SHAMOUN & NORMAN LLP vs. ALBERT G HILL, Jr., et al, DC-10-14714, BRIEF FILED 1-SNs_Letter_Brief_to_Judge (Tex. St., Dallas Co., 160th District Ct. Mar. 21, 2019) (2024)

`

`Hon. Aiesha Redmond, Presiding
`March 21, 2019
`Page 2
`
`Additionally, we hold that attorneys seeking recovery for legal services under a
`quantum-meruit theory must show that the attorney's fees award is "reasonable" under
`Arthur Andersen. See 945 S.W.2d at 818. We note that Arthur Andersen suggests that a
`fact finder consider both "the amount involved and the results obtained" and "whether
`the fee is fixed or contingent." Id. Our holding, however, makes clear that evidence of
`an oral contingent-fee agreement prohibited by the statute of frauds is no evidence of the
`reasonable value of that attorney's services and cannot be considered. It follows, then,
`that neither the fee an attorney stood to earn under such an unenforceable fee
`agreement nor the specific result that would entitle the attorneys to that contingent
`fee under the agreement constitutes evidence to be considered under the Arthur
`Andersen factors. Thus, under these circ*mstances, when the attorney has performed
`services under an alleged contingent-fee agreement prohibited by the statute of frauds
`but has provided some value to the client, the alleged contingent-fee agreement is no
`evidence of the "reasonableness" of the value of the attorney's services. It is possible
`that in some circ*mstances the amount due under an unenforceable contingent-fee
`agreement and a reasonable attorney's fees will be the same. Here, a jury would have to
`find that the fee for Shamoun's 150 to 400 hours of work is "reasonable" under the
`Arthur Andersen factors. See id; General Motors Corp. v. Bloyed, 916 S.W.2d 949, 961
`(Tex. 1996) (instructing that on remand "any fee awarded ... should be tested against
`the lodestar approach to prevent grossly excessive attorney's fee award"). (emphasis
`added)
`
`Contrary to the arguments of opposing counsel, the Supreme Court is not barring the
`fact finder on remand from considering the results obtained by the global settlement services. In
`fact, the benefits afforded to Hill, Jr. is a valid and critical consideration in determining the
`equitable value of the services provided by Shamoun in obtaining that benefit for his client.
`The benefits afforded to Hill, Jr. by the global settlement services (which included control of
`over $1 Billion) and the benefit of the bargain contemplated by the unenforceable oral
`contingency agreement (which was 50% of the difference between $73 Million and the
`settlement amount) are two very different issues and were improperly conflated as being one
`and the same by opposing counsel.
`
`It is only the latter (the amount of the unenforceable fee agreement) that is not allowed
`to be considered. It is absolutely proper to consider the nature and magnitude of all the
`monetary and non-monetary benefits obtained by Hill, Jr. due to the global settlement services
`provided by S&N in determining the equitable value of the services provided by S&N. In fact,
`the nature and magnitude of each benefit obtained for Hill, Jr. by S&N are central to the
`question the fact finder must determine on remand.
`
`There are a limited number of ways to establish the nature and magnitude of the benefits
`obtained by Hill, Jr. as a result of S&N's work. The most direct way to establish this critical
`fact is for the defendant to simply admit to the nahire and magnitude of the benefits established
`by the testimony of Frank Ikard in the original trial. Another way to establish the nature and
`magnitude of the benefits obtained is by considering the actions taken by Hill, Jr. and others
`acting on his behalf at the same time and after those benefits were obtained. Therefore, it is the
`documents and actions that occurred simultaneous with or after the benefits were obtained that
`
`

