Opinion
NO. 14-20-00312-CV
04-19-2022
MEDSTAR FUNDING, LC, Appellant v. Frode WILLUMSEN, Donal Hughs McRoberts, and Willumsen Law Firm, P.C., Appellees
Robert T. Owen, Shannon Lang, Jessica Hughes, Houston, for Appellant. Joseph Ray Little, for Appellee.
Robert T. Owen, Shannon Lang, Jessica Hughes, Houston, for Appellant.
Joseph Ray Little, for Appellee.
Panel consists of Justices Jewell, Spain, and Wilson.
Kevin Jewell, Justice
Appellant MedStar Funding, LC appeals the trial court's summary judgment in favor of appellees, a law firm and two lawyers who moved to dismiss MedStar's claims on the basis of attorney immunity. MedStar opposed summary judgment and challenges the trial court's ruling for one reason: attorney immunity cannot shield an attorney from a breach of contract claim. But MedStar did not timely plead a breach of contract claim against appellees. For this reason, we hold that the trial court did not err by granting summary judgment. Because MedStar does not otherwise challenge the trial court's dismissal of MedStar's timely pleaded claims, we affirm the court's judgment.
Background
Urooj Sheikh was in a car accident and afterwards sought medical treatment from four medical providers. Sheikh signed four identical documents, each titled "Agreement to Pay/Contractual Lien and Assignment by Patient of Proceeds of Recovery, Directive, and Authorization to Attorney to Pay Provider." The agreements assigned to each respective medical provider an interest in "the proceeds that may be recovered on [Sheikh's] behalf, regardless of the source, as the result of any compromise, settlement, ... or any other collection activities on [Sheikh's] pending claim for compensation for damages sustained in the incident on the above date, or in any subsequent action [Sheikh] may have to recover damages for personal injuries ...." At the end of the agreements, Sheikh's attorney, Donal McRoberts, signed under a paragraph titled "Protection as to Outstanding Charges," in which McRoberts "agree[d] to honor such assignment" and "agree[d] to withhold from any portion of the RECOVERY sufficient funds, after deduction of attorney's fees and expenses ... to pay any outstanding amounts owed to PROVIDER and/or its third party assignees."
MedStar allegedly purchased the medical providers’ interests in Sheikh's right to monetary recovery and sent McRoberts notice of the purchase. Sheikh settled her personal injury claim against the other driver. Sheikh allegedly failed to pay MedStar any amount owed under the assignments.
MedStar sued Sheikh, McRoberts, the law firm where McRoberts worked, Willumsen Law Firm, P.C., and another attorney at the firm, Frode Willumsen. For purposes of this opinion, we refer to the firm and the two attorney defendants as the "Law Firm." MedStar alleged: (1) Sheikh breached her contracts with the medical providers (who then assigned the contracts to MedStar); (2) Sheikh—or, alternatively, the Law Firm—had liability under a quantum meruit theory; and (3) all defendants were liable for conversion, money had and received, and unjust enrichment. MedStar also asserted a suit on a sworn account against Sheikh.
The Law Firm moved for traditional summary judgment based on an affirmative defense of attorney immunity. Relying on U.S. Bank, N.A. v. Sheena , 479 S.W.3d 475 (Tex. App.—Houston [14th Dist.] 2015, no pet.), the Law Firm argued that an attorney is entitled to immunity when the conduct allegedly giving rise to liability is that the attorney placed settlement funds into a trust account and then disbursed the funds at his client's direction without considering a third party's alleged interest in the funds. The Law Firm sought dismissal of all of MedStar's claims against it.
