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Date: 11-15-2017

Case Style:

Joseph and Nadia Abuzaid v. Modjarrad and Associates

Dallas County Courthouse - Dallas, Texas

Case Number: 05-16-00777-CV

Judge: Fillmore

Court: Texas Court of Appeals, Fifth District on appeal from the 95th Judicial District Court of Dallas County

Plaintiff's Attorney: Niles Illich

Defendant's Attorney: Carlos Cortez, Meghana Karan Wadhwani, Mohammad Said, Sean Modjarrad and Matthew J. Kita

Description: Modjarrad & Associates, P.C., d/b/a Modjarrad Abusaad Said Law Firm (the Law Firm), was retained to represent Joseph Abuzaid in Cause No. DC-12-09866, Joseph Abuzaid v. Muamar Anani, in the 95th Judicial District Court (the litigation). Abuzaid was represented by other counsel prior to the Law Firm’s involvement. Approximately ten months after it began representing Abuzaid, the Law Firm withdrew as Abuzaid’s counsel and intervened in the litigation, seeking to recover attorneys’ fees and litigation expenses from Abuzaid and his wife, Nadia Adnani (collectively, appellants). The trial court granted the Law Firm’s motion for no-answer default judgment, and awarded it $225,947.33 in actual damages, $20,145 in attorneys’ fees incurred by the Law Firm in connection with the intervention, and contingent attorneys’ fees should appellants unsuccessfully appeal the judgment. Appellants filed a motion for new trial on grounds Adnani had not been served with the intervention; Abuzaid had filed an answer to the
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intervention; and alternatively, they were entitled to a new trial under Craddock v. Sunshine Bus Lines, Inc., 133 S.W.2d 124 (1939). The trial court sustained the Law Firm’s objections to portions of appellants’ affidavits filed in support of the motion for new trial, and denied the motion for new trial.
Appellants filed this appeal, challenging the trial court’s evidentiary rulings in their first twelve issues; and contending in their final two issues that the trial court erred by denying the motion for new trial, and the evidence was factually insufficient to support the trial court’s award of contingent attorneys’ fees in the event of an unsuccessful appeal to this Court. We affirm the trial court’s order denying the motion for new trial, and the trial court’s award of attorneys’ fees to the Law Firm in the amount of $25,000 should appellants unsuccessfully appeal the default judgment to this Court.
Background
In early January 2015, the Law Firm agreed to represent Abuzaid in the litigation, a case that had been ongoing for some time. The Law Firm subsequently filed a motion to withdraw from the representation.1 The trial court heard the motion to withdraw on November 12, 2015, and signed an order granting the motion.2
The Law Firm filed a petition in intervention in the litigation on December 2, 2015, and an amended petition in intervention on December 14, 2015, seeking to recover attorneys’ fees for work performed by the Law Firm and expenses incurred by the Law Firm during the representation.3 The Law Firm asserted causes of action based on quantum meruit, suit on a sworn account, and theft of services. Although both the petition and amended petition in
1 This pleading is not in the appellate record.
2 This order is not in the appellate record.
3 The difference between the petition in intervention and the amended petition in intervention was the amount of attorneys’ fees and expenses the Law Firm sought to recover.
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intervention stated Adnani had been “added by the Defendants as a party to this litigation and was deposed in this matter,” the style of the case did not list Adnani as a party. The petition and amended petition in intervention indicated appellants were served “Via E-Service.”
Attached to both the petition and amended petition in intervention was one page of the reporter’s transcript from the November 12, 2015 hearing on the Law Firm’s motion to withdraw in which an unidentified speaker states there were “issues” with a contract and “fine details” needed to be “worked out.” The petition and amended petition in intervention were also each supported by an affidavit of Carlos Cortez, who served as lead counsel for Abuzaid in the litigation. According to Cortez, during the hearing on the motion to withdraw on November 12, 2015, Abuzaid stated (1) he took “issue” with a January 16, 2015 legal services contract that appellants signed with the Law Firm and that “fine details” needed to be resolved before the agreement would be finalized, and (2) he was pressured into signing the agreement. Cortez stated that, in light of Abuzaid’s position at the hearing that there was no finalized legal services contract and that he was pressured into signing a January 16, 2015 agreement, the Law Firm filed the intervention to recover its fees and expenses. Also attached to each of Cortez’s affidavits were billing invoices addressed to Abuzaid detailing the expenses incurred by the Law Firm during the representation, as well as the tasks performed by the Law Firm, the initials of the person who performed each task, the date each task was performed, the amount of time spent on each task, and the hourly rate charged by the person who performed the task. In his affidavit attached to the amended petition in intervention, Cortez opined that the fees and expenses, which totaled $225,947.33, were reasonable and necessary and were incurred as a result of the Law Firm’s representation of Abuzaid in the litigation. Cortez also stated he had knowledge of the facts underlying the claim; all just and lawful offsets, payments, and credits had been allowed;
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and the claim was just and true and remained outstanding and due. Further, although the Law Firm had demanded appellants pay the outstanding fees and expenses, they had failed to do so.