`

`Hon. Aiesha Redmond, Presiding
`March 21, 2019
`Page 2
`
`can provide evidence of the nature and magnitude of the benefits obtained. This requested
`discovery is not only reasonably calculated to lead to the discovery of admissible evidence, but
`it is also directly relevant to the factors that go into the equitable determination of the quantum-
`meruit amount.
`
`Kelliher/Hill, Jr. has contradicted the testimony of its prior witness and denied S&N's
`request for an admission on the critical point of the nature and magnitude of the benefit
`provided to Hill, Jr. Therefore, S&N has no recourse but to prove this crucial point by
`implication; that is by obtaining and using the documents, actions, and evidence of actions that
`took place at the same time and after the benefits were acquired to prove the existence, nature,
`and magnitude of the benefits.
`
`As further support for the required discovery, S&N points the Court to the nature and
`tenor of the entire Opinion, including those set forth in Headnotes 21, 22, and 25. The Supreme
`Court's criticism is focused on the fact that the jury was allowed to consider evidence of the
`value of the oral contingency agreement (50% of the difference between $73 Million and the
`settlement amount). There is no criticism of any other evidence presented, including the
`benefits provided to Hill, Jr., some of which were unknown to S&N prior to the trial, and which
`now requires discovery. The Opinion provides no basis to exclude testimony in that area-which
`is one of the most significant factors to be considered.
`
`Very Truly Yours,
`
`^..... p:
`William D. Cobb, Jr.
`Daniel D. Tostrud
`
`DDT/Vg/286071
`Enclosure
`
`ec: All Counsel of Record
`via e-service
`
`

`

`724 Tex.
`
`544 SOUTH WESTERN REPORTER, 3d SERIES
`
`Albert G. HILL, Jr., Petitioner,
`
`V.
`
`SHAMOUN & NORMAN,
`LLP, Respondent
`
`NO. 16-0107
`
`Supreme Court of Texas.
`
`Argued October 10, 2017
`OPINION DELWERED: April 13, 2018
`Background: Law firm brought action
`against former client for breach of con-
`tract, fraud, fraudulent inducement, quan-
`turn meruit, quasi-estoppel, exemplary
`damages, and attorney's fees, and client
`counterclaimed against firm and attorney
`for breach of fiduciary duty, breach of
`contract, and civil conspiracy. After grant-
`ing summary judgment and a du-ected ver-
`diet to client on some of firm's claims, the
`160th Judicial District Court, Dallas Coun-
`ty, granted client's motion to set aside
`jury's verdict in favor of firm on quantum
`meruit claim. Fu'm appealed. The Dallas
`Court of Appeals, 483 S.W.Sd 767, re-
`versed in part. Client petitioned for re-
`
`view.
`
`Holdings: The Supreme Court, Green, J.,
`held that:
`(1) statute of frauds did not preclude firm
`from bringing quantum meruit action;
`(2) firm presented evidence to support
`jury's finding that attorney provided
`valuable, compensable services;
`(3) evidence was insufficient to support
`jury's award of $7,250,000 as reason-
`able value of services;
`
`(4) firm was entitled to recover some of its
`fees in quantum meruit action; and
`
`(5) the Supreme Court would remand case
`for new trial in spite of rule prohibiting
`new trial on unliquidated damages.
`Judgment of the Court of Appeals re-
`versed in part and remanded.
`
`1. Implied and Constructive Contracts
`<s^30
`
`"Quantum meruit" is an equitable
`remedy that is based upon the promise
`implied by law to pay for beneficial ser-
`vices rendered and knowingly accepted.
`
`See publication Words and Phrases
`for other judicial constructions and
`definitions.
`
`2. Implied and Constructive Contracts
`®=>30
`
`To recover under a quantum-meruit
`claim, a claimant must prove that: (1) valu-
`able services were rendered or materials
`furnished, (2) for the person sought to be
`charged, (3) those services and materials
`were accepted by the person sought to be
`charged, and were used and enjoyed by
`him, and (4) the person sought to be
`charged was reasonably notified that the
`plaintiff performing such services or fur-
`nishing such materials was expecting to be
`paid by the person sought to be charged.
`
`3. Implied and Constructive Contracts
`®^55
`
`A party generally cannot recover un-
`der a quantum-meruit claim when there is
`a valid contract covering the services or
`materials furnished.
`
`4. Implied and Constructive Contracts
`•®=>uo
`
`The measure of damages for recovery
`under a quantum-meruit theory is the rea-
`sonable value of the work performed and
`the materials furnished.
`
`5. Attorney and Client <S=» 134(2)
`
`Frauds, Statute of 1®^138(4)
`
`Statute of frauds did not preclude law
`firm from bringing quantum meruit action
`against former client, even though their
`oral contingent-fee agreement was void un-
`der statute, where firm sought only rea-
`
`

