Court agrees no cap was set on lawyer's fees

Steve Korris Jul. 24, 2008, 1:49pm

AUSTIN � Business owner Charles Haden persuaded appellate judges to rewrite his contract with attorney David Sacks, but Haden couldn't persuade the Texas Supreme Court to do the same.

The justices ruled in favor of Sacks July 11, finding that Haden introduced no evidence to justify oral interpretation of their written contract.

They reversed appellate judges of the First District in Houston, who concluded that Haden could present evidence of oral agreement to cap Sacks's fee.

The First District identified a question of fact as to whether the minds of the parties met on a crucial obligation, but the justices disagreed.

A meeting of minds is necessary to form a binding contract, they wrote, but the absence of a fixed total price does not indicate failure to reach a meeting of minds.

Haden retained Sacks in 1997 to appeal a federal court judgment against his business, Haden and Company. Their contract set a rate of $200 an hour.

Sacks sought a $10,000 retainer but agreed to accept $5,000.

Sacks filed a brief seeking relief from judgment and he filed a reply brief. For these he billed Haden $40,304.71, with credit for the retainer.

Haden paid another $5,000. Sacks sued Haden in Harris County district court for the balance of his fees on the appeal plus fees from pursuing the suit over the fees. Haden countersued.

District Judge Gary Block ruled in favor of Sacks. He awarded $30,314.38 plus interest under the contract and $75,887.50 for pursuing the suit.

Block also awarded a $45,000 contingent fee to cover appeals.
On appeal, three First District judges affirmed Block. Sacks appealed to the Supreme Court, successfully.

"Though Sacks did not specify and exact total price for his services, the specified hourly rates confirm that the parties agreed that Sacks would charge and Haden would pay a reasonable price," the justices declared in an unsigned opinion.

"The plain language of the engagement letter demonstrates that Haden agreed to pay Sacks an hourly fee, and that no cap on fees was set," they wrote.

"We have never held that an open ended hourly fee agreement will be enforced only if it expressly states there is no cap on fees, and we decline to do so now," they wrote.

Sacks represented himself. Richard Countiss and Brian Womac represented Haden.

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