Opinion
No. 11-09-00052-CV
September 16, 2010.
On Appeal from the 104th District Court Taylor County, Texas, Trial Court Cause No. 24,255-B.
Panel consists of: WRIGHT, C.J., McCALL, J., and STRANGE, J.
OPINION
This is a legal malpractice suit. Stephen and Elliot Kemp sued Paul Jensen; John Saringer; and Wagstaff, Alvis, Stubbeman, Seamster Longacre, L.L.P. (collectively the attorneys), alleging causes of action for negligence and breach of fiduciary duty. The trial court granted the attorneys' traditional summary judgment motions and entered a take-nothing judgment. We affirm.
I. Background Facts
Stephen and Elliot Kemp own real property in Coleman County that is subject to mineral leases. Elliot assigned to Stephen any claims that he had for damages to this property, and Stephen retained Jensen to represent him in a surface damage dispute. On February 11, 2000, Jensen filed suit against several oil companies, including Subsurface Exploration Company, a California company. Subsurface Exploration (Cal) did not file an answer. Jensen withdrew as Stephen's counsel on June 21, 2001, and Saringer and the Wagstaff firm assumed his representation.
Saringer filed a motion for default judgment against Subsurface Exploration (Cal) on May 21, 2003, and obtained an interlocutory default judgment for $246,700. Subsurface Exploration (Cal) contacted Saringer and told him that the wrong entity had been sued. It filed a motion for new trial, and the trial court set aside the default judgment on June 19, 2003. Saringer filed an amended petition on July 18, 2003, against Jimmy Gassiot, individually and d/b/a Subsurface Exploration. Gassiot asserted limitations, and when the case was tried, the trial court instructed the jury not to assess any damages caused by Gassiot prior to July 16, 2001. The jury found that Gassiot was not negligent. The Kemps then filed this malpractice action. The attorneys responded with traditional motions for summary judgment predicated upon the jury's no-negligence finding. The trial court granted their motions, and this appeal followed.
II. Issues
The Kemps challenge the trial court's judgment with two issues. First, they contend that the underlying jury verdict did not foreclose this legal malpractice claim. Second, they argue that there are unresolved questions of material fact.
III. Discussion
A. Standard of Review.
The attorneys filed traditional motions for summary judgment. We review those motions with a well-settled, multifaceted standard of review. Questions of law are reviewed de novo. St. Paul Ins. Co. v. Tex. Dep't of Transp., 999 S.W.2d 881 (Tex. App.-Austin 1999, pet. denied). To determine if a fact question exists, we must consider whether reasonable and fair-minded jurors could differ in their conclusions in light of all the evidence presented. Goodyear Tire Rubber Co. v. Mayes, 236 S.W.3d 754, 755 (Tex. 2007). We must consider all the evidence in the light most favorable to the nonmovant, indulging all reasonable inferences in favor of the nonmovant, and determine whether the movant proved that there were no genuine issues of material fact and that it was entitled to judgment as a matter of law. Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546 (Tex. 1985).
B. Did the Attorneys Negate Proximate Cause as a Matter of Law?
The Kemps asserted negligence causes of action against each defendant. This requires proof of a legal duty, a breach of that duty, that the breach proximately caused the Kemps' injuries, and damages occurred. Alexander v. Turtur Assocs., Inc., 146 S.W.3d 113, 117 (Tex. 2004). When a legal malpractice action arises from prior litigation, the plaintiff must prove that, "but for" the attorney's breach of duty, it would have prevailed in the underlying case to establish proximate cause. Rangel v. Lapin, 177 S.W.3d 17, 24 (Tex. App.-Houston [1st] 2005, pet. denied). It is not sufficient to show that the case could have been handled differently. The plaintiff's burden is to produce evidence explaining the legal significance of the attorney's failure and the impact this had on the underlying action. Cantu v. Horany, 195 S.W.3d 867, 873 (Tex. App.-Dallas 2006, no pet.). Normally, a plaintiff must offer expert testimony to discharge this burden. See Ersek v. Davis Davis, P.C., 69 S.W.3d 268, 271 (Tex. App.-Austin 2002, pet. denied).
The attorneys do not dispute that they owed a duty to the Kemps but argue that, regardless of whether they violated that duty, the Kemps cannot show that they suffered any harm because the jury found that Gassiot was not negligent. The Kemps respond that the jury did not find that there was no negligence; it found that there was no negligence within the limitations period.
The jury charge in the underlying case read:
Did the negligence, if any, of those named below proximately cause damage to the Kemp property?
Answer "Yes" or "No"
Answer:
Jimmy Gassiot and his company, Subsurface Exploration No
Do not assess damages, if any, caused by Jimmy Gassiot that occurred prior to July 16, 2001.