MedStar responded, contending that the "only issue" in the case was whether the Law Firm "must be held to its contractual obligation to pay medical providers who provide services subject to an assignment of rights." According to MedStar, granting the Law Firm's motion on the basis of attorney immunity would "invalidate Texas contract law" and would allow attorneys to "breach contracts with impunity." As of the time MedStar filed it response, however, it had not pleaded a breach of contract claim against the Law Firm. MedStar did not otherwise challenge the applicability of attorney immunity to any of its pleaded causes of action. MedStar did not file an amended pleading with its summary judgment response. On December 2, 2019, the trial court conducted a hearing on the Law Firm's motion for summary judgment. As the Law Firm's counsel noted, MedStar's response focused exclusively on the Law Firm's purported contractual obligations, but MedStar did not plead a breach of contract claim against the Law Firm. Four days after the hearing, MedStar filed an amended petition. In the amended petition, MedStar for the first time asserted a claim for breach of contract against the Law Firm. MedStar did not request or obtain leave from the trial court to file the amended petition.
The trial court signed an order granting the Law Firm's motion for summary judgment in its entirety. The court also severed MedStar's claims against the Law Firm from the claims against Sheikh, thus creating a final judgment. Following severance, MedStar appealed.
Standard of Review and Applicable Law
We review a trial court's grant of summary judgment de novo. Valence Operating Co. v. Dorsett , 164 S.W.3d 656, 661 (Tex. 2005). In the traditional summary judgment context, the movant has the burden to show there is no genuine issue of material fact and that the movant is entitled to judgment as a matter of law. Tex. R. Civ. P. 166a(c) ; Lopez v. Ensign U.S. S. Drilling, LLC , 524 S.W.3d 836, 841 (Tex. App.—Houston [14th Dist.] 2017, no pet.). A defendant seeking summary judgment on the basis of an affirmative defense bears the burden to conclusively establish that defense. Diversicare Gen. Partner, Inc. v. Rubio , 185 S.W.3d 842, 846 (Tex. 2005) ; see also Sharp v. Kroger Tex. L.P. , 500 S.W.3d 117, 119 (Tex. App.—Houston [14th Dist.] 2016, no pet.).
The Law Firm did not attach any evidence to its motion and essentially sought traditional summary judgment based on the pleadings. The Law Firm argued that the attorney immunity defense barred all of MedStar's pleaded claims. When a motion for summary judgment is directed solely at the plaintiff's petition, we take "all allegations, facts, and inferences in the pleadings as true," viewing them in a light most favorable to the pleader, and affirm summary judgment "only if the pleadings are legally insufficient." Natividad v. Alexsis, Inc. , 875 S.W.2d 695, 699 (Tex. 1994) ; see also S. Tex. College of Law v. KBR, Inc. , 433 S.W.3d 86, 90 (Tex. App.—Houston [1st Dist.] 2014, pet. denied) ; Abbott v. City of Kaufman , 717 S.W.2d 927, 929 (Tex. App.—Tyler 1986, writ dism'd w.o.j.). If the pleading on its face conclusively shows the moving party is entitled to summary judgment based on its affirmative defense, the motion will be granted. See Cronen v. City of Pasadena , 835 S.W.2d 206, 210 (Tex. App.—Houston [1st Dist.] 1992, no writ), overruled on other grounds by Lewis v. Blake , 876 S.W.2d 314, 315 (Tex. 1994).
A defendant moving for summary judgment is required to meet the plaintiff's causes of action as they are pleaded and to demonstrate that the plaintiff cannot prevail on those claims. See Jones v. Wal-Mart Stores, Inc. , 893 S.W.2d 144, 147 (Tex. App.—Houston [1st Dist.] 1995, no writ) (citing Cook v. Brundidge, Fountain, Elliott & Churchill , 533 S.W.2d 751, 759 (Tex. 1976) ). A summary judgment movant does not have a burden to develop summary judgment evidence and present argument addressing unpleaded claims. See id. Moreover, a claim raised for the first time in a non-movant's summary judgment response does not become part of the live pleading that the movant must disprove in order to prevail. Id. If, in response to a summary judgment motion, a claimant desires to assert additional claims, then it may file an amended pleading asserting new claims before the hearing without leave, or thereafter and before judgment with the court's permission. See Tex. R. Civ. P. 166a(c).
A summary judgment non-movant may challenge for the first time on appeal the sufficiency of the evidence supporting the movant's summary judgment, but any other ground for reversal must have been raised in the trial court. See City of Houston v. Clear Creek Basin Auth. , 589 S.W.2d 671, 678 (Tex. 1979).
