Preview
Hill v. Shamoun & Norman, LLP, 544 S.W.3d 724 (Tex. 2018)
544 S.W.3d 724 agreement and whether the firm's damages expert
improperly based his damages model on that
Albert G. HILL, Jr., Petitioner, agreement. We hold that despite the firm's lack of
v. a signed writing, the statute of frauds does not
SHAMOUN & NORMAN, LLP, Respondent preclude its quantum-meruit claim. In addition,
we hold that there was sufficient evidence to
NO. 16–0107 demonstrate that the firm performed
compensable services in negotiating the global
Supreme Court of Texas. settlement. However, we hold that the expert's
opinion as to the reasonable value of the firm's
Argued October 10, 2017
services cannot be given legal weight, and without
OPINION DELIVERED: April 13, 2018
it, there is legally insufficient evidence to support
the jury's award. Because there is some evidence
William D. Cobb Jr., Wallace B. Jefferson, Charles
of the reasonable value of the firm's services, we
T. Frazier Jr., Melanie Plowman, C. Gregory
reverse the part of the court of appeals' judgment
Shamoun, Jonathan J. Cunningham, Lindsey
that reinstated the jury's award and remand the
Katherine Wyrick, Daniel D. Tostrud, Douglas W.
case to the trial court for a new trial on the
Alexander, for Respondent.
amount of the firm's recovery.
Andrew Patrick LeGrand Sr., Broadus A. Spivey,
I. Background
William Richard (Rick) Thompson II, Michael
Lawrence Raiff, Stewart H. Thomas, James C. Ho,
Albert G. Hill, Jr. (Hill) became involved in
Bradley G. Hubbard, Tom Moore Dees III, Joseph
contentious litigation with his son, Albert Hill, III
B. Morris, for Petitioner.
(Hill III) and numerous other parties beginning in
2007. These lawsuits, referred to as the "spider
W. Kenneth Paxton Jr., Beth E. Klusmann, Jeffrey
web of litigation," involved other members of the
C. Mateer, Scott A. Keller, for Amicus Curiae The
Hill family, family trusts, trustees, and various
State of Texas.
business entities. In February 2010, this web of
litigation comprised more than twenty lawsuits,
Wolfgang P. Hirczy De Mino PhD, pro se.
spanning multiple courts and involving
E. Lee Parsley, for Texans for Amicus Curiae approximately one hundred lawyers representing
Lawsuit Reform. various parties and entities.
Sean D. Jordan, Robert Earl Henneke, Danica Shamoun & Norman, LLP (S & N) initially
Lynn Milios, for Amicus Curiae, Texas Public became involved in the web of litigation in 2009.
Policy Foundation. Hill and Gregory Shamoun signed two limited-
engagement agreements for S & N's
Justice Green delivered the opinion of the Court. representation in what the parties refer to as the
"Abbott Financial" case (agreement signed
[544 S.W.3d 728] November 19, 2009) and the "Bordeaux Trust"
case (agreement signed January 15, 2010). The
This case involves a law firm's quantum-meruit Abbott Financial case involved the collection of a
suit for the reasonable value of its services in debt against Hill III, and the Bordeaux Trust case
assisting its client reach a comprehensive involved a suit alleging that Hill and his wife
settlement of various lawsuits filed against him. withdrew money from a trust for their own
We must decide whether Texas Government Code benefit. Shamoun testified that at the time he was
section 82.065 or our common law permits the retained for representation in those two cases, he
firm's quantum-meruit recovery for services it had not yet engaged in "global settlement
performed under an unenforceable contingent-fee negotiations" for Hill.
Hill v. Shamoun & Norman, LLP, 544 S.W.3d 724 (Tex. 2018)
In March 2010, Hill was also facing a federal civil discussed Hill's desire to increase his outstanding
RICO lawsuit, set for trial in May 2010, in which settlement offer from $55 million to $73 million,
$1 billion in damages were sought against him by and authorized Shamoun to make this offer to
Hill III and other family members for alleged Malouf to settle all pending cases. In this
impropriety in withdrawing and distributing conversation, Wright also told Shamoun that Hill
funds related to various trusts (the "RICO case"). had offered to pay him a bonus based on this
At an earlier point in the RICO case, Hill had been settlement offer—Hill would pay Shamoun 50% of
sanctioned and held in contempt for filing a false the savings, if any, between the $73 million
affidavit. This contempt order frustrated Hill's ceiling and the cash component of the global
settlement efforts, and as of March 2010, settlement if that resolution was reached before
settlement negotiations had effectively halted. the RICO trial in May. As Shamoun understood it
at the time, Hill would keep the other 50% of any
On March 5, 2010, Frances Wright, Hill's settlement savings. If a global settlement was
personal attorney, asked Shamoun to attend a achieved for $73 million or more, Shamoun
meeting with the lawyers for the trust, trustees, understood that under Hill's offer he would
and Hill's family because Hill needed to find "a receive nothing.
