Gonzales v. Maggio
Gonzales v. Maggio
Opinion of the Court
OPINION
Appellant Nash Jesus Gonzales and ap-pellee Marissa Ann Maggio are each Texas-licensed attorneys who were formerly partners in both marriage and law practice.
RESIDENCY
The trial-level proceedings were conducted in foui' basic stages: (1) on demand by Gonzales, a jury trial in February 2013 that ultimately resolved only contested issues of conservatorship and the children’s residency;
The three issues related to residency were submitted to the jury, without objection, through a succession of questions that tracked' the exemplars set forth in the Texas Pattern Jury Charge. Question 2 inquired, “Which joint managing conservator should have the exclusive right to designate the primary residence of the children?,” and instructed the jury to complete a blank with the name of the joint managing conservator it had chosen.
The jury found in Question 2 that Mag-gio rather than Gonzales should have the exclusive right to determine the children’s primary residence. However, it found in Question 3 that Maggio’s right should be subject to a geographic restriction. As for what that “geographic area” should be, the jury filled in the blank of Question 4 with an answer that neither party had advocated directly—“State of Texas.” The district court rendered its decree consistent with the jury’s findings, naming Gonzales and Maggio joint managing conservators and granting Maggio the exclusive right to determine the children’s primary residence within the State of Texas.
In his first issue on appeal, Gonzales challenges only the jury’s finding in Question 4 that the geographic restriction to which Maggio was subject should be the boundaries of the State of Texas.
But a fact-finder can exercise only such leeway regarding the appropriate geographic area that the evidence supports, of course, and thus Gonzales focuses on contesting whether there was legally or factually sufficient evidence to support the jury’s “State of Texas” finding. To sustain Gonzales’s legal-sufficiency challenge, the record must show (1) a complete absence of evidence of a vital fact; (2) the court is barred by rules of law or of evidence from
The Texas Supreme Court has further instructed that the “best interest” yardstick in the child-relocation context should take account of the Family Code’s policy goals of “assuring] that children will have frequent and continuing cbntact with parents who have shown the ability to act in the best interest of the child,” “providing] a safe, stable, and nonviolent environmént for the child,” and “encouragpng] parents to share in the rights and duties of raising their child after the parents have separated or dissolved their marriage.”
Informed by these considerations, wé conclude that the evidence supporting the jury’s “State of Texas” finding in Question 4 met the minimum thresholds of legal and factual sufficiency. While it is true that the parties at trial advocated competing sides of a Travis County-versus-New York debate, as Gonzales emphasizes, the evi
Viewed in the light most favorable to the jury’s verdict, this evidence amounts to more than a scintilla that it was in the children’s best interests to allow Maggio to relocate their primary residence beyond Travis County, but within Texas. We similarly cannot conclude that the evidence supporting this finding was so weak as to be clearly wrong and manifestly unjust. Accordingly, we overrule Gonzales’s first issue.
FEE INTERESTS
During their marriage, Gonzales and Maggio had formed a general partnership known as “Gonzales & Gonzales” (a reference to the surname they had shared at the time) (the Partnership) through which they had both practiced law. Although no written partnership agreement is in evidence, it is undisputed that the couple had agreed to share 50-50 in the Partnership’s capital, profits, and losses. The Partnership’s chief business was plaintiffs personal-injury work, principally auto-collision claims that tended to settle prior to suit or trial. The Partnership’s standard contracts with clients provided for a “contingent-fee”
After the divorce litigation began, attendant acrimony prompted Gonzales and Maggio to part ways professionally as well. In a Rule 11 agreement dated May 30, 2012, Gonzales and Maggio agreed that “Marissa is no longer a partner at Gonzales & Gonzales and the partnership is dissolved.” They further agreed in the Rule 11 that “[t]he liabilities of [the Partnership] and other issues pertaining to winding up the firm will be handled at a later time, most likely a final hearing.” This provision, as the parties acknowledge, referenced principles of Texas law governing dissolution and termination of general partnerships, which have been codified at relevant times in the Texas Business Organizations Code. Under these requirements, the parties agree, the Rule 11 agreement “dissolved” the Partnership but did not immediately or automatically conclude the Partnership’s legal existence or operations. Instead, it triggered requirements under the Code that the partners “wind up” the Partnership’s business and affairs—basically discharge its existing obligations and liquidate or distribute any remaining Partnership property among the partners—“as soon as reasonably practicable.”
