Southeast Texas Record

Sunday, April 5, 2020

Texas Supreme Court grants new trial to decide attorney's fee

By The SE Texas Record | Nov 11, 2009


AUSTIN – Collin County jurors who should have awarded fees to lawyer Scott Hayes slapped a zero on him and made a mess the Supreme Court of Texas can't fix.

On Oct. 23, the justices ordered District Judge Charles Sandoval to assemble another jury for a trial that would determine a fee for Hayes.

"The trial court should have directed the jury to reform its verdict," Chief Justice Wallace Jefferson wrote.

Sandoval awarded Hayes $7,500, and a chance to triple it with successful appeals.

Appeals judges in Dallas awarded $47,438.75, the amount Hayes asked jurors to award.

Jefferson understood how the appeals judges arrived at their figure but didn't understand how Sandoval arrived at his.

Jefferson wrote that "the court was not free to set a reasonable fee on its own."

He wrote, "On retrial, the evidence may support a similar fee award, but that is a matter within the jury's purview."

Hayes represented the Patrick W. Y. Tam Trust, owner of a shopping center in Plano, in a breach of contract suit against a pet store that failed.

The trust nonsuited the store when it went bankrupt and pursued a claim against Lauri Smith and Howard Smith, who guaranteed the store's lease.

The trust sought $215,391.50 in damages.

At trial, Hayes took the stand and swore he earned $47,438.75. He offered as evidence bills of other lawyers in his firm.

The Smiths objected to the bills as hearsay. Sandoval overruled them, and they lodged no further objection.

Jurors found the Smiths liable, but they trimmed damages to $65,000.

They added nothing for Hayes.

He moved to enter judgment on liability and disregard the refusal to award a fee.

Sandoval granted the motion, but the $7,500 award disappointed Hayes.

He appealed. So did the Smiths, seeking to reverse the verdict on damages.

Fifth District appeals judges affirmed the jury on damages but reversed Sandoval on the fee, holding that he abused his discretion.

They declared Hayes's fee evidence competent, uncontroverted and unchallenged.

The Smiths appealed the fee to the Supreme Court, but not the damages.

The justices ruled that jurors, Sandoval, and the Fifth District all made mistakes.

Jefferson called the Fifth District decision "unreasonable in light of the amount involved and the results obtained, and in the absence of evidence that such fees were warranted due to circumstances unique to this case."

He wrote, "The court of appeals awarded the full amount requested, despite the jury's rejection of a substantial portion of the damages sought."

He wrote, "Those fees, even though supported by uncontradicted testimony, may not be awarded by a court as a matter of law."

He found no evidence supporting the jury's decision and awarded the Smiths a new trial to determine how much they owe Hayes.

Hayes represented himself on appeals, along with Michael Massiatte.

Robert Ranen represented the Smiths.

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