Opinion issued January =
17, 2008=20
Appellant,=20
Michael J. Valentine, challenges the trial court's rendition of =
summary=20
judgment in favor of =
appellees, Lloyd=20
R. Cunningham, Jr. and Cunningham & Associates, P.C. =
(collectively=20
"Cunningham"), in Valentine's suit against Cunningham for an =
attorney=20
referral fee. In four issues, Valentine contends that the trial =
court=20
erred in granting summary judgment in favor of Cunningham on =
Valentine's=20
breach of contract, fraud, misrepresentation, and breach of =
fiduciary duty=20
claims and on Cunningham's affirmative defenses of waiver and=20
estoppel. We affirm.=20
Factual and Procedural Background In his=20
petition, Valentine alleged that between July and December 1996 he =
performed legal work for his clients Anatoly and Beryle Sverdlin. =
On or=20
about January 15, 1997, the Sverdlins contacted Valentine and told =
him=20
that there had been a "take over" at Anatoly Sverdlin's company =
and that=20
Sverdlin's employment had been terminated. Valentine met with the=20
Sverdlins to discuss the imminent litigation arising from these =
events,=20
but, due to the potential size of the case and in light of =
Valentine's=20
other obligations, Valentine eventually contacted Cunningham to =
see if he=20
would represent the Sverdlins in these matters. Valentine =
described the=20
case to Cunningham as "a potential big case involving corporate =
control=20
and breach of fiduciary duty issues." Valentine told the Sverdlins =
that he=20
was going to introduce them to Cunningham and that either "he =
[Valentine]=20
would be paid a share out of the case if he were to represent =
Sverdlin or=20
a share out of the billings by Cunningham" if Cunningham accepted =
the=20
representation. Valentine=20
further alleged that, on January 17, 1997, Valentine, the =
Sverdlins, and=20
Cunningham met. During the meeting, the group learned that =
attorneys for=20
Valentine's company had set a hearing on an application for a =
temporary=20
restraining order. Valentine and Cunningham drove to the =
courthouse for=20
the hearing, and, "[o]n the way to the courthouse," before =
Cunningham ever=20
agreed to represent In support=20
of his breach of contract claim, Valentine alleged that he and =
Cunningham=20
"entered into an enforceable oral express or implied in fact =
agreement."=20
In a section of his petition entitled "quasi contract," Valentine =
asserted=20
that Cunningham was "bound by a promise implied at law" and that =
Valentine=20
provided a "valuable service to Cunningham" and "expect[ed] to be =
paid."=20
In the section of his petition entitled "fraud," Valentine =
asserted only=20
that Cunningham "engaged in fraud by conduct and/or promissory =
fraud."=20
Valentine did not allege any specific facts in support of this =
fraud=20
claim. Finally, in a section of his petition entitled "alternative =
claims=20
based on disputed novation agreement," Valentine contended that, =
if the=20
trial court accepted Cunningham's argument that any referral fee =
agreement=20
had been replaced by a subsequently negotiated contingency fee =
agreement=20
between Valentine and Sverdlin, then Valentine sued Sverdlin and=20
Cunningham for the "value of the contingency agreement." Cunningham filed a =
summary=20
judgment motion, in which he argued that Valentine's claims fail =
as a=20
matter of law for a number of reasons, including (1) the alleged =
oral=20
referral fee agreement for 15% of "gross attorney billings" =
contemplated=20
only "hourly billings," and Valentine was not entitled to any =
referral fee=20
because Sverdlin paid Cunningham pursuant to a subsequently =
negotiated=20
contingency fee agreement, (2) Valentine, at most, alleged an=20
"unenforceable oral agreement to agree," (3) Valentine, even =
according to=20
his own admissions, The trial=20
court, without specifying its reasons, granted Cunningham summary =
judgment=20
and ordered that Valentine's claims be denied. To prevail=20
on a summary judgment motion, a movant has the burden of proving =