person who could be one voice for the group" and
deal with Hill III's lead attorney, Steven Malouf. Shamoun immediately relayed the $73 million
Shamoun attended the meeting, and though he settlement offer to Malouf, who again indicated
did not formally become settlement-negotiations no interest in settling. After this rejection,
counsel at that time, he began communicating Shamoun called Hill. Shamoun told Hill that he
and negotiating with Malouf about a global and Wright had spoken earlier that day, and
settlement. According to Malouf, settlement Wright had relayed Hill's desire for a global
negotiations became resolution of all the cases in the web of litigation
and had extended Hill's settlement-bonus offer to
[544 S.W.3d 729] achieve that end. Shamoun claims that in this
conversation he formally accepted Hill's offer.
"very active" when he started dealing with Shamoun's understanding of his obligation under
Shamoun, and Shamoun "reenergized" the this alleged oral contingent-fee agreement was to
settlement discussions. In early- to mid-March, achieve a global resolution of all the cases in the
Shamoun offered Malouf's clients $55 million to web of litigation before the RICO trial and have
settle, but they rejected the offer. Malouf emailed the trial court vacate the contempt order against
Shamoun on March 27, expressing his lack of Hill.
interest in settling and stating, "We just need to
let the jury decide." In April 2010, after Hill's counsel withdrew in the
RICO case, Shamoun agreed to formally represent
Hill claims that Shamoun first requested a Hill in that case and in a separate probate case.
potential discretionary bonus in a meeting Hill and Shamoun executed two hourly fee,
sometime in the first week of March. Hill claims limited-engagement agreements on April 12 and
he told Shamoun he would consider it, and that as April 13—bringing the total to four written
Hill understood it, he had unfettered discretion in engagement agreements between Hill and
whether there would be a bonus and how much Shamoun.
any bonus might be.
On April 30, Shamoun and Hill were summoned
On March 27, Wright called Shamoun on behalf of to the federal courthouse to discuss the status of
Hill and explained that Hill wanted Shamoun to the settlement. Shamoun and Hill both testified
get involved in the RICO case and work toward a that during their visit to the courthouse, Shamoun
global resolution of the cases composing the web told Hill three times to "remember my bonus,"
of litigation before the RICO trial in May. Wright and that each time Hill confirmed that he
Hill v. Shamoun & Norman, LLP, 544 S.W.3d 724 (Tex. 2018)
remembered. Hill testified that he thought he "should have elaborated a bit more."
Shamoun's request was odd, and he later told Shamoun's understanding of that conversation
Wright about the exchange. was not that Hill had fired him, but merely that
Hill told him that two other attorneys, Keith
On May 2, Wright presented to Hill a document Benedict and Ty Miller, would be taking the lead
entitled "Performance Incentive Bonus." Wright at the mediation the next day. Shamoun thought
testified that she prepared the document in May, this made sense because those attorneys were
that she alone drafted it, and that the document more familiar with the specific trust and tax
correctly represented the oral contingent-fee issues at hand.
agreement Shamoun reached with Hill. The
document, which was introduced into evidence by Shamoun presented text messages and emails
both parties, stated: "The performance incentive showing that he was still in contact with Benedict
bonus shall be calculated as the delta between $55 and Miller about the settlement agreement on the
million and $73 million, and shall be split 50/50 morning of May 5. Shamoun attended the
between Law Offices of Frances Johnson Wright, mediation on May 5 but left early. Before he left,
P.C. and Shamoun and Norman." Shamoun Shamoun asked Hill about the oral contingent-fee
testified agreement again and told Hill not to have a
"selective memory," to which Hill responded,
[544 S.W.3d 730] "Trust me." The final settlement terms were read
into the record at the end of the mediation on
he had not seen the document before it was May 5, and a formal settlement agreement was
presented to Hill and had no part in drafting it. signed on May 13, 2010.
When Wright presented the document to Hill,
Hill refused to sign it. There is disputed testimony as to who negotiated
the final settlement. Aldous and Malouf testified
A settlement conference was ordered in the RICO that the terms Shamoun discussed prior to and on
case for May 4, 2010, before federal Magistrate May 4 became part of the settlement agreement
Judge Paul Stickney. In attendance were signed on May 13. Hill, Benedict, and Judge
Shamoun, Hill, Hill III, and Hill III's attorney, Stickney—who acted as mediator—testified that
Charla Aldous. At this conference, Shamoun Shamoun was not involved and did not settle the
communicated Hill's settlement terms to Hill III web of litigation on May 5. Judge Stickney
and his attorney. Aldous said the terms included, testified that during Shamoun's brief time at the
but were not limited to, vacating federal orders mediation on May 5, Shamoun said he was not
from the federal lawsuit and settling the cases representing Hill in the mediation because of a
composing the web of litigation. No settlement disagreement.
documents were signed at that time, but the
parties were back in court the next day for a On May 17, 2010, Hill sent Shamoun a formal
court-ordered mediation. Later that day, letter terminating his representation in all
Shamoun discovered Wright's failed attempt to matters. The letter stated:
memorialize the oral contingent-fee agreement.
