Texas Judiciary Online - HTML Opinion

^{^[1]} The jury found that Lee and = Hasson had an=20 oral agreement, and in reviewing the evidence on the legal = sufficiency=20 issues in this appealCi.e., whether a reasonable jury could = have found=20 that Hasson and Lee had a preexisting confidential relationship = and Hasson=20 fulfilled his fiduciary duty to LeeCwe assume that jurors decided questions = of=20 credibility or conflicting evidence in favor of the verdict if = they=20 reasonably could do so. See City of Keller v. Wilson, = 168=20 S.W.3d 802, 819, 820 (Tex. 2005). Accordingly, our = recitation of the=20 facts credits favorable evidence if reasonable jurors could, and=20 disregards contrary evidence unless reasonable jurors could = not. =20 See id. at 827.

^{^[2]} The check was payable to H.I.D., = Inc.=20

^{^[3]} Pai testified that his son has a = bipolar=20 disorder. According to Hasson, AAt one point in time, [B.P.] was in a = car accident=20 in Florida. And I think the person driving the car that he = was in=20 was killed. [Lee] told me that it was well documented, = [B.P.]=3Ds challenges were well documented and = that they=20 had bought him a brand new BMW and that she felt like if he were = to hurt=20 somebody that sheCthat theyCnow that she hadChad some money, or when she got some=20 moneyCI guess this was actually before she got = money=20 when she was talking, told me about this. She said that she = was=20 worried that it would be easy to prove that she and Lou knew about = [B.P.]=3Ds challenges and that maybe somehow=20 they=3Dd beCthey could be sued and held liable = because they=20 gave him the keys to the car.@

^{^[4]} Lee was still using the name = Lanna Pai at=20 that time.

^{^[5]} See section III(B)(1)(a),=20 infra.

^{^[6]} At trial, Hasson testified that = Lee owed=20 him 10% of her marital state, plus an additional 1% of = Lee=3Ds share of the estate as salary. = During=20 closing arguments, however, Hasson=3Ds attorney did not urge the jury to = award the=20 additional 1% salary.

^{^[7]} Appellant B. Lanna, Inc. and = appellees H.=20 International Distribution, Inc. a/k/a Hasson International = Distribution,=20 Inc. and Diversified Financial Enterprises are not alleged to be = parties=20 to the contract between Lee and Hasson; however, the judgment held = B.=20 Lanna, Inc. jointly liable on the contract, and allowed = Hasson=3Ds companies to share jointly in the=20 recovery. Although appellants challenge this aspect of the = judgment,=20 we do not reach this issue.

^{^[8]} See Tex. R. Civ. P. 324(c)=20 (AWhen judgment is rendered non obstante = veredicto=20 or notwithstanding the findings of a jury on one or more = questions, the=20 appellee may bring forward by cross-point . . . any ground which = would=20 have vitiated the verdict . . . including although not limited to = the=20 ground that one or more of the jury=3Ds findings have insufficient support in = the=20 evidence or are against the overwhelming preponderance of the = evidence as=20 a matter of fact . . . .@).

^{^[9]} After the close of evidence, the = trial=20 court stated, AThere is no evidence to my mind that he = met his=20 obligations as a fiduciary. However, seems to me = it=3Ds hotly in dispute as to whether or not = he was, in=20 fact, a fiduciary.@

^{^[10]} We grant no deference to the = trial=20 court=3Ds statement that there is no evidence = that Hasson=20 complied with his fiduciary duty to Lee. See Martin-Simon = v.=20 Womack, 68 S.W.3d 793, 796 (Tex. App.CHouston [14th Dist.] 2001, pet. denied)=20 (AWe review conclusions of law de novo to = determine=20 whether they are correct.@). Rather, we relate the trial=20 court=3Ds observation solely to place the = judgment and the=20 arguments of the parties in context.

