47 (2014); see, e.g., Bishop, 553 S.W.3d at 674 (failure to include requested instruction not an abuse of discretion when trial court followed Texas Pattern Jury Charge); Cunningham v. Haroona, 382 S.W.3d 492, 508-09 (Tex. App.—Fort Worth 2012, pet. denied). By answering "Yes," the jury indicated Pennington met his burden of proof by a preponderance of the evidence regarding the reasonableness and necessity of his fees.
Even assuming the trial court erred, exclusion of the instruction did not probably cause the rendition of an improper judgment. See TEX. R. APP. P. 44.1(a)(1). During voir dire, Pennington explained it was his burden to prove his attorney's fees by a preponderance of the evidence. During the presentation of Hagan's case, Clark told the jury Pennington had the "burden of persuading the jury that his side of the story is correct." Clark also testified Pennington had the burden to demonstrate each of his billing entries was reasonable and necessary. Hagan emphasized during closing argument that Pennington had the burden of proof and "that means that he has to prove that each of the entries in his fee statements are reasonable and they're necessary." Thus, the record indicates the jury was aware of Pennington's burden to prove his fees. Accordingly, Hagan has failed to present any charge error requiring the Court to reverse and remand for a new trial.
Having considered all of Hagan's challenges to the factual sufficiency of the evidence, we overrule his fourth issue.
In Camera Inspection of Documents
In his fifth issue, Hagan argues the trial court erred by denying his motion for in camera inspection of documents Pennington withheld based on privilege. Pennington responds Hagan withdrew his requests for in camera inspection of five of the six requests for production, and the trial court properly refused inspection of the one remaining request because it was irrelevant by the time Hagan requested inspection.
"Asserting a Privilege" is governed by Texas Rule of Civil Procedure 193.3. TEX. R. CIV. P. 193.3. In response to a discovery request, a party may assert a claim of privilege under rule 193.3(c). TEX. R. CIV. P. 193.3(c).
Once a party has asserted a claim of privilege, the trial court may, upon the request of any party, conduct a hearing to determine whether the discovery should be disallowed. TEX. R. CIV. P. 193.4(a). Generally, the scope of discovery is within the trial court's discretion. See In re BP Prods. of N. Am. Inc., 263 S.W.3d 106, 111 (Tex. App.—Houston [1st Dist.] 2006, orig. proceeding). A trial court abuses its discretion if it refuses to conduct an in camera inspection when such review is critical to the evaluation of a privilege claim. In re E.I. DuPont de Nemours & Co., 136 S.W.3d 218, 223 (Tex. 2004) (orig. proceeding).
Hagan challenges the trial court's denial of his motion for in camera inspection of documents related to requests for production Nos. 1 through 5 and request No. 9. However, the record indicates Hagan conceded in an email and in "Defendant's Brief on Plaintiff's Redacted Fee Statements and Plaintiff's Failure to Respond to Discovery" that he was no longer pursuing requests Nos. 1 through 5. Therefore, the trial court's order denying Hagan's motion for in camera inspection of documents only preserved for review his request for production No. 9. See TEX. R. CIV. P. 33.1 (trial court must rule on a motion, objection, or request before presenting complaint for appellate review ).
Request for production No. 9 sought "Documents reflecting or pertaining to complaints against You based on the quality of legal services or based on Your legal practice." During the July 21, 2017 hearing, Hagan argued, as he does on appeal, that Texas Rule of Civil Procedure 193.3(c), which provides an exemption to creating a privilege log of relevant documents, does not apply. See TEX. R. CIV. P. 193.3(c) ("Without complying with paragraphs (a) and (b), a party may withhold privileged communication to or from a lawyer or lawyer's representative or a privileged document of a lawyer or lawyer's representative . . . .").
Regardless of whether rule 193.3(c) applies, we cannot conclude the trial court abused its discretion by denying Hagan's request for an in camera inspection. Hagan argues in his opening brief that through an in camera inspection, he might have discovered that Pennington had previously been subject to a malpractice claim involving the 1976 Act, which could have shown Pennington knew a pro se attorney cannot recovery such fees ("the very subject" of his counterclaim). Hagan's argument fails to account for the procedural posture of the case at the time of the trial court's order denying his motion. When the trial court denied Hagan's in camera request, the trial court had already granted motions for summary judgment in favor of Pennington on Hagan's legal malpractice counterclaim thereby leaving only the issue of Pennington's legal fees for prosecuting his breach of contract claim for the jury. As such, request for production No. 9 was not relevant to the remaining claim for legal fees. To the extent Hagan argues in his reply brief that if such documents existed he could have admitted them into evidence for the jury to consider as part of an Arthur Andersen analysis (specifically related to Pennington's reputation as a lawyer), Hagan did not raise this argument in his opening brief. A reply brief may not be used to raise new arguments. See Bagwell v. Ridge at Alta Vista Invs. I, LLC, 440 S.W.3d 287, 289 n.3 (Tex. App.—Dallas 2014, pet. denied). Hagan's fifth issue is overruled.
Motion to Compel
In his sixth issue, Hagan argues the trial court abused its discretion by denying his motion to compel Pennington to produce documents related to other lawsuits, other grievances against him, and basic witness statements. Pennington responds the trial court did not abuse its discretion because the requests were untimely, overly broad and a fishing expedition. Alternatively, Pennington contends the ruling did not harm Hagan.