that it=20
is entitled to judgment as a matter of law and that there is no =
genuine=20
issue of material fact. Tex. R. Civ. P. 166a(c); Cathey v. =
Booth,=20
900 S.W.2d 339, 341 (Tex. 1995). When a defendant moves for =
summary=20
judgment, it must either (1) disprove at least one element of the=20
plaintiff's cause of action or (2) plead and conclusively =
establish each=20
essential element of its affirmative defense, thereby defeating =
the=20
plaintiff's cause of action. Cathey, 900 S.W.2d at 341. =
When=20
deciding whether there is a disputed, material fact issue =
precluding=20
summary judgment, evidence favorable to the non-movant will be =
taken as=20
true. Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, =
548-49 (Tex.=20
1985). Every reasonable inference must be indulged in favor of the =
non-movant and any doubts must be resolved in its favor. =
Id. at=20
549. To prevail=20
on a no-evidence summary judgment motion, a movant must allege =
that there=20
is no evidence of an essential element of the adverse party's =
cause of=20
action. Tex. R. Civ. P. 166a(i); Fort Worth Osteopathic Hosp., =
Inc. v.=20
Reese, 148 S.W.3d 94, 99 (Tex. 2004). Although the non-moving =
party=20
is not required to marshal its proof, it must present evidence =
that raises=20
a genuine issue of material fact on each of the challenged =
elements. Tex.=20
R. Civ. P. 166a(i); Ford Motor Co. v. Ridgway, 135 S.W.3d =
598,=20
600 (Tex. 2004). A no-evidence summary judgment motion may not be =
granted=20
if the non-movant brings forth more than a scintilla of evidence =
to raise=20
a genuine issue of material fact on the challenged elements.=20
Ridgway, 135 S.W.3d at 600. In his=20
first issue, Valentine argues that the trial court erred in =
granting=20
summary judgment in favor of Cunningham on his breach of contract =
claim=20
because there is no legal basis to void the alleged oral referral =
fee=20
agreement under the disciplinary rules, the agreement was =
permitted under=20
Texas law, the agreement vested when Cunningham accepted =
representation,=20
the agreement was supported by consideration, and the agreement =
was not=20
replaced by a subsequent agreement. The=20
elements of a breach of contract claim are (1) the existence of a =
valid=20
contract between plaintiff and defendant, (2) the plaintiff's =
performance=20
or tender of performance, (3) the defendant's breach of the =
contract, and=20
(4) the plaintiff's damage as a result of the breach. Prime =
Prods.,=20
Inc. v. S.S.I. Plastics, Inc., 97 S.W.3d 631, 636 (Tex. =
App.--Houston=20
[1st Dist.] 2002, pet. denied). The elements of a valid contract =
are (1)=20
an offer, (2) an acceptance, (3) a meeting of the minds, (4) each =
party's=20
consent to the terms, and (5) execution and delivery of the =
contract with=20
the intent that it be mutual and binding. Id. To =
establish a=20
valid contract, a plaintiff must prove that the parties agreed on =
all of=20
the essential terms of the contract and that the essential terms =
were=20
sufficiently certain so as to define the parties' legal =
obligations.=20
See Nickerson v. E.I.L. Instruments, Inc., 874 S.W.2d =
936, 939=20
(Tex. App.--Houston [1st Dist.] 1994, writ denied). If a contract =
is so=20
indefinite that a court cannot determine the legal obligations and =
liabilities of the parties, it is not enforceable. See T.O. =
Stanley=20
Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 221 (Tex. 1992); =
Moore v. Dilworth, 142 Tex. 538, 542-43, 179 S.W.2d 940, =
942=20
(1944); Cytogenix, Inc. v. Waldroff, 213 S.W.3d 479, 485 =
(Tex.=20
App.--Houston [1st Dist.] 2006, pet. denied). Here,=20
Valentine asserts that he made an oral agreement with Cunningham =
for a=20
referral fee of 15% of gross attorney billings. Valentine further =
asserts=20
that, although Cunningham and Sverdlin entered into a contingency =
fee=20
agreement rather than an hourly fee agreement, Valentine and =
Cunningham's=20
alleged oral referral fee agreement encompassed the contingency=20