Shamoun called Hill that evening to ask about it As you know, I terminated your
and recorded the conversation, unbeknownst to representation of me as settlement
Hill. Hill, in response to Shamoun's inquiry about counsel prior to the global
whether the two had an agreement, stated, "we settlement in the cases in which you
need to make a deal that is understandable and were providing representation.
reasonable. You know, that has some relevance Given the claim you and Frances
and makes sense." Hill and Shamoun spoke again Wright have made to a fee
by phone later that evening. Hill testified that in contingent on the terms of that
this call he fired Shamoun, but Hill admitted that
Hill v. Shamoun & Norman, LLP, 544 S.W.3d 724 (Tex. 2018)
settlement, I think it would be better 2010.3 On cross examination, Sayles further
if you and I fully disengaged. admitted that his opinion was based on the
assumption that this alleged agreement was
On August 16, 2010, S & N sent Hill a demand enforceable.4 Shamoun testified that he worked
letter claiming $11,250,000 for its legal services. between 150 and 400 hours performing global
Hill declined to pay this amount, but he did settlement services for Hill, but, in contrast to his
satisfy all other fee obligations relating to the four work under the four engagement agreements, he
written engagement agreements between him and did not keep records of his time on this matter.
S & N. Sayles admitted that his opinion as to the
reasonable value of S & N's services would not be
S & N subsequently brought suit against Hill for justified based on a time factor alone.
breach of contract, fraud, fraudulent inducement,
civil conspiracy, quantum Hill's defense at trial was that Shamoun's so-
called "global settlement services"
[544 S.W.3d 731]
[544 S.W.3d 732]
meruit, quasi-estoppel, exemplary damages, and
attorney's fees.1 Hill filed counterclaims against S were actually services already covered under the
& N and Shamoun for breach of fiduciary duty, four engagement agreements the parties executed
breach of contract, and civil conspiracy. Before prior to the alleged oral contingent-fee
trial, the trial court granted Hill's summary agreement, thus preventing S & N's recovery
judgment motion on S & N's breach-of-contract under quantum meruit. Hill offered each
and quasi-estoppel claims, and S & N abandoned engagement agreement into evidence at trial.
its civil-conspiracy claim against Hill. The case Shamoun's fee under those agreements ranged
went to trial on S & N's quantum-meruit, fraud, from $400 to $650 per hour. Shamoun testified
and fraudulent-inducement claims and Hill's that in 2010 he charged his clients anywhere from
counterclaims. The trial court granted Hill's $275 to $600 per hour.
motion for directed verdict on S & N's fraud and
fraudulent-inducement claims, but it denied his The jury found in favor of S & N on its quantum-
motion for directed verdict on quantum meruit. meruit claim, concluding that (1) S & N had
provided compensable global settlement services
At trial, S & N's counsel conceded that the for Hill, and (2) the reasonable value of S & N's
"Performance Incentive Bonus" was compensable global settlement services was
unenforceable because it was an oral contingent- $7,250,000. The jury did not award S & N any
fee agreement. S & N's damages expert, Richard attorney's fees. The jury also found in S & N's
Sayles, testified at trial to the reasonable value of favor on all of Hill's counterclaims. In response to
S & N's services by considering the factors laid out this verdict, Hill filed a motion to determine
in Arthur Andersen & Co. v. Perry Equip. Corp. , appropriate equitable relief and set aside the jury
945 S.W.2d 812, 818 (Tex. 1997).2 Sayles findings, and S & N filed a motion to disregard the
discussed each factor individually and concluded jury's award of zero attorney's fees. The trial court
that the reasonable value of S & N's services in granted Hill's motion, setting aside the jury's
reaching a global settlement of the web of quantum-meruit findings and rendering a take-
litigation was $15,912,500—the same amount that nothing judgment. S & N appealed.
S & N would be entitled to had the "Performance
Incentive Bonus" been an enforceable contract. The court of appeals reversed, holding that the
On direct examination, Sayles indicated that he trial court should not have granted Hill's motion
calculated this number based on the terms of the to disregard because the verdict conflicted with
oral contingent-fee agreement that Shamoun Texas Government Code section 82.065 and there
alleges he and Hill entered into on March 27, was legally sufficient evidence to support the
Hill v. Shamoun & Norman, LLP, 544 S.W.3d 724 (Tex. 2018)
jury's finding both that S & N provided anything in return." Truly v. Austin , 744 S.W.2d
compensable global settlement services and that 934, 938 (Tex. 1988). To recover under a
the monetary value of those services was quantum-meruit claim, a claimant must prove
$7,250,000. 483 S.W.3d 767, 779–80 (Tex. that: (1) valuable services were rendered or
App.—Dallas 2016, pet. granted). In determining materials furnished; (2) for the person
that there was sufficient evidence to support this
award, the court of appeals relied primarily on [544 S.W.3d 733]
Sayles's expert opinion. Id. at 785–89.