Because the jury was instructed not to "assess" rather than not to "consider" damages occurring prior to July 16, 2001, its finding is not so precise as to eliminate any question. But we need not resolve this dilemma because, even if we assume that the Kemps are correct in their construction of the charge, they failed to raise a fact question on proximate cause.
The import of the Kemps' position is that we should not consider the jury verdict determinative because it is tainted by the attorneys' negligence, which prevented the jury from receiving and considering all of the evidence, and that, but for this negligence, a different verdict would have been obtained. To establish that evidence was excluded, Stephen Kemp testified by affidavit that the trial court disallowed any evidence of damages occurring prior to July 16, 2001, and that this precluded virtually all of his surface damage evidence. The Kemps also filed an affidavit signed by Saringer. He confirmed the trial court's ruling that limitations barred some claims against Gassiot, and his affidavit can be read to affirm that evidence of pre-July 2001 activities was excluded. Neither witness, however, described any of the excluded evidence or described any of the evidence that was admitted but the jury was prevented from considering because of the trial court's charge. Because there is no transcript from the underlying trial, we are left only to speculate what the jury would have heard or considered if Gassiot rather than Subsurface Exploration (Cal) had been sued originally.
Beyond this, the Kemps offered no evidence explaining the significance of the excluded evidence or why its exclusion altered the outcome. In Cantu, 195 S.W.3d 867, the plaintiffs brought a legal malpractice claim complaining of their former attorney's handling of a medical malpractice lawsuit. The trial court granted the attorney's motion for summary judgment. The Dallas court affirmed and noted that plaintiffs offered expert testimony that counsel breached his standard of care by not suing all of the responsible medical and nursing providers and that the legal expert also testified that more likely than not a suit against these parties would have been successful. Plaintiffs did not, however, produce any medical expert testimony corroborating this contention. The Dallas court held that, without this, the plaintiffs failed to raise a fact question on whether they would have prevailed in a medical malpractice lawsuit. Id. at 874. The Kemps' summary judgment response suffers from the same failure.
The Kemps offered a legal expert, Robin M. Green. The majority of his affidavit addressed whether the attorneys breached their duty of care, but Green did testify that the attorneys' negligence kept the Kemps from recovering against Gassiot "because the damages had actually occurred for the most part during the 1990s." However, he acknowledged that he had not seen the trial transcript, that he understood the trial court had excluded damage evidence based upon limitations, and that he needed to review the transcript to confirm his understanding. Based upon this, it is impossible to determine from Green's affidavit if he definitively knew what specific evidence was excluded. His lack of knowledge makes any testimony on proximate cause legally insufficient. See Ryland Group, Inc. v. Hood, 924 S.W.2d 120, 122 (Tex. 1996) (affidavits based upon the affiant's belief or understanding of the facts are not proper summary judgment evidence).
Even if we were to consider Green's affidavit, it is clear that he is operating on the assumption that the exclusion of evidence altered the jury's verdict. Logically, one can infer that having damage evidence excluded is prejudicial to a plaintiff's case. But, saying that there was other evidence the jury could have considered is not synonymous with saying that this additional evidence would, more likely than not, have led to a different result. Surface damage suits can be complicated, and mere evidence of damage — even significant damage — is no guarantee of a verdict. See, e.g., Primrose Operating Co. v. Senn, 161 S.W.3d 258 (Tex. App.-Eastland 2005, pet. denied) (reversing jury verdict for $2,110,000 because evidence of remediation costs was not evidence of diminution in fair market value). Consequently, Green's assumption of harm is no evidence of proximate cause.
The Kemps next note that Saringer testified in his affidavit that, if "Kemp [had] been permitted to submit evidence of the conduct of Valera Oil and Subsurface Exploration that occurred prior to July 2001, Mr. Kemp would have had a much better opportunity of obtaining a favorable jury verdict with damages in excess of $150,000.00." Without some basis for this statement and some explanation of why Valera's conduct would have supported a verdict against Gassiot, it is nothing more than a conclusion and, thus, no evidence. Burrow v. Arce, 997 S.W.2d 229, 235 (Tex. 1999). Moreover, testimony that the excluded evidence would have provided a better opportunity to prevail is insufficient to create a fact question because it addresses the wrong burden of proof. For example, if the Kemps had a five percent chance of a favorable result without the excluded evidence and a twenty-five percent chance with it, then its admission would have provided them a much better opportunity of obtaining a favorable verdict. However, the Kemps' burden was to offer evidence that more likely than not a favorable verdict would have been achieved. Saringer's affidavit does not satisfy this obligation.