fee. Valentine=20
does not clearly identify the specific evidence on which he relies =
to=20
support his breach of contract claim. Instead, he focuses his =
appellate=20
briefing on why his alleged oral referral fee agreement for 15% of =
the=20
contingency fee does not violate disciplinary rules or public =
policy.=20
Nevertheless, our review of the evidence indicates that the only =
direct=20
testimony that potentially supports any type of breach of contract =
claim=20
came from Valentine, who testified in his deposition that, as he =
and=20
Cunningham drove to the courthouse for the hearing on the =
temporary=20
restraining order, he told Cunningham that he expected a referral =
fee for=20
the case. He further testified that he told Cunningham that "a =
third [was]=20
customary," Cunningham responded that a third was "too much," and=20
Valentine asked Cunningham what he thought was "fair." According =
to=20
Valentine, Cunningham then answered 15%, and Valentine said =
"Okay."=20
Valentine and Cunningham did not reduce this alleged oral referral =
fee=20
agreement to writing. On January=20
21, 1997, Valentine sent Cunningham a letter to confirm that they =
had, in=20
fact, discussed an oral referral fee agreement in the car on the =
way to=20
the courthouse. This letter, signed by Valentine and contained in =
the=20
summary judgment record, provided, The purpose=20
of this letter is to set forth our agreement regarding the above =
client=20
and case. We have agreed that I will continue to work on the case =
on a=20
consulting basis. . . . We have agreed that I will bill your firm =
at the=20
rate of $175.00 per hour and your firm will bill the client.=20
. . . We have further agreed that in exchange for the =
referral=20
of this matter, your firm will pay me a referral fee of 15% of =
the=20
gross attorney billings (exclusive of my own) on this case. =
It is my=20
understanding that your firm's agreement with the client is for =
hourly=20
billing. Should this be renegotiated to another =
alternative=20
billing arrangement, i.e. contingency fee, I expect =
that we=20
would renegotiate our agreement. If you are in agreement with =
this=20
letter, please sign the copy and return it to me. (Emphasis=20
added). Valentine=20
provided a space for Cunningham's signature at the bottom of the =
letter.=20
Cunningham denied receiving the letter, and it is undisputed that=20
Cunningham never signed this letter. Regardless, the letter =
actually=20
defeats, rather than supports, Valentine's contention that any =
alleged=20
oral referral fee agreement between Cunningham and him encompassed =
the=20
subsequently negotiated contingency fee. At most, this letter =
confirms=20
that, at the time Valentine and Cunningham formed their alleged =
oral=20
referral fee agreement, Valentine sought as a referral fee a =
percentage of=20
fees incurred from Cunningham's hourly billings. The letter itself =
states=20
that, in the event an alternative billing arrangement was made, =
including=20
a contingency fee agreement, Valentine "expect[ed]" to =
renegotiate. No=20
evidence shows that this "expectation" was ever confirmed by=20
Cunningham. Valentine's=20
letter provides no detail as to what Valentine would have expected =
to=20
receive in the event the billing arrangement changed to a =
contingency fee.=20
Valentine seems to suggest that his oral agreement would simply =
transform=20
to automatically entitle him to 15% of the contingency fee. Of =
course, the=20
referral fee due Valentine under these circumstances could vary=20
significantly from a referral fee calculated on hourly billings. =
Moreover,=20
even if the letter provided some evidence that Valentine and =
Cunningham=20
agreed to renegotiate a referral fee upon a change to a =
contingency fee=20
agreement, the record contains no evidence as to the essential =
terms of=20
any renegotiated agreement. See Neely v. Bankers Trust Co. of=20
Tex., 757 F.2d 621, 630 (5th Cir. 1985) (applying Texas law; =
holding=20
that indefiniteness of essential part of agreement rendered whole =