The Partnership’s matters to be wound up included its rights and duties under its contingent-fee contracts in a number of cases that had not yet been resolved by the date of dissolution.
Thereafter, while their divorce litigation remained pending, both Gonzales (through either the P.C. or its predecessor partnership) and Maggio settled a number of cases that had originated with the Partnership and received expense reimbursements and attorney’s-fee payments. Disputes arose concerning the respective entitlements of Gonzales, his P.C., and Maggio to these monies or similar payments that either side would receive from Partnership-originated cases in the future. To summarize their respective positions, Maggio insisted that the Partnership had retained its contingent-fee interests in these cases, such that she was entitled as equal partner to a 50% share of any net profits. The position of Gonzales and the P.C. at the trial level was somewhat inconsistent,
After hearing additional evidence relevant to these issues, the district court addressed the Bucket 2 cases in a manner yielding the result advocated by Maggio. The court awarded Gonzales and Maggio, as his or her separate property, 50% of the fees that had been earned on the Bucket 2 cases, to “be calculated after the party who advanced the out-of-pocket case expenses is reimbursed.” In the event the out-of-pocket expenses to be reimbursed had been advanced by the Partnership, the court ordered that the reimbursement payment would be split 50-50 between Gonzales and Maggio. In addition to stating these awards in terms of equations or formulas, the district court awarded Maggio a lump sum of $44,815.39 to be paid her by Gonzales “for her equal share of the net proceeds” in the Bucket 2 cases. This figure corresponded to 50% of $89,630.78, a calculation presented in evidence as the difference between the total expense reimbursements and net fees Gonzales had received on Bucket 2 cases over the total amount Maggio had received.
As for the Bucket 3 cases, the district court awarded Gonzales and Maggio, as his or her separate property, percentages of any net fees ultimately earned on those cases that varied according to the level of that attorney’s involvement post-Partnership dissolution. The percentages varied as follows: 60% if the attorney had retained the case following the Partnership’s dissolution; 40% if the other attorney had retained the case; and 50% if the case had been referred to a third-party attorney for handling.
Like other aspects of its property division, the district court’s award of the
In response, Maggio begins by pointing out that no findings of fact and conclusions of law were requested or made to elaborate on the district court’s underlying reasoning for addressing the Buckets 2 and 3 cases 'as it' did. Consequently, as Maggio correctly observes, we are to imply that the district court made any findings necessary to support the decree and uphold the decree on any legal theory the evidence supports.
The Rule 11 agreement in evidence explicitly contemplated that the Partnership would be wound up “most likely at a final hearing,” and the parties’ conduct thereafter was consistent with that expectation. This included the parties’ entry into a November 2012 agreed order whereby they compiled case information that ultimately became the basis for the Buckets 2 and 3 case lists. The parties also acknowledged on the record repeatedly that their
The effect of these holdings is that the decree’s award of interests in the Bucket 3 cases must be reversed and re.manded for further proceedings, but the award of interests in the Bucket 2 cases would be affirmed unless it is an abuse of discretion for some other reason. The real heart of appellants’ second issue—and one having implication for both the Bucket 2 award and disposition of the Bucket 3 cases on remand—is an assertion that the Partnership’s interests in both buckets had terminated when Gonzales or Maggio became counsel of record post-dissolution, leaving nothing to be wound up. Appellants’ argument rests on the premise that the Partnership had withdrawn from representation in those cases through the post-dissolution joint letter to clients and the clients’ subsequent selection of either Gonzales or Maggio to represent them. And by withdrawing from representation, appellants continue, the Partnership forfeited its right to recover a fee in the Bucket 2 and 3 cases as a matter of law. For the proposition that the Partnership forfeited its interests in the cases, appellants point to language in the Partnership’s contingent-fee contracts stating that the client would owe “no charges for attorney’s fees and costs” if “my attorney withdraws or is unable to obtain a recovery,” as well as case law imposing fee forfeiture as a matter of contract or equity where an attorney, “without just cause, abandons his client.”