On December 28, 2016, Abuzaid filed an “Affidavit in Clarification to Counsel Carlos Cortez[’s] Comments in His Withdrawal Hearing.” Abuzaid stated in the affidavit that he was the plaintiff in the litigation, hired the Law Firm on January 9, 2015, to represent him, and signed a legal services agreement with the Law Firm. Cortez later required Abuzaid to sign a new agreement “with a higher percentage and money down.” Immediately prior to a hearing on January 16, 2016, Cortez stated that if Abuzaid did not sign a new agreement, Cortez would withdraw from the representation. Abuzaid signed a new agreement minutes before the hearing “contingent on [Cortez] working out those final terms in writing.” Abuzaid subsequently traveled to Dallas to “work out those terms,” but Cortez refused to discuss the terms with him. “Further follow ups on those terms” with the Law Firm failed to “produce any new agreement.” After the Law Firm moved to withdraw from the representation, Abuzaid attempted to finalize the terms of the new agreement by “compromising.” Abuzaid provided no details in his affidavit concerning the compromise he was willing to make in order to finalize the agreement.
Abuzaid attached three exhibits to his affidavit. Exhibit A consisted of two emails and an “Agreement for Legal Services.” The first email indicates it was sent at 9:25 a.m. on January 9, 2015. The email pertained to an “agreement for legal services,” was sent by “Joe,” and stated, “I have signed the agreement with minor changes.” The recipient of the email was redacted. The second email was sent at 1:53 p.m. on January 9, 2015. The sender, recipient, and subject matter of the email were redacted. The email stated the sender would file a notice of appearance in the litigation, but could not “do anything” concerning a separate case until current counsel withdrew.
The final document contained in Exhibit A to Aubzaid’s affidavit was an “Agreement for Legal Services” on the Law Firm’s letterhead. Abuzaid is identified as the client. On the first
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page of the document are provisions stating Abuzaid had retained the Law Firm to represent him in the litigation, and Abuzaid agreed to pay the Law Firm a contingency fee of twenty-five percent. From the twenty-five percent contingency fee, the Law Firm would pay “any remaining attorneys’ fees” owed to two of Abuzaid’s prior attorneys. The Law Firm would “continue to retain a 25% fee interest” in the case if it withdrew from the representation “for any reason.”
The “Scope of Representation” by the Law Firm was to “include advising, counseling, negotiating, investigating, handling, prosecuting, and/or defending in the above referenced matter or matters arising herein or attendant hereto or arising out of the same set of facts or circumstances.” The Law Firm was authorized to associate with other law firms or individual attorneys, but Abuzaid would not be charged for services rendered by other attorneys. The document indicated “no other legal services” were included.
The document required Abuzaid to cooperate with the Law Firm by keeping it advised of his whereabouts at all times, appearing on reasonable notice at court appearances, and complying with reasonable requests of the Law Firm in connection with the preparation and presentation of the case. The third page of the document contained a provision stating:
IT IS FURTHER DISTINCTLY UNDERSTOOD AND AGREED BETWEEN YOU AND THE FIRM, THAT THE FIRM, WHEN AND IF THE FIRM DECIDES, AFTER FULL INVESTIGATION OF THE FACTS AND RESEARCH OF THE LAW, MAY WITHDRAW FROM REPRESENTATION AND/OR RETURN YOUR CLAIM TO YOU, AND YOU RELEASE THE FIRM FROM FURTHER ACTION ON SAID LEGAL REPRESENTATION AND/OR CLAIM, AND DISCHARGE THE FIRM FROM THIS CONTRACT, WITHOUT FURTHER LIABILITY ON THE PART OF SAID FIRM TO YOU AND THE FIRM WILL WAIVE ALL 25% CONTINGENCY FEES.