contract=20
unenforceable and that "[a]s a matter of law, no contract arose"); =
see=20
also Gavrel v. Nichols, No. 01-03-00465-CV, 2004 WL 1688774, =
at *3=20
(Tex. App.--Houston [1st Dist.] July 29, 2004, pet. denied) (mem. =
op.)=20
(holding that reasonable person, at time of contracting, would =
regard=20
amount of attorney referral fee as "vitally important" term and =
that=20
breach of contract claim to recover fee failed as matter of law =
because,=20
although there was some evidence of agreement to pay fee, there =
was no=20
evidence of agreement to pay "specific amount" of referral fee).=20
In addition=20
to the failure to specify the amount Valentine "expected" from a=20
subsequently negotiated contingency fee, the alleged oral referral =
fee=20
agreement also failed to include other terms that could be =
considered=20
essential, such as whether the referral fee would be calculated =
before or=20
after the deduction of expenses and costs and how it would be =
calculated=20
if additional attorneys were retained to represent Sverdlin. The narrow scope =
of=20
Valentine's alleged oral referral fee agreement is further =
confirmed by=20
Valentine's testimony, in which he agreed that it was his =
understanding,=20
at the time he formed the agreement, that Cunningham was going to =
provide=20
legal services at a "straight hourly rate" because Sverdlin was in =
an=20
economic position to pay hourly fees. Valentine's own testimony=20
establishes that, whatever the terms of this alleged oral referral =
fee=20
agreement were, neither he nor Cunningham ever contemplated an =
agreement=20
whereby Cunningham would pay Valentine 15% of a contingency fee.=20
Thus, even if =
Valentine had=20
presented sufficient evidence to raise a fact issue as to whether =
or not=20
he was entitled to 15% of Cunningham's hourly billings, =
Valentine's breach=20
of contract claim goes well beyond any such agreement. In sum, the =
summary judgment=20
evidence affirmatively establishes that there was never a meeting =
of the=20
minds as to Valentine's entitlement to a referral fee for 15% of =
the=20
subsequently negotiated contingency fee and that the parties did =
not agree=20
on the essential terms of the purported contract. Accordingly, we =
hold=20
that there was never an enforceable contract between Valentine and =
Cunningham for the terms being sued upon and that Valentine's =
breach of=20
contract claim fails as a matter of law. We further hold that the =
trial=20
court did not err in granting Cunningham summary judgment on =
Valentine's=20
breach of contract claim. We note that, in =
his=20
deposition testimony, Valentine contradictorily testified that the =
oral=20
referral fee agreement he had with Cunningham had been =
renegotiated with=20
Sverdlin when, in January 1997, he and Cunningham met with =
Sverdlin, and=20
Sverdlin told Valentine and Cunningham that he would "make [them] =
rich."=20
Valentine testified that, around this time, the case was converted =
into a=20
contingency fee agreement. According to his alleged new agreement =
with=20
Sverdlin, Valentine "was supposed to get 10% and [Cunningham] was =
supposed=20
to get 40%," resulting in a 50% contingency fee to be charged to =
Sverdlin.=20
Valentine even agreed that the 15% Cunningham was going to pay him =
from=20
the oral referral fee agreement "turned into" The purpose of =
this letter=20
is to memorialize our agreement regarding payment for legal =
services=20
performed by me on your behalf. . . . We agreed that in =
January=20
1997 . . . that you would pay me for my services by assigning and=20
conveying to me an undivided 10% interest in the total recovery . =
. .=20
.This fee would also be in the nature of a referral fee paid =
by=20
you, not by Mr. Cunningham as is customary. . . .=20
We made this =
agreement when=20
you offered to pay Mr. Cunningham and I [sic] fifty percent (50%) =
of the=20
total recovery in the Dispute, rather than pay an hourly rate. We =
all=20