Appellants’ arguments overlook that upon dissolution, the Buckets 2 and 3 cases were Partnership work in progress, that Gonzales and Maggio each owed duties to the Partnership and to each other to complete that work, and that each partner retained an interest in receiving any income from that work as it was completed.
In their fourth issue, appellants urge that the district court’s division of the fees generated from the Bucket 2 cases lacks support in the evidence because it failed to take account of the P.C.’s interest in the cases that Gonzales had handled. This argument is predicated on appellants’ view that the Partnership had ceased to have any interest in the cases once Gonzales through the P.C. or predecessor partnership became counsel of record. We have already rejected that premise. As previously explained, any fees generated by Gonzales or his entities from the Bucket 2 cases remained subject to Gonzales’s preexisting duties owing to the Partnership and to Maggio during the winding-up process. We overrule appellants’ fourth issue.
In appellants’ fifth and final issue, appellants complain that the district court’s award of interests in the Bucket 3 cases “divides future income which is not part of the community estate.” As we have already reversed the Bucket 3 award, we need not reach this issue.
CONCLUSION
We affirm the challenged portions of the decree imposing the geographic restriction on the children’s residence and awarding lump sums deriving from the Bucket 2 cases. However, we reverse the award of interests in the Bucket 3 cases and remand for further proceedings consistent with this opinion.
. During the marriage, Maggio took her husband's surname of Gonzales, and she was so identified in the final divorce decree, notice of appeal, and thus the style of the appeal when originally docketed. Because the divorce decree changed her surname to Maggio, her maiden name, and that provision is not challenged on appeal, we have updated the style of the appeal accordingly and have similarly identified her in this opinion.
. See Tex. Fam. Code § 105.002.
. Gonzales also filed motions for new trial that were overruled by operation of law.
. Gonzales had requested joint managing conservatorship, while Maggio had sought sole managing conservatorship.
. See Tex. Fam., Code .§ 153.134(b)(1) ("In rendering an order appointing joint managing conservators, the [trial] court shall: (1) designate the conservator who has the exclusive ■ right to determine the primary residence of the child; and; (A) establish, until modified by further order, .a geographic area within which the conservator shall maintain the child’s- primary residence; or (B) specify that the conservator may determine the child’s primary residence without regard to geographic location’); see also id. § 105.002(c)(l)(D)-(F) (prohibiting trial court from contravening jury’s findings on, inter alia, "the determination of which joint managing conservator has the exclusive right to designate the primary residence of the child,” "the determination of whether to impose a restriction on the geographic area in which a joint managing conservator may designate the child’s primary residence,” and "the determination of the geographic area within which the joint man- ' aging conservator must designate the child's primary residence”); Lenz v. Lenz, 79 S.W.3d 10, 19-21 (Tex. 2002) (applying section 105.002(c)).
. See Texas Pattern Jury Charges• (Family & Probate) 216.IB (2016)/
. See id.
. See id.
. See id. 215.1.
. Gonzales does not presently challenge the jury’s finding in Question 2 that Maggio should have the exclusive right to determine the children’s primary residence. Nor has Maggio challenged the finding in Question 3 that she should be subject to a geographic restriction.