sought to be charged; (3) those services and
In this Court, Hill presents two issues in support materials were accepted by the person sought to
of his position that the court of appeals be charged, and were used and enjoyed by him;
erroneously reinstated the jury verdict that the and (4) the person sought to be charged was
trial court set aside. First, Hill raises a legal reasonably notified that the plaintiff performing
question—whether Texas Government Code such services or furnishing such materials was
section 82.065, a statute of frauds that requires expecting to be paid by the person sought to be
contingent-fee contracts for legal services be charged. Vortt Exploration Co. v. Chevron U.S.A.,
signed and in writing, precludes a law firm's Inc. , 787 S.W.2d 942, 944 (Tex. 1990). A party
quantum-meruit recovery as a matter of law for generally cannot recover under a quantum-meruit
legal services performed under an alleged oral claim when there is a valid contract covering the
contingent-fee agreement. See TEX. GOVT. CODE services or materials furnished. In re Kellogg
§ 82.065. Second, Hill contends that the court of Brown & Root , 166 S.W.3d at 740. The measure
appeals' decision violates equitable principles of damages for recovery under a quantum-meruit
governing quantum meruit, including that the theory is the reasonable value of the work
ultimate decision on the amount of equitable performed and the materials furnished. E.g. ,
relief to be awarded belongs to the trial court. We Lamajak, Inc. v. Frazin , 230 S.W.3d 786, 796
address each issue in turn. (Tex. App.—Dallas 2007, no pet.).
II. S & N's Quantum–Meruit Claim The court of appeals relied in part on Texas
Government Code section 82.065(c) in holding
We first address Hill's contention that the court of that S & N's quantum-meruit claim was
appeals' decision violates the statute of frauds by permissible despite the fact that the parties lacked
reinstating a jury verdict that gives legal effect to a signed agreement. 483 S.W.3d at 778–80.
an unenforceable oral contingent-fee agreement. Section 82.065 currently reads:
Specifically, we must determine whether Texas
Government Code section 82.065 precludes S & (a) A contingent fee contract for
N's quantum-meruit recovery as a matter of law legal services must be in writing and
for the global settlement services Shamoun signed by the attorney and client.
provided. We hold it does not.
(b) Any contract for legal services is
A. Statute of Frauds voidable by the client if it is
procured as a result of conduct
Quantum meruit is an equitable remedy that is violating Section 38.12(a) or (b),
"based upon the promise implied by law to pay for Penal Code, or Rule 7.03 of the
beneficial services rendered and knowingly Texas Disciplinary Rules of
accepted." In re Kellogg Brown & Root, Inc. , 166 Professional Conduct of the State
S.W.3d 732, 740 (Tex. 2005). The purpose of this Bar of Texas, regarding barratry by
common law doctrine is to prevent a party from attorneys or other persons.
being "unjustly enriched" by "retain[ing] the
benefits of the ... performance without paying (c) Any attorney who was paid or
Hill v. Shamoun & Norman, LLP, 544 S.W.3d 724 (Tex. 2018)
owed fees or expenses under a 534, 534–35. Subsection (b) was further amended
contract that is voided under this in 2013. Act of May 17, 2013, 83d Leg., R.S., ch.
section may recover fees and 315, § 1, sec. 82.065(b), 2013 Tex. Gen. Laws
expenses based on a quantum 1073, 1075 (narrowing
meruit theory if the client does not
prove that the attorney committed [544 S.W.3d 734]
barratry or had actual knowledge,
before undertaking the subsection (b)'s applicability by removing "the
representation, that the contract laws of this state" and replacing it with " Section
was procured as a result of barratry 38.12(a) or (b), Penal Code or Rule 7.03").
by another person. To recover fees
or expenses under this subsection, Hill and S & N agree that the court of appeals
the attorney must have reported the erred in applying subsection (c) because the
misconduct as required by the Texas alleged oral contingent-fee agreement would have
Disciplinary Rules of Professional been entered into before the enactment of that
Conduct of the State Bar of Texas, subsection.5 The 2011 version of section 82.065,
unless: effective September 1, 2011, and the 2013 version,
effective September 1, 2013, do not apply to
(1) another person has already contracts entered into prior to their effective
reported the misconduct; or dates. § 4, sec. 82.065(b), (c), 2011 Tex. Gen.