The phrase “the firm will waive all 25% contingency fees” is highlighted by a handwritten underline. Abuzaid signed the agreement on January 9, 2015, but it was not signed by Cortez on behalf of the Law Firm.
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Exhibit B to Abuzaid’s affidavit was titled “Amended Agreement of Legal Services,” stated it was “an amended agreement to January 9, 2015,” and lists both Abuzaid and Adnani as the clients. It provided appellants were required to pay a $10,000 fee to the Law Firm by January 20, 2015, for the Law Firm “to handle the motions and discovery practice that is presently outstanding and whatever else needed [sic] to be done to proceed successfully in the case.” Appellants were also required to pay their “former attorneys[’] fees to continue presenting [sic]” them in the case. The Law Firm was entitled to a one-third contingency fee, and:
In the event this law firm withdraws from continuing to represent you in this matter, or the client change [sic] counsels [sic], this law firm will get paid [a] reasonable amount of attorneys[’] fees to be determine [sic] and agreed by the firm and the client at a later date for the work was [sic] produced by the firm in relation to all of the work was [sic] done on the case in ratio to all attorneys[’] fees collected on the case and the fees that was [sic] awarded by the jury and only to be collected if there is a recovery and to be collected then.
This provision is surrounded by handwritten brackets, and there are two sets of initials on this page.
Surrounded by handwritten brackets on the next page of the document is a provision addressing the scope of the representation:
Representation is to include advising, counseling, negotiating, investigating, handling, prosecuting, and/or defending in the above referenced matter or matters arising herein or attendant hereto or arising out of the same set of facts or circumstances. Our Firm is hereby authorized and empowered through this document to use and employ such other persons and/or entities that our Firm deems necessary for the proper handling of your legal matter or matters after obtaining the client approval beforehand in writing.
Mr. Cortez is well aware of the massive outstanding documents that had [sic] not been produced and well aware of the pending four motions to compel discovery among other work to be done. Some of that remaining work is listed in the client response to the motion of Jules Slim withdrawal [sic]. He is also well aware that the discovery needs to be reopen [sic] and additional work include [sic] depositions and new discovery needs to be done. Mr. Cortez will give his client his best effort on his behalf to successfully do all of the remaining work.
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Mr. Cortez is also well aware of the problems that Mr. Abuzaid had experience [sic] with his former attorney Mr. Jules Slim and read his response with the affidavit to Mr. Slim’s withdrawal. Mr. Cortez will avoid using Mr. Slim in the case except initially to help him respond to the current summary judgment motions at the firm[’s] expense. Mr. Cortez will also give his client his best effort to successfully dig into the fraudulent sale of Frontier and getting [sic] the outstanding documents even though it might implicate the involvement of other attorneys.
Also included in the bracketed section is a provision that expands other legal services to include the “potential of representing the client in Case No[.] DC-14-08585 after the withdrawal of Mr. Jules Slim at no extra charge.” There are two sets of initials by the bracketed section.
The provision of the document regarding appellants’ duty to cooperate was expanded to require appellants to “fully cooperate” with the Law Firm and provides, in bold, that:
Any failure to do so will result in the immediate withdrawal of this Firm as your counsel with the full understanding and consent that this Firm will continue to retain a one-third (33.3%) fee interest at all times in your case.
This provision is not highlighted by brackets, and there are no initials beside it. Finally, on the third page of the document is a provision stating:
IT IS FURTHER DISTINCTLY UNDERSTOOD AND AGREED BETWEEN YOU AND THE FIRM, THAT THE FIRM, WHEN AND IF THE FIRM DECIDES, AFTER FULL INVESTIGATION OF THE FACTS AND RESEARCH OF THE LAW, MAY WITHDRAW FROM REPRESENTATION AND/OR RETURN YOUR CLAIM TO YOU, AND YOU RELEASE THE FIRM FROM FURTHER ACTION ON SAID LEGAL REPRESENTATION AND/OR CLAIM, AND DISCHARGE THE FIRM FROM THIS CONTRACT, WITHOUT FURTHER LIABILITY ON THE PART OF SAID FIRM TO YOU. THE FIRM ALSO WILL WAIVE THE FULL CONTINGENCY FEES AND WILL RELIEFE [sic] THE CLIENT FROM THIS CONTRACT.
