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Click here for the full text of this decision FACTS:The appellants, Charles M. Haden Jr., individually (Haden), and Charles McIntyre Haden Jr. & Co. d/b/a Haden & Co. (the company) � the court also noted in a footnote that it referred to the appellants jointly as “the company” � filed motions for rehearing and for en banc reconsideration of the opinions that the 1st Court of Appeals issued on Sept. 7, 2006. The appellee, David J. Sacks P.C. (Sacks) d/b/a Sacks & Associates (the law firm) filed responses to both motions. These appeals derived from a dispute over whether and how a client agreed to pay a law firm for legal services. In Cause No. 01-01-00200-CV, the company challenged a series of interlocutory summary judgments and a final judgment rendered in favor of the law firm. In three issues, the company contended that the law firm did not establish its entitlement to judgment as a matter of law: 1. for breach of a contract to pay $30,314.38 for legal services performed, 2. for $120,887.50 in attorney’s fees awarded the law firm in connection with pursuing the breach of contract claim, or 3. on the company’s counterclaims for violations of the Deceptive Trade Practices and Consumer Protection Act, breach of fiduciary duty, breach of contract and fraud. Haden and his predecessor company had an appeal pending to the 5th U.S. Circuit Court of Appeals from an adverse judgment rendered in the U.S. District Court for the Southern District of Texas’ Houston division. That controversy involved a commercial landlord-tenant dispute and resulted in an adverse judgment that not only assessed liability against the company, but also eliminated the company’s counterclaims. The trial attorney who represented the company in the federal case had prepared a preliminary draft of an appellate brief when Sacks and Haden discussed the merits of hiring independent appellate counsel for the appeal, instead of relying on trial counsel, to file the brief in the 5th Circuit and argue the case before the court. Sacks is board certified in civil appellate law by the Texas Board of Legal Specialization. The parties began their working relationship through a written engagement letter sent from the law firm and dated Aug. 4, 1997. Sacks’ signature appears at the close of the letter. Below Sacks’ signature is the statement, “Your [Haden's] signature below indicates acceptance of the terms of this fee agreement.” Haden paid a $5,000 retainer and later made a $5,000 payment to the firm, but he did not pay the remaining balance of $30,314.38. On Sept. 9, 1998, the 5th Circuit issued an 18-page, unpublished opinion in Haden’s and the predecessor company’s appeal. The disposition affirmed the adverse judgment of $66,363.03 that had been rendered as a matter of law against Haden and the predecessor company but also granted them partially favorable relief by vacating dismissal of their promissory-estoppel counterclaim and remanding those claims for trial. Sacks eventually sent a demand letter stating the account was 19 months past due. Sacks sued Haden for the balance, alleging four causes of action: suit on sworn account, breach of contract, quantum meruit and violations of the Texas DTPA. The company answered the suit and asserted its own counterclaims against the law firm for fraud, DTPA violations, unconscionable conduct, breach of contract and breach of fiduciary duty. On May 11, 2000, the trial court rendered a preliminary take-nothing summary judgment in favor of the law firm on the company’s counterclaims for unconscionable action, fraud and violations of the DTPA. On June 5, 2000, the trial court rendered an additional preliminary take-nothing summary judgment on the company’s counterclaims for breach of fiduciary duty and breach of contract. The trial court rendered an interlocutory summary judgment in favor of the law firm on its breach-of-contract claims for $30,314.38, plus interest. The trial court also ruled that the law firm was entitled to attorney’s fees expended in pursuing the contract claim but reserved ruling on the amount of reasonable attorney’s fees. Two months later, the law firm sought a traditional summary judgment against the company on the reasonableness of the attorney’s fees incurred in seeking the summary judgment on its breach-of-contract claim. The trial court then rendered a final judgment, which incorporated the earlier ruling on the contract, and awarded the law firm an additional $75,887.50 for attorney’s fees incurred in pursuing the contract claim, with contingent fees totaling $45,000 for appeals to the 1st Court of Appeals and for seeking a petition for review in the Texas Supreme Court. After prevailing in Cause No. 01-01-00200-CV in the trial court, the law firm initiated post-judgment collection and enforcement procedures. These culminated in the law firm’s obtaining turnover relief, for which the firm sought attorney’s fees pursuant to Texas Civil Practice & Remedies Code �31.002(e). In a separate cause, No. 01-03-00025-CV, the law firm again prevailed in the trial court and recovered a judgment for $90,000 in attorneys’ fees. The 1st Court initially affirmed the trial court’s judgment in Cause No. 01-01-00200-CV. Haden and the company sought rehearing en banc. The 1st Court granted rehearing by a three-judge panel. In three issues, the company contended that the law firm did not establish its entitlement to judgment as a matter of law: 1. for breach of a contract to pay $30,314.38 for legal services performed; 2. for $120,887.50 in attorneys’ fees awarded the law firm in connection with pursuing the breach of contract claim; or 3. on on the company’s counterclaims for violations of the DTPA, breach of fiduciary duty, breach of contract and