`

`HILL v. SHAMOUN & NORMAN, LLP
`Cite as 544 S.W.3d 724 (Tex. 2018)
`
`Tex. 725
`
`sonable value of services in assisting client
`reach global settlement, rather than bene-
`fit of its bargain under alleged oral agi'ee-
`ment. Tex. Gov't Code Ann. § 82.065
`(1989).
`
`6. Appeal and Error ®^3766
`Frauds, Statute of ^159
`Whether a contract falls within the
`statute of frauds is a question of law,
`which is reviewed de novo. Tex. Gov't
`Code Ann. § 82.065.
`
`7. Frauds, Statute of 0^122.5
`Whether the statute of frauds bars
`recovery for a non-contract claim depends
`on the nature of the damages the plaintiff
`seeks to recover. Tex. Gov t Code Ann.
`§ 82.065.
`
`8. Frauds, Statute of <s^l.2
`The purpose of the statute of frauds is
`to remove uncertainty, prevent fraudulent
`claims, and reduce Utigation. Tex. Gov't
`Code Ann. § 82.065.
`
`9. Attorney and Client •®^> 134(1)
`Frauds, Statute of •®=>138(4)
`
`The statute of frauds regarding attor-
`ney-client contracts does not preclude a
`law firm's quantum-meruit suit to recover
`the reasonable value of legal services per-
`formed under an unenforceable agreement.
`Tex. Gov't Code Ann. § 82.065(a).
`
`10. Attorney and Client <S»134(2)
`
`Law firm presented more than mere
`scintilla of evidence to support jury's find-
`ing that attorney had provided former
`client valuable, compensable global settle-
`ment services, as required to support an
`award to firm on quantum-meruit claim
`against client, despite contention that ser-
`vices were already covered under signed
`engagement agreements; agreements lim-
`ited scope of services to named causes of
`actions, attorney worked as one voice
`across client's approximately 100 lawyers
`
`in seeking global resolution of web of liti-
`gation, and attorney s work avoided more
`than $1 billion in liability exposure for
`client.
`
`11. Evidence ®='597
`
`Evidence is legally insufficient to sup-
`port a jury finding when (1) the record
`discloses a complete absence of evidence of
`a vital fact, (2) the court is barred by rules
`of law or of evidence from giving weight to
`the only evidence offered to prove a vital
`fact, (3) the evidence offered to prove a
`vital fact is no more than a mere scintilla,
`or (4) the evidence conclusively establishes
`the opposite of a vital fact.
`
`12. Appeal and Error <S==>3939
`
`In determining whether there is no
`evidence of probative force to support a
`jury's finding, all the record evidence must
`be considered in the light most favorable
`to the party in whose favor the verdict has
`been rendered, including evidence offered
`by the opposing party that supports the
`verdict.
`
`13. Implied and Constructive Contracts
`®^91,110
`
`A party must introduce evidence on
`the correct measure of damages to recover
`on a quantum-meruit claim, meaning that
`the party must establish the reasonable
`value of work performed or materials fur-
`nished.
`
`14. Implied and Constructive Contracts
`®=30
`
`A quantum-meruit claim does not pro-
`ceed on a contract for a specified price, but
`proceeds independently of a contract to
`recover the value of the services rendered
`or materials furnished.
`
`15. Attorney and Client 0^166(3)
`
`When an attorney attempts to support
`a quantum-meruit claim with a bare con-
`tingent-fee percentage and no supporting
`
`