The final sentence of the paragraph is highlighted by a handwritten underline, and there are two sets of initials on this page. The document stated it replaced and superseded any prior agreement for legal services between appellants and the Law Firm. The amended agreement was signed by Abuzaid and Adnani on January 15, 2015, but was not signed by Cortez on behalf of the Law Firm.
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Exhibit C attached to Abuzaid’s affidavit consisted of a January 16, 2015 email and an “Agreement for Legal Services.” The email was sent at 8:21 a.m.; has the sender, recipient, and subject redacted; and stated a signed contract is attached. The email also stated the sender has signed the agreement as promised during a telephone conversation that morning with the recipient of the email because the recipient had been “so adamant about it.” The sender expressed the hope the agreement would give the recipient “the confidence you need in conducting the hearing today to untangle what had been tangled in the last two years.” The sender noted the “signing is contingent on us working the final terms and details to satisfy us both.”
The attached document lists both Abuzaid and Adnani as the clients, and states appellants are required to pay the Law Firm $10,000 by January 20, 2015, for the Law Firm “to handle the motion and discovery practice that is presently outstanding.” The Law Firm was entitled to receive a one-third contingency fee and, if it withdrew from the representation “for any reason,” would “continue to retain a one-third (33.3%) fee interest” in the case. The “Scope of the Representation” detailed in this agreement is only that:
Representation is to include advising, counseling, negotiating, investigating, handling, prosecuting, and/or defending in the above referenced matter or matters arising herein or attendant hereto or arising out of the same set of facts and circumstances. Our Firm is hereby authorized and empowered through this document to use and employ such other persons and/or entities that our Firm deems necessary for the proper handling of your legal matter or matters.
The Law Firm was authorized to associate with other law firms or individual attorneys, including Slim. Appellants were responsible for any “payments made” to their former attorneys and any payment would be paid out of appellants’ proceeds from any settlement or judgment. The document indicated it included “no other legal services,” but noted appellants understood their former attorneys:
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[H]ave asserted or may assert a lien against you for any funds arising out of any settlement or judgment in this matter. Should the need arise, this Firm will endeavor to assist you in negotiating any such liens asserted against you by your former attorneys, however, any subsequent litigation involving you and your former attorneys is not covered under the terms of this Agreement. You understand that your need for legal representation concerning the matter between you and your former attorneys will have to be handled by a separate attorney/client fee agreement with this Firm.
The document provided appellants’ failure to cooperate with the Law Firm would result in its immediate withdrawal, and the Law Firm would “continue to retain a one-third (33.3%) interest at all times in your case.”
On the third page, the document provided:
IT IS FURTHER DISTINCTLY UNDERSTOOD AND AGREED BETWEEN YOU AND THE FIRM, THAT THE FIRM, WHEN AND IF THE FIRM DECIDES, AFTER FULL INVESTIGATION OF THE FACTS AND RESEARCH OF THE LAW, MAY WITHDRAW FROM REPRESENTATION AND/OR RETURN YOUR CLAIM TO YOU, AND YOU RELEASE THE FIRM FROM FURTHER ACTION ON SAID LEGAL REPRESENTATION AND/OR CLAIM, AND DISCHARGE THE FIRM FROM THIS CONTRACT, WITHOUT FURTHER LIABILITY ON THE PART OF SAID FIRM TO YOU.
The document also provided that appellants agreed any prior contract between them and the Law Firm was null and void. This document was signed on January 16, 2015, by Abuzaid and Adnani, but was not signed by Cortez on behalf of the Law Firm.
The Law Firm filed a motion for no-answer default judgment.4 On April 1, 2016, after considering the pleadings and the evidence and testimony presented by the Law Firm on liability, damages, and attorneys’ fees, the trial court granted the Law Firm’s motion for no-answer default judgment. The trial court awarded the Law Firm $225,947.33 in actual damages, attorneys’ fees of $20,145 incurred in connection with the intervention, and appellate fees of $25,000 in the event of an unsuccessful appeal by appellants to this Court, and of $20,000 in the event of an unsuccessful appeal by appellants to the Texas Supreme Court.