Nature of MedStar's Live Claims
Before proceeding to an analysis of the trial court's summary judgment, we ascertain the nature of MedStar's claims that the trial court dismissed. MedStar argues on appeal that the trial court erred in applying the attorney immunity defense to a breach of contract claim. But did MedStar timely plead such a claim?
MedStar did not assert a breach of contract claim against the Law Firm in its original petition. The first question we must consider is whether MedStar timely amended its petition to assert such a claim. A party may amend its pleading within seven days of trial only after obtaining leave of court. Tex. R. Civ. P. 63. A summary judgment hearing is a trial for purposes of rule 63. See Goswami v. Metro. Sav. & Loan Ass'n , 751 S.W.2d 487, 490 (Tex. 1988) ; Chehab v. Edgewood Dev., Ltd. , 619 S.W.3d 828, 834 (Tex. App.—Houston [14th Dist.] 2021, no pet.). If the amended pleading is filed before a summary judgment hearing but within the seven-day window, an appellate court will presume leave was granted to file when an order states that all pleadings were considered, the record does not indicate that an amended pleading was not considered, and the opposing party does not show surprise. See Goswami , 751 S.W.2d at 490 ; Mosbey v. Bowman , No. 14-17-00321-CV, 2018 WL 1802023, at *2 (Tex. App.—Houston [14th Dist.] Apr. 17, 2018, no pet.) (mem. op.).
Unlike amended pleadings filed within seven days before the summary judgment hearing, however, there is no presumption that leave was granted when amended pleadings are filed after the summary judgment hearing. Horie v. Law Offices of Art Dula , 560 S.W.3d 425, 431-32 (Tex. App.—Houston [14th Dist.] 2018, no pet.) ("But, this presumption does not apply if the pleading is amended after the hearing."). After the summary judgment hearing but before the trial court renders judgment, a party must obtain leave of court to amend a pleading. Tex. R. Civ. P. 166a(c) ; see also Mensa-Wilmot v. Smith Int'l, Inc. , 312 S.W.3d 771, 778-79 (Tex. App.—Houston [1st Dist.] 2009, no pet.). We will not consider an amended pleading filed without the trial court's permission after the summary judgment hearing. See Taylor v. Sunbelt Mgmt., Inc. , 905 S.W.2d 743, 745 (Tex. App.—Houston [14th Dist.] 1995, no writ) ("[W]e cannot consider appellants’ pleadings which were admittedly filed after the motion for summary judgment hearing."); W. Tex. Gas, Inc. v. 297 Gas Co. , 864 S.W.2d 681, 685 (Tex. App.—Amarillo 1993, no writ) (holding trial court did not err by failing to consider amended petition filed after hearing without leave of court). Because an untimely amended petition filed without leave does not supersede the prior petition, the summary judgment movant need not amend or supplement its motion to address any new claims asserted in the amended petition. See Taylor , 905 S.W.2d at 745 (citing Tex. R. Civ. P. 166a(c) and holding trial court did not err by granting summary judgment when new, unaddressed claims were added by amended petition filed after hearing without leave of court); W. Tex. Gas, Inc. , 864 S.W.2d at 685 (same). Here, MedStar filed its first amended petition after the summary judgment hearing and there is no indication that it sought or was granted leave to do so. The summary judgment in this case states that the court considered the motion, response, and evidence; however, the order does not state that the court considered all pleadings generally or the amended petition in particular. Thus, we cannot presume that the trial court granted MedStar leave to file its amended petition. See Chehab , 619 S.W.3d at 834 ; Mosbey , 2018 WL 1802023, at *2. We accordingly do not consider the amended pleading. See Horie , 560 S.W.3d at 432. As pleaded, then, MedStar asserted in its original petition claims against the Law Firm for conversion, money had and received, and unjust enrichment. MedStar also asserted an alternative claim for quantum meruit. MedStar's original petition did not include a breach of contract claim against the Law Firm.