^{^[11]} Hasson suggests that Lee waived = this=20 argument by failing to Alist a challenge to the finding of = compliance with=20 fiduciary duty in her issues presented.@ However, Lee has challenged the = trial=20 court=3Ds ruling disregarding the = jury=3Ds finding that a confidential = relationship=20 existed, and in a subsidiary argument, explicitly argues, = AThe JNOV error is harmful because there = is no=20 evidenceCand the trial court agreed on the record = that=20 there is no evidenceCthat Hasson complied with that = duty.@ This argument was sufficiently = briefed, and=20 we hold that appellants=3D statement of the issues, their = treatment of=20 subsidiary questions, and their corresponding statement of facts = and=20 argument satisfy the requirements of the appellate briefing = rules. =20 See Tex. R. App. = P.=20 38.1(e)B(h).

^{^[12]} This question tracks the Texas = pattern jury=20 charge addressing breach of fiduciary duty. See Comm. on Pattern Jury Charges, = State Bar=20 of Tex., Texas Pattern Jury Charges: Fiduciary Duty PJC=20 ' 104.2 (2003).

^{^[13]} Because the questions of whether = Hasson=20 fully disclosed important facts or benefitted at Lee=3Ds expense are issues that the jury was = required to=20 find independently from its determination of fairness, these = issues are=20 discussed separately below, and we will not duplicate those = discussions=20 here; however, because these issues are also factors in = determining the=20 fairness of the transaction, we incorporate those sections by = reference in=20 our discussion of fairness.

^{^[14]} This figure is calculated by = multiplying=20 $75 million by 57% (the proportion of the estate allocated to Lee) = and=20 multiplying the resulting product by 11%. The rental of the=20 Dunsinane House was to be deducted from this = figure.

^{^[15]} See section III(B)(5),=20 infra.

^{^[16]} See section III(B)(2),=20 infra.

^{^[17]} See section III(B)(1)(c),=20 infra.

^{^[18]} Pai testified that = he sold=20 the stock to convert the property to cash in order to facilitate = the=20 division of property in the divorce.

^{^[19]} This failure also demonstrates = (a)=20 Hasson=3Ds absence of the utmost good faith, (b) = his use of=20 his position to benefit at Lee=3Ds expense, (c) his failure to make = reasonable use=20 of Lee=3Ds confidence and to place her interests = before his=20 own, and (d) an instance in which Hasson=3Ds self-interest conflicted with his = obligations as=20 a fiduciary.

^{^[20]} This is also evidence that Hasson = failed to=20 exercise the utmost good faith.

^{^[21]} In addition, this is evidence of = the lack=20 of independent advice.

^{^[22]} This is also evidence of = Hasson=3Ds failure to (a) exercise the utmost = good faith=20 and scrupulous honesty, (b) place Lee=3Ds interests before his own, (c) avoid = placing=20 himself in a position in which his self-interest might conflict = with his=20 fiduciary obligations, and (d) fully and fairly disclose all = important=20 information to Lee concerning the transactions.

^{^[23]} See section III(B)(4)(b),=20 infra, for descriptions of such = transactions.

^{^[24]} Although the record does contain = a limited=20 power of attorney, it was effective only during a single specified = week in=20 March 2000. That power of attorney did not authorize Hasson = to=20 represent Lee in this transaction, and it had expired by its own = terms=20 more than a month before this transaction. The jury was not = free to=20 disregard this evidence that Hasson failed to exercise the utmost = good=20 faith and the most scrupulous honesty. See City of = Keller,=20 168 S.W.3d at 810B11 (noting that a reasonable jury cannot = disregard=20 contrary evidence if there is no favorable evidence or if the = contrary=20 evidence conclusively establishes the opposite of the fact the = jury was=20 asked to find).

^{^[25]} See also section = III(B)(1)(a),=20 supra, and sections III(B)(4)(b) and (c),=20 infra.

^{^[26]} See also section=20 III(B)(1)(a)B(c), supra, and sections = III(B)(4)(b),=20 III(B)(4)(c), and III(B)(5), infra.

^{^[27]} See also sections = III(B)(1)(a) and=20 III(B)(4)(a), supra, and section III(B)(4)(c),=20 infra.