`

`726 Tex.
`
`544 SOUTH WESTERN REPORTER, 3d SERIES
`
`evidence of the value of services rendered,
`courts deem the claimed contingent-fee
`agreement no evidence of the reasonable
`value of the services performed.
`
`16. Implied and Constructive Contracts
`<®^93.1
`
`Evidence of the value of an agreement
`that is unenforceable under the statute of
`frauds cannot be given any weight or ef-
`feet and legally cannot be considered as
`evidence supporting the jury's finding on a
`quantum-meruit claim.
`
`17. Implied and Constructive Contracts
`®^64
`
`The existence of an express contract
`does not preclude recovery in quantum
`meruit for the reasonable value of work
`performed and accepted which is not cov-
`ered by an express contract.
`
`18. Appeal and Error <S>3766
`
`Contracts •®=:>176(1)
`
`The question of whether an express
`contract covers the services at issue is a
`legal question reviewed de novo.
`
`19. Attorney and Client ®^141
`
`Evidence was insufficient to support
`jury's award of $7,250,000 as reasonable
`value of attorney's global settlement ser-
`vices to client, in law firm's quantum me-
`ruit action against client; even though
`some evidence supported finding that at-
`torney provided some value to client, in-
`eluding attorney's hourly rate under limit-
`ed-engagement agreements and number of
`hours worked, value of oral contingent-fee
`agreement that violated statute of frauds
`could not be given any weight or consid-
`ered as evidence supporting award, and
`expert that relied on oral agreement was
`only source for actual dollar amount as to
`reasonable value of services. Tex. Gov't
`Code Ann. § 82.065(a).
`
`20. Frauds, Statute of ®^122.5
`
`The principle that the statute of
`frauds bars recovery for non-contract
`claims if the plaintiff seeks to recover the
`benefit of his or her bargain applies to any
`non-contract claim seeking benefit-of-the-
`bargain damages under an agreement
`voided by the statute of frauds, not merely
`fraud claims.
`
`21. Attorney and Client <S='134(2)
`
`Law firm was entitled to recover some
`of its fees in quantum meruit action
`against former client, even though trial
`court's disregard of jury's award of
`$7,250,000 was neither arbitrary nor un-
`reasonable; there was legally sufficient evi-
`dence that law firm performed global set-
`tlement services for client and that client
`was aware attorney expected to be paid for
`those services, and to hold otherwise would
`have allowed client to be unjustly enriched
`despite promise implied by law to pay for
`beneficial services rendered and knowingly
`accepted.
`
`22. Implied and Constructive Contracts
`®='30
`
`Recovery in quantum meruit will be
`had when nonpayment for the services
`rendered or materials furnished would re-
`suit in an unjust enrichment to the party
`benefited by the work.
`
`23. Jury <S>'13(1)
`
`As a general rule, the trial court, not
`the jury, determines the expediency, ne-
`cessity, or propriety of equitable relief.
`
`24. Jury •®=>13(5.1)
`
`When contested fact issues must be
`resolved before equitable relief can be de-
`termined, a party is entitled to have that
`resolution made by a jury.
`
`25. Jury 0^13(5.1)
`
`Once any necessary factual disputes
`have been resolved by the jury, the weigh-
`
`