In a post-submission letter, MedStar appears to argue that we should construe MedStar's original petition as having asserted a breach of contract claim against the Law Firm because the facts alleged would support it and we are to construe pleadings liberally. Further, and alternatively, MedStar contends that we may nonetheless consider the untimely amended pleading because a trial court may grant summary judgment on later-pleaded claims in certain circumstances, and that the trial court must have done so here. MedStar cites cases saying that, although summary judgment generally may not be granted on a claim not addressed in the summary judgment motion, summary judgment may be granted on later pleaded causes of action if the movant has conclusively disproven ultimate facts central to all causes of action, the claims subsequently added are derivative of the claims addressed, or an affirmative defense applies equally to the claims subsequently added. See Ritter v. Las Colonitas Condo. Ass'n , 319 S.W.3d 884, 891 (Tex. App.—Dallas 2010, no pet.) ; McIntyre v. Wilson , 50 S.W.3d 674, 684-85 (Tex. App.—Dallas 2001, pet. denied) ; Lampasas v. Spring Ctr., Inc. , 988 S.W.2d 428, 437 (Tex. App.—Houston [14th Dist.] 1999, no pet.) ; Canada v. Canada , No. 02-11-00483-CV, 2013 WL 1759894, at *6 (Tex. App.—Fort Worth Apr. 25, 2013, no pet.) (mem. op.).
Though MedStar accurately characterizes those cases, they are all distinguishable from the present matter's procedural posture. See Ritter , 319 S.W.3d at 891 (no indication whether amendment was filed pre-or post-hearing, but the trial court expressly ruled on the later-amended counterclaim in its order); McIntyre , 50 S.W.3d at 684-85 (appellate court held that it would not consider an untimely amended pleading, and only in dicta indicated that, even if it considered the pleading, it need not reverse); Lampasas , 988 S.W.2d at 437 (plaintiff added "new variations" on an already pleaded negligence claim, and the trial court reset the hearing for an additional three weeks after the plaintiff filed its amendment, which indicated to the appellate court that it considered the amendment in its ruling); Canada , 2013 WL 1759894, at *6 (appellate court held that trial court had before it motions for summary judgment addressing every cause of action pleaded by the plaintiff, so the plaintiff's contention that the summary judgment order did not dispose of all her causes of action was unavailing).
In contrast to the circumstances presented in MedStar's post-submission authority, MedStar filed its amendment after the summary judgment hearing, without leave of court, and added a new cause of action rather than asserting a "variation" of an already pleaded claim. As stated, there is no indication that the trial court considered the amended pleading when it ruled.
We review a summary judgment based on the pleadings "on file at the time of the hearing, or filed thereafter and before judgment with permission of the court," and a claim not pleaded cannot form the basis for reversal. Mayfield v. Fullhart , 444 S.W.3d 222, 230 (Tex. App.—Houston [14th Dist.] 2014, pet. denied) (citing Tex. R. Civ. P. 166a(c) ). We therefore cannot say that the trial court erred in granting summary judgment for the reason MedStar asserts because MedStar did not plead a breach of contract claim against the Law Firm. See Luna v. Gunter Honey, Inc. , No. 09-05-00207-CV, 2005 WL 3490126, at *1 (Tex. App.—Beaumont Dec. 22, 2005, pet. denied) (mem. op.) ("[I]f the nonmovant raises a new theory for the first time in its response to a motion for summary judgment, and does not amend its pleadings to include this additional theory of recovery, the new theory of recovery is not considered at issue before the trial court when the trial court rules on the motion for summary judgment."); Jones , 893 S.W.2d at 147 (same).
The Trial Court Did Not Err in Granting Summary Judgment
Having determined the scope of the claims properly before the trial court, we now turn to the court's ruling. In its motion for summary judgment, the Law Firm argued that attorney immunity barred MedStar's claims of conversion, money had and received, unjust enrichment, and quantum meruit. In its response, MedStar did not challenge the Law Firm's defense as to those claims. Instead, MedStar focused solely on the Law Firm's purported breach of its contractual obligations, which were not part of the pleaded claims the Law Firm would be required to address in its summary judgment motion to disprove.