4 This pleading is not in the appellate record.
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Appellants filed a motion for new trial asserting (1) Adnani had not been served with the petition in intervention or the amended petition in intervention; (2) Abuzaid’s affidavit “in clarification” of Cortez’s statements constituted an answer to the intervention; and (3) alternatively, appellants satisfied the test in Craddock. The motion for new trial was verified by both Adnani and Abuzaid. Appellants also attached, as Exhibit B to the motion for new trial, Adnani’s affidavit, in which she stated she had not been an active participant in the litigation, had relied on Abuzaid to handle the litigation, did not have access to Abuzaid’s email account, and never received the petition or amended petition in intervention. Adnani also stated there were “multiple agreements” between Abuzaid and the Law Firm, and she signed two of these agreements. She understood the agreements were contingency fee contracts, and she and Abuzaid did not owe any money if they lost the litigation or the Law Firm withdrew from the representation.
Appellants also attached three affidavits from Abuzaid to the motion for new trial. In the first affidavit, Abuzaid stated he had been responsible for handling the litigation, Adnani had not been an active participant in the litigation, and Adnani relied on him to handle the litigation. Although Abuzaid received the petition and amended intervention by email, Adnani did not have access to Abuzaid’s email account. Abuzaid was acting pro se at the time he received the petition and amended petition in intervention, and was not aware he needed to file an answer in a case in which he was already involved. He assumed the intervention would be resolved during the trial of the underlying case. Although he subsequently retained counsel to represent him in the litigation, that attorney declined to represent him in the intervention. Abuzaid also stated there were “multiple agreements” between him and the Law Firm, and every contract he signed was a contingency fee contract. The last two agreements required him to pay $10,000 in attorneys’ fees, but the “bulk” of the compensation was based on the Law Firm securing a
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positive outcome in the litigation. Abuzaid understood that, if the Law Firm withdrew from the representation, he and Adnani did not owe the Law Firm any money.
Appellants next attached to the motion for new trial Abuzaid’s “Affidavit in Clarification to Counsel Carlos Cortez[’s] Comments in His Withdrawal Hearing,” as described above. In his third affidavit, Abuzaid stated the signatures on the attached documents were his and Adnani’s, and the subject matter of each contract was the underlying suit. Abuzaid also stated he “never received the signed versions of the contracts back from” Cortez, but “operated under these contracts for the entirety of his representation of us.” Attached to Abuzaid’s third affidavit were the January 9, 2015, January 15, 2015, and January 16, 2015 documents that were attached to his “Affidavit in Clarification to Counsel Carlos Cortez[’s] Comments in His Withdrawal Hearing.”
The Law Firm filed numerous objections to Adnani’s affidavit and Abuzaid’s first affidavit. On June 14, 2016, the trial court, after a hearing, sustained the Law Firm’s objections and denied appellants’ motion for new trial. It severed the Law Firm’s intervention from the litigation, and appellants brought this appeal.
Evidentiary Complaints
In their first twelve issues, appellants complain about the trial court’s rulings on the Law Firm’s objections to Adnani’s and Abuzaid’s affidavits. We need not address these issues because, even considering the evidence struck by the trial court, appellants failed to establish they were entitled to a new trial. See TEX. R. APP. P. 47.1.
Motion for New Trial
In their thirteenth issue, appellants contend the trial court erred by not granting their motion for new trial because they satisfied their burden under Craddock.5
5 In this appeal, appellants have not contended the trial court erred by denying the motion for new trial because Adnani was not served with the petition in intervention or the amended petition in intervention and Abuzaid’s “Affidavit in Clarification to Counsel Carlos Cortez[’s] Comments in His Withdrawal Hearing” was a sufficient answer by Abuzaid to the intervention .
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Standard of Review
We review a trial court’s denial of a motion for new trial for an abuse of discretion. Dolgencorp of Tex., Inc. v. Lerma, 288 S.W.3d 922, 926 (Tex. 2009) (per curiam). A trial court abuses its discretion by not granting a new trial after a default judgment when the defendant establishes all three elements of the Craddock test. Id.; Dir., State Emps. Workers’ Comp. Div. v. Evans, 889 S.W.2d 266, 268 (Tex. 1994).