agreed that Mr. Cunningham would get a forty percent (40%) fee and =
that I=20
would get a ten percent (10%) fee. . . . For various =
reasons, our=20
agreement was never reduced to writing. At the request of several =
persons,=20
I have waited until now to bring this issue to your attention. I =
would now=20
appreciate the courtesy of a signed agreement. . . . =
Attached to this =
letter is=20
an assignment from you to me . . . . I have left the percent =
blank. I=20
would appreciate your filling in what you consider to be fair =
compensation=20
for me, considering my role in the referral, my past services, and =
my=20
future services. I know you are an honorable man. You will do the =
right=20
thing; of this I have no doubt. . . . (Emphasis added). =
Sverdlin=20
never signed this letter, and, in his affidavit testimony, he =
denied ever=20
granting Valentine a contingent interest in the case. On January 29, =
1999, after=20
Cunningham and Sverdlin both denied agreeing to pay Valentine =
either a=20
referral fee or contingent interest, Valentine sent a demand =
letter to=20
both Cunningham and Sverdlin, in which he stated, The purpose of =
this letter=20
is to make demand upon Mr. Sverdlin and Mr. Cunningham that they=20
jointly honor our agreement to pay me a portion of =
the=20
proceeds from the above referenced lawsuit. I was hired by =
Mr.=20
Sverdlin . . . I referred the case to Mr. Cunningham. Mr. =
Cunningham and I=20
agreed [upon] a referral agreement verbally the day I referred the =
case to=20
him. I reduced the referral agreement to writing. . . =
. Subsequent to =
this, Mr.=20
Sverdlin, Mr. Cunningham, and I agreed to modify our fee =
agreement=20
from an hourly fee agreement to a contingent fee agreement. =
Mr.=20
Sverdlin proposed to pay Mr. Cunningham and I a 50% contingent fee =
of all=20
proceeds . . . His exact words were, "I make [sic] you rich." We =
agreed.=20
The terms of the agreement were that Mr. Cunningham would receive =
a 40%=20
contingent fee of all proceeds and I would receive a 10% =
contingent fee of=20
all proceeds. . . .
For reasons I will =
not set=20
forth herein, at Mr. Cunningham's request, I never reduced the =
subsequent=20
contingent fee agreement to writing. Mr. Sverdlin and Mr. =
Cunningham have=20
now repudiated our agreement . . . . Valentine's =
letters not only=20
indicate that Valentine repeatedly failed to reduce his fee =
agreements to=20
writing, but further confirm that Valentine's alleged oral =
referral fee=20
agreement with Cunningham contemplated, at most, a percentage of =
gross=20
attorney's fees billed hourly. These letters, as well as =
Valentine's=20
testimony, also confirm that, throughout the history of this =
dispute,=20
Valentine has asserted contrary positions with regard to who owed =
him fees=20
and for how much. We overrule =
Valentine's=20
first issue. In his=20
second issue, Valentine argues that the trial court erred in =
granting=20
summary judgment in favor of Cunningham on Valentine's claims for =
fraud=20
and misrepresentation because fact issues "exist which preclude =
summary=20
judgment." In his=20
petition, in support of his fraud claim, Valentine alleged only =
that=20
Cunningham "engaged in fraud by conduct and/or promissory fraud =
and such=20
fraud has been the proximate cause of damages to Valentine." He =
alleged no=20
additional facts to support the fraud claim. In his appellate =
briefing,=20
Valentine more specifically asserts that Cunningham committed =
fraud by=20
promising to pay him a referral fee but later denying that he made =
any=20
such promise. Valentine also asserts that Cunningham never =
intended to pay=20
a referral fee. To prove a fraud =
claim, a=20
plaintiff must show (1) that a material representation was made; =
(2) the=20
representation was false; (3) when the representation was made, =
the=20
speaker knew it was false or made it recklessly without any =
knowledge of=20
the truth and as a positive assertion; (4) the speaker made the=20
representation with the intent that the other party should act =
