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

Court of Appeals of Texas, Fifth District, Dallas

November 6, 2019

RICHARD RALEY AND RALEY HOLDINGS, LLC, Appellants
v.
DANIEL K. HAGOOD, P.C. AND FITZPATRICK HAGOOD SMITH & UHL, LLP, Appellees

          On Appeal from the County Court at Law No. 2 Dallas County, Texas Trial Court Cause No. CC-17-00390-B

          Before Justices Pedersen, III, Reichek, and Carlyle

          MEMORANDUM OPINION

          AMANDA L. REICHEK JUSTICE.

         Richard Raley and Raley Holdings, LLC appeal the trial court's judgment confirming an arbitration award in favor of Daniel K. Hagood, P.C. and Fitzpatrick Hagood Smith & Uhl, LLP (Hagood). Bringing four issues, Raley contends the trial court erred in denying his request for post-judgment discovery, refusing to set aside the judgment, and confirming the arbitration award. We affirm the trial court's judgment.

         Factual Background

         Hagood brought this suit against Raley and Raley Holdings ("Raley") seeking to collect unpaid legal fees. In its petition, Hagood moved for arbitration based on an arbitration clause in the legal services contract. Hagood additionally filed a motion to compel arbitration which the trial court granted.[1] At Raley's request, the trial court abated the case pending the arbitration.

         Hagood and Raley proceeded to binding arbitration with the Honorable Harlan Martin serving as arbitrator. The claims asserted by Hagood included breach of contract and quantum meruit. Raley counterclaimed for negligence/legal malpractice and breach of fiduciary duty. A final award was issued on March 12, 2018. In the award, Martin concluded Raley breached the legal services agreement and awarded Hagood $376, 313.97 in damages, interest, and attorney's fees. Martin denied all of Raley's counterclaims.

         The next day, Hagood filed a motion to lift the abatement and confirm the arbitration award in the trial court. While the motion to confirm was pending, Hagood sought post-judgment discovery. Raley resisted the discovery, and Hagood filed motions to compel. A hearing on the motion to confirm the award and the discovery motions was scheduled for May 4. On May 2, counsel for Raley sent an email to Hagood's counsel stating "[w]e are not opposed to the court confirming the arbitration award. Once an actual judgment is entered by the Court, please resend the discovery and we will address it at that time. I do not intend to appear at the hearing on Friday." On the day of the hearing, the trial court signed a final judgment stating that, after considering Hagood's motion to lift the abatement and confirm the arbitration award, it was of the opinion that the award should be confirmed.

         Raley contends that, shortly after the conclusion of the arbitration proceedings, he discovered that Martin had an ownership interest in the dispute resolution company through which the arbitration was conducted. Five days after the trial court signed the final judgment, Raley propounded discovery seeking to obtain information relating to Martin's interest in the company and any services rendered by the company to Hagood or its counsel. Hagood responded with a motion to quash, motion for protection, and motion for sanctions contending Raley was not permitted to conduct post-judgment discovery.

         On June 1, Raley filed a motion to set aside the judgment confirming the award contending (1) the arbitration ruling misstated material fact witness testimony and the standard of law to be applied, and (2) he was attempting to obtain discovery on whether proper disclosures were made prior to the arbitration. The only evidence submitted with the motion was an unsworn declaration in support of Raley's argument that the award misstated the facts presented at the arbitration. That same day, the trial court granted Hagood's motions to quash and for protection. Raley's motion to set aside the judgment was scheduled to be heard on July 18 along with several other discovery motions.

         At the July 18 hearing, when the trial court began to address the motion to set aside the judgment, Raley's counsel indicated he wanted to "pass" it. After further discussion, however, the trial court stated it viewed all the pending motions as being "tied together" and felt that addressing the motion to set aside was necessary "to get the entirety of the picture." Raley's counsel responded "sure" and proceeded to argue the points raised in the motion at length. No evidence was presented at the hearing by either party. On July 24, the trial court signed an order disposing of all the motions discussed at the hearing and denied Raley's request to set aside the judgment. This appeal followed.

         Analysis

         I. Post-Judgment Discovery

         In his first issue, Raley contends the trial court erred in denying his request to conduct discovery after the final judgment was signed. A judgment confirming an arbitration award is a final judgment just like any other. Hamm v. Millennium Income Fund L.L.C., 178 S.W.3d 256, 263 (Tex. App.-Dallas 2005, pet. denied). Discovery conducted after a final judgment ...


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