Leo Borrell v. Robert Scott Williams and Law Offices of Scott Williams

Citation: Not availableDocket: 01-13-00099-CV

Court: Court of Appeals of Texas; April 1, 2014; Texas; State Appellate Court

Original Court Document: View Document

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On April 1, 2014, the Court of Appeals for the First District of Texas affirmed the trial court's summary judgment in favor of attorney Robert Scott Williams and his law firm in a legal malpractice case brought by client Leo Borrell. The court ruled that Borrell did not provide sufficient evidence to demonstrate that his attorney's alleged malpractice during a jury trial resulted in damages to him. The court also denied Williams' motion for sanctions against Borrell for filing a frivolous appeal.

Borrell, a psychiatrist involved in healthcare-related business activities, had entered into a contract with Vital Weight Control, Inc. (NeWeigh) in 2000, which aimed to secure a partnership with a hospital for bariatric surgery programs. Under the contract, Borrell and his partner would receive compensation for successful arrangements and had a right of first refusal regarding any sale of NeWeigh. The contract expired without NeWeigh securing any agreements or offers.

Subsequently, after a meeting between NeWeigh and Dynacq International, which Borrell facilitated, NeWeigh rejected Dynacq's offer for collaboration. When Borrell sought payment from NeWeigh for his efforts, NeWeigh refused, leading him to sue for breach of contract, quantum meruit, and promissory estoppel. During the trial, Borrell claimed additional oral agreements existed, including an indefinite extension of their contract and a promise of five percent of NeWeigh's gross revenue from the proposed hospital program.

Borrell and NeWeigh reached an oral agreement wherein NeWeigh would pay Borrell five percent of Dynacq’s revenue from a specific program. Additionally, Borrell had an agreement with Dynacq to receive five percent of revenue from bariatric patients, either directly or through Crumley, and another agreement to receive the greater of $300 or five to six percent of fees collected per bariatric patient, with potential add-ons. Crumley denied any compensation agreements outside of an existing October Contract but acknowledged an extension of that contract's performance timeline. At trial, Borrell's attorney, Williams, indicated that they would focus on quantum meruit and promissory estoppel claims instead of a breach of contract claim due to challenges in proving damages and the lack of a finalized contract. The jury ruled in favor of Borrell on both claims, awarding $111,000 and $113,000, respectively. NeWeigh subsequently sought judgment notwithstanding the verdict, arguing that an express contract precluded recovery for quantum meruit. The trial court granted this motion, resulting in a judgment that Borrell take nothing. Borrell then appealed, and the appellate court affirmed the judgment. In 2011, Borrell sued his attorney, Williams, for legal malpractice, claiming Williams's failure to secure jury findings on the breach of contract claim precluded a potential recovery of approximately $800,000 from NeWeigh. Borrell also argued that had the jury considered his compensable services not covered by a contract, he would have recovered $111,000 for quantum meruit. Williams moved for summary judgment, asserting that the evidence did not support the existence of an enforceable oral agreement for Borrell to recover.

Borrell failed to prove he would have succeeded in a lawsuit against NeWeigh, even if the jury found a different agreement existed. Williams contended that there was no evidence of breach of the October Contract or any oral extension, no damages from alleged negligence, and no proximate cause linking negligence to Borrell's damages. He supported this with an affidavit explaining his decision to forgo a breach of contract claim, referencing Borrell's own testimony that no agreement on fees had been reached with Crumley. In contrast, Borrell cited different trial record excerpts to assert the consistency of his testimony and provided an expert affidavit from Dale Felton. Felton opined that Williams's failure to submit a breach of contract question constituted negligence, suggesting Borrell would have prevailed and incurred $800,000 in damages. He also noted that, even without an oral contract, Williams's negligence led to $111,000 in damages, as assessed in Borrell's quantum meruit claim. 

Williams moved for both traditional and no-evidence summary judgment, which the court reviews de novo, taking evidence favorable to the nonmovant as true. The moving party must demonstrate the absence of genuine material fact issues. A no-evidence summary judgment is warranted if there is no evidence of a vital fact, if the evidence is legally barred, if it is merely scintilla, or if it conclusively establishes the opposite of a vital fact. 