Laws at 535 (" Section 82.065, Government Code,
(2) the attorney reasonably believed as amended by this Act, applies only to a contract
that reporting the misconduct entered into on or after the effective date of this
would substantially prejudice the Act. A contract entered into before the effective
client's interests. date of this Act is governed by the law in effect
immediately before the effective date of this Act,
TEX. GOVT. CODE § 82.065. The court of appeals and that law is continued in effect for that
reasoned that even if Hill and S & N's oral purpose."); § 1, sec. 82.065(b), 2013 Tex. Gen.
contingent-fee agreement was void under Laws at 1075 (using the same language as the
subsection (a) because it was not it writing, 2011 Act). S & N and Hill allegedly entered into
subsection (c) permits an attorney to recover fees the unenforceable oral contingent-fee agreement
owed under quantum meruit. 483 S.W.3d at 779. in 2010. Thus, the court of appeals was required
Thus, the fact that the parties' oral contingent-fee to apply the 1989 version of section 82.065, which
agreement was unenforceable under the statute of did not contain subsection (c).
frauds did not preclude S & N's quantum-meruit
claim. Id. S & N concedes that the alleged oral contingent-
fee agreement is unenforceable under section
Whether a contract falls within the statute of 82.065(a), but argues it is nevertheless entitled to
frauds is a question of law, which we review de the reasonable value of its services under a
novo. Dynegy, Inc. v. Yates , 422 S.W.3d 638, quantum-meruit theory in order to prevent Hill's
642 (Tex. 2013). Section 82.065, enacted in 1989, unjust enrichment. Hill argues that S & N's claim
originally consisted of only subsections (a) and is an attempt to circumvent the statute of frauds
(b). Act of May 29, 1989, 71st Leg. R.S., ch. 866, § and give effect to an otherwise unenforceable
3, 1989 Tex. Gen. Laws 3855, 3857. In 2011, the contingent-fee agreement. The statute of frauds,
Legislature added subsection (c) and broadened Hill argues, dictates that attorney's fees cannot be
subsection (b) to apply to "any contract for legal based on a measure that is contingent on the
services" rather than only a "contingent fee result.
contract." Act of May 19, 2011, 82d Leg., R.S., ch.
94, § 4, sec. 82.065(b), (c), 2011 Tex. Gen. Laws
Hill v. Shamoun & Norman, LLP, 544 S.W.3d 724 (Tex. 2018)
Whether the statute of frauds bars recovery for a recoveries for attorneys who did not have written
non-contract claim depends on the nature of the contingent-fee agreements that complied with
damages the plaintiff seeks to recover. Baylor subsection (c). For example, in Celmer v.
Univ. v. Sonnichsen , 221 S.W.3d 632, 636 (Tex. McGarry , 412 S.W.3d 691 (Tex. App.—Dallas
2007) ; Haase v. Glazner , 62 S.W.3d 795, 800 2013, pet. denied), the court of appeals rejected
(Tex. 2001). In Haase , we held that the statute of an attorney's argument that a series of emails
frauds bars a fraud claim to the extent the constituted evidence of a contingent-fee
plaintiff seeks to recover as damages the benefit agreement but held that the attorney was
of a bargain that cannot otherwise be enforced permitted to recover the reasonable value of his
because it fails to comply with the statute of services in quantum meruit. Id. at 707–08
frauds. 62 S.W.3d at 799. We relied on this ("[W]here a written contract is unenforceable, a
holding in Sonnichsen when we held that the plaintiff is not barred from recovery in quantum
statute of frauds barred a volleyball coach's fraud meruit."); see also In re Webber , 350 B.R. 344,
claim for benefit-of-the-bargain damages when 381–82 (Bankr. S.D. Tex. 2006) (mem. op.)
the claim arose from an unenforceable oral (applying Texas law, "[t]his Court finds that even
employment contract. 221 S.W.3d at 637. We if the oral contingency fee agreement is void
noted, however, that the statute of frauds does not [under section 82.065(a) ], [the attorney] may
bar recovery of out-of-pocket damages for fraud, recover attorney's fees on the equitable principle
and if Sonnichesen had sought such restitution- of quantum meruit").
based damages, his suit would have been viable.
Id. at 636. "The purpose of the Statute of Frauds is to remove
uncertainty, prevent fraudulent claims, and
Here, S & N initially pled a claim for breach of the reduce litigation." Givens v. Dougherty , 671
alleged oral contingent-fee agreement, seeking S.W.2d 877, 878 (Tex. 1984). This Court has
the benefit of that bargain. But before trial, the recognized that attorney-client contracts "are [to
court granted Hill's summary judgment motion be] closely scrutinized." Anglo–Dutch Petrol. Int'l
on the breach-of-contract claim, and S & N's only v. Greenberg Peden, P.C. , 352 S.W.3d 445, 450
issue submitted to the jury was on quantum (Tex. 2011). Section 82.065(a)'s requirement that
meruit. The jury charge tracked the Pattern Jury such agreements be in writing and signed by both
Charge on quantum-meruit damages, asking (1) parties makes clear the Legislature's concern that
whether S & N performed "compensable global clients are aware of the terms of their contracts
settlement services" for Hill, and if so, (2) what for legal services. See TEX. GOV'T CODE §
was the "reasonable value of such compensable 82.065(a). This concern, however, does not
global services at the time and place they were preclude an attorney's recovery for the reasonable
performed." See Comm. on Pattern Jury Charges, value of his or her services under the equitable
State Bar of Tex., TEX. theory of quantum meruit. See, e.g. , Celmer , 412
S.W.3d at 708. To hold otherwise would allow
[544 S.W.3d 735] some clients to be unjustly enriched by retaining
the benefits of an attorney's performance without
PATTERN JURY CHARGES: BUSINESS, paying anything in return. See Truly , 744 S.W.2d
CONSUMER, INS. & EMPLOYMENT 115.7 at 938. Accordingly, we hold that Texas
(2012). Thus, S & N sought only the reasonable Government Code section 82.065(a) does not
value of its services in assisting Hill reach a global preclude a law firm's quantum-meruit suit to
settlement, not the benefit of its bargain under recover the reasonable value of legal services
the alleged oral contingent-fee agreement. performed under an unenforceable agreement.