Attorney immunity is an affirmative defense that protects an attorney against a non-client's claim when the claim is based on conduct that (1) constitutes the provision of legal services involving the unique office, professional skill, training, and authority of an attorney and (2) the attorney engages in to fulfill the attorney's duties in representing the client within an adversarial context in which the client and the non-client do not share the same interests. See Haynes & Boone, LLP v. NFTD, LLC , 631 S.W.3d 65, 78 (Tex. 2021).
Similarly, on appeal, MedStar in its brief characterized the nature of the case as "a breach of contract case." MedStar argued that the trial court erred in "holding that ‘attorney immunity’ trumps long-standing Texas contract law." MedStar did not argue that the trial court erred in dismissing any timely pleaded claim. In fact, MedStar did not discuss its pleaded claims at all.
MedStar has not challenged the sufficiency of the evidence supporting the Law Firm's motion on the pleaded claims (quantum meruit, conversion, money had and received, and unjust enrichment). Thus, we need not address whether the trial court erred in granting summary judgment on those claims based on the attorney immunity defense. See, e.g., Aerobic Maint. & Serv., Inc. v. First United Bank & Tr. Co. , No. 02-08-00232-CV, 2009 WL 1425179, at *7 (Tex. App.—Fort Worth May 21, 2009, no pet.) (mem. op.) ("Because appellant does not challenge the sufficiency of the evidence to support summary judgment absent an error in the rulings on its objections, we need not review the propriety of summary judgment based on the grounds asserted by appellee in its motion.") (citing Tex. R. App. P. 47.1 ; Horsley-Layman v. Adventist Health Sys./Sunbelt, Inc. , 221 S.W.3d 802, 809 (Tex. App.—Fort Worth 2007, pet. denied) ). During and after argument to this court, MedStar contended that, in fact, its position is not that the summary judgment should be reversed because the Law Firm's conduct constitutes a breach of contract and therefore is not protected by attorney immunity, but that instead "the primary issue" is whether the Law Firm met its traditional summary judgment burden on attorney immunity. MedStar has, however, expressly and exclusively tied its argument for reversal to the Law Firm's breach of its "direct, contractual relationship," "independent obligation," "signed promise," "affirmative[ ] promise[ ]," and "signed writing," all of which should be "entirely enforceable under Texas law just like any other contract." MedStar has not challenged whether the Law Firm established its attorney immunity defense as to any of MedStar's pleaded claims; instead it has limited its arguments only to unpleaded claims. Accordingly, we are not persuaded by MedStar's post-briefing attempt to recharacterize its position as anything other than "This is a breach of contract case."
Because MedStar did not timely plead a breach of contract claim, such a claim could not have been a valid ground to defeat the Law Firm's motion for summary judgment, nor may such an unpleaded claim support reversal on appeal. We express no opinion on the merits of the trial court's dismissal of MedStar's timely pleaded claims based on the Law Firm's attorney immunity defense, as it is not properly presented to us for review.
Conclusion
For the reasons given above, we overrule MedStar's issue and affirm the trial court's judgment.
( Spain, J., dissenting)
DISSENTING OPINION
Charles A. Spain, Justice
This court treats the April 7, 2020 severance order of a portion of the case previously disposed of by an interlocutory summary judgment as the trial court's final judgment. The order states:
Pending before the Court is the Plaintiff MedStar Funding, LC's Motion for Severance. Upon consideration of the Motion, response and reply, the pleadings on file, and applicable law, it is HEREBY
ORDERED that the Motion is GRANTED . The Court finds the January 10, 2020 Summary Judgment to be an Interloctuary [sic] Summary Judgment as indicated in the Court's file. Plaintiff's claims against Defendants Frode Willumsen, Donal Hughs McRoberts, and Willumsen Law Firm, P.C., are severed from Plaintiff's claims against Urooj Sheikh in Cause No. 2017-23189.