`

`HILL v. SHAMOUN & NORMAN, LLP
`CIteas544 S.W.3d 724 (Tex. 2018)
`
`Tex. 727
`
`ing of all equitable considerations and the
`ultimate decision of how much, if any, equi-
`table relief should be awarded, must be
`determined by the trial court.
`
`30. Attorney and Client ©^ 140
`
`Attorneys seeking recovery for legal
`services under a quantum-meruit theory
`must show that the attorney's fee award is
`
`26. Attorney and Client 1®^167(2)
`
`reasonable.
`
`When an attorney seeks fees for legal
`services in equity, the issue for the jury is
`the value of the attorney's reasonable and
`necessary services, not whether a reason-
`able fee thus determined should neverthe-
`less be withheld for some reason, which is
`an inherently equitable decision that must
`thus be made by the court.
`
`27. Equity <S=>3
`
`In making equity determinations, a
`court should weigh equitable consider-
`ations particular to the case, but a trial
`courts discretion to determine equitable
`relief is not unlimited.
`
`28. Appeal and Error ©='3717
`
`A trial court's decision to reduce a
`jury's attorney's fee award for equity con-
`siderations is reviewed under an abuse of
`discretion standard and may be overturned
`only if it was arbitrary or unreasonable.
`
`29. Appeal and Error 0^4751(3)
`
`Supreme Court would remand law
`firm's quantum meruit case for new trial
`on amount of firm's recovery against for-
`mer client, in spite of rule that prohibit-
`ed it from ordering new trial solely on
`unliquidated damages when liability was
`contested; even though expert opinion
`could not be considered as evidence be-
`cause it gave effect to unenforceable oral
`contingent-fee agreement, some evidence
`supported value of legal services fu-m
`provided to client, and determination of
`reasonable value of legal services on re-
`mand was no different from remand for
`new trial to determine attorney's fees.
`
`Tex. R. App. P. 2, 61.2.
`
`31. Attorney and Client ®^166(3)
`
`When an attorney has performed ser-
`vices under an alleged contingent-fee
`agreement prohibited by the statute of
`frauds but has provided some value to the
`client, the alleged contingent-fee agree-
`ment is no evidence of the reasonableness
`of the value of the attorney's services.
`Tex. Gov't Code Ann. § 82.065.
`
`ON PETITION FOR REVIEW FROM THE COURT
`OF APPEALS FOR THE FIFTH DISTRICT OF TEXAS
`
`William D. Cobb Jr., Wallace B. Jeffer-
`
`son, Charles T. Frazier Jr., Melanie Plow-
`man, C. Gregory Shamoun, Jonathan J.
`Cunningham, Lindsey Katherine Wyi'ick,
`Daniel D. Tostrud, Douglas W. Alexander,
`for Respondent.
`
`Andrew Patrick LeGrand Sr., Broadus
`A. Spivey, William Richard (Eick) Thomp-
`son II, Michael Lawrence Raiff, Stewart
`H. Thomas, James C. Ho, Bradley G. Hub-
`bard, Tom Moore Dees III, Joseph B.
`Morris, for Petitioner.
`
`W. Kenneth Paxton Jr., Beth E. Klus-
`mann, Jeffrey C. Mateer, Scott A. Keller,
`for Anucus Curiae The State of Texas.
`
`Wolfgang P. Hu'czy De Mino PhD, pro
`
`se.
`
`E. Lee Parsley, for Texans for Amicus
`Curiae Lawsuit Reform.
`
`Sean D. Jordan, Robert Earl Henneke,
`Danica Lynn Milios, for Amicus Curiae,
`Texas Public Policy Foundation.
`
`