For a legal malpractice claim, a plaintiff must show: 1) the attorney owed a duty, 2) there was a breach of that duty, 3) the breach proximately caused injury, and 4) damages occurred. In cases stemming from underlying litigation, the plaintiff must prove they would have succeeded but for the attorney's breach, a requirement known as the "suit-within-a-suit." Expert testimony is typically necessary to establish causation.

To succeed in his malpractice claim, Borrell must demonstrate that Williams’s actions or failures in the underlying lawsuit directly caused him damages. Specifically, Borrell needs to provide evidence that he likely would have won against NeWeigh had Williams pursued a breach of contract claim on his behalf. Williams argues that there is no evidence to support this assertion. The summary judgment record must be examined to determine if there is any evidence that Williams’s alleged negligence led to Borrell's loss against NeWeigh.

A breach of contract claim requires that the contract's terms are sufficiently definite to ascertain the rights and obligations of the parties involved. If essential elements, such as the services to be performed or compensation, are not clearly defined, the contract is unenforceable. Furthermore, agreements to enter into future contracts must specify all material terms to be enforceable; otherwise, they are merely agreements to agree.

The evidence from Borrell’s case against NeWeigh shows that he and Crumley verbally agreed to extend the October Contract, which required them to provide NeWeigh with an acceptable hospital for bariatric surgeries and a contract meeting specific criteria. The October Contract outlined two compensation methods: payment per client if a contract with a hospital was provided, or a sales commission if NeWeigh was acquired by an acceptable hospital. Borrell acknowledges that NeWeigh was not obligated to pay him for patients referred to Vista. He argues instead that Williams should have pursued claims for separate oral agreements or modifications to the October Contract. If the jury finds that such oral agreements existed, Borrell believes he could recover under those; if not, he asserts he should be entitled to recover under a quantum meruit theory. The summary judgment record will be assessed regarding this argument.

Borrell's claims regarding alleged oral agreements lack specificity and cannot support an independent breach of contract claim. Evidence indicates that the discussions among the parties constituted an unenforceable "agreement to agree," with undefined consideration. Borrell mentioned having discussions with Crumley about a potential agreement for a percentage of revenues from NeWeigh's dealings with Vista, but key terms remained indeterminate. Borrell stated that they intended to formalize an agreement once compensation details were clarified, and highlighted concerns from Crumley regarding possible violations of the Stark Amendment, which restricts certain financial arrangements between physicians and healthcare services.

The discussions included various compensation models, such as a flat percentage of NeWeigh’s or Dynacq’s revenues, or a minimum fee per patient. However, the inconsistencies in Borrell's accounts regarding compensation amounts and payment responsibilities reveal that no definitive agreement was reached. Williams, in his affidavit, cited this lack of clarity as a reason for not pursuing a breach of contract claim. Additionally, Borrell’s expert acknowledged the discrepancies without reconciling them. Ultimately, the evidence supports the conclusion that Borrell's claims amounted to an unenforceable promise to negotiate compensation in the future, rather than a binding contract, and thus no damages resulted from the failure to submit a breach of contract claim, apart from the October Contract.

Borrell contends that the jury could have determined he lacked an enforceable contract with NeWeigh, potentially allowing recovery under quantum meruit. However, the court of appeals previously established that Borrell's relationship with NeWeigh was governed by an express contract, specifically the October Contract, which was confirmed by testimony from both Borrell and Crumley. The appellate court concluded that there was conclusive evidence of the contract's existence, negating any possibility of a jury finding otherwise. Borrell failed to provide evidence indicating he would have succeeded in the underlying case but for his attorney's malpractice, undermining his causation claim against Williams. As a result, the trial court's grant of a no-evidence summary judgment was upheld.

Williams argued that Borrell's appeal was frivolous and sought damages under Rule of Appellate Procedure 45. Although Borrell had claimed an oral agreement regarding compensation for services rendered, the evidence presented did not raise a genuine issue of material fact sufficient to counter Williams's summary judgment motion. Consequently, while the evidence suggested discussions about various agreements for compensation, it did not support a breach of contract claim. The appeal was not deemed frivolous, leading to the denial of Williams's motion for sanctions. The trial court's summary judgment was affirmed, and the request for sanctions was denied.