Trial courts have broad discretion in matters of discovery. Reynolds v. Reynolds, No. 14-14-00624-CV, 2015 WL 7456059, at *3 (Tex. App.—Houston [14th Dist.] Nov. 24, 2015, no pet.) (mem. op.). We review a trial court's denial of a motion to compel discovery for an abuse of discretion. Carbonara v. Tex. Stadium Corp., 244 S.W.3d 651, 658-59 (Tex. App.—Dallas 2008, no pet.). We reverse a trial court's ruling on a motion to compel only when the trial court acts in an arbitrary and unreasonable manner, without reference to any guiding principles. Contractors Source, Inc. v. Amegy Bank Nat'l Assoc., 462 S.W.3d 128, 128 (Tex. App.—Houston [1st Dist.] 2015, no pet.). Even where a party shows an abuse of discretion in a discovery ruling, the complaining party must still show harm to obtain a reversal. See TEX. R. APP. P. 44.1(a); see also Ford Motor Co. v. Castillo, 279 S.W.3d 656, 667 (Tex. 2009). Harmful error is error that "probably caused the rendition of an improper judgment" or "probably prevented the appellant from properly presenting the case to the court of appeals." TEX. R. APP. P. 44.1(a).
Here, Hagan did not send the interrogatories at issue until February 13, 2017. He filed a motion to compel responses to three interrogatories and a request for disclosure regarding witness statements on March 30, 2017. However, he filed the motion to compel one day after he filed his response to Pennington's first motion for summary judgment. He did not set a hearing on his motion to compel until July 21, 2017. By this time, the trial court had granted Pennington's first motion for summary judgment regarding legal malpractice. Thus, the trial court may have found that Hagan did not exercise diligence in seeking discovery. See, e.g., Morris v. Greater McAllen Star Props., No. 13-11-00316-CV, 2012 WL 3043106, at *7 (Tex. App.—Corpus Christi July 26, 2012, no pet.) (mem. op.) (not an abuse of discretion to deny motion to compel when party filed motion one month after trial court held summary judgment hearing). Further, the trial court could have concluded the discovery regarding other lawsuits or grievances against Pennington and witness statements were no longer relevant as they involved issues related to the legal malpractice claim, which had been previously disposed.
To the extent Hagan argues other potential grievances filed against Pennington were relevant to the jury trial on fees because grievances potentially impact reputation, we disagree. Under Texas Rule of Disciplinary Procedure 2.16, the Office of Chief Disciplinary Counsel, Board of Disciplinary Appeals, Committees, and Commission are required to "maintain as confidential all Disciplinary Proceedings and associated records." See TEX. RULES DISCIPLINARY P.R. 2.16, reprinted in TEX. GOV'T CODE ANN., tit. 2, subtit. G, app. A-1. Thus, the plain language of the rule requires confidentiality. See Doe v. Bd. of Directors of State Bar of Tex., No. 03-15-00007-CV, 2015 WL 6656216, at *3 (Tex. App.—Austin Oct. 27, 2015, pet. denied) (mem. op.). The rule includes several exceptions to confidentiality; however, Hagan has not argued that any apply. Accordingly, such information was prohibited under the rules of disciplinary procedure from discovery.
Based on these facts, the trial court did not abuse its discretion by denying Hagan's motion to compel. Moreover, even assuming the trial court abused its discretion, Hagan has not put forth any argument to show how the trial court's denial of his motion to compel "probably caused the rendition of an improper verdict." See TEX. R. APP. P. 44.1(a); see also Ford Motor Co, 279 S.W.3d at 667 (complaining party has burden on appeal to show harm). We overrule Hagan's sixth issue.
Post-Judgment Interest
In his final issue, Hagan argues the trial court erred by ordering Hagan to pay post-judgment interest to Pennington but not ordering Pennington to pay post-judgment interest to him based on the $1,914 sanctions award. Pennington responds Hagan failed to preserve his argument, or alternatively, interest on a "small" sanctions award is not required or merited.
Hagan was required to present this complaint to the trial court prior to raising it as an appellate issue. See TEX. R. APP. P. 33.1; see also Goodson v. Castellanos, 214 S.W.3d 741, 760-61 (Tex. App.—Austin 2007, pet. denied) (error regarding post-judgment interest waived if not raised in trial court). Hagan filed two motions for new trial or for judgment notwithstanding the verdict; however, neither motion complained about post-judgment interest. Therefore, Hagan failed to preserve his issue for appellate review. See Goodson, 214 S.W.3d at 760-61. His seventh issue is overruled.
Conclusion
Having considered all of Hagan's complaints, the judgment of the trial court is affirmed.
/David L. Bridges/
DAVID L. BRIDGES
JUSTICE 180010F.P05
JUDGMENT
On Appeal from the County Court at Law No. 5, Collin County, Texas
Trial Court Cause No. 005-00175-2017.
Opinion delivered by Justice Bridges. Justices Partida-Kipness and Carlyle participating.
In accordance with this Court's opinion of this date, the judgment of the trial court is AFFIRMED.
It is ORDERED that appellee JAMES E. PENNINGTON recover his costs of this appeal from appellant JOHN P. HAGAN. Judgment entered June 19, 2019.