^{^[28]} Bailes=3Ds bills were disputed and were the = subject of a=20 separate lawsuit that eventually settled.

^{^[29]} We note that Hasson had helped = Lee obtain a=20 loan less than ninety days before the conversation Hasson = describes. =20 Lee had used the loan to purchase a condominium and resided there = at the=20 time of this conversation. There is no evidence in the = record that=20 Hasson advised Lee to sell the condominium or that Lee proposed to = do so.=20 Construing this evidence in the light most favorable to the = verdict, we=20 interpret Hasson to mean that Lee indicated an intent to maintain = multiple=20 residences, dividing her time among residences in Hawaii, her = recently=20 purchased condominium in Houston, and the home she would build for = the=20 Hassons in Houston.

^{^[30]} We review the evidence in light = of the jury=20 charge, in which the jury was required to find that Hasson = Adid not place himself in any position = where his=20 self-interest might conflict with his obligations as a=20 fiduciary.@ (emphasis added). Thus, it = is not=20 significant to our analysis that Hasson=3Ds failure to disclose the potential=20 unprofitability of these real estate transactions may have been = motivated=20 by reasons other than self-interest. We further note, = however, that=20 his failure to advise Lee that the transactions were likely to be=20 unprofitable also demonstrated Hasson=3Ds (a) failure to make reasonable use of = the=20 confidence Lee placed in him, (b) failure to act in the = utmost good=20 faith and with the most scrupulous honesty, (c) failure to place=20 Lee=3Ds interests before his own, (d) use of = his=20 position to gain a benefit for himself at Lee=3Ds expense, and (e) failure to fully and = fairly=20 disclose all important information to Lee about the=20 transactions.

^{^[31]} Because of our disposition of=20 appellants=3D first issue, we do not reach the issue = of whether=20 the agreement was unconscionable because it compensated Hasson for = the=20 unauthorized practice of law and did so on a contingency fee = basis. =20 See Hughes v. Fort Worth Nat=3Dl Bank,=20 164 S.W.2d 231, 234 (Tex. Civ. App.CFort Worth 1942, writ ref=3Dd) (finding that the plaintiff who was = paid $6,000=20 to represent husband Ain working out a settlement@ of a marital estate worth more than = $100,000 was=20 engaged in the unauthorized practice of law, and stating, = AIt is not in accord = with=20 reasonableness to think that Mr. Myers agreed to pay plaintiff = this large=20 sum of money merely to act as a messenger, or to act in the modest = capacity of a personal servant for a comparatively short = time.@). We note, however, that property = settlements of=20 marital estates require a diverse set of legal skills. = Family law=20 attorneys are commonly called upon not only to represent their = clients in=20 court and to advise them on divorce laws, but also to structure=20 advantageous settlements in accordance with state and federal laws = in=20 related fields such as tax, property, estates, retirement, = insurance, and=20 even corporate or securities law.

^{^[32]} See also Dominguez v. Brackey = Enters.,=20 Inc., 756 S.W.2d 788, 792 (Tex. App.CEl Paso 1988, writ denied) (AAssurances that something will be done = when=20 followed by a failure to do anything, or have it done, can = constitute=20 evidence that the initial representations are=20 misrepresentations.@).

^{^[33]} This is also evidence of = Hasson=3Ds failure to exercise the utmost good = faith and=20 most scrupulous honesty and to make reasonable use of the = confidence=20 placed in him.

^{^[34]} Hasson also argues that he = complied with=20 his fiduciary duty to Lee by urging her to protect her children by = getting=20 her own life insurance policy. However, this transaction = occurred in=20 August 1999, before any agreement between Hasson and Lee, and = therefore is=20 not relevant to our inquiry.

^{^[35]} As a result of our disposition of = appellants=3D first issue, we do not reach the = remaining=20 issues.

^{^[36]} No claims by or against Lou = Pai have=20 been appealed. Additionally, the parties do not appeal the = judgment=20 denying Lee=3Ds conversion and fraud claims; thus, the = previous=20 receipt of $4.22 million by Hasson and his companies is not at=20 = issue.