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Abuzaid v. Modjarrad & Associates, P.C.

Court of Appeals of Texas, Fifth District, Dallas

November 14, 2017

JOSEPH ABUZAID AND NADIA ADNANI, Appellants
v.
MODJARRAD & ASSOCIATES, P.C., Appellee

         On Appeal from the 95th Judicial District Court Dallas County, Texas Trial Court Cause No. DC-16-06551

          Before Justices Bridges, Fillmore, and Stoddart

          MEMORANDUM OPINION

          ROBERT M. FILLMORE, JUSTICE

         Modjarrad & Associates, P.C., d/b/a Modjarrad Abusaad Said Law Firm (the Law Firm), was retained to represent Joseph Abuzaid in Cause No. DC-12-09866, Joseph Abuzaid v. Muamar Anani, in the 95th Judicial District Court (the litigation). Abuzaid was represented by other counsel prior to the Law Firm's involvement. Approximately ten months after it began representing Abuzaid, the Law Firm withdrew as Abuzaid's counsel and intervened in the litigation, seeking to recover attorneys' fees and litigation expenses from Abuzaid and his wife, Nadia Adnani (collectively, appellants). The trial court granted the Law Firm's motion for no-answer default judgment, and awarded it $225, 947.33 in actual damages, $20, 145 in attorneys' fees incurred by the Law Firm in connection with the intervention, and contingent attorneys' fees should appellants unsuccessfully appeal the judgment. Appellants filed a motion for new trial on grounds Adnani had not been served with the intervention; Abuzaid had filed an answer to the intervention; and alternatively, they were entitled to a new trial under Craddock v. Sunshine Bus Lines, Inc., 133 S.W.2d 124 (1939). The trial court sustained the Law Firm's objections to portions of appellants' affidavits filed in support of the motion for new trial, and denied the motion for new trial.

         Appellants filed this appeal, challenging the trial court's evidentiary rulings in their first twelve issues; and contending in their final two issues that the trial court erred by denying the motion for new trial, and the evidence was factually insufficient to support the trial court's award of contingent attorneys' fees in the event of an unsuccessful appeal to this Court. We affirm the trial court's order denying the motion for new trial, and the trial court's award of attorneys' fees to the Law Firm in the amount of $25, 000 should appellants unsuccessfully appeal the default judgment to this Court.

         Background

         In early January 2015, the Law Firm agreed to represent Abuzaid in the litigation, a case that had been ongoing for some time. The Law Firm subsequently filed a motion to withdraw from the representation.[1] The trial court heard the motion to withdraw on November 12, 2015, and signed an order granting the motion.[2]

         The Law Firm filed a petition in intervention in the litigation on December 2, 2015, and an amended petition in intervention on December 14, 2015, seeking to recover attorneys' fees for work performed by the Law Firm and expenses incurred by the Law Firm during the representation.[3] The Law Firm asserted causes of action based on quantum meruit, suit on a sworn account, and theft of services. Although both the petition and amended petition in intervention stated Adnani had been "added by the Defendants as a party to this litigation and was deposed in this matter, " the style of the case did not list Adnani as a party. The petition and amended petition in intervention indicated appellants were served "Via E-Service."

         Attached to both the petition and amended petition in intervention was one page of the reporter's transcript from the November 12, 2015 hearing on the Law Firm's motion to withdraw in which an unidentified speaker states there were "issues" with a contract and "fine details" needed to be "worked out." The petition and amended petition in intervention were also each supported by an affidavit of Carlos Cortez, who served as lead counsel for Abuzaid in the litigation. According to Cortez, during the hearing on the motion to withdraw on November 12, 2015, Abuzaid stated (1) he took "issue" with a January 16, 2015 legal services contract that appellants signed with the Law Firm and that "fine details" needed to be resolved before the agreement would be finalized, and (2) he was pressured into signing the agreement. Cortez stated that, in light of Abuzaid's position at the hearing that there was no finalized legal services contract and that he was pressured into signing a January 16, 2015 agreement, the Law Firm filed the intervention to recover its fees and expenses. Also attached to each of Cortez's affidavits were billing invoices addressed to Abuzaid detailing the expenses incurred by the Law Firm during the representation, as well as the tasks performed by the Law Firm, the initials of the person who performed each task, the date each task was performed, the amount of time spent on each task, and the hourly rate charged by the person who performed the task. In his affidavit attached to the amended petition in intervention, Cortez opined that the fees and expenses, which totaled $225, 947.33, were reasonable and necessary and were incurred as a result of the Law Firm's representation of Abuzaid in the litigation. Cortez also stated he had knowledge of the facts underlying the claim; all just and lawful offsets, payments, and credits had been allowed; and the claim was just and true and remained outstanding and due. Further, although the Law Firm had demanded appellants pay the outstanding fees and expenses, they had failed to do so.