Craddock, which applies to both no-answer and post-answer default judgments, Lerma, 288 S.W.3d at 925–26, provides that a new trial should be granted when (1) the defaulting party’s failure to answer or to appear was not intentional, or the result of conscious indifference, but was due to a mistake or an accident; (2) the defaulting party has a meritorious defense or claim; and (3) the motion is filed at a time when the granting of a new trial will not occasion delay or work other injury to the prevailing party. Craddock, 133 S.W.2d at 126. The defaulting party has the burden of setting forth facts establishing all three prongs of the Craddock test. In re A.T., No. 05-16-00539-CV, 2017 WL 2351084, at *10 (Tex. App.—Dallas May 31, 2017, no pet.) (mem. op.). If the motion for new trial and accompanying affidavits or other evidence fail to establish any element of the test, we will affirm the trial court’s denial of a new trial. Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d 80, 83 (Tex. 1992); In re A.T., 2017 WL 2351084, at *10.
Meritorious Defense
Because it is dispositive of appellants’ thirteenth issue, we first consider whether appellants satisfied the second prong of the Craddock test by setting up a meritorious defense as to the Law Firm’s suit on a sworn account. A meritorious defense is one that, if proved, would cause a different result upon retrial of the case. L’Arte De La Mode, Inc. v. Neiman Marcus Grp., 395 S.W.3d 291, 296 (Tex. App.—Dallas 2013, no pet.); see also J&M Sales of Tex., LLC
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v. Sams, No. 05-15-00837-CV, 2016 WL 4039250, at *2 (Tex. App.—Dallas July 26, 2016, no pet.) (mem. op.). It is not sufficient, however, for a motion for new trial to merely allege the movant has a meritorious defense. Ivy v. Carrell, 407 S.W.2d 212, 214 (Tex. 1966). Rather, a motion for new trial sets up a meritorious defense “if the facts alleged in the movant’s motion and supporting affidavits set forth facts which in law constitute a meritorious defense, regardless of whether those facts are controverted.” In re R.R., 209 S.W.3d 112, 116 (Tex. 2006) (per curiam). The motion must be “supported by affidavits or other evidence providing prima facie proof that the defendant has such a defense.” Lerma, 288 S.W.3d at 928; see also Estate of Pollack v. McMurrey, 858 S.W.2d 388, 392 (Tex. 1993) (The affidavits or other evidence supporting motion for new trial must prove “prima facie that the defendant has such a meritorious defense.”). This requirement “prevent[s] the reopening of cases to try out fictitious or unmeritorious defenses.” Ivy, 407 S.W.2d at 214. “Mere conclusory allegations will not satisfy the meritorious defense requirement of Craddock.” Equinox Enters, Inc. v. Associated Media Inc., 730 S.W.2d 872, 876 (Tex. App.—Dallas 1987, no writ); see also In re S.H., No. 02-16-00095-CV, 2017 WL 710635, at *5 (Tex. App.—Fort Worth Feb. 23, 2017, ) (mem. op.).
A suit on a sworn account is governed by rule of civil procedure 185. TEX. R. CIV. P. 185. “Rule 185 is not a rule of substantive law but is a rule of procedure with regard to evidence necessary to establish a prima facie right of recovery.” Rizk v. Fin. Guardian Ins. Agency, Inc., 584 S.W.2d 860, 862 (Tex. 1979). As relevant to this appeal, rule 185 applies to any claim or open account for “personal service rendered” on which a systematic record has been kept. TEX. R. CIV. P. 185; Woodhaven Partners, Ltd. v. Shamoun & Norman, L.L.P., 422 S.W.3d 821, 832 (Tex. App.—Dallas 2014, no pet.). If the plaintiff’s petition on a sworn account is supported by the affidavit of the party or his representative stating the claim is within the affiant’s knowledge, is “just and true,” and is due, and that all just and lawful offsets, payments and credits have been
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allowed, then the affidavit “shall be taken as prima facie evidence thereof, unless the party resisting such claim shall file a written denial, under oath.” TEX. R. CIV. P. 185. A defendant who fails to file a written denial under oath in a suit on a sworn account is not permitted to deny the receipt of the services or the correctness of the stated charges. Airborne Freight Corp. v. CRB Mktg. Inc., 566 S.W.2d 573, 574 (Tex. 1978) (per curiam); Woodhaven Partners, Ltd., 422 S.W.3d at 833. However, in the context of a motion for new trial, a defendant who fails to file a written denial that conforms with rule 185 may still rely on an affirmative defense to set up a meritorious defense. Martin v. Allman, 668 S.W.2d 795, 797 (Tex. App.—Dallas 1984, no writ).