Further, despite Texas Government Code section The court of appeals relied on Enochs v. Brown ,
82.065(c)'s inapplicability in this case, the 872 S.W.2d 312, 321 (Tex. App.—Austin 1994, no
common law has provided for quantum-meruit writ), disapproved on other grounds , Roberts v.
Hill v. Shamoun & Norman, LLP, 544 S.W.3d 724 (Tex. 2018)
Williamson , 111 S.W.3d 113 (Tex. 2003) (citations omitted). "In determining whether
(addressing whether parents of injured children there is no evidence of probative force to support
may recover loss-of-consortium damages), in a jury's finding, all the record evidence must be
permitting S & N's quantum-meruit claim. 483 considered in the light most favorable to the party
S.W.3d at 779. Though we similarly hold that in whose favor the verdict has been rendered,"
Texas Government Code section 82.065(a) does Merrell Dow Pharms. v. Havner , 953 S.W.2d
not preclude S & N's claim despite the lack of a 706, 711 (Tex. 1997), including evidence offered
signed writing, the court of appeals' analysis in by the opposing party that supports the verdict.
Enochs conflicts with our later decision in See City of Keller v. Wilson , 168 S.W.3d 802, 827
Quigley v. Bennett , 227 S.W.3d 51 (Tex. 2007), (Tex. 2005) ("Nor can evidence supporting a
and thus did not influence our opinion.6 verdict be identified by which party offered it
....").
[544 S.W.3d 736]
As stated above, to recover under a quantum-
B. Legal Sufficiency of the Evidence meruit theory, a claimant must prove that: (1)
valuable services were rendered or materials
Having determined that the statute of frauds does furnished; (2) for the person sought to be
not preclude S & N's quantum-meruit claim as a charged; (3) those services and materials were
matter of law, we next consider Hill's argument accepted by the person sought to be charged, and
that the jury verdict fails because the jury's were used and enjoyed by him; and (4) the person
quantum-meruit findings are not supported by sought to be charged was reasonably notified that
legally sufficient evidence. We hold that there was the plaintiff performing such services or
legally sufficient evidence to support the jury's furnishing such materials was expecting to be
determination that S & N performed compensable paid by the person sought to be charged. Vortt
global settlement services for Hill. However, Exploration Co. , 787 S.W.2d at 944. A party must
because there was some evidence of the value of S introduce evidence on the correct measure of
& N's services, but not enough to support the damages to recover on a quantum-meruit claim,
jury's award, we reverse the part of the court of meaning that the party must establish the
appeals' judgment that reinstated the jury's reasonable value of work performed or materials
verdict and remand the case to the trial court for a furnished. LTS Group, Inc. v. Woodcrest Capital,
new trial on the amount of S & N's recovery. See L.L.C. , 222 S.W.3d 918, 920–21 (Tex. App.—
Midland W. Bldg. L.L.C. v. First Serv. Air Dallas 2007, no pet.). A quantum-meruit claim
Conditioning Contractors , 300 S.W.3d 738, 739 does not proceed on a contract for a specified
(Tex. 2009) (per curiam) (reversing and price, but proceeds independently of a contract to
remanding for a new trial on attorney's fees when recover the value of the services rendered or
there was evidence that services provided some materials furnished. Air Conditioning, Inc., v.
value but insufficient evidence to support the full L.E. Travis & Sons, Inc. , 578 S.W.2d 554, 556
fee requested). (Tex. Civ. App.—Austin 1979, no writ). When an
attorney attempts to support a quantum-meruit
Evidence is legally insufficient to support a jury claim with a bare contingent-fee percentage and
finding when (1) the record discloses a complete no supporting evidence of the
absence of evidence of a vital fact, (2) the court is
barred by rules of law or of evidence from giving [544 S.W.3d 737]
weight to the only evidence offered to prove a vital
fact, (3) the evidence offered to prove a vital fact value of services rendered, courts deem the
is no more than a mere scintilla, or (4) the claimed contingent-fee agreement "no evidence"
evidence conclusively establishes the opposite of a of the reasonable value of the services performed.