`

`728 Tex.
`
`544 SOUTH WESTERN REPORTER, 3d SERIES
`
`Justice Green delivered the opinion of
`the Court.
`
`hundred lawyers representing various par-
`ties and entities.
`
`This case involves a law fu'm's quantum-
`meruit suit for the reasonable value of its
`services in assisting its client reach a com-
`prehensive settlement of various lawsuits
`filed against him. We must decide whether
`Texas Government Code section 82.065 or
`our common law permits the firm's quan-
`tum-meruit recovery for services it per-
`formed under an unenforceable contin-
`gent-fee agreement and whether the firm's
`damages expert improperly based his dam-
`ages model on that agreement We hold
`that despite the firm s lack of a signed
`writing, the statute of frauds does not
`preclude its quantum-meruit claim. In ad-
`dition, we hold that there was sufficient
`evidence to demonstrate that the firm per-
`formed compensable services in negotiat-
`ing the global settlement. However, we
`hold that the expert's opinion as to the
`reasonable value of the firm's services can-
`not be given legal weight, and without it,
`there is legally insufficient evidence to
`support the jury s award. Because there is
`some evidence of the reasonable value of
`the firm's services, we reverse the part of
`the court of appeals' judgment that rein-
`stated the jury's award and remand the
`case to the trial court for a new trial on
`the amount of the firm's recovery.
`
`I. Background
`
`Albert G. Hill, Jr. (Hill) became involved
`in contentious litigation with his son, Al-
`bert Hill, III (Hill HI) and numerous oth-
`er parties beginning in 2007. These law-
`suits, referred to as the "spider web of
`litigation," involved other members of the
`Hill family, family trusts, trustees, and
`various business entities. In February
`2010, this web of litigation comprised more
`than twenty lawsuits, spanning multiple
`courts and involving approximately one
`
`Shamoun & Norman, LLP (S & N) ini-
`tially became involved in the web of litiga-
`tion in 2009. Hill and Gregory Shamoun
`signed two limited-engagement agree-
`ments for S & N's representation in what
`the parties refer to as the "Abbott Finan-
`cial" case (agreement signed November 19,
`2009) and the "Bordeaux Trust" case
`(agreement signed January 15, 2010). The
`Abbott Financial case involved the collec-
`tion of a debt against Hill III, and the
`Bordeaux Trust case involved a suit alleg-
`ing that Hill and his wife withdrew money
`from a trust for their own benefit. Sham-
`oun testified that at the time he was re-
`tained for representation in those two
`cases, he had not yet engaged in "global
`settlement negotiations" for Hill.
`
`In March 2010, Hill was also facing a
`federal civil RICO lawsuit, set for trial in
`M.ay 2010, in which $1 billion in damages
`were sought against him by Hill III and
`other family members for alleged impro-
`priety in withdrawing and distributing
`funds related to various trusts (the "RICO
`case"). At an earlier point in the RICO
`case, Hill had been sanctioned and held in
`contempt for filing a false affidavit. This
`contempt order frustrated Hill's settle-
`ment efforts, and as of March 2010, settle-
`ment negotiations had effectively halted.
`
`On March 5, 2010, Frances Wright,
`Hill's personal attorney, asked Shamoun to
`attend a meeting with the lawyers for the
`trust, trustees, and Hill's family because
`Hill needed to find "a person who could be
`one voice for the group" and deal with Hill
`Ill's lead attorney, Steven Malouf. Sham-
`oun attended the meeting, and though he
`did not formally become settlement-negoti-
`ations counsel at that time, he began com-
`municating and negotiating with Malouf
`about a global settlement. According to
`Malouf, settlement negotiations became
`
`