Appellants contend their motion for new trial set up the affirmative defense of payment to the Law Firm’s suit on a sworn account. Specifically, appellants argue they entered into a contingency fee agreement with the Law Firm that required appellants to pay the Law Firm $10,000, they paid that amount, and the Law Firm was entitled to no further payment because it had not obtained a successful outcome in the litigation. Because appellants’ alleged defense is predicated on the existence of a contingency fee contract between them and the Law Firm that set out the conditions under which the Law Firm was entitled to payment and the terms of any payment, we must determine whether appellants’ affidavits proved prima facie facts that, in law, established a binding contractual relationship between them and the Law Firm. See Farley v. Clark Equip. Co., 484 S.W.2d 142, 147 (Tex. Civ. App.—Amarillo 1972, writ ref’d n.r.e.) (“Appellant’s alleged defense is predicated upon the theory of contract and thus the question before this court is whether he has alleged and proved prima facie facts, that, in law, establish a binding contractual relationship on any theory of contract law.”).
In order to be binding, a contingency fee agreement between an attorney and a client must be in writing and signed by both the attorney and the client. TEX. GOV’T CODE ANN. § 82.065(a) (West Supp. 2016); see also TEX. DISCIPLINARY RULES PROF’L CONDUCT R. 1.04(d),
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reprinted in TEX. GOV’T CODE ANN., tit. 2, subtit. G, app. A (a contingency fee agreement “shall be in writing and shall state the method by which the fee is to be determined”). Further, to be enforceable, a contingency fee agreement must address all of its essential and material terms with a reasonable degree of certainty and definiteness. Douglas-Peters v. Cho, Choe & Holen, P.C., No. 05-15-01538-CV, 2017 WL 836848, at *19 (Tex. App.—Dallas Mar. 3, 2017, no pet.) (mem. op.); see also T.O. Stanley Boot Co., Inc. v. Bank of El Paso, 847 S.W.2d 218, 221 (Tex. 1992) (“The material terms of the contract must be agreed upon before a court can enforce the contract. Where an essential term is open for future negotiation, there is no binding contract.”). “The parties must agree to the same thing, in the same sense, at the same time.” Celmer v. McGarry, 412 S.W.3d 691, 700 (Tex. App.—Dallas 2013, pet. denied).
The record does not contain a contingency fee agreement signed by both appellants and the Law Firm, and Abuzaid stated in his third affidavit that he never received a signed agreement from the Law Firm. Regardless, appellants contend they set up a meritorious defense by pleading they entered into contingency fee agreements with the Law Firm on January 9, 2015, January 15, 2015, and January 16, 2015, and then supporting those pleaded facts with affidavits from Abuzaid and Adnani and copies of the three documents signed by them. However, the documents relied upon by appellants were not signed by a representative of the Law Firm and contained changes to the terms of the agreement. Some of the changes requested by appellants pertained to the scope of the Law Firm’s representation, its right to be paid following its withdrawal from the representation, and how any payment would be calculated. The requested changes were inconsistent with existing provisions in the documents relating to the Law Firm’s right to receive a contingency fee following withdrawal from the representation. See Nava v. Nationwide Fin. Corp., 601 S.W.2d 478, 482–83 (Tex. App.—San Antonio 1980, writ ref’d n.r.e.) (examining terms of contract to determine whether defendant had set up a meritorious
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defense to claims based on contract). Finally, in his affidavits, Abuzaid admitted “details” about the January 16, 2015 agreement needed to resolved by the parties, and that there had been no resolution of those “details.”
Taking every factual allegation in appellants’ motion for new trial as true, and considering the affidavits and evidence attached to the motion, appellants established only that they were represented in the litigation by the Law Firm, they were attempting to negotiate a contingency fee agreement with the Law Firm, and they paid the Law Firm $10,000.6 Indeed, appellants’ evidence established that, among other things, the parties had not mutually agreed on the scope of the representation, whether the Law Firm was entitled to payment should it withdraw from the representation and, if it was, how that payment would be calculated. Because appellants failed to provide prima facie evidence the parties mutually agreed to the terms of a contingency fee agreement, they failed to set up a meritorious defense that they paid the Law Firm all sums owed under such an agreement. See Farley, 484 S.W.2d at 149 (concluding appellant failed to set up meritorious defense because “facts alleged by appellant are not sufficient to base an inference of mutual assent to a contractual relationship”).