vital fact. Crosstex N. Tex. Pipeline, L.P. v. E.g. , Ray v. T.D. , No. 03-06-00242-CV, 2008
Gardiner , 505 S.W.3d 580, 613 (Tex. 2016) WL 341490, at *7–8 (Tex. App.—Austin Feb. 7,
Hill v. Shamoun & Norman, LLP, 544 S.W.3d 724 (Tex. 2018)
2008, no pet.) (mem. op.); see also Girards v. covers the services at issue is a legal question
Frank , No. 3:13-cv-2695-BN, 2016 WL 454465, reviewed de novo. Christus Health v. Quality
at *10 (N.D. Tex. Feb. 5, 2016) (stating that the Infusion Care, Inc. , 359 S.W.3d 719, 724 (Tex.
law firms' expected percentage of fee-sharing App.—Houston [1st Dist.] 2011, no pet.).
under an unenforceable agreement was not
evidence of the specific value of the work Each of the four written limited-engagement
performed). Additionally, evidence of the value of agreements, signed by Hill and Shamoun on
an agreement that is unenforceable under the behalf of S & N, covers "reasonable and necessary
statute of frauds "cannot be given any weight or legal services, including, without limitation,
effect and legally cannot be considered as conducting a preliminary investigation; drafting
evidence supporting the jury's finding." See documents, correspondence, and pleadings;
Quigley , 227 S.W.3d at 54. motion practice; conducting and defending
discovery; attending mediation and trial; and
Hill argues that S & N's quantum-meruit claim drafting settlement documents." However,
fails because Shamoun's so-called "global
settlement services" were actually services already [544 S.W.3d 738]
covered under the four signed engagement
agreements. Additionally, Hill argues that our the agreements also contain language limiting the
holding in Quigley means that the value of the scope of services to the specifically named cause
alleged unenforceable oral contingent-fee of action, such as: "[This] Engagement is not
agreement between Hill and Shamoun cannot be general in nature, but is limited to the definition
given any legal weight, thus prohibiting of ‘Engagement’ contained herein, and ... S & N
consideration of Sayles's expert opinion, which shall perform the Engagement but shall be under
relied on the terms of that agreement.7 Because no obligation to perform services not within the
Sayles's opinion is the only evidence S & N offered scope of the Engagement." Thus, nothing in these
as to the reasonable value of its services and it agreements granted S & N authority to engage in
cannot be considered, Hill argues, there is no global settlement services regarding the various
evidence to support the jury's award. S & N argues lawsuits in the web of litigation. Further,
that Sayles's opinion is permissible because his Shamoun's initial contact with Malouf about a
calculation of the reasonable value of S & N's global settlement was over a month before the
services did not rely exclusively on the oral parties executed the third and fourth engagement
contingent-fee agreement; Sayles also offered agreements in which Shamoun replaced Hill's
opinions as to why the reasonable fee he proffered lead attorney in the RICO case. Therefore, we
was appropriate under each of the Arthur agree with the court of appeals that the four
Andersen factors. limited-engagement agreements do not
encompass any services S & N provided in
A party generally cannot recover under a negotiating the global settlement.
quantum-meruit theory when there is a valid
contract covering the services or materials We also agree that there was legally sufficient
furnished. In re Kellogg Brown & Root , 166 evidence to support the jury's finding that S & N
S.W.3d at 740. However, the existence of an performed global settlement services for Hill
express contract does not preclude recovery in outside of those four engagement agreements and
quantum meruit for the reasonable value of work that Hill was aware Shamoun expected to be paid
performed and accepted which is not covered by for these services. The jury heard extensive
an express contract. Black Lake Pipe Line Co. v. testimony from Shamoun about how he worked as
Union Const. Co. , 538 S.W.2d 80, 86 (Tex. 1976), the "one voice" across Hill's approximately one
overruled on other grounds by Sterner v. hundred lawyers in seeking a global resolution of
Marathon Oil Co. , 767 S.W.2d 686 (Tex. 1989). the cases composing the web of litigation. The
The question of whether an express contract jury heard testimony that Shamoun's services
Hill v. Shamoun & Norman, LLP, 544 S.W.3d 724 (Tex. 2018)
avoided over $1 billion in liability exposure for alternatively, seeking the value of a royalty
Hill, achieved dismissal of more than twenty interest as damages. Id. at 53. At
contentious and expensive legal battles, and
resulted in a federal judge vacating a perjury [544 S.W.3d 739]
finding against Hill. Malouf, Hill III's lead
attorney, testified that from the end of March to trial, Bennett presented evidence that geologists
May 1, 2010, only he and Shamoun engaged in are usually compensated with overriding royalty
settlement discussions. Malouf described the interests in the prospects they help generate, and
discussions as "intensive" and involving twelve- to that the value of a 1% overriding royalty interest
fifteen-hour days. Several witnesses testified that in the past and estimated future production of the
Shamoun relayed Hill's primary settlement terms leases Bennett's work helped Quigley sell was
to Hill III and his attorney at the May 4 approximately $4 million. Id. Quigley offered
settlement conference, and that it was at this evidence that geologists who work for cash
conference that the parties reached a global compensation rather than overriding royalty
resolution in principle of all the cases composing interests earned between $500 a day and
the web of litigation. Malouf testified that the $20,000 per job. Id. The jury awarded Bennett $1
"genesis of those terms [in the final settlement million on his fraud claim and $2,500 on his
agreement] was the discussions [he] had with Mr. quantum-meruit claim, and the court of appeals
Shamoun." Finally, the jury heard an audio affirmed. Id. at 53–54.