.During the pendency of this appeal, Mag-gio filed a motion to dismiss Gonzales’s first appellate issue for want of subject-matter jurisdiction. She relies on intervening events. Following the jury trial and the district court’s oral rendition of judgment consistent with the jury's findings, Maggio procured employment with a Dallas-area law office and moved with the children to Collin County. In that venue, Gonzales filed a motion to modify the final decree to grant him rather than Maggio the exclusive right to determine the children’s primary residence. In the alternative, Gonzales prayed in his modification motion that Maggio's exclusive right under the
.See Tex. Fam. Code § 153.134(b)(1)(A) ("the court shall ... establish ... a geographic area within which the conservator [who has the exclusive right to determine the child’s primary residence] shall maintain the child’s primary residence”); see also id. § 105.002(c)(1)(F) (entitlement to jury finding as to "the determination of the geographic area within which the joint managing conservator [with the exclusive right to determine the child’s primary residence] must designate the child’s primary residence” in event jury finds that a geographic restriction should be imposed on that right).
. See Deinhart v. McGrath-Stroatman, No. 03-09-00283-CV, 2010 WL 4595708, at ⅜5, 2010 Tex. App. LEXIS 9040, at *9-21 (Tex. App.-Austin Nov. 10, 2010, pet. denied) (mem. op.) (upholding jury finding imposing two alternative geographic restrictions that essentially combined two opposing alternative geographic restrictions advocated by the parties).
. Id. at *5 n. 4, 2010 Tex. App. LEXIS 9040, at *13 n. 4 (citing Strenk v. Strenk, No. 03-01-00051-CV, 2001 WL 1379924, at *12-13, 2001 Tex. App. LEXIS 7495,’at *38-39 (Tex. App.-Austin Nov. 8, 2001, no pet.) (mem. op.)).
. See City of Keller v. Wilson, 168 S.W.3d 802, 810 (Tex. 2005).
. See id. at 807. .
. See Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986) (per curiam).
. See City of Keller, 168 S.W.3d at 816-17, 819-20, 822 (legal sufficiency); Golden Eagle Archery, Inc. v. Jackson, 116 S.W.3d 757, 761 (Tex. 2003) (factual sufficiency).
. See Lenz, 79 S.W.3d at 14 (citing Tex. Fam. Code § 153.001(a)), 18-19.
. Id. at 15-16; see also Yasin v. Yasin, No. 03-10-00774-CV, 2011 WL 5009895, *3 & n. 3, 2011 Tex. App. LEXIS 8411, *7-11 & n. 3 (Tex. App.-Austin Oct. 21, 2011, no pet.) (mem. op.) (explaining' that while Lenz involved a motion to modify, “the factors are also applicable in an appeal of a trial court's decision regarding geographic restriction in a divorce decree”).
. See Lenz, 79 S.W.3d at 18-19.
. Our vagueness and generality here is deliberate—the tenor of the parties' custody dispute prompted an agreed order sealing the record on Gonzales’s agreed motion. See also Tex. R. App. P. 47.4 ("If the issues are settled, the court should write a brief memorandum opinion no longer than necessary to advise the parties of the court’s decision and the basic reasons for it.”).
. As explained below in connection with the fees issue, Gonzales and Maggio had’both practiced plaintiffs personal-injury law, and the majority of their firm’s clients had chosen to remain with Gonzales rather than Maggio after the partnership dissolved. Maggio testified to difficulty in what she characterized as ' restarting her legal career while remaining rooted in the same legal community and specialty as her soon-to-be ex-husband.
. See Tex. Bus. Orgs. Code §§ 11.051(2) ("Winding up of a domestic entity is required on ... a voluntary decision to wind up the domestic entity ....”), .057(a) (voluntary decision to wind up a domestic general partnership not having a specific duration or purpose requires, in absence of partnership agreement providing otherwise, express will of a majority-in-interest of the partners who have not assigned their interests); see generally id. §§ 11.051-.055 (general provisions governing winding up of domestic entity), 152,701-708 (supplemental provisions governing winding up of domestic partnership).