fraud. HOLDING:The court affirmed the judgment in Cause No. 01-01-00200-CV in part and reversed and remanded in part, a disposition that the court noted compelled it to reverse the judgment in Cause No. 01-03-00025-CV. The court disagreed with the law firm’s contention that it established its right to prevail as a matter of law for unpaid legal fees and expenses in the amount of $30,314.38 and that Haden’s company offered no properly admissible summary judgment evidence to dispute that right. Parties form a binding contract, the court stated, when the following elements are present: 1. an offer; 2. an acceptance in strict compliance with the terms of the offer; 3. a meeting of the minds; 4. each party’s consent to the terms; and 5. execution and delivery of the contract with the intent that it be mutual and binding. To be enforceable, the court stated, a contract must be sufficiently certain to enable a court to determine the rights and responsibilities of the respective parties. Under settled principles of contract interpretation, the court stated it would construe a contract as a matter of law to determine whether it can be enforced as written without resorting to parol evidence. Construing the engagement-letter contract at issue, the court concluded that it binds the parties to the following terms: 1. “the law firm would represent Haden and the company” by providing professional assistance with their appellate brief to the 5th Circuit; 2. “Haden, both individually and for the company,” acknowledged the law firm’s rates and responsibility for the law firm’s disbursed expenses; and 3. the parties agreed that a $5,000 retainer fee instead of a $10,000 retainer fee would apply. The engagement-letter contract, the court stated, did not bind Sacks or his firm to do work representing a value in fees of $37,000 or any amount except the $5,000 retainer fee. Similarly, the court stated, the engagement-letter contract does not bind Haden and the company to pay any amount except the retainer fee. On the critical issue of potential fees owed, the letter simply acknowledges differing rates for differing levels of staff input, the court stated. Because all prior negotiations and agreements are presumed merged into the final agreement, the court stated that parol evidence is generally not admissible. But parol evidence may also be admissible under an exception to show collateral, contemporaneous agreements that are consistent with the underlying agreement to be construed. The engagement letter, the court stated, does not clarify whether payments were to be made as accrued or until a flat fee amount was reached and is equally consistent with either type of payment. Thus, the court found that the parol evidence rule did not preclude Haden and the company from asserting that, in addition to the recitals in the engagement letter, they had an additional agreement with the law firm for a flat, maximum fee. Accordingly, the court stated that its holding that fact issues remain concerning whether the minds of the parties met about whether the law firm would bill for its services at an hourly rate, as accrued, or for a flat, maximum fee did not offend the parol evidence rule. For similar reasons, the court rejected the law firm’s contention that it should affirm summary judgment in favor of the law firm, because Haden and the company ratified payment of the law firm’s fees on an as-accrued basis on payment of the additional $5,000. The court rejected the law firm’s ratification argument on grounds that fact issues remained “concerning whether the parties had agreed that the law firm would collect fees as accrued and on an hourly basis or on a flat, or maximum, fee basis and without regard to hours spent, the trial court could not determine, as a matter of law, that, by paying $5,000 after receiving all of the invoices, Hayden, for the company, acknowledged and therefore ratified, payment on an hourly or accrued basis.” Accordingly, the court stated that whether the parties had a meeting of the minds on fees billed during the representation was a question of fact for a jury to decide. Similarly, the court held that because fact issues precluded summary judgment, Sacks’ firm was not a prevailing party for the purposes of Texas Civil Practice & Remedies Code �38.001(8) and thus could not collect attorneys’ fees as a prevailing party. The court then re-evaluated Haden and the company’s counterclaims, which the trial judge threw out on summary judgment. Because the settled prohibition against recovery of attorneys’ fees as actual damages barred the trial court from accepting the only evidence that Haden and the company offered to defeat the law firm’s no-evidence motion for summary judgment for lack of evidence of damages � Haden and the company’s evidence consisted solely of documentation of the attorneys’ fees and expenses they had sustained in defending the suit and could sustain if the law firm prevailed � the court found that the trial court ruled properly by rendering no-evidence summary judgment in favor of the law firm. Having reversed the underlying judgment in the contract dispute between Sacks and Haden, the court also reversed a companion judgment that awarded the law firm $120,887.50 in attorney’s fees under the turnover statute for enforcing the underlying judgment, pursuant to �31.002. OPINION:Radack, C.J.; Radack, C.J., and Keyes, J. DISSENT:Alcala, J. “I respectfully dissent. I would hold that in this breach of contract lawsuit (1) parol evidence is inadmissible, and (2) the written documents establish a meeting of the minds. I concur, however, with the resolution of the counterclaims and agree that the trial court properly granted summary judgment regarding those claims.”

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