Because appellants failed to set up a meritorious defense as to the Law Firm’s suit on a sworn account, they did not satisfy the second prong of the Craddock test. See Equinox Enters., Inc., 730 S.W.2d at 876 (concluding defendant must set up meritorious defense regarding each of plaintiff’s causes of action to satisfy the second prong of Craddock test). Accordingly, the trial court did not abuse its discretion by denying appellants’ motion for new trial. See Heine, 835 S.W.2d at 83 (concluding that, because appellants failed to satisfy first element of Craddock test,
6 Although both Abuzaid and Adnani stated in their affidavits that they believed they had a contingency fee agreement with the Law Firm, had paid everything owed under the agreement, and owed nothing further to the Law Firm unless a favorable outcome was achieved in the litigation, these bare beliefs and conclusions are insufficient to set up a meritorious defense. See Ivy, 407 S.W.2d at 215 (defendant who alleged in motion for new trial that he had good and valid deed to land, a meritorious defense, and held fee simple ownership of property alleged conclusions that were insufficient to set up meritorious defense); Rotella v, Dozier Cabinet Works, Inc., No. 02-07-00226-CV, 2008 WL 638239, at * (Tex. App.—Fort Worth Jan. 31, 2008, no pet.) (mem. op.) (per curiam) (“Mere allegations of beliefs or legal conclusions are insufficient to set up a meritorious defense.”).
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it was not necessary to reach other two elements); Ivy, 407 S.W.2d at 215 (concluding trial court did not err in overruling motion for new trial because motion did not contain allegations of fact which in law constituted meritorious defense to cause of action and testimony at hearing did not prove such a defense prima facie). We resolve appellants’ thirteenth issue against them.
Contingent Attorneys’ Fees
In their fourteenth issue, appellants argue the evidence was factually insufficient to support the trial court’s award in the default judgment of $25,000 for “anticipated reasonable and necessary fees and expenses that would be incurred by the Law Firm” should appellants unsuccessfully appeal the default judgment to this Court. The default judgment states the trial court considered, among other things, the “evidence and testimony” presented by the Law Firm “on liability, damages, [and] attorney’s fees.” The appellate record does not contain a reporter’s record from the hearing on the Law Firm’s motion for default judgment.7
When there is no reporter’s record and findings of fact and conclusions of law are neither requested nor filed, we imply the trial court made all the necessary findings to support its judgment. Johnson v. CitiMortgage, Inc., No. 05-16-00931-CV, 2017 WL 2871453, at *1 (Tex. App.—Dallas July 5, 2017, no pet.) (mem. op.). “The absence of a reporter’s record obligates us to presume the evidence presented supports the judgment.” Lyons v. Polymathic Properties, Inc., No. 05-15-00408-CV, 2016 WL 3564210, at *2 (Tex. App.—Dallas June 29, 2016, no pet.) (mem. op.); see also Schafer v. Conner, 813 S.W.2d 154, 155 (Tex. 1991) (per curiam) (“[C]ourt of appeals correctly overruled Schafer’s complaints concerning the adequacy of the damages because in the absence of a complete statement of facts, it is presumed that the omitted evidence
7 Appellants requested the court reporter “prepare and transcribe any hearings that occurred in this case,” and specifically requested a transcription of the hearing that occurred on “June 24, 2016.” Appellants did not specifically request a transcript of the April 1, 2016 hearing on the Law Firm’s motion for default judgment. Further, after the court reporter informed this Court that she had reviewed her stenographic notes and it appeared “there is not a Reporter’s Record for the date requested on this appeal,” appellants did not request the appellate record be supplemented with a reporter’s record from the hearing on April 1, 2016. See TEX. R. APP. P. 34.6(d).
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supports the trial court’s judgment.”). Therefore, in the absence of a reporter’s record of the hearing on the Law Firm’s motion for default judgment, we presume the evidence admitted at the hearing supports the trial court’s award of contingent attorneys’ fees to the Law Firm should appellants unsuccessfully appeal the default judgment to this Court. See In re Estate of Kam, 2016 WL 7473905, at *6 (Tex. App.—Dallas Dec. 29, 2016, pet. denied) (mem. op.). We resolve appellants’ fourteenth issue against them.

Outcome: We affirm the trial court’s order denying appellants’ motion for new trial and the trial court’s award of attorneys’ fees to the Law Firm in the amount of $25,000 if appellants unsuccessfully appeal the default judgment to this Court.

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