recording of the phone conversation that took
place after that settlement conference between We reversed, holding that because there was no
Hill and Shamoun, in which Hill acknowledged written agreement and an agreement to transfer a
that Shamoun should be compensated for his royalty interest falls within the statute of frauds,
services, but said the parties need to make a deal evidence of the value of the interest could not be
that was "understandable and reasonable." given any legal effect in support of a damages
Reviewing the record in the light most favorable award on Bennett's fraud claim. Id. at 54–55.
to the jury's finding, we conclude that S & N Allowing such evidence would "circumvent the
presented more than a mere scintilla of evidence protections of the statute [of frauds]." Id. ; see
to support the jury's finding that Shamoun also id. at 57 (Brister, J., dissenting on other
provided Hill valuable, compensable global grounds) ("[T]he problem was not with the charge
settlement services. but with the evidence Bennett tried to squeeze
into it. There was no evidence that generating
We next examine whether there was legally geologists are paid $1 million in cash for their
sufficient evidence to support the jury's award of services; the evidence showed they are paid
$7,250,000 as the reasonable value of those royalty interests, which are sometimes worth $1
services. In evaluating legal sufficiency, we must million and sometimes worth nothing. As the
first determine whether, as Hill argues, Sayles's Statute of Frauds prevents enforcement of oral
expert testimony cannot be given legal weight contracts for royalty interests, it likewise prevents
under our holding in Quigley , or whether, as S & an action for damages measured by that
N argues, Quigley is distinguishable. amount.").
In Quigley , a geologist named Bennett agreed to The Legislature has made clear that a contingent-
help Quigley analyze Bennett's interest in some fee contract for legal services must be in writing
oil and gas leases in anticipation of selling those and signed by the attorney and client to be
interests. 227 S.W.3d at 52. The parties had no enforceable. TEX. GOVT. CODE § 82.065(a). As
written or oral agreement as to Bennett's in Quigley , allowing S & N to recover the value of
compensation. Id. Sometime after the project was the oral contingent-fee agreement would give
completed and Bennett had not been paid, he effect to an otherwise unenforceable agreement.
sued Quigley for fraud and quantum meruit, See 227 S.W.3d at 54. Thus, as we reasoned in
Hill v. Shamoun & Norman, LLP, 544 S.W.3d 724 (Tex. 2018)
Quigley , evidence of the oral contingent-fee other evidence of value. However, in none of the
agreement's value "cannot be given any weight or cases S & N cites did the parties' contract violate
effect and legally cannot be considered as the statute of frauds. See, e.g. , Brender v.
evidence supporting the jury's award." Id. Sanders Plumbing, Inc. , No. 2-05-00067-CV,
Accordingly, we hold that an attorney's 2006 WL 2034244, at *1–2 (Tex. App.—Fort
contingent-fee agreement that violates the statute Worth July 20, 2006, pet. denied) (mem. op.);
of frauds cannot be considered as evidence of the H.E. Butt Grocery Co. v. Rencare, Ltd. , No. 04-
reasonable value of that attorney's services. 03-00190-CV, 2004 WL 199272, at *1–2 (Tex.
App.—San Antonio Feb. 4, 2004, pet. denied)
S & N argues that Quigley is distinguishable (mem. op.). Here, we cannot conclude that the
because this holding was part of the Court's formula stated in the "Performance Incentive
disposition of Bennett's fraud claim, whereas the Bonus" is how both parties valued S & N's services
Court reversed Bennett's quantum-meruit claim when Hill disputes that he ever agreed to such an
only on limitations grounds. The court of appeals arrangement.
distinguished Quigley for the same reason. 483
S.W.3d at 780. However, our holding is consistent Quigley requires us to exclude the entirety of
with previous holdings that the statute of frauds Sayles's opinion as to the reasonable value of S &
bars recovery for non-contract claims if the N's services. Though he analyzed S & N's services
plaintiff seeks to recover the benefit of his or her under each Arthur Andersen factor separately,
bargain. See Sonnichsen , 221 S.W.3d at 636 ; Sayles conceded that his final opinion was based
Haase , 62 S.W.3d at 800. This principle applies on the assumption t