upon it;=20
(5) the party acted in reliance on the representation; and (6) the =
party=20
thereby suffered injury. In re FirstMerit Bank, N.A., 52 =
S.W.3d=20
749, 758 (Tex. 2001); Johnson & Higgins of Texas, Inc. v. =
Kenneco=20
Energy, Inc., 962 S.W.2d 507, 524 (Tex. 1998). Even assuming that =
Valentine=20
adequately pleaded a fraud claim in his petition, we conclude that =
the=20
summary judgment record establishes, as a matter of law, that =
Cunningham=20
did not commit fraud because he did not make any material =
representations=20
that were false. As stated above in our discussion of Valentine's =
breach=20
of contract claim, the evidence establishes that Cunningham, at =
most,=20
agreed that a fair referral fee might constitute 15% of hourly =
billings.=20
Valentine contends that this agreement should have encompassed 15% =
of the=20
contingency fee. However, the evidence shows that Cunningham never =
made=20
any representations to support this contention. In fact, =
Valentine's own=20
letters and testimony establish that the parties never =
contemplated a=20
referral fee based on a percentage of any contingency fee. The =
evidence=20
shows only that Valentine may have expected this issue to be =
renegotiated=20
in the future. Valentine, by his own conduct, attempted to =
transform any=20
sort of oral referral fee agreement he had with Cunningham for =
hourly=20
billings into an entirely different agreement for a portion of the =
contingency fee. Moreover, =
Valentine's=20
allegations that Cunningham committed "fraud" by preventing him =
from=20
securing his 10% contingency interest offered to him by Sverdlin =
are not=20
supported by the record. Contrary to Valentine's allegations, =
there is=20
simply no evidence that Cunningham committed fraud by failing to =
"secure=20
[Sverdlin's] signature on the written fee agreement," =
"cultivat[ing]=20
dissension between [Sverdlin] and [Valentine]," or making "it =
impossible=20
for [Valentine] to get a signed written contract." In fact, =
Sverdlin=20
himself has denied orally granting Valentine a contingent interest =
in the=20
case. We overrule =
Valentine's=20
second issue. Breach=20
of Fiduciary Duty In his third =
issue,=20
Valentine contends that the trial court erred in granting summary =
judgment=20
in favor of Cunningham on Valentine's claims for breach of =
fiduciary duty.=20
In his=20
petition, Valentine did not assert a breach of fiduciary duty =
claim and=20
did not plead any facts supporting such a claim. There was nothing =
in=20
Valentine's pleadings sufficient to put Cunningham on notice that=20
Valentine sought recovery for a breach of fiduciary duty. =
Pleadings must=20
give "fair notice of the claim involved." Tex. R. Civ. P. 47(a); =
see=20
also Eikon King St. Manager, L.L.C. v. LSF King St. Manager, =
L.L.C.,=20
109 S.W.3d 762, 771 (Tex. App.--Dallas 2003, pet. denied). =
Valentine's=20
claim for a breach of fiduciary duty was not before the trial =
court at the=20
time it granted summary judgment in favor of Cunningham, and =
Valentine=20
cannot raise such a claim for the first time on appeal. See =
Baxter v.=20
Gardere Wynne Sewell LLP, 182 S.W.3d 460, 465 (Tex. =
App.--Dallas=20
2006, pet. denied); Loera v. Interstate Inv. Corp., 93 =
S.W.3d=20
224, 228 (Tex. App.--Houston [14th Dist] 2002, pet. denied); =
see also=20
Tex. R. App. P. 33.1(a). We overrule=20
Valentine's third issue. Having held that =
the trial=20
court did not err in granting Cunningham summary judgment on =
Valentine's=20
breach of contract and fraud claims, and having held that =
Valentine cannot=20
assert a breach of fiduciary duty claim for the first time on =
appeal, we=20
need not address Valentine's fourth issue, in which he contends =
that the=20
trial court erred in granting summary judgment in favor of =
Cunningham on=20
Cunningham's affirmative defenses of waiver and estoppel. =
We affirm the =
judgment of=20
the trial court.
Terry =
Jennings Justice Panel consists of =
Justices=20
Nuchia, Jennings, and Keyes. 1. 2. 3. 4. 5. 6. 7.