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Daniel K. Hagood, P.C. v. Kapai

Court of Appeals of Texas, Fifth District, Dallas

August 26, 2019

DANIEL K. HAGOOD, P.C. AND FITZPATRICK HAGOOD SMITH AND UHL, LLP, Appellants
v.
KUNAL KAPAI, Appellee

          On Appeal from the County Court at Law No. 4 Dallas County, Texas Trial Court Cause No. CC-18-04027-D

          Before Justices Bridges, Brown, and Nowell

          MEMORANDUM OPINION

          ERIN A. NOWELL JUSTICE

         This is an interlocutory appeal from an order denying a motion to compel arbitration. The issue in this appeal is the scope of an arbitration provision in an engagement agreement between an attorney and his client. The trial court determined the fees sought by the attorney were for services that were not rendered under the engagement agreement and did not fall within the scope of the arbitration provision. We conclude the trial court did not abuse its discretion and affirm.

         Background

         Daniel K. Hagood, P.C. and Fitzpatrick Hagood Smith and Uhl, LLP, (collectively Hagood) sued Kunal Kapai to recover unpaid attorney's fees and sought to compel arbitration under the terms of an engagement letter with Kapai. Hagood alleged claims for breach of contract and quantum meruit. Kapai contends the services for which Hagood is seeking fees are excluded from the engagement agreement and not within the scope of the arbitration provision in that agreement.

         In 2014, Kapai was involved in civil litigation with his former employer, GTL. He was represented by attorneys Lee Cameron and John Coutilish in the civil litigation. It was alleged that after Kapai was discharged from the company, he took some GTL checks and cashed them for himself. GTL alleged that Kapai committed theft by deception and forgery. In early May 2014, Frisco police contacted Kapai for an interview. Hagood's billing records indicate Cameron contacted Hagood on May 9, 2014 and Kapai met with Hagood later that day. Kapai and Hagood signed an engagement letter relating to the potential police questioning.

         The engagement letter (Agreement) is dated May 9, 2014. In relevant part, it provides:

1. Scope of the Engagement. The Client hereby retains the Firm to provide legal representation with regard to a potential questioning of client by the [Frisco], Texas Police Department and related matters.
8. Arbitration of Disputes. Any disputes regarding the Firm's services will be resolved by binding arbitration in Dallas, Texas by an arbitrator mutually agreed on. If there is a dispute and no mutual agreement is reached as to an arbitrator, the arbitrator will be appointed by a sitting Judge in Dallas County, Texas.
11. Entire Agreement. This Agreement contains the entire agreement between the Firm and the Client. No promise, representation, or warranty has been made by any of the parties, except as expressly stated in this Agreement. This Agreement does not include representation for any other criminal, administrative, civil, or appeal matter.

         Kapai stated in his affidavit that during Hagood's representation, Kapai advised Hagood that Cameron and Coutilish represented him in what became five civil and bankruptcy cases where Kapai and GTL were parties.[1] Kapai stated he retained Hagood to represent him in connection with the police interview. He did not retain Hagood to represent him on any other criminal, administrative, civil, or appeal matter. In June 2014, Kapai, Hagood, and Cameron determined that Kapai would not give an interview to police. Kapai considered Hagood's representation pursuant to the Agreement ended at that time. Kapai reviewed Hagood's billing records and stated they were consistent with his recollection that all legal services relating to the potential police questioning ended in June 2014. Kapai stated the legal services rendered after June 2014 related to other criminal, administrative, civil, or litigation matters. Kapai also stated that only a few of the documents in the client file he received from Hagood related to the potential police questioning. The remaining documents related to the other civil, bankruptcy, and litigation matters in which he was represented by Cameron.

         Hagood testified that all services rendered by his firm were related to the original criminal investigation for which Kapai retained him. He denied representing Kapai in any other criminal, administrative, civil, or appeal matter. Hagood testified the civil litigation referenced in his billing statements "surrounded the criminal matter in large measure." Hagood worked to make sure the civil settlement did not include language that could impact the criminal case. He also worked to prepare Kapai for a civil deposition in order to avoid any criminal issues. His role was to make sure nothing in the civil cases would cause criminal trouble for Kapai.

         Hagood introduced his billing statements for the work performed for Kapai. Those statements indicate that in May 2014, Hagood communicated with the Frisco Police Department and a Detective Corki, conferred with Cameron and Coutilish, reviewed documents, and met with the client and others. Hagood also reviewed Texas Workforce Commission documents. In June, Hagood had conferences regarding documents requested from Kapai, advised Kapai of a telephone call from Detective Corki, and conferred with Coutilish regarding a request for documents. In July, Hagood reviewed documents and an e-mail from Coutilish. Hagood billed Kapai for over ten hours in May ...


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