The trial court was presented with a jury finding of no negligence. Regardless of whether this is considered only a finding of no negligence within the limitations period, it was still evidence that the attorneys' negligence was not the proximate cause of the Kemps' damages. To overcome this, the Kemps effectively collaterally challenged it, and they produced evidence that the attorneys breached their duty and evidence that this breach resulted in the exclusion of damage evidence in the underlying trial. But the Kemps did not show what evidence was excluded, did not explain the significance of this excluded evidence or its impact on the trial, and did not produce testimony that but for its exclusion the jury would have returned a different verdict. The trial court had no reason to disregard the jury verdict and, therefore, did not err when it granted the attorneys' motions for summary judgment and dismissed the Kemps' negligence causes of action.
C. Breach of Fiduciary Duty.
The Kemps also sued Jensen for breach of fiduciary duty, contending that his failure to disclose to them or Saringer that he had sued the wrong entity was a breach of duty. Jensen successfully moved for summary judgment on this claim, contending that the Kemps were attempting to improperly fracture a negligence cause of action. The Kemps argue that the trial court erred because it had no evidence upon which to decide this question and that Jensen had a fiduciary duty to render a full and fair disclosure of material facts, citing Willis v. Maverick, 760 S.W.2d 642, 645 (Tex. 1988).
A professional negligence claim arises when an attorney provides improper representation. Newton v. Meade, 143 S.W.3d 571, 574 (Tex. App.-Dallas 2004, no pet.). This can happen by giving an erroneous legal opinion or advice; by delaying or failing to handle a matter entrusted to the attorney's care; or by not using ordinary care in preparing, managing, and prosecuting a case. Murphy v. Gruber, 241 S.W.3d 689, 693 (Tex. App.-Dallas 2007, pet. denied). Conversely, a breach of fiduciary duty involves the attorney's integrity and fidelity and focuses on whether counsel obtained an improper benefit from representing the client. Gibson v. Ellis, 126 S.W.3d 324, 330 (Tex. App.-Dallas 2004, no pet.). An attorney breaches his fiduciary duty when he benefits improperly from the attorney-client relationship by, among other things, subordinating his client's interest to his own, retaining the client's funds, engaging in self-dealing, improperly using client confidences, failing to disclose conflicts of interest, or making misrepresentations to achieve these ends. Goffney v. Rabson, 56 S.W.3d 186, 193 (Tex. App.-Houston [14th] 2001, pet. denied).
Professional negligence claims cannot be converted into fraud, breach of contract, breach of fiduciary duty, or violations of the DTPA. Murphy, 241 S.W.3d at 693, 698-99 (allegations that attorneys failed to properly advise, inform, and communicate with clients about their case are claims of professional negligence). Texas courts have consistently held that the failure to disclose significant information about a client's case is professional negligence and not a breach of fiduciary duty. See, e.g., Murphy v. Mullin, Hoard Brown, L.L.P., 168 S.W.3d 288, 290 (Tex. App.-Dallas 2005, no pet.) (the failure to timely inform clients of defects in documents was claim for professional negligence and not breach of fiduciary duty because there was no claim that attorneys received an improper benefit from the representation); Aiken v. Hancock, 115 S.W.3d 26, 29 (Tex. App.-San Antonio 2003, pet. denied) (allegations that lawyer falsely represented he was prepared to try case, failed to reveal he was not prepared to try case, falsely represented expert witness was prepared to testify, and failed to reveal expert witness was not fully prepared to testify did not allege self-dealing, deception, or express misrepresentations in the lawyer's representation to support separate cause of action for breach of fiduciary duty); Kimleco Petroleum, Inc. v. Morrison Shelton, 91 S.W.3d 921, 924 (Tex. App.-Fort Worth 2002, pet. denied) (claim that lawyer misled clients into believing case ready for trial stated claim for legal malpractice, not breach of fiduciary duty). But cf. Latham v. Castillo, 972 S.W.2d 66, 69-70 (Tex. 1998) (allegation that attorney affirmatively misrepresented to clients that he had filed and was actively prosecuting their claim was distinct from professional negligence cause of action because of allegation of deceptive conduct).
The Kemps' allegations share some similarities with those raised in Latham because of the contention that Jensen engaged in deceptive conduct by withholding information. However, there are no allegations that Jensen received an improper benefit. Instead, the Kemps assert the type of misconduct — not communicating significant information about their case — that courts have consistently found constitutes an allegation of professional negligence. Jensen's obligation to keep his clients informed is an integral component of his duty as a professional. A violation of that duty is a claim for professional negligence. Absent an allegation that Jensen received an improper benefit or other similar contention, it is not a claim for breach of fiduciary duty. The trial court did not err by granting Jensen's motion for summary judgment on the Kemps' breach of fiduciary duty claim. Because of this, the trial court also did not err by granting summary judgment on the Kemps' claim that Saringer was negligent for not advising them that they had a potential DTPA claim against Jensen.
IV. Conclusion
Issues One and Two are overruled. The judgment of the trial court is affirmed.