`

`HILL v. SHAMOUN & NORMAN, LLP
`Cite as 544 S.W.3d 724 (Tex. 2018)
`
`Tex. 729
`
`"very active" when he started dealing with
`Shamoun, and Shamoun "reenergized" the
`settlement discussions. In early- to mid-
`March, Shamoun offered IVCaloufs clients
`$55 million to settle, but they rejected the
`offer. Malouf emailed Shamoun on March
`27, expressing his lack of interest in set-
`tling and stating, "We just need to let the
`jury decide.
`
`Hill claims that Shamoun first requested
`a potential discretionary bonus in a meet-
`ing sometime in the first week of March.
`Hill claims he told Shamoun he would con-
`sider it, and that as Hill understood it, he
`had unfettered discretion in whether there
`would be a bonus and how much any bonus
`might be.
`
`On March 27, Wright called Shamoun on
`behalf of Hill and explained that Hill want-
`ed Shamoun to get involved in the RICO
`case and work toward a global resolution
`of the cases composing the web of litiga-
`tion before the RICO trial in ]V[ay. Wright
`discussed Hill's desire to increase his out-
`standing settlement offer from $55 million
`to $73 million, and authorized Shamoun to
`make this offer to Malouf to settle all
`pending cases. In this conversation,
`Wright also told Shamoun that Hill had
`offered to pay him a bonus based on this
`settlement offer—Hill would pay Shamoun
`50% of the savings, if any, between the $73
`million ceiling and the cash component of
`the global settlement if that resolution was
`reached before the RICO trial in May. As
`Shamoun understood it at the time, Hill
`would keep the other 50% of any settle-
`ment savings. If a global settlement was
`achieved for $73 million or more, Shamoun
`understood that under Hill's offer he
`would receive nothing.
`
`Shamoun immediately relayed the $73
`million settlement offer to Malouf, who
`again indicated no interest in settling. Af-
`ter this rejection, Shamoun called Hill.
`Shamoun told Hill that he and Wright had
`
`spoken earlier that day, and Wright had
`relayed Hill's desu'e for a global resolution
`of all the cases in the web of litigation and
`had extended Hill's settlement-bonus offer
`to achieve that end. Shamoun claims that
`in this conversation he formally accepted
`Hill's offer. Shamoun's understanding of
`his obligation under this alleged oral con-
`tingent-fee agreement was to achieve a
`global resolution of all the cases in the web
`of litigation before the RICO trial and
`have the trial court vacate the contempt
`order against Hill.
`
`In April 2010, after Hill's counsel with-
`drew in the RICO case, Shamoun agreed
`to formally represent Hill in that case and
`in a separate probate case. Hill and Sham-
`oun executed two hourly fee, limited-en-
`gagement agreements on April 12 and
`April 13—bringing the total to four written
`engagement agreements between Hill and
`Shamoun.
`
`On April 30, Shamoun and Hill were
`summoned to the federal courthouse to
`discuss the status of the settlement. Sham-
`oun and Hill both testified that during
`their visit to the courthouse, Shamoun told
`Hill three times to "remember my bonus,"
`and that each time Hill confirmed that he
`remembered. Hill testified that he thought
`Shamoun's request was odd, and he later
`told Wright about the exchange.
`
`On May 2, Wright presented to Hill a
`document entitled "Performance Incentive
`Bonus." Wright testified that she prepared
`the document in May, that she alone draft-
`ed it, and that the document correctly
`represented the oral contingent-fee agree-
`ment Shamoun reached with Hill. The doc-
`ument, which was introduced into evidence
`by both parties, stated: "The performance
`incentive bonus shall be calculated as the
`delta between $55 million and $73 million,
`and shall be split 50/50 between Law Of-
`fices of Frances Johnson Wright, P.O. and
`Shamoun and Norman." Shamoun testified
`
`