The Court Clerk is directed to assign Cause No. 2017-23189-A to the severed portion, styled MedStar Funding, LC v. Frode Willumsen, Donal Hughs McRoberts, and Willumsen Law Firm, P.C. The severed case shall be deemed "Disposed (final) " thirty (30) days after the date of severance assuming no post judgment motions are filed.
The severed matter, Case No. 2017-23189-A, should include the following documents filed in Cause No. 2017-23189:
(i) ...
...
(lx) ....
Plaintiff MedStar Funding, L.C., shall be responsible for all filing fees and court costs incurred to effectuate this order.
DATED this _____ day of __________, 2020.
Signed:
4/7/2020
11:17 AM
/s/ [trial judge]
While a precise explanation of this order would be challenging, one thing is easy—it is not a final judgment. The operative date when the order is "deemed ‘Disposed (final) ’ " is 30 days after April 7, 2020, i.e., May 7, 2020. We have no subsequent writing signed by the trial court memorializing that nothing of legal significance occurred between April 7 and May 7, 2020. The April 7, 2020 order is simply interlocutory. See Hegwood v. American Habilitation Servs., Inc. , 294 S.W.3d 603, 605 (Tex. App.—Houston [1st Dist.] 2009, no pet.) (order expressly conditioned on future events is not final judgment); Felt v. Bailey , No. 14-20-00465-CV, 2022 WL 872246, at *3 n.12 (Tex. App.—Houston [14th Dist.] Mar. 24, 2022, no pet. h.) (mem. op.).
For example, how is the unconventional phrase "assuming no post judgment motions are filed" to be interpreted? Does that phrase mean postjudgment motions filed before the 30-day deadline, May 7, 2020, or filed on or after May 7, 2020? Neither the Texas Rules of Civil Procedure nor the Texas Rules of Appellate Procedure change the date of the trial court's final judgment if postjudgment motions such as a motion for new trial or motion for reconsideration are denied.
Assuming this order would pass muster under Lehmann v. Har-Con Corp. if the phrase "thirty (30) days after the severance" were omitted, would the subsequent phrase "assuming no post judgment motions are filed" retroactively negate any such final judgment were such a postjudgment motion to be filed? Lehmann , 39 S.W.3d 191, 204 (Tex. 2001) ("an order can be a final judgment for appeal purposes even though it does not purport to be if it actually disposes of all claims still pending in the case"). Or do we just ignore "assuming no post judgment motions are filed"?
All the foregoing should be a giant klaxon that a Lehmann problem exists. Fortunately, it is unnecessary to answer the what-ifs posed above. The solution is to send a notice of involuntary dismissal. Tex. R. App. P. 42.3.
This order is such a mess that this court does not even agree on the date of the alleged final judgment. The majority treats it as April 7, 2020; it seems clear to me that the order was attempting to be final 30 days later.
Acting like the interlocutory order signed 30 days before the date of the trial court's final judgment is truly final cannot make it final. The order is still interlocutory, and the case is still pending in the trial court. See Merchandise Mart, Inc. v. Marcus , 515 S.W.2d 663, 664 (Tex. 1974) (per curiam), dismissing motion to clarify judgment in 501 S.W.2d 712 (Tex. Civ. App.—Tyler 1973, no writ). In commenting on judgments, Chief Justice Calvert said, "If Merchandise Mart teaches nothing else, it teaches that, when an incorrect judgment is called into question, the defense ‘everyone knows what the court meant’ will not work." Robert W. Calvert, Appellate Court Judgments or Strange Things Happen on the Way to Judgment , 6 Tex. Tech. L. Rev. 915, 925 (1975).
If our final challenge in an appeal is to draft a correct judgment, see id. , then our first challenge is to ensure we have jurisdiction over the trial court's judgment or appealable order. In this case we have no subject-matter jurisdiction over the appeal, and we cannot change that.
I dissent and would—after giving the notice required by Texas Rule of Appellate Procedure 42.3 —dismiss the appeal for want of subject-matter jurisdiction.