A Fight and a Promise

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From Nat’l Ass’n for Legal Gun Defense, LLC v. Hensley, decided Thursday by the Texas Court of Appeals, in an opinion by Chief Justice Bonnie Sudderth, joined by Justices Dabney Bassel and Dana Womack:

In the days following his arrest, Hensley sought and obtained approval from NALGD to cover his legal expenses under the liability coverage agreement. However, after NALGD later refused to pay for his attorney’s fees, Hensley filed suit, bringing claims for violations of the Texas Deceptive Trade Practices Act, negligent misrepresentation, breach of contract, and, alternatively, promissory estoppel. The case was tried to the bench in December 2020….

The terms of the agreement effective at the time of Hensley’s arrest provided that NALGD would “defend and assist its members for the use of force to counter an immediate threat of violence or a countermeasure that involve[d] defending oneself or the well-being of another from physical harm by the use of[ ] any type, kind, or make of” a delineated list of weapons. Specifically, the agreement provided unlimited coverage for attorney’s fees and up to $1,000,000 of coverage per occurrence for various other legal expenses such as bail bonds, travel, and trial costs….

Hensley testified that he travelled in December 2017 to the Hollywood, California location of the Church of Scientology to perform a First Amendment audit. As his group filmed on a sidewalk outside of the church, a security guard emerged from the church and told them to leave. Hensley and the security guard exchanged “words,” and both became upset. According to Hensley, the security guard “became extremely aggressive,” stepped to within inches of him, and pulled out a flashlight. With the flashlight near his face and “blind[ing]” him, Hensley “felt like [he] was about to be harmed,” so he pulled the flashlight down. According to Hensley, the flashlight then “came out of” the guard’s hand, and as Hensley turned to separate himself from the guard, the guard tackled Hensley from behind and slammed him into a car.

Hensley said that he called NALGD’s director, Larry Keilberg, on December 8, the day following his arrest, to inquire whether NALGD would cover his legal expenses related to the incident, and Keilberg asked Hensley to email him a video of the altercation for his review. The following day, after Hensley emailed the video, he received a response from Keilberg indicating that NALGD would cover the fees:

OK [NALGD] will wright [sic] you a check for $3,000.00 for you to pay your attorney. We will need an attorney invoice or payment agreement before we can send you a check. Send a copy of the bail bond you paid.

[NALGD] needs permission to post [your] video on our website and a testimonial from you ….

Shortly thereafter, Keilberg emailed Hensley again, informing him that Hensley was “clearly on public property and within [his] rights” during the incident but that NALGD could not post the video on their website due to profanity contained therein. NALGD issued a $3,000 reimbursement check to Hensley for “attorney Hemming” dated January 2, 2018.

According to Hensley, after his charges were upgraded, Keilberg told him that it was in Hensley’s “best interest” to find another attorney and that Keilberg assured him that NALGD would cover the fees for the new attorney. At trial, Hensley read into evidence a text message from late February 2018, wherein Keilberg advised Hensley to find a new attorney.

Hensley took Keilberg’s advice and contacted another attorney—Lisa Houlé—who quoted an initial retainer fee of $100,000 and an additional $75,000 fee should Hensley’s case proceed to trial. Hensley testified that he spoke with Keilberg about Houlé’s possible representation and that after Keilberg also spoke with Houlé he told Hensley to proceed with hiring her. According to Hensley, Keilberg said that Houlé’s fee was not unreasonable, given the charge.

According to Hensley, Houlé later notified him that she had spoken with Keilberg and that Keilberg “had agreed to pay her retainer and that [Hensley] was to pay her and that [he] would be reimbursed.” Accordingly, he and Houlé entered into a fee agreement and Hensley ultimately paid $125,000 to her for representation. Hensley testified that he relied on Keilberg’s promise to pay Houlé’s fee when he hired Houlé and that but for Keilberg’s promise he would not have hired Houlé because he could not have otherwise afforded her fee….

The trial court found in favor of Hensley and signed a judgment awarding him $125,000 in actual damages. The judgment does not specify the grounds for recovery, and no findings of fact or conclusions of law were requested or filed….

NALGD’s only complaint on appeal challenges the trial court’s judgment as improper under a breach of contract theory because, according to NALGD, Hensley’s conduct during his altercation with the security guard was not covered by the agreement. We acknowledge the potential merit of this argument in light of the record before us. However, even assuming that NALGD is correct that it did not breach the agreement with Hensley, the law requires us to inquire further. We must determine if the judgment was supported on any other grounds.

After reviewing the pleadings and the evidence, we hold that the judgment can be supported on the theory of promissory estoppel…. The elements of promissory estoppel are “(1) a promise, (2) foreseeability of reliance thereon by the promisor, and (3) substantial reliance by the promisee to his detriment.” When a contract exists between the parties, the claimant must also prove that the promise on which it relied to its detriment was made outside of that contract….

NALGD takes the position that Hensley’s actions related to the altercation with the security guard were not covered by the agreement and, in fact, were “well outside the [a]greement’s terms.” Thus, according to NALGD’s own logic, if NALGD made any promises to cover Hensley’s related attorney’s fees, they were necessarily made outside of that agreement.

There is ample evidence in this record that NALGD made multiple such promises over the course of nearly three months and even after Keilberg viewed video evidence of the December altercation …. Because this evidence is sufficient to prove that NALGD made promises outside of the agreement to Hensley that it would pay for his attorney’s fees, Hensley satisfied the first promissory estoppel element….

Starting the day after the altercation, Hensley repeatedly communicated with Keilberg about NALGD covering his attorney’s fees. Further, both of Hensley’s attorneys contacted Keilberg seeking either payment or assurance of payment from NALGD, and Keilberg himself encouraged Hensley to hire a new attorney. We hold that this constituted at least some record evidence that it was foreseeable to NALGD that Hensley would rely on its promises to pay his fees….

Both documentary and testimonial evidence shows that Houlé was paid $125,000 for her representation of Hensley. Hensley testified that he could not afford Houlé’s fee and that he indebted himself to a friend to help pay her fee in anticipation that NALGD would provide a reimbursement. Further, only after Hensley and Houlé received assurances of coverage from Keilberg did Hensley enter into the fee agreement with Houlé. We hold that this constituted at least some record evidence that Hensley relied to his detriment on NALGD’s promise to cover his attorney’s fees….

Because NALGD failed to raise a challenge that the judgment was not supported under a theory of promissory estoppel and because we hold that the record contains some evidence to support the judgment on promissory estoppel grounds, we affirm….

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