. See id. §§ 11.052(a)(1) (upon occurrence of an event requiring winding up, entity shall "cease to carry on its business, except to the extent necessary to wind up its business”), 152.701(1) (upon occurrence of event requiring winding up of partnership business, "the partnership continues until the winding up of its business is completed, at which time the partnership is terminated”).
. See id. §§ 152.204-206.
. See id. § 11.103 ("the existence of a nonfil-ing entity,” which includes domestic general partnerships, "terminates on the completion of the winding up of its business and affairs”).
. See Bader v. Cox, 701 S.W.2d 677, 681-82 (Tex.App.-Dallas 1985, writ ref’d n.r.e.) (plurality op.) (holding that contingent-fee contracts of dissolving law firm partnership were “unfinished business” and assets of the partnership required to be wound up); id. at 688 (Whitham, J„ concurring) (agreeing with that holding); see also Harris v. Harris, 765 S.W.2d
.Following dissolution of the Partnership, Gonzales had formed a new "Gonzales & Gonzales” partnership with his sister, also an attorney, and her affiliation was disclosed in the joint letter. Maggio had further agreed in the Rule 11 that Gonzales could have exclusive use of the Partnership's existing phone number, fax number, and websites. In August of that year, Gonzales and his sister formed the P.C. Shortly thereafter, however, the sister accepted other legal employment and relinquished her interest in the P.C., leaving Gonzales as the sole owner.
. Both Gonzales and Maggio have had a lengthy succession of different counsel, and Gonzales was also pro se during some portions of the trial-level proceedings.
. Initially, the dispute had taken the form of tort, contract, and equitable claims asserted by Maggio against Gonzales and the P.C., and those parties had counterclaimed with similar theories against Maggio. As the jury trial began, both sides presented evidence relevant to these claims in the evident expectation that issues would be submitted to the jury on liability and damages. However, while the record is not entirely clear as to the sequence of events, it appears that the parties agreed at some point during trial to waive the jury submissions and reserve the dispute over the Partnership-originated cases for subsequent resolution by the district court alongside the other remaining issues in the case.
. The parties did not dispute rights in Partnership-originated cases that had been concluded pre-dissolution, nor cases that had originated in their respective practices post-dissolution. The district court ultimately awarded Gonzales and Maggio each 100% of his or her ownership interest in their respective law firms, subject to its awards concerning the Buckets 2 and 3 cases.
. In other words, if Gonzales had handled a Bucket 3 case post-Partnership dissolution, he was entitled to $0% of any net proceeds upon the case’s conclusion, while Maggio would receive 40% of the net fees. The ratios were reversed for Bucket 3 cases that Maggio had handled post-dissolution.
.See Tex. Bus, Orgs. Code § 152.203(c) (authorizing "reasonable compensation” of partners "for services rendered in winding up the business of the partnership”).
. See, e.g., Murff v. Murff, 615 S.W.2d 696, 698 (Tex. 1981). ,A trial court abuses its discretion if it acts arbitrarily, unreasonably, or without regard to guiding legal principles or supporting evidence. Bocquet v. Herring, 972 S.W.2d 19, 21 (Tex. 1998).
. See Tex. Bus. Orgs. Code §§ 152.056 ("A partnership is an entity distinct from its partners.”), .101 ("Partnership property is not properly of the partners. A partner or a partner's spouse does not have an interest in partnership property.”); see also Harris, 765 S.W.2d at 803-04 (recognizing that contingent-fee contract of law partnership was asset of the partnership, not of partners).
. See Marshall v. Marshall, 735 S.W.2d 587, 594 (Tex.App.-Dallas 1987, writ ref’d n.r.e.) (“[P]artnership property is owned by the partnership itself and not by the individual partners. In the absence of fraud, such property is neither community nor separate property of the individual partners.”).'
. See Lifshutz v. Lifshutz, 199 S.W.3d 9, 26-27 (Tex.App.-San Antonio 2006, pet. denied); Marshall, 735 S.W.2d at 593-95.