         On December 28, 2016, Abuzaid filed an "Affidavit in Clarification to Counsel Carlos Cortez['s] Comments in His Withdrawal Hearing." Abuzaid stated in the affidavit that he was the plaintiff in the litigation, hired the Law Firm on January 9, 2015, to represent him, and signed a legal services agreement with the Law Firm. Cortez later required Abuzaid to sign a new agreement "with a higher percentage and money down." Immediately prior to a hearing on January 16, 2016, Cortez stated that if Abuzaid did not sign a new agreement, Cortez would withdraw from the representation. Abuzaid signed a new agreement minutes before the hearing "contingent on [Cortez] working out those final terms in writing." Abuzaid subsequently traveled to Dallas to "work out those terms, " but Cortez refused to discuss the terms with him. "Further follow ups on those terms" with the Law Firm failed to "produce any new agreement." After the Law Firm moved to withdraw from the representation, Abuzaid attempted to finalize the terms of the new agreement by "compromising." Abuzaid provided no details in his affidavit concerning the compromise he was willing to make in order to finalize the agreement.

         Abuzaid attached three exhibits to his affidavit. Exhibit A consisted of two emails and an "Agreement for Legal Services." The first email indicates it was sent at 9:25 a.m. on January 9, 2015. The email pertained to an "agreement for legal services, " was sent by "Joe, " and stated, "I have signed the agreement with minor changes." The recipient of the email was redacted. The second email was sent at 1:53 p.m. on January 9, 2015. The sender, recipient, and subject matter of the email were redacted. The email stated the sender would file a notice of appearance in the litigation, but could not "do anything" concerning a separate case until current counsel withdrew.

         The final document contained in Exhibit A to Aubzaid's affidavit was an "Agreement for Legal Services" on the Law Firm's letterhead. Abuzaid is identified as the client. On the first page of the document are provisions stating Abuzaid had retained the Law Firm to represent him in the litigation, and Abuzaid agreed to pay the Law Firm a contingency fee of twenty-five percent. From the twenty-five percent contingency fee, the Law Firm would pay "any remaining attorneys' fees" owed to two of Abuzaid's prior attorneys. The Law Firm would "continue to retain a 25% fee interest" in the case if it withdrew from the representation "for any reason."

         The "Scope of Representation" by the Law Firm was to "include advising, counseling, negotiating, investigating, handling, prosecuting, and/or defending in the above referenced matter or matters arising herein or attendant hereto or arising out of the same set of facts or circumstances." The Law Firm was authorized to associate with other law firms or individual attorneys, but Abuzaid would not be charged for services rendered by other attorneys. The document indicated "no other legal services" were included.

         The document required Abuzaid to cooperate with the Law Firm by keeping it advised of his whereabouts at all times, appearing on reasonable notice at court appearances, and complying with reasonable requests of the Law Firm in connection with the preparation and presentation of the case. The third page of the document contained a provision stating:

IT IS FURTHER DISTINCTLY UNDERSTOOD AND AGREED BETWEEN YOU AND THE FIRM, THAT THE FIRM, WHEN AND IF THE FIRM DECIDES, AFTER FULL INVESTIGATION OF THE FACTS AND RESEARCH OF THE LAW, MAY WITHDRAW FROM REPRESENTATION AND/OR RETURN YOUR CLAIM TO YOU, AND YOU RELEASE THE FIRM FROM FURTHER ACTION ON SAID LEGAL REPRESENTATION AND/OR CLAIM, AND DISCHARGE THE FIRM FROM THIS CONTRACT, WITHOUT FURTHER LIABILITY ON THE PART OF SAID FIRM TO YOU AND THE FIRM WILL WAIVE ALL 25% CONTINGENCY FEES.

         The phrase "the firm will waive all 25% contingency fees" is highlighted by a handwritten underline. Abuzaid signed the agreement on January 9, 2015, but it was not signed by Cortez on behalf of the Law Firm.

          Exhibit B to Abuzaid's affidavit was titled "Amended Agreement of Legal Services, " stated it was "an amended agreement to January 9, 2015, " and lists both Abuzaid and Adnani as the clients. It provided appellants were required to pay a $10, 000 fee to the Law Firm by January 20, 2015, for the Law Firm "to handle the motions and discovery practice that is presently outstanding and whatever else needed [sic] to be done to proceed successfully in the case." Appellants were also required to pay their "former attorneys['] fees to continue presenting [sic]" them in the case. The Law Firm was entitled to a one-third contingency fee, and:

In the event this law firm withdraws from continuing to represent you in this matter, or the client change [sic] counsels [sic], this law firm will get paid [a] reasonable amount of attorneys['] fees to be determine [sic] and agreed by the firm and the client at a later date for the work was [sic] produced by the firm in relation to all of the work was [sic] done on the case in ratio to all attorneys['] fees collected on the case and the fees that was [sic] awarded by the jury and only to be collected if there is a recovery and to be collected then.

         This provision is surrounded by handwritten brackets, and there are two sets of initials on this page.

         Surrounded by handwritten brackets on the next page of the document is a provision addressing the scope of the representation:

Representation is to include advising, counseling, negotiating, investigating, handling, prosecuting, and/or defending in the above referenced matter or matters arising herein or attendant hereto or arising out of the same set of facts or circumstances. Our Firm is hereby authorized and empowered through this document to use and employ such other persons and/or entities that our Firm deems necessary for the proper handling of your legal matter or matters after obtaining the client approval beforehand in writing.
Mr. Cortez is well aware of the massive outstanding documents that had [sic] not been produced and well aware of the pending four motions to compel discovery among other work to be done. Some of that remaining work is listed in the client response to the motion of Jules Slim withdrawal [sic]. He is also well aware that the discovery needs to be reopen [sic] and additional work include [sic] depositions and new discovery needs to be done. ...

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