`

`730 Tex.
`
`544 SOUTH WESTERN REPORTER, 3d SERIES
`
`he had not seen the document before it
`was presented to Hill and had no part in
`drafting it. When Wright presented the
`document to Hill, Hill refused to sign it.
`
`A settlement conference was ordered in
`the RICO case for M:ay 4, 2010, before
`federal Magistrate Judge Paul Stickney.
`In attendance were Shamoun, Hill, Hill
`Ill, and Hill Ill's attorney, Charla Aldous.
`At this conference, Shamoun communicat-
`ed Hill's settlement terms to Hill III and
`his attorney. Aldous said the terms includ-
`ed, but were not limited to, vacating feder-
`al orders from the federal lawsuit and
`settling the cases composing the web of
`litigation. No settlement documents were
`signed at that time, but the parties were
`back in court the next day for a court-
`ordered mediation. Later that day, Sham-
`oun discovered Wright's failed attempt to
`memorialize the oral contingent-fee agi'ee-
`ment. Shamoun called Hill that evening to
`ask about it and recorded the conversation,
`unbeknownst to Hill. Hill, in response to
`Shamoun's inquiry about whether the two
`had an agreement, stated, "we need to
`make a deal that is understandable and
`reasonable. You know, that has some rele-
`vance and makes sense." Hill and Sham-
`oun spoke again by phone later that eve-
`ning. Hill testified that in this call he fired
`Shamoun, but Hill admitted that he
`"should have elaborated a bit more."
`Shamoun's understanding of that conver-
`sation was not that Hill had fired him, but
`merely that Hill told him that two other
`attorneys, Keith Benedict and Ty Miller,
`would be taking the lead at the mediation
`the next day. Shamoun thought this made
`sense because those attorneys were more
`familiar with the specific trust and tax
`issues at hand.
`
`Shamoun presented text messages and
`emails showing that he was still in contact
`with Benedict and Miller about the settle-
`ment agreement on the morning of May 5.
`
`Shamoun attended the mediation on IVtay 5
`but left early. Before he left, Sham oun
`asked Hill about the oral contingent-fee
`agreement again and told Hill not to have
`a "selective memory," to which Hill re-
`sponded, "Trust me." The final settlement
`terms were read into the record at the end
`of the mediation on May 5, and a formal
`settlement agreement was signed on May
`13,2010.
`
`There is disputed testimony as to who
`negotiated the final settlement. Aldous and
`Malouf testified that the terms Shamoun
`discussed prior to and on May 4 became
`part of the settlement agreement signed
`on M.sy 13. Hill, Benedict, and Judge
`gtickney—who acted as mediator—testi-
`fied that Shamoun was not involved and
`did not settle the web of litigation on May
`6. Judge Stickney testified that during
`Shamoun's brief time at the mediation on
`M.ay 5, Shamoun said he was not repre-
`senting Hill in the mediation because of a
`disagreement.
`
`On May 17, 2010, Hill sent Shamoun a
`formal letter terminating his representa-
`tion in all matters. The letter stated:
`
`As you know, I terminated your repre-
`sentation of me as settlement counsel
`prior to the global settlement in the
`cases in which you were providing rep-
`resentation. Given the claim you and
`Frances Wright have made to a fee con-
`tingent on the terms of that settlement,
`I think it would be better if you and I
`fully disengaged.
`On August 16, 2010, S & N sent Hill a
`demand letter claiming $11,250,000 for its
`legal services. Hill declined to pay this
`amount, but he did satisfy all other fee
`obligations relating to the four written en-
`gagement agreements between him and S
`&N.
`S & N subsequently brought suit against
`Hill for breach of contract, fraud, fraudu-
`lent inducement, civil conspiracy, quantum
`
`

`

`HILL v. SHAMOUN & NORMAN, LLP
`Cite as 544 S.W.3d 724 (Tex. 2018)
`
`Tex. 731
`
`meruit, quasi-estoppel, exemplary dam-
`ages, and attorney's fees.* Hill filed coun-
`terclaims against S & N and Shamoun for
`breach of fiduciary duty, breach of con-
`tract, and civil conspiracy. Before trial, the
`trial court granted Hill's summary judg-
`ment motion on S & N's breach-of-contract
`and quasi-estoppel claims, and S & N
`abandoned its civil-conspiracy claim
`against Hill. The case went to trial on S &
`N's quantum-meruit, fraud, and fraudu-
`lent-inducement claims and Hill's counter-
`claims. The trial court granted Hill's mo-
`tion for du-ected verdict on S & N's fraud
`and fraudulent-inducement claims, but it
`denied his motion for directed verdict on
`quantum meruit
`
`At trial, S & N's counsel conceded that
`the "Performance Incentive Bonus" was
`unenforceable because it was an oral con-
`tingent-fee agreement. S & N's damages
`expert, Richard Sayles, testified at trial to
`the reasonable value of S & N's services
`by considering the factors laid out in Ar-
`thw Andersen & Co. v. Pen-y Equip.
`Corp., 945 S.W.2d 812, 818 (Tex. 1997).2
`
`1. S & N also asserted various causes of action
`against Benedict, Miller, and AG Hill Part-
`ners, LLC, but later nonsuited those claims.
`
`2. The factors are:
`(1) the time and labor required, the novelty
`and difficulty of the questions involved, and
`the skill required to perform the legal ser-
`vice properly; (2) the likelihood . . . that the
`acceptance of the particular employment
`will preclude other employment by the law-
`yer; (3) the fee customarily charged in the
`locality for similar legal services; (4) the
`amount involved and the results obtained;
`(5) the time limitations imposed by the
`client or by the circ*mstances; (6) the na-
`ture and length of the professional relation-
`ship with the client; (7) the experience, rep-
`utation, and ability of the lawyer or lawyers
`performi