. See McKnight v. McKnight, 543 S.W.2d 863, 867-68 (Tex. 1976).
. See, e.g., Coburn v. Moreland, 433 S.W.3d 809, 823 (Tex.App.-Austin 2014, no pet.) (citing Worford v. Stamper, 801 S.W.2d 108, 109 (Tex. 1990)).
. See Lifshutz, 199 S.W.3d at 27 (distributions from partnership are community property regardless whether in form of income or assets (citing Marshall, 735 S.W.2d at 594)).
. See Tex. Fam. Code § 7.001.
. Tex. Bus. Orgs. Code § 154.203(a).
. See McKnight, 543 S.W.2d at 867-68.
. See Royden v. Ardoin, 160 Tex. 338, 331 S.W.2d 206, 209 (1960):
. See Tex. Bus. Orgs. Code §§ 152.204-.206; Bader, 701 S.W.2d at 682-83; see also Robert W. Hillman, Problems and Prevention: Law Firm Management in an Era of Breakups and Lawyer Mobility: Limitations and Opportunities, 43 Tex. Tech L. Rev. 449, 465 (2011) ("In the absence of an agreement, income derived
. (Emphases added.)
. Appellants presented evidence of only a single contingent-fee contract between the P.C. and a Partnership client, and there was no proof of any such contract executed by Maggio.
. See Cofer v. Heame, 459 S.W.2d 877, 880-81 (Tex.Civ.App.-Austin 1970, writ ref'd n.r.e.) (in dispute between partners of dissolving law partnership over income from unfinished business, holding that letter from client of one partner purporting to “discharge” other partners "is of no materiality” because "[t]he relationship between [the client] and [her attorney] was one thing but the relationship between [the attorney] and his partners was another matter”); cf Bader, 701 S.W.2d at 683 n. 5 (“Even,if a new partnership is formed, and the practice of law is, thus, continued, the surviving partners owe a[n] ... obligation to wind up all old business of the former partnership and distribute to each partner or representative his or her pro rata share of partnership assets.”).
The additional facet of Cofer that has drawn some, criticism, relating to whether partners in a dissolving law firm are entitled to extra compensation for performing work in progress under the 1914 Texas Uniform Partnership Act, see Kahn v. Seely, 980 S.W.2d 794, 799 (Tex.App.-San Antonio 1998, pet. denied) (noting the criticism and rejecting Cofer’s holding on that point), is not implicated in the posture of this appeal.
.Jewel v. Boxer, 156 Cal.App.3d 171, 177-79, 203 Cal.Rptr. 13 (Cal.Ct.App. 1984) (also observing that a purported substitution of counsel did not change the analysis); see also Hillman, supra, at 465 (citing' Jewel as the leading case nationally "illustrat[ing] sharing of winding up income” and as standing for "the unsurprising conclusion .that income derived from cases pending on the date of dissolution is shared by all partners without regard to who performed the services generating the fees”).
. Tex. Disciplinary Rules Prof’l Conduct R. 1.04(f), reprinted ip. Tex. Gov't Code, tit. 2, subtit. G, app, A (Tex. State Bar R. art. X, § 9). '
. See Jeffrey G. Blackwell, The Rights of a Withdrawing Partner arid the Proper Disposition of Firm Assets, 19 J, Legal Prof. 267, 274 (1994-95) (observing', similarly that the fee-splitting restriction of the Model Rules of Professional Conduct "should not be an obstacle to a division of fees among the former partners [of a dissolved partnership] according to their respective interests. The former partnership continues a fictional existence during the winding up process such that no fee division as contemplated by the Rule qccurs”).
.Cf. id. (adding that ‘‘[t]he application of the Rule to this situation would also be contrary to the ... duties of partners in dissolution if no agreement to the contrary existed”).
Case-law data current through December 31, 2025. Source: CourtListener bulk data.